UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20162019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of event requiring this shell company report _____________
For the transition period from _____________ to _____________
Commission file number 0-20486
COMPAÑIA CERVECERIASÍA CERVECERÍAS UNIDAS S.A.
(Exact name of Registrant as specified in its charter)
UNITED BREWERIES COMPANY, INC.
(Translation of Registrant's name into English)
Republic of Chile
(Jurisdiction of incorporation or organization)
Vitacura 2670, Twenty-Third Floor, Santiago, Chile
(Address of principal executive offices)
Felipe Dubernet, (562-24273536),fdubern@ccu.cl Vitacura 2670, Twenty-Third Floor, Santiago, Chile
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to section 12(b) of the Act.
__________ * Not for trading, but only in connection with the registration of American Depositary Shares which are evidenced by American Depositary Receipts
Securities registered or to be registered pursuant to Section 12(g) of the Act. Not applicable 30444.00900 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. Not applicable
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report. Common stock, with no par value: 369,502,872
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES X NO____
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
YES NO X
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO_____
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES XNO__
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of “accelerated filer”, “large accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer X Accelerated filer Non-accelerated
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
___
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP International Financial Reporting Standards as issued by the International Accounting Standards Board X
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ITEM 17 ITEM 18__
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES NO X
30444.00900
Introduction
In this annual report on Form 20-F, all references to “we”, “us”, “Company” or “CCU” are to Compañía Cervecerías Unidas S.A., an open stock corporation
Forward Looking Statements
This annual report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to as the “Securities Act”, and Section 21E of the Securities and Exchange Act of 1934, which we refer to as the “Exchange Act”. These statements relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. They also relate to our future prospects, development and business strategies.
These forward-looking statements are identified by the use of terms and phrases such as “anticipate”; “believes”; “could”; “expects”; “intends”; “may”; “plans”; “predicts”; “projects”; “will” and similar terms and phrases. We caution you that actual results could differ materially from those expected by us, depending on the outcome of certain factors, including, without limitation:
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this annual report. We undertake no obligation to
PART I ITEM 1: Identity of Directors, Senior Management and Advisers Not applicable. ITEM 2: Offer Statistics and Expected Timetable Not applicable.
The following table presents selected consolidated financial data as of December 31,
Exchange
In order to keep fluctuations in the average exchange rate within certain limits, the Central Bank of Chile has in the past intervened by buying or selling foreign currency on the formal exchange market. In September 1999, the Central Bank of Chile decided to limit its formal commitment to intervene and decided to exercise it only under extraordinary circumstances, which are to be announced in advance. The Central Bank of Chile also committed to provide periodic information about the levels of its international reserves.
The observed exchange rate is the average exchange rate at which commercial banks conduct authorized transactions on a given date, as certified by the Central Bank of Chile. The Central Bank of Chile generally carries out its transactions at the spot market rate. Authorized transactions by banks are now generally conducted at the spot market rate.
Purchases and sales of foreign currencies effectuated outside the formal exchange market are carried out in the
The following table sets forth the low, high, average and period-end observed exchange rates for CLP.
The exchange rate on April
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable. D. Risk Factors
RISKS RELATING TO CHILE
We are substantially dependent on economic, political and social conditions in Chile, which may adversely impact the results of our operations and financial condition.
Furthermore, Chile, as an emerging The beginning of a massive social movement during the fourth quarter of 2019 has increased uncertainty levels in Chile, which could affect economic growth through a deterioration of business and consumer confidence. This could have a negative effect on the demand of our products. See “—Uncertainties about how Chile’s social situation will develop could negatively impact its economy and hence our results of operations and financial condition.” Uncertainties about how Chile’s social situation will develop could negatively impact the Chilean economy and our results of operations and financial condition. Beginning on October 18, 2019, protests spread throughout Chile, initially sparked over an increase in the Santiago metro system fares. Protestors vandalized metro stations and other public and private sector assets in Santiago and other major cities. The protests and associated violence have caused commercial disruptions throughout the country, especially in Santiago. A number of demands have been raised throughout the protests, which are generally related to increased economic inclusion and social equality. In response to these events, the government has announced a robust social agenda intended to increase basic pensions, expand social health coverage, increase the tax burden on wealthy taxpayers, reduce working hours, increase the minimum wage, and reduce and stabilize certain public service tariffs, including those related to public transport and electricity. To fund the social agenda, the government and part of the opposition reached an agreement, which introduces certain modifications to the tax reform bill of 2018 that eventually was passed by the Chilean Congress on January 2020. In response to this social unrest, on November 15, 2019, the majority of the political parties in Chile reached an agreement, which among other items contemplated initial steps toward a potential amendment of the Chilean constitution. In spite of these measures, the Chilean markets continue to be volatile, and social unrest and violence are still to be fully controlled. The long-term effects of the recent social unrest on the Chilean economy and a possible change in the Constitution are hard to predict and could result in an adverse effect on our results of operations and financial condition.
Currency fluctuations may affect our
Because we purchase the majority of our supplies at prices set in
The relative liquidity and volatility of Chilean securities markets may increase the price volatility of our American Depositary Shares (“ADSs”) and adversely impact a holder’s ability to sell any shares of our common stock withdrawn from our American Depositary Receipt (“ADR”) facility.
The Chilean securities markets are substantially smaller, less liquid and more volatile than major securities markets in the United States. For example, the Santiago Stock Exchange, which is Chile’s principal stock exchange, had a market capitalization of approximately
The lower liquidity and greater volatility of the Chilean markets relative to markets in the United States could increase the price volatility of the ADSs and may impair a holder’s ability to sell
We are subject to different corporate disclosure requirements and accounting standards than U.S. companies.
Although the securities laws of Chile
RISKS RELATING TO ARGENTINA
We
If economic conditions in Argentina were to Inflationary pressures in Argentina may negatively impact demand for our goods, profitability and future investments. Argentina has faced and continues to face inflationary pressures. The increase in inflationary risk may erode macroeconomic growth and limit the availability of financing, causing a negative impact on our operations. In the past, during periods of high inflation, the Argentine government has regulated prices of consumer goods, including beverages, which has impacted our profitability. Even without government regulation, high inflation may impede our ability to pass on higher costs to customers, which would also negatively impact profitability.
The Argentine peso is subject to volatility which could adversely affect our results.
A Given that we cannot predict how macroeconomic conditions will evolve in the future in Argentina, nor when Argentina will cease to qualify as a hyperinflationary economy for accounting purposes, we cannot foresee how CCU’s business will be affected by Argentina’s future macroeconomic environment. In order to mitigate the impact of the current macroeconomic challenges,Compañía Cervecerías Unidas Argentina S.A. (“CCU Argentina”) has implemented efficiency and revenue management plans, as well as cost and expense improvements through the “ExCCelencia CCU” program. However, we cannot guarantee that our business will not be materially affected by Argentina’s macroeconomic environment.
Argentina’s legal regime and economy are susceptible to changes that could adversely affect our Argentine operations.
RISKS RELATING TO OUR BUSINESS
Our businesses are subject to
Fluctuations in the cost of our raw materials may adversely impact our profitability if we
We purchase malt, rice and hops for beer, sugar for soft drinks, grapes for wine, pisco and cocktails, and packaging
Although we historically have been able to implement price increases in response to increases in raw material costs, we cannot assure you that our ability to recover increases in the cost of raw materials will continue in the future.
Consolidation in the beer industry may impact our market share.
In
Competition in the Chilean beer market may erode our market share and lower our profitability.
Our largest competitor in the Chilean beer market by volume is Cervecería
Quilmes dominates the beer market in Argentina and we may not be able to maintain our current market share.
In Argentina we face competition from Cervecería y Maltería Quilmes
Changes in the labor market in the countries in which we operate may affect margins in our business.
In labor supply, as well as changes in labor legislation, among others. In Argentina, The foregoing, as well as the implementation of new labor regulations, could have an adverse effect on our expenses and negatively affect our margins.
We depend upon the renewal of certain license agreements to maintain our current operations.
Most of our license agreements include certain conditions that must be met during their term, as well as provisions for their renewal at their expiry date. We cannot
Consolidation in the supermarket industry may affect our operations.
The Chilean supermarket industry has gone through a consolidation process,
Additionally, and despite having insurance coverage, this supermarket chain consolidation has the effect of increasing our exposure to counterparty credit risk, given the fact that we have more exposure in the event one of these large customers fails to fulfill its payment obligations to us for any reason.
In the case of aluminum cans, both in Chile and Argentina, we purchase from a single supplier, Ball, which has production plants in both countries. However,
Water supply is essential to the development of our businesses.
Water is an essential component for
Additionally, the Chilean Congress is currently discussing the passing of a bill Furthermore, decrees issued byDirección General de Aguas (the Chilean The supply, production and logistics chain is
Our supply, production and logistics chain is crucial for the delivery of our products to consumer centers. An interruption or a significant failure in this chain may negatively affect our results, if the failure is not quickly resolved. An interruption in the chain could be caused by various factors, such as strikes, utility shutdowns such as customs and ports, planning errors of our suppliers, Catastrophic events in the regions in which we operate could have a significant adverse effect on our financial condition. Natural disasters, climate change impact events, pandemics or other catastrophic events could impair our ability to manufacture, distribute or sell our products. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to manage such events effectively if they occur, could adversely affect our sales volume, cost and supply of raw materials, earnings and could have a significant effect on our business, operational results, and financial position. Chile has been affected in the past by several natural disasters, including large floods, mudslides and forest fires. These events did not have a significant effect on our operations, although a future catastrophic event could have a significant effect on our business, results of operations and financial condition. Health crises, pandemics or the outbreak of contagious diseases at a global or regional level could have a negative impact on our operations and financial position. A health crisis, pandemic or the outbreak of disease at a global or regional level, such as the case of the recent outbreak of COVID-19, which was declared a pandemic by the World Health Organization in March 2020, could have a negative impact on our operations and financial position. The above-mentioned circumstances could impede the normal operation of the Company, limit our production and distribution capacity, and/or generate a contraction in the demand for our products. The degree of impact on our operations will depend on factors that we cannot predict, such as the duration, spread, and severity of the health crisis. Any prolonged restrictive measures put in place in order to control an outbreak of a contagious disease or other adverse public health development in any of our targeted markets may have a material and adverse effect on our business operations. The ultimate severity of the Coronavirus outbreak is uncertain at this time and therefore we cannot predict the impact it may have on the world, the economies where we operate or the financial markets, and consequently in ourfinancial condition or results of operations. As of the date of this report, we continue selling, producing and distributing our products, all across our business operations. Given the high degree of uncertainty about the spread of COVID-19 or regarding future measures that may be adopted across the countries where we operate, we cannot predict the impact the pandemic may have on our operations in the near future, and therefore, any future adverse effects it may have on our results of operations and financial condition.
If we are unable to protect our information systems against data corruption, cyber-based attacks or network security breaches, our operations could be disrupted.
We are increasingly dependent on information technology networks and systems, including the Internet, to process, transmit and store electronic information. In particular, we depend on our information technology infrastructure, including data centers, for
Possible regulations for labeling materials and
If further
New applicable environmental regulations CCU’s operations are subject to
CCU has been actively participating through the associations that represent the different
If we are unable to maintain the image and quality of our products and a good relationship with our clients and consumers, our financial results may suffer.
The image and quality of our products is essential for The Company must also ensure that our sales force provides good customer service and adapts to fulfill the needs and preferences of our consumers. If we are unable to maintain a good relationship with our clients and consumers, our financial results may suffer.
RISKS RELATING TO OUR ADSs
We are controlled by one majority shareholder, whose interests may differ from those of holders of our ADSs, and this shareholder may take actions that adversely affect the value of a holder’s ADSs or common stock.
As of March 31,
Chilean economic policies, currency fluctuations, exchange controls and currency devaluations may adversely affect the price of our ADSs.
The Chilean government’s economic policies and any future changes in the value of the
While our ADSs trade in
For example, since our consolidated financial statements are reported in
Holders of our ADSs may be subject to certain risks due to the fact that holders of our ADSs do not hold shares of our common stock directly.
ADS holders may exercise voting rights associated with common stock only in accordance with the deposit agreement governing our ADSs. Accordingly, ADS holders will face practical limitations when exercising their voting rights because ADS holders must first receive a notice of a shareholders’ meeting from the
The right of a holder of our ADSs to force us to purchase the underlying shares of our common stock pursuant to Chilean corporate law upon the occurrence of certain events may be limited.
Because of the absence of legal precedent as to whether a shareholder that has voted both for and against a proposal, such as the In the past, Chile has imposed controls on foreign investment and repatriation of investments that affected investments in, and earnings from, our ADSs.
Equity investments in Chile by persons who are not Chilean residents have historically been subject to various exchange control regulations that restrict repatriation of investments and earnings therefrom. In April 2001, the Central Bank eliminated most of the regulations that affected foreign investors, although foreign investors still have to provide the Central Bank with information related to equity investments and must conduct such operations within the formal exchange market. Additional Chilean restrictions applicable to holders of our ADSs, the disposition of the shares underlying them, the repatriation of the proceeds from such disposition or the payment of dividends may be imposed in the future, and we cannot advise you as to the duration or impact of such restrictions if imposed. See also “Item 10: Additional Information – D. Exchange Controls”.
If for any reason, including changes in Chilean law, the depositary for our ADSs were unable to convert
Preemptive rights to purchase additional shares of our common stock may be unavailable to holders of our ADSs in certain circumstances and, as a result, their ownership interest in our Company may be diluted.
TheLey sobre Sociedades Anónimas N° 18,046
We intend to evaluate at the time of any future offerings of shares of our common stock the costs and potential liabilities associated with any registration statement as well as the indirect benefits to us of enabling U.S. owners of our ADSs to exercise preemptive rights and any other factors that we consider appropriate at the time, before making a decision as to whether to file such a registration statement. We cannot assure you that any such registration statement would be filed.
To the extent that a holder of our ADSs is unable to exercise their preemptive rights because a registration statement has not been filed, the depositary will attempt to sell the holder’s preemptive rights and distribute the net proceeds of the sale, net of the depositary’s fees and expenses, to the holder, provided that a secondary market for those rights exists and a premium can be recognized over the cost of the sale. A secondary market for the sale of preemptive rights can be expected to develop if the subscription price of the shares of our common stock upon exercise of the rights is below the prevailing market price of the shares of our common stock. Nonetheless, we cannot assure you that a secondary market in preemptive rights will develop in connection with any future issuance of shares of our common stock or that if a market develops, a premium can be recognized on their sale. Amounts received in exchange for the sale or assignment of preemptive rights relating to shares of our common stock will be taxable in Chile and in the United States. See “Item 10: Additional Information – E. Taxation – Chilean Tax Considerations – Capital Gains” and “– United States
ITEM 4: Information on the Company
A.History and Development of the Company
Our current legal and commercial name is Compañía Cervecerías Unidas S.A. We are a public corporation (sociedad anónima abierta) organized by means of a public deed dated January 8, 1902,following the merger of two existing breweries, one of which traces its origins back to 1850, when Mr. Joaquín Plagemann founded one of the first breweries in Chile (in Valparaíso). By 1916, we owned and operated the largest brewing facilities in Chile. Our operations have also included the production and
We are subject to a full range of governmental regulation and supervision generally applicable to companies engaged in business in Chile, Argentina, Bolivia, Colombia, Paraguay and Uruguay. These regulations include labor laws, social security laws, public health, consumer protection and environmental laws, securities laws, and antitrust laws. In addition, regulations exist to ensure
Our principal executive offices are located at Avenida Vitacura N°2670, 23rd floor, Santiago, Chile. Our telephone number in Santiago is (56-2) 2427-3000, and our website is www.ccu.cl. Our authorized representative in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware
In 1986, IRSA, our current
In September 1992, we issued 4,520,582 ADSs, each representing five shares of our common stock, in an international American Depositary Receipt (“ADR”) offering. The underlying ADSs were listed and traded on the NASDAQ, until March 25, 1999. Since that date, the ADSs have been listed and traded on the NYSE. On December 20, 2012, the ratio of ADSs to shares of common stock was changed from 1 to 5, to a new ratio of 1 to 2.
Prior to November 1994, we independently produced, bottled and distributed carbonated and non-carbonated soft drinks in Chile. In November 1994, we merged our soft drink and mineral water businesses with the one owned by Buenos Aires Embotelladora S.A. (“BAESA”) in Chile (PepsiCo’s bottler in Chile at that time) creating Embotelladoras Chilenas Unidas S.A. (“ECUSA”) for the production, bottling, distribution and
In 1994 we purchased 48.4% of the equity of the Chilean wine producer Viña San Pedro S.A. (“VSP”) for approximately CLP 17,470 million. During the first half of 1995, VSP’s capital was increased by approximately CLP 14,599 million, of which we contributed approximately CLP 7,953 million. From August through October 1997, VSP’s capital was increased again by approximately CLP 11,872 million, of which we contributed approximately CLP 6,617 million, plus approximately CLP 191 million in additional shares bought during October 1997 in the local stock market. Furthermore, in October 1998 and during 1999, we purchased additional shares in VSP through the local stock exchanges for an amount of approximately CLP 5,526 million. From March through June 1999, VSP’s capital was increased by approximately CLP 17,464 million, of which we contributed approximately CLP 10,797 million.
In December 1995, we entered into a joint venture agreement pursuant to which Anheuser-Busch acquired a 4.4% interest in
After a capital increase approved by our shareholders in October 1996, we raised approximately
In November 2000, we
During 2000, VSP, through its subsidiary Finca La Celia S.A. (“FLC”), acquired the winery Finca La Celia in Mendoza, Argentina, initiating its international expansion, allowing VSP to include fine quality Argentine wines into its export product portfolio. In December 2001, Viña Santa Helena S.A. (“VSH”) created its own commercial and productive winemaking operation, distinct from its parent, VSP, under the Viña Santa Helena label in the Colchagua Valley. Between November 2000 and March 2001, VSP’s capital was increased by approximately CLP 22,279 million, of which we contributed approximately CLP 13,402 million.
In February 2003, we began the sale of a new product for our beverage portfolio, pisco, under the brand Ruta Norte. Pisco is a grape spirit very popular in Chile that is produced in the northern part of the country. Our pisco, at that time, was only produced in the Elqui Valley in the Coquimbo Region
On April 17, 2003, the Schörghuber Group, at the time an indirect owner of 30.8% of our ownership interest, gave Quiñenco, also at the time an indirect owner of 30.8% of our ownership interest, formal notice of its intent to sell 100% of its interest in FHI to Heineken Americas B.V., a subsidiary of Heineken International B.V. As a result of the sale, Quiñenco and Heineken Americas B.V., the latter through FHI, became the only two shareholders of IRSA, the owner of 61.6% of our equity at that time, each with a 50% interest in IRSA. Heineken International B.V. and FHI subsequently formed Heineken Chile Ltda., to hold the latter’s 50%
In August 2003, VSP formed Viña Tabalí S.A., a joint venture in equal parts with Sociedad Agrícola y Ganadera Río Negro Ltda., for the production of premium wines. This winery is located in the Limarí Valley, Chile’s northernmost winemaking region, which is noted for the production of outstanding wines.
In January 2004, we entered the sweet snacks business by means of a joint venture between CCU Inversiones S.A. and Industria Nacional de Alimentos S.A., a subsidiary of Quiñenco, with a 50% interest each in Calaf S.A.
In October 2004, VSP acquired the well-known Manquehuito Pop Wine brand, a sparkling fruit-flavored wine with low alcohol content, broadening its range of products. At VSP’s extraordinary shareholders meeting held on July 7, 2005, the shareholders approved a capital increase that was to be partially used for stock option programs. During October and November 2005, VSP’s capital was increased by approximately CLP 346 million. We did not participate in this capital increase.
In December 2006, we signed a joint venture agreement with Watt’s S.A. (“Watt’s”), a local food related company, under which, as of January 30, 2007, we participate in equal parts in Promarca S.A. (“Promarca”)
In January 2007, Viña Tabalí S.A. bought the assets of Viña Leyda, located in the Leyda Valley, a new winemaking region south of Casablanca Valley and close to the Pacific Ocean. Viña Leyda produces excellent wines that have won awards in different international contests. After this acquisition, Viña Tabalí S.A. changed its name to Viña Valles de Chile S.A. In September 2007, VSP bought a 50% interest in Viña Altaïr S.A. which belonged to Château Dassault, in line with our strategy of focusing on premium wines. As a consequence, VSP owns 100% of said company. Between April and June 2007, VSP’s capital was increased by approximately CLP 13,692 million, of which we contributed approximately CLP 5,311 million.
In May 2007, CPCh entered the rum market with our proprietary brand Sierra Morena and later, in 2008, added new rum brand extensions and introduced various pisco based cocktails. In June 2010 CPCh purchased Fehrenberg, a small, but well-recognized spirits brand produced in Chile. In July 2011 CPCh began the distribution of Pernod Ricard products (Chivas Regal, Ballantine’s, Havana Club, Absolut, among others). Furthermore, in 2011, CPCh signed a
In December 2007, we entered into an agreement with Nestlé Chile S.A. and Nestlé Waters Chile S.A., the latter of which acquired a 20% interest in our subsidiary Aguas CCU-Nestlé Chile S.A. (“Aguas CCU”), the company through which we develop our bottled water business in Chile. As part of this new association, Aguas CCU introduced in 2008 the Nestlé Pure Life brand in Chile.
In 2008, the licensing contract,
In December 2010, our subsidiary Inversiones Invex CCU Ltda., acquired a 4.04% equity stake in CCU Argentina from Anheuser-Busch Investment, S.L. After the acquisition, CCU, through its subsidiary Inversiones Invex CCU Ltda., became the sole equity holder of CCU Argentina. This transaction had no effect on the Budweiser brand production and distribution contract, which
In December 2010, CICSA acquired equity interests in Saénz Briones y Cí
In August 2011, the board of directors of VSPT agreed to spin-off Viña Valles de Chile S.A. (“VDC”), a corporation owned, in equal parts, by VSPT and Sociedad Agrícola y Ganadero Río Negro Limitada (“ARN”). VDC had two major vineyards: Viña Tabalí and Viña Leyda. According to such agreement, VSPT would remain the
In September 2012, CCU acquired 100% of the shares of the Uruguayan companies Milotur S.A. (“Milotur”), Marzurel S.A. (“Marzurel”) and Coralina S.A. (“Coralina”) and, indirectly of Andrimar S.A. (“Andrimar”), a wholly-owned subsidiary of Milotur. These companies own the assets of a business developed in Uruguay that engages in the production and
In December 2012, Aguas CCU completed an acquisition of 51.01% of the company Manantial S.A. (“Manantial”), a Home and Office Delivery (“HOD”) business of purified water in bottles with the use of dispensers. The partnership enabled Aguas CCU to participate in a new business category. The shareholders agreement of Manantial included a call option to purchase the remaining shares.
On June 18, 2013, the extraordinary shareholders’ meeting approved the issuance of 51,000,000 of
In December 2013, CCU acquired 50.005% of Bebidas del Paraguay S.A. (“Bebidas del Paraguay”), and 49.959% of Distribuidora del Paraguay S.A. (“Distribuidora del Paraguay”), entering the Paraguayan market with the production, marketing and sale of non-alcoholic beverages, such as soft drinks, juices and water, and
Furthermore, in 2013, CCU, through its subsidiary CCU Inversiones S.A., increased its stake in VSPT to 64.72% by acquiring
In May 2014, CCU entered the Bolivian market through a partnership with Grupo Monasterio, acquiring 34% of Bebidas Bolivianas BBO S.A. (“BBO”). BBO produces and commercializes alcoholic and non-alcoholic beverages in Bolivia. CCU's initial stake in BBO
As of June 6, 2014, CICSA reached agreements with Cervecería Modelo S.A. de CV. and Anheuser-Busch LLC, for the termination of the contract which
In November 2014, CCU, directly and through its subsidiary CCU Inversiones II Ltda., signed a series of contracts and agreements with the Colombian entity Postobón S.A. and related companies (“Grupo Postobón”), by which we agreed to initiate a joint venture for the manufacturing, commercialization and distribution of beer and malt based non-alcoholic beverages in Colombia. The joint venture
In November 2015, ECUSA entered into a joint operation agreement with Empresas Carozzi S.A. (“Carozzi”) for the production, commercialization, and distribution of instant powder drinks under the brands Sprim, Fructus, Vivo and Caricia. This joint operation is carried out by Bebidas Carozzi CCU SpA (“Bebidas Carozzi CCU”), of which ECUSA acquired 50% of the share capital. Carozzi
In 2015 we sold the brands Calaf and Natur to Carozzi, leaving Foods only with its 50%
On January 29, 2016, Aguas CCU and ECUSA exercised the call option, acquiring 48.07% and 0.92% of the shares of Manantial respectively. As a consequence,
In February 2016 CCU and
In March 2016, we, through our subsidiary Bebidas del Paraguay S.A., acquired 51% of Sajonia Brewing Company SRL (formerly Artisan SRL) which produces and commercializes Sajonia craft
In 2016, CCC acquired the brand and assets related to the craft beer brand “3 In 2017, we began producing and commercializing Miller Genuine Draft (“MGD”) in Argentina. As of April 2017, CCC also has a license agreement to commercialize and distribute the Miller Lite and Miller Genuine Draft brands in Colombia. In June 2017, CPCh incorporated to its portfolio the Peruvian pisco brand BarSol, through the acquisition of 40% of Americas Distilling Investments LLC, which is based in the United States and owns the BarSol brand and productive assets based in Peru. On June 15, 2017, Foods and CCU Inversiones S.A. signed a purchase agreement, for the sale of all the shares of its subsidiary Nutrabien, with Ideal S.A, a subsidiary of Grupo Bimbo, subject to the approval of the antitrust authorities in Chile. Having received said approval, the sale of 100% of the shares of Nutrabien to Ideal S.A. was completed on December 17, 2018. On August 16, 2017, CCU, through its subsidiary CCU Inversiones ll Ltda., acquired 50% of Zona Franca Central Cervecera S.A.S. (“ZF CC”), a company incorporated in Colombia in which CCU and Grupo Postobón are the sole shareholders in equal parts. The price of the transaction amounted to USD 10.2 million, equivalent to CLP 6.4 billion. Until November 2019, the main purpose of ZF CC was to act exclusively as an industrial user of one or more free-trade zones, providing toll manufacturing services to CCC, which was the company that produced, marketed and distributed beer and malt beverages. Since November 2019, ZF CC is producing and selling to CCC, which continues to market and distribute our products. In December 2017, CCU, through its subsidiary CCU Inversiones S.A., increased its stake in VSPT by acquiring additional outstanding shares of VSPT through a tender offer, which concluded at the end of January 2018, and allowed us to increase our total stake from 67.22% to 83.01%. On September 6, 2017, CCU and CCU Argentina signed an offer letter with ABI (together with CCU Argentina, the "Parties"), under which the early termination of the "Budweiser" license agreement in Argentina was agreed to in exchange for the transfer to CCU Argentina of a portfolio of beer brands and cash payments, among other matters. This transaction was subject to the prior approval of the Comisión Nacional de Defensa de la Competencia (“CNDC”) and the Secretario de Comercio del Ministerio de Producción de la Argentina (“SECOM”), which are Argentina’s antitrust regulators. On March 14, 2018, SECOM, based on the CNDC's favorable opinion, approved the transaction, pending review and approval by the CNDC of the terms and conditions of the definitive contracts in respect thereof. On April 27, 2018, after receiving the approval from CNDC and SECOM, the Parties were legally obliged to close the transaction. On May 2, 2018, the abovementioned transaction (the “Transaction”) was executed, which included, among other matters: (i) the early termination of the Budweiser brand license agreement in Argentina, between the Parties, and (ii) the transfer to CCU Argentina of the ownership of the Isenbeck, Diosa, Norte, Iguana and Báltica brands, as well as the transfer of the licenses for Argentina of the international brands Warsteiner and Grolsch. In order to achieve an orderly transition of the aforementioned brands, the Transaction contemplates several contracts in which (i) CCU Argentina will produce Budweiser, on behalf of ABI, for a period of up to one year; (ii) ABI will produce Isenbeck and Diosa, on behalf of CCU Argentina, for a period of up to one year; and (iii) ABI will carry out the production and distribution of Iguana, Norte, Báltica, Grolsch and Warsteiner, on behalf of CCU Argentina, for a period of up to three years (the “Transition Brands”). As a consequence, as of May 2, 2018, CCU Argentina began commercializing Isenbeck and Diosa and ceased selling Budweiser. As part of the terms of the Transaction, CCU Argentina received from ABI a cash payment of US$ 306 million, as part of its compensation for the early termination of the license contract for the Budweiser brand, as well as an additional US$ 10 million for producing Budweiser on behalf of ABI for a year. CCU Argentina will also receive from ABI payments of up to US$ 28 million per year, for a period of up to three years, depending on the scope and length of the transition of the production and/or commercialization of the Transition Brands. On August 9, 2018, CCU exercised its option to purchase from Grupo Monasterio, holder of 66% of BBO capital stock, 30,286, ordinary shares of BBO, representing 17% of the total capital stock of BBO, with which CCU increased its stake from 34% to 51%, with Grupo Monasterio retaining the remaining 49%. Subsequently, on December 17, 2018, CCU contributed the totality of its BBO shares to its subsidiary CCU Inversiones II Ltda., the current shareholder and controller of BBO. On August 17, 2018, CCU placed a three million UF bond in the Chilean market. The 25-year bullet note was priced at 2.85% in UF’s (Chile’s inflation adjusted currency), which represented a spread of 68 bps over the Chilean Central Bank bond (BCU) with the same duration. In September of 2018, CCU was included for the first time in the Dow Jones Sustainability Index Chile, created in 2015, which assesses and selects companies based on an analysis of their environmental, social and governance (ESG) performance. On September 4, 2018, CCU and 29 other companies in Chile, signed a Zero Waste to Landfill Clean Production Agreement (CPA), together with the Chilean government’s Sustainability and Climate Change Agency (ASCC) and the Recycling Industry National Association. In this agreement, the participant companies committed to reducing to zero the waste that they send to landfills, within a period of two years. In November of 2018, and as part of our electromobility plan, CCU began to operate the first 100% electric, high-tonnage truck in the country. With a capacity of up to 13 tons and a range of 280 kilometers, the heavy-load vehicle will be used to transport CCU’s products in Santiago. CCU’s goal is for electric trucks to represent 50% of the fleet by 2030. At the end of 2018, CCU finalized the construction of the new distribution center for non-alcoholic beverages as part of the CCU Renca Project. The new distribution center has a 22,500 square meter warehouse and uses 100% electricity-powered machinery, in addition to being a zero-waste-to-landfill operation. In 2019, CCU started the construction of the production plant for non-alcoholic beverages, as part of the CCU Renca Project, and it is expected to be operational by the end of 2020. This project incorporates the latest technology for efficient and sustainable production and distribution. On May 31, 2019, CCU, through its subsidiary Viña San Pedro Tarapacá S.A., completed the purchase of the wine assets of Pernod Ricard Argentina SRL, which included the brands Graffigna, Colón and Santa Silvia. On August 8, 2019, CCU announced that CPCh, acting through the companies Inversiones Internacionales SpA and International Spirits Investments USA LLC, communicated to LDLM Investments LLC their decision to start a process of selling their total participation in Americas Distilling Investments LLC, owner of the Peruvian company Bodega San Isidro SRL and Barsol brand. In December 2019, as part of our 2030 Environmental Vision, CCU committed for the next ten years to: (i) continue reducing greenhouse gas emissions per liter produced to reach a 50% reduction, (ii) continue optimizing water consumption per liter produced, until a 60% reduction is achieved, (iii) 100% valorization of industrial solid waste, (iv) use 75% renewable energy, (v) use 100% reusable, recyclable or compostable packaging, and (vi) aim for our packaging to be made on average of 50% recycled material.
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CCU is a
CCU reports its consolidated results pursuant to the following Operating segments, essentially defined with respect to its revenues in the geographic areas of commercial activity: Chile, International Business and Wine. These Operating segments mentioned are consistent with the way the Company is managed and how results will be reported by CCU. These segments reflect separate operating results which are regularly reviewed by each segment Chief Operating Decision Maker in order to make decisions about the resources to be allocated to the segment and assess its performance. Corporate revenues and expenses are presented separately as Other.
In 2015 the Committee of International Business was created, which brought together management of business activities in Argentina, Uruguay and Paraguay. Following this, the Río de la Plata Operating segment (consisting of the business activities referred to above) was renamed the International Business Operating segment. The Committee of International Business also represents and looks after the interests associated with investments in
CCU
2) Overview Overview:Chile Operating segment We estimate that our weighted volume market share
We produce and sell alcoholic and non-alcoholic beverages in Chile. In the beer category, we carry a wide portfolio of products which includes premium, mainstream and convenience brands, which are primarily marketed under different proprietary brands and licensed brands.
Our non-alcoholic beverages in Chile include carbonated soft drinks (both cola and non-cola),
We also produce and distribute pisco and cocktails, rum, flavored alcoholic beverages (“FABs”) and
Wholesale and retail prices of all the previously mentioned categories are not regulated in Chile. Wholesale prices are subject to negotiation between the producer and the purchaser; while retailers determine retail prices to the final consumer. We believe that the key factors determining retailers’ prices include: national and/or local price promotions offered by the manufacturer, the nature of product consumption
During 2016 we implemented the integration of the route-to-market of the beer and non-alcoholic category in Chile throughout the
Comercial CCU is responsible for the sale of As part of CCU’s innovation and digital transformation initiatives, we broadened our remote sale platforms through the launch of a modern online sales website in Chile during 2019, called "La Barra", providing a new experience for consumers through home delivery of our portfolio. During 2019, through La Barra we delivered products to over 24,000 households in Chile. In addition, we began to develop a similar platform in Argentina. In Argentina, Bolivia, Paraguay and Uruguay
Plasco, a subsidiary of CCU, produces nearly all
Overview:International Business Operating segment We estimate that our weighted volume market share
We produce and/or import, sell and distribute beer under proprietary brands and licensed brands in Argentina,
In Argentina, we are the exclusive producer and distributor of Heineken, Amstel, Sol,
In Uruguay, CCU, through its subsidiaries,
In Paraguay, CCU, through its subsidiaries, In Bolivia, CCU, through its subsidiary BBO, produces and distributes beer under the brands Real, Capital and Cordillera; and carbonated soft drinks under Mendocina, Free Cola, Sinalco and Malta Real. The latter is a soft drink with sugar based on malt, but without alcohol. BBO also participates with Mendocina in the water category and Natur-All in juices. Overview:Wine Operating segment
VSPT’s
Overview:Joint Ventures and Associated CCU
In Colombia, CCU entered into a series of contracts and agreements with Grupo Postobón, by which the parties agreed to initiate a joint agreement for the manufacturing, commercialization and distribution of beer and malt based non-alcoholic beverages through CCC in Colombia. CCC is a 50-50 joint venture between CCU and Grupo Postobón, in which neither party exercises full control; thus, CCU uses the equity method to account for this investment. CCC has exclusive contracts
The Beverage Market:Chile Operating segment We estimate that annual beer consumption in Chile was
The non-alcoholic beverages market in Chile consists of both carbonated and non-carbonated beverages. The principal types of carbonated beverages are colas, non-colas and carbonated mineral bottled water. The non-carbonated beverages are fruit
The table below sets forth
The following table sets forth Nielsen estimates as to the percentage of total carbonated soft drinks sales in Chile, represented by each of the two principal categories of carbonated soft drinks during the last three years:
Traditionally, beer, wine and pisco have been the principal alcoholic beverages consumed in Chile. Pisco is a distilled wine spirit, produced
The table below sets forth
The Beverage Market:International Business Operating segment The Argentine beer market is estimated by us to be around 2.3 times the size of
The table below sets forth our estimates of total and per capita beer,
In Uruguay, we participate in the beer and non-alcoholic beverages categories since our entrance to the market in 2012. The table below sets forth
In Paraguay, we participate in the beer and non-alcoholic beverages categories since our entrance to the market in 2013, both proprietary and under license. The table below sets forth our estimates of total and per capita beer and non-alcoholic
In Bolivia, we participate in
The Beverage Market:Wine Operating segment
The following chart shows our estimates for the
Wines in Chile can be segmented by product type. Chilean wineries produce and sell premium, varietal and popular-priced wines within the domestic market. Premium wines and many of the varietal wines are Production and Marketing:Chile Operating segment The production, marketing and sales of beverages in Chile generated
Under each license agreement, we have the right to produce and/or sell and distribute the respective licensed products in Chile. Generally, under our license agreements, we are required to maintain certain standards of quality with respect to the production of licensed products, to achieve certain levels of marketing and, in certain cases, to fulfill minimum sales requirements. We strongly believe that we are in compliance with
Our brand Cristal is
In October 2001, Cervecería Austral entered into a license agreement with our subsidiary
On April 28, 2003, through our subsidiaries Cervecería CCU and CCU Argentina, we and Heineken Brouwerijen B.V. signed license and technical assistance agreements providing us with the exclusive rights to produce, sell and distribute Heineken beer in Chile and Argentina commencing June 18, 2003. On October 12, 2011, we signed with Heineken Brouwerijen B.V. the Amended and Restated versions of the Trademark License Agreements, which provide us with the exclusive rights to produce, sell and distribute Heineken beer in Chile and Argentina, in force as of January 1, 2011. These agreements have an initial term of
During January 2015, we launched Coors and Coors Light in Chile. The license agreement with Coors Brewing Company
The following table shows our proprietary parent beer brands, brands produced under license and brands imported under license for the Chilean Market:
Our beer products sold in Chile are bottled or packaged in returnable and non-returnable glass bottles, aluminum cans or stainless steel kegs at our main production facilities in the Chilean cities of Santiago, Temuco, Valdivia, and Punta Arenas.
During the last three years we sold our beer products in Chile in the following containers:
The following table sets forth our beer sales volume breakdown in Chile by category, for each of the last three years:
Our soft drinks Our subsidiary Aguas CCU produces, commercializes and distributes mineral, purified and flavored waters. We have
In 1994, our subsidiary ECUSA and Cadbury Schweppes plc (“Cadbury Schweppes”), the latter through its subsidiaries CS Beverages Ltd. and Canada Dry Corporation Ltd., entered into license agreements for all Cadbury Schweppes products. On December 11, 1998, The Coca-Cola Company announced an agreement with Cadbury Schweppes to acquire certain of the latter's international beverage brands, including those licensed to ECUSA, and in August 1999 the agreement was reported to have been consummated. In September 2000, after more than a year’s litigation, both in Chile (suits at civil courts and antitrust authorities) and England (arbitration under ICC rules), ECUSA and The Coca-Cola Company reached an agreement superseding ECUSA’s previous license contracts with CS Beverages Ltd. and Canada Dry Corporation Ltd. The new agreement, referred to as the “Bottler Contract”, was executed between ECUSA and Schweppes Holdings
In August, 2002, we began importing, selling and distributing Gatorade, a sport drink. In March 2006, a new franchise commitment letter and exclusive bottling
In November 2007, ECUSA signed an exclusive bottling agreement with Pepsi Lipton International Limited, authorizing ECUSA to produce, sell and distribute ready to drink tea beverages in Chile. This agreement
The license agreement for
Since December 2007, through our subsidiary Aguas CCU, we produce and sell the Nestlé Pure Life brand in Chile under a license contract of the same date, with an initial term of five years, renewable for successive periods of five years if certain conditions are met.
In line with our multicategory business strategy, in November 2015 we entered
The following table shows the soft drink and water parent brands produced and/or sold and distributed by us through our non-alcoholic subsidiary ECUSA, during
During the last three years, we sold our non-alcoholic beverageproducts in the following packaging formats:
The following table shows the sales mix of our non-alcoholic beverages by category during each of the last three years:
After the completion of the CPCh transaction with Control in 2005, we expanded our proprietary parent brand portfolio considerably, adding brands such as Campanario in the pisco mainstream and cocktail categories, as well as Control C, Mistral, Horcón Quemado, Espíritu de los Andes and Tres Erres MOAI in the ultra-premium pisco segment, Mistral, Bauzá (until January 2016) and Our spirits
In the rum market, our proprietary parent brands are Cabo Viejo and Sierra Morena. Also, CPCh distributes Pernod Ricard products, including Chivas Regal, Ballantine’s, Havana Club and Absolut, among others.
In 2018 CPCh entered the cider category with the launch of Cygan, a beverage made from green and red apples, with an alcohol content of 4.5° and 64 calories per 100 ml. The following table shows our parent pisco, cocktail and FAB brands:
(1)In January 2016 CPCh divested its interest in Compañía Pisquera Bauzá S.A. In June 2017, CPCh added the Peruvian brand Barsol to its portfolio through the acquisition of 40% of Americas Distilling Investments LLC, which is based in the United States and owns the Barsol brand and productive assets based in Peru. On August 8, 2019, CCU announced that CPCh, acting through the companies Inversiones Internacionales SpA. and International Spirits Investments USA LLC, communicated to LDLM Investments LLC their decision to start a process of selling their total participation in Americas Distilling Investments LLC, owner of the Peruvian company Bodega San Isidro SRL and Barsol brand. Production and Marketing:International Business Operating segment Our
CCU, through its subsidiary CCU Argentina,
On April 28, 2003, CCU Argentina and Heineken Brouwerijen B.V., a subsidiary of Heineken International B.V., signed license and technical assistance agreements that provide us with the exclusive rights to produce, sell and distribute Heineken beer in Argentina commencing June 18, 2003. On October 12, 2011, we and Heineken Brouwerijen B.V. signed the Amended and Restated versions of the Trademark License Agreements which provide us with the exclusive rights to produce, sell and distribute Heineken beer in Argentina, in force as of January 1, 2011. These agreements have an initial term of
On November 28, 2012, CICSA and Heineken Brouwerijen B.V. entered into a Trademark License Agreement which granted us the exclusive rights to produce, sell and distribute Heineken beer in Paraguay. This agreement had an initial term of ten years, automatically renewable for a period of five years unless either party gave notice of its decision not to renew, in which case the agreements would be in force until the last renewal periodexpired. On April 20, 2018, Bebidas del Paraguay S.A. and Heineken Brouwerijen B.V. signed a Trademark License Agreement and a Distribution Agreement which provides us with the exclusive rights to produce, sell and distribute Heineken beer in Paraguay. This agreement has an initial term of five years from May 1, 2018, and will be automatically renewed for subsequent three year periods unless any party gives notice of its decision not to renew. Therefore, and as agreed on June 11, 2018, the Trademark License Agreement entered on November 28, 2012, by CICSA and Heineken Brouwerijen B.V. was terminated with retroactive effects as of April 30, 2018 and, in its place, Heineken Brouwerijen B.V. and CICSA entered into a supply agreement which provides CICSA the non-exclusive right to sell and supply Heineken Lager in the Paraguayan market to Bebidas del Paraguay S.A., for a period of five years beginning on April 30, 2018. In 2013, we started exporting Heineken to Milotur, our subsidiary in Uruguay, and in 2015 to BBO, our then associated company in Bolivia. On June 4, 2013, CICSA, Milotur and Heineken Brouwerijen B.V. signed a trademark license agreement that provides us with the exclusive rights to produce, sell and distribute Heineken beer in Uruguay, in force as of May 1, 2013. This agreement has an initial term of ten years, and automatically renews on January 1 of each year for a new period of ten years, unless any party gives notice of its decision not to renew, in which case the agreements will be in force until the last renewal period expires. In Uruguay, we participate in the mineral and flavored water business with the Nativa and Nativa MAS brand, in soft drinks with the Nix brand, and in Watt's branded juices, isotonic drinks with the Fullsport brand and energy drinks with Thor brand. In addition, we import Heineken, Schneider, Imperial and Kunstmann beer. On July 15, 2015, CICSA, BBO and Heineken Brouwerijen B.V. signed the Ancillary Trademark License Agreement which provides us with the exclusive rights to produce, sell and distribute Heineken beer in Bolivia, in force as of January 1, 2015. This agreement has an initial term of ten years, and will be automatically renewed for five-year periods unless any party gives notice of its decision not to renew, in which case the agreement will be in force until the last renewal period expires. In September 2014, CICSA began with the exclusive distribution in Argentina of imported Sol beer. The Sol beer brand is owned by Heineken. This licensing agreement has an initial term of ten years in Argentina, automatically renewable on the same terms (rolling contract), each year for a period of ten years, unless notice of non-renewal is given. In October 2006, we signed a long-term contract with ICSA to brew, bottle and package beer in the former
The license agreement between CCU Argentina and Anheuser-Busch LLC (See “Item 4: Information on the Company – A. History and Development of the Company”), which On September 6, 2017, CCU and CCU Argentina reached an agreement with ABI for the early termination of the Budweiser license in Argentina, in exchange for a portfolio of brands (Isenbeck and Diosa, which were at the time owned by SAB Miller; and Báltica, Iguana, and Norte, which were owned by ABI), representing similar volumes to Budweiser in Argentina, plus a series of payments over a three-year period. On April 27, 2018, after receiving approval from Argentina’s antitrust regulators, CCU Argentina and ABI were legally obliged to close the transaction. As a result, on May 2, 2018, CCU Argentina and ABI (CCU Argentina and ABI, together identified as the “Parties”) executed a transaction (the “Transaction”), which included, among other matters: (i) the early termination of the Budweiser brand license agreement in Argentina, between the Parties, and (ii) the transfer to CCU Argentina of the ownership of the Isenbeck, Diosa, Norte, Iguana and Báltica brands, as well as the transfer of the licenses for Argentina of the international brands Warsteiner and Grolsch. In
In CCU Argentina participates in the cider business, with the leading Real brand and other brands such as La Victoria and 1888. We also participate in
In 2012, the Company began in Argentina the migration process to its new proprietary returnable bottle in place of the generic container currently in the industry. The decision to implement this important project was based primarily on the change introduced by the main market player, who in 2011 started to replace the use of generic packaging by a proprietary container for one liter returnable products. The proprietary container’s use results in significant important changes in logistics processes, including the adaptation of the building structure of plants, the acquisition of specific equipment, the adaptation of production lines and agreements with glass bottles and crates suppliers in order to achieve the timely supply of the new bottling process required inputs. The introduction of these proprietary returnable bottles resulted in significant impacts on the industry’s value chain, with higher operating costs associated with the operation of recovery and classification of packaging that significantly affect the level of profitability and
Milotur.In Paraguay we participate in the beer and non-alcoholic categories since our entrance to the market in 2013, with the introduction of new brands In 2018, the Company increased its stake from 34% to 51% in BBO.In Bolivia, CCUparticipates in the non-alcoholic beverages and beer business, with two plants located in the city of Santa Cruz de la Sierra. In non-alcoholic beverages, it participates in the soft drinks business with the brands Mendocina, Free Cola, Sinalco and Malta Real. The latter is a soft drink with sugar based on malt, but without alcohol. BBO, with Mendocina, also participates in the water category and Natur-All in juices. In beers, it has the brands Real, Capital and Cordillera. In addition, it markets the imported Heineken brand.
At present we produce and market premium, medium-priced and popular-priced beer brands in the International Business Operating segment, which includes Argentina, The following table shows our
In 2019 CCU launched the Nativa MAS brand in the flavored water category. Also in 2019, we began to export wine to Uruguay, from our subsidiary Viña San Pedro Tarapacá S.A. under the brands Misiones de Rengo, Eugenio Bustos and Finca La Celia . The following table shows our proprietary parent beer, wine, water and soft drinks brands, produced and/or imported under license for the market in Uruguay:
The following table shows our proprietary parent beer and soft drinks brands, produced and/or imported under license for the market in Paraguay:
The following table shows our proprietary parent beer and soft drinks brands, produced and/or imported under license for the market in Bolivia:
The following table sets forth our beer sales volume in Argentina by category during each of the last three years, including exports to other countries:
Our beer products are bottled or packaged in returnable and non-returnable glass bottles, aluminum cans
Wine Operating segment VSPT is one of Chile’s largest producers and distributors of wine in terms of sales volume and Net sales. Our VSPT is composed of
The following table indicates the breakdown of Wine Operating segment’s volume in the domestic and export markets, including sales from FLC and Tamarí in Argentina:
Viña San Pedro, Viña Tarapacá, Viña Leyda, Viña Santa Helena, Viña Misiones de Rengo, Viña Mar The principal brands are set forth below:
The following table presents our breakdown of total sales volume in thousands of liters by category of the Wine Operating segment during
Domestic Market. Our Chilean domestic wine is packaged in glass bottles,
Export Market.According to industry sources, exports of Chilean wine increased from approximately 43 million liters in 1990 to
VSPT exported from Chile
Most exported wine is sold in glass bottles, except for a certain quantity of unbranded wine that is occasionally sold in bulk, as well as
The main raw materials that we use are sugar, soft drink concentrates, fruit pulps, malt, rice, hops, grapes and water. The sugar and fruit pulps that we use are from local and international origin suppliers. We obtain our supply of malt through long term contracts with malt suppliers from Chile and Argentina. Rice is sourced mainly from international suppliers in spot transactions.
Water is essential in our production. We obtain all of our water from wells located at our plants and/or from public utilities. The water is treated at facilities located at our plants to remove impurities and to adjust the characteristics of the water before it is used in the production process.
We own two mineral water sources in Chile from which the Cachantun and Porvenir brand mineral water products are obtained. These water springs are located in two areas near Santiago: Coinco and Casablanca, respectively. All of our mineral water products are bottled at their respective sources and distributed throughout the country. Purified water is produced with water pumped from our wells
The most relevant packaging materials are: glass bottles, aluminum cans, PET bottles, caps, films, labels, corrugated cases and folding cartons. Long term contracts are signed with the main strategic suppliers.
Glass bottles used in our packaging are purchased from the main local glass suppliers, Cristalerías Chile S.A. and Verallia Chile S.A. and Cristalerías Toro
We maintain testing facilities at each of our plants and factories where raw materials are analyzed according to our standards. Additionally, the samples are analyzed at various stages of production to ensure product quality. For example, samples of Heineken
Prices of our main raw materials used in the production are tied to the
Standard and customary commercial terms and conditions are widely used in all our contracts and supply agreements. Strategic alliances and supplier diversification allow us to
VSPT’s main raw
6)Sales, Transportation and Distribution Sales, Transportation and Distribution:Chile Operating segment We distribute all of our products in Chile directly to retail, supermarket and wholesale customers. This system enables us to maintain a high frequency of contact with our customers, obtain more timely and accurate marketing-related information, and maintain good working relationships with our retail customers.
After production, bottling and packaging, our beverages are either stored at one of our production facilities or transported to a network of
Beginning in October 2001, all of the distribution centers and transportation companies used to store and deliver all of our Comercial Patagona We distribute our products throughout Chile to: ·off-premise retail: small and medium-sized retail outlets, which in turn sell our products to consumers for take-out consumption; ·on premise retail: retail establishments such as restaurants, hotels and bars for on-premises consumption; ·wholesalers; and ·supermarket chains In the last three years, the percentage mix of the above distribution channels for our products in Chile was as follows:
In October 2005, we launched Comercial CCU, a subsidiary responsible for a single sales force dedicated to selling our beverages, in order to capture synergies and focus on sales execution. Originally, this plan was piloted in rural areas and small cities in southern Chile. As of 2008, the territory covered by Comercial CCU
As of August 2016, following the restructuring in Chile that encompassed combining the route-to-market of the beer and non-alcoholic categories in the whole country, Comercial CCU also covers the beer and non-alcoholic category in the Metropolitan Region including the capital Santiago, and several other large cities such as Viña del Mar, Rancagua, La Serena, and Concepción.
For areas not covered by Comercial CCU we have dedicated sales forces. Together with Comercial CCU we have a total sales force of
Our customers make payment for our products either in cash or checks at the time of delivery or in accordance with one of several types of credit
International Business Operating segment In Argentina, after production, bottling and packaging, our beer is either stored at the production facilities or transported to a network of six
Looking for greater operational efficiency, during 2016 and 2017 we modified our route to the market, moving volume from direct sales to wholesalers within the outer Buenos Aires Metropolitan
In Argentina, though most beer is sold through wholesalers and distributors, we also sell our products to retailers and supermarket chains. In the last three years, the percentage mix of the above distribution channels for our beer products in Argentina was as follows:
In Uruguay our commercial distribution system reaches the whole country and all supermarkets. During 2016, as a result of restructuring, we changed from a direct sales system in Montevideo to an indirect sales system. In
In the last three years, the percentage mix of the
In Paraguay, we have four distribution centers
In the last three years, the percentage mix of the above distribution channels for our beer and non-alcoholic products in Paraguay was as follows:
In Bolivia, we have four distribution centers and a direct sales force. We reach a total of 40,522 points of sale, which allows us to have national coverage with our products. The percentage mix of the above distribution channels for our beer and non-alcoholic products in Bolivia was as follows:
Our International Business segment customers
Sales, Transportation and Distribution:Wine Operating segment Domestic.After production, bottling, and packaging, wine is either stored at the production facilities or transported to one of our
We distribute our wine products throughout Chile in the territories not covered by Comercial CCU or Comercial Patagona,
· · · wholesalers; and · supermarket chains.
For the last three years, the percentage mix of the above distribution channels for our wine products in Chile was as follows:
We reach a total of
Export.VSPT has a presence in more than 80 countries. In order to increase its presence in the international market, we have distribution agreements with key distributors, such as Pernod Ricard in Sweden, Finland
Our Wine Operating segment customers make payment for our products either in cashor checksat the time of delivery or in accordance with one of several types of credit arrangements that we offer.Sales through credit arrangements accounted for 83.9%, 83.5% and 83.4% of total sales during 2017, 2018 and 2019, respectively. Losses on credit sales have not been significant.
Seasonality:Chile Operating segment As a result of the seasonality of our different beverages, our sales and production volumes are normally at their lowest in the second and third calendar quarters and at their highest in the first and fourth calendar quarters (i.e., those months corresponding to the holidays as well as the summer vacation season in Chile).
The following table shows our annual sales volume of beer, non-alcoholic beverages and spirits in Chile, excluding exports, by quarter in the last three years:
Seasonality:International Business Operating segment As a result of the seasonality of the beverage industry with respect to the categories in which we participate, our sales and production volumes are normally at their lowest in the second and third calendar quarters and at their highest in the first and fourth quarters (i.e., those months corresponding to the summer and holiday seasons in the region). The following table shows the annual sales volume for the International Business operating segment, including exports, during each quarter in the last three
Seasonality:Wine Operating segment As a result of the seasonality of the beverage industry with respect to the categories in which we participate, our sales and production volumes are normally at their lowest in the first and fourth calendar quarters and at their highest in the second and third quarters (i.e., the highest selling quarters correspond to autumn and winter in the Southern Hemisphere). The following table shows the annual sales volume for the Wine Operating segment during each quarter in the last three years:
CCU’s net sales are
CCU’s Wine Operating segment exports wine from Chile and world. The following table provides the distribution of Wine Operating segment’s exports
Competition:Chile Operating segment The beer market in Chile is beers. Our largest competitor in the beer business is Cervecería Chile (a subsidiary of
Another relevant player in the beer market in Chile is Viña Concha y Toro, Cooperativa Agrícola Pisquera Elqui Limitada (“Capel”), which we also compete with in the
Our principal competitors in the non-alcoholic beverages business are companies which produce, bottle and distribute soft drinks in Chile under licenses from The Coca-Cola Company and its affiliates. The two principal soft
Our principal competitor in the mineral, purified and flavored water business is Vital Aguas S.A.
Our domestic competitors in the soft
On August 8, 2019, CCU announced that CPCh, acting through the companies Inversiones Internacionales SpA. and International Spirits Investments USA LLC, communicated to LDLM Investments LLC their decision to start a process of selling their total participation in Americas Distilling Investments LLC”), owner of the Peruvian company Bodega San Isidro SRL and Barsol brand. The following chart shows estimates of our Chile market share for the last five
(1) Source: Nielsen. The calculation of the weighted average for past periods includes markets and industries that CCU entered at a later
Competition:International Business Operating segment Since 2003, after the agreement between Quilmes and
Quilmes, the beer market leader in Argentina and our principal competitor, also has beer operations in Chile, Paraguay, Uruguay and Bolivia.
In May 2002,
In 2010 SAB Miller bought Casa Isenbeck (Isenbeck, Warsteiner and La Diosa brands) and launched Miller Genuine Draft and Miller Lite beer in Argentina.
During 2015 SAB Miller plc accepted an offer from AB Inbev to merge its operations. As a result of the merger between AB Inbev and SAB Miller plc, Quilmes and CASA Isenbeck
In 2016 AB Inbev sold the Miller brands
The following table shows estimates of the market share of our International Business Operating segment including: beer and cider for 2015 through 2017, and beer for 2018 and 2019 in Argentina; beer, carbonated soft drinks, juice, mineral and flavored water in Uruguay; beer, carbonated soft drinks, juice and mineral water in Paraguay; and beer, malt and carbonated soft drinks in Bolivia:
(1)Sources: Nielsen for Argentina until 2017 and Ernst and Young for 2018 and 2019. ID Retail for Uruguay, CCR for Paraguay, internal estimates and Ciesmori for Bolivia. The calculation of the weighted average for past periods includes markets and industries that CCU entered at a later date. (2)Figures include our operation in Bolivia; excluding Bolivia, the 2018 figure is 20.0%. Competition:Wine Operating segment The wine industry is highly fragmented and competitive in both the domestic and the export markets. No single wine producer in Chile accounts for the majority of production and/or sales. In Chile, VSPT competes directly against all other Chilean wineries.Apart from VSPT, the leading wineries in Chile include Viña Concha y Toro S.A. (“Concha y Toro”), Viña Santa Rita S.A. (“Santa Rita”) and Bodegas y Viñedos Santa Carolina S.A. (“Santa Carolina”). In addition, VSPT competes against numerous medium-sized wineries, including Viña Undurraga S.A. (“Undurraga”), Cousiño Macul S.A. (“Cousiño Macul”) and Viña Montes, among others. We believe that VSPT’s
Internationally, VSPT competes against Chilean producers as well as with wine producers from other parts of the world. According to information compiled by the
The following table shows estimates of the volume market share of our Wine Operating segment (excluding bulk wine sales) for the last five
(1)According to Nielsen figures for domestic wine and Viñas de Chile for export figures.
Government Regulation in Chile We are subject to the full range of governmental regulation and supervision generally applicable to companies engaged in business in Chile. These regulations include labor laws, social security laws, public health, consumer protection, environmental laws, securities laws, and antitrust laws. In addition, regulations exist to ensure healthy and safe conditions in facilities for the production, bottling, and distribution of beverages. For a more detailed discussion of environmental laws, see “Item
Regulations specifically concerning the production and distribution of “alcoholic beverages” are contained in Chilean Law N°18,455 and its Ordinance, which set the standards for human consumption of such beverages, by minutely describing the different types of alcohol; the minimum requirements that must be met by each class of beverage; raw materials and additives that may be used in their manufacture; their packaging and the information that must be provided by their labels; and the procedure for their importation, among others.
Additional regulations concerning wine origin denominations are contained in
The large-scale production of alcoholic beverages does not need any licenses or permits other than those required for the general run of commercial and industrial enterprises engaged in the manufacture of consumer commodities.
According to Law N°19,925 enacted in 2004, which amended and restated the Act on Sale and Consumption of Alcoholic Beverages (former Law N°17,105), all establishments dealing in alcoholic beverages, whether wholesale or retail, require a special municipal license, the cost of which is fixed by the law and varies according to the nature of the outlet or point of sale (i.e. liquor store, tavern, restaurant, hotel,
Law N°19,925 also set opening and closing hours; limited geographical areas for the sale of alcohol; reduced the maximum number of licenses to be granted by zones and population; increased criminal liability for selling alcohol to persons under eighteen years of age; and tightened the restrictions, imposing prison sentences and higher fines, among others, for violations formerly deemed lighter. One of its most important innovations
The regulatory agency for alcoholic beverages is the Servicio Agrícola y Ganadero (“SAG”).
The production, bottling and marketing of non-alcoholic beverages is subject to applicable sanitary legislation and regulations, particularly the Sanitary Code and the Food Ordinance (theReglamento Sanitario de los
Non-alcoholic beverages are also subject to the provisions of Law N°20,606 on Nutritional Composition of Food and Advertising enacted in 2012, Decree N° 13 of the Ministry of Health which was enacted on June 26, 2015, The third phase of the regulationreducing the maximum permitted calorie level (see table below), entered into effect in June 2019. We have taken measures to comply with this regulation and mitigate the impact of this new law.We cannot assure you that this regulation will not have an impact on our sales volumes and, therefore, on our results.
Law N°19,937, enacted in 2004, and fully operative by February 2006, established the structure and powers for the current Sanitary Authority. The Ministry of Health’s Regional Offices, which constitute the Sanitary Authorities, inspect plants on a regular basis, taking samples for analysis, directing the adoption of new safety procedures and applying fines and other penalties for infringement of regulations.
The production and distribution of mineral water is also subject to special
Independently of the products manufactured or services provided in each plant or facility, the premises are also regularly inspected by the Sanitary Authorities, regarding sanitary and environmental conditions, labor safety, and related matters.
There are currently no material legal or administrative proceedings pending against us in Chile with respect to any regulatory matter. We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our businesses in Chile.
Government Regulation in Argentina We are subject to the full range of governmental regulation and supervision generally applicable to companies engaged in business in Argentina, including social security laws, public health, consumer protection and environmental laws, securities laws and antitrust laws. As closely held corporations, our subsidiaries in Argentina are principally governed by Law N° 19,550 on commercial companies included in the Civil and Commercial Code.
National Law N° 18,284 (the Argentine Food Code, or the “Food Code”) regulates the manufacturing, packaging, import, export and marketing of food and beverages. The Food Code provides specific standards with which manufacturing plants must comply and regulates the production of food and beverages mentioned in the Food Code. The Food Code also specifies the different methods in which beer may be bottled as well as the information to be provided on labels. National Law N° 24,788, enacted in March 1997, and its Regulatory Decree N° 688/2009, regulates the sale and consumption of alcoholic beverages and its advertising and establishes the national minimum age requirements for the purchase of alcoholic beverages. Under this Law, the sale of alcoholic beverages is not permitted to persons under 18 years of age, and the health authorities of each province undertake the enforcement of the Food Code. In the Federal Capital and many provinces of Argentina, local law restricts the sale of alcoholic beverages, particularly between the hours of 11 p.m. and
There are currently no material legal or administrative proceedings pending against us in Argentina with respect to any regulatory matter. We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our business in Argentina.
Government Regulation in Uruguay In Uruguay, we are subject to the full range of governmental regulation and supervision generally applicable to companies engaged in business in said country. As a
The main applicable laws are Decree N° 315/94 containing the National Bromatological Regulations, Code of Children and Adolescents regulating aspects related to sale and advertising of alcoholic beverages, Law N°17,849 and its Regulatory Decree N° 260/07 regulating Integrated Packaging Management System, Mercosur Technical Regulations for labeling of packaged food, Law N°18,159 regulates the promotion and defense of competition, There are currently no material legal or administrative proceedings pending against us in Uruguay with respect to any regulatory matter. We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our business in Uruguay.
Government Regulation in Paraguay In Paraguay, Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A. are governed by the laws of the Republic of Paraguay, in particular by Law N° 1,034/83 of Merchants, and Articles In addition, for the import, sale and advertising of alcoholic and non-alcoholic beverages,
There are currently no material legal or administrative proceedings pending against us in Paraguay with respect to any regulatory matter. We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our business in Paraguay. Government Regulation in Bolivia BBO is a closely held corporation governed by the laws of the Plurinational State of Bolivia, in particular by Chapter V (Corporations) of Decree Law N° 14,379 Commercial Code, which establishes provisions on theconstitution of companies, rights and obligations of the shareholders, the administration and control bodies of the company, as well as the classification of the shares, issuance rules and records. In addition, in view of the corporate purpose of BBO and the commercial activities carried out in Bolivia, regarding the production, import, export and marketing of alcoholic and non-alcoholic beverages, the following rules are applicable: Law N° 1,990 or General Law of Customs and Supreme Decree N° 25.870 that contains the regulation of the General Law of Customs, both regulate the regime of imports and exports, Law N° 2.061 of the National Service of Agricultural Health and Food Safety (“SENASAG”), regulating entities responsible for administering the agricultural health and food safety regime in the country, Resolution N° 15/2018 that contains the regulation for the classification and registration of food, issued by SENASAG, Law N° 259 on control of sale and consumption of alcoholic beverages, and Supreme Decree N° 29,519 that regulates competition and consumer protection. There are currently no material legal or administrative proceedings pending against us in Bolivia with respect to any regulatory matter. We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our business in Bolivia. Government Regulation in Colombia CCC and ZF CC are simplified stock corporations governed by the laws of the Republic of Colombia, in particular, with respect to their corporate existence and operation, Law N° 1,258 of 2008, Law N° 222 of 1995 and the Colombian Commercial Code. ZF CC must comply with the free trade zone regime, including Decree N° 2,685 of 1999, Law N°1,004 of 2005, Decree N° 2,147 of 2016, Decree N° 390 of 2016 and Decree N° 349 of 2018 and its approved master plan (plan maestro). Furthermore, both CCC and ZF CC must comply with the free zone regime, including Law No. 1004 of 2005, Decree No. 1165 of 2019, Decree N° 2,147 of 2016, Decree N° 1,054 of 2019, Resolution No. 46 of 2019 and its general development master plan approved by the Ministry of Commerce, Industry and Tourism. In addition, the specific rules relating to the activities and business that each company carries out are applicable to these companies, the main ones being: Law N° 9 of 1979, which establishes the conditions that raw materials for the production of alcoholic beverages must satisfy, Law N° 124 of 1994, which regulates the sale and consumption of alcoholic beverages and their advertising and establishes that the minimum age for the purchase of alcoholic beverages at the national level is 18 years of age, Decree N° 1,686 of 2012, which sets forth the sanitary requirements for the production, packaging, advertising, transportation, import and marketing of alcoholic beverages destined for human consumption, Decree N° 780 of 2016, which establishes, in the field of alcoholic beverages, the obligation to emphasize in advertising and related legends the prohibition of the sale of alcoholic beverages to minors, as well as the specifications that must be included in their packaging and labels, Decree N° 1,506 of 2014, Decree N° 216 of 2019 and Circular N° 486 of 2016, establishing the health requirements associated with the manufacture, processing, packaging, storage, distribution, marketing, sale, import or export of alcoholic beverages, and Law N° 223 of 1995 and Law N° 1,816 of 2016 regulating local taxes applicable to the production and distribution of alcoholic beverages, including beer, in Colombian territory. There are currently no material legal or administrative proceedings pending against us in Colombia with respect to any regulatory matter. We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our business in Colombia.
Ownership Structure as of March 31, We are controlled by IRSA, which owns directly and indirectly 60.0% of the shares of our common stock. IRSA, since 1986, was a joint venture between Quiñenco and the Schörghuber Group through its wholly owned subsidiary FHI of the Netherlands. In April 2003, the Schörghuber Group sold FHI to Heineken Americas B.V., a subsidiary of Heineken International B.V. FHI and Heineken International B.V. formed Heineken Chile Ltda., through which 50% of IRSA shares are held. On December 30, 2003, FHI merged into Heineken Americas B.V. Currently, Quiñenco and Heineken Chile Ltda., a Chilean limited corporation controlled by Heineken Americas B.V., are the only shareholders of IRSA, each with a 50% equity interest.
Quiñenco is the holding company of one of the largest and most diversified business conglomerates in Chile, with investments in various sectors of the Chilean economy. Apart from CCU, Quiñenco’s principal holdings include Banco de Chile (a leading financial institution in Chile), Invexans S.A. (the largest shareholder of the French cable producer Nexans S.A.), Empresa Nacional de Energía Enex S.A. (the second-largest
Heineken, the Dutch brewer, is one of the largest brewers in the world
The following table provides our significant subsidiaries as of December
Set forth below is information concerning our production facilities as of December 31,
For the Chile Operating segment, we had an aggregated Supply Capacity per month Our Chile Operating segment total facilities size is 587,765 square meters (total built area including warehousing logistics activities related to the production process).
Set forth below is
The CCU Renca project, which is currently being developed, includes a
For the International Business Operating segment, we had an aggregated Supply Capacity per month of
Our International Business Operating segment total facilities size is Set forth below is a list of our 10 principal production facilities:
For the Wine Operating segment, we had an aggregated Nominal Filling Capacity of
Set forth below is a list of our five principal production and two storage facilities:
Our two principal production facilities through joint ventures are set forth below (see “Item 4: Information on the Company – B. Business Overview – Overview – Joint Ventures and Associated Companies”):
In addition to our production plants listed above, we have 35 owned and 7 leased distribution centers in the countries in which we operate:
E.Environmental Matters
Chile Our operations are subject to both national and local regulations in Chile
The environmental framework is governed by Law N°19,300, enacted in 1994, as amended, which includes not only environmental protection rules but also rules concerning the preservation of natural resources. Among other matters, it creates the environmental impact assessment system, which requires any
Law N°19,300 also creates a mechanism Over the years, we have implemented specific action plans in each
Also in 2019, we renewed our commitment to environmental matters, by launching our 2030 Environmental Vision, which implies an even more challenging plan including three new areas of action and
There are currently no material legal or administrative proceedings pending against us in Chile with respect to any environmental matter. We believe that we are in compliance in all material respects with all applicable environmental regulations.
Argentina
Another important federal environmental legislation in Argentina is the Hazardous Waste Act (Law N°24,051), which is supplemented by additional provincial legislation, to enforce the provisions of the Hazardous Waste Act when specific federal tests indicate the need to do so. The application of the provisions of the Hazardous Waste Act depends upon the magnitude of the public health risk and whether those conditions exist in more than one province. Hazardous waste is defined broadly and includes any residue that may cause harm, directly or indirectly, to human beings that may pollute the soil, water, atmosphere or the environment in general. Generally, claims involving hazardous waste give rise to strict liability in the event of damage to third parties. In addition, each province in which we operate facilities has enacted environmental legislation with broad and generic goals, as well as water codes and related agencies to regulate the use of water and the disposal of effluents in the water.
Over the last several years CCU Argentina has implemented a complete program for the treatment of its industrial waste, which involves the separation, collection, transportation and reusing of the generated solid waste, in compliance with the Industrial Waste Act (Law N°25,612), as well as wastewater treatment plants. The waste program is part of our constant effort to improve environmental conditions.
Notwithstanding the foregoing, the regulation of matters related to environmental protection is not as well developed in Argentina as in the United States and certain other countries. Accordingly, we anticipate that additional laws and regulations will be enacted over time with respect to environmental matters.
While we believe that we will continue to be in compliance with all applicable environmental regulations, we cannot assure you that future legislative or regulatory developments will not impose restrictions on us, which could result in material adverse effects on our businesses, results of operations and our financial condition. There are currently no material legal or administrative proceedings pending against us in Argentina with respect to any regulatory matter. We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our business in Argentina. ITEM 4A: Unresolved Staff Comments Not applicable. ITEM 5: Operating and Financial Review and Prospects
We face certain key challenges and risks associated with our Item 3.D. Risk Factors. The analysis of our results is based on financial statements prepared in accordance with IFRS as issued by the IASB. The three most recent years are considered in the discussion below.
A. ADJUSTED OPERATING RESULT
The following discussion should be read in conjunction with our consolidated financial statements and the notes included thereto in this annual report. In the following discussion,
We evaluate the performance of the segments based on several indicators, including Adjusted Operating Result, Adjusted Operating Result Before Depreciation and Amortization (ORBDA), ORBDA margin (% of ORBDA of total revenues for the Operating segment), volumes and sales revenues. Sales between segments are conducted using terms and conditions at current market rates.
Adjusted Operating Result
The Company believes that the use of
The following table presents the Net sales and Adjusted Operating Result, and the relevant percentage as a component of Net sales, for each of our Operating segments. Starting from the third quarter of 2016, the Company has incorporated into the Chile Operating segment the business activities performed by the Strategic Service Units (SSU), which include Transportes CCU, Comercial CCU, CRECCU
The following is a reconciliation of our Net 2019.
The following table presents our Income statement
FISCAL YEAR ENDED DECEMBER 31, The 2018 Income Statement reflects both ongoing operations and the impact of the CCU Argentina – ABI transaction (“the Transaction”), which had a positive impact of CLP 208,842 million on Adjusted Operating Result and CLP 157,359 million in Net income in 2018. See “ Item 4: Information of the Company – A. History and Development of the Company.” See also Note 1 – Letter C of our consolidated financial statements included herein. The Net sales Our Net sales Chile: Net sales increased International Business: Net sales decreased Wine: Cost of sales
Our Cost of sales Chile: International Business: Cost of sales increased 8.2% to CLP 248,881 million in 2019, from
Gross profit Our Gross profit decreased 1.0% to CLP 914,223 million in 2019, from CLP 923,271 million in 2018. Gross margin decreased to Marketing, Selling, Distribution and Administrative Expenses
Our MSD&A expenses increased Chile: International Business: MSD&A expenses decreased 0.2% to CLP 210,156 million in 2019, from CLP 210,591 million in 2018. However, as a percentage of Net sales, MSD&A
Other
Adjusted Operating Result Our Adjusted Operating Result The Adjusted Operating Result performance of each of our Operating segments during Chile: The Adjusted Operating Result International Business: The Adjusted Operating Result decreased 92.6% to CLP 19,653 million in
Wine: The Adjusted Operating Result Other:The Adjusted Operating Result for Others improved to a loss of CLP 17,750 million in 2019, from a loss of CLP Net Financial Expenses Our Net financial expenses increased 88.0% to a loss of CLP
Equity and income from joint ventures and associated companies CCU has 50% or less participation in Cervecería Austral, Foods, Result as per adjustment units and Foreign currency exchange differences The adjustment applied to our net liabilities due to Chilean inflation and foreign exchange fluctuations resulted in a Other gains (losses) Our Other gains (losses) Income taxes Our income taxes in Net income Our Net income prior to minority shareholders in Net income attributable to equity holders of the parent company Our Net income attributable to equity holders of Net income attributable to Non-controlling interests
FISCAL YEAR ENDED DECEMBER 31,
B. Liquidity and Capital Resources
Our principal source of liquidity has been cash generated by our operating activities, which amounted to Our cash flow from operations and working capital are our primary sources to meet both our short-term and long-term obligations. In the opinion of our management, they are sufficient for those purposes. The principal component of cash flows generated by operating activities in 2017. In ). In Partially offset by proceeds from other long term assets classified as investing of CLP 11,200 million in 2019. As of December 31, • CLP • CLP • CLP
As of December 31, • CLP • CLP • CLP
In April 2009 the Company issued two series of notes in the local market for UF 3 million (all outstanding amounts under the “I” Series bonds were paid during 2014), and UF 2 million for a total of CLP 104,188 million in order to refinance a previous loan of CLP 30,000 million and a
As of December 31,
At December 31,
None of our indebtedness, or that of our subsidiaries, contains any term that restricts our ability to pay dividends other than the requirement to maintain a minimum consolidated equity.
The following table summarizes debt obligations held by us as of December 31,
To hedge our market risks, we hold debt obligations in various currencies and enter into derivatives contracts. See “Item 11: Quantitative and Qualitative Disclosure about Market
Our treasury policy is to invest in highly liquid financial instruments issued by first-class financial institutions. Investments are made primarily in 2019:
Capital Expenditures During the year 2020, we plan to execute capital expenditures to support organic growth. On a consolidated basis, during 2020 we expect to invest CLP 184,914 million, mainly consisting of (i) CLP 103,172 million in production assets, which includes part of the construction of the new non-alcoholic plant in Santiago, Chile, and other investments to expand capacity in our businesses in Chile and Argentina, (ii) CLP 3,557 million in distribution assets, (iii) CLP 26,522 million in packaging and returnable packaging and (iv) CLP 23,980 million in marketing assets. Of the total investment planned for 2020, CLP 138,497 million will be allocated in Chile. Our plans for capital expenditures through the period
We
The financing of our investments comes mostly from cash flow from operations generated by the Company and new credits, always taking into account an adequate debt/equity structure in order to minimize capital costs, and at the same time debt levels and maturities compatible with our operational cash flow generation.
Innovation is the driver that allows CCU to meet constantly evolving demand. Our research and development efforts to continuously satisfy the market by introducing new products and brands, although significant, do not involve material expenditures, as we have a close relationship with the companies that own the brands subject to license contracts. The relationship with the license owners is a constant resource in these matters as well as in the application of production best practices, providing access to the “state of the art” techniques and knowledge in the industry.
In 2003, we entered into two technical agreements with Heineken Brouwerijen B.V. for assistance regarding all technical issues related to the production and bottling of Heineken Lager, one for Chile and the other for Argentina.
In May 2005, we entered into a technical assistance agreement
In addition to brands and production techniques, the Company constantly invests in new technologies and digital transformation in order to compete in a challenging environment. In this regard, during 2019 we started updating our operational platforms and developed artificial intelligence tools to optimize the use of information in the sale and distribution processes, among other initiatives.
The Chilean economy grew
The exchange rate between the CLP and the USD, has been subject to high volatility in the recent years. For example, when compared average exchange rates for each period, the CLP depreciated 9.7% in 2019, appreciated 1.4% in 2018, appreciated 4.1% in 2017 and depreciated 3.5% in 2016. Weaker economic conditions for the Chilean economy are usually related to a depreciation of the CLP. In
In addition, as
All CCU plants have electrical power contracts, either regulated or agreed to with distributors or generators, with prices tied to spot prices, coal prices and CPI (U.S. consumer price index). A shortage is not foreseen in the coming years. Natural gas for CCU plants
In
Argentina has faced in the past, and continues to face, high inflation. The Measures taken by
Regarding the
E. Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements involving any transactions, agreements or other contractual arrangements involving an unconsolidated entity under which we have:
·a retained or a contingent interest in transferred assets; ·an obligation under derivative instruments classified as equity; or ·any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or that engages in leasing, hedging or research and development arrangements with us.
During the initial measurement of lease agreements the Company excluded leases with remaining terms less than 12 months and leases with a value lower than US$ 5,000 (ThCH$ 3,747). Short-term leases and low-value leases will be kept under the operating lease treatment, in which we record these payments We have no other off-balance sheet arrangements. See Note 34 to our
The following table summarizes our known contractual obligations as of December 31, 2019:
Critical Accounting Policies and Practices A summary of our significant accounting policies
b.The valuation ofcommercial trademarks to determine the existence of losses due to potential impairment. c.The assumptions used in the current calculation of liabilities and obligations to employees. d.Useful lives of property, plant and equipment and e.The f.The likelihood of occurrence and g.The valuation of
During the year ended on December 31, ITEM 6: Directors, Senior Management and Employees A.Directors and Senior Management The following table sets forth certain information with respect to the members of our Directors: Directors Position Position Held Since At CCU Since Andrónico Luksic Chairman of the Board April 2013 (Chairman), November 1986 (Director) November 1986 Vice Chairman of the Board May 2018 (Vice Chairman) April April Francisco Pérez Director July 1998 February 1991 Vittorio Corbo Director April 2012 April 2012 Pablo Granifo Director April 2013 April 2013 Rodrigo Hinzpeter Director July 2015 July 2015 José Miguel Barros Director April 2016 April 2016 Director May May Hemmo Parson Director May 2018 May 2018 Andrónico Luksic Francisco Pérez Vittorio Corbo Pablo Granifo Rodrigo Hinzpeter José Miguel Barros Rory Cullinan(60),He has served as director of The principal business activities of our current and former Directors Business Activities Andrónico Luksic Chairman of CCU Francisco Pérez Quiñenco’s CEO Vittorio Corbo Economist and Director of Companies Pablo Granifo Chairman of Banco de Chile and VSPT Rodrigo Hinzpeter José Miguel Barros Partner of LarrainVial Hemmo Parson Legal Director Heineken Americas Rory Cullinan Director of Companies Didier Debrosse(1) (2) President of Heineken Brazil Heineken Americas (2) Retired as President of Heineken Brazil as of March 1, 2019. The shareholders’ meeting held on April 13, 2016, On May 9, 2018, due to the resignation of directors Messrs. Marc Busain and Didier Debrosse, both effective as of May 1, 2018, the board of directors appointed, pursuant to article 32 of the Chilean Corporations Act, Messrs. Hemmo Parson and Rory Cullinan in these vacancies until the next shareholders' meeting. In addition, in said meeting, the board designated Mr. Carlos Molina as vice chairman of the board of directors, in lieu of Mr. Marc Busain Pursuant to the above, the shareholders’ meeting held on April 17, 2019 elected as directors, for a term of three years, Messrs. Andrónico Luksic, Francisco Pérez, Carlos Molina, Vittorio Corbo, Pablo Granifo, Rodrigo Hinzpeter, The following table sets forth certain information with respect to our senior management as registered Senior Management Position Position Held Since At Company Since Patricio Jottar Chief Executive Officer July 1998 July 1998 Marisol Bravo Corporate Affairs June 1994 July 1991 Chief Human Resources Officer April Felipe Dubernet Chief Financial Officer February 2014 May 2011 General March 2015 March 2015 Jesús García General Comptroller May 2015 May 2015 Martín Rodríguez Head of Project Management Office and Innovation March 2015 March 2015 Antonio Cruz Corporate Development Manager June 2017 June 2017 Francisco Diharasarri General Manager CCU Chile October 2003 June 1985 Fernando Sanchis General Manager CCU Argentina May 1995 November 1994 International Business Manager November 2019 November 2019 Pedro Herane General April 2013 May Domingo Jiménez General Manager CPCh August 2018 May Corporate Industrial Processes Manager Patricio Jottar Felipe Dubernet Jesús García Gabriela Ugalde (54), joined CCU as chief human resources officer in April 2018. Previously, she had been in charge of Organizational Development at Quiñenco S.A. since 2014. During her career she has worked for multinational and local companies, including Nestlé, CMR Falabella, Banco Itaú and Banco de Chile, where she has held management positions in the Human Resources Department. She received a degree in Psychology from the Pontificia Universidad Católica de Chile and a Master’s degree from the same university. Felipe Benavides (44), has been our general counsel since March 2015. He is currently a member of the board of Millahue S.A., Aguas CCU-Nestle Chile S.A. and Fábrica de Envases Plásticos S.A. in Chile; Andrimar S.A., Coralina S.A., Marzurel S.A. and Milotur S.A. in Uruguay; Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A. in Paraguay; and Bebidas Bolivianas BBO S.A. in Bolivia. Previously, he was the general counsel at SMU S.A. since 2013. He was also a senior associate at Cariola, Diez, Pérez Cotapos and an international associate for Debevoise & Plimpton LLP (New York). He received his Law degree from the Pontificia Universidad Católica de Chile and a LLM from Duke University. Marisol Bravo (60), is our corporate affairs officer and has been with the Company since 1991. She is currently member of the board of directors of CRECCU S.A. Prior to her current position, she was head of special projects at CCU. Before joining us, she was assistant manager of marketing at Citicorp Mutual Funds. She received a degree in Business Administration from the Universidad de Chile. Martín Rodríguez (59), joined CCU as head of the Project Management Office in March 2015 and in September 2017 he was also appointed head of innovation. He is currently member of the board of directors of CRECCU S.A. Previously, he was M&A manager and strategic development manager at Quiñenco S.A., where he held various positions since 1999. He also was a board member of Cervecera CCU Chile Limitada, Embotelladoras Chilenas Unidas S.A. and Foods Compañía de Alimentos CCU S.A. until March 2015. He holds a degree in Business Administration from the Pontificia Universidad Católica de Chile and he has an MBA from UCLA as well as a Master’s degree in Economics from the Pontificia Universidad Católica de Chile. Antonio Cruz (38) joined CCU as corporate development manager in June 2017. He is currently general manager of Foods Compañía de Alimentos CCU S.A. and member of the board of Bebidas del Paraguay S.A., Distribuidora del Paraguay S.A. in Paraguay; Bebidas Bolivianas BBO S.A. in Bolivia; as well as Andrimar S.A., Coralina S.A., Marzurel S.A. and Milotur S.A. in Uruguay, among others. He has been with CCU since June 2015, and before joining us, he worked at Quiñenco S.A. within its Business Development division. He holds a degree in Business Administration from the Pontificia Universidad Católica de Chile and an MBA from Columbia University in New York. Francisco Diharasarri (59),is the general manager of CCU Chile and has been with the Company since 1985. Previously, he was general manager of Embotelladoras Chilenas Unidas S.A. and before that he was general manager of Cervecera CCU Chile Limitada and general manager of Fábrica de Envases Plásticos S.A. He is also currently chairman of the board of Aguas CCU-Nestlé Chile S.A., Comercial CCU S.A., CRECCU S.A., Bebidas Ecusa SpA., Foods Compañía de Alimentos CCU S.A., Manantial S.A. and Bebidas CCU-Pepsico SpA, and is also a member of the board of Bebidas Carozzi CCU SpA, Cervecería Austral S.A. and Promarca S.A., among others. He received a degree in Civil Engineering from the Universidad de Chile. Fernando Sanchis (59), is the general manager of Companía Cervecerías Unidas Argentina S.A. and he has been with the Company since 1995. Previously, he was chief financial officer of Embochile, a former PepsiCo bottler, and he also held the same position at Uruguay’s PepsiCo’s bottler. He is currently a board member of Companía Cervecerías Unidas Argentina S.A. and Compañía Industrial Cervecera S.A. He received an accounting degree from the University of Buenos Aires in Argentina. Sebastián Landi (45), is our international business manager since November 2019. He is the chairman of the board of Andrimar S.A., Coralina S.A., Marzurel S.A., Milotur S.A. in Uruguay and of Bebidas del Paraguay S.A., and a member of the board of Distribuidora del Paraguay S.A. and Bebidas Bolivianas BBO S.A, among others. Previously, he worked at Clorox since 2004, where he has held various positions in marketing first and then as general manager of Peru and finally general manager for Argentina, Paraguay & Uruguay. He is Chemistry Engineer and holds a Master’s degree in Strategic Marketing. Domingo Jiménez (39), is the general manager of Compañía Pisquera de Chile S.A. Previously, he was the finance director at CCU Chile. He has been with the Company since 2004, working in different subsidiaries, as well as Heineken Americas and Heineken USA. He received a degree in Business Administration from the Pontificia Universidad Católica de Chile. Pedro Herane (50), has been the general manager of Viña San Pedro Tarapacá S.A. since April 2013. Prior to his current position, he was the commercial manager in charge of the Domestic Market at Viña San Pedro Tarapacá S.A. Prior to joining us, he was senior group manager at Procter & Gamble, where he worked for ten years in multiple positions in Chile, Latin America and United States. He received a Bachelor’s degree in Business from University Adolfo Ibáñez in Chile and a Master’s degree in Marketing and Communications from the Paris School of Management (ESCP – EAP) in France. Juan Martin Vannicola (40), is the Corporate Industrial Processes Manager from April 2020. Previously, he held various Supply Chain positions at Heineken since 2009. He worked in the Netherlands as Global Logistics consultant, in the USA as Regional Logistics Manager of the Americas, and in Greece as Supply Chain Director, in charge of breweries, malteries, water plants and the distribution operations. He holds an Industrial Engineering degree from Instituto Tecnológico de Buenos Aires, Argentina. He also graduated from the Logistics Management Program in the Eindhoven University of Technology, the Netherlands. Our senior managers are full time employees; therefore, they do not perform principal business activities outside The board of directors’ gross compensation is determined by the shareholders at the annual shareholders’ meeting. As approved at the annual shareholders´ meeting held on April The described gross compensation In Attendance Dividend Director Meetings fee Participation(1) Total (in thousands of CLP) Andrónico Luksic Craig 68,564 201,347 269,911 Marc Busain 27,769 - 27,769 John Nicolson 40,593 201,347 241,940 Jorge Luis Ramos 59,011 260,930 319,941 Manuel José Noguera Eyzaguirre - 100,673 100,673 Philippe Pasquet - 147,244 147,244 Francisco Pérez Mackenna 203,582 283,644 487,226 Carlos Molina Solís 192,894 214,359 407,253 Vittorio Corbo 48,718 268,463 317,181 Pablo Granifo Lavin 139,457 253,397 392,854 Jose Miguel Barros van Hövell tot Westerflier 107,063 - 107,063 Rodrigo Hinzpeter Kirberg 139,483 100,673 240,156 Didier Debrosse 55,874 100,673 156,547 Total 1,083,008 2,132,750 3,215,758 (1) Includes the remuneration for members of the Audit and Directors Committees. Attendance Dividend Participation(2) Director Meetings fee(2) 2018(3) 2019(4) Total (in thousands of CLP) Andrónico Luksic Craig 43,872 511,485 92,376 647,733 Carlos Molina Solís 213,517 700,520 92,376 1,006,413 Francisco Pérez Mackenna 224,216 700,520 92,376 1,017,112 Vittorio Corbo Lioi 58,089 681,980 92,376 832,445 Pablo Granifo Lavín 160,296 548,568 92,376 801,240 Rodrigo Hinzpeter Kirberg 161,549 511,485 92,376 765,410 José Miguel Barros van Hövell tot Westerflier 175,078 530,025 92,376 797,479 Didier Debrosse(1) - 170,495 - 170,495 Marc Busain(1) - 170,495 - 170,495 Rory Cullinan 201,748 340,990 92,376 635,114 Hemmo Parson 123,067 340,990 92,376 556,432 Total 1,361,432 5,207,550 831,384 7,400,366 (1)Resigned as director of CCU S.A., effective May 1, 2018. (2) Includes the remuneration for members of the audit and directors committees. (3)Charged to 2018’s distributable Net Income. Considering the final dividend paid in 2019. (4)Charged to 2019’s distributable Net Income. Considering the iterim dividend paid in 2019. For the year ended December 31, For the year ended December 31, We do not maintain any stock option, pension or retirement programs for our directors or senior managers. We are managed by our board of directors which, in accordance with our bylaws (Estatutos), is formed by nine directors who are elected at the annual shareholders’ meeting. The entire board of directors is elected for three Pursuant to the above, the shareholders´ meeting held on April Our Chief Executive Officer and other senior managers are appointed by the board of directors and hold office at the discretion of the board of directors. There are regularly scheduled meetings of the board of directors once a month; extraordinary meetings are specially summoned by the Chairman, at the request of one or more board members where prior qualification of the necessity of such meeting has been met and, in any case, if requested by the absolute majority of the directors. The board of directors does not have an executive committee. The In addition to the general liabilities imputable to any director, the directors that compose the directors committee shall, in the exercise of their duties, be jointly and severally liable for any damage caused to the corporation or the shareholders. According to the Chilean Securities Market Law and the Chilean Corporations Act, corporations whose market capitalization reaches or exceeds UF 1.5 million Pursuant to the Chilean Corporations Act, the powers and duties of the directors committee are as follows: Regarding related party transactions mentioned in the third bullet point above, Chapter XVI of the Chilean Corporations Act applies to open stock corporations and its subsidiaries, while dispositions of Articles N° 44, Pursuant to the Chilean Corporations Act, no person shall be considered independent who, at any time during the previous eighteen months: 1. Maintained any relationship, interest or economic, professional, credit or commercial dependence, of a nature and relevant volume, with the company, other companies of the financial conglomerate to which the company belongs, its comptroller, or principal executive officer of any one of them, or was a director, manager, administrator, principal executive officer or advisor of such companies; 2. Was a close relative (i.e., parents, father/mother in law, sisters, brothers, sisters/brothers in law), to any one of the persons referred to in 1 above; 3. Was a director, manager, administrator or principal executive officer of non-profit organizations that received contributions or large donations from any individual referred to in clause 1 above; 4. Was a partner or shareholder that possessed or controlled, directly or indirectly, 10% or more of the company’s capital; a director; manager; administrator or principal executive officer of entities who had provided consulting or legal services, for relevant amounts, or of external audit, to the persons referred to in 1 above; or 5. Was a partner or shareholder who possessed or controlled, directly or indirectly, 10% or more of the company’s capital; a director; manager; administrator or principal executive officer of principal competitors, suppliers or clients of the company. Should there be more than three directors entitled to participate in the directors committee, the board of directors shall elect the members of the directors committee by unanimous vote. Should the board of directors fail to reach an agreement, preference to be appointed to the committee shall be given to directors elected with the highest percentage of votes cast by shareholders that individually control or possess less than 10% of the company’s shares. If there is only one independent director, such director shall appoint the other members of the committee among non-independent directors. Such directors shall be entitled to exercise full powers as members of the committee. The chairman of the board of directors shall not be entitled to be appointed as a member of the committee nor any of its subcommittees, unless he is an independent director. To be elected as independent director, the candidates must be proposed by shareholders that represent 1% or more of the shares of the company, at least 10 days prior to the date of the shareholders' meeting called to that end. The candidate who obtains the highest number of votes shall be elected as independent director. The members of the directors committee receive a remuneration the amount of which is established annually by the shareholders, taking into consideration the duties that the directors committee members shall perform, which shall not be less than a third of the remuneration of a director. The The The shareholders shall determine the budget of the directors committee and those of its advisors, which, pursuant to Chilean Corporations Act, shall not be less than the aggregate amount of the annual remuneration of the committee members. The directors committee shall be allowed to request the recruitment of professionals to fulfill its duties within the limits imposed by the budget. The activities of the directors committee, the annual report of the performance of its duties and its expenses, including its advisors’ expenses, shall be included in the annual report and conveyed to the shareholders. The budget of the In accordance with provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act of 2002 The duties of the audit committee are: The audit committee meets regularly and also holds meetings with our managers, our comptroller, and our internal and external auditors in order to discuss a variety of topics related to its duties. As approved at the shareholders’ Finally, as approved at the shareholders’ meeting of the Company held on April 15, 2020, members and observers of the audit committee are entitled to receive (with effect as of May 2020) a compensation consisting of a monthly gross remuneration for their attendance to audit committee meetings, independent of the number of meetings held in each period, of UF 50 (as of March 31, 2020, approximately CLP 1,430 thousand). The total annual budget for operating cost and advisors of the audit committee, approved at each of the shareholders’ meetings referred to above, amounts to UF 2,000. D.Employees The following table shows the breakdown of our employees by operating segments as of December 31 for each of the years listed below: 2014 2015 2016 2017 2018 2019 Chile 4,439 4,547 4,567 4,635 4,650 4,701 International Business 1,857 1,938 1,990 International Business(1) 2,030 2,578 2,582 Wine 1,206 1.250 1,264 1,242 1,197 1,273 Others(1) 340 365 365 Others(2) 363 372 405 Total 7,842 8,100 8,186 8,270 8,797 8,961 (1)Includes Bolivia as of 2018. (2)Includes corporate head office functions only. All employees whose contracts are terminated for reasons other than misconduct are entitled by law to receive a severance payment. In the last three years, we made severance payments in the amounts of CLP In Chile, permanent employees are entitled to Chile Operating segment, Wine Operating segment and Other In the Chile and Wine Operating segments and Other, as of December 31 of the last three years, we had a total of Unionized employees represent approximately During We do not maintain any pension fund or retirement program for our employees. Workers in Chile are subject to a national pension fund law which establishes a system of independent pension plans, administered by Administradoras de Fondos de Pensiones (“AFPs”). We have no liability for the performance of the pension plans or any pension payments to be made to our employees. In addition to our permanent work force, as of December 31, International Business Operating segment Collective bargaining in Argentina is done on an industry-wide basis, rather than, as in Chile, on a company-by-company basis. In Argentina, as in Chile, all employees who are terminated for reasons other than misconduct are entitled by law to receive a severance payment. According to the Argentine Labor Law, employees who joined us before October 1998 are entitled to the basic payment as required by law of one month’s salary for each In Argentina, unionized employees represent approximately In addition to our permanent work force, as of December 31, Except as disclosed in “Item 7: Major Shareholders and Related Party Transactions – A. Major Shareholders”, as of March 31, We do not maintain stock option or other programs involving our employees in the capital of the Company. ITEM 7: Major Shareholders and Related Party Transactions Our only outstanding voting securities are our shares of our common stock. The following table sets forth information concerning the ownership of our common stock as of March 31, 2020: Shareholder Number of shares owned % Ownership INVERSIONES Y RENTAS S.A.(1) 196,421,725 53.16% J P MORGAN CHASE BANK SEGUN CIRCULAR 56,360,299 15.25% BANCO ITAU POR CUENTA DE INVERSIONISTAS EXTRANJEROS 30,477,217 8.25% BANCO DE CHILE POR CUENTA DE TERCEROS NO RESIDENTES 25,836,720 6.99% INVERSIONES IRSA LTDA.(1) 25,279,991 6.84% BANCO SANTANDER POR CUENTA DE INV. EXTRANJEROS 8,527,278 2.31% BANCO SANTANDER-HSBC BANK PLC LONDON CLIENT ACCOUNT 3,118,000 0.84% BANCHILE C. DE B. S.A 2,576,522 0.70% BOLSA ELECTRONICA DE CHILE BOLSA DE VALORES 1,862,931 0.50% BOLSA DE COMERCIO DE SANTIAGO BOLSA DE VALORES 1,344,589 0.36% BTG PACTUAL CHILE S.A.C.B. 951,529 0.26% VALORES SECURITY S.A.C.B. 855,859 0.23% Our directors and senior management as a group(2) 14,897 0.004% (1) Inversiones y Rentas S.A. owns 99.9999% of Inversiones IRSA Ltda.’s equity. (2) Does not include the 221,701,716 shares of our common stock owned, directly and indirectly, by Inversiones y Rentas S.A., which is 50% beneficially owned by Quiñenco, holding company of the Luksic Group, as discussed below, which is controlled by the Luksic family. Andrónico Luksic, our Director, is a member of the Luksic family. Number of shares owned Ownership % INVERSIONES Y RENTAS S.A. (“IRSA”)(1) 196,421,725 53.1584% INVERSIONES IRSA LIMITADA(1) 25,279,991 6.8416% Controlling Shareholders 221,701,716 60.000% JPMorgan Chase Bank N.A. (ADRs) 74,605,267 20.1907% BANCO DE CHILE POR CUENTA DE TERCEROS NO RESIDENTES 22,331,157 6.0436% BANCO ITAU CORPBANCA POR CTA. DE INVERSIONISTAS EXTRANJEROS 15,075,151 4.0798% BANCO SANTANDER POR CUENTA DE INV. EXTRANJEROS 13,418,453 3.6315% BANCO DE CHILE POR CUENTA DE CITI NA NEW YORK CLIENT 1,741,694 0.4714% BANCO DE CHILE POR CUENTA DE CITI NA LONDON CLIENT 1,412,497 0.3823% BANCO DE CHILE POR CUENTA DE CEP LUXEMBOURG CLIENT 1,409,503 0.3815% BANCO SANTANDER-HSBC BANK PLC LONDON CLIENT ACCOUNT 1,383,491 0.3744% BANCO SANTANDER HSBC GLOBAL CUSTODY CLIENTS SC 911,855 0.2468% BANCO DE CHILE POR CUENTA DE CITI NA HONG KONG CLIENT 353,454 0.0957% Custodian banks 58,037,255 15.7068% AFPs as a group (Chilean pension funds) 784,390 0.2123% Our directors and senior management as a group(2)(3) 35,440 0.0096% Other 14,338,804 3.8806% TOTAL 355,164,068 96.1194% (1) Inversiones y Rentas S.A. owns 99.9999% of Inversiones IRSA Limitada’s equity. (2) Does not include the 221,701,716 shares of our common stock owned, directly and indirectly, by Inversiones y Rentas S.A., which is 50% beneficially owned by Quiñenco, a holding company of the Luksic Group, as discussed below, which is controlled by the Luksic family. Andrónico Luksic, our director, is a member of the Luksic family. (3) As of March 31, 2020, our director Francisco Pérez Mackenna has a 0.004% direct ownership interest in Compañía Cervecerías Unidas S.A. with 14,897 shares. Our director Vittorio Corbo Lioi indirectly owns 4,343 shares of Compañía Cervecerías Unidas S.A., equivalent to 0.001%, through the ownership of Vittorio Corbo y Asociados Limitada, of which it holds 82%. Our director José Miguel Barros van Hövell tot Westerflier indirectly owns 16,200 shares of Compañía Cervecerías Unidas S.A., equivalent to 0.004%, through Inversiones Carpe Vitam Limitada. To the best of our knowledge our beneficial shareholders who, directly or indirectly, own more than 5% of the outstanding shares of our common stock IRSA is a Chilean corporation owned 50% by Quiñenco, which is a holding company of the Luksic Group, and 50% by Heineken Chile Ltda., a subsidiary of Heineken The shareholders of IRSA, Quiñenco S.A. and Heineken Chile Ltda., signed a Shareholders' Agreement, which was then registered in the Depósito Central de Valores (“DCV”). The agreement restricts IRSA’s shareholders, Quiñenco and Heinenken, from independently acquiring shares of CCU, with the exception of acquiring shares through IRSA. This Shareholders’ Agreement also restricts the shareholders of IRSA from freely selling CCU’s shares, as it imposes preferential rights, among other restrictions. As of March 31, 2020, JPMorgan Chase Bank N.A. (“JPMorgan”), the depositary for our ADR facility, was the record owner of 74,605,267 shares of our common stock 20.19% of the outstanding common stock) deposited in our ADR facility. As of March 31, 2020, we had3,864shareholders of record. All shareholders have equal voting rights. It is not practicable for us to determine the number of our ADSs or our common shares beneficially owned in the United States as the depositary for our ADSs only has knowledge of the record holders, including the Depositary Trust Company and its nominees. As a result, we are not able to ascertain the domicile of the final beneficial holders represented by the one ADS record holder in the United States. Likewise, we cannot readily determine the domicile of any of our foreign shareholders who hold our common stock, either directly or indirectly. To our knowledge, none of our common stock is currently owned by governmental entities. Our common stock is listed and traded on the principal Chilean stock exchanges. B.Related Party Transactions Regarding related party transactions, Chapter XVI of the Chilean Corporations Act is applicable to Pursuant to Chapter XVI of the Chilean Corporations Act referenced above, a related-party transaction shall be any and all negotiation, agreement or operation between the · one or more related persons pursuant to the Chilean Securities Market Law; · a director, manager, administrator, principal executive officer or liquidator of the company, personally or acting on behalf of a person other than the company, or their respective spouses or close relatives (e.g. parents, father/mother in law, sisters, brothers, sisters/brothers in law); · company or concern in which the persons referred to in the above clause are the owners, directly or indirectly through any other individual or corporation, of 10% or more of its capital; or of which any of the persons referred to in the above clause are a director, manager, administrator, principal executive officer thereof; · those contemplated by the bylaws of the company or upon sufficient grounds determined by the directors committee, as the case may be, which can include subsidiaries in which the company owns, directly or indirectly, at least 95% of the equity or capital stock; and · those in which the office of director, manager, administrator, principal executive officer or liquidator has been held by a director, manager, administrator, principal executive officer or liquidator of the company within the prior 18 months. The following persons are considered under the Chilean Securities Market Law to be related persons: The · whether acting alone or in agreement with others, has sufficient voting power to influence the company’s management · creates conflicts of interest in doing business with the company; · in the case of a corporate entity, is influenced in its management by the company; or · holds employment or a position which affords the person access to non-public information about the company and its business, which renders the person capable of influencing the value of the company’s securities. However, a person shall not be considered to be related to a company by the mere fact of owning up to 5% of the company, or if the person is only an employee of the company without managerial responsibilities. Additionally, pursuant to Article 147 of Chapter XVI of the Chilean Corporations Act, an 1. The directors, managers, administrators, principal executive officers or liquidators that have an interest or that take part in negotiations conducive to the execution of an arrangement with a related party of the open stock corporation, shall report it immediately to the board of directors or whomever the board designates. Those who breach this obligation will be jointly liable for damages caused to the company and its shareholders. 2. Prior to the company’s consent to a related party transaction, it must be approved by the absolute majority of the members of the board of directors, with exclusion of the interested directors or liquidators, who nevertheless shall make public his/her/their opinion with respect to the transaction if it is so requested by the board of directors, which opinion shall be set forth in the minutes of the meeting. Likewise, the grounds of the decision and the reasons for excluding such directors from its adoption must also be recorded in the minutes. 3. The resolutions of the board of directors approving a related party transaction shall be reported at the next following shareholders' meeting, including a reference to the directors who approved such transaction. A reference to the transaction is to be included in the notice of the respective shareholders' meeting. 4. In the event that an absolute majority of the members of the board of directors should abstain from voting, the related-party transaction shall only be executed if it is approved by the unanimous vote of the members of the board of directors not involved in such transaction, or if it is approved in a shareholders' extraordinary meeting by two-thirds of the voting shares of the company. 5. If a shareholders' extraordinary meeting is called to approve the transaction, the board of directors shall appoint at least one independent advisor who shall report to the shareholders the terms of the transaction, its effects and the potential impact for the company. In the report, the independent advisor shall include all the matters or issues the directors committee may have expressly requested to be evaluated. The directors committee of the company or, in the absence of such committee, directors not involved in the transaction, shall be entitled to appoint an additional independent advisor, in the event they disagree with the appointment made by the board. The reports of the independent advisors shall be made available to the shareholders by the board on the business day immediately following their receipt by the company, at the company’s business offices and on its internet site, for a period of at least 15 business days from the date the last report was received from the independent advisor, and such arrangement shall be communicated to the shareholders by means of a “Relevant Fact” (Communication sent to the CMF and the stock markets in Chile). The directors shall decide whether the transaction is in the best interest of the corporation, within five business days from the date the last report was received from the independent advisors. 6. When the directors of the company must decide on a related party-transaction, they must expressly state the relationship with the transaction counterparty or the interest involved. They shall also express their opinion on whether the transaction is in the best interest of the corporation, their objection or objections that the directors committee may have expressed, as well as the conclusions of the reports of the advisors. The opinions of the directors shall be made available to the shareholders the day after they were received by the company, at the business offices of the company as well as on its internet site, and such arrangement shall be reported by the company as a “Relevant Fact”. 7. Notwithstanding the applicable sanctions, any infringement of the above provisions will not affect the validity of the transaction, but it will grant the company or the shareholders the right to sue the related party involved in the transaction for reimbursement to the company of a sum equivalent to the benefits that the operation reported to the counterpart involved in the transaction, as well as indemnity for damages incurred. In this case, the defendant bears the burden of proof that the transaction complies with the requirements and procedures referred to above. Notwithstanding the above, the following related party transactions may be executed, pursuant to letters a), b) and c) of Article 147 of the Chilean Corporations Act, without complying with the requirements and procedures stated above, with prior authorization by the board: 1. Transactions that do not involve a “material amount”. For this purpose, any transaction that is both greater than UF 2,000 (as of March, 31, 2020, approximately CLP 57 million) and in excess of 1% of the corporation’s equity, or involving an amount in excess of UF 20,000 (as of March 31, 2020, approximately CLP 572 million) shall be deemed to involve a material amount. All transactions executed within a 12 month period that are similar or complementary to each other, with identical parties, including related parties, or objects, shall be deemed to be a single transaction. 2. Transactions that pursuant to the company’s policy of usual practice as determined by its board of directors, are in the ordinary course of business of the company. Any agreement or resolution establishing or amending such policies shall be communicated as a “Relevant Fact” and made available to shareholders at the company’s business offices and on its internet site, and the transaction shall be reported as a “Relevant Fact”, if applicable. 3. Transactions between legal entities in which the company possesses, directly or indirectly, at least 95% of the equity of the counterpart. The usual practice policy adopted by the board of directors in the meeting held on January 13, 2010, as amended on July 6, 2011, In the ordinary course of business, we engage in a variety of transactions with some of our affiliates and related parties. Financial information concerning these transactions is set forth in Note Our corporate support units and strategic service units provide shared services to all the organization through service level-agreements. Shared services are provided in a centralized manner to capture the synergies between the different units. Service-level agreements are annual contracts specifying the services to be provided as well as the variables used to measure the levels of service and their prices. Service levels are evaluated directly by users three times a year. Additionally, our logistic subsidiaries Transportes CCU and Comercial CCU provide logistic, warehousing and sales services on a consolidated basis to all of our strategic business units. These services are regulated by annual contracts specifying the services to be provided as well as the variables used to measure the levels of service and their prices. Service levels are evaluated directly by users three times a year. We engage in a variety of transactions with affiliates of the Luksic Group and Heineken, the beneficial owners of IRSA, as well as with other shareholders of ours. Currently, Quiñenco and Heineken Chile Ltda., a Chilean limited corporation controlled by Heineken Americas B.V., are the only shareholders of IRSA, each with a 50% equity interest See “Item 4: Information on the Company – C. Organizational Structure”. On November 30, 2005, we and Heineken Brouwerijen B.V. amended the license and technical assistance agreements which provide us with the exclusive rights to produce, sell and distribute Heineken beer in Chile and Argentina commencing June 18, 2003. These agreements have an initial term of 10 years beginning in June 2003, renewable for subsequent periods of five years. See “Item 4: Information on the Company – B. Business Overview On October 12, 2011, we and Heineken Brouwerijen B.V. signed the Amended and Restated versions of the Trademark License Agreements which provide us with the exclusive rights to produce, sell and distribute Heineken beer in Chile and Argentina, in force as of January 1, 2011. These agreements have an initial term of 10 years, and automatically renew on January 1 of each year for a new period of ten years, unless any party gives notice of its decision not to renew, in which case the agreements will be in force until the last renewal period expires. On On June 4, 2013, CICSA, Milotur and Heineken Brouwerijen B.V. On November 10, 2014, Central Cervecera de Colombia S.A.S. and Heineken Brouwerijen B.V. signed a Trademark License Agreement which provides us with the exclusive rights to import, produce, sell and distribute Heineken beer in Colombia. This agreement has an initial term of thirteen years as of March 1, 2015, and will each year thereafter (January 1) be automatically renewed for subsequent five year periods unless, starting in 2029, any party gives notice of its decision not to renew, in which case the agreement will be in force until the expiration of the latest renewal period. This agreement was amended on March 29, 2019 to include Zona Franca Central Cervecera S.A.S. as brewer for the production of Heineken in Colombia. On July 15, 2015, CICSA, BBO and Heineken Brouwerijen B.V. signed the Ancillary Trademark License Agreement, which provide us with the exclusive rights to produce, sell and distribute Heineken beer in Bolivia, in force as of January 1, 2015. This agreement has an initial term of Additionally, a Technical Assistance Agreement was executed with Heineken Technical Services B.V. (currently Heineken Supply Chain B.V.) on May 4, 2005, whereby the latter was appointed, on a non-exclusive basis, as our technical advisor in respect of operational aspects of our breweries, including also special services regarding project engineering for extensions of the breweries’ capacity and construction of new plants, assistance in development of new products, production methods and distribution systems as well as advice on purchasing systems, among others. This agreement has an initial term of one year as from May 4, 2005, renewable for subsequent periods of one year each, unless either party gives at least three months’ prior written notice to the other of its intention to terminate this agreement. This agreement has been renewed automatically each year. On March 23, 2015, CICSA and Heineken Brouwerijen B.V. signed the Trademark License Agreement which provides with the exclusive rights to produce, sell and distribute Sol beer in On April 4, 2016, Central Cervecera de Colombia S.A.S. and Heineken Brouwerijen B.V. signed a Trademark License Agreement which provides us with the exclusive rights to import, produce, sell and distribute Tecate beer in Colombia. This agreement came into force on April 1, 2016, will continue to be in force until February 28, 2028, and each year thereafter (January 1) will be automatically renewed for subsequent five year periods unless, starting in 2029, any party gives notice of its decision not to renew, in which case the agreement will be in force until the expiration of the latest renewal period. This agreement was amended on March 29, 2019 to include Zona Franca Central Cervecera S.A.S. as brewer for the production of Tecate in Colombia. On September 27, 2017, Central Cervecera de Colombia S.A.S. and Heineken Brouwerijen B.V. signed the Trademark License Agreement which provides us with the exclusive rights to import, produce, sell and distribute, Sol beer in Colombia. This agreement came into force on July 1, 2017, will continue to be in force until February 28, 2028, and shall each year thereafter (January 1) be automatically renewed for subsequent five-year periods unless, starting in 2029, any party gives notice of its decision not to renew, in which case the agreement will be in force until the expiration of the latest renewal period. In January 2018, Bebidas del Paraguay S.A. and Heineken Brouwerijen B.V. signed the Trademark License Agreement which provides us with the exclusive rights to produce, sell and distribute Sol beer in Paraguay. This agreement has an initial term of five years, and will be automatically renewed for a three-year period unless any party gives notice of its decision not to renew, in which case the agreements will be in force until the last renewal period expires. On April 20, 2018, Bebidas del Paraguay S.A. and Heineken Brouwerijen B.V. signed a Trademark License Agreement and a Distribution Agreement which provides us with the exclusive rights to produce, sell and distribute Heineken beer in Paraguay. These agreements have an initial term of five years from May 1, 2018, and will be automatically renewed for subsequent three-year periods unless any party gives notice of its decision not to renew. Therefore, and as agreed on June 11, 2018, the Trademark License Agreement entered on November 28, 2012, by CICSA and Heineken Brouwerijen B.V., which provided CICSA with the exclusive rights to produce, sell and distribute Heineken beer in Paraguay,was terminated with retroactive effects as of April 30, 2018 and, in its place, Heineken Brouwerijen B.V. and CICSA entered into a supply agreement which provides CICSA the non-exclusive right to sell and supply Heineken Lager in the Paraguayan market to Bebidas del Paraguay S.A., for a period of five years beginning on April 30, 2018. On November 13, 2018, we and Heineken Brouwerijen B.V. signed an Amendment Agreement to the Amended and Restated Trademark License Agreement with Cercevera CCU Chile Limitada dated October 12, 2011, in order to include, as of January 1, 2018, the trade mark “Heineken 0.0” to the Trade Marks we have the exclusive rights to produce, sell and distribute in Chile. Finally, in 2015, we revised and amended the 2014 amended and restated Framework Agreement entered with Banco de Chile, a Quiñenco subsidiary, which was in effect as of May 1, 2003, for the rendering of banking services to us and certain of our subsidiaries and affiliates, including, among others, payment to suppliers and shareholders, cashier service, transportation of valuables and payment of salaries. Since the establishment of our directors’ committee in 2001, as required by the Chilean Corporations Act, it has reviewed all related-party contracts, before being sent to our board of directors for approval, which was standard practice prior to the creation of the directors’ committee. The above does not include related-party transactions that fall within the exemptions contemplated in letters a), b) and c) of Article 147 of the Chilean Corporations Act, which includes those executed according to the usual practice policy adopted by the board of directors on January 13, 2010 as amended on July 6, 2011, Our principal transactions with related parties for the twelve-month period ended December 31, Company Relationship Transaction Amount (in millions of CLP) Related to the License and technical assistance Shareholder of subsidiary Dividends paid Cervecería Austral S.A. Joint venture Related to non-controlling subsidiary Sales of products/Services received 933 Chajha S.A. Related to the Sales of Cigar Trading S.R.L. Related to the subsidiary's shareholder Sales of products 1 Club Libertad Related to the subsidiary's shareholder Sales of products 3 Comercial Patagona Ltda. Subsidiary of joint venture Sales of products/Services received 7,520 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Shareholder of subsidiary Dividends paid/Loan/Purchase of products/Sales of products 5,475 Ecor Ltda. Related to the subsidiary's shareholder Services received 158 Emprendimientos Hoteleros S.A.E.C.A. Related to the subsidiary's shareholder Sales of products 16 Empresa Nacional de Energía Enex S.A. Related to the controller's shareholder Purchase of products/Services received 644 Empresas Carozzi S.A. Shareholder of joint operation Purchase of products/Sales of products 5,288 Foods Compañía de Alimentos CCU S.A. Joint venture Related to the subsidiary's shareholder Sales of products 4 Gráfica Editorial Inter-Sudamericana S.A. Sales of products 1 Hapag-Lloyd Chile SpA. Related to the controller's shareholder Services received 161 Heineken Brouwerijen B.V. Related to the controller's shareholder License and technical assistance/Purchase of products/Services received 24,429 Inversiones Enex S.A. Related to the controller's shareholder Sales of products 1,395 Inversiones Irsa Ltda. Related to the controller Dividends paid 14,494 Inversiones PFI Chile Ltda. Shareholder of joint operation Purchase of Sales of Related to the subsidiary's shareholder Sales of products 1 Minera Antucoya Related to the controller's shareholder Sales of products 3 Minera Centinela Related to the controller's shareholder Sales of products 9 Nestlé Chile S.A. Related to the controller Related to the Sales of products QSR S.A. Related to the subsidiary's shareholder Sales of products 94 Quiñenco S.A. Sales of products Related to the controller's shareholder Services received 306 SAAM Extraportuario S.A. Related to the Services received 41 Societé des Produits Nestlé S.A. Related to the subsidiary's shareholder Royalty 984 Tabacalera del Este S.A. Related to the subsidiary's shareholder Sales of products Zona Franca Central Cervecera S.A.S. Joint venture Capital contribution 13,564 See Note C.Interests of Experts and Counsel Not applicable. A.Consolidated Statements and Other Financial Information See “Item 18: Financial Statements” and “Item 19: Exhibits” for the Company's Financial Statements and notes, audited by Wine Exports We, through our subsidiary VSPT, exported wine to more than80 countries in The following table presents our total wine exports by volume and sales, as of December of the last three years as percentage of consolidated volume and sales for the last three years: 2014 2015 2016 2017 2018 2019 Exports (thousands of liters)(1) 70,519 75,788 77,927 75,462 71,169 73,895 % of total consolidated sales volume 3.08% 3.17% 3.14% 3.14% 3.04% 2.87% Exports (CLP million)(1) 108,064 123,544 131,168 123,023 118,206 119,197 % of total consolidated sales 8.33% 8.25% 8.41% 8.41% 8.21% 7.18% (1) Includes Argentinean operations and bulk wine. (1) Includes Argentinean operations and bulk wine. (1)Includes Argentinean operations and bulk wine. Legal Proceedings Nothing to report. Our dividend policy is reviewed and established from time to time by our board of directors and reported during our annual ordinary shareholders’ meeting, which is generally held in April of each year. Each year our board of directors must submit its proposal for a final dividend for the preceding year for shareholder approval at the annual ordinary shareholders’ meeting. As required by the Chilean Corporations Act, we must distribute a cash dividend in an amount equal to at least 30% of our Our board of directors announced at our annual ordinary shareholders’ meeting held on April Dividends are paid to shareholders of record The board of directors, in its meeting held on December The following table sets forth the amounts of interim and final dividends and the aggregate amounts of such dividends per share of common stock and per ADS in respect of each of the years indicated: Year ended CLP Per share(1) US$ Per ADS(2) Interim Final(3) Total Interim Final(3) Total 2012 63 116.64 179.64 0.27 0.49 0.76 2013 63 103.49 166.49 0.24 0.37 0.61 2014 63 98.78 161.78 0.21 0.32 0.52 2015 66 97.47 163.47 0.18 0.29 0.47 2016 66 110.32 176.32 0.20 0.33 0.53 (1) Interim and final dividend amounts are expressed in historical pesos. (2) U.S. dollars per ADS dividend information serves reference purposes only as we pay all dividends in Chilean pesos. On December 20, 2012, there was an ADS ratio change from 1 ADS to 2 common shares. The ammounts shown above have been adjusted to reflect this change. The Chilean peso amounts as shown here have been converted into U.S. dollars at the respective observed exchange rate in effect at each payment date. Note: The Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos. (3) The final dividend with respect to each year is declared and paid within the first five months of the subsequent year. Year ended CLP Per share(1) USD Per ADS(2) December 31 Interim Final(3) Total Interim Final(3) Total 2015 66 97.47 163.47 0.18 0.29 0.47 2016 66 110.32 176.32 0.20 0.33 0.53 2017 70 108.89 178.89 0.23 0.36 0.59 2018 140 358.33 498.33 0.41 1.07 1.49 2019 75 179.95 254.95 0.20 0.42 0.62 (1) Interim and final dividend amounts are expressed in historical pesos (2) USD per ADS dividend information provided solely for reference purposes only, as we pay all dividends in CLP. The amounts shown above have been adjusted to reflect this change. The Chilean peso amounts as shown here have been converted into USD at the respective observed exchange rate in effect at each payment date or, in respect of the dividend payable for the year ended December 31, 2019, at the observed exchange rate in effect as of April 24, 2020. Note: The Federal Reserve Bank of New York does not report a noon buying rate for CLP. (3) The final dividend with respect to each year is declared and paid within the first five months of the subsequent year. Pursuant to current Chilean foreign exchange regulations, a shareholder who is not a resident of Chile does not need to be authorized as a foreign investor in order to receive dividends, sale proceeds or other amounts with respect to its shares remitted outside Chile, but the investor must inform the Central Bank about any such transactions and must remit foreign currency through the B.Significant Changes For the periods indicated, the table below sets forth the reported high and low closing sales prices for the common stock on the Stock Exchanges in Chile as well as the high and low sales prices of the ADSs as reported by the Santiago Stock Exchange NYSE(1) (per share of common stock) (per ADS) Santiago Stock Exchange NYSE (per share of common stock) (per ADS) High Low High Low High Low High Low (CLP) (CLP) (US$) (CLP) (CLP) (CLP) Years Years 2015 8,784 5,479 25.27 17.73 2016 8,120 6,500 24.17 18.78 2017 9,300 6,820 29.72 20.31 2018 2018 9,587 7,848 30.35 24.30 2019 9,990 6,850 29.48 17.80 2012 7,788 5,930 32.73 24.07 2013 8,094 5,900 34.91 22.89 2014 6,900 5,600 24.22 17.89 2015 8,784 5,479 25.27 17.73 2016 8,120 6,500 24.17 18.78 2017 (through Mar. 31) 8,449 6,820 25.46 20.31 2014 1st quarter 6,400 5,670 24.22 20.46 2nd quarter 6,900 5,804 23.94 21.02 3rd quarter 6,750 6,200 23.79 21.02 4th quarter 6,594 5,600 22.13 17.89 2015 1st quarter 6,500 5,479 20.90 17.73 2nd quarter 7,146 6,409 23.91 20.73 3rd quarter 7,935 6,550 23.80 20.23 4th quarter 8,784 7,300 25.27 20.58 2016 1st quarter 7,875 6,502 22.87 18.78 2nd quarter 8,120 7,128 24.12 19.85 3rd quarter 7,810 6,530 24.17 19.31 4th quarter 7,250 6,500 21.85 19.49 2017 1st quarter 8,449 6,820 25.46 20.31 2nd quarter 9,120 8,236 27.28 25.16 3rd quarter 9,190 8,220 28.22 25.40 4th quarter 9,300 8,000 29.72 25.03 2018 1st quarter 9,210 7,890 30.35 27.27 2nd quarter 9,100 7,848 29.86 24.37 3rd quarter 9,587 7,850 28.52 24.65 4th quarter 9,545 8,300 28.88 24.30 2019 1st quarter 9,974 8,600 29.47 24.92 2nd quarter 9,940 8,812 29.48 25.55 3rd quarter 9,990 7,789 29.40 21.71 4th quarter 8,199 6,850 22.52 17.80 Last six months Last six months October 2016 7,250 6,577 21.85 19.58 November 2016 7,140 6,500 21.58 19.49 December 2016 7,119 6,585 21.39 19.79 January 2017 7,367 6,820 22.66 20.31 February 2017 7,740 7,285 23.94 22.40 March 2017 8,449 7,529 25.46 22.93 (1) On December 20, 2012, there was an ADS ratio change from 1 ADS to 5 common shares, to a new ratio of 1 ADS to 2 common shares. Prices shown above take into account this change. October 2019 8,199 7,201 22.52 19.78 November 2019 7,600 6,850 20.06 17.80 December 2019 7,700 7,052 19.84 17.81 January 2020 9,399 8,600 28.00 24.92 February 2020 7,490 6,144 19.14 15.62 March 2020 6,710 4,989 16.72 11.25 Significant trading suspensions of the Company's stock have not occurred in the last three years. B.Plan of distribution Not applicable. Our common stock is currently traded on the Santiago Stock Exchange, the Chile Electronic Stock Exchange and, until October 8, 2018, the Valparaíso Stock Exchange under the symbol “CCU”. The Santiago Stock Exchange accounted for approximately The trading volume of our ADSs in the NYSE in the last three years is as follows: Year Quarter Traded Volume(1) Quarter Traded Volume (thousands of ADS) 2014 1st quarter 12,052 2nd quarter 10,094 3rd quarter 9,642 4th quarter 10,771 Total 42,559 2015 1st quarter 8,464 2nd quarter 8,133 3rd quarter 8,730 4th quarter 9,338 Total 34,666 2016 1st quarter 10,853 1st quarter 10,853 2nd quarter 10,121 2nd quarter 10,121 3rd quarter 16,093 3rd quarter 16,093 4th quarter 15,288 4th quarter 15,288 Total 52,355 Total 52,355 2017 1st quarter 11,269 2nd quarter 13,193 3rd quarter 9,606 4th quarter 11,597 Total 45,665 2018 1st quarter 8,848 2nd quarter 10,560 3rd quarter 14,465 4th quarter 12,038 Total 45,911 2019 1st quarter 12,259 2nd quarter 13,753 3rd quarter 17,288 4th quarter 24,402 Total 67,702 Not applicable. Not applicable. F.Expenses of the Issue Not applicable. ITEM 10: Additional Information Not applicable. B.Memorandum and Articles of Association Provided below is a summary of certain material information found in our bylaws and provisions of Chilean law. This summary is not exhaustive. For more information relating to the items discussed in this summary, the reader is encouraged to read our updated bylaws, available in our website atwww.ccu.cl. The information on our website is not incorporated by reference into this document. Registration and corporate purposes. We are a public corporation (sociedad anónima abierta) organized by means of a public deed dated January 8, 1902, executed before the notary public of Valparaíso, Mr. Pedro Flores, and our existence was approved by Supreme Decree N° 889 of the Treasury Department, dated March 19, 1902, both of which were recorded on the reverse of folio 49, N° 45 of Valparaíso’s Registry of Commerce for 1902, and published in Chile’s Official Gazette on March 24, 1902. We were recorded on March 8, 1982, at Chile’s Securities Registry of the The last amendment to our articles of association, which incorporates the resolutions of the extraordinary shareholders’ meeting held on June 18, 2013, that approved to increase the capital of the Company, by the issuance of 51,000,000 shares, were set forth in a public deed dated June 18, 2013, executed before the notary public of Santiago, Eduardo Diez Morello, an extract of which was recorded on the folio 48,216 N° 32,190 of the Santiago Registry of Commerce for 2013, published in the Official Gazette on June 25, 2013. Under Article 4 of our bylaws, the corporation’s principal purpose is to produce, manufacture and market alcoholic and non-alcoholic beverages, to manufacture containers and packaging, and to provide transportation services, among other businesses. Directors. Under the Chilean Corporations Act, a corporation may not enter into a contract or agreement in which a director has a direct or indirect interest without prior approval by the board of directors, and then only if it is in the interest of the company, the price, terms and conditions are similar to those prevailing in the market at the time of its approval and the transaction complies with the requirements and procedures stated in Chapter XVI of the Chilean Corporations Act regarding Related Party Transactions. See “Item 7: Major Shareholders and Related Party Transactions”. The amount of any director’s remuneration is established each year by the annual shareholders’ meeting. Directors are forbidden, unless previously and duly authorized thereto by the board of directors, to borrow or otherwise make use of corporate money or assets for their own benefit or that of their spouses, certain relatives or related persons. These rules can only be modified by law. It is not necessary to hold shares to be elected director, and there is no age limit established for the retirement of directors. Rights, preferences and restrictions regarding shares. At least 30% of our net profits for each fiscal year are required to be distributed as dividends in cash to our shareholders, unless our shareholders unanimously decide otherwise. Any remaining profits may be used to establish a reserve fund (that may be capitalized at any time, amending the corporate bylaws by the vote of a majority of the voting stock issued), or to pay future dividends. Compulsory minimum dividends, i.e., at least thirty percent of our net profits for each fiscal year, become due thirty days after the date on which the annual shareholders' meeting has approved the distribution of profits in the fiscal year. Any additional dividends approved by our shareholders become due on the date set by our shareholders or our board of directors. Accrued dividends that corporations fail to pay or make available to their shareholders within certain periods are to be adjusted from the date on which those dividends became due and that of actual payment. Overdue dividends will accrue Dividends and other cash benefits unclaimed by shareholders after five years from the date on which they became due will become the property of the Chilean Fire Department. We have only one class of shares and there are therefore no preferences or limitations on the voting rights of shareholders. Each of our shareholders is entitled to one vote per share. In annual shareholders’ meetings, resolutions are made by Our directors are elected every three years and their terms are not staggered. Our shareholders may accumulate their votes in favor of just one person or distribute their votes to more than one person. In addition, by unanimous agreement of our shareholders present and entitled to vote, the vote may be omitted and the election made by acclamation. In the event of liquidation, the Chilean Corporations Act provides that corporations may carry out distributions to shareholders on account of a reimbursement of capital only after the payment of corporate indebtedness. There are no redemption or sinking fund provisions applicable to us, nor are there any liabilities to our shareholders relating to future capital calls by us. Under Chilean law, certain provisions affect any existing or prospective holder of securities as a result of the shareholder owning a substantial number of shares. The Chilean Securities Market Law, establishes that (a) any person who, directly or indirectly, owns 10% or more of the subscribed capital of an The Chilean Securities Market Law also provides that when one or more persons intend to take over a corporation subject to oversight by the Finally, Chapter XXV of the Chilean Securities Market Law was enacted on December 20, 2000, to ensure that controlling shareholders share with minority shareholders the benefits of a change of control, by requiring that certain share acquisitions be made pursuant to a tender offer. Article 199 bis of the Chilean Securities Market Law extends the obligation to make a tender offer for the remaining outstanding shares to any person, or group of persons with a joint performance agreement, that, as a consequence of the acquisition of shares, becomes the owner of two-thirds or more of the issued shares with voting rights of a corporation. Such tender offer must be effected within 30 days from the date of such acquisition. The Chilean Corporations Act provides shareholders with preemptive The Chilean Corporations Act also provides shareholders with the right to withdraw from a corporation in certain situations. Unless there is an ongoing bankruptcy proceeding, if a shareholders’ meeting approves any of the following matters, dissenting shareholders will be automatically entitled to withdraw from the corporation upon payment by the corporation of the market value of their shares: · our transformation into a different type of legal entity; · our merger with and/or into another company; · the disposition of 50% or more of the corporate assets, whether or not liabilities are also transferred, to be determined according to the balance sheet of the previous fiscal year, or the proposal or amendment of any business plan that contemplates the transfer of assets exceeding said percentage; the disposition of 50% or more of the corporate assets of a subsidiary, which represents at least 20% of the assets of the corporation, as well as any disposition of shares which results in the parent company losing its status as controller; · the granting of real or personal guarantees to secure third-party obligations exceeding 50% of the corporate assets, except when the third party is a subsidiary of the company (in which case approval of the board of directors will suffice); · the creation of preferences for a series of shares or the increase, extension or reduction in the already existing ones. In this case, only dissenting shareholders of the affected series shall have the right to withdraw; · curing certain formal defects in the corporate charter which otherwise would render it null and void or any modification of its bylaws that should grant this right; and · other cases provided for by statute or in our bylaws, if any. In addition, shareholders may withdraw if a person becomes the owner of two-thirds or more of the outstanding shares of the corporation as a consequence of a share acquisition and such person does not make a tender offer for the remaining shares within 30 days from the date of such acquisition. Minority shareholders are also granted the right to withdraw when the controlling shareholder acquires more than 95% of the shares of an Our bylaws do not provide for additional circumstances under which shareholders may withdraw. Action necessary to change the rights of holders of stock. The rights of stockholders are established by law and pursuant to the bylaws of a corporation. For certain modifications of shareholders’ rights, the law requires a special majority, such as the creation, increase, extension, reduction or suppression of preferred stock, which may be adopted only with the consent of at least two-thirds of the affected series. Consequently any other impairment of rights not specifically regulated needs only an absolute majority (more than 50%) of the stock entitled to vote. However, the waiver of the shareholders’ right to receive no less than 30% of the net profits accrued in any fiscal year (the “minimum dividend”) requires the unanimous vote of all stockholders. The above notwithstanding, no decision of the shareholders’ meeting can deprive a shareholder of any part of the stock that he/she owns. Our bylaws do not contemplate additional conditions in connection with matters described in this subsection. Shareholders’ meetings. Our annual shareholders' meetings are to be held during the first four months of each year. During the meetings, determinations are made relating to particular matters, which matters may or may not be specifically indicated in the summons for such meeting. The quorum for a shareholders' meeting is established by the presence, in person or by proxy, of shareholders representing at least an absolute majority of our issued voting stock; if a quorum is not present at the time of the first call of the meeting, a second call of the meeting can be reconvened and upon the meeting being reconvened, shareholders present at the time of the second call of the reconvened meeting are deemed to constitute a valid quorum regardless of the percentage of the voting stock represented. In that case, decisions will be made by the absolute majority of stock with voting rights present or otherwise represented. The following matters are specifically reserved for annual meetings: · review of our state of affairs and of the reports of external auditors, and the approval or rejection of the annual report, balance sheet, financial statements and records submitted by our officers or liquidators; · distribution of profits of the respective fiscal year, including the distribution of dividends; · election or revocation of regular and alternate board members, liquidators and external auditors; and determination of the remuneration of the board members, directors committee remuneration and budget, designation of the newspaper where summons for meetings shall be published and, in general, any other matter to be dealt with by the annual meeting being of corporate interest and not specifically reserved to extraordinary shareholders' meetings. Extraordinary shareholders' meetings may be held at any time, when required by corporate necessity. During extraordinary meetings, determinations are made relating to any matter which the law or the Company's bylaws reserve for consideration by such extraordinary meetings, which matters shall be expressly set forth in the relevant summons. When in an extraordinary shareholders' meeting determinations relating to matters specifically reserved to annual meetings must be made, the operation and decisions of such extraordinary meeting will follow the requirements applicable to annual meetings. The following matters, are specifically reserved for extraordinary meetings: · dissolution of the corporation; · transformation, merger or spin-off of the corporation and amendments to its bylaws; · issuance of bonds or debentures convertible into stock; · the disposition of 50% or more of the corporate assets, whether or not liabilities are also transferred, to be determined according to the balance sheet of the previous fiscal year, or the proposal or amendment of any business plan that contemplates the transfer of assets exceeding said percentage, the disposition of 50% or more of the corporate assets of a subsidiary, which represent at least 20% of the assets of the corporation, as well as any disposition of shares which results in the parent company losing its status of controlling shareholder; and · guarantees of third parties' obligations, except when these third parties are subsidiary companies (in which case approval of the board of directors will suffice). In addition to the above, annual and extraordinary shareholders' meetings must be called by the board of directors in the following circumstances: · when requested by shareholders representing at least 10% of issued stock with voting rights regarding · when required by the Only holders of stock recorded in the Register of Shareholders of Shareholders may be represented at meetings by other individuals, regardless of whether or not those persons are shareholders themselves. A proxy must be conferred in writing, and for the total number of shares held by the shareholder and entitled to vote in accordance with the previous paragraph. Limitations on the right to own securities. The right to own any kind of property is guaranteed by the Chilean Constitution, and the Chilean Corporations Act does not contain any general limitation regarding the right to own securities. There are, however, certain limitations on the right of foreigners to own securities of Chilean corporations, but only for certain special types of companies. We are not affected by these limitations, and our bylaws do not contain limitations or restrictions in this regard. Article 14 of the Chilean Corporations Act forbids open stock corporations from including in their bylaws any provisions restricting the free transferability of stock. However, shareholders may enter into a private agreement on this matter, but, in order for these agreements to be effective against the company and third parties, they must be recorded by the corporation and thus made available to any interested third parties. See “Item 6: Directors, Senior Management and Employees – A. Directors and Senior Management”. Takeover defenses. Our bylaws do not contain any provisions that would have the effect of delaying, deferring or preventing a change in control of us and that would operate only with respect to a merger, acquisition or Ownership threshold. Our bylaws do not contain any ownership threshold above which shareholder ownership must be disclosed. For a description of the ownership thresholds mandated by Chilean law, see “– Rights, preferences and restrictions regarding shares” above. See “Item Our bylaws do not impose any conditions that are more stringent than those required by law for effecting changes in our capital. General Legislation and Regulations. The Central Bank of Chile is responsible for, among other things, monetary policies and exchange controls in Chile. See “Item 3. Key Information – Selected Financial Data – Exchange Rates”. Foreign investments can be registered with the Central Bank of Chile under Chapter XIV of the Central Bank Foreign Exchange Regulations, which regulates foreign exchange transactions, including access to the Formal Exchange Market. Pursuant to Law N° 20,780, on June 25, 2015 Law N° 20,848 was enacted, replacing Decree Law N° 600 of 1974 and establishing a new statute for direct foreign investments (henceforth, the "New Statute for Foreign Investment"). The New Statute for Foreign Direct Investments went into effect as of January 1, 2016. Foreign investors in companies that maintain a valid foreign investment agreement with the Government of Chile pursuant to the regulations of Decree Law N° 600 will fully retain the rights and obligations set forth in said agreements, provided that the agreements were executed prior to January 1, 2016. The New Statute for Foreign Investment does not grant investors eligibility for a tax invariability regime, which was granted to them by Decree Law N° 600. However, a transitory 4 four-year system has been established, under which foreign investors may request foreign investment authorizations via the execution of agreements with the Government of Chile, albeit subject to a total income tax rate of 44.5%. Effective April 19, 2001, the Central Bank of Chile abrogated the then existing Chapter XXVI of the Central Bank Foreign Exchange Regulations (“Chapter XXVI”), which addressed issuance of ADSs by a Chilean company, and issued an entirely new set of Foreign Exchange Regulations (the “April 19th Regulations”), virtually eliminating all the restrictions and limitations that had been in force up to that date. The April 19th Regulations were based upon the general principle that foreign exchange transactions can be made freely in Chile by any person,notwithstanding the power conferred by law to the Central Bank of Chile of imposing certain restrictions and limitations to such transactions. With the issuance of the April 19th Regulations, the approval by the Central Bank of Chile required for access to the Formal Exchange Market was replaced with the requirement of reporting of the relevant transactions to the Central Bank of Chile. However, some foreign exchange transactions, notably foreign loans, capital investment or deposits, continued to be subject to the requirement of being effected through the Formal Exchange Market. The April 19th Regulations reduced the time needed to effect foreign exchange transactions by foreign investors in Chile. According to the April 19th Regulations, foreign exchange transactions performed before April 19, 2001, remained subject to the regulations in effect at the time of the transactions (i.e. Chapter XXVI), unless the interested parties elected the applicability of the April 19th Regulations, thereby expressly waiving the applicability of the regulations in force at the time of the execution of the respective transaction. On January 23, 2002, the Central Bank of Chile issued an entirely new set of Foreign Exchange Regulations, effective March 1, 2002, replacing the April 19th Regulations (the “New Rules”). The New Rules preserve the general principle established in the April 19th Regulations of freedom in foreign exchange transactions, Pursuant to the New Rules, Chilean entities are allowed, under Chapter XIV, which governs credits, deposits, investments and capital contribution from abroad, to: (i) dispose of such foreign currency allocated abroad, executing any of the transactions contemplated in Chapter XIV, without the need of delivering it into Chile, subject to the obligation of reporting said transaction to the Central Bank of Chile; and (ii) capitalize any liability expressed in foreign currency and acquired abroad. According to the New Rules, section 7 of Chapter XIV, duly in force, states that foreign exchange transactions made pursuant to Chapter XIV, executed before April 19, 2001, were to continue to be subject to the regulations in effect at the time of the transactions, unless the interested parties elect the applicability of the New Rules, expressly waiving the applicability of the provisions which would otherwise govern them. In connection with our initial public offering of ADSs, we entered into a foreign investment contract (the “Foreign Investment Contract”) with the Chilean Central Bank and the Depositary, pursuant to Article 47 of the Central Bank Act and former Chapter XXVI. Absent the Foreign Investment Contract, under Chilean exchange controls in force until April 19, 2001, investors would not have been granted access to the Formal Exchange Market for the purpose of converting Notwithstanding the April 19th Regulations and the New Rules, Chapter XXVI remained in effect with respect to our ADR facility. On March 3, 2014, we, the Central Bank of Chile and the Depositary executed an agreement that terminated the Foreign Investment Contract. Consequently, the special exchange regime established under Chapter XXVI is no longer applicable. The Deposit Agreement, therefore, and the Company’s ADR program became subject to the exchange regulations of general applicability of Chapter XIV or such new regulations that may be issued in the future. The ADS facility is currently governed by Chapter XIV on “Regulations applicable to Credits, Deposits, Investments and Capital Contributions from Abroad”. According to Chapter XIV number 2.3, the establishment of an ADS facility is regarded as an ordinary foreign investment, subject to the above mentioned limitations, and it is not necessary to seek the Central Bank’s prior approval in order to establish an ADS facility. The establishment of an ADS facility only requires that the Central Bank be informed of the transaction, and that the transactions thereunder be conducted through the Formal Exchange Market. Investment in Our Shares and ADSs Investments made in shares of our common stock are subject to the following requirements: According to Chapter XIV of the Central Bank Foreign Exchange Regulations Information Procedures and Forms Manual (hereinafter the “Manual”), any foreign investor acquiring shares of our common stock who brought funds into Chile for that purpose must bring those funds through an entity participating in the Formal Exchange Market; any foreign investor acquiring shares of our common stock to be deposited and converted into ADSs who brought funds into Chile for that purpose must bring those funds through an entity participating in the Formal Exchange Market; in both cases, the entity of the Formal Exchange Market through which the funds are brought into Chile must report such investment to the Central Bank following the instructions detailed in Chapter I of the Manual; all remittances of funds from Chile to the foreign investor upon the sale of the acquired shares of our common stock or from dividends or other distributions made in connection therewith must be made through the Formal Exchange Market; all remittances of funds from Chile to the foreign investor upon the sale of shares underlying ADSs (after conversion is implemented through the depositary) or from dividends or other distributions made in connection therewith must be made through the Formal Exchange Market; and all remittances of funds made to the foreign investor must be reported to the Central Bank by the intervening entity of the Formal Exchange Market. When funds are brought into Chile for a purpose other than to acquire shares for subsequent deposit and eventual conversion into ADSs and subsequently such funds are used to acquire shares to be deposited and converted When funds to acquire shares of our common stock or to acquire shares for subsequent deposit and eventual conversion into ADSs are received by us abroad (i.e., outside of Chile), such investment must be reported to the Central Bank directly by the foreign investor within ten days following the end of the month in which the investment was made, according to number 2.2 of Chapter XIV of the Manual, using its Appendix N° 4. When funds to acquire shares of our common stock or to acquire shares for subsequent deposit and eventual conversion into ADSs are received by us in Chile, such investment must be reported to the Central Bank directly by an entity participating in the Formal Exchange Market on the day the investment is made, according to number 1.2 of Chapter XIV of the Manual. All payments in foreign currency in connection with our shares of common stock or ADSs made from Chile through the Formal Exchange Market must be reported to the Central Bank by the entity participating in the transaction, according to number 4 of Chapter XIV of the Manual. In the event there are payments made with foreign currency originating outside of Chile, the foreign investor must provide the relevant information to the Central Bank directly within the first ten calendar days of the month following the date on which the payment was made, according to number 5 of Chapter XIV of the Manual. There can be no assurance that additional Chilean restrictions applicable to the holders of shares of our common stock or ADSs, the disposition of shares of our common stock underlying ADSs or the conversion or repatriation of the proceeds from such disposition will not be imposed in the future, nor can we assess the duration or impact of such restrictions if imposed. This summary does not purport to be complete and is qualified by reference to Chapter XIV of the Central Bank Foreign Exchange Regulations, a copy of which is available in Spanish and English versions at the Central Bank’s website atwww.bcentral.cl Chilean Tax Considerations The following discussion is based on certain Chilean income tax laws presently in effect, including Rulings N°324 of January 29, 1990, and N°3,708 of October 1, 1999 of the Chilean Internal Revenue Service and other applicable regulations and rulings. The discussion summarizes the principal Chilean income tax consequences Under Chilean law, provisions contained in statutes such as tax rates applicable to foreign holders, the computation of taxable income for Chilean purposes and the manner in which Chilean taxes are imposed and collected may be amended only by another statute. In addition, the Chilean tax authorities issue rulings and regulations of either general or specific application interpreting the provisions of Chilean tax law. Chilean taxes may not be assessed retroactively against taxpayers who act in good faith relying on such rulings and regulations,but Chilean tax authorities may Cash dividends and Other Distributions. Cash dividends paid by us with respect to the ADSs or shares of common stock held by a foreign holder will be subject to a 35.0% withholding tax, which is withheld and paid by us (the “Chilean Withholding Tax”). A credit against the Chilean Withholding Tax is available based on the level of corporate income tax, or first category tax, actually paid by us on the taxable income to which the dividend is imputed; however, this credit does not reduce the Chilean Withholding Tax on a one-for-one basis because it also increases the base on which the Chilean Withholding Tax is imposed. The corporate income tax is For other no resident shareholders, the credit for the corporate tax paid on such income may be used with a limit of 65% of its amount. In these cases, the The foregoing tax consequences apply to cash dividends paid by us. Dividend distributions made in property (other than shares of common stock) will be subject to the same Chilean tax rules as cash dividends. Capital Gains. Gain realized on the sale, exchange or other disposition by a foreign holder of ADSs (or ADRs evidencing ADSs) will not be subject to Chilean taxation, provided that such disposition occurs outside Chile or that it is performed under the rules of Title XXIV of the Chilean Securities Market Law, as amended by Law N°19,601, dated January 18, 1999. The deposit and withdrawal of shares of common stock in exchange for ADRs will not be subject to any Chilean taxes, according to Rulings N°1,705 of May 15, 2006 and N°2,144 of October 3, 2013. The tax basis of shares of common stock received in exchange for ADSs will be the acquisition value of such shares. The valuation procedure set forth in the deposit agreement, which has been analyzed by the Chilean Internal Revenue Service pursuant to Ruling Nº 324 of 1990, values shares of common stock that are being exchanged at the highest price at which they trade on the Santiago Stock Exchange on the date of the exchange, generally will determine the acquisition value for this purpose. Consequently, the conversion In the case where the sale of the shares is made on a day that is different from the date in which the exchange is recorded, capital gains subject to taxation in Chile may be generated. However, following Ruling N° 3708 of 1999 of the Chilean Internal Revenue Service, we will include in the deposit agreement a provision whereby the capital gain that may be generated if the exchange date is different from the date in which the shares received in exchange for ADSs are sold, will not be subject to taxation. Such provision states that in the event that the exchanged shares are sold by the ADS holders in a Chilean stock exchange on the same day in which the exchange is recorded in the shareholders’ registry of the issuer or within two business days prior to the date on which the sale is recorded in the shareholders’ registry, the acquisition price of such exchanged shares shall be the price registered in the invoice issued by the stock broker that participated in the sale transaction. The exercise of preemptive rights relating to the shares of common stock will not be subject to Chilean taxation. Amounts received for the assignment of preemptive rights relating to the shares will be subject to both the first category tax and the Chilean Withholding Tax (the former being creditable against the latter to the extent described above). Given the amendments made to the Chilean Tax Legislation which is fully enforced from 2017, please bear in mind that the tax treatment just mentioned regarding the ADR could be subject to future modifications, considering that the current tax treatment of ADR is supported in Chilean Internal Revenue Service rulings mentioned above, taking into account the new regulation of the taxation in indirect transfer of assets. The Chilean Internal Revenue Service has not enacted any rule nor issued any ruling about the applicability of the norms explained below (referred to as Laws Nº 19,738 and Nº 19,768) to the foreign holders of ADRs. To the extent that our shares are actively traded on a Chilean stock exchange, foreign institutional investors who acquire our shares may benefit from a tax exemption included in an amendment to the Chilean Income Tax Law, Law Nº 19,738 published on June 19, 2001, as amended by Law Nº 20,448 published on August 13, 2010. The amendment established an exemption for the payment of income tax by foreign institutional investors, such as mutual funds, pension funds and others, that obtain capital gains in the sales through a Chilean stock exchange, a tender offer or any other system authorized by the A foreign institutional investor is an entity that is either: In order to be entitled to the exemption, foreign institutional investors, during the time in which they operate in Chile must: It is important to take into account that Article 106 of the Chilean Income Tax Law that contains the mentioned exemption was abrogated by Act N° 20,712 enacted on December 24, 2013. Transitional In addition, Transitory Pursuant to the enacted amendment to the Chilean Income Tax Law published on November 7, 2001 (Law N° 19,768) as amended by Law Nº 19,801 published on April 25, 2002, as amended by Law Nº 20,448 published on August 13, 2010, the sale and disposition of shares of Chilean public corporations which are actively traded on a Chilean stock exchange is not levied by any Chilean tax on capital gains if the sale or disposition was made: Other Chilean Taxes. No Chilean inheritance, gift or succession taxes apply to the transfer or disposition of the ADSs by a foreign holder but such taxes generally will apply to the transfer at death or by a gift of shares of common stock by a foreign holder. No Chilean stamp, issue, registration or similar taxes or duties apply to foreign holders of ADSs or shares of common stock. Withholding Tax Certificates. Upon request, we will provide to foreign holders appropriate documentation evidencing the payment of the Chilean Withholding Tax. We will also inform when the withholding was excessive in order to allow the filing for the reimbursement of taxes. In order to comply with our withholding obligations, we may require certificates of residence, affidavits or any other type of documentation aimed to demonstrate the tax residence and effective beneficiary status of the foreign holders. United States Federal Income Tax Considerations The following discussion summarizes the principal U.S. federal income tax considerations relating to the acquisition, ownership and disposition of This summary does not purport to address all the material U.S. federal income tax consequences that may be relevant to the U.S. holders of the As used below, a “U.S. holder” is a beneficial owner of ·an individual citizen or resident of the United States; ·an estate, the income of which is subject to U.S. federal income tax regardless of its source; or ·a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (B) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person. If a partnership or other entity taxable as a partnership holds In general, for U.S. federal income tax purposes, holders of ADRs evidencing ADSs will be treated as the beneficial owners of the Taxation of Distributions Since January 1st, 2017, we are subject to Chile’s Partially Integrated System, which may affect the U.S. federal income tax treatment of distributions on our The gross amount of any dividends (including amounts withheld in respect of Chilean taxes) paid with respect to the Under current law, the U.S. dollar amount of dividends by an individual with respect to the ADSs will be subject to taxation at a reduced rate if the dividends represent “qualified dividend income”. Dividends paid on the ADSs will be treated as qualified dividend income if (i) the ADSs are readily tradable on an established securities market in the United States, (ii) the U.S. holder meets the holding period requirement for the ADSs (generally more than 60 days during the 121-day period that begins 60 days before the ex-dividend date), and (iii) we were not in the year prior to the year in which the dividend was paid, and are not in the year in which the dividend is paid, a passive foreign investment company (“PFIC”). The ADSs are listed on the New York Stock Exchange, and should qualify as readily tradable on an established securities market in the United States so long as they are so listed. However, no assurances can be given that the ADSs will be or remain readily tradable. Based on our audited financial statements as well as relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our Based on existing guidance, it is not entirely clear whether dividends received with respect to the shares of Dividends paid by us generally will constitute foreign source “passive category” income and will be subject to various other limitations for U.S. foreign tax credit purposes. Subject to generally applicable limitations under U.S. federal income tax law, Chilean income tax withheld on such dividends, reduced by the credit for any first category tax, as described above under “Item 10, Additional Information—E. Taxation—Chilean Tax Considerations—Cash dividends and Other Distributions”, generally will be treated as a foreign income tax eligible for credit against a U.S. holder’s U.S. federal income tax liability (or at a U.S. holder’s election if it does not elect to claim a foreign tax credit for any foreign income taxes paid during the taxable year, all foreign income taxes paid may instead be deducted in computing such U.S. holder’s taxable income). In general, special rules will apply to the calculation of foreign tax credits in respect of dividend income that is subject to preferential rates of U.S. federal income tax. U.S. holders should be aware that the IRS has expressed concern that parties to whom ADSs are released may be taking actions that are inconsistent with the claiming of foreign tax credits by U.S. holders of ADSs. Accordingly, the discussion above regarding the creditability of Chilean income tax on dividends could be affected by future actions that may be taken by the IRS. The rules with respect to the U.S. foreign tax credit are complex, and U.S. holders of Taxation of Capital Gains Deposits and withdrawals of In general, gain or loss, if any, realized by a U.S. holder upon a sale, exchange or other taxable disposition of Gain, if any, realized by a U.S. holder on the sale, exchange or other taxable disposition of Passive Foreign Investment Company Rules In general, a foreign corporation is a PFIC with respect to a U.S. holder if, for any taxable year in which the U.S. holder holds stock in the foreign corporation, at least 75% of the foreign corporation’s gross income is passive income or at least 50% of the value of its assets (determined on the basis of a quarterly average) produce passive income or are held for the production of passive income. For this purpose, passive income generally includes, among other things, dividends, interest, rents, royalties and gains from the disposition of investment assets (subject to various exceptions). Based upon our current and projected income, assets and activities, we do not expect the A U.S. U.S. Information Reporting and Backup Withholding A U.S. holder of “Specified Foreign Financial Asset” Reporting Owners of “specified foreign financial assets” with an aggregate value in excess of Prospective purchasers should consult their own tax advisors regarding the application of the U.S. federal income tax laws to their particular situations as well as any additional tax consequences resulting from purchasing, holding or disposing of Not applicable. Not applicable. We are subject to the informational requirements of the Exchange Act. In accordance with these requirements, we file annual reports and submit other information to the United States Securities and Exchange Commission ITEM 11: Quantitative and Qualitative Disclosures about Market Risk The following discussion about our risk management activities includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. We face primary market risk exposures in three categories: interest rate fluctuations, exchange rate fluctuations and commodity price fluctuations. We periodically review our exposure to the three principal sources of risk described above and determine at our senior-management level how to minimize the impact on our operations of commodity price, foreign exchange and interest rate changes. As part of this review process, we periodically evaluate opportunities to enter into hedging mechanisms to mitigate such risks. The market risk sensitive instruments referred to below are entered into only for purposes of hedging our risks and are not used for trading purposes. A.Qualitative Information About Market Risk Interest Rate Risk As of December 31, To manage the interest rate risk, we have an interest rate administration policy that intends to reduce the volatility of our financial expenses, and to maintain an ideal percentage of our debt in fixed interest rate instruments. The financial position is mainly set by the use of short-term and long-term debt, as well as derivative instruments such as cross currency interest rate swaps and cross interest rate swaps. As of December 31, The terms and conditions of the Company’s obligations as of December 31, Commodity and Raw Material Price Sensitivity The principal commodity price Of the cost of Chile Operating segment, the cost of cans represents approximately Concentrates, sugar and plastic resin. The Grapes and wine. The principal raw materials used by our wine subsidiary VSPT in the production of wine are its own harvested grape as well as purchased grapes and wine. VSPT obtains approximately Exchange Rate Sensitivity We are exposed to exchange rate risks As of December 31, Regarding the foreign subsidiaries operations, the net exposure assets in To protect the value of the foreign currency assets and liabilities net position of our Chilean operations, we enter into derivative agreements (currency forwards) to hedge against any variation in the Chilean peso as compared to other currencies. As of December 31, In On the other hand, we are exposed to exchange rate movements related to the conversion from As of December 31, Quantitative Information About Market Risk Interest Rate Sensitivity Most of our debt is at a fixed interest rate, so it is not mainly exposed to fluctuations in interest rates. As of December 31, The following table summarizes debt obligations with interest rates by maturity date, the related weighted-average interest rates and fair values: Interest - Bearing Debts as of December 31, 2016 (millions of Ch$, except percentages) Contractual Flows Maturities Interest - Bearing Debts as of December 31, 2019 Interest - Bearing Debts as of December 31, 2019 (millions of CLP, except percentages) (millions of CLP, except percentages) Contractual Flows Maturities Contractual Flows Maturities 2017 2018 2019 2020 2021 Thereafter Total Fair Value 2020 2021 2022 2023 2024 Thereafter Total Fair Value Interest bearing liabilities Interest bearing liabilities Interest bearing liabilities Fixed rate Fixed rate Ch$ (UF)(1) Bonds and Banks 7,435 7,176 19,435 11,139 10,833 85,517 141,536 122,528 CLP(UF)(1) Bonds and Banks 13,493 11,801 11,584 10,773 10,557 188,012 246,219 220,472 Average interest rate 4.6% 3.6% 4.5% 5.2% Average interest rate 3.5% 3.7% 3.8% 3.2% Ch$ 28,794 2,660 313 - 34,740 34,318 CLP 18,883 10,122 59,929 1,904 1,846 1,754 94,440 89,696 Average interest rate 5.9% 5.2% 5.1% Average interest rate 2.8% 4.0% 4.6% 3.8% US$ 1,086 - 1,086 1,083 USD 13,449 9,715 11,269 315 1,840 36,903 36,900 Average interest rate 2.9% Average interest rate 3.3% 3.1% 6.0% Argentine pesos 9,686 4,378 2,683 - 16,747 13,163 EUR 107 101 30 - 369 369 Average interest rate 27.4% 30.5% Average interest rate 1.5% Uruguayan pesos 1,045 348 - 1,742 ARS 2,579 116 - - - - 2,695 2,695 Average interest rate 6.0% Average interest rate 53.3% 62.0% BOB 42 1,696 3,392 922 11,141 11,141 Average interest rate 5.0% UIU 719 240 - - - - 958 958 Average interest rate 4.9% Variable rate Variable rate US$ 108 5,332 - - 5,440 5,336 Average interest rate Libor + 1.8% USD 7,720 - - - - - 7,720 7,664 Average interest rate 3.1% Argentine pesos 2,154 1,586 1,005 - 4,744 3,423 Argentine pesos 4,385 - - - - - 4,385 4,385 Average interest rate Badlar + 18.0% 15.67% 15.7% Average interest rate 55.0% Non interest bearing liabilities Non interest bearing liabilities Non interest bearing liabilities Derivate Contract Derivate Contract Derivate Contract Cross Interest Rate Swap: Cross Interest Rate Swap: Cross Interest Rate Swap: Receive - Receive - - - - - - - - Pay - - - - - - - - - Forwards 11,119 - 11,119 Forwards 240 - - - - - 240 240 (1) UF as of Dec 31, 2016 (1) UF as of Dec 31, 2019. (1) UF as of Dec 31, 2019. Commodity Price Sensitivity The major commodity price sensitivity faced by us relate to fluctuations in malt prices. The following table summarizes information about our malt, sugar and bulk wine inventories and futures contracts that are sensitive to changes in commodity prices, mainly malt prices. For inventories, the table presents the carrying amount and fair value of the inventories and contracts as of December 31, Commodity Price Sensitivity as of December 31, 2019 Carrying Amount Fair Value On Balance Sheet Position Malt inventory (millions of CLP) 7,981 7,981 Bulk wine inventory - raw material (millions of CLP) 39,759 43,933 Expected Maturity Fair Value 2020 2021 2022 2023 2024 Thereafter Purchase Contracts Malt: Fixed Purchase Volume (tons) 157,368 150,250 152,000 156,000 158,250 26,500 Weighted Average Price (USD per ton)(*) 510 510 510 510 510 510 Contract Amount (thousands of USD) 80,275 76,644 77,537 79,577 80,725 13,518 408,276 Sugar: Fixed Purchase Volume (tons) 55,647 52,839 - - - - Weighted Average Price (USD per ton)(*) 467 467 - - - - Contract Amount (thousands of USD) 25,987 24,676 - - - - 50,663 Grapes: Fixed Purchase Volume (tons) 58,231 29,867 20,678 12,795 400 - Weighted Average Price (CLP per kg.)(*) 205 186 185 165 633 - Contract Amount (millions of CLP) 11,910 5,542 3,822 2,111 253 - 23,638 Wine: Fixed Purchase Volume (Mlts) 14,443 - - - - - Weighted Average Price (CLP per liter)(*) 231 - - - - - Contract Amount (millions of CLP) 3,332 - - - - - 3,332 (*) Weighted average price estimation is calculated based on expected market prices. Prices to be paid by us are adjusted based on current market conditions. Commodity Price Sensitivity as of December 31, 2016 Carrying Amount Fair Value On Balance Sheet Position Malt inventory (millions of CLP) 8,817 8,817 Bulk wine inventory - raw material (millions of CLP) 30,337 30,337 Expected Maturity Fair Value 2017 2018 2019 2020 2021 Thereafter Purchase Contracts Malt: Fixed Purchase Volume (tons) 126,033 128,867 133,183 87,983 - - - Weighted Average Price (US$ per ton)(*) 523 523 523 523 - - - Contract Amount (thousands of US$) 65,967 67,450 69,709 46,051 - - 239,797 Sugar: - - - - - - - Fixed Purchase Volume (tons) 65,219 - - - - - - Weighted Average Price (US$ per ton)(*) 610 - - - - - - Contract Amount (thousands of US$) 39,784 - - - - - 39,322 Grapes: Fixed Purchase Volume (tons) 34,752 24,789 13,247 4,026 1,110 84 - Weighted Average Price (CLP per kg.)(*) 201 189 203 259 182 934 - Contract Amount (millions of CLP) 6,971 4,676 2,690 1,043 202 78 14,752 Wine: Fixed Purchase Volume (Mlts) 4,639 2,700 2,700 - - - - Weighted Average Price (CLP per liter)(*) 373 166 166 - - - - Contract Amount (millions of CLP) 1,730 448 448 - - - 2,507 (*) Weighted average price estimation is calculated based on expected market prices. Prices to be paid by us are adjusted based on current market conditions. As of December 31, Exchange Rate Sensitivity The major exchange rate risk faced by us is the variation of the Chilean peso against the A portion of our subsidiaries adjusted operating results, assets and liabilities are in currencies that differ from our functional currencies. However, since some of their operating revenues, costs and expenses are in the same currency, this can create a partial natural hedge. For the portion that is not naturally hedged of operations in Chile we enter into derivative agreements (currency forwards) to mitigate any variation in the Chilean peso as compared to other currencies. The following table summarizes our debt obligations, cash and cash equivalents, accounts receivable, accounts payable and derivative contracts in foreign currencies as of December 31, Exchange Rate Sensitivity as of December 31, 2016 Exchange Rate Sensitivity as of December 31, 2019 Exchange Rate Sensitivity as of December 31, 2019 (millions of CLP, except percentages and exchange rate) (millions of CLP, except percentages and exchange rate) (millions of CLP, except percentages and exchange rate) Contractual Maturity Date 2019 2020 2021 2022 2023 Thereafter Total Fair Value 2017 2018 2019 2020 2021 Thereafter Total Fair Value Debt Obligations Debt Obligations Debt Obligations Variable rate (US$) Variable rate (USD) Variable rate (USD) Short and medium term Short and medium term 108 5,332 - 5,440 5,336 Short and medium term 7,720 - - - - - 7,720 7,664 Average int.rate Libor + 1.8% 1.8% - Fixed rate (US$) Average int.rate Libor + Average int.rate Libor + 3.1% Fixed rate (USD) Fixed rate (USD) Short term 1,086 - 1,086 1,083 Short term 13,449 9,715 11,269 315 315 1,840 36,903 36,900 Interest rate 2.9% - Interest rate 3.3% 3.1% 3.1% 6.0% 6.0% 6.0% Fixed rate (USD) Fixed rate (USD) Short term Short term 107 101 101 30 30 - 369 369 Interest rate 1.5% 1.5% 1.5% 1.5% 1.5% Cash and Cash Cash and Cash Cash and Cash Equivalents(1) Equivalents(1) Equivalents(1) US$ 8,238 - 8,238 USD 25,498 25,498 25,498 Others 1,290 - 1,290 3,724 3,724 3,724 TOTAL 9,528 - 9,528 29,222 29,222 29,222 Accounts Receivable(1) Accounts Receivable(1) Accounts Receivable(1) US$ 24,449 - 24,449 USD 35,796 35,796 35,796 EUR 7,025 - 7,025 9,710 9,710 9,710 Others 1,257 - 1,257 1,762 1,762 1,762 TOTAL 32,732 - 32,732 47,268 47,268 47,268 (1)Figures as of December 31, 2016. (1) Figures as of December 31, 2019. (1) Figures as of December 31, 2019. Contractual Maturity Date Notional 2017 2018 2019 2020 2021 Thereafter Total Fair Value Notional 2020 2021 2022 2023 2024 Thereafter Total Fair Value amount amount Derivate Contracts (in millions of Ch$) Receive US$ 467 5,332 - 5,799 5,695 Pay US$ 18,031 - 18,031 17,991 Derivate Contracts Derivate Contracts (in millions of CLP) (in millions of CLP) Receive USD Receive USD 3,230 8,798 - - - - 12,029 11,810 Pay USD Pay USD 161 - - - - - 161 161 Receive EUR 109 - 109 109 Receive EUR 412 - - - - - 412 412 Pay EUR 578 4,967 - 5,545 5,603 Pay EUR 161 8,436 - - - - 8,597 8,644 Receive Others 11 - 11 11 Receive Others 11 - - - - - 11 11 Pay Others 9 - 9 9 Pay Others - - - - - - - - ITEM 12: Description of Securities Other than Equity Securities 12.D.3. Depositary Fees and Charges JPMorgan is the depositary of CCU shares in accordance with the amended and restated Deposit Agreement, dated July 31, 2013, entered into by and among CCU, JPMorgan, as depositary, and all owners from time to time of ADSs issued by CCU (“Deposit Agreement”). Pursuant to the Deposit Agreement, holders of our ADSs may have to pay to JPMorgan, either directly or indirectly, fees or charges up to the amounts set forth in the table below. Service Fee Issuance of ADSs Cancellation or withdrawal of ADSs Cash distributions Transfer of ADRs USD 1.50 per ADR or ADRs Distribution or sale of securities pursuant to the Deposit Agreement Fee shall be in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities. The Depositary may sell (by public or private sale) sufficient securities and property received in respect of share distributions, rights and other distributions contemplated by Article IV of the Deposit Agreement prior to such deposit to pay such charge. During each year, the depositary will collect fees of ADS holders will also be responsible to pay certain fees and expenses incurred by the depositary bank and/or any of its agents (including, without limitation, the custodian, and expenses incurred on behalf of holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment),in connection with the servicing of the shares or other deposited securities, the sale of securities, the delivery of deposited securities or otherwise in connection with the Depositary's or its custodian's compliance with applicable law, rule or regulation (which shall be payable at the sole discretion of the Depositary by billing such holders or by deducting such charge from one or more cash dividends or other cash distributions),and certain taxes and governmental charges such 12.D.4. Depositary Payments In program. ITEM 13: Defaults, Dividend Arrearages and Delinquencies Not applicable. ITEM 14: Material Modifications to the Rights of Security Holders and Use of Proceeds Not applicable. ITEM 15: Controls and Procedures (a) Controls and Procedures. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, Disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods required and that such information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. (b) Management’s Annual Report on Internal Control over Financial Reporting. Our management, including our CEO and CFO, are responsible for establishing and maintaining adequate internal controls over financial reporting and has assessed the effectiveness of our internal control over financial reporting as of December 31, Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness of internal control to future periods are subject to the risk that controls may become inadequate because of changes in conditions, and that the degree of compliance with the policies or procedures may deteriorate. The effectiveness of our internal control over financial reporting as of December 31, (c) Attestation Report of the Registered Public Accounting Firm. See (d) Changes in Internal Control over Financial Reporting. There has been no change in our internal control over financial reporting during (e) Whistle-blowing procedure. We have a whistle-blowing procedure which allows any employee of CCU, of its associates or any person, to communicate to a designated person questionable practices or activities that constitute a breach of accounting procedures, internal controls, audit matters and the Code of Business Conduct. ITEM 16A: Audit Committee Financial Expert At the board of directors´ meeting held on April 13, 2016, following the election of a new board at the shareholders´ meeting held the same day, the board of directors appointed directors Messrs. Vittorio Corbo and Carlos Molina to our audit committee. Mr. Corbo and Mr. Molina meet the independence criteria under the Exchange Act and under the NYSE Rules. The board of directors also resolved that directors Messrs. José Miguel Barros and Francisco Pérez shall participate in the audit At the board of directors’ meeting held on April 17, 2019, following the election of a new board at the shareholders´ meeting held the same day, the board of directors appointed directors Messrs. Vittorio Corbo and Carlos Molina to our audit committee, both of whom meet the independence criteria under the Exchange Act and under the NYSE Rules. The board of directors also resolved that directors Messrs. José Miguel Barros and Francisco Pérez shall participate in the audit committee’s meetings as observers. We do not have an audit committee financial expert serving on our audit committee, as such term is defined under Item 407 of Regulation S-K. We do not have an audit committee financial expert because we are not required to appoint one under Chilean law. We have adopted a Code of Business Conduct that applies to all of our executive officers and employees. Our Code of Business Conduct is available on our website atwww.ccu.cl orwww.ccuinvestor.com. Our code of ethics was updated on March 4, 2014 and no waivers, either explicit or implicit, of provisions of the code of ethics have been granted to the Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer. The information on our website is not incorporated by reference into this document. In December 2013, we adopted a Code of Conduct of the board of directors that applies to all of the members of our board of directors, which was updated in July and December 2015. This Code of Conduct is available on our website atwww.ccu.cl orwww.ccuinvestor.com. The Code of Conduct sets forth certain basic principles intended to guide the actions of our directors, as well as certain procedures, policies and corporate governance best practices. The Code of Conduct covers matters of confidentiality, access to independent experts, and orientation of newly elected directors and review of information regarding candidates for election to the board of directors. The Code of Conduct also establishes rules and procedures regarding conflicts of interest. The information on our website is not incorporated by reference into this document. ITEM 16C: Principal Accountant Fees and Services The following table sets forth the fees billed to us by our independent auditors,PricewaterhouseCoopers 2019: 2014 2015 2016 2017 2018 2019 (millions of CLP) (millions of CLP) Audit Fees 462 487 743 737 689 864 Audit-Related Fees - 30 1 0 0 Tax Fees - 8 7 8 7 6 All Other Fees 2 11 18 12 16 Total Fees 464 506 798 758 712 886 “Audit fees” in the above table are the aggregate fees billed by Audit Committee Pre-Approval Policies and Procedures Since July 2005, our audit committee pre-approves all audit and non-audit services provided by our independent auditor pursuant to Sarbanes-Oxley Act of 2002. ITEM 16D: Exemptions from the Listing Standards for Audit Committees Not applicable. ITEM 16E: Purchases of Equity Securities by the Issuer and Affiliated Purchasers Not applicable. ITEM 16F: Change in Registrant’s Certifying Accountants ITEM 16G: Corporate Governance General summary of significant differences with regard to corporate government standards The following paragraphs provide a brief, general summary of significant differences between corporate government practices followed by us pursuant to our home-country rules and those applicable to U.S. domestic issuers under NYSE listing standards. Composition of the board of directors; independence. The NYSE listing standards provide that listed companies must have a majority of independent directors and that certain board committees must consist solely of independent directors. Under NYSE rule 303A.02, a director qualifies as independent only if the board affirmatively determines that such director has no material relationship with the company, either directly or indirectly. In addition, the NYSE listing standards enumerate a number of relationships that preclude independence. Under the Chilean Corporations Act an Furthermore, such transactions must be reviewed by the directors’ committee (as defined below); they require prior approval by the board of directors and must be disclosed at the next meeting of shareholders, unless such transactions fall within one the exemptions contemplated by the Chilean Corporations Act or, if applicable, included in the usual practice policy approved by the board of directors. See “Item 7: Major Shareholders and Related Party Transactions”. Pursuant to NYSE rule 303A.00, we may follow Chilean practices and are not required to have a majority of independent directors. Committees.The NYSE listing standards require that listed companies have a Under Chilean law, the only board committee that is required is the Pursuant to NYSE Rule 303A.06, we must have an audit committee that satisfies the requirements of Rule 10A-3 under the Exchange Act by July 31, 2005. At the board of directors´ meeting held on April Shareholder approval of equity-compensation plans. Under NYSE listing standards, shareholders must be given the opportunity to vote on all equity-compensation plans and material revisions thereto, with limited exemptions. An “equity-compensation plan” is a plan or other arrangement that provides for the delivery of equity securities of the listed company to any employee, director or other service provider as compensation for services. Under Chilean law, if previously approved by shareholders at an extraordinary shareholders’ meeting, up to ten percent of a capital increase in a publicly traded company may be set aside to fund equity-compensation plans for the company’s employees and/or for the employees of the company’s subsidiaries. Pursuant to NYSE rule 303A.00, as a foreign private issuer, we may follow Chilean practices and are not required to comply with the NYSE listing standards with respect to shareholder approval of equity-compensation plans. Corporate Governance Guidelines.The NYSE listing standards provide that listed companies must adopt and disclose corporate governance guidelines with regard to (a) director qualifications standards; (b) director responsibilities; (c) director access to management and independent advisors; (d) director compensation; (e) director orientation and continuing education; (f) management succession; and (g) annual performance evaluations of the board. Chilean law does not require that such corporate governance guidelines be adopted. Director responsibilities and access to management and independent advisors are directly provided for by applicable law. Director compensation is determined by the annual meeting of shareholders pursuant to applicable law. As a foreign private issuer, we may follow Chilean practices and are not required to adopt corporate governance guidelines. Pursuant to Code of Business Conduct.The NYSE listing standards require that listed companies adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. We have adopted a code of business conduct that applies generally to all of our executive officers and employees. A copy of the code of business conduct, as amended, is available on our website atwww.ccu.cl orwww.ccuinvestor.com. The information on our website is not incorporated by reference into this document. We have also adopted a code of conduct that applies to all members of our board of directors. A copy of this code is available on our website atwww.ccu.cl orwww.ccuinvestor.com. The information on our website is not incorporated by reference into this document. Manual of Information of Interest to the Market. In 2008, the SVS (currently “Comisión para el Mercado Financiero”, or “CMF”) promulgated new rules which require Executive Sessions. To empower non-management directors to serve as a more effective check on management, NYSE listing standards provide that non-management directors of each company must meet at regularly scheduled executive sessions without management. Under Chilean law, the office of director is not legally compatible with that of general manager in publicly traded companies. The board of directors exercises its functions as a collective body and may partially delegate its powers to executive officers, attorneys, a director or a board commission of the company, and for specific purposes to other persons. As a foreign private issuer, we may follow Chilean practices and are not required to comply with the NYSE listing standard for executive sessions. Certification Requirements. Under NYSE listing standards, Section 303A.12(a) provides that each listed company CEO must certify to the NYSE each year that he or she is not aware of any violation by the company of NYSE corporate governance listing standards, and Section 303A.12(b) provides that each listed company CEO must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any material non-compliance with any applicable provisions of Section 303A. As a foreign private issuer, we must comply with Section 303A.12(b) of the NYSE listing standards, but we are not required to comply with 303A.12(a). ITEM 16H: Mine Safety Disclosure Not applicable. The Company has responded to Item 18 in lieu of responding to this item. See Annex for the Financial Statements. Index to Exhibits 1.1 Unofficial English translation of the By-laws of the Company (incorporated by reference to Exhibit 3.1 of the Company’s registration statement on Form F-3 (File 2(d)Description Of Securities Other Than Equity Securities. 8.1 Compañía Cervecerías Unidas S.A. significant 101.INS XBRL Instance Document. 101.SCH XBRL Taxonomy Extension Schema Document. 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB XBRL Taxonomy Extension Label Linkbase Document. 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. SIGNATURES The Registrant certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf. Compañía Cervecerías Unidas S.A. By: /s/ Patricio Jottar ___________________ Name: Patricio Jottar Title: Chief Executive Officer Date: April27th, INDEX CONSOLIDATED STATEMENT OF FINANCIAL POSITION (ASSETS) CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF INCOME CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOW 37 Environment liabilities 71 Note 30 Other incomes by function Note 31 Other Gains (Losses) Note 32 Financial results Compañía Cervecerías Unidas S.A. and subsidiaries Consolidated Statement of Financial Position (Figures expressed in thousands of Chilean pesos) ASSETS Notes As of December 31, 2019 As of December 31, 2018 ThCh$ ThCh$ Current assets Cash and cash equivalents 8 196,369,224 319,014,050 Other financial assets 7 9,815,358 22,745,469 Other non-financial assets 9 22,395,591 18,861,414 Trade and other current receivables 10 300,013,940 320,702,339 Accounts receivable from related parties 11 3,278,685 3,048,841 Inventories 12 232,434,461 228,062,237 Biological assets 13 9,459,071 8,489,873 Current tax assets 24 15,132,290 17,302,429 Total current assets other than non-current assets of disposal groups classified as held for sale 788,898,620 938,226,652 Non-current assets of disposal groups classified as held for sale 14 383,138 2,780,607 Total Non-current assets of disposal groups classified as held for sale 383,138 2,780,607 Total current assets 789,281,758 941,007,259 Non-current assets Other financial assets 7 4,670,538 3,325,079 Other non-financial assets 9 7,042,297 5,007,150 Trade and other non-current receivables 10 3,224,627 3,363,123 Accounts receivable from related parties 11 118,122 190,865 Investments accounted for using equity method 16 136,098,062 142,017,781 Intangible assets other than goodwill 17 125,618,666 118,964,142 Goodwill 18 124,955,438 123,044,901 Property, plant and equipment (net) 19 1,097,534,155 1,021,266,631 Investment property 20 8,313,274 8,715,956 Deferred tax assets 24 54,528,648 37,691,088 Current tax assets non-current 24 2,305,129 1,270,941 Total non-current assets 1,564,408,956 1,464,857,657 Total Assets 2,353,690,714 2,405,864,916 The accompanying notes 1 to 35 are an integral part of these consolidated financial statements. Compañía Cervecerías Unidas S.A. and subsidiaries Consolidated Statement of Financial Position (Figures expressed in thousands of Chilean pesos) LIABILITIES AND EQUITY Notes As of December 31, 2019 As of December 31, 2018 LIABILITIES ThCh$ ThCh$ Current liabilities Other financial liabilities 21 68,385,728 62,766,946 Trade and other current payables 22 306,655,558 303,380,168 Accounts payable to related parties 11 8,979,434 6,936,910 Other current provisions 23 3,040,930 405,069 Current tax liabilities 24 20,504,374 75,885,449 Provisions for employee benefits 25 27,356,205 31,794,163 Other non-financial liabilities 26 48,359,767 164,555,540 Total current liabilities 483,281,996 645,724,245 Non-current liabilities Other financial liabilities 21 261,769,288 228,185,297 Trade and other non-current payables 22 26,550 12,413 Other non-current provisions 23 531,961 7,425,759 Deferred tax liabilities 24 131,582,558 108,500,171 Provisions for employee benefits 25 33,571,138 26,901,088 Total non-current liabilities 427,481,495 371,024,728 Total liabilities 910,763,491 1,016,748,973 EQUITY Equity attributable to equity holders of the parent 27 Paid-in capital 562,693,346 562,693,346 Other reserves (137,502,529) (151,048,226) Retained earnings 902,863,353 868,481,588 Total equity attributable to equity holders of the parent 1,328,054,170 1,280,126,708 Non-controlling interests 28 114,873,053 108,989,235 Total Shareholders' Equity 1,442,927,223 1,389,115,943 Total Liabilities and Shareholders' Equity 2,353,690,714 2,405,864,916 The accompanying notes 1 to 35 are an integral part of these consolidated financial statements. Compañía Cervecerías Unidas S.A. and subsidiaries Consolidated Statement of Income (Figures expressed in thousands of Chilean pesos) CONSOLIDATED STATEMENT OF INCOME Notes For the years ended December 31, 2019 2018 2017 ThCh$ ThCh$ ThCh$ Net sales 6 1,822,540,697 1,783,282,337 1,698,360,794 Cost of sales 29 (908,318,190) (860,011,392) (798,738,655) Gross margin 914,222,507 923,270,945 899,622,139 Other income by function 30 22,584,710 228,455,054 6,717,902 Distribution costs 29 (327,543,973) (314,391,183) (290,227,129) Administrative expenses 29 (136,975,243) (152,376,458) (142,514,649) Other expenses by function 29 (241,479,749) (216,236,609) (238,704,061) Other gains (losses) 31 3,156,799 4,029,627 (7,716,791) Income from operational activities 233,965,051 472,751,376 227,177,411 Finance income 32 13,117,641 15,794,456 5,050,952 Finance costs 32 (27,720,203) (23,560,662) (24,166,313) Share of net loss of joint ventures and associates accounted for using the equity method 16 (16,431,759) (10,815,520) (8,914,097) Foreign currency exchange differences 32 (9,054,155) 3,299,657 (2,563,019) Result as per adjustment units 32 (8,255,001) 742,041 (110,539) Income before taxes 185,621,574 458,211,348 196,474,395 Income tax expense 24 (39,975,914) (136,126,817) (48,365,976) Net income of year 145,645,660 322,084,531 148,108,419 Net income attributable to: Equity holders of the parent 130,141,692 306,890,792 129,607,353 Non-controlling interests 28 15,503,968 15,193,739 18,501,066 Net income of year 145,645,660 322,084,531 148,108,419 Basic earnings per share (Chilean pesos) from: Continuing operations 352.21 830.55 350.76 Diluted earnings per share (Chilean pesos) from: Continuing operations 352.21 830.55 350.76 The accompanying notes 1 to 35 are an integral part of these consolidated financial statements. Compañía Cervecerías Unidas S.A. and subsidiaries Consolidated Statement of Comprehensive Income (Figures expressed in thousands of Chilean pesos) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Notes For the years ended December 31, 2019 2018 2017 ThCh$ ThCh$ ThCh$ Net income of year 145,645,660 322,084,531 148,108,419 Other comprehensive income Components of other comprehensive income that will not be reclassified to income for the year, before taxes Gains (losses) from defined benefit plans 27 (4,127,305) (1,263,781) 19,669 Other comprehensive income that will not be reclassified to income for the year, before taxes (4,127,305) (1,263,781) 19,669 Components of other comprehensive income that will be reclassified to income for the year, before taxes Gains (losses) on exchange differences on translation 27 17,077,670 37,990,079 (34,786,480) Gains (losses) on cash flow hedges 27 345,986 63,008 (5,661) Other comprehensive income that will be reclassified to income for the year, before taxes 17,423,656 38,053,087 (34,792,141) Other comprehensive income, before tax 13,296,351 36,789,306 (34,772,472) Income taxes related to components of other comprehensive income that will not be reclassified to income for the year Income tax relating to defined benefit plans 27 1,107,699 339,533 (47,228) Income taxes related to components of other comprehensive income that will not be reclassified to income for the year 1,107,699 339,533 (47,228) Income taxes related to components of other comprehensive income that will be reclassified to income for the year Income tax relating to cash flow hedges 27 (93,416) (16,196) 728 Income taxes related to components of other comprehensive income that will be reclassified to income for the year (93,416) (16,196) 728 Total other comprehensive income and expense 14,310,634 37,112,643 (34,818,972) Comprehensive income (expense) 159,956,294 359,197,174 113,289,447 Comprehensive income (expense) attributable to: Equity holders of the parent 143,626,508 341,548,106 96,580,893 Non-controlling interests 16,329,786 17,649,068 16,708,554 Total Comprehensive income (expense) 159,956,294 359,197,174 113,289,447 . The accompanying notes 1 to 35 are an integral part of these consolidated financial statements. Compañía Cervecerías Unidas S.A. and subsidiaries Consolidated Statement of Changes in Equity (Figures expressed in thousands of Chilean pesos) STATEMENT OF CHANGES IN EQUITY Paid in capital Other reserves Total other reservations Retained earnings Equity attributable to equity holders of the parent Non-controlling interests Total Shareholders' Equity Common Stock Reserve of exchange differences on translation Reserves of cash flow hedges Reserve of actuarial gains and losses on defined benefit plans Other reserves ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ Balanced as of January 1, 2017 562,693,346 (120,558,932) 39,081 (3,925,717) (18,527,810) (142,973,378) 657,578,187 1,077,298,155 123,357,563 1,200,655,718 Initial balance restated 562,693,346 (120,558,932) 39,081 (3,925,717) (18,527,810) (142,973,378) 657,578,187 1,077,298,155 123,357,563 1,200,655,718 Changes Final dividends (1) - - - - - - (5,922,874) (5,922,874) - (5,922,874) Interim dividends (2) - - - - - - (25,865,201) (25,865,201) - (25,865,201) Interim dividends according to policy (3) - - - - - - (38,938,475) (38,938,475) - (38,938,475) Other increase (decrease) in Equity (4) - - - - - - - - (8,805,260) (8,805,260) Total comprehensive income (expense) (5) - (32,982,829) (10,837) (32,794) - (33,026,460) 129,607,353 96,580,893 16,708,554 113,289,447 Increase (decrease) through changes in ownership interests in subsidiaries (6) - - - - (2,075,441) (2,075,441) - (2,075,441) (5,509,306) (7,584,747) Total changes in equity - (32,982,829) (10,837) (32,794) (2,075,441) (35,101,901) 58,880,803 23,778,902 2,393,988 26,172,890 AS OF DECEMBER 31, 2017 562,693,346 (153,541,761) 28,244 (3,958,511) (20,603,251) (178,075,279) 716,458,990 1,101,077,057 125,751,551 1,226,828,608 Balanced as of January 1, 2018 562,693,346 (153,541,761) 28,244 (3,958,511) (20,603,251) (178,075,279) 716,458,990 1,101,077,057 125,751,551 1,226,828,608 Increase (decrease) due to changes in accounting policies (7) - - - - - - (126,722) (126,722) (9,054) (135,776) Initial balance restated 562,693,346 (153,541,761) 28,244 (3,958,511) (20,603,251) (178,075,279) 716,332,268 1,100,950,335 125,742,497 1,226,692,832 Changes Final dividends (1) - - - - - - (1,296,076) (1,296,076) - (1,296,076) Interim dividends (2) - - - - - - (51,730,402) (51,730,402) - (51,730,402) Interim dividends according to policy (3) - - - - - - (101,714,994) (101,714,994) - (101,714,994) Other increase (decrease) in Equity (4) - - - - - - - - (7,374,653) (7,374,653) Effects business combination (8) - - - - - - - - 6,755,102 6,755,102 Total comprehensive income (expense) (5) - 35,487,433 51,944 (882,063) - 34,657,314 306,890,792 341,548,106 17,649,068 359,197,174 Increase (decrease) through changes in ownership interests in subsidiaries (9) - - - - (7,630,261) (7,630,261) - (7,630,261) (33,782,779) (41,413,040) Total changes in equity - 35,487,433 51,944 (882,063) (7,630,261) 27,027,053 152,149,320 179,176,373 (16,753,262) 162,423,111 AS OF DECEMBER 31, 2018 562,693,346 (118,054,328) 80,188 (4,840,574) (28,233,512) (151,048,226) 868,481,588 1,280,126,708 108,989,235 1,389,115,943 Balanced as of January 1, 2019 562,693,346 (118,054,328) 80,188 (4,840,574) (28,233,512) (151,048,226) 868,481,588 1,280,126,708 108,989,235 1,389,115,943 Changes Final dividends (1) - - - - - - (30,689,081) (30,689,081) - (30,689,081) Interim dividends (10) - - - - - - (27,712,715) (27,712,715) - (27,712,715) Interim dividends according to policy (3) - - - - - - (37,358,131) (37,358,131) - (37,358,131) Other increase (decrease) in Equity (4) - - - - - - - - (11,918,592) (11,918,592) Effects business combination (8) - - - - 60,881 60,881 - 60,881 639,893 700,774 Total comprehensive income (expense) (5) - 16,122,893 249,503 (2,887,580) - 13,484,816 130,141,692 143,626,508 16,329,786 159,956,294 Increase (decrease) through changes in ownership interests in subsidiaries (11) - - - - - - - - 832,731 832,731 Total changes in equity - 16,122,893 249,503 (2,887,580) 60,881 13,545,697 34,381,765 47,927,462 5,883,818 53,811,280 AS OF DECEMBER 31, 2019 562,693,346 (101,931,435) 329,691 (7,728,154) (28,172,631) (137,502,529) 902,863,353 1,328,054,170 114,873,053 1,442,927,223 (1) Corresponds to the differences between the final dividend and CCU’s policy of distributing a minimum dividend of at least 50% of income (Note 27 - Common Shareholders’ Equity). (2) Related to dividends declared as of December 31 of each year and paid during January of the following year, as agreed by the Board of Directors. (3) Corresponds to the differences between CCU’s policy to distribute a minimum dividend of at least 50% of the income (Note 27-Common Shareholders’ Equity) and the interim dividends declared or payed as of December 31 of each year. (4) Mainly related to dividends to Non-controlling interest. (5) SeeNote 27 - Common Shareholders’ Equity. (7) Corresponds to the effect by the adoption of IFRS 9 and IFRS15. (8) SeeNote 15 – Business combinations. (9) Mainly related to the acquisition of an additional interest of VSPT, through the subsidiary CCU Inversiones S.A. for an amount of ThCh$ 49,222,781 with a carrying amount of ThCh$ 36,165,735, which generated, at CCU's consolidated level, a decrease in Other reserves of ThCh$ 13,054,114 on January 29, 2018. Additionally, on December 17, 2018 the joint venture Foods Compañía de Alimentos CCU S.A. (“Foods”) and subsidiary CCU Inversiones S.A. sold the property over Alimentos Nutrabien S.A.generating an effect in Other reserves of ThCh $ 5,426,209 (Note 27 - Common Shareholders’ Equity). (10) Corresponds to Interim dividends that were paid on December 26, 2019, as agreed by the Ordinary Board of Directors. (11) SeeNote 1 – General information, letter D, number (4). The accompanying notes 1 to 35 are an integral part of these consolidated financial statements. Compañía Cervecerías Unidas S.A. and subsidiaries Consolidated Statement of Cash Flow (Figures expressed in thousands of Chilean pesos) CONSOLIDATED STATEMENT OF CASH FLOW Notes For the years ended as of December 31, 2019 2018 2017 ThCh$ ThCh$ ThCh$ Cash flows from operating activities Classes of cash receipts from operating activities: Proceeds from goods sold and services rendered 2,398,342,913 2,063,846,199 2,027,615,713 Other proceeds from operating activities 30 34,857,922 211,980,184 27,287,853 Classes of cash payments from operating activities: Payments of operating activities (1,548,279,410) (1,308,662,407) (1,263,418,419) Payments of salaries (240,710,775) (202,182,968) (202,321,289) Other payments for operating activities (302,964,849) (282,794,912) (262,820,379) Cash flow from (used in) operations 341,245,801 482,186,096 326,343,479 Dividends received 428,681 374,208 264,079 Interest paid (24,943,412) (17,691,156) (18,564,514) Interest received 13,053,176 13,627,809 4,870,651 Income tax paid (93,733,867) (35,068,401) (40,656,061) Other cash movements 31 6,269,666 (14,115,425) (10,096,203) Net cash inflow from operating activities 242,320,045 429,313,131 262,161,431 Cash flows from investing activities Cash flows used to obtain control of subsidiaries or other businesses 8 (8,652,268) (5,819,495) - Cash flows used to purchase non-controlling interests 8 - - (1,149,689) Proceeds from the sale of interests in joint ventures 10 1,240,461 - 1,058,984 Other payments to acquire interests in joint ventures 8 (13,549,638) (59,505,559) (49,312,890) Proceeds from sales of property, plan and equipment 6,049,705 1,064,516 1,554,696 Purchase of property, plant and equipment (134,668,653) (128,366,525) (123,526,778) Purchases of intangibles assets (5,819,196) (3,073,897) (2,238,702) Proceeds from other long term assets classified as investing activities 16 11,200,000 - - Other cash movements 13,863 (3,301,141) - Net cash (outflow) from investing activities (144,185,726) (199,002,101) (173,614,379) Cash flows from financing activities Proceeds from changes in ownership interests in subsidiaries that do not result in loss of control 8 - (49,222,782) (7,800,000) Proceeds from long-term loans and bonds 25,641,701 91,326,177 41,300,000 Proceeds from short-term loans and bonds 25,347,785 92,681,410 16,477,169 Total proceeds from loans 50,989,486 184,007,587 57,777,169 Loan and bonds payments (27,049,506) (112,665,293) (25,754,218) Payments of lease liabilities (6,416,902) (1,077,462) (1,414,228) Payments of loan from related parties - - (717,900) Dividends paid (218,035,429) (74,825,181) (75,128,211) Other cash movements 1,092,190 819,269 36,190 Net cash (outflow) from financing activities (199,420,161) (52,963,862) (53,001,198) Net (decrease) increase in cash and cash equivalents (101,285,842) 177,347,168 35,545,854 Effects of exchange rate changes on cash and cash equivalents (21,358,984) (28,377,720) 465,565 Increase (decrease) in cash and cash equivalents (122,644,826) 148,969,448 36,011,419 Cash and cash equivalents at beginning of the year 319,014,050 170,044,602 134,033,183 Cash and cash equivalents at end of the year 8 196,369,224 319,014,050 170,044,602 The accompanying notes 1 to 35 are an integral part of these consolidated financial statements. Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 |
|
ASSETS | Notes | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | ||
Current assets |
|
|
|
Cash and cash equivalent | 13 | 133,789,950 | 192,554,239 |
Other financial assets | 6 | 8,406,491 | 13,644,105 |
Other non-financial assets | 18 | 15,859,137 | 17,654,373 |
Accounts receivable-trade and other receivables | 14 | 280,766,784 | 252,225,937 |
Accounts receivable from related companies | 15 | 3,523,825 | 4,788,930 |
Inventories | 16 | 199,290,678 | 174,227,415 |
Biological assets | 17 | 7,948,379 | 7,633,340 |
Taxes receivables | 25 | 29,423,479 | 15,264,220 |
Total current assets different from assets of disposal group held for sale |
| 679,008,723 | 677,992,559 |
Assets of disposal group held for sale | 24 | 2,377,887 | 6,319,316 |
Total assets of disposal group held for sale |
| 2,377,887 | 6,319,316 |
Total current assets |
| 681,386,610 | 684,311,875 |
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Non-current assets |
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Other financial assets | 6 | 203,784 | 80,217 |
Other non-financial assets | 18 | 5,369,211 | 5,220,954 |
Accounts receivable non-current | 14 | 3,563,797 | - |
Accounts receivable from related companies | 15 | 356,665 | 445,938 |
Investment accounted by equity method | 19 | 64,404,946 | 49,995,263 |
Intangible assets other than goodwill | 20 | 77,678,850 | 71,868,007 |
Goodwill | 21 | 96,663,023 | 99,490,372 |
Property, plant and equipment (net) | 22 | 903,831,702 | 872,667,210 |
Investment property | 23 | 6,253,827 | 6,838,002 |
Deferred tax assets | 25 | 31,864,635 | 34,529,593 |
Total non-current assets |
| 1,190,190,440 | 1,141,135,556 |
Total Assets | 1,871,577,050 | 1,825,447,431 |
F-5
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LIABILITIES AND EQUITY | Notes | As of December 31, 2016 | As of December 31, 2015 |
LIABILITIES | ThCh$ | ThCh$ | |
Current liabilities |
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|
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Other financial liabilities | 26 | 66,679,933 | 43,973,991 |
Accounts payable-trade and other payables | 27 | 259,677,852 | 227,736,803 |
Accounts payable- to related companies | 15 | 9,530,071 | 11,624,218 |
Other short-term provisions | 28 | 409,164 | 503,440 |
Tax liabilities | 25 | 11,806,434 | 12,198,024 |
Employee benefits provisions | 30 | 22,838,228 | 21,712,059 |
Other non-financial liabilities | 29 | 71,369,972 | 70,942,144 |
Total current liabilities |
| 442,311,654 | 388,690,679 |
Non-current liabilities |
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Other financial liabilities | 26 | 117,944,033 | 136,926,545 |
Others accounts payable | 27 | 1,082,898 | 1,645,098 |
Other long-term provisions | 28 | 1,323,520 | 1,476,518 |
Deferred tax liabilities | 25 | 86,789,951 | 90,237,843 |
Employee benefits provisions | 30 | 21,832,415 | 18,948,603 |
Total non-current liabilities |
| 228,972,817 | 249,234,607 |
Total liabilities |
| 671,284,471 | 637,925,286 |
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EQUITY | |||
Equity attributable to equity holders of the parent | 32 |
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Paid-in capital |
| 562,693,346 | 562,693,346 |
Other reserves |
| (142,973,378) | (103,226,416) |
Retained earnings |
| 657,578,187 | 598,349,442 |
Total equity attributable to equity holders of the parent |
| 1,077,298,155 | 1,057,816,372 |
Non-controlling interests | 31 | 122,994,424 | 129,705,773 |
Total Shareholders' Equity | 1,200,292,579 | 1,187,522,145 | |
Total Liabilities and Shareholders' Equity | 1,871,577,050 | 1,825,447,431 |
F-6
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CONSOLIDATED STATEMENT OF INCOME | Notes | For the years ended December 31. | ||
2016 | 2015 | 2014 | ||
ThCh$ | ThCh$ | ThCh$ | ||
Net sales | 7 | 1,558,897,708 | 1,498,371,715 | 1,297,966,299 |
Cost of sales | 9 | (741,819,916) | (685,075,251) | (604,536,815) |
Gross margin |
| 817,077,792 | 813,296,464 | 693,429,484 |
Other income by function | 11 | 5,144,154 | 6,577,244 | 25,463,716 |
Distribution costs | 9 | (270,835,822) | (277,599,722) | (240,848,630) |
Administrative expenses | 9 | (155,322,295) | (128,135,799) | (110,014,716) |
Other expenses by function | 9 | (195,412,109) | (209,201,189) | (188,109,562) |
Other gains (losses) | 12 | (8,345,907) | 8,512,000 | 4,036,939 |
Income from operational activities |
| 192,305,813 | 213,448,998 | 183,957,231 |
Financial Income | 10 | 5,680,068 | 7,845,743 | 12,136,591 |
Financial costs | 10 | (20,307,238) | (23,101,329) | (22,957,482) |
Share of net loss of joint ventures and associates accounted for using the equity method | 19 | (5,560,522) | (5,228,135) | (898,607) |
Foreign currency exchange differences | 10 | 456,995 | 957,565 | (613,181) |
Result as per adjustment units | 10 | (2,246,846) | (3,282,736) | (4,159,131) |
Income before taxes |
| 170,328,270 | 190,640,106 | 167,465,421 |
Income taxes | 25 | (30,246,383) | (50,114,516) | (46,673,500) |
Net income of year |
| 140,081,887 | 140,525,590 | 120,791,921 |
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Net income attibutable to: |
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Equity holders of the parent |
| 118,457,488 | 120,808,135 | 106,238,450 |
Non-controlling interests | 31 | 21,624,399 | 19,717,455 | 14,553,471 |
Net income of year |
| 140,081,887 | 140,525,590 | 120,791,921 |
Net income per share (Chilean pesos) from: |
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Continuing operations |
| 320.59 | 326.95 | 287.52 |
Diluted earnings per share (Chilean pesos) from: |
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Continuing operations |
| 320.59 | 326.95 | 287.52 |
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F-7
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | Notes | For the years ended December 31. | ||
2016 | 2015 | 2014 | ||
ThCh$ | ThCh$ | ThCh$ | ||
Net income of year |
| 140,081,887 | 140,525,590 | 120,791,921 |
Other income and expenses charged or credited againts equity |
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Cash flow hedges (1) | 32 | 84,962 | 80,693 | (155,258) |
Exchange differences of foreign subsidiaries (1) | 32 | (27,280,176) | (29,678,944) | (4,629,683) |
Gains (losses) from defined plans | 32 | (2,355,384) | (939,433) | (1,884,054) |
Income tax related with cash flow hedge (1) | 32 | (20,648) | (17,563) | 39,470 |
Income tax relating to defined benefit plans | 32 | 659,198 | 314,541 | 501,689 |
Total other comprehensive income and expense |
| (28,912,048) | (30,240,706) | (6,127,836) |
Comprehensive income and expense |
| 111,169,839 | 110,284,884 | 114,664,085 |
Comprehensive income originated by: |
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Equity holders of the parent (2) |
| 91,752,250 | 92,606,720 | 97,067,296 |
Non-controlling interests |
| 19,417,589 | 17,678,164 | 17,596,789 |
Comprehensive income and expense |
| 111,169,839 | 110,284,884 | 114,664,085 |
(1)These items will be reclassified to Consolidated Statement of Income when they are settled.
(2)Corresponds to the income for the year where no income or expenses have been recorded directly against shareholder´s equity.
F-8
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STATEMENT OF CHANGES IN EQUITY | Paid in capital | Other reserves | Retained earnings | Equity attributable to equity holders of the parent | Non-controlling interests | Total Shareholders' Equity | |||
Common Stock | Currency translation difference | Hedge reserves | Actuarial gains and losses on defined benefit plans reserves | Other reserves | |||||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Balanced as of January 1, 2014 | 562,693,346 | (60,084,197) | 65,109 | (348,673) | (5,514,048) | 491,864,319 | 988,675,856 | 95,568,422 | 1,084,244,278 |
Changes |
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Interim dividends (1) | - | - | - | - | - | (23,278,681) | (23,278,681) | - | (23,278,681) |
Interim dividends according to policy (2) | - | - | - | - | - | (36,500,001) | (36,500,001) | - | (36,500,001) |
Other increase (decrease) in Equity (3) | - | - | - | - | 2,419 | (378,712) | (376,293) | (8,594,222) | (8,970,515) |
Effects business combination | - | - | - | - | - | - | - | 18,340,752 | 18,340,752 |
Comprehensive income and expense | - | (7,698,661) | (108,479) | (1,364,014) | - | 106,238,450 | 97,067,296 | 17,596,789 | 114,664,085 |
Total changes in equity | - | (7,698,661) | (108,479) | (1,364,014) | 2,419 | 46,081,056 | 36,912,321 | 27,343,319 | 64,255,640 |
AS OF DECEMBER 31, 2014 | 562,693,346 | (67,782,858) | (43,370) | (1,712,687) | (5,511,629) | 537,945,375 | 1,025,588,177 | 122,911,741 | 1,148,499,918 |
Balanced as of January 1, 2015 | 562,693,346 | (67,782,858) | (43,370) | (1,712,687) | (5,511,629) | 537,945,375 | 1,025,588,177 | 122,911,741 | 1,148,499,918 |
Changes |
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Interim dividends (1) | - | - | - | - | - | (24,387,190) | (24,387,190) | - | (24,387,190) |
Interim dividends according to policy (2) | - | - | - | - | - | (36,016,878) | (36,016,878) | - | (36,016,878) |
Other increase (decrease) in Equity (3) | - | - | - | - | 25,543 | - | 25,543 | (10,884,132) | (10,858,589) |
Comprehensive income and expense | - | (27,652,528) | 40,844 | (589,731) | - | 120,808,135 | 92,606,720 | 17,678,164 | 110,284,884 |
Total changes in equity | - | (27,652,528) | 40,844 | (589,731) | 25,543 | 60,404,067 | 32,228,195 | 6,794,032 | 39,022,227 |
AS OF DECEMBER 31, 2015 | 562,693,346 | (95,435,386) | (2,526) | (2,302,418) | (5,486,086) | 598,349,442 | 1,057,816,372 | 129,705,773 | 1,187,522,145 |
Balanced as of January 1, 2016 | 562,693,346 | (95,435,386) | (2,526) | (2,302,418) | (5,486,086) | 598,349,442 | 1,057,816,372 | 129,705,773 | 1,187,522,145 |
Changes |
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Interim dividends (1) | - | - | - | - | - | (24,387,190) | (24,387,190) | - | (24,387,190) |
Interim dividends according to policy (2) | - | - | - | - | - | (34,841,553) | (34,841,553) | - | (34,841,553) |
Other increase (decrease) in Equity (3) | - | - | - | - | - | - | - | (14,413,649) | (14,413,649) |
Comprehensive income and expense | - | (25,123,546) | 41,607 | (1,623,299) | - | 118,457,488 | 91,752,250 | 19,417,589 | 111,169,839 |
Increase (decrease) through changes in ownership interests in subsidaries (4) | - | - | - | - | (13,041,724) | - | (13,041,724) | (11,715,289) | (24,757,013) |
Total changes in equity | - | (25,123,546) | 41,607 | (1,623,299) | (13,041,724) | 59,228,745 | 19,481,783 | (6,711,349) | 12,770,434 |
AS OF DECEMBER 31, 2016 | 562,693,346 | (120,558,932) | 39,081 | (3,925,717) | (18,527,810) | 657,578,187 | 1,077,298,155 | 122,994,424 | 1,200,292,579 |
(1)Related to declared dividends at December 31 of each year and paid during January of the following year, as agreed by the Board of Directors.
(2)Corresponds to the differences between CCU’s policy to distribute a minimum dividend of at least 50% of the income (Note 32) based on the local statutory reported to SVS and the interim dividends declared at December 31 of each year.
(3)Mainly related to dividends to Non-controlling interest.
(4)In 2016, the Company, through its subsidiaries Aguas CCU-Nestlé Chile S.A. and Embotelladoras Chilenas Unidas S.A., acquired additional interests in Manantial S.A. for an amount of ThCh$ 19,111,686, with a carrying value to ThCh$ 3,816,220, resulting in a decrease to Other reserves of ThCh$ 7,801,153 (seeNote 1 (1)). Additionally, during 2016 the Company, through its subsidiary Compañía Industrial Cervecera S.A. acquired additional interests in Los Huemules SRL. for an amount of ThCh$ 118,092, with a carrying value to ThCh$ 312,103, resulting in an increase to Other reserves of ThCh$ 194,000 (seeNote 1 (4)). Finally during 2016, joint venture Foods acquired additional interest in Alimentos Nutrabien S.A. for an amount of ThCH$ 14,352,706, with a carrying value to ThCh$ 3,497,385, resulting in a decrease of ThCh$ 5,426,209.
F-9
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CONSOLIDATED STATEMENT OF CASH FLOW | Notes | For the years ended as of December 31, | ||
2016 | 2015 | 2014 | ||
ThCh$ | ThCh$ | ThCh$ | ||
Cash flows from (used in) operational activities |
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Collection classes: | ||||
Proceeds from goods sold and services rendered | 1,862,763,071 | 1,770,338,769 | 1,584,494,230 | |
Other proceeds from operating activities | 23,086,788 | 20,467,143 | 30,247,374 | |
Types of payments: | ||||
Payments of operating activities | (1,216,451,995) | (1,120,571,275) | (1,051,616,618) | |
Payments of salaries | (201,389,122) | (178,915,580) | (171,898,347) | |
Other payments for operating activities | (228,011,323) | (220,365,087) | (162,644,788) | |
Dividends received | 34,380 | 45,492 | 75,169 | |
Interest paid | (16,958,068) | (19,813,502) | (20,757,207) | |
Interest received | 5,635,697 | 6,476,628 | 10,763,936 | |
Income tax reimbursed (paid) | (47,055,951) | (44,584,176) | (44,208,661) | |
Other cash movements | 12 | 8,360,871 | 6,432,460 | (833,425) |
Net cash flows from operational activities |
| 190,014,348 | 219,510,872 | 173,621,663 |
Cash flows from (used in) investing activities |
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Cash flows used for control of subsidaries or other businesses | 13 | (641,489) | - | (8,369) |
Cash flows used in the purchase of non-controlling interests | 13 | (2,174,370) | (1,921,245) | (13,776,885) |
Collections from related entities | - | 6,709,845 | - | |
Other collections on the sale of interests in joint ventures | 24 | 512,596 | - | - |
Other payments to acquire interests in joint ventures | 13 | (27,043,481) | (42,163,032) | (1,445,478) |
Proceeds from sale of property, plan and equipment | 2,753,539 | 2,776,474 | 2,587,448 | |
Acquisition of property, plant and equipment | (125,691,740) | (129,668,910) | (227,863,039) | |
Purchases of intangibles assets | (3,191,685) | (2,062,012) | (2,217,113) | |
Other cash movements | 469,240 | 518,711 | 3,753,297 | |
Net cash flows used in investing activities |
| (155,007,390) | (165,810,169) | (238,970,139) |
Cash flows from (used in) financing activities |
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Payments for changes in ownership interests in subsidaries | 13 | (19,111,686) | - | - |
Proceeds from long-term loans | 3,804,384 | 19,570,689 | 15,482,763 | |
Porceeds from short-term loans | 19,345,325 | 23,358,700 | 21,882,842 | |
Total amount from loans | 23,149,709 | 42,929,389 | 37,365,605 | |
Loan payments | (25,295,124) | (54,797,023) | (20,766,024) | |
Payments of finance lease liabilities | (1,530,851) | (1,697,649) | (1,745,210) | |
Payments of loan from related entities | (750,000) | (601,494) | (223,225) | |
Dividends paid | (69,819,729) | (66,147,145) | (65,315,914) | |
Other cash movements | (1,945,457) | (2,525,569) | (81,470,807) | |
Net cash flows used in financing activities |
| (95,303,138) | (82,839,491) | (132,155,575) |
Net decrease in cash equivalents, before the effect of changes in exchange rate | (60,296,180) | (29,138,788) | (197,504,051) | |
Effects of changes in exchange rates on cash and cash equivalents |
| 1,531,891 | 6,918,151 | 3,425,660 |
Cash and cash equivalents, beginning of the year |
| 192,554,239 | 214,774,876 | 408,853,267 |
Cash and cash equivalents, final of the year | 13 | 133,789,950 | 192,554,239 | 214,774,876 |
F-10
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A)Company information
Compañía Cervecerías Unidas S.A. (CCU,(hereinafter also “CCU”, “the Company” or the Company or the“the Parent Company)Company”) was incorporated in Chile as an open stock company, and it is registered in the Securities RecordRegistry of the Comisión para el Mercado Financiero (CMF) (ex Superintendencia de Valores y Seguros de Chile (Localor Local Superintendence of Equity Securities, SVS)(SVS)) under Nº 0007, and consequently, the Company is subject to Regulationoverseen by the SVS.CMF. The Company’s shares are quotedtraded in Chile on the Santiago Stock Exchange Electronic Stock Exchange and ValparaísoElectronic Stock Exchange. The Company is also registered with the United States of America Securities and Exchange Commission (SEC) and it quotes its American Depositary Shares (ADS) on’s are traded in the New York Stock Exchange (NYSE). There was an amendment to the Deposit Agreement dated December 3, 2012, between the Company, JP Morgan Chase Bank, NA and all holders of ADRs. According to this Amendment,ADRs, whereby there was ana change in the ADS ratio change from 1 ADS to 5 common shares to a new ratio of 1for each ADS to 2 common shares. There was no change to CCU's underlying ordinary shares. This action wasshares for each ADS, effective onas of December 20, 2012.
CCU is a diversified beverage company, with operations mainly in Chile, Argentina, Uruguay, Paraguay, Colombia and Bolivia. CCU is the largest Chilean brewery, the second largest brewery in Argentina, the second largest producer of soft drinks in Chile, the second-largest wine producer in Chile, the largest bottlerproducer of bottled mineral water, nectar and nectarsport drinks in Chile and one of the largest pisco producerproducers in Chile. It also participates in the business of Home and Office Delivery (“HOD”), in a business ofinvolving home delivery of purified water in bottles through the use of dispensers, and in the rum and candy industry in Chile. It participates in the industry of the ciders, spirits and wines in Argentina and also participates in the industry of mineral water and soft drinks and beer distribution in Uruguay, Paraguay, Colombia and Bolivia.
In Chile and abroad, CCU and its subsidiaries areCompañía Cervecerías Unidas S.A. is under the ownerscontrol of a wide range of brands, underInversiones y Rentas S.A. (IRSA), which market our products. In the domestic market, its portfolio of brands in the beer category consists among others of Cristal, Cristal Light, Cristal Cero 0°, Cristal Cero Radler, Escudo, Kunstmann, Austral, D´olbek, Royal Guard, Morenita, Dorada, Szot, Guayacán and Stones of Lemon, Maracuyá and Apple varieties. It holds exclusive license to produce and market Heineken, Sol and Coors. In Chile, the Company is the exclusive distributordirect and indirect owner of Tecate and Blue Moon beer.
In Argentina, CCU produces beers in its plants located in60% of the cities of Salta, Santa Fé and Luján. Its main brands are Schneider, Imperial, Palermo, Bieckert, Santa Fé, Salta, Córdoba and are the holders of exclusive license for the production and marketing of Budweiser, Heineken, Amstel and Sol. CCU also imports Kunstmann beer. Additionally, exports beer to different countries in the region mainly under the SchneiderCompany’s shares. IRSA is currently a joint venture between Quiñenco S.A. and Heineken brands. In Argentina, CCU is the exclusive distributor of the energy drink Red Bull. Besides, participates in the cider business, controlling of Saenz Briones, marketing Sidra Real, La Victoria and “1888”Chile Limitada, a company controlled by Heineken Americas B.V., brands leaders in the market. Also participates in the spirits business, which its marketed under El Abuelo brand, as well as import other liquors from Chile.
In Uruguay, the Company participates in the mineral waters and soft drinks business with Native and Nix brand, flavoured waters with the Native brand, soft drinks with the Nix and nectars with Watt´s brand. In addition, it sells beers imported under Heineken, Schneider and Kuntsmann brand and cider Sidra Real.
In Paraguay, the Company participates in the non-alcoholic and alcoholic business. Its portfolio of non-alcoholic brands consists of Pulp, Watt's, Puro Sol, La Fuente and Zuma. These brands include own, licensed and imported. The Company in the beer business is owner of Sajonia brand and imports Heineken, Coors Light, Coors 1873, Schneider, Paulaner and Kunstmann, brands.
In Colombia, through its joint venture with Central Cervecera de Colombia S.A.S. (“CCC”), CCU participates in the business of beers and malts since November 2014. Its portfolio of beers includes licensed and imported Heineken, Amstel, Murphys and Buckler brands. Its has of exclusive license for the importation, distribution and production of Heineken. Since October 2015, it holds exclusive license to produce and market Coors and Coors Light. Subsequently, from April and July of 2016, were incorporated Tecate and Sol brands, respectively,each with a license contract to produce and market these brands.
In Bolivia, through its associate Bebidas Bolivianas BBO S.A., the Company participates in the non-alcoholic and alcoholic business since May 2014. Its portfolio of non-alcoholic brands consist of Mendocina, Free cola, Sinalco, Real and Natur-all. These brands include own and licensed. The alcoholic brands consist of Real, Capital and Cordillera. It has of exclusive license for the importation and distribution of Heineken and the energy drink Monster.
Within the non-alcoholic, in Chile Operating segment, CCU has the Bilz,Pap, Kem, Kem Xtreme, Nobis, Cachantun, Más, Mas Woman and Porvenir brands. Regarding the HOD category, CCU has the Manantial brand. The Company, directly or through its subsidiaries, has license agreements with Pepsi, 7up, Mirinda, Gatorade, Adrenaline Red, Life Water, Lipton Ice Tea, Ocean Spray, Crush, Canada Dry Limón Soda, Canada Dry Ginger Ale, Canada Dry Agua Tónica, Nestlé Pure Life,Watt´s and Frugo. In Chile,CCU is the exclusive distributor of the energy drink Red Bull and Perrier water. Besides, through a joint operation also owns the Sprim and Fructus and the licencse Vivo and Caricia brands.
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In the spirits, in Chile Operating segment, in the category of pisco, CCU owns the brand Mistral, Campanario, Horcón Quemado, Control C, Tres Erres, La Serena and Ruta cocktail, and their respective extensions. In rum category Company owns the brands Sierra Morena and their extensions and Cabo Viejo. The Company has the Fehrenberg brand and is exclusive distributor in Chile of Pernod Ricard’s products.
In the Wine Operating segment, through its subsidiary Viña San Pedro Tarapacá S.A. (“VSPT”), produces wines and sparkling, which are sold in the domestic and overseas markets exporting to more than 80 countries.Its main brands of Viña San Pedro are Altaïr, Cabo de Hornos, Sideral, 1865, Castillo de Molina, Épica, 35 Sur, GatoNegro, Gato, Manquehuito and San Pedro Exportación. The brands´s portfolio of Viña Tarapacá includes: Gran Reserva Etiqueta Azul, Gran Reserva Etiqueta Negra, Gran Reserva Etiqueta Blanca, Gran Tarapacá, León de Tarapacá and Tarapacá Varietal. The brands´s portfolio of Viña Santa Helena includes: Parras Viejas, Selección del Directorio, Siglo de Oro, Santa Helena Varietal, Alpaca, Gran Vino and Santa Helena. VSPT also participates in Chile and international market with vines Misiones de Rengo, Viña Mar, Casa Rivas, Leyda and Finca La Celia and Tamari in Argentina.
At the end of year 2015, the joint venture in Foods Compañía de Alimentos CCU S.A. ("Foods"), who participates in the business of snacks and food in Chile, sold Calaf and Natur brands to Empresas Carozzi S.A. In addition Foods holds the brand Nutra Bien.
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The detail of the described licenses appears below:
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(1) After the initial termination date, license is automatically renewed under the same conditions (Rolling Contract), each year for a period of 10 years, unless notice of non-renewal is given.
(2) Renewable for periods of two years, subject to the compliance of the contract conditions.
(3) If Renewal criteria have been satisfied, renewable through December, 2025, thereafter shall automatically renew every year for a new term of 5 years (Rolling Contract).
(4) After the initial termination date, license is automatically renewed under the same conditions (Rolling Contract), each year for a period of 5 years, subject to the compliance of the contract conditions.
(5) License renewable for one period of 5 years, subject to the compliance of the contract conditions.
(6) License renewable for periods of 5 years, subject to the compliance of the contract conditions.
(7) Renewable for an additional period equal to the duration of the Shareholders Agreement of Bebidas CCU-PepsiCo SpA., subject to the compliance of the contract conditions.
(8) License for 10 years, automatically renewable for periods of 5 years, unless notice of non-renewal.
(9) License for 10 years, automatically renewable on the same terms (Rolling Contract), each year for a period of 10 years, unless notice of non-renewal is given.
(10) After the initial termination date, License is automatically renewable each year for a period of 5 years (Rolling Contract), unless notice of non-renewal is given.
(11) Indefinite contract, notice of termination 6 months in advance. The earliest possible effective date of termination is October 31, 2018.
(12) Indefinite contract, subject to the compliance of the contract conditions. 50% equity participation.
The Company’s address and main office is located in Santiago, Chile, at Avenida Vitacura Nº 2670, Las Condes district and its tax identification number (Rut) is 90,413,000-1.
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As of December 31, 20162019 the Company had a total 8,961 employees detailed as follows:
| Number of employes | |
| Parent company | Consolidated |
Senior Executives | 10 | 14 |
Managers and Deputy Managers | 89 | 439 |
Other workers | 306 | 8,508 |
Total | 405 | 8,961 |
These Consolidated Financial Statements include: Statement of 8,186 employees accordingFinancial Position, Statement of Income, Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows (direct method), and the Accompanying Notes with disclosures.
In the accompanying Statement of Financial Position, assets and liabilities that are classified as current, are those with maturities equal to or less than twelve months, and those classified as non-current, are those with maturities greater than twelve months. In turn, in the Consolidated Statement of Income, expenses are classified by function, and the nature of depreciation and personnel expenses is identified in footnotes. The Consolidated Statement of Cash Flows is presented using the direct method.
The figures in the Consolidated Statement of Financial Position and their explanatory notes are presented compared to the following detail:previous year (2018) and the Consolidated Statement of Income, Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows and their explanatory notes are presented compared with 2018 and 2017.
| Number of employes | |
| Parent company | Consolidated |
Senior Executives | 10 | 16 |
Managers and Deputy Managers | 79 | 400 |
Other employees | 276 | 7,770 |
Total | 365 | 8,186 |
These Consolidated Financial Statements are presented in thousands of Chilean pesos (ThCh$) and have been prepared from the accounting records of Compañía Cervecerías Unidas S.A. is under the control of Inversiones y Rentas S.A. (IRSA), which is the direct and indirect owner of 60% of the Company shares. IRSA is currently a joint venture between Quiñenco S.A. and Heineken Chile Limitada, a company controlled by Heineken Americas B.V, each with a 50% equity participation.
The consolidated financial statements include the following direct and indirect significant subsidiaries where the percentage of participation represents the economic interests at the consolidated level:its subsidiaries. All amounts have been rounded to thousand Chilean pesos, except when otherwise indicated.
Subsidiary | Tax ID | Country of origin | Functional currency | Share percentage direct and indirect | |||
As of December 31, 2016 | As of December 31, 2015 | ||||||
Direct | Indirect | Total | Total | ||||
Cervecera CCU Chile Limitada | 96,989,120-4 | Chile | Chilean Pesos | 99.7500 | 0.2499 | 99.9999 | 99.9999 |
Embotelladora Chilenas Unidas S.A. (3) | 99,501,760-1 | Chile | Chilean Pesos | 99.0670 | 0.9164 | 99.9834 | 99.9338 |
Cía. Cervecerías Unidas Argentina S.A. (4) | 0-E | Argentina | Argentine pesos | - | 99.9923 | 99.9923 | 99.9923 |
Viña San Pedro Tarapacá S.A. (*) | 91,041,000-8 | Chile | Chilean Pesos | - | 64.6980 | 64.6980 | 64.6980 |
Compañía Pisquera de Chile S.A. | 99,586,280-8 | Chile | Chilean Pesos | 46.0000 | 34.0000 | 80.0000 | 80.0000 |
Transportes CCU Limitada | 79,862,750-3 | Chile | Chilean Pesos | 98.0000 | 2.0000 | 100.0000 | 100.0000 |
CCU Investments Limited | 0-E | Cayman Islands | Chilean Pesos | 99.9999 | 0.0001 | 100.0000 | 100.0000 |
Inversiones INVEX CCU DOS Limitada | 76,126,311-0 | Chile | Chilean Pesos | 99.8516 | 0.1484 | 100.0000 | 99.9999 |
CRECCU S.A. | 76,041,227-9 | Chile | Chilean Pesos | 99.9602 | 0.0398 | 100.0000 | 100.0000 |
Fábrica de Envases Plásticos S.A. | 86,150,200-7 | Chile | Chilean Pesos | 90.9100 | 9.0866 | 99.9966 | 99.9966 |
Southern Breweries Limited (5) | 0-E | Cayman Islands | Chilean Pesos | 61.2146 | 38.7804 | 99.9950 | 99.9553 |
Comercial CCU S.A. | 99,554,560-8 | Chile | Chilean Pesos | 50.0000 | 49.9866 | 99.9866 | 99.9866 |
CCU Inversiones S.A. | 76,593,550-4 | Chile | Chilean Pesos | 98.8398 | 1.1339 | 99.9737 | 99.9732 |
Millahue S.A. | 91,022,000-4 | Chile | Chilean Pesos | 99.9621 | - | 99.9621 | 99.9621 |
Aguas CCU-Nestlé Chile S.A. (1) | 76,007,212-5 | Chile | Chilean Pesos | - | 50.0669 | 50.0669 | 50.0669 |
CCU Inversiones II Limitada (2) | 76,349,531-0 | Chile | Chilean Pesos | 98.6709 | 1.3290 | 99.9999 | 99.9946 |
Compañía Cervecera Kunstmann S.A. | 96,981,310-6 | Chile | Chilean Pesos | 50.0007 | - | 50.0007 | 50.0007 |
Inversiones INVEX TRES Limitada | 76,248,389-0 | Chile | Chilean Pesos | 99.0000 | 0.9884 | 99.9884 | 99.9884 |
Milotur S.A. | 0-E | Uruguay | Uruguayan pesos | 100.0000 | - | 100.0000 | 100.0000 |
Coralina S.A. | 0-E | Uruguay | Uruguayan pesos | 100.0000 | - | 100.0000 | 100.0000 |
Marzurel S.A. | 0-E | Uruguay | Uruguayan pesos | 100.0000 | - | 100.0000 | 100.0000 |
Bebidas del Paraguay S.A. (2) | 0-E | Paraguay | Paraguayan guarani | 50.0050 | - | 50.0050 | 50.0050 |
Distribuidora del Paraguay S.A. (2) | 0-E | Paraguay | Paraguayan guarani | 49.9590 | - | 49.9590 | 49.9590 |
Los Huemules S.R.L. | 0-E | Argentina | Argentine pesos | - | 75.4931 | 75.4931 | 26.9680 |
Bebidas Ecusa SpA. (3) | 76,517,798-7 | Chile | Chilean Pesos | - | 99.9338 | 99.9338 | 99.9338 |
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Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The Company’s functional currency and presentation currency is the Chilean peso, except for some subsidiaries in Chile, Argentine, Uruguay, Paraguay and Bolivia that use the US Dollar, Argentine peso, Uruguayan Peso, Paraguayan guaraní and Bolivian, respectively. The functional currency of joint operations in Colombia and associates in Perú, are the Colombian peso and the Sol, respectively. However they use the Chilean peso as the presentation currency for consolidation purposes.
Subsidiaries whose functional currency is not the Chilean peso, have converted their financial statement from their functional currency to the Group’s presentation currency, which is the Chilean peso. The following exchange rates have been used: for the Consolidated Statement of Financial Position and the Consolidated Statement of Changes in Equity, net at the year-end exchange rate, and for the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income and the Consolidated Statement of Cash Flows at the transaction date exchange rate or at the average monthly exchange rate, as appropriate. For consolidation purposes, the assets and liabilities of subsidiaries whose functional currency is different from the Chilean peso, are translated into Chilean pesos using the exchange rates prevailing at the date of the Consolidated Financial Statements while the exchange differences caused by the conversion of assets and liabilities are recorded in the Conversion Reserves account under Other equity reserves. Income, costs and expenses are translated at the average monthly exchange rate for the respective periods. These exchange rates have not undergone significant fluctuations during the year, with the exception of subsidiaries in hyperinflationary economies.
B)Brands and licensing
In Chile, its portfolio of brands in the beer category consists of its own CCU brands, international licensing brands and distribution of Craft brands. CCU’s own brands which correspond to national products, produced, marketed and distributed by Cervecería CCU, which include the following brands, among others, Cristal, Escudo, Royal Guard, Morenita, Dorada, Andes, Bavaria and Stones in its Lemon, Maracuyá and Guaraná and Red Citris varieties. The international licensing brands, of which some are produced and other are imported, marketed and distributed by Cervecería CCU, include, among others, Coors, Heineken and Sol brands. The Craft distribution brands, which are beer that is created and produced in their original breweries and are marketed and distributed in partnership with Cervecera CCU, Austral, Imperial, Kunstmann, Szot, Guayacán, D´olbek and Blue Moon.
In the Chile operating segment, in the non-alcoholic beverage’s category, CCU has the Bilz, Pap, Kem, Kem Xtreme, Nobis, Cachantun, Mas, Mas Woman and Porvenir brands. In the HOD category, CCU has the Manantial brand. The Company, directly or through its subsidiaries, has licensing agreements with Pepsi, 7up, Mirinda, Gatorade, Adrenaline Red, Lipton Ice Tea, Ocean Spray, Crush, Canada Dry Limón Soda, Canada Dry Ginger Ale, Canada Dry Agua Tónica, Nestlé Pure Life, Watt’s, Watt´s Selección and Frugo. In Chile, CCU is the exclusive distributor of the Red Bull energy drink and Perrier water. Through a joint venture it also has its own brands, Sprim and Fructus and a license for the Vivo and Caricia brands.
Additionally, in the Chile operating segment, in the pisco and cocktails categories, CCU owns the Mistral, Campanario, Horcón Quemado, Control C, Tres Erres, Espíritu de los Andes, La Serena, Iceberg, Ruta Cocktail, Sabor Andino Sour, Sol de Cuba, brands, together with the respective line extensions, as applicable. In the rum category, the Company owns the Sierra Morena (and their extensions) and Cabo Viejo brands. In the liquor category, the Company has the Fehrenberg and Barsol brands and is the exclusive distributor in Chile of Pernod Ricard in the traditional channel. Finally, in the cider category, the Company owns the Cygan brand.
On August 8th 2019 CCU announced that its subsidiary Compañía Pisquera de Chile S.A. (CPCh), acting through its subsidiary Inversiones Internacionales SpA. and International Spirits Investment USA LLC ended its asociation in Americas Distilling Investment LLC (ADI), owner of the Peruvian Company Bodega San Isidro S.R.L. (BSI).
CCU announced that its subsidiary CPCh, acting through out Inversiones Internacionales SpA. and International Spirits Investments USA LLC, have communicated to LDLM Investment LLC their decision to initiate the sell of its whole participation in Americas Distilling Investment LLC (“ADI”) which amount to 40%. ADI is the owner of the Peruvian Company Bodega San Isidro S.R.L. (“B.S.I”) and the Barsol brand.
CPCh, subject to the terms and conditions - which must still be agreed - would continue to distribute the Barsol brand in Chile. Finally, CPCh has voluntarily made the decision to cease the use of the "Cusqueño Sour" brand and replace it with other brands in its portfolio.
F-13
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
In Argentina, CCU produces beer in its plants located in Salta, Santa Fé and Luján. Its main brands are Schneider, Imperial, Palermo, Bieckert, Santa Fé, Salta, Córdoba, Isenbeck, Diosa, Norte, Iguana and Báltica. At the same time it is the holder of exclusive license for the production and marketing of Miller, Heineken, Amstel, Sol, Warsteiner and Grolsch. CCU also imports Kunstmann and Blue Moon brands, and exports beer to different countries, mainly under the Schneider, Heineken and Imperial brands. Until April, 2018 in Argentina, CCU was the exclusive license for the production and marketing of Budweiser beer (seeletter C). Additionally, until December 31, 2017 in Argentina, CCU was the exclusive distributor of the Red Bull energy drink. Besides, participates in the cider business, with control of Saenz Briones, marketing the leading market brands “Sidra Real”, “La Victoria” and “1888”. Also participates in the spirits business, which it market under the El Abuelo brand, in addition of importing other liquors from Chile, as well as also sells and distributes of Eugenio Bustos and La Celia. Since June 2019 has incorporated to its wine portfolio Colon and Graffina brands belonging to the bodega Finca La Celia (subsidiary in Argentina of the Chilean subsidiary Viña San Pedro de Tarapacá S.A. (VSPT)). (SeeNote 1 – General information letter D) number (9)).
In Uruguay, the Company participates in the mineral water and soft drinks business with the Nativa Mas and Nix brands, flavored waters with the Nativa brand, soft drinks with the Nix brand and nectars with Watt´s brand,inisotonic drink with the FullSport brand and energy drink with the Thor brand. In addition, it sells imported beer under the Heineken, Schneider, Imperial and Kuntsmann brands. Recently the wine category, with Misiones de Rengo, Eugenio Bustos and La Celia brands were launched.
In Paraguay, the Company participates in the non-alcoholic and alcoholic drink business. Its portfolio of non-alcoholic brands consists of Pulp, Watt's, Puro Sol, La Fuente and the FullSport isotonic drink. These brands include its own, licensed and imported brands. The Company in the beer business is owner of Sajonia brand and imports Heineken, Schneider, Paulaner, Sol and Kunstmann, brands.
In the Wine operating segment, through its subsidiary Viña San Pedro Tarapacá S.A. (VSPT), CCU produces wines and sparkling wines, which are sold in the domestic and overseas markets, exporting to more than 80 countries.The main brands of Viña San Pedro are Altaïr, Cabo de Hornos, Sideral, 1865, Castillo de Molina, Épica, 35 Sur, GatoNegro, Gato, Manquehuito and San Pedro Exportación. Viña Tarapacá’s brands include: Gran Reserva Etiqueta Azul, Gran Reserva Etiqueta Negra, Gran Reserva Etiqueta Blanca, Tarapacá Reserva and Tarapacá Varietal. Viña Santa Helena’s brands portfolio includes: Selección del Directorio, Siglo de Oro, Santa Helena Varietal, Alpaca, Gran Vino and Santa Helena. Furthermore VSPT has presence in different markets such as: Misiones de Rengo, Viña Mar, Casa Rivas, Leyda, Finca la Celia y Tamarí.
As of May 2019 the purchase of Bodega San Juan, located in province of San Juan to Pernod Ricard Argentina S.R.L. was completed, togheter with the vineyards of Pocito and Cañada Onda as well as Graffina, Colon and Santa Silvia brands.
Since November 2014, in Colombia, CCU participates in the beer business through its joint venture with Central Cervecera de Colombia S.A.S. (CCC). Its portfolio includes the imported Heineken brand. Also it has exclusive licensing contracts for importing, distributing and producing Heineken beer in Colombia. In October 2015 Coors and Coors Light brands were incorporated to CCC’s brand portfolio through licensing contract for the production and/or marketing of them, this licence was extended only until December 2019. As of December 2015 Artesanos de Cerveza’s company was acquired togheter with its Brand “Tres Cordilleras”. As of April and July of 2016, the Tecate and Sol brands were incorporated, respectively, with a licensing contract to produce and/or market them. During April 2017 the Miller and Miller Genuine Draft (MGD) brands were incorporated with a licensing contract to produce and market them. As of February 2019, the local Andina brand was launched. As of July 2019, the local production of the Tecate brand began and the launch of Natu Malta (alcohol-free product based on malt) was made. Finally, since October 2019 Colombia started to import and market the Kunstmann brand.
In Bolivia, through its subsidiary Bebidas Bolivianas BBO S.A. (BBO), the Company participates in the non-alcoholic and alcoholic beverage business since May 2014. Its portfolio of non-alcoholic brands, both owned and licensed, includes the Mendocina, Free cola, Sinalco, Real and Natur-all brands. The alcoholic brands are Real, Capital and Cordillera. In addition BBO markets imported Heineken beer.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The described licenses are detailed as follows:
Main brands under license | |
Licenses |
|
Aberlour, Absolut, Ballantine's, Beefeater, Blender´s Pride, Borzoi, Chivas Reagal, Cuvee MUMM, Dubonnet, Elyx, G.H. MUMM, Havana Club, Jameson, Kahlúa, Level, Long John, Longmorn, Malibu, Martell, Olmeca, Orloff, Passport, Pernod, Perrier Jouet, Ricard, Royale Salute, Sandeman, Scapa, Strathisla, The Glenlivet, Wyborowa, 100 Pipers, in Chile (1) | June 2027 |
Adrenaline, Adrenaline Rush (9) | February 2028 |
Amstel in Argentina (2) | July 2022 |
Austral in Chile (4) | July 2020 |
Blue Moon in Chile (5) | December 2021 |
Coors in Chile (6) | December 2025 |
Crush, Canada Dry (Ginger Ale, Agua Tónica and Limón Soda) in Chile (7) | December 2023 |
Frugo in Chile | Indefinitely |
Gatorade in Chile (8) | December 2043 |
Grolsch in Argentina | May 2028 |
Heineken in Bolivia (9) | December 2024 |
Heineken in Chile, Argentina and Uruguay (10) | 10 years renewables |
Heineken in Colombia (11) | March 2028 |
Heineken in Paraguay (1) | May 2023 |
Mas in Uruguay (16) | December 2028 |
Miller in Argentina (11) | December 2026 |
Miller and Miller Genuine Draft in Colombia (14) | December 2026 |
Nestlé Pure Life in Chile (7) | December 2022 |
Paulaner in Paraguay | April 2022 |
Pepsi, Seven Up and Mirinda in Chile | December 2043 |
Red Bull in Chile (12) | Indefinitely |
Schneider in Paraguay | May 2023 |
Sol in Chile and Argentina (10) | 10 years renewables |
Sol in Colombia (3) | March 2028 |
Sol in Paraguay | January 2023 |
Té Lipton in Chile | March 2020 |
Tecate in Colombia (3) | March 2028 |
Warsteiner para Argentina (15) | May 2028 |
Watt´s in Uruguay | 99 years |
Watt's (nectars, fruit-based drinks and other) rigid packaging, except carton in Chile | Indefinitely |
Watt's in Paraguay (13) | July 2026 |
(1) | Renewable for periods of 3 years. |
(2) | After the initial termination date, license is automatically renewed under the same conditions (Rolling Contract), each year for a period of 10 years, unless notice of non-renewal is given. |
(3) | The contract will remain in effect as long as the Heineken license agreement for Colombia remains in force. |
(4) | Renewable for periods of two years, subject to the compliance of the contract conditions. |
(5) | If Renewal criteria have been satisfied, renewable through December, 2025, thereafter shall automatically renew every year for a new term of 5 years (Rolling Contract). |
(6) | After the initial termination date, license is automatically renewed under the same conditions (Rolling Contract), each year for a period of 5 years, subject to the compliance of the contract conditions. |
(7) | License renewable for one period of 5 years, subject to the compliance of the contract conditions. |
(8) | License was renewed for a period equal to the duration of the Shareholders Agreement of Bebidas CCU-PepsiCo SpA. |
(9) | License for 10 years, automatically renewable for periods of 5 years, unless notice of non-renewal. |
(10) | License for 10 years, automatically renewable on the same terms (Rolling Contract), each year for a period of 10 years, unless notice of non-renewal is given. |
(11) | After the initial termination date, License is automatically renewable each year for a period of 5 years (Rolling Contract), unless notice of non-renewal is given. |
(12) | Indefinite contract, notice of termination 6 months in advance. |
(13) | Sub-license is renewed automatically and successively for two periods of 5 years each, subject to the terms and conditions stipulated in the International Sub-license agreement of December 28, 2018 between Promarca Internacional Paraguay S.R.L. and Bebidas del Paraguay S.A. |
(14) | License renewable for one period of 5 years, subject to the compliance of the contract conditions. |
(15) | Prior to the expiry of its term, Parties shall negotiate its continuity for five (5) more years. |
(16) | License automatically renewable for periods of 10 years. |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
C)Early termination Budweiser license
The general aspects of the transaction are described below:
a)Description of the Transaction.
According to the Material Event reported on September 6, 2017, the CMF was informed that CCU and Compañía Cervecerías Unidas Argentina S.A. (CCU-A), entity organized under the laws of the Republic of Argentina and a subsidiary of CCU, have agreed with Anheuser-Busch InBev S.A./N.V. (ABI and together with CCU-A the "Parties"), an offer letter ("Term Sheet") which, among other matters, contemplates the early termination of license agreement in Argentina for the brand "Budweiser", signed between CCU-A and Anheuser-Busch, Incorporated (today Anheuser-Busch LLC, a subsidiary of ABI) dated March 26, 2008 (the "License Agreement").
As agreed to in the Early Termination of the License Agreement (the “Transaction”), ABI directly or its subsidiaries (hereinafter together referred to as the “ABI Group”), pays to CCU-A the amount of US$ 306,000,000.
The Transaction also includes the transfer from ABI to CCU-A of: (a) ownership of the brands Isenbeck and Diosa. This does not include the production plant owned by Cervecería Argentina S.A. Isenbeck (CASA Isenbeck) located in Zárate, province of Buenos Aires, Argentina (which will continue to operate under the ownership of ABI Group), nor the contracts with its employees and/or distributors, nor the transfer of any liabilities of CASA Isenbeck; (b) the ownership of the following registered brands in Argentina: Norte, Iguana and Báltica; and (c) the obligation of ABI to make its reasonable best efforts to cause that certain international premium beer brands are licensed to CCU-A (together with the brands identified in letter (b) above and with the brand Diosa referred to as the "Group of Brands") in Argentine territory.
In order to establish a smooth transition of the brands that are transferred by virtue of the Transaction, the Parties will enter into the following contracts (all together with the Early Termination referred to as the “Transaction”):
I. | Contract by virtue of which CCU-A will produce for the ABI Group part or all of the volume of the beer Budweiser, for a period of up to one year; |
II. | Contract by virtue of which the ABI Group will produce for CCU-A part or all of the volume of the beer Isenbeck and Diosa for a period of up to one year; |
III. | Contract by virtue of which the ABI Group will produce and distribute the Group of Brands, on behalf of CCU-A, for a period of maximum three years; and |
IV. | Other agreements, documents and/or contracts that the Parties deem necessary for the Transaction (the “Transaction Documents”). |
In summary, this agreement with ABI consists of the early termination of the license agreement of the Budweiser brand in exchange for a portfolio of brands representing similar volumes, plus different payments of up to US$ 400,000,000 before taxes, over a period of up to three years.
b)Status of the Transaction:
On March 14, 2018, CCU reported as a Material Event that CCU-A had been notified of the resolution of the Secretario de Comercio del Ministerio de Producción de la Argentina (SECOM), which, based on the favorable opinion of the Comisión Nacional de Defensa de la Competencia (CNDC), approved the Transaction. The resolution established that the Parties must submit to the CNDC, for review and approval, drafts of contracts that contained all of the terms and conditions of the Transaction (the "Contracts"). On March 16, 2018, the Parties filed the Contracts with the CNDC.
On April 27, 2018, CCU-A was notified of the resolution of the CNDC that approved the Contracts, thus fulfilling the condition established in the Term Sheet, becoming binding and therefore, the parties were legally obliged to close the Transaction. The signature of the respective contracts took place on May 2, 2018.
As a consequence of the closing of the Transaction:
b.1) CCU-A early terminated the license agreement with ABI in Argentina for the brand “Budweiser”.
b.2) CCU-A received a payment from ABI of US$ 306,000,000, equivalents to ThCh$ 185,648,399 before taxes (SeeNote 30 – Other income by function).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
b.3) ABI transferred to CCU-A (i) the ownership of the Isenbeck and Diosa brands and certain assets related to said brands (not including the production plant owned by Cervecería Argentina S.A. Isenbeck, nor the contracts with its employees and/or distributors, nor the transfer of any liabilities of said entity); and (ii) ownership of the following registered trademarks in Argentina: Norte, Iguana and Báltica. The five brands mentioned above were valued at US$ 44,044,000, equivalents to ThCh$ 26,721,236 (SeeNote 17 – Intangible assets other than goodwilland Note 30 – Other income by function).
As of December 31, 2018, the net effect of the aforementioned compensations generated in the consolidated results of Compañía Cervecerías Unidas S.A. and subsidiaries a Net income attributable to the equity holders of the parent of ThCh$ 157,358,973 shown in (SeeNote 6 – Financial information as per operating segments).
b.4) CCU-A was granted the licenses of the Warsteiner and Grolsch brands for the Argentine territory (these brands, together with Isenbeck, Diosa, Norte, Iguana and Báltica, the “Brands”);
b.5) CCU-A received an ABI payment of US$ 10,000,000, equivalents to ThCh$ 6,109,800, before taxes, for the production of Budweiser of one year, which will be reflected in results under Other income by function as performance obligations are met, of which as of December 31, 2019 have been recognized in Other income by function US$ 3,447,728 (6,451,629 as of December 31, 2018), equivalents to ThCh$ 2,581,452 (ThCh$ 4,840,167 as of December 31, 2018); and
b.6) CCU-A will receive from ABI annual payments of up to US$ 28,000,000, equivalents to ThCh$ 17,107,440, before taxes, for a period of up to three years, depending on the volume and the timing of the transition to CCU-A of the production and/or commercialization of the Brands, which will be reflected in the results, under Net sales, Cost of sales and MSD&A, as the performance obligations are met, of which as of December 31, 2019 have been recognized in results an amount of US$ 21,372,012 (US$ 19,802,868 as of December 31, 2018) equivalents to ThCh$ 16,002,081 (ThCh$ 14,251,811 as of December 31, 2018).
This transaction did not result in impairment of the productive assets of the Company.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
D)Direct and indirect significant subsidiaries
The consolidated financial statements include the following direct and indirect subsidiaries where the percentage of participation represents the economic interest at a consolidated level:
Subsidiary | Tax ID | Country of origin | Functional currency | Share percentage direct and indirect | |||
As of December 31, 2019 | As of December 31, 2018 | ||||||
Direct % | Indirect % | Total % | Total % | ||||
Aguas CCU-Nestlé Chile S.A. | 76,007,212-5 | Chile | Chilean Pesos | - | 50.0917 | 50.0917 | 50.0917 |
Cervecera Guayacán SpA. (***) (5) | 76,035,409-0 | Chile | Chilean Pesos | - | 25.0006 | 25.0006 | 25.0006 |
CRECCU S.A. | 76,041,227-9 | Chile | Chilean Pesos | 99.9602 | 0.0398 | 100.0000 | 100.0000 |
Cervecería Belga de la Patagonia S.A. (***) | 76,077,848-6 | Chile | Chilean Pesos | - | 25.5034 | 25.5034 | 25.5034 |
Inversiones Invex CCU Dos Ltda. | 76,126,311-0 | Chile | Chilean Pesos | 99.8516 | 0.1484 | 100.0000 | 100.0000 |
Inversiones Invex CCU Tres Ltda. | 76,248,389-0 | Chile | Chilean Pesos | 99.9999 | 0.0001 | 100.0000 | 100.0000 |
Bebidas CCU-PepsiCo SpA. (***) | 76,337,371-1 | Chile | Chilean Pesos | - | 49.9888 | 49.9888 | 49.9888 |
CCU Inversiones II Ltda. (8) | 76,349,531-0 | Chile | US Dollar | 99.7435 | 0.2565 | 100.0000 | 100.0000 |
Cervecería Szot SpA. (***) (13) | 76,481,675-7 | Chile | Chilean Pesos | - | 25.0009 | 25.0009 | - |
Bebidas Carozzi CCU SpA. (***) | 76,497,609-6 | Chile | Chilean Pesos | - | 49.9917 | 49.9917 | 49.9917 |
Bebidas Ecusa SpA. | 76,517,798-7 | Chile | Chilean Pesos | - | 99.9834 | 99.9834 | 99.9834 |
Inversiones Invex CCU Ltda. | 76,572,360-4 | Chile | US Dollar | 6.7979 | 93.1941 | 99.9920 | 99.9920 |
Promarca Internacional SpA. (***) | 76,574,762-7 | Chile | US Dollar | - | 49.9917 | 49.9917 | 49.9917 |
CCU Inversiones S.A. (3) | 76,593,550-4 | Chile | Chilean Pesos | 99.0242 | 0.7533 | 99.7775 | 99.7775 |
Inversiones Internacionales SpA. | 76,688,727-9 | Chile | US Dollar | - | 80.0000 | 80.0000 | 80.0000 |
New Ecusa S.A. (10) | 76,718,230-9 | Chile | Chilean Pesos | - | - | - | 99.9834 |
Promarca S.A. (***) | 76,736,010-K | Chile | Chilean Pesos | - | 49.9917 | 49.9917 | 49.9917 |
CCU Inversiones III SpA. (6) | 76,933,685-0 | Chile | US Dollar | - | 99.9950 | 99.9950 | 99.9950 |
Vending y Servicios CCU Ltda. (10) | 77,736,670-K | Chile | Chilean Pesos | - | - | - | 99.9779 |
Transportes CCU Ltda. | 79,862,750-3 | Chile | Chilean Pesos | 98.0000 | 2.0000 | 100.0000 | 100.0000 |
Fábrica de Envases Plásticos S.A. (12) | 86,150,200-7 | Chile | Chilean Pesos | 95.8904 | 4.1080 | 99.9984 | 99.9966 |
Millahue S.A. | 91,022,000-4 | Chile | Chilean Pesos | 99.9621 | - | 99.9621 | 99.9621 |
Viña San Pedro Tarapacá S.A. (*) (3) | 91,041,000-8 | Chile | Chilean Pesos | - | 82.9870 | 82.9870 | 82.9870 |
Manantial S.A. | 96,711,590-8 | Chile | Chilean Pesos | - | 50.5507 | 50.5507 | 50.5507 |
Viña Altaïr SpA. | 96,969,180-9 | Chile | Chilean Pesos | - | 82.9870 | 82.9870 | 82.9870 |
Cervecería Kunstmann S.A. | 96,981,310-6 | Chile | Chilean Pesos | 50.0007 | - | 50.0007 | 50.0007 |
Cervecera CCU Chile Ltda. | 96,989,120-4 | Chile | Chilean Pesos | 99.7500 | 0.2499 | 99.9999 | 99.9999 |
Embotelladoras Chilenas Unidas S.A. (10) | 99,501,760-1 | Chile | Chilean Pesos | 98.8000 | 1.1834 | 99.9834 | 99.9834 |
Viña Valles de Chile S.A. (3) | 99,531,920-9 | Chile | Chilean Pesos | - | - | - | 82.9870 |
Comercial CCU S.A. | 99,554,560-8 | Chile | Chilean Pesos | 50.0000 | 49.9888 | 99.9888 | 99.9888 |
Compañía Pisquera de Chile S.A. | 99,586,280-8 | Chile | Chilean Pesos | 46.0000 | 34.0000 | 80.0000 | 80.0000 |
Andina de Desarrollo SACFAIMM | 0-E | Argentina | Argentine Pesos | - | 59.1971 | 59.1971 | 59.1971 |
Bodega San Juan S.A.U. (9) | 0-E | Argentina | Argentine Pesos | - | 82.9870 | 82.9870 | - |
Cía. Cervecerías Unidas Argentina S.A. (2) | 0-E | Argentina | Argentine Pesos | - | 99.9936 | 99.9936 | 99.9936 |
Compañía Industrial Cervecera S.A. | 0-E | Argentina | Argentine Pesos | - | 99.9950 | 99.9950 | 99.9950 |
Finca La Celia S.A. (9) | 0-E | Argentina | Argentine Pesos | - | 82.9870 | 82.9870 | 82.9870 |
Los Huemules S.R.L. | 0-E | Argentina | Argentine Pesos | - | 74.9979 | 74.9979 | 74.9979 |
Sáenz Briones y Cía. S.A.I.C. | 0-E | Argentina | Argentine Pesos | - | 89.9150 | 89.9150 | 89.9150 |
Bebidas Bolivianas BBO S.A. (4) | 0-E | Bolivia | Bolivians | - | 51.0000 | 51.0000 | 51.0000 |
International Spirits Investments USA LLC | 0-E | United States | US Dollar | - | 80.0000 | 80.0000 | 80.0000 |
Inversiones CCU Lux S.à r.l. (7) | 0-E | Luxemburg | US Dollar | - | 99.9999 | 99.9999 | 99.9999 |
Southern Breweries S.C.S. (1) | 0-E | Luxemburg | US Dollar | 38.7810 | 61.2141 | 99.9951 | 99.9951 |
Bebidas del Paraguay S.A. (**) | 0-E | Paraguay | Paraguayan Guaranies | - | 50.0049 | 50.0049 | 50.0049 |
Distribuidora del Paraguay S.A. (**) | 0-E | Paraguay | Paraguayan Guaranies | - | 49.9589 | 49.9589 | 49.9589 |
Promarca Internacional Paraguay S.R.L. (***) | 0-E | Paraguay | Paraguayan Guaranies | - | 49.9917 | 49.9917 | 49.9917 |
Sajonia Brewing Company S.R.L. (***) | 0-E | Paraguay | Paraguayan Guaranies | - | 25.5025 | 25.5025 | 25.5025 |
Andrimar S.A. | 0-E | Uruguay | Uruguayan Pesos | - | 99.9999 | 99.9999 | 99.9999 |
Coralina S.A. | 0-E | Uruguay | Uruguayan Pesos | - | 99.9999 | 99.9999 | 99.9999 |
Marzurel S.A. | 0-E | Uruguay | Uruguayan Pesos | - | 99.9999 | 99.9999 | 99.9999 |
Milotur S.A. (11) | 0-E | Uruguay | Uruguayan Pesos | - | 99.9999 | 99.9999 | 99.9999 |
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(*)Listed company in Chile.
(**) SeeNote 1 – General Information, letter E),Subsidiaries with direct or indirect participation of less than 50%
(***) Subsidiaries in which we have an interest of more or equal than 50% through one or more subsidiaries of the Company.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
In addition to what is shown in the preceding table, presented above, belowthe following are the percentages of participation with voting rights, in each of the subsidiaries as of December 31, 2016 and December 31, 2015, respectively.subsidiaries. Each shareholder has one vote per share which he ownsowned or represents.represented. The percentage of participation with voting rights represents the sum of the direct participation and indirect participation viathrough a subsidiary.
Subsidiary | Tax ID | Country of origin | Functional currency | Share percentage with voting rights | |
As of December 31, 2019 | As of December 31, 2018 | ||||
% | % | ||||
Aguas CCU-Nestlé Chile S.A. | 76,007,212-5 | Chile | Chilean Pesos | 50.0917 | 50.0917 |
Cervecera Guayacán SpA. (***) (5) | 76,035,409-0 | Chile | Chilean Pesos | 25.0006 | 25.0006 |
CRECCU S.A. | 76,041,227-9 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Cervecería Belga de la Patagonia S.A. (***) | 76,077,848-6 | Chile | Chilean Pesos | 25.5034 | 25.5034 |
Inversiones Invex CCU Dos Ltda. | 76,126,311-0 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Inversiones Invex CCU Tres Ltda. | 76,248,389-0 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Bebidas CCU-PepsiCo SpA. (***) | 76,337,371-1 | Chile | Chilean Pesos | 49.9888 | 49.9888 |
CCU Inversiones II Ltda. (8) | 76,349,531-0 | Chile | US Dollar | 100.0000 | 100.0000 |
Cervecería Szot SpA. (***) (13) | 76,481,675-7 | Chile | Chilean Pesos | 25.0009 | - |
Bebidas Carozzi CCU SpA. (***) | 76,497,609-6 | Chile | Chilean Pesos | 49.9917 | 49.9917 |
Bebidas Ecusa SpA. | 76,517,798-7 | Chile | Chilean Pesos | 99.9834 | 99.9834 |
Inversiones Invex CCU Ltda. | 76,572,360-4 | Chile | US Dollar | 99.9920 | 99.9920 |
Promarca Internacional SpA. (***) | 76,574,762-7 | Chile | US Dollar | 49.9917 | 49.9917 |
CCU Inversiones S.A. (3) | 76,593,550-4 | Chile | Chilean Pesos | 99.7775 | 99.7775 |
Inversiones Internacionales SpA. | 76,688,727-9 | Chile | US Dollar | 80.0000 | 80.0000 |
New Ecusa S.A. (10) | 76,718,230-9 | Chile | Chilean Pesos | - | 99.9834 |
Promarca S.A. (***) | 76,736,010-K | Chile | Chilean Pesos | 49.9917 | 49.9917 |
CCU Inversiones III SpA. (6) | 76,933,685-0 | Chile | US Dollar | 100.0000 | 100.0000 |
Vending y Servicios CCU Ltda. (10) | 77,736,670-K | Chile | Chilean Pesos | - | 99.9779 |
Transportes CCU Ltda. | 79,862,750-3 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Fábrica de Envases Plásticos S.A. (12) | 86,150,200-7 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Millahue S.A. | 91,022,000-4 | Chile | Chilean Pesos | 99.9621 | 99.9621 |
Viña San Pedro Tarapacá S.A. (*) (3) | 91,041,000-8 | Chile | Chilean Pesos | 82.9870 | 82.9870 |
Manantial S.A. | 96,711,590-8 | Chile | Chilean Pesos | 50.5507 | 50.5507 |
Viña Altaïr SpA. | 96,969,180-9 | Chile | Chilean Pesos | 82.9870 | 82.9870 |
Cervecería Kunstmann S.A. | 96,981,310-6 | Chile | Chilean Pesos | 50.0007 | 50.0007 |
Cervecera CCU Chile Ltda. | 96,989,120-4 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Embotelladoras Chilenas Unidas S.A. (10) | 99,501,760-1 | Chile | Chilean Pesos | 99.9834 | 99.9834 |
Viña Valles de Chile S.A. (3) | 99,531,920-9 | Chile | Chilean Pesos | - | 82.9870 |
Comercial CCU S.A. | 99,554,560-8 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Compañía Pisquera de Chile S.A. | 99,586,280-8 | Chile | Chilean Pesos | 80.0000 | 80.0000 |
Andina de Desarrollo SACFAIMM | 0-E | Argentina | Argentine Pesos | 100.0000 | 100.0000 |
Bodega San Juan S.A.U. (9) | 0-E | Argentina | Argentine Pesos | 82.9870 | - |
Cía. Cervecerías Unidas Argentina S.A. (2) | 0-E | Argentina | Argentine Pesos | 100.0000 | 100.0000 |
Compañía Industrial Cervecera S.A. | 0-E | Argentina | Argentine Pesos | 100.0000 | 100.0000 |
Finca La Celia S.A. (9) | 0-E | Argentina | Argentine Pesos | 82.9870 | 82.9870 |
Los Huemules S.R.L. | 0-E | Argentina | Argentine Pesos | 74.9979 | 74.9979 |
Sáenz Briones y Cía. S.A.I.C. | 0-E | Argentina | Argentine Pesos | 100.0000 | 100.0000 |
Bebidas Bolivianas BBO S.A. (4) | 0-E | Bolivia | Bolivian | 51.0000 | 51.0000 |
International Spirits Investments USA LLC | 0-E | United States | US Dollar | 80.0000 | 80.0000 |
Inversiones CCU Lux S.à r.l. (7) | 0-E | Luxemburg | US Dollar | 99.9999 | 99.9999 |
Southern Breweries S.C.S. (1) | 0-E | Luxemburg | US Dollar | 100.0000 | 100.0000 |
Bebidas del Paraguay S.A. (**) | 0-E | Paraguay | Paraguayan Guaranies | 50.0049 | 50.0049 |
Distribuidora del Paraguay S.A. (**) | 0-E | Paraguay | Paraguayan Guaranies | 49.9589 | 49.9589 |
Promarca Internacional Paraguay S.R.L. (***) | 0-E | Paraguay | Paraguayan Guaranies | 49.9917 | 49.9917 |
Sajonia Brewing Company S.R.L. (***) | 0-E | Paraguay | Paraguayan Guaranies | 25.5025 | 25.5025 |
Andrimar S.A. | 0-E | Uruguay | Uruguayan Pesos | 99.9999 | 99.9999 |
Coralina S.A. | 0-E | Uruguay | Uruguayan Pesos | 99.9999 | 99.9999 |
Marzurel S.A. | 0-E | Uruguay | Uruguayan Pesos | 99.9999 | 99.9999 |
Milotur S.A. (11) | 0-E | Uruguay | Uruguayan Pesos | 99.9999 | 99.9999 |
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(*)Listed company in Chile.
(**) SeeNote 1 – General Information, letter E),Subsidiaries with direct or indirect participation of less than 50%
(***) Subsidiaries in which we have an interest of more or equal than 50% through one or more subsidiaries of the Company.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Subsidiary | Tax ID | Country of origin | Functional currency | Share percentage with voting rights | |
As of December 31, 2016 | As of December 31, 2015 | ||||
% | % | ||||
Cervecera CCU Chile Limitada | 96,989,120-4 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Embotelladora Chilenas Unidas S.A. (3) | 99,501,760-1 | Chile | Chilean Pesos | 99.9834 | 99.9338 |
Cía. Cervecerías Unidas Argentina S.A. (4) | 0-E | Argentina | Argentine pesos | 100.0000 | 100.0000 |
Viña San Pedro Tarapacá S.A. | 91,041,000-8 | Chile | Chilean Pesos | 64.6980 | 64.6980 |
Compañía Pisquera de Chile S.A. | 99,586,280-8 | Chile | Chilean Pesos | 80.0000 | 80.0000 |
Transportes CCU Limitada | 79,862,750-3 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
CCU Investments Limited | 0-E | Cayman Islands | Chilean Pesos | 100.0000 | 100.0000 |
Inversiones INVEX CCU DOS Limitada | 76,126,311-0 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
CRECCU S.A. | 76,041,227-9 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Fábrica de Envases Plásticos S.A. | 86,150,200-7 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Southern Breweries Limited (5) | 0-E | Cayman Islands | Chilean Pesos | 100.0000 | 100.0000 |
Comercial CCU S.A. | 99,554,560-8 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
CCU Inversiones S.A. | 76,593,550-4 | Chile | Chilean Pesos | 99.9737 | 99.9737 |
Millahue S.A. | 91,022,000-4 | Chile | Chilean Pesos | 99.9621 | 99.9621 |
Aguas CCU-Nestlé Chile S.A. (1) | 76,007,212-5 | Chile | Chilean Pesos | 50.1000 | 50.1000 |
CCU Inversiones II Limitada (2) | 76,349,531-0 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Compañía Cervecera Kunstmann S.A. | 96,981,310-6 | Chile | Chilean Pesos | 50.0007 | 50.0007 |
Inversiones INVEX TRES Limitada | 76,248,389-0 | Chile | Chilean Pesos | 100.0000 | 100.0000 |
Milotur S.A. | 0-E | Uruguay | Uruguayan pesos | 100.0000 | 100.0000 |
Coralina S.A. | 0-E | Uruguay | Uruguayan pesos | 100.0000 | 100.0000 |
Marzurel S.A. | 0-E | Uruguay | Uruguayan pesos | 100.0000 | 100.0000 |
Bebidas del Paraguay S.A. (2) | 0-E | Paraguay | Paraguayan guarani | 50.0050 | 50.0050 |
Distribuidora del Paraguay S.A. (2) | 0-E | Paraguay | Paraguayan guarani | 49.9590 | 49.9590 |
Los Huemules S.R.L. | 0-E | Argentina | Argentine pesos | 100.0000 | 24.9680 |
Bebidas Ecusa SpA. (3) | 76,517,798-7 | Chile | Chilean Pesos | 99.9338 | 99.9338 |
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The main movements in the ownership of the subsidiaries included in these consolidated financial statements are the following:
(1) Southern Breweries S.C.S. (SB SCS) (Ex Southern Breweries Limited)
On December 7, 2018, Southern Breweries Limited (Subsidiary of CCU) was re-domiciled from Cayman Islands to Luxembourg and changed its name to Southern Breweries S.á.r.l., later and once the subsidiary was stablished in Luxembourg it was converted from S.á.r.l. to S.C.S. Finally, the Company sold one share of SB SCS to the subsidiary Inversiones CCU Lux S.á r.l. by an amount of US$ 2,600.
(1) Aguas CCU-Nestlé(2) Compañía Cervecerías Unidas Argentina S.A.
As a result of the early termination of Budweiser license, as described inNote 1 – General information, letter C), and based on the Audited Financial Statements as of and for the year ended on April 30, 2018 of the subsidiary Compañía Cervecerías Unidas Argentina S.A., on June 5, 2018, held the Ordinary and Extraordinary General Assembly of such subsidiary, agreed the distribution of dividends for a total amount of ARS 5,141,760,000 (equivalent to ThCh$ 129,858,280), according with the stock rights of their shareholders, which are domiciled in Chile, distributed to Inversiones Invex CCU Limitada the amount of ARS 4,146,778,022.40 (equivalent to ThCh$ 104,729,404 (80.65 %)) and Inversiones Invex CCU Dos Limitada the amount of ARS 994,981,977.60 (equivalent to ThCh$ 25,128,876 (19.35%)). According to the above mentioned, the distribution of dividends to the Chilean shareholders, is based on the realized result to April 30, 2018 of the subsidiary Compañía Cervecerías Unidas Argentina S.A.
(3) CCU Inversiones S.A., Viña San Pedro Tarapacá S.A. (VSPT) and Viña Valles de Chile S.A. (VVCH)
On January 29, 20162018, the subsidiaries Aguas CCU-Nestléoutcome notice of the tender offer was published, as result CCU Inversiones S.A. acquired an additional 15.79% of VSPT for the amount of ThCh$ 49,222,782, equivalent to 6,310,613,119 shares, thus resulting in an 83.01% stake in VSPT.
On January 29, 2018, the Company acquired an additional 0.18% of subsidiary CCU Inversiones S.A. for an amount of ThCh$ 49,400,000, equivalent to 934,774,763 shares, thus resulting in a 99.02% stake in this subsidiary.
On July 31, 2018, subsidiary Viña Orgánica SPT S.A. merged with Viña San Pedro Tarapacá S.A., which became the legal continuer and beginning from August 1, 2018. The transactions mentioned above had no significant effects on the results of the Company.
Viñas Valles de Chile S.A. (“Aguas”)(VVCH) dissolved and Embotelladoras Chilenas Unidas S.A. (“ECUSA”) have acquired 48.07%merged into VSPT, being the latter the surviving entity, as the result of VSPT becoming, pursuant to a share purchase agreement executed on May 21, 2019 between Viña Altaïr SpA. and 0.92%VSPT, the sole owner, in a period that exceeded 10 days, of all of the shares of Manantial S.A. (“Manantial”) respectively, exercisingVVCH. This merger had legal and accounting effects as of June 1, 2019. VVCH Board of Directors´ Resolution evidencing the call option granteddissolution of VVCH was executed as public deed on June 4, 2019, and further registered in the Shareholders’ AgreementRegister of Manantial. AsCommerce and published in the Official Gazette.
(4) Bebidas Bolivianas BBO S.A. (BBO)
On May 7, 2014, the Company acquired 34% of the stock rights of Bebidas Bolivianas BBO S.A. (BBO) a consequence, CompañíBolivian and a Cervecerías Unidas S.A. is currentlyclosed stock company that produces soft drinks and beers in three plants located in Santa Cruz de la Sierra and Nuestra Señora de la Paz cities.
Subsequently, on August 9, 2018, the indirect owner of 100%Company acquired an additional the 17% of the shares of Manantial, remaining as the only direct shareholders of Manantial: (i) Aguas with 99.08% of the capital stock, and (ii) ECUSA with 0.92% of the capital stock. The totalBBOfor an amount of US$ 8,500,000, equivalents to ThCh$ 5,457,935, thus resulting in a 51% stake in BBO (seeNote 15 – Business combinations). The Company has determined the fair values of assets and liabilities for this transaction was ThCh$ 19,111,686.business combination as follows:
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
(2) CCU Inversiones II Limitada
On December23,2013, the Company acquired 50.005% and 49.959% of the stock of Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A., respectively. This transaction allows the Company, participates in the beer distribution business, and production and marketing of non-alcoholic drinks, waters and nectars. The total amount of this transaction was ThCh$ 11,254,656. Subsequently, on June 9, 2015, the Company paid a committed capital of ThCh$ 7,414,290and this transaction does not change the percentage of participation.
Bebidas del Paraguay S.A. (BdP) and Distribuidora del Paraguay S.A. (DdP) are considered as an economic group that share operational and financial strategy. BdP manufactures products with different brands of its property. DdP is sole and exclusive customer, which is responsible for the distribution and marketing of its products, reason why BdP is it consolidates DdP, and accordingly is presented in the consolidated financial statements of CCU.
As explained inNote 8, on March 31, 2016, through its subsidiary Bebidas del Paraguay S.A., acquired 51% of the stock rights of paraguayan company Artisan SRL. The amount of this transaction was ThCh$ 641,489 (equivalents to US$ 1,000,000). At the date of issuance of these consolidated financial statements the fair value is still preliminary and that the Company is not expecting that the final fair value to be significantly different.
Addittionaly, as explained inNote 19, the Company participates of 50% of shares of Central Cervecera de Colombia S.A.S.
(3) Embotelladoras Chilenas Unidas S.A.
On November 16, 2015,formed a new company called Bebidas ECUSA SpA.,where the subsidiary Embotelladoras Chilenas Unidas S.A. has the 100% of shares. The purpose of this companyis the distribution, transport, import, export and marketing in general, on all types of soft drinks.
As explained inNote 1 (1) before mentioned, on January 29, 2016, Embotelladoras Chilenas Unidas S.A. acquired 0.92% of the stock rights of Manantial S.A.
(4) Compañía Cervecerías Unidas Argentina S.A.
On January 7, 2016, throgh the argentinian subsidiary Compañía Industrial Cervecera S.A. (CICSA), the Company acquired 50.99% of the stock rights of Los Huemules SRL, after Mr. Juan Javier Negri declared its commitment character of CICSA and notified such situation to Los Huemules SRL. As a consequence of the above mentioned the shareholders of Los Huemules SRL. are Compañía Cervecera Kunstmann S.A. and CICSA with 49.01% and 50.99%, respectively. The final amount of this transaction was ThCh$ 118,092.
(5) Southern Breweries Limited
On August 26, 2016, the subsidiaries Saint Joseph Investments Limited and South Investments Limited was merged in CCU Cayman Limited, latter being the continuing legal entity.
Besides, on October 2016, Southern Breweries Establishment, subsidiary of CCU in Liechtenstein, changed its named to "Southern Breweries Aktiengesellschaft" and on October 18, 2016 re-domiciling it to Cayman Islands. Subsequently, on November 2016, was modified the statutes of such subsidiary and changed its name by the "Southern Breweries Limited". Finally, starting December 1, 2016, the subsidiary CCU Cayman Limited before mentioned was merged in Southern Breweries Limited, latter being the continuing legal entity. Transactions mentioned above had no significant effects on the results of the Company.
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Below we briefly describe the companies that qualify as joint operations:
(a) Promarca S.A.
Promarca S.A. is a closed stock company with its main activity being the acquisition, development and administration of trademarks and their corresponding licenses to their operators.
OnDecember 31, 2016, Promarca S.A. recorded a profit of ThCh$ 4,812,696 (ThCh$ 4,708,318 in 2015 and ThCh$ 4,646,620 in 2014), which in accordance with the Company´s policies is 100% distributable.
At the Extraordinary Shareholders´ Meetings of Promarca S.A. held on June 2016, agreed to increase the Paid-in capital (jointly the "Capital Increase"). The Capital Increase was subscribed by the subsidiary New Ecusa S.A. and Watt´s Dos S.A.in equal parts, and who maintained its current 50% of the stock rights, through the Paid-in capital of ThCh$ 8,199,240 and 100% of stock rights of the company the Promarca Internacional SpA. (which its main activity are the exploitation and development of Watt´s brands in Argentina, Paraguay, Uruguay and Bolivia). From June 2016, Promarca Internacional SpA., it became a subsidiary in a 100% of Promarca S.A. During June 30, 2016, for this joint operation has determined the following fair values of assets and liabilities:
Assets and Liabilities | Fair Value |
ThCh$ | |
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Total non-current assets |
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Total Assets |
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Total current liabilities |
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Total non-current liabilities | 9,181,670 |
Total liabilities | 14,575,449 |
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Net identifiable assets acquired |
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Non-controlling interests | (6,508,159) |
Goodwill | 10,480,792 |
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As a result of the previously mentioned fair values determined previouslyintangibles and in according to rights on the joint operation,goodwill have been generated, intangibleswhich are exposed inNote 17 – Intangible assets other than goodwilland Note 18 – Goodwill.
On September 20, 2018, the Company paid committed capital of US$ 1,530,029 (equivalent toThCh$ 1,044,688) in BBO, since both partners concurred with the same capital contributions, the percentages of participation were maintained.
On June 28 and July 11, 2019 the subsidiary CCU Inversiones II Ltda. made capital contributions to Bebidas Bolivianas BBO S.A. for an amount of US$ 1,249,713 y US$ 178,305 (equivalent to ThCh$ 849,630 and ThCh$ 122,210), respectively, since both partners concurred with the same contributions, the participation percentages were maintained.
(5) Cervecera Guayacán SpA.
On August 31, 2018, the subsidiary Cervecería Kunstmann S.A. (CK) acquired an additional 30.0004% of the stock rights of Cervecera Guayacán SpA. for an amount of ThCh$ 5,614,575 described inNote 20.
(b) Compañía Pisquera Bauzá S.A.
On December 2, 2011,361,560, equivalent to 39,232 shares and the subsidiary Compañía Pisquera de Chile S.A. (CPCh) signed a license agreement for the commercializationsubscription and distribution of the pisco brand Bauzá in Chile. In addition, this transaction included the acquisition by CPCh of 49% of Compañía Pisquera Bauzá S.A. (CPB), owner of the brand Bauzá in Chile. The family Bauzá owns 51% of that company and all of its productive assets, thereby continuing the link to the production of pisco Bauzá maintaining its quality, origin and premium character.
On December 31,2015, CPB recorded a profitpayment of ThCh$ 82,663 (ThCh$ 109,207470,711, equivalent to 49,038 shares. As a consequence above mentioned CKhas the 50.0004% stake in 2014), which in accordance with the Company´s policies is 100% distributable.
On January 7, 2016, CPCh sold its interest of 49% to Agroproductos Bauzá S.A. (agroproductos Bauzá). At the end of December 31, 2015 this joint operation was classified to Assets of disposal group held for saleCervecera Guayacán SpA. (seeNote 2415 – Business combinations).
(c) Bebidas CCU-Pepsico SpA.
On October 23, 2013, Bebidas CCU-PepsiCo SpA (BCP) was incorporated, which is qualifies as an joint operation, where the subsidiary Embotelladoras Chilenas Unidas S.A. has the 50% of participation. The capital of this entity amounts to ThCh$ 1,000. The purpose of this company is the manufacture, production, processing, transformation, transport, import, export, purchase, sale and in general comercialization of all type of concentrates. Its operations commenced on January 1, 2014.
On December 31, 2016, BCP recorded a profit of ThCh$ 1,066,005 (ThCh$ 802,418 in 2015 and ThCh$ 789,648 in 2014), which in accordance with the Company´s policies is 100% distributable.
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(d) Bebidas Carozzi CCU SpA.
On November 26, 2015, the Company through its subsidiary ECCUSA, entered into a joint arrangement that qualifies as a joint operation, in the company called Bebidas Carozzi CCU SpA. (BCCCU) where CCU and Empresas Carozzi S.A. participate as only shareholders in equal parts. The purpose of this company is the production, marketing and distribution of instant beverage powder in the national territory. The total disbursement by ECCUSA in this transaction was an amount of ThCh$ 21,846,500. Its operations commenced on December 1, 2015. During year 2016for this joint operation has determined the following fair values of assets and liabilities:liabilities for this business combination as follows:
Assets and Liabilities | Fair Value |
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Total non-current liabilities | 306,828 |
Total liabilities | 545,093 |
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As a result of the previously mentioned fair values determined previouslyintangibles and in according to rights on the joint operation,goodwill have been generated, intangibles and goodwill for an amount of ThCh$ 7,747,581 and ThCh$ 16,189,798, respectively (seewhich are exposed inNote 20 and 2117 – Intangible assets other than goodwill)and Note 18 – Goodwill.
As of December 31, 2015, the Company was in the process of assessing of the fair values of acquisitions above mentioned, so it was recorded under Other non-financial non-current assets for an amount of ThCh$ 21,846,500,however for comparison purposes of this Consolidated Financial Statements, the Company have been reclassified from Other non-financial non-current assets to Intangibles, Goodwill and Deferred taxes as is shown below:
Non-current assets | Balances presented at 12.31.2015 | Reclassification | Balances 31.12.2015 | |
ThCh$ | ThCh$ | ThCh$ | ||
Other non-financial assets | 27,067,454 | (21,846,500) | 5,220,954 | |
Intangible assets other than goodwill | 64,120,426 | 7,747,581 | 71,868,007 | |
Goodwill | 83,300,573 | 16,189,799 | 99,490,372 | |
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Non-current liabilities | Balances presented at 12.31.2015 | Reclassification | Balances 31.12.2015 | |
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Deferred tax liabilities | 88,146,963 | 2,090,880 | 90,237,843 | |
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On December 31, 2016, BCCCU recorded a profit of ThCh$ 797,268 (ThCh$ 402,228 in 2015), which in accordance with the Company´s policies is 100% distributable.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
(6) CCU Inversiones III SpA.
On September 13, 2018, the subsidiary Southern Breweries S.C.S. (ex Southern Breweries Limited) incorporated the company CCU Inversiones III SpA. in Chile, whose purpose will be to make all kinds of investments, in any type of goods, foreign currency, financial instruments and commercial paper, including shares or social rights in companies incorporated in Chile or abroad, among others.
(7) Inversiones CCU Lux S.á r.l.
On November 13, 2018, the subsidiary Inversiones CCU Lux S.á r.l. was created in Luxembourg, where the subsidiary CCU Inversiones II Ltda. made the total stock payment of Euros 12,000 (12,000 shares), equivalent to ThCh$ 9,252.
(8) CCU Inversiones II Limitada
On December 17, 2018, the Company made a capital contribution to the subsidiary CCU Inversiones II Ltda., through the shareholding contribution of the Bolivian subsidiary, Bebidas Bolivianas BBO S.A. for an amount of US$ 40,294,696, equivalents to ThCh$ 27,659,891.
On May 27 and June 12, 2019, the Company made capital contributions to the subsidiary CCU Inversiones II Ltda. For an amount of US$ 3,200,000 (equivalent toThCh$ 2,223,488) and US$ 1,428,017 (equivalent toThCh$ 990,473).
On September 6, 2019, the Company made a capital contribution to the subsidiary CCU Inversiones II Ltda. For an amount of US$ 10,000,000 (equivalent toThCh$ 7,233,000).
(9) Finca La Celia S.A. and Bodega San Juan S.A.U.
On January 28, 2019, Bodega San Juan S.A.U. was established in Argentina, where the subsidiary Finca la Celia S.A. made a capital contribution of ARS 100,000 (100,000 ordinary, non-endorsable nominal shares).
On March 1, 2019, the subsidiary VSPT made a capital increase at the subsidiary Finca La Celia S.A. for US$ 7,000,000 through the issuance of 265,300.00 ordinary, non-endorsable shares.
On May 31, 2019, the subsidiary VSPT made a capital increase at the subsidiary Finca La Celia S.A. for US$ 14,000,000 through the issuance of 607,600,000 non-endorsable nominal shares.
The aforementioned had no significant effects on the Company's results.
Graffina Business
In December 2018, the subsidiary VSPT signed an agreement to acquire a part of the Pernod Ricard wine business in Argentina. The purchase agreement, subject to local regulatory approval, included the Argentine wine brands Graffigna, Colón and Santa Silvia, which represent approximately 1.5 million boxes of 9-liter wine bottles per year. Bodegas Graffigna has a winery in the province of San Juan, two fields in the same province, and a field in Mendoza.
On January 28, 2019, the Argentine subsidiary Finca La Celia S.A. constituted the Bodega San Juan S.A.U. through a capital contribution of ARS 100,000, in order to use it as a vehicle for the acquisition of the Graffigna, Colón and Santa Silvia wine business of Pernod Ricard Argentina S.R.L., in addition to the purchase of Bodega Graffigna and Pocito vineyards, Cañada Honda and La Consulta.
On May 31, 2019, the subsidiary VSPT made a capital contribution to the subsidiary Finca La Celia S.A. by US$ 14,000,000, equivalent toThCh$9,910,040 and on the same date, Finca La Celia S.A. made a capital contribution to Bodega San Juan S.A.U. for US$ 2,806,820, equivalent toThCh$ 1,986,836.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The Company has determined the provisional fair values of assets and liabilities for this business combination as follows:
Assets and Liabilities |
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ThCh$ | |
Total current assets | 4,470,464 |
Total non-current assets | 8,783,049 |
Total Assets | 13,253,513 |
Total current liabilities | 370,326 |
Total non-current liabilities | 1,200,124 |
Total liabilities | 1,570,450 |
Identificable Net Assets Acquired / Investment value | 11,683,063 |
Bargain purchase gain (1) | 3,043,107 |
Investment value | 8,639,956 |
(1) SeeNote 31 – Other gain (losses)
(10)Embotelladoras Chilenas Unidas S.A., New Ecusa S.A. and Vending y Servicios CCU Ltda.
On April 1, 2019, the subsidiary New Ecusa S.A. was merged into Embotelladoras Chilenas United S.A., the latter becoming its legal continuator. The transaction mentioned above had no significant effect on the Company's results.
On June 1, 2019, the subsidiary Vending y Servicios CCU Ltda. merged into Embotelladoras Chilenas Unidas S.A., the latter becoming its legal continuator. The aforementioned had no significant effects on the Company's results.
(11)Milotur S.A.
On May 27, 2019, the subsidiary CCU Inversiones II Ltda. made a capital contribution to Milotur S.A. for an amount of US$ 3,200,000 (equivalent toThCh$ 2,223,488), maintaining its participation percentage.
(12)Fábrica de Envases Plásticos S.A. (Plasco)
According to Plasco's Extraordinary Shareholder meeting dated May 31, a capital increase ofThCh$ 10,000,000 was agreed upon with the issuance of 16,000,000 shares at a price of $ 625 per share. Likewise, it is stipulated in said meeting, that the shareholder Millahue S.A. will not concur in this increase. For this reason, 100% of the increase will be made by CCU S.A. This increase was materialized on June 25, 2019.
(13)Cervecería Szot SpA.
On August 30, 2019, the subsidiary Cervecería Kunstmann S.A. (CK) acquired an additional 5,001% of Cervecería Szot SpA. from the purchase of 5,001 shares, equivalent toThCh$ 6,156. As a result of the aforementioned, CK reached a total participation of 50,0010% on this subsidiary.(SeeNote 15 – Business combinations).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
For this business combination, the provisional fair values of assets and liabilities were determined, which are the following:
Assets and Liabilities | Fair Value |
ThCh$ | |
Total current assets | 131,599 |
Total non-current assets | 451,672 |
Total Assets | 583,271 |
Total current liabilities | 158,551 |
Total non-current liabilities | 90,067 |
Total liabilities | 248,618 |
Identificable Net Assets Acquired / Investment value | 334,653 |
Non-controlling interests | (167,323) |
Investment value | 167,330 |
As a result of the previously mentioned fair values intangibles and goodwill have been generated, which are exposed inNote 17 – Intangible assets other than goodwilland Note 18 – Goodwill, respectively.
E)Subsidiaries with direct or indirect participation of less than 50%
These Consolidated Financial Statements incorporate as a subsidiary to Distribuidora del Paraguay S.A., a company in which we have a total participation of 49.9589%.
Bebidas del Paraguay S.A. (BdP) and Distribuidora del Paraguay S.A. (DdP) are considered to be one economic group that shares their operational and financial strategy, leaded by the same management team that seeks compliance with the strategic plan defined simultaneously for both entities. Additionally BdP produces different brands owned by it. DdP is its sole and exclusive customer, which is responsible for the distribution and marketing of BdP’s products. The administrative and commercial integration added to its operational and financial dependence of DdP explain the reason why BdP proceeds to present this entity as a subsidiary of CCU.
F) Joint operations:
Promarca S.A. is a closed stock company whose main activity is the acquisition, development and administration of trademarks and their corresponding licensing to their operators.
On December 31, 2019, Promarca S.A. recorded a profit ofThCh$ 4,511,337 (ThCh$ 4,581,922 in 2018 and ThCh$ 4,524,117 in 2017), which in accordance with the Company’s policies is 100% distributable.
(b) Bebidas CCU-Pepsico SpA.(BCP)
The line of business of this company is manufacture, produce, process, transform, transport, import, export, purchase, sell and in general market all types of concentrates.
On December 31, 2019, BCP recorded a profit of ThCh$ 1,243,574 (ThCh$ 1,137,233 in 2018 and ThCh$ 1,078,916 in 2017), which in accordance with the Company’s policies is 100% distributable.
(c) Bebidas Carozzi CCU SpA.(BCCCU)
The purpose of this company is the production, marketing and distribution of instant powder drinks in the national territory.
On December 31, 2019, BCCCU recorded a profit of ThCh$ 1,157,424 (ThCh$ 1,263,169 in 2018 and ThCh$ 2,278,345 in 2017), which in accordance with the Company’s policies is 100% distributable.
The companies mentioned above (letter a) to d)) meet the conditions stipulated in IFRS 11 to be considered "joint operations", assince the primary assets in both entities are trademarks, the contractual arrangements establishes that the partiestheparties to the joint arrangement share all interests in the assets relating to the arrangement in a specified proportion and their income is 100% royaltyfrom royalties charged to the joint operators fromfor the sale of products using these trademarks.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Significant accounting policies adopted for the preparation of these consolidated financial statements are described below:
The accompanying consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standard Board (IASB), which have been applied uniformly toconsistently in the periodsyears presented.
The consolidated financial statements cover the following periods: Statement of Financial Position as ofDecember 31, 2016, 2015 and 2014, Statement of changes in Equity, Statement of Income, Statement of Comprehensive Income and Statement of Cash Flow Except for the years ended December 31, 2016, 2015 y 2014.
The amounts shownstandards included inNote 4 - Accounting Changes, which explains the attached financial statements are expressed in thousandstreatment that was applied for each of Chilean pesos, which is the Company’s functional currency. All amounts have been rounded to thousand pesos, except when otherwise indicated.them.
The consolidated financial statements have been prepared on thea historical basis, as modified by the subsequent valuation of financial assets and financial liabilities (including derivative instruments) at fair value through profit and loss.value.
The preparation of the consolidated financial statementsConsolidated Financial Statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires that management uses its professional judgment in the process of applying the Company’s accounting policies. SeeNote 3- Estimates and application of professional judgment for disclosure of significant accounting estimates and judgments.
All IFRS standards, amendments and enhancements whose adoption was required by January 1, 2016, have been adopted by the Company, without significant impacts in the financial statements as of December 31, 2016.
At the date of issuance of these consolidated financial statementsConsolidated Financial Statements the following Standars,Standards, Amendments, Improvements and Interpretations to existing IFRS standards have been published. not taken effect and the Company has not adopted in advance.
These standards are required to be applied as following:by the following dates:
| Mandatory for years beginning in: | |
Amendments to IAS |
| January, 1, |
Amendments to IFRS 3 | Definition of a Business. | January, 1, 2020 |
IFRS 17 | Insurance Contracts. | January, 1, 2021 |
Amendments to IAS |
| January, 1, |
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AsThe Company estimates the adoption of December 31, 2016, the company is in the process of evaluating the impact of adopting the IFRS 9, IFRS 15these new Standards, Improvements, Amendments and IFRS 16. These standards will not be early adopted. For the rest of the standardsInterpretations mentioned in the table above the Company doeswill not expecthave a material impact on the consolidated financial statements upon initial application.Consolidated Financial Statements.
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Subsidiaries
Subsidiaries are the entities over which the Company is empoweredhas power to direct their financial and operationaloperating policies, which generally is generally the result of ownership of overmore than half of the voting rights. When assessing whether the Company controls another entity, the existence and effect of potential voting rights that are currently liable to be exercised at the date of the Consolidated Financial Statements is considered. Subsidiaries are consolidated as from the date on which control was obtained by the Company, and they are excluded from consolidation as of the date the Company loses such control.
The acquisition method is used for the accounting of acquisition of subsidiaries. The acquisition cost is the fair value of the assets delivered, of the equity instruments issued and of the liabilities incurred or assumed as of the exchange date. The identifiable assets acquired, as well as the identifiable liabilities and contingencies assumed in a business combination are initially valued at their fair value on the acquisition date, independently fromregardless the scope of minority interests.Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized as income.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Joint operations
As explained inNote 11- General information, in thosefor the joint arrangements that qualify as joint operations, the Company recognisesrecognizes its share of the assets, liabilities gains (losses) from operational activitiesand income in respect ofto its interest in the joint operations in accordance with IFRS 11.
Intercompany transaction
Intercompany transactions, balances and unrealized gains from transactions between the Group’sCompany’s entities are eliminated duringin consolidation. Unrealized losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. Whenever necessary, the subsidiaries accounting policies of subsidiaries are amended to ensure uniformity with the policies adopted by the Company.
Non-controlling Interest
The non-controllingNon-controlling interest is presented in the Equity section of the Consolidated Statement of Financial Position. The net income attributable to equity holder of the parent and the non-controlling interest are each disclosed separately in the Consolidated Statement of Income after net income.
Investments accounted byfor using the equity method
Joint ventures and associates
The Company maintains investments in joint arrangements that qualify as joint ventures, which correspond to a contractual agreement by which two or more parties carry out an economic activity that is subject to joint control, and normally involves the establishment of a separate entity in which each party has a share based on a shareholders’ agreement. In addition, the Company maintains investments in associates which are defined as those entities thatin which the investor hasdoes not have significant influence and isare not a subsidiary or is a joint venture.
The Company accounts for its participation in joint arrangementarrangements that qualify as joint ventures and in associates using the equity method. The financial statements of the joint venturesventure are prepared for the same year, under accounting policies consistent with those of the Company. Adjustments are made to conformagree any difference in accounting policies that may exist towith the Company´sCompany’s accounting policies.
Whenever the Company contributes or sells assets to the companies under joint control or associate,associates, any part of the income or loss originated byarising from the transaction is recognized based on how the asset is realized. WheneverWhen the Company purchases assets of suchfrom those companies, it does not recognize its share in the income or loss of the joint venture as regardsin respect to such transaction until the asset is sold or realized by the joint venture.realized.
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The Company has defined three operating segments which are essentially defined with respect to its revenues in the geographic areas of commercial activity: 1.- Chile, 2.- International business and 3.- Wine.
These operating segments mentioned are consistent with the way the Company is managed and how results will be reported by CCU. These segments reflect separate operating results which are regularly reviewed by chief operating decision maker in order to make decisions about the resources to be allocated to the segment and assess its performance(SeeNote 76 - Financial information as per operating segment).
The segments performance is measured according to several indicators, of which OR (Adjust Operating Result), OR before Exceptional Items (EI), ORBDA (Adjust Operating Result Before Depreciation and Amortization), ORBDA before EI, ORBDA margin (ORBDA’s % of total revenues for the operating segment), the volumes and Net sales. Sales between segments are conducted using terms and conditions at current market rates.
The Company defined the Adjusted Operating Result as the Net incomes (losses) before Other gains (losses), Net financial cost, Equity and income from joint ventures and associates, Foreign currency exchange differences, Results as per adjustment units and Income tax, and the ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.
MSD&A, included Marketing, Selling, Distribution and Administrative expenses.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Exceptional Items are income or expenses that do not occur regularly as part of the normal activities of the Company. It’s presented separately because its important items for the understanding the normal operations of the Company due to importance or nature.
OR before exceptional items (EI) and ORBDA before EI are defined as OR plus exceptional items and ORBDA plus exceptional items, respectively.
Presentation and functional currency
The Company uses the Chilean peso ($(Ch$ or CLP) as its functional currency and for the presentation of its financial statements. The functional currency has been determined considering the economic environment in which the Company carries out its operations and the currency in which the main cash flows are generated. The functional currency of the Argentine,Argentinian, Uruguayan, Paraguayan and ParaguayanBolivian subsidiaries is the Argentine peso,Peso, Uruguayan pesoPeso, Paraguayan Guarani and Paraguayan guarani,Bolivian, respectively. The functional currency of the joint venture an associates in Colombia and Bolivia areassociate in Perú is the Colombian pesoPeso and Boliviano,Sol, respectively.
Transactions and balances
Transactions in foreign currencies and adjustment units (“Unidad de Fomento” or “UF”) are initially recorded at the exchange rate of the corresponding currency or adjustment unit as of the date on which the transaction occurs. The Unidad de Fomento (UF) is a Chilean inflation-indexed peso-denominated monetary unit. The UF rate is set daily in advance based on changes in the previous month’s inflation rate. At the close of each Consolidated Statement of Financial Position, the monetary assets and liabilities denominated in foreign currencies and adjustment units are translated into Chilean pesos at the exchange rate of the corresponding currency or adjustment unit. The exchange difference arising, both from the liquidation of foreign currency transactions, as well as from the valuation of foreign currency monetary assets and liabilities, is included in statement of income, in Foreign currency exchange differences, while the difference arising from the changes in adjustment units are recorded in the statement of income as Result as per adjustment units.
For consolidation purposes, the assets and liabilities of the subsidiaries whose functional currency is different from the Chilean peso and not operating in countries whose economy is considered hyperinflationary, are translated into Chilean pesos by using the exchange rates valid as ofprevailing at the date of the consolidated financial statements, and theConsolidated Financial Statements while exchange differences originated by the translationconversion of the assets and liabilities, are recorded in Equityunder Reserve under the Currency Translation Reserves item. The incomeof exchange differences on translation within Other equity reserves. Incomes, costs and expenseexpenses are translated at the average monthly average exchange rate for the correspondingrespective fiscal years. These exchange rates have not suffered significant fluctuations during these months.
The results and financial situation in CCU Group's entities, which have a functional currency different from the presentation currency, being their functional currency the currency of a hyperinflationary economy (as the case of subsidiaries in Argentina as from 1 July 2018 as described below), are converted into the presentation currency as established in IAS 21 and IAS 29. The comparative figures, as the Group's presentation currency is the currency of a non-hyperinflationary economy, are not changed with respect to those that were presented as current amounts of year in question, within the Financial Statements of the preceding period, that is, these amounts are not adjusted for subsequent changes that have occurred in the price level or exchange rates.
Financial information in hyperinflationary economies
Inflation in Argentina has shown significant increases since the beginning of 2018. The three-year cumulative inflation rate, calculated using different combinations of consumer price indices, has exceeded 100% for several months, and it is still increasing. The three-year cumulative inflation calculated using the general price index has already exceeded 100%. Therefore, as prescribed by IAS 29, Argentina was declared a hyperinflationary economy as of July 1, 2018.
In accordance with the foregoing, IAS 29 must be applied by all those entities whose functional currency is the Argentine peso for the accounting periods ended after July 1, 2018, as if the economy had always been hyperinflationary. In this regard, IAS 29 requires that the financial statements of an entity whose functional currency is the currency of a hyperinflationary country be restated in terms as differences since thereof the purchasing power in force at the end of the reporting period. This implies that the restatement of non-monetary items must be made from their date of origin, last restatement, appraisal or other particular date in some very specific cases.
The adjustment factor used in each case is that obtained based on the combined index of the National Consumer Price Index (CPI), with the Wholesale Price Index (IPIM), published by the National Institute of Statistics and Census of the Argentinian Republic (INDEC), according to the series prepared and published by the Argentine Federation of Professional Councils of Economic Sciences (FACPCE).
For consolidation purposes, for subsidiaries whose functional currency is the Argentine peso, paragraph 43 of IAS 21 has been considered, which requires that the financial statements of a subsidiary that has the functional currency of ahyperinflationary economy be restated in accordance with IAS 29, before being converted for these to be included in the consolidated financial statements. The comparative amounts presented above (until the semester ended June 30, 2018 for purposes of the Consolidated Statement of Income by Function, Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows in Chilean pesos) They have not been significant fluctuations in the exchange rates during each month.restated.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The re-expression of non-monetary items is made from the date of initial recognition in the statements of financial position and considering that the financial statements are prepared under the criteria of historical cost.
Hyperinflation re-expression will be recorded until the period in which the entity's economy ceases to be considered a hyperinflationary economy; at that time, adjustments made by hyperinflation will be part of the cost of non-monetary assets and liabilities.
The exchange rates of the primary foreign currencies, and adjustment units and index used in the preparation of the consolidated financial statements as ofDecember 31, 2016, 2015 y 2014areare detailed as follows:
Chilean Pesos as per unit of foreign currency or adjustable unit | Chilean Pesos as per unit of foreign currency or adjustable unit | As of December 31, 2016 | As of December 31, 2015 | As of December 31, 2014 | Chilean Pesos as per unit of foreign currency or adjustable unit | As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | |
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US Dollar | USD | 669.47 | 710.16 | 606.75 | USD | 748.74 | 694.77 | 614.75 | |
Euro | EUR | 705.60 | 774.61 | 738.05 | EUR | 839.58 | 794.75 | 739.15 | |
Argentine Peso | ARG | 42.13 | 54.46 | 70.96 | ARS | 12.50 | 18.43 | 32.96 | |
Uruguayan Peso | UYU | 22.82 | 23.71 | 24.90 | UYU | 20.07 | 21.44 | 21.34 | |
Canadian Dollar | CAD | 573.26 | 509.62 | 491.05 | |||||
Sterling Pound | GBP | 826.10 | 1,053.02 | 944.21 | GBP | 983.24 | 882.36 | 832.09 | |
Paraguayan guarani | PYG | 0.12 | 0.12 | 0.13 | |||||
Bolivians | BS | 97.59 | 103.67 | 88.45 | |||||
Paraguayan Guarani | PYG | 0.12 | 0.12 | 0.11 | |||||
Swiss Franc | CHF | 773.81 | 706.00 | 631.16 | |||||
Bolivian | BOB | 107.58 | 101.28 | 89.61 | |||||
Australian Dollar | AUD | 524.25 | 489.17 | 480.31 | |||||
Danish Krone | DKK | 112.41 | 106.44 | 99.31 | |||||
Brazilian Real | BRL | 186.51 | 179.59 | 185.64 | |||||
Colombian Peso | COP | 0.22 | 0.22 | 0.25 | COP | 0.23 | 0.21 | ||
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Unidad de fomento* | UF | 26,347.98 | 25,629.09 | 24,627.10 | |||||
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Unidad de fomento (*) | UF | 28,309.94 | 27,565.79 | 26,798.14 | |||||
Unidad de indexada (**) | UI | 87.98 | 86.19 | 79.62 | |||||
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*(*) The Unidad de Fomento (UF) is a Chilean inflation-indexed, Chilean peso-denominated monetary unit. The UF rate is set daily in advance based on changes in the previous month´s inflation rate.
(**) The Unidad Indexada (UI) is a Uruguay inflation-indexed, Uruguayan peso-denominated monetary unit. The UI rate is set daily in advance based on changes in the previous month´s inflation rate.
Index used in hyperinflationary economies | As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | ||
Argentina Consumer Price Index |
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Index percentage variation of Argentina Consumer Price Index |
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Cash and cash equivalents includes available cash, available, bank balances, time deposits at financial entities, investments in mutual funds and financial instruments acquired under re-saleresale agreements, as well as highly liquid short-term investments, with a high liquidity, all at a fixed interest rate, normally with an original maturity of up to three months.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Other financial assets include money market securities, derivativesderivative contracts and time deposits at financial entities with a maturity overmaturing in more than 90 days.
IFRS 9 – Financial instruments, replaces the IAS 39 - Financial instruments, for the annual periods beginning on January 1, 2018 and which brings together three aspects of accounting and which are: classification and measurement; impairment and hedge accounting.
Financial assets
The Company recognizes a financial asset in its Consolidated Statement of Financial Position according to the following:as follows:
As of the date of the initial recognition, Managementmanagement classifies its financial assetsassets: (i) at fair value through profit and loss (ii) Trade and (ii) collectible creditsother current receivables and accounts, depending(iii) hedging derivatives. The classification depends on the purpose for which the financial assets were acquired. For those instruments not classified at fair value through income,Income, any cost attributable to the transaction is recognized as part of the assetasset’s value.
The fair value of the instruments that are actively quotedtraded in formal markets is determined by the quotedtraded price as ofon the financial statement closing date. For those investments without an active market, the fair value is determined using valuation techniquetechniques including (i) the use of recent market transactions, (ii) references to the current market value of another financial instrument of similar characteristics, (iii) discounted cash flowflows and (iv) other valuation models.
After the initial recognition, the Company values the financial assets as described below:
Accounts receivableTrade and other current receivables
Trade receivable credits or accounts are recognized according to their invoice value.
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The Company acquires loan insurancespurchases credit insurance covering approximately 90% and 99% of the individually significant accounts receivable balances for the domestic market and the international market, respectively, of the total of accountstrade receivable, respectively, net of a 10% deductible.
An impairment of accounts receivable balances is recorded when there is an objective evidence that the Company not will be capable to collect amounts according to the original terms. Some indicators that an account receivable has impairment are the financial problems, initiation of a bankruptcy, financial restructuring and age of the balances of our customers.
Estimated losses from bad debts are determined by applying different percentages, taking into account maturityis measured in an amount equal to the "expectations of credit losses", using the simplified approach established in IFRS 9 and in order to determine whether or not there is impairment from portfolio, a risk analysis is carried out according to the historical experience (three years) on the uncollectibility, also considering other factors of aging until reaching 100% of the balance in most of the debts older than 180 days, with the exception of those cases that in accordance with current policies, losses are estimated due to partial deterioration based on a case by case analysis.
The Company considers that these financial assets are past-due when: i) The debtor is unlikely to pay its obligations and the Company it hasn’t still taken actions such as to claim the credit insurance, or ii) The financial asset has exceeded the contractually agreed expiration date.
a) Measurement of expected loss
The Expected Credit Loss corresponds to the probability of credit losses according to recent history considering the uncollectability of the last three mobile years. These historical indices are adjusted according to the monthly payment and amount of the different historical trade receivables. Additionally, the portfolio is analyzed according to its solvency probability for the future, its recent financial history and market conditions, to determine the category of the client, for the constitution of impairment in relation to its defined risk.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
b) Credit impairment
On each issuing date of the Financial Statements, the Company evaluates if these financial assets measured at amortized cost have credit impairment. A financial asset has a "credit impairment" when one or more events occur that have a detrimental impact on the estimation of future cash flows. Additionally, the Company includes information on the effects of modifications to the contractual effective flows (repactations), which are minor and correspond to specific cases with strategic clients of the Company.
Additionally, the company maintains credit insurance for individually significant accounts receivable. Impairment losses are recorded in the Consolidated Statement of Income in the period incurred.
Current trade receivable credits and accounts are initially recognized at their nominal value and are not discounted because they do not differ significantly from their fair value. The Company has determined that the calculation of the amortized cost is not materially different from the invoiced amount because the transactions do not have significant associated costs.
Financial liabilities
The Company recognizes a financial liability in its Consolidated Statement of Financial Position according to the following:as follows:
DebtsInterest-bearing loans and financial liabilities that accrue interestsobligations
LoansInterest-bearing loans and financial obligations accruing interest are initially recognized at the fair value of the resources obtained, less incurred costs incurredthat are directly attributable to the transaction. After initial recognition, interest-bearing loans and obligations accruing interest are measured at their amortized cost. The difference between the net amount received and the value to be paid is recognized in the Consolidated Statement of Income duringover the term of the loan, using the effective interest rate method.
Interest paid and accrued related to debtsloans and obligations used in a financingto finance its operations appearare presented under financial cost.finance costs.
LoansInterest-bearing loans and obligations accruing interest with a maturitymaturing within twelve month periodmonths are classified as current liabilities, unless the Company has the unconditional right to defer the payment of the obligation for at least a twelve month periodmonths after the financial statement closing date.date of the Consolidated Financial Statement.
Trade accounts payable and other payables
Accounts payableTrade and other accounts payablepayables are initially recognized at their nominal value because they do not differ significantly from their fair value. The Company has determined that no significant differences exist between the carrying value and amortized cost using the effective interest rate method.
Derivative Instruments
All derivative financial instruments are initially recognized at fair value as of the date of the derivative contract and subsequently re-measured at their fair value. Gains and losses resulting from fair value measurement are recorded in the Consolidated Statement of Income as gains or losses due to fair value of financial instruments, unless the derivative instrument is designated as a hedging instrument.
The Financial Instruments at fair value through profit and loss include financial assets classified as held for trading and financial assets which have been designated as such by the Company. Financial assets are classified as held for trading when acquired withfor the purpose of selling them within ain the short term. The fair value of derivative financial instruments that do not qualify for hedge accounting areis immediately recognized in the consolidated statement of income under Other gains (losses). The fair value of these derivatives areis recorded under Other financial assets yand Other financial liabilities.
Derivative instruments are classified as held for trading unless they are classified as hedge instruments.
Derivative instruments classified as hedges are accounted for as cash flow hedges.
In order to classify a derivative as a hedging instrument for accounting purposes, the Company documents (i) as of the transaction date or at designation time, the relationship or correlation between the hedging instrument and the hedged item, as well as the risk management purposes and strategies, (ii) the assessment, both at designation date as well as on a continuing basis, whether the derivative instrument used in the hedging is highly transaction effective to offset changes ininceptionin inception cash flows of the hedged item. A hedge is considered effective when changes in the cash flows of the underlying directly attributable to the risk hedged are offset with the changes in fair value, or in the cash flows of the hedging instrument with effectiveness between 80% to 125%.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The total fair value of a hedging derivatives arederivative is classified as assets or financial liabilities in Other non-current if the maturity of the hedged item is more than 12 months and as other assets or current liabilities if the remaining maturity of the hedged item is less than 12 months. The ineffective portion of these instruments can be viewed in Other gains (losses) of the Consolidated Statements of Income. The effective portion of the change in the fair value of derivative instruments that are designated and qualified as cash flow hedges are initially recognized in Cash Flow Hedge Reserve in a separate component of Equity. The income or loss related to the ineffective portion is immediately recognized in the Consolidated Statement of Income. The amounts accumulated in Equity are reclassified in Income during the same period in which the corresponding hedged item is reflected in the Consolidated Statement of Income. When a cash flow hedge ceases to comply with the hedge accounting criteria, any accumulated income or loss existing in Equity remains in Equity and is recognized when the expected transaction is finally recognized in the Consolidated Statement of Income. When it is estimated that an expected transaction will not occur, the accumulated gain or loss recorded in Equity is immediately recognized in the Consolidated Statement of Income.
Derivative instruments are classified as held for trading unless they are classified as hedge instruments.
Deposits for returns of bottles and containers
Deposits for returns of bottles and containers corresponds to the liabilities registered by the guarantees of money received from customers for bottles and containers placed at their disposal and represents the value that will be returned to the customer when it returns the bottles to the Company in good condition along with the original invoice. This value is determined by the estimation of the bottles and containers in circulation that are expected to be returned to the Company in the course of time based on the historic experience, physical counts held by clients and independent studies over the quantities that are in the hands of end consumers, valued at the average weighted guarantees for each type of bottles and containers.
The Company does not intend to make significant repayment of these deposits within the next 12 months. Such amounts are classified within current liabilities, under the line Other financial liabilities, since the Company does not have the legal ability to defer this payment for a period exceeding 12 months. This liability is not discounted, since it is considered a payable on demand, with the original invoice and the return of the respective bottles and containers and it does not have adjustability or interest clauses of any kind in its origin.
As of each financial statement date the Company assesses ifwhether a financial asset or financial group of financial assets is impaired.
The Company assesses impairment of accounts receivable collectively by grouping the financial assets according to similar risk characteristics, which indicate the debtor’s capacity to comply with their obligations under the agreed upon conditions. When there is objective evidence that a loss due to impairment has been incurred in the accounts receivable, the loss amount is recognized in the Consolidated Statement of Income, as Administrative expenses.
In the event that during subsequent periodsIf the impairment loss amount decreases during subsequent periods and such decrease maycan be objectively related to an event occurringoccurred after impairment recognition of the impairment, lossthe previously recognized impairment loss is reversed.
Any subsequent impairment reversal is recognized in Income provided that the book valuecarrying amount of the asset does not exceed its value as of the date the impairment was recognized.
Inventories are stated at the lower of cost acquisition or production cost and net realizable value. The production cost of finished products and of products under processing includes raw material, direct labor, indirect manufacturing expenses based on a normal operational capacity and other costs incurred to place the products at the locations and in the conditions necessary for sale, net of discounts attributable to inventories.
The net realizable value is the estimated sale price in the normal course of business, less marketing and distribution expenses. When market conditions cause the production cost to be higher than its net realizable value, an allowance forassetsfor assets deterioration is registered for the difference in value. This allowance for inventory deterioration also includes amounts related to obsolete items due to low turnover, technical obsolescence and products withdrawn from the market.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The inventories and cost of products sold, is determined using the Weighted Average Cost (WAC). The Company estimates that most of the inventories have a high turnover.
The materials and raw materials purchased from third parties are valued at their acquisition cost; once used, they are incorporated in finished products using the WAC methodology.
Under thecurrent Biological current assets, the Company includes the costs associated with agricultural activities (grapes), which are capitalized up to the harvestharvesting date, at which timewhen they become part of the inventory cost for subsequentssubsequent processes. The Company considers that the costs associated with agricultural activities represent a reasonable approximation to their fair value.
Other non-financial assets mainly includes advance paymentsprepayments associated with advertising related to contracts regarding the making of commercials which are work in progress and have not yet been shown (current and non-current), payments to insurances and advances to suppliers in relation with certain purchases of property, plant and equipment. Additionally it includes disbursements related to tax payments to be recovered from subsidiaries in Argentina,paid guarantees paid related with leases and materials to be consumed related to industrial security tools.safety implements.
Property, plant and equipment items are recorded at their historic cost, less accumulated depreciation and impairment losses. The cost includes both the disbursements directly attributable to the asset acquisition or construction, as well as the financing interest directly related to certain qualified assets, which are capitalized during the construction or acquisition period, as long as these assets qualify for these purposes considering the period necessary to complete and prepare the assets to be operative. Disbursements after the purchase or acquisition are only capitalized when it is likely that the future economic benefits associated to the investment will flow towardsto the Company, and costs may be reasonably measured. Subsequent disbursements related to repairs and maintenance are recorded as expenseexpenses when incurred.
Property,Depreciation of property, plant and equipment depreciation,items, including the assets under financial lease, is calculated on a straight line basis over the estimated useful lifelives of the fixed assets,property, plant and equipment items, taking into account their estimated residual value. When an asset is formed by significant components with different useful lives, each part is separately depreciated. Property, plant and equipment useful lives and residual values estimates are reviewed and adjusted at each financial statement closing date, if necessary.
Property,The estimated useful lives of property, plant and equipment estimated useful lives are detailed as follows:
Type of Assets | Number of years |
Land | Indefinite |
Buildings and Constructions | 20 to 60 |
Machinery and equipment | 10 to 25 |
Fumiture and accesories | 5 to 10 |
Other equipment (coolers and mayolicas) | 5 to 8 |
Glass containers, and plastic containers | 3 to 12 |
Vines in production | 30 |
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Gains and losses resulting from the sale of properties, plants and equipment are calculated comparing their book values against the related sales proceeds and are included in the Consolidated Statement of Income.
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Biological assets held by Viña San Pedro Tarapacá S.A. (VSPT) and its subsidiaries consist of vines underin formation and underin production. The harvestedHarvested grapes are used for the later production of wines.subsequent wine production.
Vines under production are valued at the historic cost, less depreciation and any impairment loss.
Depreciation of undervines in production vines is recorded on ausing the straight-line basis based onmethod over the 30-years30-year estimated average estimated production useful life, which is periodically assessed. Vines underin formation are not depreciated until they start production.producing.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Costs incurred in acquiring and planting new vines are capitalized.
Additionally, the “Right of use assets” are included under PPE, according to IFRS 16.
When the book valuecarrying amount of an asset ofa property, plant and equipment item exceeds its recoverable amount, thisvalue, it is reduced immediately written down to its recoverable amount (See(See Note 2 2.17)- Summary of significant accounting policies 2.17).
During year 2015, the Company has early adopted the amendment of IAS 16 and 41, therefore vines under formation and under production are recorded in Properties, plant and equipment.
Lease agreementscontracts are classified as financial leases whenrecorded by recognizing an asset for the agreement transfersright to use the assets subject to operational lease contracts and a liability, which is equivalent to the present value of the payments associated to the contract. It should be noted that the assets and liabilities arising from a lease contract are initially measured at its present value.
Regarding the effects on the Consolidated Statement of Income, the depreciation of the right of use is recognized on a monthly basis using the straight-line method over the lease term and registered under PPE, together with the financial cost associated to the lease; both are recognized in our P&L during the lease period in order to produce a constant periodic interest rate over the remaining balance of the liability. In case of modifications to the lease agreement, such as lease value, maturity, readjustment index, associated interest rate, etc., the lessee recognizes the amount of the new measurement of the lease liability as an adjustment to the asset for the right of use. (See Note 4 – Accounting changes, letter a).
Prior to the adoption of IFRS 16, the Company substantiallyclassified leases as finance leases when all the risks and rewards inherent toassociated with the asset ownership according to International Accounting Standard No. 17 “Leases”. For those agreements that qualify as financial leases, at the initial date an asset and a liability are recognized at a value equivalent to the lower of the fair value of the asset andassets were substantially transferred. All other leases were considered as operational. The assets acquired through financial leasing were recorded as non-current assets, initially being valued at the present value of future lease payments. Subsequently, leaseminimum payments are allocated betweenor at their fair value if lower, reflecting in the liability the debt with the lessee. In this scenario the payments were accounted as the payments of the debt plus the corresponding financial cost, which is accounted as the financial expense andcost of the obligation reduction, so that a constant interest rate on the obligation balance is obtained.
Lease agreements that do not qualify as financial leases are classified as operating leases. Lease paymentsperiod. In case of operating leases, are charged to incomethe expense was accounted based on a straight line basis over the lifeduration of the lease.lease agreement for the value of the accrued service.
Investment property consistsconsist of land and buildingbuildings held by the Company withfor the purpose of generating appreciation and are not to be used in the normal course of business, and are recorded at historichistorical cost less any impairment loss, if any. Investmentloss. Depreciation of investment property, depreciationexcluding land, is calculated on a straight line basisusing the straight-line method over the estimated useful life of such property,the asset, taking into account thetheir estimated residual value of such property.value.
Commercial Trademarkstrademarks
The Company’s commercial trademarks correspond toare intangible assets with an indefinite useful lifelives that are presented at their historichistorical cost, less any impairment loss. The Company believes that through investing in marketing, investments trademarks maintain their value, consequently they are considered as having an indefinite useful lifelives and they are not amortizable. SuchThese assets are subject totested for impairment tests on a yearly basis,annually, or when factors exist indicating a likely loss of value (more frequently if events or circumstances indicate potential impairment (SeeNote 2 - Summary of significant accounting policies 2.17).
Software Programprogram
Software Programprogram licenses acquired are capitalized at the value of the costs incurred forin their acquisition and preparationin preparing the software for the use of the specific programs.use. Such costs are amortized over their estimated useful lives (4 to 7 years). The maintenance costs of the software programs are recognized as an expense in the year duringin which they are incurred.
Water Rightsrights
Water Rightsrights acquired by the Company correspond to the right to use existing exploitation rights of water from natural sources, and they are recorded at their attributed cost as of the date of transition date to IFRS. Given thatSince such rights are perpetual they are not amortizable, neverthelesshowever they are tested for impairment annually, subject toor more frequently if events or circumstances indicate potential impairment assessment, or when factors exist that indicate a likely loss of value ((SeeSee Note 2 - Summary of significant accounting policies 2.17).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Distribution Rightsrights
Corresponds to rights acquired to distribute different products. These rights are amortisedamortized over their estimated useful lives.
Research and development
Research and development expenses are recognized in the period incurred.
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred, the amount of any non-controlling interesinterest in the acquireeacquire and the acquisition date fair valevalue of any previous equity interest in the acquireeacquire over the fair value of the identifiable net idetificable assets acquiree,acquired, If the total of consideration transferred, non-controlling interest recognized and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognized directly in the statement of income. Godwill is accounted for at its cost value less accumulated impairment losses. Goodwill related to joint venture acquisitions is included in the investment accounting value.
For the purposespurpose of impairment tests,testing, goodwill is assignedallocated to each of the Cash Generating Units (CGU)(CGUs), or groups of CGUs, that areis expected to benefit from the synergies of a business combination. Each unit or group of units (CGU(See Note 18 -See Note 21) Goodwill) to which the goodwill is allocated represents the lowest level insidewithin the Companyentity at which goodwill is monitored for internal administrationmanagement purposes, which is not larger than a business segment. The cash generating unitsCGUs to which the goodwill is assigned are tested for impairment annually or with a higher frequency, when there are signs indicating that a cash generating unit could experience impairmentmore frequently if events or some of the significant market conditions have changed.
Goodwillchanges in the acquisition of joint ventures is assessed for impairment as part of the investment, provided that there are signs indicating that the investment may be impaired.circumstances indicate potential impairment.
An impairment loss is recognized for the amount thatby which the book valuecarrying amount of the cash generating unitCGU exceeds its recoverable value,amount. The recoverable amount of the recoverable value beingCGU is the higher of value in use and the fair value of the cash generating unit, less costs to sell and its value in use.sell.
An impairment loss is first assigned inallocated to goodwill to reduce its book value,carrying amount, and then to other assets in the cash generating unit. ACGU. Once recognized, impairment losslosses are not subsequently reversed.
Goodwill that forms part of the carrying amount of an investment in a joint venture is not reversedseparately recognized. The entire carrying amount of the investment in joint venture is assessed for impairment as a single asset provided that there are indications that the following years.
investment may be impaired.
The Company annually assesses the existence of non-financial asset impairment indicators on non-financial assets.indicators. When indicators exist, the Company estimates the recoverable amount of the impaired asset. In caseIf it is not possible tocannot estimate the recoverable amount of the impaired asset at an individual level, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
For intangible assets with indefinite useful life intangible assets,lives which are not amortized, the Company performs all required testtesting to ensure that the carrying amount does not exceed the recoverable value.
The recoverable amountvalue is defined as the higher of the fair value, less selling cost to sell and theor value in use. The valueuse, whichever is higher. Value in use is determined by estimating future cash flows associated withto the asset or withto the cash generating unit, discounted from its current value by using interest rates before taxes, which reflect the time value of money and the specific risks of the asset. InIf the eventcarrying amount of the asset book value exceeds its recoverable amount, the Company records an impairment loss in the Statement of Income.
For otherthe rest of non-financial assets differentother than goodwill and intangibles with indefinite useful life,lives, the Company assesses the existence of impairment indicators when somean event or change in business circumstances indicateindicates that the book valuecarrying amount of the asset may not be recoverable and impairment is recognisedrecognized when the book valuecarrying amount is higher than itsthe recoverable value.
The Company annually assesses ifwhether the impairment indicators of non-financial assets for which impairment losses were recorded during prior years have disappeared or decreased. In the event of such situation, the recoverable amount of the specific asset is recalculated and its book valuecarrying amount is increased, if necessary. Such increase is recognized in the Statement of Income as reversal of impairment losses. The increase in the value of the previously impaired asset is recognized only when it is originated by changes in the assumptions used to calculate the recoverable amount. TheTheincrease in the asset amount increaseresulting from thedue to reversal of the impairment loss is limited to the amount that would have been recorded had the impairment not occurred.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The Company register as non-current assets of disposal groups classified as held for sale as Property, plant and equipment expected to be recovered primarily through sale, rather than through continuing use, for which active sale negotiations have begun and it is estimated that they will be sold within twelve months following the closing date are classified as assets of a disposal group held for sale.begun.
These assets are measured at the lower of their book valuecarrying amount and the estimated fair value, less costs to sell.selling costs. From the moment in which the assets are classified as non-current assets of a disposal group classified held for sale they are no longer depreciated.
Income taxes areThe income tax account is composed by theof current income tax associated to legal income tax obligations and the deferred taxes recognized according to International Accounting Standard Nº 12 – Income Taxes.in accordance with IAS 12. Income tax is recognized in the Consolidated Statement of Income by Function, except when it is related to entriesitems recorded directly recorded in Equity, in which case the tax effect is also recognized in Equity.
Income Tax Obligation
Income tax obligations are recognized in the financial statements on the basis of the best estimates of the taxable profits as of the financial statement closing date, and the income tax rate valid as of that date in the countries where the Company operates.
Deferred Tax
Deferred taxes are those the Company expects to pay or to recover in the future, due to temporary differences between the book valuecarrying amount of assets and liabilities (carrying amount for financial reporting purposes) and the corresponding tax basis of such assets and liabilities used to determine the profits subject to taxes. Deferred tax assets and liabilities are generally recognized for all temporary differences, and they are calculated at the rates that will be valid on the date the liabilities are paid or the assets realized.
Deferred tax is recognized foron temporary differences arising from investments in subsidiaries and associates, except in those cases where the Company is able to control the date on which temporary differences will be reversed, and it is likely that they will not be reverted in the foreseeable future. Deferred tax assets, including those originated byarising from tax losses are recognized provided it is likely that in the future there arewill be taxable profits against which deductible temporary differences maycan be charged.offset.
Deferred tax assets and liabilities are offset when there is a legal right to offset tax assets against tax liabilities, and the deferred tax is related to the same taxable entity and the same taxingtax authority.
Employees Vacation
The Company accrues the expense associated with staff vacation when the employee earns the benefit.
Employees Bonuses
The Company recognizes a liability and an expense for bonuses when it’s contractually obligated, it is estimated that, depending on the income requirement at a given date, bonuses will be paid out at the end of the year.
Severance Indemnity
The Company recognizes a liability for the payment of irrevocable severance indemnities, originated from the collective and individual agreements entered into with employees. Such obligation is determined based on the actuarial value of the accrued cost of the benefit, a method which considers several factors in the calculation, such as estimates of future continuance, mortality rates, future salary increases and discount rates. The determined value is shown at its present valueby using the accrued benefits for years of service method. The discount rates are determined by reference to market interest rates curves. The current losses and gains are directly recorded in Income.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
According to the amendment of IAS 19, the actuarial gains and losses are recognized directly in Other Comprehensive Income, under Equity and, according to the accounting policies of the Company, financial costs related to the severance indemnity are directly recorded under Financialfinancial cost in the Consolidated Statement of Income.
Provisions are recognized when: (i) the Company has a current obligation, legal or implicit obligation, as a result of past events, (ii) it is probable that monetary resources will be required to settle the obligation and (iii) the amounts can be reasonably established. The amounts recognized as provisions as of the financial statementsstatement closing date, are Management´sManagement’s best estimates, and consider the necessary disbursements to liquidate the obligation.
The concepts used by which the Company establishesto establish provisions charged against Incomeincome correspond mainly to civil, labourlabor and taxation proceedings that could affect the Company ((SeeSee Note 2823 - Other provisions).
Revenues areRevenue is recognized when it is likely that economic benefits will flow to the Company and these can be measured reliably.reliably measured. Income is measured at the fair value of the economic benefits received or to be received, and they areis presented net of valued added taxes,tax, specific taxes, returns, discounts and rebates.
Sales of goods Goods sold are recognized after the Company has transferred to the buyer all the risks and benefits inherent in theto ownership of suchthe goods, and it doesdo not holdhave the right to dispose of them; inthem. In general, this means that sales are recorded atwhen the transfer of risks and benefits of ownership are transferred to clients,the customer, pursuant to the terms agreed in the commercial agreements.agreements and once the performance obligation is satisfied.
In relation to IFRS 15, the Company has applied the criteria established in this standard for these Consolidated Financial Statements.
Sale of products in the domestic market
The Company obtains its revenues, both in Chile and Argentina, mainly from the sales of beers, soft drinks, mineral waters, purified water, juices,nectars, wines, cider and spirits, products that are distributed through retail establishments, wholesale distributors and supermarket chains. Nonechains, and none of which act as commercial agents of the Company. Such revenues in the domestic markets, net of the value added tax, specific taxes, returns, discounts and rebates to clients, are recognized when products are delivered, together with the transfer of all risks and benefits related to them.them and once the performance obligation is satisfied.
Exports
In general, the Company´sCompany’s sales delivery conditions for sale are the basis for revenue recognition related to exports.
The structure of revenue recognition is based on the grouping of Incoterms, mainly in the following groups:
• "FOB (Free on Board) shipping point", by which buyer organizes and pays for transportation, consequently the sales occur
• | "FOB (Free on Board) shipping point", by which the buyer organizes and pays for transportation, consequently the sales occurs and revenue is recognized upon delivery of the merchandise to the transporter hired by the buyer. |
• | “CIF (Cost, Insurance & Freight) and similar", by which the Company organizes and pays for external transportation and some other expenses, although CCU ceases being responsible for the merchandise after delivering it to the marine or air shipping company in accordance with the relevant terms. The sale occurs and revenue is recognized upon the delivery of
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In the case of discrepancies between the commercial agreements and Incoterms, the first one willformer shall prevail.
The revenue recognition related to exports are recorded net of specific taxes, returns, discounts and rebates to clients, are recognized when products are delivered, together with the transfer of all risks and benefits related to them and once the performance obligation is satisfied.
The Company enters into commercial agreements with its clients, distributors and supermarkets through which they establish: (i) volume discounts and other client variables, (ii) promotional discounts that correspond to an additional rebate on the price of the products sold by reason ofdue to commercial initiatives development (temporary promotions), (iii) services payment forservices and rendering of counter-services (advertising and promotionpromotional agreements, use of preferential spaces and others)and (iv) shared advertising, which corresponds to the Company’s participation in advertising campaigns, promotionpromotional magazines and opening of new sales locations.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Volume discounts and promotional discounts are recognized as a reduction in the salesselling price of the products sold. Shared advertising contributions are recognized when the advertising activities agreed upon with the distributor have been carried out, and they are recorded as marketing expenses incurred, under Other expenses by function.
The commitmentsCommitments with distributors or importers in the exports area are recognized on the basis of existing trade agreements.
The costsCost of sales includeincludes the production cost of the products sold and other costs incurred to place inventories inat the locations and under the conditions necessary for the sale. Such costs mainly include raw materialmaterials costs, packing costs, production staff labourlabor costs, production-related assetsasset depreciation, returnable bottles depreciation, license payments, operationaloperating costs and plant and equipment maintenance costs.
Other incomes by function mainly include incomes from sale of fixed assets and other assets, recovery of claims, leases and payments related to advance term license.
Other expenses by function mainly include mainly advertising and promotion expenses, depreciation of assets sold, selling expenses, marketing costs (sets, signs, neon signs at client’scustomer facilities) and marketing and sales staff remuneration and compensations.compensation.
Distribution costs include all the necessary costs to deliver products to clients.customers.
AdministrationAdministrative expenses include the support unitsunit staff remuneration and compensation, depreciation of offices, equipment, facilities and furniture used for these functions, non-current assetsasset amortization and other general and administrationadministrative expenses.
Environmental liabilities are recorded based on the current interpretation of environmental laws and regulations, or when an obligation is likely to occur and the amount of such liability can be calculated reliably.reliably calculated.
Disbursements related to environmental protection are charged to the Consolidated Statements of Income by Function as incurred, except for investments in infrastructure designed to comply with environmental requirements, which are recordedaccounted for following the accounting policies for property, plant and equipment.
The preparation of Financial statement preparationStatement requires estimates and assumptions from Management affecting the amounts included in the consolidated financial statementsConsolidated Financial Statements and their related notes. The estimates made and the assumptions used by the Company are based on the historical experience, changes in the industry and the information supplied by external qualified sources. Nevertheless, final results could differ from the estimates under certain conditions.
Significant estimates and accounting policies are defined as those that are important to correctly reflect the Company’s financial position and income, and/or those that require a high level of judgment by Management.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The primary estimates and professional judgments relate to the following concepts:
• The valuation of goodwill acquired to determine the existence of losses due to potential impairment(Note 2, 2.16 and Note 21).
• The valuation of commercial trademarks to determine the existence of potential losses due to potential impairment (Note 2, 2.17 and Note 20).
• The assumptions used in the current calculation of liabilities and obligations to employees(Note 2, 2.20 and Note 30).
• Useful life of property, plant and equipment (Note 2, 2.12 and Note 22) and intangibles (Note 2, 2.15 and Note 20).
• The assumptions used for the calculation of fair value financial instruments(Note 2, 2.7 and Note 6).
• The occurrence likelihood and the estimates amount in an uncertain or contingent manner(Note 2, 2.21 and Note 28).
• The valuation of goodwill acquired to determine the existence of losses due to potential impairment(Note 2 - Summary of significant accounting policies (2.16)andNote 18 - Goodwill). • The valuation of commercial trademarks to determine the existence of potential losses due to potential impairment(Note 2 - Summary of significant accounting policies (2.17)andNote 17 – Intangible assets other than goodwill). • The assumptions used in the current calculation of liabilities and obligations to employees(Note 2 - Summary of significant accounting policies (2.20)andNote 25 – Employee benefits). • Useful lives of property, plant and equipment(Note 2 - Summary of significant accounting policies (2.12)andNote 19 – Property, plant and equipment)and intangibles(Note 2 - Summary of significant accounting policies (2.15)andNote 17 - Intangible assets other than goodwill). • The assumptions used for calculating the fair of value financial instruments(Note 2 - Summary of significant accounting policies (2.7)andNote 7 – Financial instruments). • The likelihood of occurrence and amounts estimated in an uncertain or contingent matter(Note 2 - Summary of significant accounting policies (2.21)andNote 23 – Other provisions). • The valuation of current Biological assets(Note 2 - Summary of significant accounting policies (2.10)andNote 13 – Biological assets). Such estimates are based on the best available information of the events However, it is possible that events that may occur in the future a)The accounting policies described in the Consolidated Financial Statements as of December 31, 2019 reflect the adoption of IFRS 16 and IFRIC 23 which went into effect as of January 1, 2019 and the initial impact of the application of these rules is described as follows: The Company has implemented IFRS 16 using the modified retrospective approach. Under this method, the cumulative effect of initially applying the standard is recognized at January 1, 2019 and comparative amounts are not restated. Additionally, there was no impact on retained earnings as a result of the adoption of IFRS 16. On adoption of IFRS 16, the Company recognized right of use assets and lease liabilities in relation to leases which had been previously classified as "operating leases" under the principles of IAS 17 Leases, except for the short term leases and leases of low value assets. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of January 1, 2019. The lease liability is remeasured when there is a change in future lease payments, typically due to a change in index or rate (e.g., inflation), or if there is a reassessment of whether an extension or termination option will be exercised. A corresponding adjustment is made to the right of use asset. Considerations: Identification of the asset for right of use: As part of the contract review and analysis process, the Company identified assets by right of use associated with identifiable and non-substitutable lease contracts, which were classified under the PPE category. The Company mainly has warehouses, offices, vehicles and lands leases contract. Interest rate used for the measurement of the financial liability: The average incremental borrowing interest rate applied to lease liabilities used is 4.28%. Term of the contract: The Company evaluated the leases’ clauses, market conditions, costs related to the termination of the contract and early cancellation. Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 Other considerations: 1) During the initial measurement of leases agreements the Company applied exemptions for leases with remaining terms less than 12 months and leases with a value lower than US$ 5,000 (ThCh$ 3,747) as of January 1, 2019. These leases have been considered as short term and, accordingly, no right of use asset or lease liability have been recognized. 2) The Company excluded initial direct costs from measuring the right of use asset at the date of initial application. 3) The Company analyzed the lease term on a case-by-case basis, in those with an option to extend or terminate the lease. The right of use asset is presented in property, plant and equipment and lease liability in borrowings. Also it has modified the nature of the lease expenses, eliminating the operating expense offset by the expense of depreciation and a financial cost, the short-term and low-value leases are still going through the Consolidated Financial Statement of Income. Finally the presentation in the Consolidated Statement of Cash Flows was modified. The main portion of lease payments are presented in cash flow from financing activities and the interest associated to leases are presented in cash flow from operating activities. For leases previously classified as financial leases, the Company recognized the carrying amount of the lease asset and the lease liability immediately before the transition as the carrying amount of the asset for the right to use and the lease liability on the date of the lease initial recognition. Showing up next: Reconciliation table between the commitments for leases as of December 31, 2018, before the adoption of IFRS 16 and what was disclosed by this same concept as of January 1, 2019: January 1, 2019 ThCh$ Operating lease and services contracts as of December 31, 2018 138,377,120 Commitments not qualified as lease liabilities (1) (113,040,682) Obligations for lease contracts as of December 31, 2018 25,336,438 Adjustments to present value (6,252,251) Leases according to IFRS 16 as of January 1, 2019 19,084,187 Financial leases liabilities recognized as of December 31, 2018 17,912,134 Lease liabilities recognized as of January 1, 2019 36,996,321 Current leases liabilities 7,633,617 Non-current leases liabilities 29,362,704 Lease liabilities recognized as of January 1, 2019 36,996,321 (1)It mainly corresponds to services contracts., short-term and low-value operational leases. - In relation to IFRIC 23, this interpretation clarifies how the recognition and measurement requirements of IAS 12 apply when there is uncertainty about the tax treatments adopted. The Company has determined that this standard has no impact on the Consolidated Financial Statements. b)During the year ended on December 31, Risk In Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 In The Company’s main risk exposure is related to For each of the following points, where applicable, the sensitivity • The valuation of Biological current assets(Note 2, 2.10 and Note 17)analysedanalyzed to date in these consolidated financial statements.thatmay result in adjustments to such estimates, which would be recorded prospectively.Note 4Accounting changes
2016,2019, there have been no significantother changes in the use of accounting principles or relevant changes in any accounting estimates with regard to previous years that have affected these consolidated financial statements.Consolidated Financial Statements.Note 5Risk Administration
administrationManagementthose companies withoutwhere CCU has a significant non-controllingcontrolling interest, the Company’s Administration and Finance OfficerManagement provides a centralized service for the group’s companies to obtain financing and administration of exchange rate,rates, interest rate,rates, liquidity, inflation, raw materialmaterials and loancredit risks. Such activity operates according toin accordance with a framework of policies and procedures framework, which is regularly reviewed to comply withensure it fulfils the purpose of administratingmanaging the risk originatedrisks by the business needs. those companies with a significant non-controlling interest (VSPT, CPCh,CPCH, Aguas CCU-Nestlé S.A., Bebidas del Paraguay S.A., Cervecería Kunstmann S.A. and Cervecera Kunstmann) eachBebidas Bolivianas BBO S.A.) the responsibility for this service lies with the respective Board of Directors and respective Administration and Finance Officer exercises such responsibility.Management Area. When necessary,applicable, the Board of Directors and Directors Committee has the final responsibility for establishing and reviewing the risk administration structure, as well as for the review ofreviewing significant changes made to the risk administrationmanagement policies.According to theIn accordance with financial risk policies, the Company uses derivativederivate instruments only for the purpose of covering exposureshedging exposure to the interest rate and exchangeExchange rate risks originated byarising from the Company’s operations and its financing sources.sources of financing. The Company does not acquire derivative facilities withderivate instruments for speculative or investment purposes nevertheless,purposes. Nevertheless, some derivatives are not treated as hedges for accounting purposespurpose because they do not qualify as such. Transactions with derivativederivate instruments are exclusively carried out by staff under theAdministration and Finance Managementstaff and Internal Audit Management regularly reviews the control environment of this function. The relationshipRelationships with Credit Rating Agenciescredit rating agencies and the monitoring of financial restrictions (covenants) are also administeredmanaged by Finance Management.Administration and Finance.the exchange rates, interest rates, inflation and raw material pricesmaterials price (commodities), taxes, client’strade accounts receivable and liquidity. For the purposeSeveral types of managingfinancial instruments are used to manage the risk originated by such exposures, several financial instruments are used.these exposures.analysisanalyses developed are merely for illustrativeillustration purposes, since in practice the sensitized variables rarely change without affecting each other and without affecting other factors that were considered as constants.constant and which also affect the Company’s financial position and results.
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The Company is exposed to exchange rate risks originated by: a) its net exposure to foreign currency assets and liabilities, b) exports sales, c) the purchase of raw material,materials, products and capital investments effected in foreign currencies, or indexed in such currencies, and d) the net investment of subsidiaries in foreign countries. The Company’s greatest exchange rate exposure is to the variation ofon the Chilean peso as compared to the US Dollar, Euro, Argentine Peso, Uruguayan Peso, Paraguayan Guarani, Bolivian Peso and Colombian Peso.
As ofDecemberof December 31, 2016,2019, the Company maintained foreign currency obligations amounting to ThCh$ 49,694,209104,821,573 (ThCh$ 49,785,548 in 2015)88,218,862 as of December 31, 2018), mostly denominated in US Dollars. ForeignObligations with banks in foreign currency obligations (ThCh$ 6,352,391 in 201643,638,446 as of December 2019 and ThCh$ 16,626,496 in 2015)25,403,961 as of December 31, 2018) represent 4% (10% in 2015)a 14% (9% as of theDecember 31, 2018) of total of Otherother financial liabilities. The remaining 96% (90%86% (91% in 2015)2018) is mainly denominated in inflation-indexedUnidades de Fomento (inflation-indexed Chilean pesos (seemonetary unit – see inflation risk section). In addition, the Company maintainshas assets in foreign currency assets forin the amount of ThCh$ 66,435,330207,727,159 (ThCh$ 72,887,721 in 2015)212,008,612 as of December 31, 2018) that mainly correspond to exportsnet investments of subsidiaries in foreign countries and export accounts receivable.
Regarding the operations of foreign subsidiaries, operations, the net liability exposure assets in US Dollars and other currencies amounts to ThCh$ 3,806,184 (ThCh$ 1,368,068 in 2015)28,167,683 (net liability ThCh$ 7,871,677 as of December 31, 2018).
To protect the value of the net foreign currency assets and liabilities position of its Chilean operations, the Company enters into derivative agreementsderivate contracts (currency forwards) to ease any variation in the Chilean peso as compared to other currencies.
As ofDecemberof December 31, 2016,2019, the Company’s mitigate net asset exposure of the Company in Chile in foreign currencies, in Chile, after the use of derivativederivate instruments, is a asset amounting toassets in the amount of ThCh$ 3,808,526 (liability amounting to ThCh$ 757,256 in 2015)8,440,013 (ThCh$ 1,364,230 as of December 31, 2018).
As of December 31, 2016,2019, of the Company’s total sales, both in Chile and abroad, 8% (8%7% (7% in 20152018 and 8%7% in 2014)2017) corresponds to export sales made in foreign currencies, mainly US Dollars and EuroEuros and approximately 64% (61% in 2018 and 62% in 2017) of the total direct costs 63% (54% in 2015 and 55% in 2014) correspondscorrespond to raw materials and products purchased in foreign currencies, or indexed to such currencies. The Company does not hedge the eventualpossible variations in the expected cash flows from such transactions.
The Company is also exposed to movementsfluctuations in exchange rates relating to the conversion from Argentine Pesos,Peso, Uruguayan Pesos,Peso, Paraguayan Guaranis, BoliviansGuaraní, Bolivian Peso and Colombian PesosPeso to Chilean Pesos with respect to assets, liabilities, income and expenses of its subsidiaries in Argentina, Uruguay, Paraguay and Paraguay, associatedBolivia the associate in BoliviaPerú and a joint venturesventure in Colombia. The Company does not coverhedge the risks associated withto the conversion of its subsidiaries,which whose effects are recorded in Equity.equity.
As of December 31, 2016, the net investment in foreign subsidiaries, associated and joint ventures amounted to ThCh$ 135,001,540, ThCh$ 8,249,048 and ThCh$ 35,449,038 respectively (ThCh$ 133,554,918, ThCh$ 6,628,484 and ThCh$ 18,718,832 in 2015).
Exchange rate sensitivity analysis
The exchange rate differences effect recognized in the Consolidated Statement of Income for the year ended as ofDecember 31, 2016, related to the foreign currency denominated assets and liabilities, was an income of ThCh$ 456,996 (income of ThCh$ 957,565 in 2015 and a loss of ThCh$ 613,181 in 2014). Considering the exposure as ofDecember 31, 2016, and assuming a 10% increase (or decrease) in the exchange rate, and maintaining constant all other variables, such as interest rates, it is estimated that the effect over the Company’s income would be an income after taxes of ThCh$ 289,448 (a loss of ThCh$ 58,687 in 2015 and a loss of ThCh$ 204,456 in 2014).
Considering that approximately 8% of the Company’ sales relates to export sales carried out in Chile (8% in 2015 and 8% in 2014), in currencies different from the Chilean Peso, and in approximately 63% (54% in 2015 and 55% in 2014) of the Company’s direct costs are indexed to the US Dollar and assuming that the functional currencies will be appreciated or (depreciated) by 10% as compared to the set of foreign currencies, when maintaining constant the rest of the variables the hypothetical effect on the Company’s income would be loss after taxes of ThCh$ 13,908,457 (loss of ThCh$ 10,380,193 in 2015 and ThCh$ 10,004,379 in 2014).
The Company can also be affected by the variation of the exchange rate of where the foreign subsidiaries operate, since the result is converted to Chilean Pesos at the average rate of each month. The result of the operations in the foreign subsidiaries during the year 2016 were an income of ThCh$ 32,507,630 (ThCh$32,141,475 in 2015 andThCh$ 29,235,462 in 2014). Therefore, a depreciation (or appreciation) of 10% in the exchange rate of the Argentine Peso, the UruguayanPeso and the Paraguayan Guarani against the Chilean Peso, would be a loss (income) before tax of ThCh$ 3,250,763 (ThCh$ 3,214,147 in 2015 and ThCh$ 2,923,546 in 2014).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Exchange rate sensitivity analysis
The effect of foreign currency translation differences recognized in the Consolidated Statement of Income for the year ended as of December 31, 2019, related to assets and liabilities denominated in foreign currency, was a loss of ThCh$ 9,054,155 (a gain of ThCh$ 3,299,657 in 2018 and loss of ThCh$ 2,563,019 in 2017). Considering exposure as of December 31, 2019 and assuming a 10% increase in the exchange rate, and keeping constant all other variables such as interest rates constant, it is estimated that the effect on the Company’s net income would be a net income after taxes of ThCh$ 616,121 (ThCh$ 99,589 in 2018 and a loss of ThCh$ 76,478 in 2017) associated of the owners of the controller.
Considering that approximately 7% of the Company’s sales revenue comes from export sales carried out in Chile (7% in 2018 and 7% in 2017), in currencies other than Chilean Peso, and that approximately 64% (61% in 2018 and 62% in 2017) of the Company’s direct costs are in or indexed to the US Dollar and assuming that the functional currencies will appreciate (depreciate) by 10% in respect to the US Dollar, and keeping all other variables constant, the hypothetical effect on the Company’s income would be a loss after taxes of ThCh$ 27,683,581 (ThCh$ 22,116,350 in 2018 and ThCh$ 18,772,323 in 2017).
The Company can also be affected by changes in the Exchange rate of the countries where its foreign subsidiaries operate, since income is converted to Chilean Pesos at the average Exchange rate of each month. The operating income of foreign subsidiaries as of December 31, 2019 was a net income of ThCh$ 20,517,569 (ThCh$ 56,533,194 in 2018 and ThCh$ 46,395,490 in 2017). Therefore, a depreciation (appreciation) of 10% in the exchange rate of the Argentine Peso, the Uruguayan Peso, the Paraguayan Guarani and the Bolivian peso against the Chilean Peso, would result in a loss (income) before taxes of ThCh$ 2,051,757 (ThCh$ 5,653,319 in 2018 and ThCh$ 4,639,549 in 2017).See Note 1 – General information letter C.
The net investment in foreign subsidiaries, associatedassociates and joint ventures as of December 31, 2019, amounted to ThCh$ 135,001,540,272,584,756, ThCh$ 8,249,0481,149,291 and ThCh$ 35,449,038,125,518,313, respectively (ThCh$ 133,554,918,247,679,930, ThCh$ 6,628,484958,474 and ThCh$ 18,718,832121,448,016 in 2015)2018). Assuming a 10% increase or decrease in theArgentinethe Argentine Peso, Uruguayan Peso, Paraguayan Guarani, BoliviansBolivian Peso and Colombian Peso against the Chilean Peso, and maintaining constant all the rest of theother variables constant, the increase (decrease) would hypothetically result in Net income (loss) of ThCh$ 17,869,96339,925,236 (ThCh$ 16,655,06937,008,642 in 2015)2018 and ThCh$ 21,161,126 in 2017) recorded as a credit (charge) against Equity.to equity.
TheCompany Company does not cover thehedge risks associated with theto currency conversion of the financial statements of its subsidiaries that have othera different functional currency, whose effects are reportedrecorded in Equity.equity.
Interest ratesrate risk
The interestInterest rate risk mainly originatedoriginates from the Company’s financing sources. The main exposure is related variable interest rate obligations indexed to the London Inter Bank Offer Rate (“LIBOR”) and the Buenos Aires Deposits of Large AmountAmounts Rate (“BADLAR”) variable interest rate indexed obligations.
As of December 31, 2016,2019, the Company had a total ThCh$ 10,142,84112,015,001 in debt indexed to variable interest ratesdebt (ThCh$ 20,206,6088,576,258 in 2015)2018). Consequently, as of December 31, 2016,2019, the company’s financing structure is made up (without considering the effects of cross currency swaps effect) of approximately 6% (12%4% (3% in 2015) in2018) of debt with variable interest rates,rate, and 94% (88%96% (97% in 2015)2018) in debt with fixed interest rates.
To administer themanage interest rate risk, the Company has a policy that intendswhich seeks to reduce the volatility of its financial expense,finance cost, and to maintain anand ideal percentage of its debt in fixed rate instruments. The financial position is mainly set by the use of short-term and long-term, debt, as well as derivativederivate instruments such as cross currency interest rate swaps and cross interest rate swaps.
As of December 31, 2016,2019, after considering the effect of interest rates and currency swaps, approximately 97% (97%a 98,6% (99,8% in 2015)2018) of the Company’s long-term debt hasis at fixed interest rates.
The terms and conditions of the Company’s obligations as of December 31, 2016,2019, including exchangeExchange rates, interest rates, maturities and effective interest rates, are detailed inNote 2621 – Other financial liabilities..
Interest rates sensitivity analysis
The total financial expense recognized in the Consolidated Statement of Income for the twelve month ended as of December 31, 2016, related to short-term and long-term debts amounted to ThCh$ 20,307,238 (ThCh$ 23,101,329 in 2015 and ThCh$ 22,957,482 in 2014). Assuming a reasonably possible increase of 100 bps in variable interest rates and maintaining constant all the rest of the variables, the increase would hypothetically result in a loss before tax of ThCh$ 48,700 (ThCh$ 42,664 in 2015).
The Company maintains a series of Unidad de Fomento* (UF) indexed agreements with third parties, as well as UF indexed financial debt, which means that the Company is exposed to the UF fluctuations, generating increases in the value of the agreements and inflation adjustable liabilities, in the event it experiences growth. This risk is mitigated by the Company’s policy of keeping the unitary net sales in UF constant, as long as the market conditions allow it.
* The Unidad de Fomento (UF) is a Chilean inflation-indexed, peso-denominated monetary unit. The UF rate is set daily based on changes in the previous month´s inflation rate.
Inflation sensitivity analysis
The income for total adjustment unit recognized in the Consolidated Statement of Comprehensive Income for the twelve month ended as of December 31, 2016, related to UF indexed short-term and long-term debt, and resulted in a loss ofThCh$ 2,246,846 (ThCh$ 3,282,736 in 2015 and ThCh$ 4,159,131 in 2014). Assuming a reasonably possible increase (decrease) of the Unidad de Fomento by approximately 3% and maintaining constant all the rest of the variables, such as interest rates, the aforementioned increase (decrease) would hypothetically result in a loss (income) of ThCh$ 3,065,645 (ThCh$ 3,065,747 in 2015 and ThCh$ 3,035,371 in 2014) in the Consolidated Statement of Income.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Interest rate sensitivity analysis
The total financial cost recognized in the Consolidated Statement of Income for the twelve months ended as of December 31, 2019, related to short and long-term debt amounted to ThCh$ 27,720,203 (ThCh$ 23,560,662 in 2018 and ThCh$ 24,166,313 in 2017). Assuming a reasonably possible increase of 100 bps in variable interest rates and maintaining all other variables constant, the increase would hypothetically result in a loss before taxes of ThCh$ 43,854 (ThCh$ 5,059 in 2018 and ThCh$ 17,176 in 2017).
Inflation risk
The Company maintains a series of agreements indexed to Unidades de Fomento (UF) with third parties, as well as UF indexed financial debt which means the Company is exposed to fluctuations in the UF, generating an increase in the value of those agreements and liabilities if the UF increases due to inflation. This risk is partially mitigated by the Company’s policy of keeping net sales per unit in UF constant as long as the market conditions allow it, and taking cross currency swaps if the if the market conditions are favorable to the Company.
Inflation in Argentina has shown significant increases since the beginning of 2018. The cumulative inflation rate of three years, calculated using different combinations of consumer price indices, has exceeded 100% for several months, and it’s still increasing. The cumulative three-year inflation calculated using the general price index has already exceeded 100%. Therefore, as prescribed by IAS 29, Argentina was declared a hyperinflationary economy as of July 1, 2018.(SeeNote 2 - Summary of significant accounting polices (2.4)).
Inflation sensitivity analysis
Income from indexation units recognized in the Consolidated Statement of Income for the nine-months ended as of December 31, 2019, related to UF indexed short and long-term debt and the application of Hyperinflation Accounting in Argentina, is a loss of ThCh$ 8,255,001 (a gain of ThCh$ 742,041 in 2018 and a loss of ThCh$ 110,539 in 2017). Assuming a reasonably possible 3% increase (decrease) in the Unidad de Fomento and a 10% in the inflation rate in Argentina and keeping all other variables such as interest rates constant, the aforementioned increase (decrease) would hypothetically result in a loss (income) of ThCh$ 4,781,394 (ThCh$ 3,380,752 in 2018 and ThCh$ 1,419,965 in 2017).
Raw material pricePrice risk
The main exposure to the raw material pricematerials Price variation is related to barley, malt, and maltcans used in the production of beer, concentrates, sugar and plastic containers used in the production of soft drinks and bulk wine and grapes for the manufacturing of wine and spirits.
Barley, maltMalt and cans
In Chile, the Company obtains its barley and malt supply from both from local producers and from the international market. Long-termmarkets (mainly from Argentina). With local and argentine producers the Company enters into long-term supply agreements are entered into with local producers where the barleyin which malt price is set annually, according tousing for this purpose the market prices, which are used to determine the malt price according to theof barley and manufacturing cost established in these agreements.
The purchases and commitments madeentered for the acquisition of raw materials expose the Company to a raw material price fluctuationfluctuations risk. During 2016,2019, the Company purchased 13,914acquired 79,459 tons (46,620of malt (73,498 tons in 2015) of barley and 61,753 tons (53,890 tons in 2015) of malt. CCU Argentina acquires mainly malt from local producers. Such raw materials represent2018). Malt represents approximately 7% (9% in 2015 and 12% in 2014)6% of the direct cost of the Chile Operating segment.segment (5% in 2018 and 6% in 2017). CCU Argentina acquires all of its malt from local producers.
OfAs of December 31, 2019, in the Chile Operation segment, the cost of Chilecans represented approximately 17% of direct costs (12% in 2018 and 12% in 2017). In the International Business Operating segment, the cost of cans representsrepresented approximately 15%38% of the direct cost (12% in 2015 and 12% in 2014). Meanwhile in the International Business Operating segment the cans cost represent approximately 34% of the direct cost of raw materials costs as of December 31, 2019 (38% in 2016 (30%2018 and 33% in 2015 and 20% in 2014)2017).
Concentrates, Sugar and plastic containers
The main raw materials used in the production of non-alcoholic beverages are concentrates,concentrated, which are mainly acquired from licensees,licenses, sugar and plastic resin for the manufacturing of plastic bottles and containers. The Company is exposed to price fluctuation risks ofinvolving these raw materials, which jointly represent approximately 30% (29%31% (27% in 20152018 and 29% in 2014)2017) of the direct cost of the Chile Operating segment. The company does not engage in hedging the purchases of raw materials.
Grapes and wine
The main raw material used by the subsidiary VSPT for wine production are harvested grapes from own production and grapes and wines acquired from third parties through long term and spot contracts. For the last 12 months, approximately 26% (31% in 2015) of the total wine of VSPT supply comes from its own vineyards. In the export business the own supply for 2016 was 40% (48% for 2015).
The remaining 74% (69% in 2015) supply is purchased from third parties through long term and spot contracts. During 2016, the subsidiary VSPT acquired 64% (55% in 2015) of the necessary grapes and wine from third parties through spot contracts. It also acquired 11% of its grape needs in 2016 from long term agreements (14% in 2015).
We must consider that as of December 31, 2016, the wine represents 56% (57% in 2015) of the total direct cost of the Wine Operating Segment, meaning that the supply purchased to third parties represents 36% of the direct cost (31% in 2015).
Raw material price sensitivity Analysis
The total direct cost in the Consolidated Statement of Income for 2016 amounts to ThCh$ 540,692,963 (ThCh$ 485,391,583 in 2015 and ThCh$ 433,749,832 in 2014). Assuming a reasonably possible increase (decrease) in the direct cost of each Operating segment of 8% and maintaining constant all the rest of the variables, such as exchange rates, the aforesaid increase (decrease) would hypothetically result into a loss (income) before taxes of ThCh$ 28,076,333 (ThCh$ 24,078,370 in 2015 and ThCh$ 21,875,405 in 2014) for Chile Operating segment, ThCh$ 8,089,082 (ThCh$ 8,444,331 in 2015 and ThCh$ 5,925,786 in 2014) for International Business Operating segment, ThCh$ 7,222,786 (ThCh$ 6,736,734 in 2015 and ThCh$ 6,414,035 2014) for Wine Operating segment.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The Company does not engage in hedging raw materials purchases.
Grapes and wine
The main raw materials used by subsidiary Viña San Pedro Tarapacá S.A. for wine production are grapes harvested from its own vineyards and grapes and wine acquires from third parties through long-term and spot contracts. In the last 12 months, approximately 27% (26% in 2018) of VSPT’s total wine supply came from its own vineyards. Regarding our export market, and considering our focus on this market, approximately 43% (41% in 2018) of our wine supply for export came from our own vineyards.
The remaining 73% (74% in 2018) supply was purchased from third parties through long-term and spot contracts. In the last 12 months, the subsidiary VSPT acquired 54% (63% in 2018) of the necessary grapes and wine from third parties through spot contracts. Additionally, the long-term transactions were 19% (11% in 2018) of the total supply.
We should consider that as of December 31, 2019, wine represents 60% (64% in 2018) of the total direct cost of the Wine Operating segment, and supplies purchased from third parties represented 33% (38% in 2018).
Raw material Price sensitivity analysis
Total direct costs in the Consolidated Statement of Income for the twelve months ended as of December 31, 2019, amounted to ThCh$ 694,307,741 (ThCh$ 650,386,343 in 2018 and ThCh$ 586,223,676 in 2017). Assuming a reasonably possible 8% increase (decrease) in the direct cost of each Operating segment and keeping all other variables such as exchange rates constant, the aforesaid increase (decrease) would hypothetically result into a loss (income) before taxes of ThCh$ 33,084,911 (ThCh$ 30,150,723 in 2018 and ThCh$ 28,604,884 in 2017) for the Chile Operating segment, ThCh$ 14,807,640 (ThCh$ 13,545,233 in 2018 and ThCh$ 10,404,929 in 2017) for the International Business Operating segment and ThCh$ 8,310,433 (ThCh$ 8,734,204 in 2018 and ThCh$ 8,215,317 in 2017) for the Wine operating segment.
Credit risk
The credit risk to which the Company is exposed to originates from: a) the commercialtrade accounts receivable maintained withfrom retail clients, wholesalecustomers, whole sale distributors and supermarket chains ofin the domestic markets;market; b) accounts receivable from exports; and c) financial facilitiesinstruments maintained with Banks and financial institutions, such as demand deposits, mutual fundsfund investments, facilitiesinstrument acquired under resale commitments and derivatives.
Domestic market
The credit risk related to commercial collectibletrade accounts ofreceivable from domestic markets is administeredmanaged by the LoanCredit and Collection Administration Officer,Collections Management Department, and it is monitored by the LoanCredit Committee of each business unit.
The domestic market mainly refers to accounts receivables in Chile and represents 63% of total trade accounts receivable (63% in 2018 and 66% in 2017). The Company has a wide client base of customers that isare subject to the policies, procedures and controls established by the Company. The loanCredit limits are established for all clientscustomers on the basis of an internal qualificationrating and their payment performance.behavior. Outstanding commercialtrade accounts receivable are regularly monitored. In addition, the Company acquires loan insurances coveringpurchases credit insurance that covers 90% of the individually significant accounts receivable balances, a coverage that as of December 31, 2016, amounts2019, is equivalent to 88% (88%86% (84% in 2015)2018) of the total accounts receivable.
Overdue, but not impaired, commercialtrade accounts receivable corresponds to clientsreceivables represent customers that show delays ofare less than 3330 days (21 daysoverdue (22 in 2015)2018).
As of December 31, 2016,2019, the Company hadhas approximately 1,078 clients (998 clients1,381 customers (1,294 in 2015) indebted in over2018) with more than Ch$ 10 million in debt each, that togetherwhich altogether represent approximately 84% (85%85% (86% in 2015)2018) of the total commercialtrade accounts receivable. There were 224 clients (217 clientsare 265 customers (261 customers in 2015)2018) with balances overin excess of Ch$ 50 million each, representing approximately 74% (74%73% (75% in 2015)2018) of the total accounts receivable. The 91% (93%receivable.The 92% (90% in 2015)2018) of suchthose accounts receivable are covered by the loancredit insurance.
The Company sells its products through retail customers, wholesale distributors and supermarket chains, with a credit worthiness of 100% (99% in 2018).
As of December 31, 2019, the Company has no significant guarantees from its customers.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The Company believes that no additional credit risk provisions are needed toother than the individual and collective provisions determined atas of December 31, 2016, as2019, that amount to ThCh$ 5,792,821 (ThCh$ 6,059,201 in 2018) are needed since a large percentage of these are covered by insurance.
Exports market
The loancredit risk related to accounts receivable forfrom exports is administeredmanaged by VSPTthe Head of LoanCredit and Collection,Collections at VSPT and it is monitored by VSPT Administration and Finance Officer. The CompanyManagement. VSPT’s export trade accounts receivable represent 14% of total trade accounts receivable (12% in 2018). VSPT has a large clientwide base of customers, in overmore than eighty countries, which are subject to the policies, procedures and controls established by the Company.VSPT. In addition, the CompanyVSPT acquires loancredit insurance covering 90% (89%to cover 99.1% (99.5% in 2015)2018) of theindividually significant accounts receivable. This coverage accounts for more than 89% (90% in 2018) of total accounts receivable.receivable are covered. Pending paymentpayments of commercialtrade accounts receivable isare regularly monitored. Apart from the loancredit insurance, having diversified sales in different countries decreases the loancredit risk.
As of December 31, 2016,2019, there were 76 clients (69 clients68 customers (58 in 2015) indebted for over2018) with more than ThCh$ 65,000 of debt each, which represent 91% (88%93% (92% in 2015)2018) of theVSPT´s total export market accounts receivable of the export market.receivable.
Overdue,Regarding VSPT’s export customers, overdue, but notno impaired, commercialtrade accounts receivable corresponds to clientsreceivables are customers that show delays ofare less than 3228 days (25overdue (28 days average in 2015)2018).
The Company estimatesbelieves that no loancredit risk provisions are necessary in addition toother than the individual and collective provisions determined as of December 31, 2016.2019. See analysis of accounts receivables maturitiesreceivable aging and losses due to impairment of accounts receivables (receivables.(SeeNote 1410 – Trade and other receivables))).
The Company has policies limiting the counterparty loan risk exposure with respect to financial institutions, and such exposures are frequently monitored. Consequently, the Company does not have significant risk concentration with any specific financial institutions as of December 31, 2016.
The financial
Financial investments correspond to time deposits, investments in mutual funds andwhich are financial instruments acquired under re-salewith repurchase agreements as well as short-term investments with high liquidity, all at a fixed interest rate, normally with an original maturity of up tomaturing in less than three months which theyplaced in financial institutions in Chile, so there are not exposed to significant risks of market. With respect to financial derivative instruments, thesemarket risk. Derivatives are valuedmeasured at fair value and contractedtraded only in the Chilean market. Since 2018, the amendment to IFRS 9, which requires changes to the valuation of derivative financial instruments considering the counterparty risk (CVA and DVA), is applied. The CVA and DVA effect is calculated using the probability of default of the counterparty or CCU, when applicable, assuming a 40% recovery rate for each derivative instrument. For CCU, the default probability is obtained from the spread of corporate bonds with the same credit risk rating than CCU, while for the counterparty, considers the sum between the Credit Default Swap (CDS) of Chile and the CDS of Citibank in the United States. As of December 31, 2019 the effect is not material.
Tax risk
Our businesses are taxed with different duties, particularly with excise taxes on the consumption of alcoholic and non-alcoholic beverages. An increase in the rate of these or any other tax could negatively affect our sales and profitability.
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The Company administersmanages liquidity risk at a consolidated level. The cashCash flows originated from operationaloperating activities beingare the main liquidity source.source of liquidity. Additionally, the Company has the ability to issue debt and equity instruments in the capitalcapitals market according tobased on our needs.
ToIn order to manage short-term liquidity, the Company considers projected cash flows for a twelve monthstwelve-month moving period and maintains cash and cash equivalents available to meet its obligations.
Based on the current operationaloperating performance and its liquidity position, the Company estimates that cash flows originated by operatingfrom operation activities and theavailable cash available shallwill be sufficient to finance working capital, capital investments, interest payments, dividend paymentspayment and debt payment requirementsrequirement for the next 12-month12-months period and in the foreseeable future.
A summary of the Company’s financial liabilities with their maturities as of December 31, 2016 and 2015, based on the non-discounted contractual cash flows appears below:
As of December 31, 2016 | Book value (*) | Contractual cash flows maturities | |||||
0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | ||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Other financial liabilities no derivative |
|
|
|
|
|
|
|
Bank borrowings | 68,685,959 | 8,567,124 | 34,661,755 | 31,604,772 | 626,411 | - | 75,460,062 |
Bond payable | 74,086,739 | 1,108,143 | 4,551,720 | 13,401,920 | 19,666,590 | 56,878,538 | 95,606,911 |
Financial leases obligations | 17,716,869 | 368,052 | 1,050,810 | 2,603,315 | 2,305,704 | 28,638,952 | 34,966,833 |
Deposits for return of bottles and containers | 13,015,723 | - | 13,015,723 | - | - | - | 13,015,723 |
Sub-Total | 173,505,290 | 10,043,319 | 53,280,008 | 47,610,007 | 22,598,705 | 85,517,490 | 219,049,529 |
Derivative |
|
|
|
|
|
|
|
Derivative financial instruments | 11,118,676 | 11,118,676 | - | - | - | - | 11,118,676 |
Sub-Total | 11,118,676 | 11,118,676 | - | - | - | - | 11,118,676 |
Total | 184,623,966 | 21,161,995 | 53,280,008 | 47,610,007 | 22,598,705 | 85,517,490 | 230,168,205 |
As of December 31, 2015 | Book value (*) | Contractual cash flows maturities | |||||
0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | ||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Other financial liabilities no derivative |
|
|
|
|
|
|
|
Bank borrowings | 76,050,091 | 18,531,305 | 30,981,974 | 32,627,707 | 3,135,314 | - | 85,276,300 |
Bond payable | 74,508,233 | 1,077,908 | 4,529,040 | 10,909,363 | 17,346,078 | 64,742,891 | 98,605,280 |
Financial leases obligations | 17,559,874 | 418,380 | 1,087,320 | 2,709,603 | 2,439,335 | 28,871,228 | 35,525,866 |
Deposits for return of bottles and containers | 12,503,170 | - | 12,503,170 | - | - | - | 12,503,170 |
Sub-Total | 180,621,368 | 20,027,593 | 49,101,504 | 46,246,673 | 22,920,727 | 93,614,119 | 231,910,616 |
Derivative |
|
|
|
|
|
|
|
Hedging derivatives | 107,698 | 61,543 | 46,333 | - | - | - | 107,876 |
Derivative financial instruments | 171,470 | 167,701 | 3,770 | - | - | - | 171,471 |
Sub-Total | 279,168 | 229,244 | 50,103 | - | - | - | 279,347 |
Total | 180,900,536 | 20,256,837 | 49,151,607 | 46,246,673 | 22,920,727 | 93,614,119 | 232,189,963 |
(*) View current and non-current book value inNote 6.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Financial instruments categories
The followingCompany’s financial liabilities expiring as of December 31, 2019 and December 31, 2018 based on non-discounted contractual cash flows are the book values of each financial instrument category at the closing of each year:summarized as follows:
| As of December 31, 2016 | As of December 31, 2015 | ||
| Current | Non current | Current | Non current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Cash and cash equivalents | 133,789,950 | - | 192,554,239 | - |
Other financial assets | 8,406,491 | 203,784 | 13,644,105 | 80,217 |
Accounts receivable - trade and other receivable (net) | 280,766,784 | 3,563,797 | 252,225,937 | - |
Acoounts receivable from related companies | 3,523,825 | 356,665 | 4,788,930 | 445,938 |
Total financial assets | 426,487,050 | 4,124,246 | 463,213,211 | 526,155 |
Bank borrowings | 39,079,561 | 29,606,398 | 27,714,998 | 48,335,093 |
Bonds payable | 3,250,023 | 70,836,716 | 3,155,239 | 71,352,994 |
Financial leases obligations | 215,950 | 17,500,919 | 321,416 | 17,238,458 |
Derivative financial instruments | 11,118,676 | - | 171,470 | - |
Hedging derivatives | - | - | 107,698 | - |
Deposits for return of bottles and containers | 13,015,723 | - | 12,503,170 | - |
Total other non-financial liabililities (*) | 66,679,933 | 117,944,033 | 43,973,991 | 136,926,545 |
Account payable- trade and other payable | 259,677,852 | 1,082,898 | 227,736,803 | 1,645,098 |
Accounts payable to related entities | 9,530,071 | - | 11,624,218 | - |
Total financial liabilities | 335,887,856 | 119,026,931 | 283,335,012 | 138,571,643 |
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|
|
|
|
As of December 31, 2019 | Book value (*) | Contractual flows maturities | |||||
0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | ||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Other financial liabilities no derivative |
|
|
|
|
|
|
|
Bank borrowings | 142,196,520 | 20,991,920 | 33,633,237 | 84,363,883 | 10,396,997 | 966,733 | 150,352,770 |
Bond payable | 140,551,686 | 4,932,819 | 4,878,698 | 18,973,584 | 18,107,650 | 163,272,427 | 210,165,178 |
Lease liabilities | 33,070,356 | 1,393,064 | 4,581,643 | 6,652,459 | 4,049,398 | 26,579,745 | 43,256,309 |
Deposits for return of bottles and containers | 13,290,754 | - | 13,290,754 | - | - | - | 13,290,754 |
Sub-Total | 329,109,316 | 27,317,803 | 56,384,332 | 109,989,926 | 32,554,045 | 190,818,905 | 417,065,011 |
Hedgin derivative |
|
|
|
|
|
|
|
Derivative financial instruments | 240,394 | 229,726 | 10,668 | - | - | - | 240,394 |
Derivative hedge liabilities | 805,306 | 460,503 | 439,381 | - | - | - | 899,884 |
Sub-Total | 1,045,700 | 690,229 | 450,049 | - | - | - | 1,140,278 |
Total | 330,155,016 | 28,008,032 | 56,834,381 | 109,989,926 | 32,554,045 | 190,818,905 | 418,205,289 |
As of December 31, 2018 | Book value (*) | Contractual flows maturities | |||||
0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | ||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Other financial liabilities no derivative |
|
|
|
|
|
|
|
Bank borrowings | 113,360,982 | 4,171,430 | 38,017,422 | 20,574,967 | 59,839,650 | 3,381,796 | 125,985,265 |
Bond payable | 139,362,478 | 2,349,873 | 4,855,854 | 18,896,434 | 18,053,262 | 167,691,118 | 211,846,541 |
Financial leases obligations | 17,912,134 | 241,724 | 725,183 | 1,911,683 | 1,909,956 | 23,078,634 | 27,867,180 |
Deposits for return of bottles and containers | 13,967,995 | - | 13,967,995 | - | - | - | 13,967,995 |
Sub-Total | 284,603,589 | 6,763,027 | 57,566,454 | 41,383,084 | 79,802,868 | 194,151,548 | 379,666,981 |
Hedgin derivative |
|
|
|
|
|
|
|
Derivative financial instruments | 4,997,124 | 4,997,124 | - | - | - | - | 4,997,124 |
Derivative hedge liabilities | 1,351,530 | 639,032 | 620,516 | 424,299 | - | - | 1,683,847 |
Sub-Total | 6,348,654 | 5,636,156 | 620,516 | 424,299 | - | - | 6,680,971 |
Total | 290,952,243 | 12,399,183 | 58,186,970 | 41,807,383 | 79,802,868 | 194,151,548 | 386,347,952 |
(*) SeeView current and non-current book value inNote 26 - Other financial liabilities7 – Financial Instruments.
Financial instruments fair value
a)Composition of financial assets and liabilities:
The following tables show the fair values, based on the financial instrument categories, as compared to the book value included in the Consolidated Statements of Financial Position:
| As of December 31, 2016 | As of December 31, 2015 | ||
| Book Value | Fair Value | Book Value | Fair Value |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Cash and cash equivalents | 133,789,950 | 133,789,950 | 192,554,239 | 192,554,239 |
Other financial assets | 8,610,275 | 8,610,275 | 13,724,322 | 13,724,322 |
Accounts receivable - trade and other receivable (net) | 284,330,581 | 284,330,581 | 252,225,937 | 252,225,937 |
Acoounts receivable from related companies | 3,880,490 | 3,880,490 | 5,234,868 | 5,234,868 |
Total financial assets | 430,611,296 | 430,611,296 | 463,739,366 | 463,739,366 |
Bank borrowings | 68,685,959 | 69,668,649 | 76,050,091 | 77,380,452 |
Bonds payable | 74,086,739 | 81,769,096 | 74,508,233 | 80,087,449 |
Financial leases obligations | 17,716,869 | 30,154,204 | 17,559,874 | 29,104,078 |
Derivative financial instruments | 11,118,676 | 11,118,676 | 171,470 | 171,470 |
Hedging derivatives | - | - | 107,698 | 107,698 |
Deposits for return of bottles and containers | 13,015,723 | 13,015,723 | 12,503,170 | 12,503,170 |
Total other non-financial liabililities (*) | 184,623,966 | 205,726,348 | 180,900,536 | 199,354,317 |
Account payable- trade and other payable | 260,760,750 | 260,760,750 | 229,381,901 | 229,381,901 |
Accounts payable to related entities | 9,530,071 | 9,530,071 | 11,624,218 | 11,624,218 |
Total financial liabilities | 454,914,787 | 476,017,169 | 421,906,655 | 440,360,436 |
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(*) SeeNote 26 - Other financial liabilities.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The Company has defined three Operating segments, essentially defined with respect to its revenues in the geographic areas of commercial activity: 1. Chile, 2. International business and 3.Wine.
These Operating segments mentioned are consistent with the way the Company is managed and how results are reported by CCU. These segments reflect separate operating results which are regularly reviewed by the chief operating decision maker in order to make decisions about the resources to be allocated to the segment and assess its performance.
Operating segment |
|
Chile | Beers, non-alcoholic beverages, spirits and SSU. |
International Business | Beers, cider, non-alcoholic beverages and spirits in Argentina, Uruguay, Paraguay and Bolivia. |
Wines | Wines, mainly in export markets to more 80 countries. |
The book value of current accounts receivables, cashCorporate revenues and cash equivalents and other financial assets and liabilities approximate fair value due toexpenses are presented separately within the short-term nature of such facilities, andOther, in addition in the caseother presents the elimination of accounts receivable, due totransactions between segments.
The Company does not have any customers representing more than 10% of consolidated revenues.
The detail of the fact that any collection losssegments is already reflectedpresented in the impairment loss provision.
The fair value of non-derivative financial assets and liabilities that are not quoted in active markets are estimated through the use of discounted cash flows calculated on market variables observed as of the date of the financial statements. The fair value of derivative instruments is estimated through the discount of future cash flows, determined according to information observed in the market or to variables and prices obtained from third parties.
The fair value of bank borrowings and Bonds payable have hierarchy level 2 of fair value.
b)Financial instruments as per category:
following tables:
As of December 31, 2016 | Fair value with changes in income | Cash and cash equivaletns and loans and accounts receivables | Hedge derivatives | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Financial assets |
|
|
|
|
Derivative financial instruments | 479,492 | - | 309,237 | 788,729 |
Marketable securities and investments in other companies | 7,821,546 | - | - | 7,821,546 |
Total other financial assets | 8,301,038 | - | 309,237 | 8,610,275 |
Cash and cash equivalents | - | 133,789,950 | - | 133,789,950 |
Accounts receivable-trade and other receivables (net) | - | 284,330,581 | - | 284,330,581 |
Account receivable from to related companies | - | 3,880,490 | - | 3,880,490 |
Total | 8,301,038 | 422,001,021 | 309,237 | 430,611,296 |
As of December 31, 2016 | Fair value with changes in income | Hedge derivatives | Financial libilities measured at amortized cost | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Financial liabilities |
|
|
|
|
Bank borrowings | - | - | 68,685,959 | 68,685,959 |
Bonds payable | - | - | 74,086,739 | 74,086,739 |
Financial leases obligations | - | - | 17,716,869 | 17,716,869 |
Deposits for return of bottles and containers | - | - | 13,015,723 | 13,015,723 |
Derivative financial instruments | 11,118,676 | - | - | 11,118,676 |
Total others financial liabililities | 11,118,676 | - | 173,505,290 | 184,623,966 |
Account payable- trade and other payable | - | - | 260,760,750 | 260,760,750 |
Accounts payable to related entities | - | - | 9,530,071 | 9,530,071 |
Total | 11,118,676 | - | 443,796,111 | 454,914,787 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
a)Information as per operating segments for the years ended December 31, 2019 and 2018:
| Chile | International Business | Wines | Others | Total | |||||
| 2019 | 2018 | 2019 | 2018 (4) | 2019 | 2018 | 2019 | 2018 (4) | 2019 | 2018 (5) |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Sales revenue external customers | 1,134,048,629 | 1,080,974,052 | 452,267,652 | 473,972,819 | 203,230,777 | 201,305,759 | - | - | 1,789,547,058 | 1,756,252,630 |
Other income | 16,438,937 | 15,754,493 | 11,724,538 | 9,404,839 | 3,806,545 | 4,190,594 | 1,023,619 | (2,320,219) | 32,993,639 | 27,029,707 |
Sales revenue between segments | 13,816,469 | 12,845,646 | 495,259 | 548,184 | 5,284,436 | 1,022,378 | (19,596,164) | (14,416,208) | - | - |
Net sales | 1,164,304,035 | 1,109,574,191 | 464,487,449 | 483,925,842 | 212,321,758 | 206,518,731 | (18,572,545) | (16,736,427) | 1,822,540,697 | 1,783,282,337 |
Change % | 4.9 | - | (4.0) | - | 2.8 | - | - | - | 2.2 | - |
Cost of sales | (540,048,331) | (501,255,744) | (248,880,925) | (230,068,601) | (128,763,785) | (133,271,578) | 9,374,851 | 4,584,531 | (908,318,190) | (860,011,392) |
% of Net sales | 46.4 | 45.2 | 53.6 | 47.5 | 60.6 | 64.5 | - | - | 49.8 | 48.2 |
Gross margin | 624,255,704 | 608,318,447 | 215,606,524 | 253,857,241 | 83,557,973 | 73,247,153 | (9,197,694) | (12,151,896) | 914,222,507 | 923,270,945 |
% of Net sales | 53.6 | 54.8 | 46.4 | 52.5 | 39.4 | 35.5 | - | - | 50.2 | 51.8 |
MSD&A (1) | (429,093,171) | (407,242,869) | (210,155,693) | (210,591,361) | (55,595,811) | (52,408,689) | (9,726,563) | (11,332,903) | (704,571,238) | (681,575,822) |
% of Net sales | 36.9 | 36.7 | 45.2 | 43.5 | 26.2 | 25.4 | - | - | 38.7 | 38.2 |
Other operating income (expenses) | 5,266,475 | 1,586,173 | 14,201,709 | 223,078,626 | 515,019 | 1,828,938 | 1,173,780 | 532,889 | 21,156,983 | 227,026,626 |
Adjusted operating result (2) | 200,429,008 | 202,661,751 | 19,652,540 | 266,344,506 | 28,477,181 | 22,667,402 | (17,750,477) | (22,951,910) | 230,808,252 | 468,721,749 |
Change % | (1.1) | - | (92.6) | - | 25.6 | - | - | - | (50.8) | - |
% of Net sales | 17.2 | 18.3 | 4.2 | 55.0 | 13.4 | 11.0 | - | - | 12.7 | 26.3 |
Net financial expense | - | - | - | - | - | - | - | - | (14,602,562) | (7,766,206) |
Equity and income of associates and joint ventures | - | - | - | - | - | - | - | - | (16,431,759) | (10,815,520) |
Foreign currency exchange differences | - | - | - | - | - | - | - | - | (9,054,155) | 3,299,657 |
Results as per adjustment units | - | - | - | - | - | - | - | - | (8,255,001) | 742,041 |
Other gains (losses) | - | - | - | - | - | - | - | - | 3,156,799 | 4,029,627 |
Income before taxes |
|
|
|
|
|
|
|
| 185,621,574 | 458,211,348 |
Tax income (expense) | (39,975,914) | (136,126,817) | ||||||||
Net income for year |
|
|
|
|
|
|
|
| 145,645,660 | 322,084,531 |
Non-controlling interests | 15,503,968 | 15,193,739 | ||||||||
Net income attributable to equity holders of the parent |
|
|
|
|
|
|
|
| 130,141,692 | 306,890,792 |
Depreciation and amortization | 66,301,914 | 63,148,804 | 27,077,745 | 19,798,708 | 9,826,148 | 7,935,006 | 1,815,127 | 2,406,676 | 105,020,934 | 93,289,194 |
ORBDA (3) | 266,730,922 | 265,810,555 | 46,730,285 | 286,143,214 | 38,303,329 | 30,602,408 | (15,935,350) | (20,545,234) | 335,829,186 | 562,010,943 |
Change % | 0.3 | - | (83.7) | - | 25.2 | - | - | - | (40.2) | - |
% of Net sales | 22.9 | 24.0 | 10.1 | 59.1 | 18.0 | 14.8 | - | - | 18.4 | 31.5 |
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(1) |
|
(2) | Adjusted operating result (for management purposes we have defined as Net income before other gains (losses), net financial expense, equity and income of joint venture, foreign currency exchange differences, result as per adjustment units and income taxes). |
(3) | ORBDA (for management purpose we have defined as Adjusted Operating Result before Depreciation and Amortization). |
(4) | The net impact, related to early termination of Budweiser license, on International Business Operating segment earnings was a one-time gain of ThCh$ 211,228,960 in ORBDA and a loss in Other for an amount of ThCh$ 2,386,517. |
(5) | The net impact, related to early termination of Budweiser license (SeeNote 1 – General information, letter C),on CCU’s consolidated earnings was a one-time gain of ThCh$ 208,842,443 inORBDA and ThCh$ 157,358,973 in Net income attributable to equity holder of the parent. |
As of December 31, 2015 | Fair value with changes in income | Cash and cash equivaletns and loans and accounts receivables | Hedge derivatives | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Financial assets |
|
|
|
|
Derivative financial instruments | 9,365,572 | - | 816,622 | 10,182,194 |
Marketable securities and investments in other companies | 3,542,128 | - | - | 3,542,128 |
Total other financial assets | 12,907,700 | - | 816,622 | 13,724,322 |
Cash and cash equivalents | - | 192,554,239 | - | 192,554,239 |
Accounts receivable-trade and other receivables (net) | - | 252,225,937 | - | 252,225,937 |
Account receivable from to related companies | - | 5,234,868 | - | 5,234,868 |
Total | 12,907,700 | 450,015,044 | 816,622 | 463,739,366 |
As of December 31, 2015 | Fair value with changes in income | Hedge derivatives | Financial libilities measured at amortized cost | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Financial liabilities |
|
|
|
|
Bank borrowings | - | - | 76,050,091 | 76,050,091 |
Bonds payable | - | - | 74,508,233 | 74,508,233 |
Financial leases obligations | - | - | 17,559,874 | 17,559,874 |
Deposits for return of bottles and containers | - | - | 12,503,170 | 12,503,170 |
Derivative financial instruments | 171,470 | 107,698 | - | 279,168 |
Total others financial liabililities | 171,470 | 107,698 | 180,621,368 | 180,900,536 |
Account payable- trade and other payable | - | - | 229,381,901 | 229,381,901 |
Accounts payable to related entities | - | - | 11,624,218 | 11,624,218 |
Total | 171,470 | 107,698 | 421,627,487 | 421,906,655 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Derivative Instruments
The detail of maturities, number of derivative agreements, contracted nominal amounts, fair values and the classification of such derivative instrumentsb)Information as per type of agreement atoperating segments for the closing of each year is as follows:
| As of December 31, 2016 | As of December 31, 2015 | ||||||
Number of agreements | Nominal amounts thousand | Asset | Liability | Numberofagreements | Nominal amounts thousand | Asset | Liability | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||
Cross currency interest rate swaps CLP/USD | 1 | 11,237 | 53,743 | - | - | - | - | - |
Less than a year | 1 | 11,237 | 53,743 | - | - | - | - | - |
Cross interest rate swaps USD/USD | - | - | - | - | 1 | 10,094 | - | 107,698 |
Less than a year | - | - | - | - | - | 10,094 | - | 107,698 |
Cross currency interest rate swaps USD/EURO | 1 | 7,889 | 255,494 | - | 2 | 12,353 | 816,622 | - |
Less than a year | - | - | 51,710 | - | - | 4,477 | 736,405 | - |
Between 1 and 5 years | - | 7,889 | 203,784 | - | - | 7,876 | 80,217 | - |
Forwards USD | 29 | 224,332 | 359,254 | 10,586,653 | 27 | 148,404 | 9,276,156 | 117,151 |
Less than a year | - | 224,332 | 359,254 | 10,586,653 | - | 148,404 | 9,276,156 | 117,151 |
Forwards Euro | 10 | 49,421 | 109,164 | 523,079 | 7 | 11,981 | 57,834 | 52,368 |
Less than a year | - | 49,421 | 109,164 | 523,079 | - | 11,981 | 57,834 | 52,368 |
Forwards CAD | 2 | 1,480 | 11,074 | 7,720 | 4 | 1,500 | 18,192 | 1,951 |
Less than a year | - | 1,480 | 11,074 | 7,720 | - | 1,500 | 18,192 | 1,951 |
Forwards GBP | 2 | 700 | - | 1,224 | 3 | 865 | 13,390 | - |
Less than a year | - | 700 | - | 1,224 | - | 865 | 13,390 | - |
Total derivative instruments | 45 |
| 788,729 | 11,118,676 | 44 |
| 10,182,194 | 279,168 |
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These derivative agreements have been entered into as a hedge of exchange rate risk exposure. In the case of forwards, the Company does not comply with the formal requirements for hedging designation; consequently their effects are recorded in Income, in Other gains (losses).
In the case of Cross Currency Interest Rate Swapsyears endedDecember 31, 2018 and the Cross Interest Rate Swaps, these qualify as cash flow hedges of the cash flows related to loans from Banco de Chile and Banco Scotiabank. See additional disclosures inNote 26.2017:
As of December 31, 2016 | |||||||
Entity | Nature of risks covered | Rights | Obligations | Fair value of net asset (liabilities) | Maturity | ||
Currency | Amount | Currency | Amount | Amount | |||
ThCh$ | ThCh$ | ThCh$ | |||||
Scotiabank | Interest rate and exchange rate on bank bonds | USD | 5,335,826 | EUR | 5,080,332 | 255,494 | 06-18-2018 |
Banco de Chile | Interest rate on bank bonds | CLP | 7,458,187 | USD | 7,404,444 | 53,743 | 07-03-2017 |
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| Chile | International Business | Wines | Others | Total | |||||
| 2018 | 2017 | 2018 (4) | 2017 | 2018 | 2017 | 2018 (4) | 2017 | 2018 (5) | 2017 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Sales revenue external customers | 1,080,974,052 | 1,020,763,055 | 473,972,819 | 457,178,413 | 201,305,759 | 200,455,713 | - | - | 1,756,252,630 | 1,678,397,181 |
Other income | 15,754,493 | 14,667,777 | 9,404,839 | 2,740,533 | 4,190,594 | 3,105,064 | (2,320,219) | (549,761) | 27,029,707 | 19,963,613 |
Sales revenue between segments | 12,845,646 | 11,688,658 | 548,184 | 398,100 | 1,022,378 | 893,005 | (14,416,208) | (12,979,763) | - | - |
Net sales | 1,109,574,191 | 1,047,119,490 | 483,925,842 | 460,317,046 | 206,518,731 | 204,453,782 | (16,736,427) | (13,529,524) | 1,783,282,337 | 1,698,360,794 |
Change % | 6.0 | - | 5.1 | - | 1.0 | - | - | - | 5.0 | - |
Cost of sales | (501,255,744) | (483,604,499) | (230,068,601) | (190,387,412) | (133,271,578) | (126,244,373) | 4,584,531 | 1,497,629 | (860,011,392) | (798,738,655) |
% of Net sales | 45.2 | 46.2 | 47.5 | 41.4 | 64.5 | 61.7 | - | - | 48.2 | 47.0 |
Gross margin | 608,318,447 | 563,514,991 | 253,857,241 | 269,929,634 | 73,247,153 | 78,209,409 | (12,151,896) | (12,031,895) | 923,270,945 | 899,622,139 |
% of Net sales | 54.8 | 53.8 | 52.5 | 58.6 | 35.5 | 38.3 | - | - | 51.8 | 53.0 |
MSD&A (1) | (407,242,869) | (383,169,121) | (210,591,361) | (225,341,789) | (52,408,689) | (53,941,735) | (11,332,903) | (6,330,835) | (681,575,822) | (668,783,480) |
% of Net sales | 36.7 | 36.6 | 43.5 | 49.0 | 25.4 | 26.4 | - | - | 38.2 | 39.4 |
Other operating income (expenses) | 1,586,173 | 2,438,416 | 223,078,626 | 678,153 | 1,828,938 | 251,765 | 532,889 | 687,209 | 227,026,626 | 4,055,543 |
Adjusted operating result (2) | 202,661,751 | 182,784,286 | 266,344,506 | 45,265,998 | 22,667,402 | 24,519,439 | (22,951,910) | (17,675,521) | 468,721,749 | 234,894,202 |
Change % | 10.9 | - | 488.4 | - | (7.6) | - | - | - | 99.5 | - |
% of Net sales | 18.3 | 17.5 | 55.0 | 9.8 | 11.0 | 12.0 | - | - | 26.3 | 13.8 |
Net financial expense | - | - | - | - | - | - | - | - | (7,766,206) | (19,115,361) |
Equity and income of associates and joint ventures | - | - | - | - | - | - | - | - | (10,815,520) | (8,914,097) |
Foreign currency exchange differences | - | - | - | - | - | - | - | - | 3,299,657 | (2,563,019) |
Results as per adjustment units | - | - | - | - | - | - | - | - | 742,041 | (110,539) |
Other gains (losses) | - | - | - | - | - | - | - | - | 4,029,627 | (7,716,791) |
Income before taxes |
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| 458,211,348 | 196,474,395 |
Tax income (expense) | (136,126,817) | (48,365,976) | ||||||||
Net income for year |
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| 322,084,531 | 148,108,419 |
Non-controlling interests | 15,193,739 | 18,501,066 | ||||||||
Net income attributable to equity holders of the parent |
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| 306,890,792 | 129,607,353 |
Depreciation and amortization | 63,148,804 | 64,807,818 | 19,798,708 | 15,568,301 | 7,935,006 | 7,505,440 | 2,406,676 | 4,317,945 | 93,289,194 | 92,199,504 |
ORBDA (3) | 265,810,555 | 247,592,104 | 286,143,214 | 60,834,299 | 30,602,408 | 32,024,879 | (20,545,234) | (13,357,576) | 562,010,943 | 327,093,706 |
Change % | 7.4 | - | 370.4 | - | (4.4) | - | - | - | 71.8 | - |
% of Net sales | 24.0 | 23.6 | 59.1 | 13.2 | 14.8 | 15.7 | - | - | 31.5 | 19.3 |
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(1) | MSD&A included Marketing, Selling, Distribution and Administrative expenses. |
(2) | Adjusted operating result (for management purposes we have defined as Net income before other gains (losses), net financial expense, equity and income of joint venture, foreign currency exchange differences, result as per adjustment units and income taxes). |
(3) | ORBDA (for management purpose we have defined as Adjusted Operating Result before Depreciation and Amortization). |
(4) | The net impact, related to early termination of Budweiser license, on International Business Operating segment earnings was a one-time gain of ThCh$ 211,228,960 in ORBDA and a loss in Other for an amount of ThCh$ 2,386,517. |
(5) | The net impact, related to early termination of Budweiser license (SeeNote 1 – General information, letter C),on CCU’s consolidated earnings was a one-time gain of ThCh$ 208,842,4443 inORBDA and ThCh$ 157,358,973 in Net income attributable to equity holder of the parent. |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Sales information by geographic location
Net sales per geographical location | For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Chile (1) | 1,342,369,499 | 1,289,513,013 | 1,226,668,091 |
Argentina (2) | 390,443,569 | 421,607,095 | 413,466,737 |
Uruguay | 17,805,957 | 17,708,773 | 16,402,136 |
Paraguay | 47,148,643 | 43,565,171 | 41,823,830 |
Bolivia (3) | 24,773,029 | 10,888,285 | - |
Foreign countries | 480,171,198 | 493,769,324 | 471,692,703 |
Total | 1,822,540,697 | 1,783,282,337 | 1,698,360,794 |
(1) |
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(2) | Includes net sales made by the subsidiaries Finca La Celia S.A. and Los Huemules SRL., registered under the Wines Operating segment and Chile Operating segment, respectively. |
(3) | SeeNote 15 – Business combinations, letter a). |
As of December 31, 2015 | |||||||
Entity | Nature of risks covered | Rights | Obligations | Fair value of net asset (liabilities) | Maturity | ||
Currency | Amount | Currency | Amount | Amount | |||
ThCh$ | ThCh$ | ThCh$ | |||||
Scotiabank | Interest rate and exchange rate in bank obligations | USD | 5,700,299 | EUR | 5,589,172 | 111,127 | 06-18-2018 |
Banco de Chile | Interest rate and exchange rate on bank bonds | USD | 3,205,865 | EUR | 2,500,370 | 705,495 | 07-11-2016 |
Banco de Chile | Interest rate on bank bonds | USD | 7,227,245 | USD | 7,334,943 | (107,698) | 07-07-2016 |
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The Consolidated Statement of Other Comprehensive Income includes under the caption cash flow hedge, for the years ended December 31, 2016, a credit before income taxes of ThCh$ 84,962 (ThCh$ 80,693 and ThCh$ 155,258, in 2015 and 2014, respectively), relating to the fair value of the Cross Currency Interest Swap and Cross Interest Rate Swap derivatives instruments.
Fair value hierarchiesSales information by customer
| For the years ended as of December 31, | ||
Net Sales | 2019 | 2018 | 2017 |
| ThCh$ | ThCh$ | ThCh$ |
Domestic sales | 1,702,109,548 | 1,664,613,889 | 1,572,617,473 |
Exports sales | 120,431,149 | 118,668,448 | 125,743,321 |
Total | 1,822,540,697 | 1,783,282,337 | 1,698,360,794 |
The financial instruments recorded at fair value in the Statement
Sales information by product category
Sales information by product category | For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Alcoholic business | 1,206,288,857 | 1,206,506,503 | 1,158,451,078 |
Non-alcoholic business | 583,258,201 | 549,746,127 | 519,946,103 |
Others (1) | 32,993,639 | 27,029,707 | 19,963,613 |
Total | 1,822,540,697 | 1,783,282,337 | 1,698,360,794 |
(1)Others consist mainly of Financial Position are classified as follows, depending on the method used to obtain their fair values:
Level 1 Fair values obtained through direct reference to quoted market prices, without any adjustment.
Level 2 Fair values obtained through the usesales of valuation models accepted in the marketby-products and based on prices different from those of Level 1, which may be directly or indirectly observed as of the measurement date (adjusted prices).
Level 3 Fair values obtained through internally developed models or methodologies that use information which may not be observed or which is illiquid.
The fair value of financial instruments recorded at fair value in the Consolidated Financial Statements, are as follows:packaging including bottles, pallets, and glasses.
As of December 31, 2016 | Recorded fair value | Fair value hierarchy | ||
Level 1 | Level 2 | Level 3 | ||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Derivative financial instruments | 479,492 | - | 479,492 | - |
Market securities and investments in other companies | 7,821,546 | 7,821,546 | - | - |
Hedging derivatives | 309,237 | - | 309,237 | - |
Fair value financial assets | 8,610,275 | 7,821,546 | 788,729 | - |
Derivative financial instruments | 11,118,676 | - | 11,118,676 | - |
Fair value financial liabilities | 11,118,676 | - | 11,118,676 | - |
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Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Depreciation and amortization as per operating segments
As of December 31, 2015 | Recorded fair value | Fair value hierarchy | ||
Level 1 | Level 2 | Level 3 | ||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Derivative financial instruments | 9,365,572 | - | 9,365,572 | - |
Market securities and investments in other companies | 3,542,128 | 3,542,128 | - | - |
Hedging derivatives | 816,622 | - | 816,622 | - |
Fair value financial assets | 13,724,322 | 3,542,128 | 10,182,194 | - |
Hedging derivatives | 107,698 | - | 107,698 | - |
Derivative financial instruments | 171,470 | - | 171,470 | - |
Fair value financial liabilities | 279,168 | - | 279,168 | - |
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Depreciation and amortization | For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Chile operating segment | 66,301,914 | 63,148,804 | 64,807,818 |
International Business operating segment | 27,077,745 | 19,798,708 | 15,568,301 |
Wines operating segment | 9,826,148 | 7,935,006 | 7,505,440 |
Others (1) | 1,815,127 | 2,406,676 | 4,317,945 |
Total | 105,020,934 | 93,289,194 | 92,199,504 |
During year ended as ofDecember 31, 2016,(1)Includes depreciation and amortization corresponding to the Company has not made any significant instrument transfer between levels 1 and 2.Corporate Support Units.
Credit Quality of financial assetsCash flows Operating Segments
Cash flows Operating Segments |
| For the years ended as of December 31, | ||
| 2019 | 2018 | 2017 | |
| ThCh$ | ThCh$ | ThCh$ | |
Cash flows from operating activities |
| 242,320,045 | 429,313,131 | 262,161,431 |
Chile operating segment |
| 139,560,085 | 155,728,711 | 161,413,504 |
International business operating segment |
| 3,885,657 | 228,740,495 | 58,773,027 |
Wines operating segment |
| 37,196,293 | 14,340,011 | 16,167,068 |
Others |
| 61,678,010 | 30,503,914 | 25,807,832 |
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Cash flows from investing activities |
| (144,185,726) | (199,002,101) | (173,614,379) |
Chile operating segment |
| (125,009,624) | (115,670,330) | (78,746,298) |
International business operating segment |
| (38,558,437) | (35,475,310) | (32,312,751) |
Wines operating segment |
| (28,895,781) | (16,749,301) | (10,870,574) |
Others (1) (*) |
| 48,278,116 | (31,107,160) | (51,684,756) |
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Cash flows from financing activities |
| (199,420,161) | (52,963,862) | (53,001,198) |
Chile operating segment |
| (14,458,606) | (60,093,788) | (65,996,567) |
International business operating segment |
| 25,039,794 | (100,573,425) | (8,217,846) |
Wines operating segment |
| 439,231 | 3,741,241 | (15,171,642) |
Others (1) (*) |
| (210,440,580) | 103,962,110 | 36,384,857 |
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The Company uses two credit assessment systems for its clients: a) Clients with loan insurance are assessed according to the external risk criteria (trade reports, non-compliance and protested documents that are available in the local market), payment capability and equity situation required by the insurance company to grant a loan coverage; b) All other the clients are assessed through an ABC risk model, which considers internal risk (non-compliance and protested documents), external risk (trade reports, non-compliance and protested documents that are available in the local market) and payment capacity and equity situation. The uncollectible rate during the last two years has not been significant.
(1) | Others include Corporate Support Units, due to cash flows are managed by CCU. |
(*) | Itincludes contribution to joint ventures. SeeNote 8 - Cash and cash equivalents. |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Capital expenditures as per operating segments
Capital expenditures (property, plant and equipment and software additions) | For the years ended as of December 31, | |||
2019 | 2018 | 2017 | ||
ThCh$ | ThCh$ | ThCh$ | ||
Chile operating segment |
| 69,394,303 | 78,887,075 | 80,866,369 |
International Business operating segment |
| 38,524,717 | 32,756,828 | 32,312,751 |
Wines operating segment |
| 22,020,111 | 16,961,638 | 10,948,212 |
Others (1) |
| 10,548,718 | 2,834,881 | 1,638,148 |
Total |
| 140,487,849 | 131,440,422 | 125,765,480 |
(1)Others include the capital investments corresponding to the Corporate Support Units.
Assets as per operating segments
Assets as per Operating segment | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Chile operating segment | 1,255,267,920 | 1,183,145,732 |
International Business operating segment | 460,237,744 | 463,913,523 |
Wines operating segment | 380,892,311 | 341,959,321 |
Others (1) | 257,292,739 | 416,846,340 |
Total | 2,353,690,714 | 2,405,864,916 |
(1)Includes assets corresponding to the Corporate Support Units.
Assets per geographic location
Assets per geographical location | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Chile (1) | 1,862,882,784 | 1,924,196,897 |
Argentina (2) | 370,434,173 | 373,091,516 |
Uruguay | 26,403,153 | 26,925,415 |
Paraguay | 55,536,326 | 53,126,091 |
Bolivia (3) | 38,434,278 | 28,524,997 |
Total | 2,353,690,714 | 2,405,864,916 |
(1) |
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(2) | Includes the assets of the subsidiaries Finca La Celia S.A. and Los Huemules S.R.L., registered under the Wines Operating segment and Chile Operating segment, respectively. |
(3) | SeeNote 15 – Business combinations, letter a). |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Liabilities as per operating segments
Liabilities as per Operating segment | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Chile operating segment | 479,278,341 | 457,517,605 |
International Business operating segment | 170,050,938 | 172,893,966 |
Wines operating segment | 139,805,629 | 112,427,830 |
Others (1) | 121,628,583 | 273,909,572 |
Total | 910,763,491 | 1,016,748,973 |
(1)Others include liabilities corresponding to the Corporate Support Units.
Operating Segment’s additional information
The Consolidated Statement of Income classified according to the Company’s operations management is as follows:
CONSOLIDATED STATEMENT OF INCOME | Notes | For the years ended December 31, | ||
2019 | 2018 (*) | 2017 | ||
ThCh$ | ThCh$ | ThCh$ | ||
Sales revenue external customers |
| 1,789,547,058 | 1,756,252,630 | 1,678,397,181 |
Other income |
| 32,993,639 | 27,029,707 | 19,963,613 |
Net sales |
| 1,822,540,697 | 1,783,282,337 | 1,698,360,794 |
Change % |
| 2.2 | 5.0 | - |
Cost of sales |
| (908,318,190) | (860,011,392) | (798,738,655) |
% of Net sales |
| 49.8 | 48.2 | 47.0 |
Gross margin |
| 914,222,507 | 923,270,945 | 899,622,139 |
% of Net sales |
| 50.2 | 51.8 | 53.0 |
MSD&A (1) |
| (704,571,238) | (681,575,822) | (668,783,480) |
% of Net sales |
| 38.7 | 38.2 | 39.4 |
Other operating income (expenses) |
| 21,156,983 | 227,026,626 | 4,055,543 |
Adjusted operating result (2) |
| 230,808,252 | 468,721,749 | 234,894,202 |
Change % |
| (50.8) | 99.5 | - |
% of Net sales |
| 12.7 | 26.3 | 13.8 |
Net financial expense | 32 | (14,602,562) | (7,766,206) | (19,115,361) |
Equity and income of associates and joint ventures | 16 | (16,431,759) | (10,815,520) | (8,914,097) |
Foreign currency exchange differences | 32 | (9,054,155) | 3,299,657 | (2,563,019) |
Results as per adjustment units | 32 | (8,255,001) | 742,041 | (110,539) |
Other gains (losses) | 31 | 3,156,799 | 4,029,627 | (7,716,791) |
Income before taxes |
| 185,621,574 | 458,211,348 | 196,474,395 |
Tax income (expense) | 24 | (39,975,914) | (136,126,817) | (48,365,976) |
Net income for year |
| 145,645,660 | 322,084,531 | 148,108,419 |
Non-controlling interests | 28 | 15,503,968 | 15,193,739 | 18,501,066 |
Net income attributable to equity holders of the parent |
| 130,141,692 | 306,890,792 | 129,607,353 |
Depreciation and amortization | 29 | 105,020,934 | 93,289,194 | 92,199,504 |
ORBDA (3) |
| 335,829,186 | 562,010,943 | 327,093,706 |
Change % |
| (40.2) | 71.8 | - |
% of Net sales |
| 18.4 | 31.5 | 19.3 |
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(*) The net impact, related to early termination of Budweiser license (SeeNote 1 – General information, letter C), on CCU’s consolidated earnings was a one-time gain of ThCh$ 208,842,443 in ORBDA and ThCh$ 157,358,973 in Net income attributable to equity holder of the parent.
See definition of (1), (2) and (3) in information as per Operating segment under this Note.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The following is a reconciliation of our Net income, the main comparable IFRS measure to Adjusted Operating Result for the years ended December 31, 2019, 2018 and 2017:
| For the years ended December 31, | ||
2019 | 2018 (*) | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Net income of year | 145,645,660 | 322,084,531 | 148,108,419 |
Add (Subtract): |
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Other gains (losses) | (3,156,799) | (4,029,627) | 7,716,791 |
Finance income | (13,117,641) | (15,794,456) | (5,050,952) |
Finance costs | 27,720,203 | 23,560,662 | 24,166,313 |
Share of net loss of joint ventures and associates accounted for using the equity method | 16,431,759 | 10,815,520 | 8,914,097 |
Foreign currency exchange differences | 9,054,155 | (3,299,657) | 2,563,019 |
Result as per adjustment units | 8,255,001 | (742,041) | 110,539 |
Income tax expense | 39,975,914 | 136,126,817 | 48,365,976 |
Adjusted operating result | 230,808,252 | 468,721,749 | 234,894,202 |
Depreciation and amortization | 105,020,934 | 93,289,194 | 92,199,504 |
ORBDA | 335,829,186 | 562,010,943 | 327,093,706 |
(*) | The net impact, related to early termination of Budweiser license (SeeNote 1 – General information, letter C), on CCU’s consolidated earnings was a one-time gain of ThCh$ 208,842,443 in ORBDA and ThCh$ 157,358,973 in Net income attributable to equity holder of the parent. |
The following is a reconciliation of the consolidated amounts presented for MSD&A with the comparable amounts presented on the face of our consolidated statement of income:
| For the years ended December 31. | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Consolidated statement of income |
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Distribution costs | (327,543,973) | (314,391,183) | (290,227,129) |
Administrative expenses | (136,975,243) | (152,376,458) | (142,514,649) |
Other expenses by function | (241,479,749) | (216,236,609) | (238,704,061) |
Other expenses included in ´Other expenses by function´ | 1,427,727 | 1,428,428 | 2,662,359 |
Total MSD&A | (704,571,238) | (681,575,822) | (668,783,480) |
Segment information by joint ventures and associates
The Administration of the Company review the financial situation and result of the all of their joint ventures and associated that is described inNote 16 – Investments accounted for using equity method.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Financial instruments categories
The Company has defined three Operating segments, essentially defined with respect to its revenues in the geographic areascarrying amounts of commercial activity: 1. Chile, 2. International business and 3. Wine.each financial instrument category as of each year-end are detailed as follows:
From the fourth quarter of 2015 onwards, was created the Committee of International Business, which brings together management of the business activities regarding the geographical areas Argentina, Uruguay and Paraguay. Following this change, the Río de la Plata Operating segment (consisting of the business activities referred to) will be renamed into the International Business Operating Segment. The Committee of International Business will at the same time represent and look after the interests associated with the investments in Bolivia and Colombia, which will continue to report its results under Equity and income of JVs and associated on a consolidated basis.
Starting from the third quarter of 2016, the Company has incorporated in the Chile operating segment the business activities performed by the Strategic Service Units (SSU), which include Transportes CCU Limitada, Comercial CCU S.A., CRECCU S.A. and Fábrica de Envases Plásticos S.A. For the year ended December 31, 2015 and 2014, revenue and expenses of the Strategic Service Units were previously reported under Others. However, for comparability purposes, these revenues and expenses have been restated and are now allocated to Chile Operating segment.
These Operating segments mentioned are consistent with the way the Company is managed and how results are reported by CCU. These segments reflect separate operating results which are regularly reviewed by the chief operating decision maker in order to make decisions about the resources to be allocated to the segment and assess its performance.
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As of December 31, 2019 | As of December 31, 2018 | |||
| Current | Non-current | Current | Non-current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Derivative financial instruments | 3,412,197 | - | 11,522,482 | - |
Market securities and investments in other companies | 6,245,817 | - | 11,010,433 | - |
Derivative hedge assets | 157,344 | 4,670,538 | 212,554 | 3,325,079 |
Total other financial assets | 9,815,358 | 4,670,538 | 22,745,469 | 3,325,079 |
Accounts receivable - trade and other receivable (net) | 300,013,940 | 3,224,627 | 320,702,339 | 3,363,123 |
Accounts receivable from related parties | 3,278,685 | 118,122 | 3,048,841 | 190,865 |
Total accounts receivables | 303,292,625 | 3,342,749 | 323,751,180 | 3,553,988 |
Sub-Total financial assets | 313,107,983 | 8,013,287 | 346,496,649 | 6,879,067 |
Cash and cash equivalents | 196,369,224 | - | 319,014,050 | - |
Total financial assets | 509,477,207 | 8,013,287 | 665,510,699 | 6,879,067 |
Bank borrowings | 42,447,438 | 99,749,082 | 38,160,178 | 75,200,804 |
Bonds payable | 6,744,739 | 133,806,947 | 4,081,175 | 135,281,303 |
Lease Liabilities / Financial leases obligations | 4,857,097 | 28,213,259 | 365,972 | 17,546,162 |
Deposits for return of bottles and containers | 13,290,754 | - | 13,967,995 | - |
Total financial liabilities measured at amortized cost | 67,340,028 | 261,769,288 | 56,575,320 | 228,028,269 |
Derivative financial instruments | 240,394 | - | 4,997,124 | - |
Derivative hedge liabilities | 805,306 | - | 1,194,502 | 157,028 |
Total financial derivative liabilities | 1,045,700 | - | 6,191,626 | 157,028 |
Total other financial liabilities (*) | 68,385,728 | 261,769,288 | 62,766,946 | 228,185,297 |
Account payable- trade and other payable | 306,655,558 | 26,550 | 303,380,168 | 12,413 |
Accounts payable to related parties | 8,979,434 | - | 6,936,910 | - |
Total commercial obligations and other accounts payable | 315,634,992 | 26,550 | 310,317,078 | 12,413 |
Total financial liabilities | 384,020,720 | 261,795,838 | 373,084,024 | 228,197,710 |
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Corporate revenues and expenses are presented separately within the(*) SeeNote 21 - Other in addition in the other presents the elimination of transactions between segments.
The Company does not have any customers representing more than 10% of consolidated revenues.
The detail of the segments is presented in the following tables.financial liabilities.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Fair value of Financial instruments
The following tables show fair values, based on financial instrument categories, compared to the carrying amount included in the Consolidated Statements of Financial Position:
a) InformationFinancial assets and liabilities are detailed as per operating segments for the years ended December 31, 2016 and 2015:follows:
| Chile(4) | International Business | Wines | Others(4) | Total | |||||
| 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Sales revenue external customers | 973,220,715 | 885,769,609 | 366,778,056 | 400,051,022 | 195,322,270 | 184,169,165 | - | - | 1,535,321,041 | 1,469,989,796 |
Other income | 15,630,481 | 16,757,566 | 2,783,615 | 4,708,728 | 5,851,015 | 5,214,674 | (688,444) | 1,700,951 | 23,576,667 | 28,381,919 |
Sales revenue between segments | 8,524,493 | 6,932,905 | 546,972 | 953,967 | 228,767 | 131,209 | (9,300,232) | (8,018,081) | - | - |
Net sales | 997,375,689 | 909,460,080 | 370,108,643 | 405,713,717 | 201,402,052 | 189,515,048 | (9,988,676) | (6,317,130) | 1,558,897,708 | 1,498,371,715 |
Change % | 9.7 | - | (8.8) | - | 6.3 | - | - | - | 4.0 | - |
Cost of sales | (471,151,686) | (411,375,380) | (157,485,547) | (162,665,341) | (112,938,261) | (105,956,281) | (244,422) | (5,078,249) | (741,819,916) | (685,075,251) |
% of Net sales | 47.2 | 45.2 | 42.6 | 40.1 | 56.1 | 55.9 | - | - | 47.6 | 45.7 |
Gross margin | 526,224,003 | 498,084,700 | 212,623,096 | 243,048,376 | 88,463,791 | 83,558,767 | (10,233,098) | (11,395,379) | 817,077,792 | 813,296,464 |
% of Net sales | 52.8 | 54.8 | 57.4 | 59.9 | 43.9 | 44.1 | - | - | 52.4 | 54.3 |
MSD&A (1) | (373,407,847) | (343,380,553) | (191,413,501) | (216,098,525) | (52,007,092) | (51,070,291) | (2,714,311) | (2,015,407) | (619,542,751) | (612,564,776) |
% of Net sales | 37.4 | 37.8 | 51.7 | 53.3 | 25.8 | 26.9 | - | - | 39.7 | 40.9 |
Other operating income (expenses) | 1,734,871 | 626,889 | (394,820) | 3,315,892 | 732,689 | 44,823 | 1,043,939 | 217,706 | 3,116,679 | 4,205,310 |
Adjusted operating result (2) | 154,551,027 | 155,331,036 | 20,814,775 | 30,265,743 | 37,189,388 | 32,533,299 | (11,903,470) | (13,193,080) | 200,651,720 | 204,936,998 |
Change % | (0.5) | - | (31.2) | - | 14.3 | - | - | - | (2.1) | - |
% of Net sales | 15.5 | 17.1 | 5.6 | 7.5 | 18.5 | 17.2 | - | - | 12.9 | 13.7 |
Net financial expense | - | - | - | - | - | - | - | - | (14,627,170) | (15,255,586) |
Share of net loss of joint ventures and associates accounted for using | - | - | - | - | - | - | - | - | (5,560,522) | (5,228,135) |
Foreign currency exchange differences | - | - | - | - | - | - | - | - | 456,995 | 957,565 |
Results as per adjustment units | - | - | - | - | - | - | - | - | (2,246,846) | (3,282,736) |
Other gains (losses) | - | - | - | - | - | - | - | - | (8,345,907) | 8,512,000 |
Income before taxes | - | - | - | - | - | - | - | - | 170,328,270 | 190,640,106 |
Income taxes | - | - | - | - | - | - | - | - | (30,246,383) | (50,114,516) |
Net income for year | - | - | - | - | - | - | - | - | 140,081,887 | 140,525,590 |
Non-controlling interests | - | - | - | - | - | - | - | - | 21,624,399 | 19,717,455 |
Net income attributable to equity holders of the parent | - | - | - | - | - | - | - | - | 118,457,488 | 120,808,135 |
Depreciation and amortization | 61,736,849 | 56,698,871 | 11,928,705 | 14,334,415 | 7,078,872 | 7,568,991 | 2,783,619 | 2,964,525 | 83,528,045 | 81,566,802 |
ORBDA (3) | 216,287,876 | 212,029,907 | 32,743,480 | 44,600,158 | 44,268,260 | 40,102,290 | (9,119,851) | (10,228,555) | 284,179,765 | 286,503,800 |
Change % | 2.0 | - | (26.6) | - | 10.4 | - | - | - | (0.8) | - |
% of Net sales | 21.7 | 23.3 | 8.8 | 11.0 | 22.0 | 21.2 | - | - | 18.2 | 19.1 |
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| As of December 31, 2019 | As of December 31, 2018 | ||
| Book Value | Fair Value | Book Value | Fair Value |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Derivative financial instruments | 3,412,197 | 3,412,197 | 11,522,482 | 11,522,482 |
Market securities and investments in other companies | 6,245,817 | 6,245,817 | 11,010,433 | 11,010,433 |
Derivative hedge assets | 4,827,882 | 4,827,882 | 3,537,633 | 3,537,633 |
Total other financial assets | 14,485,896 | 14,485,896 | 26,070,548 | 26,070,548 |
Accounts receivable - trade and other receivable (net) | 303,238,567 | 303,238,567 | 324,065,462 | 324,065,462 |
Accounts receivable from related parties | 3,396,807 | 3,396,807 | 3,239,706 | 3,239,706 |
Total accounts receivables | 306,635,374 | 306,635,374 | 327,305,168 | 327,305,168 |
Sub-Total financial assets | 321,121,270 | 321,121,270 | 353,375,716 | 353,375,716 |
Cash and cash equivalents | 196,369,224 | 196,369,224 | 319,014,050 | 319,014,050 |
Total financial assets | 517,490,494 | 517,490,494 | 672,389,766 | 672,389,766 |
Bank borrowings | 142,196,520 | 146,544,455 | 113,360,982 | 117,211,707 |
Bonds payable | 140,551,686 | 189,670,078 | 139,362,478 | 187,276,391 |
Lease Liabilities / Financial leases obligations | 33,070,356 | 41,851,389 | 17,912,134 | 24,278,897 |
Deposits for return of bottles and containers | 13,290,754 | 13,290,754 | 13,967,995 | 13,967,995 |
Total financial liabilities measured at amortized cost | 329,109,316 | 391,356,676 | 284,603,589 | 342,734,990 |
Derivative financial instruments | 240,394 | 240,394 | 4,997,124 | 4,997,124 |
Derivative hedge liabilities | 805,306 | 805,306 | 1,351,530 | 1,351,530 |
Total financial derivative liabilities | 1,045,700 | 1,045,700 | 6,348,654 | 6,348,654 |
Total other financial liabilities (*) | 330,155,016 | 392,402,376 | 290,952,243 | 349,083,644 |
Account payable- trade and other payable | 306,682,108 | 306,682,108 | 303,392,581 | 303,392,581 |
Accounts payable to related parties | 8,979,434 | 8,979,434 | 6,936,910 | 6,936,910 |
Total commercial obligations and other accounts payable | 315,661,542 | 315,661,542 | 310,329,491 | 310,329,491 |
Total financial liabilities | 645,816,558 | 708,063,918 | 601,281,734 | 659,413,135 |
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(1)(*) SeeMSD&A, included Marketing, Selling, Distribution and Administrative expenses.
(2)Adjusted operating result (for management purposes we have defined as Net income before other gains (losses), netNote 21 - Other financial expense, equity and income of joint venture, foreign currency exchange differences, result as per adjustment units and income taxes).liabilities
(3)ORBDA (for management purpose we have defined as Adjusted Operating Result before Depreciation and Amortization).
(4)Starting from the third quarter of 2016, the Company has incorporated in the Chile operating segment the business activities performed by the Strategic Service Units (SSU), which include Transportes CCU Limitada, Comercial CCU S.A., CRECCU S.A. and Fábrica de Envases Plásticos S.A. As of December 2015, the revenue and expenses of the Strategic Service Units were previously reported under Others. However for comparability purposes these revenues and expenses have been restated and are now reported under to Chile operating segment (see reconciliation in letter c) under this Note).
The carrying amount of current accounts receivable, cash and cash equivalents and other financial assets and liabilities approximate their fair value due to their short-term nature, and in the case of accounts receivable, due to the fact that any collection loss is already reflected in the impairment loss provision.
The fair value of non-derivative financial assets and liabilities that are not quoted in active markets are estimated through the use of discounted cash flows calculated on market variables observed as of the date of the financial statements. The fair value of derivative instruments is estimated through the discount of future cash flows, determined according to information observed in the market or to variables and prices obtained from third parties.
The fair value of bank borrowings and Bonds payable has hierarchy level 2 of fair value.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
b) Information as per operating segments for the years endedDecember 31, 2015 and 2014:Financial instruments by category:
| Chile (5) | International Business | Wines | Others (5) | Total | |||||
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Sales revenue external customers | 885,769,609 | 813,639,952 | 400,051,022 | 292,152,707 | 184,169,165 | 168,139,809 | - | - | 1,469,989,796 | 1,273,932,468 |
Other income | 16,757,566 | 15,562,980 | 4,708,728 | 3,992,902 | 5,214,674 | 3,918,028 | 1,700,951 | 559,921 | 28,381,919 | 24,033,831 |
Sales revenue between segments | 6,932,905 | 6,227,110 | 953,967 | 3,522,074 | 131,209 | 290,716 | (8,018,081) | (10,039,900) | - | - |
Net sales | 909,460,080 | 835,430,042 | 405,713,717 | 299,667,683 | 189,515,048 | 172,348,553 | (6,317,130) | (9,479,979) | 1,498,371,715 | 1,297,966,299 |
Change % | 8.9 | - | 35.4 | - | 10.0 | - | - | - | 15.4 | - |
Cost of sales | (411,375,380) | (374,336,312) | (162,665,341) | (136,174,602) | (105,956,281) | (97,523,600) | (5,078,249) | 3,497,698 | (685,075,251) | (604,536,816) |
% of Net sales | 45.2 | 44.8 | 40.1 | 45.4 | 55.9 | 56.6 | - | - | 45.7 | 46.6 |
Gross margin | 498,084,700 | 461,093,730 | 243,048,376 | 163,493,081 | 83,558,767 | 74,824,953 | (11,395,379) | (5,982,281) | 813,296,464 | 693,429,484 |
% of Net sales | 54.8 | 55.2 | 59.9 | 54.6 | 44.1 | 43.4 | - | - | 54.3 | 53.4 |
MSD&A (1) | (343,380,553) | (328,766,178) | (216,098,525) | (154,299,739) | (51,070,291) | (50,284,131) | (2,015,407) | (2,252,954) | (612,564,776) | (535,603,002) |
% of Net sales | 37.8 | 39.4 | 53.3 | 51.5 | 26.9 | 29.2 | - | - | 40.9 | 41.3 |
Other operating income (expenses) | 626,889 | 850,122 | 3,315,892 | 20,173,967 | 44,823 | 238,952 | 217,706 | 2,458,269 | 4,205,310 | 23,721,310 |
Adjusted operating result before Exceptional Items (EI) | 155,331,036 | 133,177,674 | 30,265,743 | 29,367,309 | 32,533,299 | 24,779,774 | (13,193,080) | (5,776,966) | 204,936,998 | 181,547,792 |
Change % | 16.6 | - | 3.1 | - | 31.3 | - | - | - | 12.9 | - |
% of Net sales | 17.1 | 15.9 | 7.5 | 9.8 | 17.2 | 14.4 | - | - | 13.7 | 14.0 |
Exceptional Items (EI) (2) | - | (301,550) | - | (1,214,505) | - | - | - | (111,445) | - | (1,627,500) |
Adjusted operating result (3) | 155,331,036 | 132,876,124 | 30,265,743 | 28,152,804 | 32,533,299 | 24,779,774 | (13,193,080) | (5,888,411) | 204,936,998 | 179,920,292 |
Change % | 16.9 | - | 7.5 | - | 31.3 | - | - | - | 13.9 | - |
% of Net sales | 17.1 | 15.9 | 7.5 | 9.4 | 17.2 | 14.4 | - | - | 13.7 | 14 |
Net financial expense | - | - | - | - | - | - | - | - | (15,255,586) | (10,820,891) |
Share of net loss of joint ventures and associates accounted for using | - | - | - | - | - | - | - | - | (5,228,135) | (898,607) |
Foreign currency exchange differences | - | - | - | - | - | - | - | - | 957,565 | (613,181) |
Results as per adjustment units | - | - | - | - | - | - | - | - | (3,282,736) | (4,159,131) |
Other gains (losses) | - | - | - | - | - | - | - | - | 8,512,000 | 4,036,939 |
Income before taxes | - | - | - | - | - | - | - | - | 190,640,106 | 167,465,421 |
Income taxes | - | - | - | - | - | - | - | - | (50,114,516) | (46,673,500) |
Net income for year | - | - | - | - | - | - | - | - | 140,525,590 | 120,791,921 |
Non-controlling interests | - | - | - | - | - | - | - | - | 19,717,455 | 14,553,471 |
Net income attributable to equity holders of the parent | - | - | - | - | - | - | - | - | 120,808,135 | 106,238,450 |
Depreciation and amortization | 56,698,871 | 48,459,588 | 14,334,415 | 11,194,117 | 7,568,991 | 7,115,790 | 2,964,525 | 1,838,071 | 81,566,802 | 68,607,566 |
ORBDA before EI | 212,029,907 | 181,637,262 | 44,600,158 | 40,561,426 | 40,102,290 | 31,895,564 | (10,228,555) | (3,938,895) | 286,503,800 | 250,155,358 |
ORBDA (4) | 212,029,907 | 181,335,712 | 44,600,158 | 39,346,921 | 40,102,290 | 31,895,564 | (10,228,555) | (4,050,340) | 286,503,800 | 248,527,858 |
Change % | 16.9 | - | 13.4 | - | 25.7 | - | - | - | 15.3 | - |
% of Net sales | 23.3 | 21.7 | 11.0 | 13.1 | 21.2 | 18.5 | - | - | 19.1 | 19.1 |
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As of December 31, 2019 | Fair value with changes in income | Financial assets measured at amortized cost | Hedge derivatives | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Financial assets |
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Derivative financial instruments | 3,412,197 | - | - | 3,412,197 |
Marketable securities and investments in other companies | 6,245,817 | - | - | 6,245,817 |
Derivative hedge assets | - | - | 4,827,882 | 4,827,882 |
Total other financial assets | 9,658,014 | - | 4,827,882 | 14,485,896 |
Cash and cash equivalents | - | 196,369,224 | - | 196,369,224 |
Trade and other receivable (net) | - | 303,238,567 | - | 303,238,567 |
Accounts receivable from related parties | - | 3,396,807 | - | 3,396,807 |
Total financial assets | 9,658,014 | 503,004,598 | 4,827,882 | 517,490,494 |
As of December 31, 2019 | Fair value with changes in income | Hedge derivatives | Financial liabilities measured at amortized cost | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Financial liabilities |
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Bank borrowings | - | - | 142,196,520 | 142,196,520 |
Bonds payable | - | - | 140,551,686 | 140,551,686 |
Leases liabilities | - | - | 33,070,356 | 33,070,356 |
Deposits for return of bottles and containers | - | - | 13,290,754 | 13,290,754 |
Derivative financial instruments | 240,394 | - | - | 240,394 |
Derivative hedge liabilities | - | 805,306 | - | 805,306 |
Total Other financial liabilities | 240,394 | 805,306 | 329,109,316 | 330,155,016 |
Account payable- trade and other payable | - | - | 306,682,108 | 306,682,108 |
Accounts payable to related parties | - | - | 8,979,434 | 8,979,434 |
Total financial liabilities | 240,394 | 805,306 | 644,770,858 | 645,816,558 |
(1)MSD&A, included Marketing, Selling, Distribution and Administrative expenses.
(2)Exceptional Items are income or expenses that do not occur regularly as part of the normal activities of the Company. It’s presented separately because its important items for the understanding the normal operations of the Company due to importance or nature.During the year 2014, the Company has considered this result as an Exceptional Items related to different restructuring process of operating segments.
(3)Adjusted operating result (for management purposes we have defined as Net income before other gains (losses), net financial expense, equity and income of joint venture, foreign currency exchange differences, result as per adjustment units and income taxes).
(4)ORBDA (for management purpose we have defined as Adjusted Operating Result before Depreciation and Amortization).
(5)Starting from the third quarter of 2016, the Company has incorporated in the Chile operating segment the business activities performed by the Strategic Service Units (SSU), which include Transportes CCU Limitada, Comercial CCU S.A., CRECCU S.A. and Fábrica de Envases Plásticos S.A. As of December 2015, the revenue and expenses of the Strategic Service Units were previously reported under Others. However for comparability purposes these revenues and expenses have been restated and are now reported under to Chile operating segment (see reconciliation in letter c) under this Note).
As of December 31, 2018 | Fair value with changes in income | Financial assets measured at amortized cost | Hedge derivatives | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Financial assets |
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Derivative financial instruments | 11,522,482 | - | - | 11,522,482 |
Marketable securities and investments in other companies | 11,010,433 | - | - | 11,010,433 |
Derivative hedge assets | - | - | 3,537,633 | 3,537,633 |
Total other financial assets | 22,532,915 | - | 3,537,633 | 26,070,548 |
Cash and cash equivalents | - | 319,014,050 | - | 319,014,050 |
Trade and other receivable (net) | - | 324,065,462 | - | 324,065,462 |
Accounts receivable from related parties | - | 3,239,706 | - | 3,239,706 |
Total financial assets | 22,532,915 | 646,319,218 | 3,537,633 | 672,389,766 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
As of December 31, 2018 | Fair value with changes in income | Hedge derivatives | Financial liabilities measured at amortized cost | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Financial liabilities |
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Bank borrowings | - | - | 113,360,982 | 113,360,982 |
Bonds payable | - | - | 139,362,478 | 139,362,478 |
Financial leases obligations | - | - | 17,912,134 | 17,912,134 |
Deposits for return of bottles and containers | - | - | 13,967,995 | 13,967,995 |
Derivative financial instruments | 4,997,124 | - | - | 4,997,124 |
Derivative hedge liabilities | - | 1,351,530 | - | 1,351,530 |
Total Other financial liabilities | 4,997,124 | 1,351,530 | 284,603,589 | 290,952,243 |
Account payable- trade and other payable | - | - | 303,392,581 | 303,392,581 |
Accounts payable to related parties | - | - | 6,936,910 | 6,936,910 |
Total financial liabilities | 4,997,124 | 1,351,530 | 594,933,080 | 601,281,734 |
c)Derivative InstrumentsFor the year ended December 31, 2015 and 2014, revenue and expenses of the Strategic Service Units were previously reported under Others. However, for comparability purposes, these revenues and expenses have been restated and are now allocated to Chile Operating segment explained in the following tables:
ForThe detail of maturities, number of derivative agreements, contracted nominal amounts, fair values and the classification of such derivative instruments by type of agreement at the closing of each year endedare detailed as of December 31, 2015:follows:
| Chile | Others | ||||
| 2015 | 2015 | ||||
| Previously reported | Adjusted | Tight | Previously reported | Adjusted | Tight |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Sales revenue external customers | 885,769,609 | - | 885,769,609 | - | - | - |
Other income | 10,238,408 | 6,519,158 | 16,757,566 | 8,220,109 | (6,519,158) | 1,700,951 |
Sales revenue between segments | 6,013,177 | 919,728 | 6,932,905 | (7,098,353) | (919,728) | (8,018,081) |
Net sales | 902,021,194 | 7,438,886 | 909,460,080 | 1,121,756 | (7,438,886) | (6,317,130) |
Cost of sales | (420,297,983) | 8,922,603 | (411,375,380) | 3,844,354 | (8,922,603) | (5,078,249) |
% of Net sales | 46.6 | - | 45.2 | - | - | - |
Gross margin | 481,723,211 | 16,361,489 | 498,084,700 | 4,966,110 | (16,361,489) | (11,395,379) |
% of Net sales | 53.4 | - | 54.8 | - | - | - |
MSD&A (1) | (328,488,527) | (14,892,026) | (343,380,553) | (16,907,433) | 14,892,026 | (2,015,407) |
% of Net sales | 36.4 | - | 37.8 | - | - | - |
Other operating income (expenses) | 688,920 | (62,031) | 626,889 | 155,675 | 62,031 | 217,706 |
Adjusted operating result (2) | 153,923,604 | 1,407,432 | 155,331,036 | (11,785,648) | (1,407,432) | (13,193,080) |
% of Net sales | 17.1 | - | 17.1 | - | - | - |
Net financial expense | - | - | - | - | - | - |
Share of net loss of joint ventures and associates accounted for using | - | - | - | - | - | - |
Foreign currency exchange differences | - | - | - | - | - | - |
Results as per adjustment units | - | - | - | - | - | - |
Other gains (losses) | - | - | - | - | - | - |
Income before taxes | - | - | - | - | - | - |
Net income for year | - | - | - | - | - | - |
Net income attributable to equity holders of the parent | - | - | - | - | - | - |
Depreciation and amortization | 45,766,393 | 10,932,478 | 56,698,871 | 13,897,003 | (10,932,478) | 2,964,525 |
ORBDA (3) | 199,689,997 | 12,339,910 | 212,029,907 | 2,111,355 | (12,339,910) | (10,228,555) |
% of Net sales | 22.1 | - | 23.3 | - | - | - |
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| As of December 31, 2019 | As of December 31, 2018 | ||||||
Number of agreements | Nominal amounts thousand | Asset | Liability | Number of agreements | Nominal amounts thousand | Asset | Liability | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||
Cross currency interest rate swaps CLP/USD | 1 | 2,000 | 4,571,984 | 805,306 | 1 | 2,000 | 3,325,079 | 1,194,502 |
Less than a year | - | - | - | 805,306 | 1 | - | - | 1,194,502 |
Between 1 and 5 years | 1 | 2,000 | 4,571,984 | - | - | 2,000 | 3,325,079 | - |
Cross currency interest rate swaps USD/EURO | 1 | 11,600 | 255,898 | - | 1 | 11,600 | 212,554 | 157,028 |
Less than a year | - | - | 157,344 | - | 1 | - | 212,554 | - |
Between 1 and 5 years | 1 | 11,600 | 98,554 | - | - | 11,600 | - | 157,028 |
Total | 2 |
| 4,827,882 | 805,306 | 2 |
| 3,537,633 | 1,351,530 |
Forwards USD | 14 | 72,593 | 2,989,286 | 160,803 | 32 | 269,371 | 11,264,711 | 3,832,634 |
Less than a year | 14 | 72,593 | 2,989,286 | 160,803 | 32 | 269,371 | 11,264,711 | 3,832,634 |
Forwards Euro | 5 | 26,393 | 412,065 | 79,591 | 10 | 79,326 | 225,815 | 1,153,302 |
Less than a year | 5 | 26,393 | 412,065 | 79,591 | 10 | 79,326 | 225,815 | 1,153,302 |
Forwards CAD | 1 | 800 | 10,846 | - | 3 | 2,650 | 28,381 | 3,986 |
Less than a year | 1 | 800 | 10,846 | - | 3 | 2,650 | 28,381 | 3,986 |
Forwards GBP | - | - | - | - | 4 | 1,030 | 3,575 | 7,202 |
Less than a year | - | - | - | - | 4 | 1,030 | 3,575 | 7,202 |
Total | 20 |
| 3,412,197 | 240,394 | 49 |
| 11,522,482 | 4,997,124 |
Total instruments | 22 |
| 8,240,079 | 1,045,700 | 51 |
| 15,060,115 | 6,348,654 |
See definition of (1), (2) and (3) in information as per Operating segment letter a).
These derivative agreements have been entered into as a hedge of exchange rate risk exposure. In the case of forwards, the Company does not comply with the formal requirements for hedging designation; consequently their effects are recorded in Income, in Other gains (losses).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
In the case of Cross Currency Interest Rate Swaps and the Cross Interest Rate Swaps, these qualify as cash flow hedges of the cash flows related to loans from Banco de Chile and Scotiabank Chile. See additional disclosures inNote 21 – Other financial liabilities.
As of December 31, 2019 | |||||||
Entity | Nature of risks covered | Rights | Obligations | Fair value of net asset (liabilities) | Maturity | ||
Currency | Amount | Currency | Amount | Amount | |||
ThCh$ | ThCh$ | ThCh$ | |||||
Scotiabank Chile | Flow interest rate and exchange rate on bank bonds | USD | 8,820,379 | EUR | 8,564,481 | 255,898 | 06-18-2021 |
Banco de Chile | Flow interest rate on bank bonds | UF | 59,233,320 | CLP | 55,466,642 | 3,766,678 | 09-15-2021 |
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Entity | Nature of risks covered | Rights | Obligations | Fair value of net asset (liabilities) | Maturity | ||
Currency | Amount | Currency | Amount | Amount | |||
ThCh$ | ThCh$ | ThCh$ | |||||
Scotiabank Chile | Flow interest rate and exchange rate on bank bonds | USD | 8,256,869 | EUR | 8,201,343 | 55,526 | 06-18-2021 |
Banco de Chile | Flow interest rate on bank bonds | UF | 60,388,039 | CLP | 58,257,462 | 2,130,577 | 09-15-2021 |
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The Consolidated Statement of Other Comprehensive Income includes under the caption cash flow hedge, for the years ended December 31, 2019, a credit before income taxes of ThCh$ 345,986 (ThCh$ 63,008 and ThCh$ 5,661, in 2018 and 2017, respectively), related to the fair value of Cross Currency Interest Swap and Cross Interest Rate Swap derivatives instruments.
The financial instruments recorded at fair value in the Statement of Financial Position are classified as follows, depending on the method used to obtain their fair values:
Level 1 | Fair values obtained through direct reference to quoted market prices, without any adjustment. |
Level 2 |
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Level 3 | Fair values obtained through internally developed models or methodologies that use information which may not be observed or which is illiquid. |
For the year ended as of December 31, 2014:
| Chile | Others | ||||
| 2014 | 2014 | ||||
| Previously reported | Adjusted | Tight | Previously reported | Adjusted | Tight |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Sales revenue external customers | 813,639,952 | - | 813,639,952 | - | - | - |
Other income | 9,100,957 | 6,462,023 | 15,562,980 | 7,021,944 | (6,462,023) | 559,921 |
Sales revenue between segments | 7,600,483 | (1,373,373) | 6,227,110 | (11,413,273) | 1,373,373 | (10,039,900) |
Net sales | 830,341,392 | 5,088,650 | 835,430,042 | (4,391,329) | (5,088,650) | (9,479,979) |
Cost of sales | (383,558,625) | 9,222,313 | (374,336,312) | 12,720,013 | (9,222,315) | 3,497,698 |
% of Net sales | 46.2 | - | 44.8 | - | - | - |
Gross margin | 446,782,767 | 14,310,963 | 461,093,730 | 8,328,684 | (14,310,965) | (5,982,281) |
% of Net sales | 53.8 | - | 55.2 | - | - | - |
MSD&A (1) | (317,765,236) | (11,000,942) | (328,766,178) | (13,253,897) | 11,000,943 | (2,252,954) |
% of Net sales | 38.3 | 1 | 39.4 | - | - | - |
Other operating income (expenses) | 722,478 | 127,644 | 850,122 | 2,585,913 | (127,644) | 2,458,269 |
Adjusted operating result before Exceptional Items (EI) | 25,561,470 | (2,954,119) | 22,607,351 | (3,624,700) | 2,954,118 | (670,582) |
Change % | - | - | - | - | - | - |
% of Net sales | 0.04 | - 0.56 | 0.04 | - 334.38 | - 0.56 | - |
Exceptional Items (EI) (2) | - | (301,550) | (301,550) | (412,995) | 301,550 | (111,445) |
Adjusted operating result (3) | 129,740,009 | 3,437,665 | 133,177,674 | (2,339,300) | (3,437,666) | (5,776,966) |
% of Net sales | 15.6 | - | 15.9 | - | - | - |
Net financial expense | - | - | - | - | - | - |
Share of net loss of joint ventures and associates accounted for using | - | - | - | - | - | - |
Foreign currency exchange differences | - | - | - | - | - | - |
Results as per adjustment units | - | - | - | - | - | - |
Other gains (losses) | - | - | - | - | - | - |
Income before taxes | - | - | - | - | - | - |
Income taxes | - | - | - | - | - | - |
Net income for year | - | - | - | - | - | - |
Non-controlling interests | - | - | - | - | - | - |
Net income attributable to equity holders of the parent | - | - | - | - | - | - |
Depreciation and amortization | 38,832,969 | 9,626,619 | 48,459,588 | 11,464,690 | (9,626,619) | 1,838,071 |
ORBDA before EI | 37,317,380 | (533,386) | 36,783,994 | (713,134) | 533,385 | (179,749) |
Change % | - | - | - | - | - | - |
% of Net sales | 0.06 | - 0.10 | 0.06 | - 65.79 | - 0.10 | - |
ORBDA (4) | 168,572,978 | 12,762,734 | 181,335,712 | 8,712,395 | (12,762,735) | (4,050,340) |
% of Net sales | 20.3 | - | 21.7 | - | - | - |
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See definition of (1), (2), (3) and (4) in information as per Operating segment letter b).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The fair value of financial instruments recorded at fair value in the Consolidated Financial Statements, is detailed as follows:
As of December 31, 2019 | Recorded fair value | Fair value hierarchy | ||
level 1 | level 2 | level 3 | ||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Derivative financial instruments | 3,412,197 | - | 3,412,197 | - |
Market securities and investments in other companies | 6,245,817 | 6,245,817 | - | - |
Derivative hedge assets | 4,827,882 | - | 4,827,882 | - |
Total other financial assets | 14,485,896 | 6,245,817 | 8,240,079 | - |
Derivative financial instruments | 240,394 | - | 240,394 | - |
Derivative hedge liabilities | 805,306 | - | 805,306 | - |
Total financial derivative liabilities | 1,045,700 | - | 1,045,700 | - |
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As of December 31, 2018 | Recorded fair value | Fair value hierarchy | ||
level 1 | level 2 | level 3 | ||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Derivative financial instruments | 11,522,482 | - | 11,522,482 | - |
Market securities and investments in other companies | 11,010,433 | 11,010,433 | - | - |
Derivative hedge assets | 3,537,633 | - | 3,537,633 | - |
Total other financial assets | 26,070,548 | 11,010,433 | 15,060,115 | - |
Derivative financial instruments | 4,997,124 | - | 4,997,124 | - |
Derivative hedge liabilities | 1,351,530 | - | 1,351,530 | - |
Total financial derivative liabilities | 6,348,654 | - | 6,348,654 | - |
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During the year ended as ofDecember 31, 2019, the Company has not made any significant instrument transfers between levels 1 and 2.
Sales information by geographic locationCredit quality of financial assets
Net sales per geographical location | For the years ended as of December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Chile (1) | 1,176,972,109 | 1,081,835,420 | 991,938,043 |
Argentina (2) | 329,585,488 | 366,886,701 | 264,631,403 |
Uruguay | 15,204,331 | 14,432,950 | 11,204,806 |
Paraguay | 37,135,780 | 35,216,644 | 30,192,047 |
Total | 1,558,897,708 | 1,498,371,715 | 1,297,966,299 |
(1)Includes net sales correspondThe Company uses two credit assessment systems for its clients: a) Clients with loan insurance are assessed according to Corporate Support Unitthe external risk criteria (trade reports, non-compliance and eliminations between geographical locations. Additionally, includes net sales madeprotested documents that are available in Chile of the Wines Operating segment.
(2)Includes net sales madelocal market), payment capability and equity situation required by the subisiaries Finca La Celia S.A.insurance company to grant a loan coverage; b) All other the clients are assessed through an ABC risk model, which considers internal risk (non-compliance and Los Huemules SRL.protested documents), registered underexternal risk (trade reports, non-compliance and protested documents that are available in the Wines Operating segmentlocal market) and Chile Operating segment, respectively.
Sales information by customer
| For the years ended as of December 31, | ||
Net Sales | 2016 | 2015 | 2014 |
| ThCh$ | ThCh$ | ThCh$ |
Domestic sales | 1,429,152,068 | 1,374,282,584 | 1,188,231,333 |
Exports sales | 129,745,640 | 124,089,131 | 109,734,966 |
Total | 1,558,897,708 | 1,498,371,715 | 1,297,966,299 |
Sales information by product category
| For the years ended as of December 31, | ||
Sales information by product category | 2016 | 2015 | 2014 |
| ThCh$ | ThCh$ | ThCh$ |
Alcoholic business | 1,041,923,724 | 1,040,145,164 | 880,580,817 |
Non-alcoholic business | 493,397,317 | 429,844,632 | 393,351,650 |
Others (1) | 23,576,667 | 28,381,919 | 24,033,832 |
Total | 1,558,897,708 | 1,498,371,715 | 1,297,966,299 |
(1)Others consist mainly of sales of by-productspayment capacity and packaging including bottles, pallets, and glasses.
Depreciation and amortization as per operating segments
Property, plant and equipment depreciation and amortization of software | For the years ended as of December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Chile Operating segment | 61,736,849 | 56,698,871 | 38,832,969 |
International business Operating segment | 11,928,705 | 14,334,415 | 11,194,117 |
Wines Operating segment | 7,078,873 | 7,568,991 | 7,115,790 |
Others (1) | 2,783,619 | 2,964,525 | 11,464,690 |
Total | 83,528,046 | 81,566,802 | 68,607,566 |
(1)Includes depreciation and amortization corresponding toequity situation. The uncollectible rate during the Corporate Support Units.last two years has not been significant.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Cash flows Operating Segments
Cash flows Operating Segments |
| For the years ended as of December 31, | ||
| 2016 | 2015 | 2014 | |
| ThCh$ | ThCh$ | ThCh$ | |
Cash flows from (used in ) Operating activities |
| 190,014,348 | 219,510,872 | 173,621,663 |
Chile Operating segment |
| 152,862,350 | 49,531,088 | 27,943,224 |
International BusinessOperating segment |
| 13,065,093 | 31,975,494 | 10,070,867 |
Wines Operating segment |
| 32,949,789 | 30,926,463 | 31,523,287 |
Others (1) |
| (8,862,884) | 107,077,827 | 104,084,285 |
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Cash flows from (used in ) Investing Activities |
| (155,007,390) | (165,810,169) | (238,970,139) |
Chile Operating segment |
| (57,119,431) | (59,046,239) | (55,303,491) |
International Business Operating segment |
| (40,032,866) | (26,457,885) | (31,118,042) |
Wines Operating segment |
| (13,499,538) | (9,807,177) | (10,279,735) |
Others (1) |
| (44,355,555) | (70,498,868) | (142,268,871) |
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Cash flows from (used in ) Financing Activities |
| (95,303,138) | (82,839,491) | (132,155,575) |
Chile Operating segment |
| (90,636,820) | 21,923,989 | 17,907,244 |
International Business Operating segment |
| 18,577,556 | 3,431,139 | 23,525,276 |
Wines Operating segment |
| (18,841,106) | (19,061,949) | (10,447,305) |
Others (1) |
| (4,402,768) | (89,132,670) | (163,140,790) |
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(1)Others includes Corporate Support Units, due to cahs flows are managed by CCU.
Capital expenditures as per operating segments
Capital expenditures (property, plant and equipment and software additions) |
| For the years ended as of December 31, | ||
| 2016 | 2015 | 2014 | |
| ThCh$ | ThCh$ | ThCh$ | |
Chile Operating segment |
| 53,809,780 | 43,771,262 | 53,895,523 |
International business Operating segment |
| 39,592,739 | 27,871,662 | 33,481,407 |
Wines Operating segment |
| 14,767,858 | 10,052,863 | 12,686,080 |
Others (1) |
| 20,713,048 | 50,035,135 | 130,017,142 |
Total |
| 128,883,425 | 131,730,922 | 230,080,152 |
(1)Others includes the capital investments corresponding to the Corporate Support Units.
AssetsCash and cash equivalent balances are detailed as per operating segmentsfollows:
Assets as per Operating segments | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Chile Operating segment | 1,125,266,274 | 1,056,161,363 |
International business Operating segment | 259,002,220 | 256,319,478 |
Wines Operating segment | 316,965,318 | 308,288,465 |
Others (1) | 170,343,238 | 204,678,125 |
Total | 1,871,577,050 | 1,825,447,431 |
| As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 |
| ThCh$ | ThCh$ | ThCh$ |
Cash on hand | 242,308 | 221,071 | 97,228 |
Bank balances | 71,393,732 | 64,085,358 | 45,389,589 |
Cash | 71,636,040 | 64,306,429 | 45,486,817 |
Time deposits | 4,356,420 | 46,723,278 | 4,804,224 |
Securities purchased under resale agreements | 101,077,015 | 196,319,058 | 102,695,758 |
Investments in mutual funds | 5,888,424 | 10,194,222 | 16,586,749 |
Short term investments classified as cash equivalents | 106,965,439 | 206,513,280 | 119,282,507 |
Cash equivalents | 111,321,859 | 253,236,558 | 124,086,731 |
Overnight deposits | 13,411,325 | 1,471,063 | 471,054 |
Total other cash and cash equivalents | 13,411,325 | 1,471,063 | 471,054 |
Total | 196,369,224 | 319,014,050 | 170,044,602 |
(1)Includes assets corresponding to the Corporate Support Units.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Assets per geographic location
The composition of cash and cash equivalents by currency as ofDecember 31, 2019, is detailed as follows:
Assets per geographical location | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Chile (1) | 1,600,077,453 | 1,557,641,691 |
Argentina (2) | 197,986,123 | 188,897,724 |
Uruguay | 27,327,545 | 25,703,157 |
Paraguay | 46,185,929 | 53,204,859 |
Total | 1,871,577,050 | 1,825,447,431 |
(1)Includes the assets corresponding to the Corporate Support Units and eliminations between geographic location. Additionally, includes part of Wines Operating segment and excludes its argentine subsidiary Finca La Celia S.A.
(2)Includes the assets of the subisiaries Finca La Celia S.A. and Los Huemules SRL., registered under the Wines Operating segment and Chile Operating segment, respectively.
Liabilites as per operating segments
Liabilities as per Operating segments | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Chile Operating segment | 242,132,457 | 218,651,536 |
International business Operating segment | 100,994,174 | 97,680,139 |
Wines Operating segment | 104,147,109 | 102,780,420 |
Others (1) | 224,010,731 | 218,813,191 |
Total | 671,284,471 | 637,925,286 |
| Chilean Peso | US Dollar | Euro | Argentine Peso | Uruguayan Peso | Paraguayan Guarani | Bolivian | Others | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Cash on hand | 92,440 | 3,964 | - | 6,727 | - | - | 139,177 | - | 242,308 |
Bank balances | 48,583,607 | 10,176,489 | 2,592,865 | 1,577,902 | 1,384,395 | 2,763,191 | 3,184,376 | 1,130,907 | 71,393,732 |
Cash | 48,676,047 | 10,180,453 | 2,592,865 | 1,584,629 | 1,384,395 | 2,763,191 | 3,323,553 | 1,130,907 | 71,636,040 |
Time deposits | 2,450,392 | 1,906,028 | - | - | - | - | - | - | 4,356,420 |
Securities purchased under resale agreements | 101,077,015 | - | - | - | - | - | - | - | 101,077,015 |
Investments in mutual funds | - | - | - | 5,888,424 | - | - | - | - | 5,888,424 |
Short term investments classified as cash equivalents | 101,077,015 | - | - | 5,888,424 | - | - | - | - | 106,965,439 |
Cash equivalents | 103,527,407 | 1,906,028 | - | 5,888,424 | - | - | - | - | 111,321,859 |
Overnight deposits | - | 13,411,325 | - | - | - | - | - | - | 13,411,325 |
Total other cash and cash equivalents | - | 13,411,325 | - | - | - | - | - | - | 13,411,325 |
Total | 152,203,454 | 25,497,806 | 2,592,865 | 7,473,053 | 1,384,395 | 2,763,191 | 3,323,553 | 1,130,907 | 196,369,224 |
(1)Others includes liabilites corresponding to the Corporate Support Units.The composition of cash and cash equivalents by currency as ofDecember 31, 2018, is detailed as follows:
| Chilean Peso | US Dollar | Euro | Argentine Peso | Uruguayan Peso | Paraguayan Guarani | Bolivian | Others | Total |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Cash on hand | 77,940 | 5,290 | - | 5,477 | - | - | 132,364 | - | 221,071 |
Bank balances | 39,692,222 | 17,550,277 | 954,640 | 1,039,825 | 548,975 | 2,495,748 | 1,127,401 | 676,270 | 64,085,358 |
Cash | 39,770,162 | 17,555,567 | 954,640 | 1,045,302 | 548,975 | 2,495,748 | 1,259,765 | 676,270 | 64,306,429 |
Time deposits | 24,755,756 | - | - | 21,967,522 | - | - | - | - | 46,723,278 |
Securities purchased under resale agreements | 196,319,058 | - | - | - | - | - | - | - | 196,319,058 |
Investments in mutual funds | - | - | - | 10,194,222 | - | - | - | - | 10,194,222 |
Short term investments classified as cash equivalents | 196,319,058 | - | - | 10,194,222 | - | - | - | - | 206,513,280 |
Cash equivalents | 221,074,814 | - | - | 32,161,744 | - | - | - | - | 253,236,558 |
Overnight deposits | - | 1,471,063 | - | - | - | - | - | - | 1,471,063 |
Total other cash and cash equivalents | - | 1,471,063 | - | - | - | - | - | - | 1,471,063 |
Total | 260,844,976 | 19,026,630 | 954,640 | 33,207,046 | 548,975 | 2,495,748 | 1,259,765 | 676,270 | 319,014,050 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Operating Segment’s additional information
The Consolidated Statementcomposition of Income classified according to the Company’s operations managementcash and cash equivalents by currency as ofDecember 31, 2017, is detailed as follows:
CONSOLIDATED STATEMENT OF INCOME | Notes | For the years ended December 31, | ||
2016 | 2015 | 2014 | ||
ThCh$ | ThCh$ | ThCh$ | ||
Sales revenue external customers |
| 1,535,321,041 | 1,469,989,796 | 1,273,932,468 |
Other income |
| 23,576,667 | 28,381,919 | 24,033,831 |
Net sales |
| 1,558,897,708 | 1,498,371,715 | 1,297,966,299 |
Change % |
| 4.0 | 15.4 | - |
Cost of sales |
| (741,819,916) | (685,075,251) | (604,536,815) |
% of Net sales |
| 47.6 | 45.7 | 46.6 |
Gross margin |
| 817,077,792 | 813,296,464 | 693,429,484 |
% of Net sales |
| 52.4 | 54.3 | 53.4 |
MSD&A (1) |
| (619,542,751) | (612,564,776) | (535,603,002) |
% of Net sales |
| 39.7 | 40.9 | 41.3 |
Other operating income (expenses) |
| 3,116,679 | 4,205,310 | 23,721,310 |
Change % |
| (2.1) | 12.9 | - |
Exceptional Items (EI) (2) |
| - | - | (1,627,500) |
Adjusted operating result (3) |
| 200,651,720 | 204,936,998 | 179,920,292 |
Change % |
| (2.1) | 13.9 | - |
% of Net sales |
| 12.9 | 13.7 | 13.9 |
Net financial expense | 10 | (14,627,170) | (15,255,586) | (10,820,890) |
Share of net loss of joint ventures and associates accounted for using | 19 | (5,560,522) | (5,228,135) | (898,607) |
Foreign currency exchange differences | 10 | 456,995 | 957,565 | (613,180) |
Results as per adjustment units | 10 | (2,246,846) | (3,282,736) | (4,159,131) |
Other gains (losses) | 12 | (8,345,907) | 8,512,000 | 4,036,939 |
Income before taxes |
| 170,328,270 | 190,640,106 | 167,465,421 |
Income taxes | 25 | (30,246,383) | (50,114,516) | (46,673,500) |
Net income for year |
| 140,081,887 | 140,525,590 | 120,791,921 |
Non-controlling interests | 31 | 21,624,399 | 19,717,455 | 14,553,471 |
Net income attributable to equity holders of the parent |
| 118,457,488 | 120,808,135 | 106,238,450 |
Depreciation and amortization |
| 83,528,045 | 81,566,802 | 68,607,566 |
Change % |
| (0.8) | 14.5 | - |
ORBDA (4) |
| 284,179,765 | 286,503,800 | 248,527,858 |
Change % |
| (0.8) | 15.3 | - |
% of Net sales |
| 18.2 | 19.1 | 19.1 |
|
|
|
|
|
| Chilean Peso | US Dollar | Euro | Argentine Peso | Uruguayan Peso | Paraguayan Guarani | Bolivian | Others | Total |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Cash on hand | 75,623 | 16,154 | - | 5,451 | - | - | - | - | 97,228 |
Bank balances | 30,110,816 | 4,691,411 | 182,966 | 1,391,103 | 718,348 | 7,758,211 | - | 536,734 | 45,389,589 |
Cash | 30,186,439 | 4,707,565 | 182,966 | 1,396,554 | 718,348 | 7,758,211 | - | 536,734 | 45,486,817 |
Time deposits | 4,804,224 | - | - | - | - | - | - | - | 4,804,224 |
Securities purchased under resale agreements | 102,695,758 | - | - | - | - | - | - | - | 102,695,758 |
Investments in mutual funds | - | - | - | 16,586,749 | - | - | - | - | 16,586,749 |
Short term investments classified as cash equivalents | 102,695,758 | - | - | 16,586,749 | - | - | - | - | 119,282,507 |
Cash equivalents | 107,499,982 | - | - | 16,586,749 | - | - | - | - | 124,086,731 |
Overnight deposits | - | 471,054 | - | - | - | - | - | - | 471,054 |
Total other cash and cash equivalents | - | 471,054 | - | - | - | - | - | - | 471,054 |
Total | 137,686,421 | 5,178,619 | 182,966 | 17,983,303 | 718,348 | 7,758,211 | - | 536,734 | 170,044,602 |
See definition of (1), (2), (3) and (4) in information as per Operating segment letter b).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The composition of time deposits is detailed as follows:
The following is a reconciliationAs of our Net income, the main comparable IFRS measure to Adjusted Operating Result for the years ended December 31, 2016, 2015 and 2014:2019:
| For the years ended December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Net income of year | 140,081,887 | 140,525,590 | 120,791,921 |
Add (Subtract): |
|
|
|
Other gains (losses) | 8,345,907 | (8,512,000) | (4,036,939) |
Financial Income | (5,680,068) | (7,845,743) | (12,136,591) |
Financial costs | 20,307,238 | 23,101,329 | 22,957,482 |
Share of net loss of joint ventures and associates accounted for using the equity method | 5,560,522 | 5,228,135 | 898,607 |
Foreign currency exchange differences | (456,995) | (957,565) | 613,181 |
Result as per adjustment units | 2,246,846 | 3,282,736 | 4,159,131 |
Income taxes | 30,246,383 | 50,114,516 | 46,673,500 |
Adjusted Operating result | 200,651,720 | 204,936,998 | 179,920,292 |
Financial entity | Date of placement | Due date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | |||||
Banco de Chile | 12-27-2019 | 01-03-2020 | CLP | 2,450,392 | 0.12 |
Banco de Chile | 12-27-2019 | 01-09-2020 | USD | 1,108,307 | 0.12 |
Banco de Chile | 12-20-2019 | 01-10-2020 | USD | 486,897 | 0.12 |
Banco de Chile | 12-23-2019 | 01-06-2020 | USD | 310,824 | 0.12 |
Total |
|
|
| 4,356,420 |
|
Exceptional Item (EI) | - | - | 1,627,500 |
AdjustedOperating result before(EI) | 200,651,720 | 204,936,998 | 181,547,792 |
Depreciation and amortization | 83,528,045 | 81,566,802 | 68,607,566 |
ORBDA before (EI) | 284,179,765 | 286,503,800 | 250,155,358 |
Exceptional Item (EI) | - | - | (1,627,500) |
ORBDA | 284,179,765 | 286,503,800 | 248,527,858 |
As of December 31, 2018:
Financial entity | Date of placement | Due date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | |||||
Banco de Chile | 12-21-2018 | 01-30-2019 | USD | 486,812 | 0.29 |
Banco de Chile | 12-24-2018 | 01-09-2019 | CLP | 1,250,613 | 0.21 |
Banco de Chile | 12-26-2018 | 01-25-2019 | USD | 139,017 | 0.27 |
Banco de Chile | 12-27-2018 | 01-25-2019 | USD | 62,548 | 0.23 |
Banco Francés - Argentina | 12-07-2018 | 03-07-2019 | ARS | 5,921,330 | 0.53 |
Banco Francés - Argentina | 12-12-2018 | 03-12-2019 | ARS | 5,110,766 | 0.50 |
Banco HSBC - Argentina | 12-12-2018 | 03-12-2019 | ARS | 4,921,479 | 0.50 |
Banco Itaú - Argentina | 11-07-2018 | 01-07-2019 | ARS | 6,013,947 | 0.58 |
Banco Santander - Chile | 12-18-2018 | 01-10-2019 | CLP | 2,803,033 | 0.25 |
Banco Santander - Chile | 12-19-2018 | 01-10-2019 | CLP | 10,010,400 | 0.26 |
Banco Santander - Chile | 12-27-2018 | 01-24-2019 | CLP | 10,003,333 | 0.25 |
Total |
|
|
| 46,723,278 |
|
As of December 31, 2017:
Financial entity | Date of placement | Due date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | |||||
Banco Consorcio - Chile | 12-20-2017 | 01-03-2018 | CLP | 4,804,224 | 0.24 |
Total |
|
|
| 4,804,224 |
|
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The following is a reconciliation of the consolidated amounts presented for MSD&A with the comparable amounts presented on the face of our consolidated statement of income:
| For the years ended December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Consolidated statement of income |
|
|
|
Distribution costs | (270.835.822) | (277.599.722) | (240.848.630) |
Administrative expenses | (155.322.295) | (128.135.799) | (110.014.716) |
Other expenses by function | (195.412.109) | (209.201.189) | (188.109.562) |
Other expenses included in ´Other expenses by function´ | 2.027.475 | 2.371.934 | 3.369.906 |
Total MSD&A | (619.542.751) | (612.564.776) | (535.603.002) |
Segment information by joint ventures and associates
The Administration of the Company review the financial situation and operations result of the all of their joint ventures and associated that is described inNote 19.
a) Bebidas del Paraguay S.A.
Year 2016 Acquisitions
On March 31, 2016, the susbsidiary Bebidas del Paraguay S.A. acquired 51%The composition of the stock rights of Artisan SRL (Paraguayan company). The purpose of this companySecurities purchased under resale agreements is the production and marketing of Sajonia brand beer. The amount of this transaction was ThCh$ 641,489 (equivalents to US$ 1,000,000). At the date of issuance of these consolidated financial statements the Company is in the process of assessing the fair values of acquisitions above mentioned, estimating preliminarily that the effects will not be significant, so it was recorded under Other non-financial assets (seeNote 18).
It is expected that the acquisition of this company allows to transform the brand into a reference in the segment of craft beer, increases their productive capacities and distribution network, forming part of the portfolio brands of BdP. Acoording with the above mentioned, BdP begins to participate in the elaboration of beer, with its own brand and with great growth prospects.
b) Other acquisitions
On December 2015 and June 2016, The Company participates, thorough subsidiary Embotelladoras Chilenas Unidas S.A., in joint operations Bebidas Carozzi CCU SpA. and Promarca Internacional SpA., determining fair valuesdetailed as explained inNote 1, letter a)and d), respectively.follows:
As of December 31, 2016, the Company has not made other business combinations.2019:
Financial entity | Underlying Asset (Time Deposit) (*) | Date of placement | Due date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | ||||||
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones - Chile | 12-30-2019 | 01-02-2020 | CLP | 1,124,056 | 0.22 |
BanChile Corredores de Bolsa S.A. | Banco Central de Chile | 12-30-2019 | 01-02-2020 | CLP | 6,176,480 | 0.22 |
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones - Chile | 12-27-2019 | 01-02-2020 | CLP | 2,776,880 | 0.18 |
BanChile Corredores de Bolsa S.A. | Banco Itaú Corpbanca - Chile | 12-27-2019 | 01-02-2020 | CLP | 489,632 | 0.18 |
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones - Chile | 12-30-2019 | 01-09-2020 | CLP | 100,005 | 0.16 |
BanChile Corredores de Bolsa S.A. | Banco Bice - Chile | 12-27-2019 | 01-02-2020 | CLP | 734,448 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-26-2019 | 01-03-2020 | CLP | 4,001,333 | 0.20 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander - Chile | 12-26-2019 | 01-03-2020 | CLP | 9,403,133 | 0.20 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-27-2019 | 01-03-2020 | CLP | 12,003,360 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-27-2019 | 01-03-2020 | CLP | 5,001,400 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú Corpbanca - Chile | 12-27-2019 | 01-03-2020 | CLP | 4,001,120 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Sudamericano - Chile | 12-27-2019 | 01-02-2020 | CLP | 1,192,040 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Banco Security - Chile | 12-27-2019 | 01-02-2020 | CLP | 658,478 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-30-2019 | 01-09-2020 | CLP | 200,012 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Sudamericano - Chile | 12-27-2019 | 01-09-2020 | CLP | 1,200,336 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-30-2019 | 01-24-2020 | CLP | 331,012 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Banco Consorcio - Chile | 12-30-2019 | 01-24-2020 | CLP | 369,030 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-26-2019 | 01-03-2020 | CLP | 6,002,000 | 0.20 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-30-2019 | 01-09-2020 | CLP | 300,018 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Banco Security - Chile | 12-23-2019 | 01-06-2020 | CLP | 300,168 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Banco Consorcio - Chile | 12-23-2019 | 01-06-2020 | CLP | 300,168 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-23-2019 | 01-06-2020 | CLP | 1,200,672 | 0.21 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Sudamericano - Chile | 12-30-2019 | 01-16-2020 | CLP | 3,864,985 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander - Chile | 12-30-2019 | 01-16-2020 | CLP | 5,959,517 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Banco Security - Chile | 12-30-2019 | 01-16-2020 | CLP | 1,000,060 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Banco Consorcio - Chile | 12-30-2019 | 01-16-2020 | CLP | 376,110 | 0.18 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-26-2019 | 01-03-2020 | CLP | 500,167 | 0.20 |
Scotia Corredora de Bolsa Chile S.A. | Scotiabank Sudamericano - Chile | 12-27-2019 | 01-06-2020 | CLP | 8,363,007 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Banco Itaú Corpbanca - Chile | 12-27-2019 | 01-06-2020 | CLP | 639,513 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Banco de Chile | 12-26-2019 | 01-03-2020 | CLP | 1,500,525 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Banco de Chile | 12-26-2019 | 01-03-2020 | CLP | 1,211,714 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Banco Bice - Chile | 12-26-2019 | 01-03-2020 | CLP | 2,289,511 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Banco de Chile | 12-26-2019 | 01-03-2020 | CLP | 814,100 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Scotiabank Sudamericano - Chile | 12-26-2019 | 01-03-2020 | CLP | 2,926,683 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Banco Santander - Chile | 12-26-2019 | 01-03-2020 | CLP | 5,705,073 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Banco Itaú Corpbanca - Chile | 12-26-2019 | 01-03-2020 | CLP | 5,109,314 | 0.21 |
Scotia Corredora de Bolsa Chile S.A. | Banco Security - Chile | 12-26-2019 | 01-03-2020 | CLP | 2,950,955 | 0.21 |
Total |
|
|
|
| 101,077,015 |
|
(*) All financial instruments acquired under resale agreements, correspond to time deposits and are subject to a fixed interest rate.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
As of December 31, 2018:
Financial entity | Underlying Asset (Time Deposit) (*) | Date of placement | Due date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | ||||||
BanChile Corredores de Bolsa S.A. | Banco del Estado de Chile | 12-17-2018 | 01-04-2019 | CLP | 6,807,616 | 0.24 |
BanChile Corredores de Bolsa S.A. | Scotiabank Chile | 12-20-2018 | 01-10-2019 | CLP | 3,552,994 | 0.23 |
BanChile Corredores de Bolsa S.A. | Scotiabank Chile | 12-21-2018 | 01-10-2019 | CLP | 1,196,505 | 0.23 |
BanChile Corredores de Bolsa S.A. | Banco BICE - Chile | 12-21-2018 | 01-10-2019 | CLP | 1,997,067 | 0.23 |
BanChile Corredores de Bolsa S.A. | Banco Security - Chile | 12-21-2018 | 01-10-2019 | CLP | 709,418 | 0.23 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-21-2018 | 01-10-2019 | CLP | 296,155 | 0.23 |
BanChile Corredores de Bolsa S.A. | Banco Security - Chile | 12-21-2018 | 01-10-2019 | CLP | 184,213 | 0.23 |
BanChile Corredores de Bolsa S.A. | Scotiabank Chile | 12-21-2018 | 01-16-2019 | CLP | 283,475 | 0.23 |
BanChile Corredores de Bolsa S.A. | Banco Security - Chile | 12-21-2018 | 01-16-2019 | CLP | 91,813 | 0.23 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-26-2018 | 01-15-2019 | CLP | 10,004,000 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones - Chile | 12-26-2018 | 01-10-2019 | CLP | 300,885 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco del Estado de Chile | 12-26-2018 | 01-10-2019 | CLP | 1,100,440 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco del Estado de Chile | 12-26-2018 | 01-10-2019 | CLP | 490,196 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-26-2018 | 01-10-2019 | CLP | 5,001,235 | 0.24 |
BanChile Corredores de Bolsa S.A. | Scotiabank Chile | 12-28-2018 | 01-15-2019 | CLP | 3,500,840 | 0.24 |
BanChile Corredores de Bolsa S.A. | Scotiabank Chile | 12-28-2018 | 01-15-2019 | CLP | 1,500,360 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-13-2018 | 01-14-2019 | CLP | 4,105,904 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-14-2018 | 01-02-2019 | CLP | 1,094,729 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-14-2018 | 01-02-2019 | CLP | 7,009,520 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-14-2018 | 01-02-2019 | CLP | 1,911,598 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander - Chile | 12-14-2018 | 01-02-2019 | CLP | 415,536 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco Security - Chile | 12-14-2018 | 01-02-2019 | CLP | 5,690,513 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander - Chile | 12-14-2018 | 01-30-2019 | CLP | 250,340 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco Security - Chile | 12-20-2018 | 01-30-2019 | CLP | 500,440 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Chile | 12-24-2018 | 01-10-2019 | CLP | 199,653 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-24-2018 | 01-10-2019 | CLP | 950,991 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-26-2018 | 01-30-2019 | CLP | 2,634,725 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-26-2018 | 01-30-2019 | CLP | 6,702,680 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Chile | 12-26-2018 | 01-30-2019 | CLP | 4,829,042 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-26-2018 | 01-30-2019 | CLP | 8,848,606 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander - Chile | 12-26-2018 | 01-30-2019 | CLP | 6,560,550 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú Corpbanca - Chile | 12-26-2018 | 01-30-2019 | CLP | 1,650,525 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco Security - Chile | 12-26-2018 | 01-30-2019 | CLP | 4,881,954 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco Consorcio | 12-26-2018 | 01-30-2019 | CLP | 3,427,727 | 0.24 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-27-2018 | 01-15-2019 | CLP | 3,279,009 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-27-2018 | 01-15-2019 | CLP | 472,241 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-27-2018 | 01-10-2019 | CLP | 600,200 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-27-2018 | 01-15-2019 | CLP | 3,001,000 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco del Estado de Chile | 11-30-2018 | 01-04-2019 | CLP | 3,899,730 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco Itaú Corpbanca - Chile | 11-30-2018 | 01-04-2019 | CLP | 2,216,658 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco del Estado de Chile | 12-13-2018 | 01-02-2019 | CLP | 2,859,342 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco del Estado de Chile | 12-13-2018 | 01-30-2019 | CLP | 270,405 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco de Crédito e Inversiones - Chile | 12-13-2018 | 01-16-2019 | CLP | 233,620 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco Security - Chile | 12-13-2018 | 01-16-2019 | CLP | 1,969,680 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco de Chile | 12-13-2018 | 01-02-2019 | CLP | 3,550,258 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco Santander - Chile | 12-17-2018 | 01-02-2019 | CLP | 2,876,187 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco Itaú Corpbanca - Chile | 12-17-2018 | 01-02-2019 | CLP | 7,880,787 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Scotiabank Chile | 12-17-2018 | 01-16-2019 | CLP | 1,474,627 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco de Crédito e Inversiones - Chile | 12-17-2018 | 01-16-2019 | CLP | 1,550,072 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco Itaú Corpbanca - Chile | 12-17-2018 | 01-16-2019 | CLP | 1,230,260 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco de Crédito e Inversiones - Chile | 12-17-2018 | 01-02-2019 | CLP | 4,911,284 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Banco de Chile | 12-19-2018 | 01-10-2019 | CLP | 6,881,358 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco del Estado de Chile | 12-19-2018 | 01-10-2019 | CLP | 7,941,664 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Scotiabank Chile | 12-19-2018 | 01-10-2019 | CLP | 3,822,988 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco Santander - Chile | 12-19-2018 | 01-10-2019 | CLP | 4,451,265 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco Itaú Corpbanca - Chile | 12-19-2018 | 01-10-2019 | CLP | 1,963,352 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco Itaú Corpbanca - Chile | 12-19-2018 | 01-10-2019 | CLP | 185,620 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco Security - Chile | 12-19-2018 | 01-10-2019 | CLP | 1,967,453 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco Security - Chile | 12-19-2018 | 01-10-2019 | CLP | 895,503 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco de Crédito e Inversiones - Chile | 12-24-2018 | 01-10-2019 | CLP | 4,802,350 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco Santander - Chile | 12-24-2018 | 01-10-2019 | CLP | 2,602,140 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco de Crédito e Inversiones - Chile | 12-24-2018 | 01-10-2019 | CLP | 2,501,517 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco de Chile | 12-24-2018 | 01-09-2019 | CLP | 900,546 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco de Crédito e Inversiones - Chile | 12-27-2018 | 01-30-2019 | CLP | 1,190,413 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco de Crédito e Inversiones - Chile | 12-27-2018 | 01-10-2019 | CLP | 3,801,316 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Scotiabank Chile | 12-27-2018 | 01-15-2019 | CLP | 9,453,276 | 0.26 |
BBVA Corredores de Bolsa Ltda. | Banco Itaú Corpbanca - Chile | 12-27-2018 | 01-09-2019 | CLP | 2,000,692 | 0.26 |
Total |
|
|
|
| 196,319,058 |
|
(*) All financial instruments acquired under resale agreements, correspond to time deposits and are subject to a fixed interest rate.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
As of December 31, 2017:
Financial entity | Underlying Asset (Time Deposit) (*) | Date of placement | Due date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | ||||||
BanChile Corredores de Bolsa S.A. | Scotiabank Chile | 12-12-2017 | 01-05-2018 | CLP | 369,413 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco del Estado de Chile | 12-14-2017 | 01-05-2018 | CLP | 144,116 | 0.24 |
BanChile Corredores de Bolsa S.A. | Scotiabank Chile | 12-14-2017 | 01-05-2018 | CLP | 6,006,912 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones - Chile | 12-14-2017 | 01-05-2018 | CLP | 196,591 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco Itaú Corpbanca - Chile | 12-14-2017 | 01-05-2018 | CLP | 970,704 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco Security - Chile | 12-14-2017 | 01-05-2018 | CLP | 3,796,772 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-22-2017 | 01-05-2018 | CLP | 3,672,751 | 0.25 |
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones - Chile | 12-26-2017 | 01-05-2018 | CLP | 2,910,394 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco Itaú Corpbanca - Chile | 12-26-2017 | 01-05-2018 | CLP | 1,591,406 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco Security - Chile | 12-12-2017 | 01-05-2018 | CLP | 2,935,603 | 0.24 |
BanChile Corredores de Bolsa S.A. | Banco del Estado de Chile | 12-22-2017 | 01-05-2018 | CLP | 2,631,974 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-28-2017 | 01-04-2018 | CLP | 80,020 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-22-2017 | 01-03-2018 | CLP | 5,003,750 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-28-2017 | 01-05-2018 | CLP | 2,750,688 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-28-2017 | 01-05-2018 | CLP | 3,000,750 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Chile | 12-28-2017 | 01-05-2018 | CLP | 5,001,250 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-28-2017 | 01-05-2018 | CLP | 4,001,000 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco Security - Chile | 12-28-2017 | 01-05-2018 | CLP | 1,000,250 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Azul - Chile | 12-28-2017 | 01-05-2018 | CLP | 1,000,250 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-28-2017 | 01-10-2018 | CLP | 4,251,063 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Chile | 12-29-2017 | 01-10-2018 | CLP | 3,238,217 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú Corpbanca - Chile | 12-29-2017 | 01-10-2018 | CLP | 2,000,333 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco Security - Chile | 12-29-2017 | 01-10-2018 | CLP | 1,938,656 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-28-2017 | 01-30-2018 | CLP | 1,250,313 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Chile | 12-29-2017 | 01-10-2018 | CLP | 340,057 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Chile | 12-22-2017 | 01-10-2018 | CLP | 2,628,752 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander - Chile | 12-22-2017 | 01-10-2018 | CLP | 1,974,698 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-28-2017 | 01-15-2018 | CLP | 3,800,950 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-28-2017 | 01-04-2018 | CLP | 950,238 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander - Chile | 12-22-2017 | 01-10-2018 | CLP | 1,000,750 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco Internacional - Chile | 12-28-2017 | 01-10-2018 | CLP | 944,884 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco BICE - Chile | 12-28-2017 | 01-10-2018 | CLP | 2,000,500 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander - Chile | 12-28-2017 | 01-10-2018 | CLP | 8,475,346 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-28-2017 | 01-04-2018 | CLP | 225,056 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco del Estado de Chile | 12-28-2017 | 01-30-2018 | CLP | 8,102,025 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones - Chile | 12-29-2017 | 01-10-2018 | CLP | 2,524,410 | 0.25 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú Corpbanca - Chile | 12-28-2017 | 01-10-2018 | CLP | 3,833,082 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Scotiabank Azul - Chile | 12-27-2017 | 01-08-2018 | CLP | 1,700,567 | 0.25 |
BBVA Corredores de Bolsa Ltda. | Scotiabank Azul - Chile | 12-18-2017 | 01-18-2018 | CLP | 290,289 | 0.23 |
BBVA Corredores de Bolsa Ltda. | Scotiabank Chile | 12-28-2017 | 01-30-2018 | CLP | 1,455,543 | 0.23 |
BBVA Corredores de Bolsa Ltda. | Scotiabank Azul - Chile | 12-28-2017 | 01-30-2018 | CLP | 2,425,349 | 0.23 |
Valores Security S.A. Corredores de Bolsa | Banco Security - Chile | 12-27-2017 | 01-10-2018 | CLP | 280,086 | 0.23 |
Total |
|
|
|
| 102,695,758 |
|
(*) All financial instruments acquired under resale agreements, correspond to time deposits and are subject to a fixed interest rate.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Payments for business acquisitions are detailed as follows:
|
| For the years ended as of December 31, | ||
| 2019 | 2018 | 2017 | |
| ThCh$ | ThCh$ | ThCh$ | |
Total disbursement per business acquisition |
|
|
|
|
Other cash payment to acquire interests in joint ventures (1) | 13,549,638 | 59,505,559 | 49,312,890 | |
Cash flow used for control of subsidiaries or other business (2) | - | 49,222,782 | 7,800,000 | |
Cash flow used in the purchase of non-controlling interests (3) | - | - | 1,149,689 | |
Payment for changes in ownership interests in subsidiaries (4) | 8,652,268 | 5,819,495 | - | |
Total |
| 22,201,906 | 114,547,836 | 58,262,579 |
(1) |
|
(2) | In 2018, the Company, through its subsidiary, CCU Inversiones S.A. correspond to the acquisition of 15.79% of VSPT (seeNote 1 – General information, letter D)). In 2017, corresponds to the acquisition of 2.5% of interest in VSPT, through its subsidiary CCU Inversiones S.A. (seeNote 1 – General information, letter D)). |
(3) | Corresponds to the payment for the acquisition of the 40% of Americas Distilling Investment LLC. |
(4) | SeeNote 15 – Business combinations.For year 2019 letters c) and d)and for year 2018 letters a) and b). |
The Company maintained the following other non-financial assets:
| As of December 31, 2019 | As of December 31, 2018 | ||
| Current | Non-current | Current | Non-current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Insurances paid | 3,709,267 | 1,701 | 3,565,768 | - |
Advertising | 8,940,821 | 5,372,024 | 7,976,638 | 3,173,523 |
Advances to suppliers | 7,548,987 | - | 4,695,341 | - |
Prepaid expenses | 1,068,339 | 1,510,785 | 1,685,096 | 1,705,693 |
Total advances | 21,267,414 | 6,884,510 | 17,922,843 | 4,879,216 |
Guarantees paid | 30,592 | 139,742 | 62,316 | 106,571 |
Consumables | 481,494 | - | 393,234 | - |
Dividends receivable | 614,591 | - | 423,994 | - |
Other | 1,500 | 18,045 | 59,027 | 21,363 |
Total other assets | 1,128,177 | 157,787 | 938,571 | 127,934 |
Total | 22,395,591 | 7,042,297 | 18,861,414 | 5,007,150 |
Nature of costeach non-financial asset:
a)Insurances paid: Annual payments for insurances policies are included, which are capitalized and expensethen amortized according the term of the contract.
b)Advertising: Corresponds to advertising and promotion contracts related to customers and advertising service providers, that promote our brands which are capitalized and then amortized according the term of the contract.
c)Advances to suppliers: Payments made to suppliers mainly for assets constructions and purchases of property, plants and equipments.
d)Prepaid expenses: Services paid in advance that give entitlement to benefits usually for a period of 12 months, they are reflected against result as they are accrued.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
e)Guarantees paid: It is the initial payment for the lease of goods required by the lessor to ensure compliance with the conditions stipulated in the contract.
f)Materials to be consumed: Under this item are mainly included security supplies, clothing or supplies to be used in administrative offices, such as: eyeglasses, gloves, masks, aprons, etc.
g)Dividends receivable: Dividends receivable from associates and joint ventures.
Operational costThe trade and expense grouped by natural classificationother receivables are detailed as follows:
| For the years ended as of December 31, | ||
Costs and expenses by nature | 2016 | 2015 | 2014 |
| ThCh$ | ThCh$ | ThCh$ |
Raw material cost | 540,692,964 | 485,391,583 | 433,749,832 |
Materials and maintenance expense | 47,102,582 | 43,093,939 | 38,678,842 |
Personnel expense (1) | 210,885,553 | 197,915,151 | 169,331,464 |
Transportation and distribution | 230,047,942 | 234,431,464 | 201,371,151 |
Advertising and promotion expense | 105,938,586 | 117,921,841 | 105,649,991 |
Lease expense | 16,294,896 | 13,641,122 | 13,347,091 |
Energy expense | 24,444,163 | 25,178,032 | 29,566,627 |
Depreciation and amortization | 83,528,045 | 81,566,802 | 68,607,566 |
Other expenses | 104,455,411 | 100,872,027 | 83,207,159 |
Total | 1,363,390,142 | 1,300,011,961 | 1,143,509,723 |
| As of December 31, 2019 | As of December 31, 2018 | ||
| Current | Non-current | Current | Non-current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Chile operating segment | 154,120,306 | - | 162,477,091 | - |
International business operating segment | 66,023,849 | - | 76,166,145 | - |
Wines operating segment | 51,727,913 | - | 51,478,501 | - |
Total commercial debtors | 271,872,068 | - | 290,121,737 | - |
Impairment loss estimate | (5,792,821) | - | (6,059,201) | - |
Total commercial debtors - net | 266,079,247 | - | 284,062,536 | - |
Others accounts receivables (1) | 33,934,693 | 3,224,627 | 36,639,803 | 3,363,123 |
Total other accounts receivable | 33,934,693 | 3,224,627 | 36,639,803 | 3,363,123 |
Total | 300,013,940 | 3,224,627 | 320,702,339 | 3,363,123 |
(1)As of December 31, 2019, an account receivable is included that relates to the sale of 49% of the participation that CPCh held over Compañía Pisquera Bauzá S.A. where in the current asset it maintains an amount of ThCh$ 1,325,613 (ThCh$ 1,392,650 as of December 31, 2018) and in non-current assets with no balance as of December 31, 2019 (ThCh$ 1,240,461 as of December 31, 2018). The charges received for this transaction as of December 31, 2019 are presented in the Consolidated Statement of Cash Flows, in investment activities, under the heading "Proceeds from the sale of interests in joint ventures"
The Company’s accounts receivable are denominated in the following currencies:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Chilean Peso | 181,846,678 | 191,979,443 |
Argentine Peso | 57,199,230 | 67,553,470 |
US Dollar | 35,796,040 | 34,113,849 |
Euro | 9,709,996 | 10,152,559 |
Unidad de Fomento | 3,242,714 | 2,678,592 |
Uruguayan Pesos | 4,350,677 | 5,128,068 |
Paraguayan Guarani | 7,411,985 | 8,774,244 |
Bolivian | 1,919,063 | 1,340,388 |
Others currencies | 1,762,184 | 2,344,849 |
Total | 303,238,567 | 324,065,462 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The detail of the accounts receivable maturities as ofDecember 31, 2019, is detailed as follows:
| Total | Current balance | Overdue balances | |||
0 a 3 months | 3 a 6 months | 6 a 12 months | More than 12 months | |||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Chile operating segment | 154,120,306 | 145,910,170 | 4,488,495 | 758,196 | 1,264,373 | 1,699,072 |
International business operating segment | 66,023,849 | 60,199,888 | 4,015,211 | 20,872 | 167,968 | 1,619,910 |
Wines operating segment | 51,727,913 | 44,080,110 | 7,317,810 | 155,026 | 50,090 | 124,877 |
Total commercial debtors | 271,872,068 | 250,190,168 | 15,821,516 | 934,094 | 1,482,431 | 3,443,859 |
Impairment loss estimate | (5,792,821) | (745,303) | (664,608) | (344,670) | (877,811) | (3,160,429) |
Total commercial debtors - net | 266,079,247 | 249,444,865 | 15,156,908 | 589,424 | 604,620 | 283,430 |
Others accounts receivables | 33,934,693 | 33,638,366 | 105,976 | 138,377 | - | 51,974 |
Total other accounts receivable | 33,934,693 | 33,638,366 | 105,976 | 138,377 | - | 51,974 |
Total current | 300,013,940 | 283,083,231 | 15,262,884 | 727,801 | 604,620 | 335,404 |
Others accounts receivables | 3,224,627 | 3,224,627 | - | - | - | - |
Total non-current | 3,224,627 | 3,224,627 | - | - | - | - |
The detail of the accounts receivable maturities as of December 31, 2018, is detailed as follows:
| Total | Current balance | Overdue balances | |||
| 0 a 3 months | 3 a 6 months | 6 a 12 months | More than 12 months | ||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Chile operating segment | 162,477,091 | 152,644,412 | 5,928,791 | 1,085,806 | 844,101 | 1,973,981 |
International business operating segment | 76,166,145 | 63,419,349 | 9,546,370 | 1,092,229 | 701,571 | 1,406,626 |
Wines operating segment | 51,478,501 | 44,304,213 | 6,248,007 | 272,721 | 305,811 | 347,749 |
Total commercial debtors | 290,121,737 | 260,367,974 | 21,723,168 | 2,450,756 | 1,851,483 | 3,728,356 |
Impairment loss estimate | (6,059,201) | (148,214) | (542,195) | (600,433) | (1,407,848) | (3,360,511) |
Total commercial debtors - net | 284,062,536 | 260,219,760 | 21,180,973 | 1,850,323 | 443,635 | 367,845 |
Others accounts receivables | 36,639,803 | 36,056,454 | 321,767 | 162,295 | 99,233 | 54 |
Total other accounts receivable | 36,639,803 | 36,056,454 | 321,767 | 162,295 | 99,233 | 54 |
Total current | 320,702,339 | 296,276,214 | 21,502,740 | 2,012,618 | 542,868 | 367,899 |
Others accounts receivables | 3,363,123 | 3,363,123 | - | - | - | - |
Total non-current | 3,363,123 | 3,363,123 | - | - | - | - |
The Company markets its products through wholesale customers, retail and supermarket chains. As ofDecember 31, 2019, the accounts receivable from the three most important supermarket chains in Chile and Argentina represent 29.1% (27.9% in 2018) of the total accounts receivable.
As indicated in the Risk management note (SeeNote 5 – Risk administration), for Credit Risk purposes, the Company acquires credit insurance policies to cover approximately 90% and 99% of the significant accounts receivable balances domestic and export, respectively, of the total of the account receivables.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The general criteria for the determination of the provision for impairment has been established in the framework of IFRS 9, which requires analyzing the behavior of the client portfolio in the long term in order to generate an expected credit loss index by tranches based on the age of the portfolio. This analysis delivered the following results for the Company:
| As of December 31, 2019 | As of December 31, 2018 | ||||
| Credit loss rate | Total carrying amount | Impairment provision | Credit loss rate | Total carrying amount | Impairment provision |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Up to date | 0.13% | 283,828,534 | (745,303) | 0.10% | 296,424,428 | (148,214) |
0 a 3 months | 4.76% | 15,927,492 | (664,608) | 4.30% | 22,044,935 | (542,195) |
3 a 6 months | 36.48% | 1,072,471 | (344,670) | 32.60% | 2,613,051 | (600,433) |
6 a 12 months | 100.00% | 1,482,431 | (877,811) | 100.00% | 1,950,716 | (1,407,848) |
More than 12 months | 100.00% | 3,495,833 | (3,160,429) | 100.00% | 3,728,410 | (3,360,511) |
Total |
| 305,806,761 | (5,792,821) |
| 326,761,540 | (6,059,201) |
The percentage of impairment determined for the portfolio in each court may differ from the direct application of the previously presented parameters because these percentages are applied to the uncovered portfolio of credit insurance that the Company takes. Past due balances over 6 months and for which no estimates have been made for impairment losses, correspond mainly to items protected by credit insurance. Additionally, there are expired amounts in this stretch, which according to the policy, partial losses due to impairment are estimated based on an individual case-by-case analysis.
For the above mentioned, management estimates that it does not require establishing allowances for further impairment, in addition to those already constituted based on an aging analysis of these balances.
The write-offs of our doubtful clients are once all pre-trial and judicial, efforts have been made and exhausted all means of payment, with the proper demonstration of the insolvency of customers. This process of write off normally takes more than 1 year.
The movement of the impairment losses provision for accounts receivable is as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Balance at the beginning of year | (6,059,201) | (4,154,752) |
First application effect IFRS 9 | - | (192,377) |
Initial balance restated | (6,059,201) | (4,347,129) |
Estimate of expected credit losses up 12 months | (903,754) | (474,984) |
Estimate of expected credit losses longer than 12 months | (964,554) | (1,222,877) |
Sub total of impairment estimate for accounts receivable | (1,868,308) | (1,697,861) |
Provision of repaired portfolio | (129,841) | (149,303) |
Uncollectible accounts | 1,389,330 | 527,545 |
Add back of unused provisions | 441,106 | 597,359 |
Estimates resulting from business combinations (1) | - | (1,354,559) |
Effect of translation into presentation currency | 434,093 | 364,747 |
Total | (5,792,821) | (6,059,201) |
(1) SeeNote 30 Employee benefits.15 – Business Combinations, letter a).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Transactions between the Company and its subsidiaries occur in the normal course of operations and have been eliminated during the consolidation process.
The amounts indicated as transactions in the following table relate to trade operations with related parties, which are under similar terms than what a third party would get respect to price and payment conditions. There are no uncollectible estimates decreasing accounts receivable or guarantees provided to related parties.
Conditions of the balances and transactions with related parties:
(1) | Business operations agreed upon Chilean peso with a payment condition usually up to 30 days. |
(2) | Business operations agreed upon in foreign currencies and with a payment condition up to 30 days. Balances are presented at the closing exchange rate. |
(3) | An agreement of the subsidiary Compañía Pisquera de Chile S.A. with Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. due to differences resulting from the capital contributions made by the latter. It establishes a 3% annual interest over capital, with annual payments to be made in eight instalments of UF 1,124 each. Beginning February 28, 2007 and UF 9,995 bullet payment at the last contribution date. In accordance with the contract,Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda.renewed the contract for a period of nine years with maturing in the year 2023. Consequently, the UF 9,995 will be paid in nine equal and successive instalments of UF 1,200 each and a final payment of UF 2,050, beginning on February 28, 2015. |
(4) | An agreement of grape supply between the subsidiary Compañía Pisquera de Chile S.A. and Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. These contracts stipulate a 3% annual interest on the capital, with a term of eight years, and annual payments with a last payment maturing on May 31, 2020. |
(5) | Business operations agreed upon Chilean pesos between the subsidiary Cervecería Kunstmann S.A. with Cervecería Szot SpA., which will accrue interest corresponding to the nominal TAB rate of 30 days plus spread of 0.78% per year. This operation has a duration of twelve months from September 5, 2018, automatically renewable for equal and successive periods, and any of the parties may terminate in advance, by means of a notice to the other, given thirty days in advance of the date on which it is desired to expire. |
(6) | Business operations agreed upon Chilean pesos of the subsidiary Cervecería Guayacán SpA. with Inversiones Diaguitas # 33 SpA., which will accrue interest corresponding to the nominal TAB rate of 30 days plus spread of 0.78% per year. This operation has a duration of eighteen months from May 30, 2019. |
The transaction table includes the main transactions made with related parties.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The detail of the accounts receivable and payable from related parties as of December 31, 2019 and 2018, are detailed as follows:
Accounts receivable from related parties
Current:
Tax ID | Company | Country of origin | Ref. | Relationship | Transaction | Currency | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |||||||
6,062,786-K | Andrónico Luksic Craig | Chile | (1) | Chairman of CCU | Sales of products | CLP | 1,334 | - |
52,000,721-0 | Representaciones Chile Beer Kevin Michael Szot E.I.R.L. | Chile | (1) | Shareholder of subsidiary | Sales of products | CLP | 19,475 | - |
76,029,109-9 | Inversiones Chile Chico Ltda. | Chile | (1) | Related to the controller's shareholder | Services provided | CLP | 1,928 | 2,959 |
76,079,669-7 | Minera Antucoya | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 350 | 161 |
76,111,872-2 | Inversiones Tv Medios Ltda. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 22 | 33 |
76,115,132-0 | Canal 13 SpA. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | - | 51 |
76,178,803-5 | Viña Tabalí S.A. | Chile | (1) | Related to the controller's shareholder | Services provided | CLP | 30,888 | 51,667 |
76,178,803-5 | Viña Tabalí S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 1,437 | 153 |
76,363,269-5 | Inversiones Alabama Ltda. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 2,046 | 738 |
76,380,217-5 | Hapag-Lloyd Chile SpA. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 2,948 | 141 |
76,481,675-7 | Cervecería Szot SpA. | Chile | (5) | Associate of subsidiary (until august 2019) | Loan | CLP | - | 50,825 |
76,481,675-7 | Cervecería Szot SpA. | Chile | (1) | Associate of subsidiary (until august 2019) | Services provided | CLP | - | 2,869 |
76,481,675-7 | Cervecería Szot SpA. | Chile | (1) | Associate of subsidiary (until august 2019) | Sales of products | CLP | - | 23,090 |
76,486,051-9 | Inversiones Río Elqui SpA. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 11,845 | 24,029 |
76,727,040-2 | Minera Centinela | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 1,081 | 608 |
76,806,870-4 | Transacciones e Inv. Arizona S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | - | 11 |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | (1) | Related to non-controlling subsidiary | Services provided | CLP | 22,755 | 23,229 |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | (1) | Related to non-controlling subsidiary | Sales of products | CLP | 192,227 | 78,435 |
77,755,610-K | Comercial Patagona Ltda. | Chile | (1) | Subsidiary of joint venture | Sales of products | CLP | 1,277,205 | 1,222,832 |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | (1) | Shareholder of joint operation | Services provided | CLP | 380,253 | 751,805 |
81,148,200-5 | Ferrocarril de Antofagasta a Bolivia S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 5,453 | 5,070 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (1) | Shareholder of subsidiary | Advance purchase | CLP | 800,000 | 14,393 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (4) | Shareholder of subsidiary | Sales of products | UF | 48,353 | 47,082 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (3) | Shareholder of subsidiary | Loan | UF | 33,827 | 32,149 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (1) | Shareholder of subsidiary | Sales of products | CLP | 2,898 | 1,478 |
90,160,000-7 | Compañía Sud Americana de Vapores S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 2,173 | 1,264 |
91,021,000-9 | Invexans S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 32 | 33 |
91,705,000-7 | Quiñenco S.A. | Chile | (1) | Controller's shareholder | Sales of products | CLP | 2,141 | 3,929 |
92,011,000-2 | Empresa Nacional de Energía Enex S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 6,841 | 4,384 |
92,048,000-4 | SAAM S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 85 | 149 |
93,920,000-2 | Antofagasta Minerals S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 3,218 | 3,167 |
94,625,000-7 | Inversiones Enex S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 177,270 | 195,720 |
96,427,000-7 | Inversiones y Rentas S.A. | Chile | (1) | Controller | Services provided | CLP | 2,708 | 3,465 |
96,536,010-7 | Inversiones Consolidadas Ltda. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 2,325 | 853 |
96,571,220-8 | Banchile Corredores de Bolsa S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 889 | 3,545 |
96,591,040-9 | Empresas Carozzi S.A. | Chile | (1) | Shareholder of joint operation | Sales of products | CLP | 936 | - |
96,645,790-2 | Socofin S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 1,028 | - |
96,767,630-6 | Banchile Administradora General de Fondos S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | - | 315 |
96,790,240-3 | Minera Los Pelambres | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 588 | 300 |
96,819,020-2 | Agrícola El Cerrito S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 22 | 11 |
96,847,140-6 | Inmobiliaria Norte Verde S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 32 | 33 |
96,892,490-7 | Protección y Seguridad S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 248 | - |
96,908,970-K | San Antonio Terminal Internacional S.A. | Chile | (1) | Related to the controller's shareholder | Services provided | CLP | 9,516 | - |
96,919,980-7 | Cervecería Austral S.A. | Chile | (1) | Joint venture | Services provided | CLP | 126,755 | 139,647 |
96,919,980-7 | Cervecería Austral S.A. | Chile | (1) | Joint venture | Remittance send | CLP | - | 2,923 |
96,922,250-7 | Agrícola Valle Nuevo S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 32 | 33 |
96,951,040-5 | Inversiones Rosario S.A. | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 65 | 22 |
97,004,000-5 | Banco de Chile | Chile | (1) | Related to the controller's shareholder | Sales of products | CLP | 9,767 | 44,604 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Remittance send | CLP | - | 20,035 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Services provided | CLP | 17,626 | 269,616 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Sales of products | CLP | - | 11,071 |
0-E | Central Cervecera de Colombia S.A.S. | Colombia | (2) | Joint venture | Sales of products | USD | 77,375 | 9,480 |
0-E | QSR S.A. | Paraguay | (2) | Related to the subsidiary's shareholder | Sales of products | PYG | 688 | 434 |
Total |
|
|
|
|
|
| 3,278,685 | 3,048,841 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Non Current:
Tax ID | Company | Country of origin | Ref. | Relationship | Transaction | Currency | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |||||||
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (3) | Shareholder of subsidiary | Loan | UF | 118,122 | 143,783 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (4) | Shareholder of subsidiary | Sales of products | UF | - | 47,082 |
Total |
|
|
|
|
|
| 118,122 | 190,865 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Accounts payable to related parties
Current:
Tax ID | Company | Country of origin | Ref. | Relationship | Transaction | Currency | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |||||||
76,115,132-0 | Canal 13 SpA. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 148,288 | 277,515 |
76,380,217-5 | Hapag-Lloyd Chile SpA. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 24,910 | 32,646 |
76,460,328-1 | Inversiones Diaguitas #33 SpA. | Chile | (6) | Shareholder of subsidiary | Loan | CLP | 188,669 | - |
76,455,830-8 | DiWatts S.A. | Chile | (1) | Related joint venture shareholder | Purchase of products | CLP | 161,612 | - |
76,481,675-7 | Cervecería Szot SpA. | Chile | (1) | Associate of subsidiary | Purchase of products | CLP | - | 2,199 |
77,003,342-K | Origen Patagónico SpA. | Chile | (1) | Related to non-controlling subsidiary | Services received | CLP | 9 | - |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | (1) | Related to non-controlling subsidiary | Services received | CLP | 480 | 8,704 |
77,755,610-K | Comercial Patagona Ltda. | Chile | (1) | Subsidiary of joint venture | Services received | CLP | 72,148 | 92,129 |
78,053,790-6 | Servipag Ltda. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 1,972 | 4,218 |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | (1) | Shareholder of joint operation | Purchase of products | CLP | 258,133 | 1,160,168 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (1) | Shareholder of subsidiary | Purchase of products | CLP | - | 417 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (1) | Shareholder of subsidiary | Services received | CLP | 919 | - |
92,011,000-2 | Empresa Nacional de Energía Enex S.A. | Chile | (1) | Related to the controller's shareholder | Purchase of products | CLP | 1,898 | 44,239 |
94,058,000-5 | Servicios Aeroportuarios Aerosan S.A. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 911 | 1,711 |
94,625,000-7 | Inversiones Enex S.A. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | - | 76 |
96,591,040-9 | Empresas Carozzi S.A. | Chile | (1) | Shareholder of joint operation | Purchase of products | CLP | 654,756 | 736,974 |
96,689,310-9 | Transbank S.A. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 273 | 5,868 |
96,798,520-1 | Saam Extraportuarios S.A. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 807 | 17,201 |
96,810,030-0 | Radiodifusión SpA. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 14,230 | 41,170 |
96,908,970-K | San Antonio Terminal Internacional S.A. | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 1,792 | 15,724 |
96,919,980-7 | Cervecería Austral S.A. | Chile | (1) | Joint venture | Remittance received | CLP | - | 7,869 |
96,919,980-7 | Cervecería Austral S.A. | Chile | (1) | Joint venture | Purchase of products | CLP | 1,806,688 | 1,204,662 |
96,919,980-7 | Cervecería Austral S.A. | Chile | (1) | Joint venture | Royalty | CLP | 76,420 | 109,091 |
97,004,000-5 | Banco de Chile | Chile | (1) | Related to the controller's shareholder | Services received | CLP | 22,230 | 1,244 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Purchase of products | CLP | - | 19,920 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Remittance received | CLP | - | 46,708 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Consignation sales | CLP | - | 211,985 |
0-E | Ecor Ltda. | Bolivia | (2) | Related to the subsidiary's shareholder | Services received | BOB | 30,565 | 11,879 |
0-E | Central Cervecera de Colombia S.A.S. | Colombia | (2) | Joint venture | Services received | USD | 145,454 | 24,449 |
0-E | Nestlé Waters Marketing & Distribution S.A.S. | France | (2) | Related to the subsidiary's shareholder | Purchase of products | Euros | 11,893 | 12,256 |
0-E | Amstel Brouwerijen B.V. | Netherlands | (2) | Related to the controller's shareholder | License and technical assistance | Euros | 59,740 | 120,726 |
0-E | Heineken Brouwerijen B.V. | Netherlands | (2) | Related to the controller's shareholder | Purchase of products | USD | 1,355,062 | 1,044,963 |
0-E | Heineken Brouwerijen B.V. | Netherlands | (2) | Related to the controller's shareholder | License and technical assistance | Euros | 2,100,423 | 1,486,100 |
0-E | Heineken Brouwerijen B.V. | Netherlands | (2) | Related to the controller's shareholder | Royalty | USD | 1,554,066 | 12,879 |
0-E | Heineken Brouwerijen B.V. | Netherlands | (2) | Related to the controller's shareholder | Services received | USD | - | 1,025 |
0-E | Gráfica Editorial Inter-Sudamericana S.A. | Paraguay | (2) | Related to the subsidiary's shareholder | Services received | PYG | 122 | - |
0-E | Banco BASA S.A. | Paraguay | (2) | Related to the subsidiary's shareholder | Services received | PYG | - | 18 |
0-E | Emprendimientos Hoteleros S.A.E.C.A | Paraguay | (2) | Related to the subsidiary's shareholder | Services received | PYG | 11,334 | 11,249 |
0-E | Watt's Alimentos S.A. | Paraguay | (2) | Related joint venture shareholder | Purchase of products | USD | 112,891 | 106,531 |
0-E | Hoteles Contemporáneos S.A. | Paraguay | (2) | Related to the subsidiary's shareholder | Services received | PYG | 494 | - |
0-E | Société des Produits Nestlé S.A. | Switzerland | (2) | Related to the subsidiary's shareholder | Royalty | CHF | 160,245 | 62,397 |
Total |
|
|
|
|
|
| 8,979,434 | 6,936,910 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Most significant transactions and effects on results:
As of December 31, 2019 and 2018 the most significant transactions with related parties that are not subsidiaries of the Company and their effect on the Consolidated Statement of Income are detailed as follows:
Tax ID | Company | Country of origin | Relationship | Transaction | 2019 | 2018 | ||
Amounts | (Charges)/Credits (Effect on Income) | Amounts | (Charges)/Credits (Effect on Income) | |||||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||
76,079,669-7 | Minera Antucoya | Chile | Related to the controller's shareholder | Sales of products | 2,813 | 1,988 | 2,045 | 1,454 |
76,115,132-0 | Canal 13 SpA. | Chile | Related to the controller's shareholder | Services received | 2,054,644 | (2,054,644) | 2,641,844 | (2,641,844) |
76,178,803-5 | Viña Tabali S.A. | Chile | Related to the controller's shareholder | Services provided | 69,567 | 25,771 | 90,214 | 90,214 |
76,313,970-0 | Inversiones Irsa Ltda. | Chile | Related to the controller | Dividends paid | 14,493,784 | - | 4,522,295 | - |
76,380,217-5 | Hapag-Lloyd Chile SpA. | Chile | Related to the controller's shareholder | Services received | 160,967 | (160,967) | 159,652 | (159,652) |
76,727,040-2 | Minera Centinela | Chile | Related to the controller's shareholder | Sales of products | 9,016 | 6,372 | 7,246 | 5,152 |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | Related to non-controlling subsidiary | Services received | 135,589 | (135,589) | 113,507 | (113,507) |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | Related to non-controlling subsidiary | Sales of products | 796,617 | 614,988 | 773,056 | 589,466 |
77,755,610-K | Comercial Patagona Ltda. | Chile | Subsidiary of joint venture | Services received | 544,738 | (544,738) | 405,845 | (405,845) |
77,755,610-K | Comercial Patagona Ltda. | Chile | Subsidiary of joint venture | Sales of products | 6,975,121 | 4,492,551 | 5,691,405 | 3,761,223 |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | Shareholder of joint operation | Purchase of products | 10,237,934 | - | 10,555,440 | - |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | Shareholder of joint operation | Services provided | 2,289,097 | 2,289,097 | 2,756,584 | 2,756,584 |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | Shareholder of joint operation | Services received | 269,996 | (269,996) | 302,332 | (302,332) |
79,985,340-K | Cervecera Valdivia S.A. | Chile | Shareholder of subsidiary | Dividends paid | 3,886,021 | - | 990,073 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder of subsidiary | Purchase of products | 4,496,965 | - | 5,432,008 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder of subsidiary | Dividends paid | 928,507 | - | 768,325 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder of subsidiary | Loan | 36,828 | 4,285 | 35,016 | 3,863 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limari Ltda. | Chile | Shareholder of subsidiary | Sales of products | 12,367 | 8,164 | 3,731 | 2,464 |
90,703,000-8 | Nestlé Chile S.A. | Chile | Related to the controller | Dividends paid | 4,931,641 | - | 3,922,143 | - |
91,705,000-7 | Quiñenco S.A. | Chile | Controller's shareholder | Sales of products | 19,952 | 13,932 | 20,362 | 14,330 |
92,011,000-2 | Empresa Nacional de Energía Enex S.A. | Chile | Related to the controller's shareholder | Purchase of products | 200,481 | (200,481) | 227,106 | (227,106) |
92,011,000-2 | Empresa Nacional de Energía Enex S.A. | Chile | Related to the controller's shareholder | Services received | 444,367 | (444,367) | 277,482 | (277,482) |
92,048,000-4 | SAAM S.A. | Chile | Related to the controller's shareholder | Services received | - | - | 11,453 | (5,366) |
93,920,000-2 | Antofagasta Minerals S.A. | Chile | Related to the controller's shareholder | Sales of products | 38,007 | 28,630 | 34,966 | 27,973 |
94,625,000-7 | Inversiones Enex S.A. | Chile | Related to the controller's shareholder | Sales of products | 1,394,919 | 988,572 | 1,434,303 | 1,020,286 |
96,427,000-7 | Inversiones y Rentas S.A. | Chile | Controller | Dividends paid | 112,614,526 | - | 35,137,554 | - |
96,427,000-7 | Inversiones y Rentas S.A. | Chile | Controller | Services provided | 9,176 | 9,176 | 9,106 | 9,106 |
96,571,220-8 | BanChile Corredores de Bolsa S.A. | Chile | Related to the controller's shareholder | Investments | 531,200,000 | - | 1,231,060,000 | - |
96,571,220-8 | BanChile Corredores de Bolsa S.A. | Chile | Related to the controller's shareholder | Investment Rescue | 552,594,958 | 274,958 | 1,220,115,263 | 1,225,263 |
96,591,040-9 | Empresas Carozzi S.A. | Chile | Shareholder of joint operation | Purchase of products | 5,201,040 | - | 3,823,086 | - |
96,591,040-9 | Empresas Carozzi S.A. | Chile | Shareholder of joint operation | Sales of products | 86,790 | 81,906 | 35,852 | 28,656 |
96,657,690-1 | Inversiones Punta Brava S.A. | Chile | Related to the controller's shareholder | Services received | - | - | 87,894 | (87,894) |
96,657,690-1 | Inversiones Punta Brava S.A. | Chile | Related to the controller's shareholder | Sales of products | 1,188 | 840 | 1,095 | 779 |
96,689,310-9 | Transbank S.A. | Chile | Related to the controller's shareholder | Services received | 187,378 | (187,378) | 167,149 | (167,149) |
96,798,520-1 | SAAM Extraportuario S.A. | Chile | Related to the controller's shareholder | Services received | 41,188 | - | 83,711 | - |
96,810,030-0 | Radiodifusión SpA. | Chile | Related to the controller's shareholder | Services received | 306,153 | (306,153) | 470,325 | (470,325) |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Purchase of products | 14,235,437 | - | 10,055,050 | - |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Dividends received | 438,258 | - | 372,088 | - |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Royalty | 331,083 | (331,083) | 329,276 | (329,276) |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Services provided | 253,789 | 253,789 | 258,099 | 258,099 |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Sales of products | 71,885 | 51,102 | 38,444 | 28,125 |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Interests | 149,209 | (149,209) | 165,325 | (165,325) |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Investments | 106,006,335 | - | 374,540,529 | - |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Derivatives | 75,540,396 | 2,859 | 42,723,097 | (753,383) |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Investment Rescue | 105,256,049 | 175,733 | 371,884,715 | 343,839 |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Services received | 393,096 | (393,096) | 368,839 | (368,839) |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Sales of products | 246,431 | 223,733 | 247,781 | 218,469 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Purchase of products | 5,515 | (5,515) | 24,944 | (24,944) |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Capital decrease | 11,200,000 | - | - | - |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Services provided | 325,857 | 325,857 | 444,677 | 444,677 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Consignation sales | 956,516 | - | 3,029,169 | - |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | Associate (until july 2019) | Sales of products | - | - | 194,516 | 73,916 |
0-E | Ecor Ltda. | Bolivia | Related to the subsidiary's shareholder | Services received | 157,818 | (157,818) | 67,426 | (67,426) |
0-E | Zona Franca Central Cervecera S.A.S. | Colombia | Joint venture | Capital contribution | 13,563,816 | - | 59,505,559 | - |
0-E | Amstel Brouwerijen B.V. | Netherlands | Related to the controller's shareholder | License and technical assistance | 265,594 | (265,594) | 247,395 | (247,395) |
0-E | Heineken Brouwerijen B.V. | Netherlands | Related to the controller's shareholder | Purchase of products | 13,916,593 | - | 11,604,832 | - |
0-E | Heineken Brouwerijen B.V. | Netherlands | Related to the controller's shareholder | License and technical assistance | 10,395,266 | (10,395,266) | 9,678,688 | (9,678,688) |
0-E | Heineken Brouwerijen B.V. | Netherlands | Related to the controller's shareholder | Services received | 116,703 | (116,703) | 73,733 | (73,733) |
0-E | Banco BASA S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 1,458 | 797 | - | - |
0-E | Chajha S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 4,284 | 893 | 2,003 | 1,318 |
0-E | Cigar Trading S.R.L. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 704 | 368 | 671 | 392 |
0-E | Club Libertad | Paraguay | Related to the subsidiary's shareholder | Sales of products | 3,304 | 1,412 | 7,697 | 4,737 |
0-E | Consignataria de Ganado S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 239 | 60 | - | - |
0-E | Emprendimientos Hoteleros S.A.E.C.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 15,626 | 9,009 | 12,401 | 8,101 |
0-E | Fundación Ñande Paraguay | Paraguay | Related to the subsidiary's shareholder | Sales of products | - | - | 1,602 | 947 |
0-E | Fundación Ramón T. Cartes | Paraguay | Related to the subsidiary's shareholder | Sales of products | 3,860 | 1,005 | 217 | 107 |
0-E | Ganadera Las Pampas S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 457 | 135 | 836 | 242 |
0-E | Gráfica Editorial Inter-Sudamericana S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 967 | 665 | 5,973 | 4,154 |
0-E | La Misión S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 774 | 543 | 871 | 610 |
0-E | Palermo S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 3,161 | 1,040 | 4,069 | 2,825 |
0-E | QSR S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 93,590 | 60,787 | 32,858 | 19,080 |
0-E | Tabacalera del Este S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 3,489 | 2,152 | 25,861 | 16,339 |
0-E | Societé des Produits Nestlé S.A. | Switzerland | Related to the subsidiary's shareholder | Royalty | 984,337 | (984,337) | 706,629 | (706,629) |
|
|
|
|
|
|
|
|
|
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
As of December 31, 2018 and 2017 the most significant transactions with related parties that are not subsidiaries of the Company and their effect on the Consolidated Statement of Income are detailed as follows:
Tax ID | Company | Country of origin | Relationship | Transaction | 2018 | 2017 | ||
Amounts | (Charges)/Credits (Effect on Income) | Amounts | (Charges)/Credits (Effect on Income) | |||||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||
76,079,669-7 | Minera Antucoya | Chile | Related to the controller's shareholder | Sales of products | 2,045 | 1,454 | 1,501 | 1,200 |
76,115,132-0 | Canal 13 SpA. | Chile | Related to the controller's shareholder | Services received | 2,641,844 | (2,641,844) | 2,064,067 | (2,064,067) |
76,178,803-5 | Viña Tabali S.A. | Chile | Related to the controller's shareholder | Services provided | 90,214 | 90,214 | 85,931 | 85,931 |
76,313,970-0 | Inversiones Irsa Ltda. | Chile | Related to the controller | Dividends paid | 4,522,295 | - | 4,457,428 | - |
76,380,217-5 | Hapag-Lloyd Chile SpA. | Chile | Related to the controller's shareholder | Services received | 159,652 | (159,652) | 183,292 | (183,292) |
76,481,675-7 | Cervecería Szot SpA. | Chile | Associate of subsidiary | Capital contribution | - | - | 52,771 | - |
76,727,040-2 | Minera Centinela | Chile | Related to the controller's shareholder | Sales of products | 7,246 | 5,152 | 5,085 | 4,068 |
76,553,712-6 | Heliservicios S.A. | Chile | Related to the controller | Services received | - | - | 17,760 | (17,760) |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | Related to non-controlling subsidiary | Services received | 113,507 | (113,507) | 152,578 | (152,578) |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | Related to non-controlling subsidiary | Sales of products | 773,056 | 589,466 | 640,590 | 484,283 |
77,755,610-K | Comercial Patagona Ltda. | Chile | Subsidiary of joint venture | Services received | 405,845 | (405,845) | 355,279 | (355,279) |
77,755,610-K | Comercial Patagona Ltda. | Chile | Subsidiary of joint venture | Sales of products | 5,691,405 | 3,761,223 | 4,807,422 | 2,884,453 |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | Shareholder of joint operation | Purchase of products | 10,555,440 | - | 11,062,488 | - |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | Shareholder of joint operation | Services provided | 2,756,584 | 2,756,584 | 3,154,653 | 3,154,653 |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | Shareholder of joint operation | Services received | 302,332 | (302,332) | 162,589 | (162,589) |
79,985,340-K | Cervecera Valdivia S.A. | Chile | Shareholder of subsidiary | Dividends paid | 990,073 | - | 818,433 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder of subsidiary | Purchase of products | 5,432,008 | - | 4,956,446 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder of subsidiary | Dividends paid | 768,325 | - | 637,313 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder of subsidiary | Loan | 35,016 | 3,863 | 25,204 | 6,467 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder of subsidiary | Sales of products | 3,731 | 2,464 | 4,727 | 3,116 |
90,703,000-8 | Nestlé Chile S.A. | Chile | Shareholder of subsidiary | Dividends paid | 3,922,143 | - | 4,158,228 | - |
91,705,000-7 | Quiñenco S.A. | Chile | Controller's shareholder | Sales of products | 20,362 | 14,330 | 15,941 | 12,753 |
92,011,000-2 | Empresa Nacional de Energía Enex S.A. | Chile | Related to the controller's shareholder | Purchase of products | 227,106 | (227,106) | 260,177 | (260,177) |
92,011,000-2 | Empresa Nacional de Energía Enex S.A. | Chile | Related to the controller's shareholder | Services received | 277,482 | (277,482) | 298,865 | (298,865) |
92,048,000-4 | SAAM S.A. | Chile | Related to the controller's shareholder | Services received | 11,453 | (5,366) | 103 | (9) |
93,920,000-2 | Antofagasta Minerals S.A. | Chile | Related to the controller's shareholder | Sales of products | 34,966 | 27,973 | 33,441 | 26,753 |
94,625,000-7 | Inversiones Enex S.A. | Chile | Related to the controller's shareholder | Sales of products | 1,434,303 | 1,020,286 | 1,445,395 | 1,156,316 |
96,427,000-7 | Inversiones y Rentas S.A. | Chile | Controller | Dividends paid | 35,137,554 | - | 34,633,542 | - |
96,427,000-7 | Inversiones y Rentas S.A. | Chile | Controller | Services provided | 9,106 | 9,106 | 9,622 | 9,622 |
96,571,220-8 | BanChile Corredores de Bolsa S.A. | Chile | Related to the controller's shareholder | Investments | 1,231,060,000 | - | 645,420,000 | - |
96,571,220-8 | BanChile Corredores de Bolsa S.A. | Chile | Related to the controller's shareholder | Investment Rescue | 1,220,115,263 | 1,225,263 | 653,920,000 | 720,312 |
96,591,040-9 | Empresas Carozzi S.A. | Chile | Shareholder of joint operation | Purchase of products | 3,823,086 | - | 19,251,592 | - |
96,591,040-9 | Empresas Carozzi S.A. | Chile | Shareholder of joint operation | Sales of products | 35,852 | 28,656 | 91,198 | 72,958 |
96,657,690-1 | Inversiones Punta Brava S.A. | Chile | Related to the controller's shareholder | Services received | 87,894 | (87,894) | 83,946 | (83,946) |
96,657,690-1 | Inversiones Punta Brava S.A. | Chile | Related to the controller's shareholder | Sales of products | 1,095 | 779 | 1,150 | 920 |
96,689,310-9 | Transbank S.A. | Chile | Related to the controller's shareholder | Services received | 167,149 | (167,149) | 131,269 | (131,269) |
96,798,520-1 | SAAM Extraportuario S.A. | Chile | Related to the controller's shareholder | Services received | 83,711 | - | 55,148 | - |
96,810,030-0 | Radiodifusión SpA. | Chile | Related to the controller's shareholder | Services received | 470,325 | (470,325) | 391,598 | (391,598) |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Purchase of products | 10,055,050 | - | 8,481,780 | - |
96,919,980-7 | Cervecería Austral S.A. | Chille | Joint venture | Dividends received | 372,088 | - | 245,068 | - |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Royalty | 329,276 | (329,276) | 333,356 | (333,356) |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Services provided | 258,099 | 258,099 | 253,473 | 253,473 |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Sales of products | 38,444 | 28,125 | 413,117 | 183,835 |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Interests | 165,325 | (165,325) | 369,097 | (369,097) |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Investments | 374,540,529 | - | 2,146,826 | - |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Derivatives | 42,723,097 | (753,383) | 63,548,208 | 5,500,174 |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Investment Rescue | 371,884,715 | 343,839 | 21,152,221 | 3,596 |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Services received | 368,839 | (368,839) | 359,579 | (359,579) |
97,004,000-5 | Banco de Chile | Chile | Related to the controller's shareholder | Sales of products | 247,781 | 218,469 | 219,821 | 175,857 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Purchase of products | 24,944 | (24,944) | 393,705 | (393,705) |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Remittance send | - | - | 717,900 | - |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Services provided | 444,677 | 444,677 | 731,310 | 731,310 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Consignation sales | 3,029,169 | - | 2,804,870 | - |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | Associate (until july 2018) | Sales of products | 194,516 | 73,916 | 425,664 | 161,752 |
0-E | Ecor Ltda. | Bolivia | Related to the subsidiary's shareholder | Services received | 67,426 | (67,426) | - | - |
0-E | Central Cervecera de Colombia S.A.S. | Colombia | Joint venture | Capital contribution | - | - | 28,232,532 | - |
0-E | Zona Franca Central Cervecera S.A.S. | Colombia | Joint venture | Capital contribution | 59,505,559 | - | 21,080,358 | - |
0-E | Americas Distilling Investments | United States | Associate of subsidiary | Capital contribution | - | - | 1,043,720 | - |
0-E | Amstel Brouwerijen B.V. | Netherlands | Related to the controller's shareholder | License and technical assistance | 247,395 | (247,395) | 211,740 | (211,740) |
0-E | Heineken Brouwerijen B.V. | Netherlands | Related to the controller's shareholder | Purchase of products | 11,604,832 | - | 13,493,244 | - |
0-E | Heineken Brouwerijen B.V | Netherlands | Related to the controller's shareholder | Sales of products | - | - | 846,179 | 634,634 |
0-E | Heineken Brouwerijen B.V. | Netherlands | Related to the controller's shareholder | License and technical assistance | 9,678,688 | (9,678,688) | 11,051,487 | (11,051,487) |
0-E | Heineken Brouwerijen B.V. | Netherlands | Related to the controller's shareholder | Services received | 73,733 | (73,733) | 166,677 | (166,677) |
0-E | Chajha S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 2,003 | 1,318 | 2,139 | 1,497 |
0-E | Cigar Trading S.R.L. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 671 | 392 | 630 | 441 |
0-E | Club Libertad | Paraguay | Related to the subsidiary's shareholder | Sales of products | 7,697 | 4,737 | 6,358 | 4,450 |
0-E | Consignataria de Ganado S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | - | - | 327 | 229 |
0-E | Emprendimientos Hoteleros S.A.E.C.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 12,401 | 8,101 | 3,162 | 2,214 |
0-E | Fundación Ñande Paraguay | Paraguay | Related to the subsidiary's shareholder | Sales of products | 1,602 | 947 | 2,998 | 2,099 |
0-E | Fundación Ramón T. Cartes | Paraguay | Related to the subsidiary's shareholder | Sales of products | 217 | 107 | 283 | 198 |
0-E | Ganadera las Pampas S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 836 | 242 | 1,575 | 1,103 |
0-E | Gráfica Editorial Inter-Sudamericana S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 5,973 | 4,154 | 2,714 | 1,900 |
0-E | La Misión S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 871 | 610 | - | - |
0-E | Palermo S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 4,069 | 2,825 | 7,354 | 5,148 |
0-E | QSR S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 32,858 | 19,080 | 31,154 | 21,808 |
0-E | Tabacalera del Este S.A. | Paraguay | Related to the subsidiary's shareholder | Sales of products | 25,861 | 16,339 | 58,202 | 40,741 |
0-E | Societé des Produits Nestlé S.A. | Switzerland | Related to the subsidiary's shareholder | Royalty | 706,629 | (706,629) | 410,421 | (410,421) |
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Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Remuneration of the Management key employees
The Company is managed by a Board of Directors comprised of 9 members, each of whom is in office for a 3-year term and may be re-elected.
The Board was appointed at the Ordinary Shareholders´ Meeting held on April 17, 2019, being elected Messrs.Andrónico Luksic Craig, Francisco Pérez Mackenna, Pablo Granifo Lavín, Rodrigo Hinzpeter Kirberg, Carlos Molina Solís, José Miguel Barros van Hövell tot Westerflier, Hemmo Parson, Rory Cullinan and Vittorio Corbo Lioi, the latter independent according to article 50 bis of Law Nº18,046. The Chairman and the Vice Chairman, as well as the members of the Audit Committee were appointed at the Board of Directors´ meeting held on April 17, 2019. At the same meeting, and according to article 50 bis of Law N° 18,046, the independent Director Mr. Vittorio Corbo Lioi appointed the other members of the Directors Committee, which is composed of Directors Messrs. Corbo, Pérez and Molina. Additionally, Messrs. Corbo and Molina were appointed as members of the Audit Committee, both meeting the independence criteria under the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 and the New York Stock Exchange Rules. The Board of Directors also resolved that Directors Messrs. Pérez and Barros shall participate in the Audit Committee´s meetings as observers.
The Ordinary Shareholders´ Meeting referred to above resolved to maintain the remuneration of the Directors agreed at the previous Ordinary Shareholders´ Meeting, which consists of a gross monthly fee for attendance to Board Meetings of UF 100 per Director, and UF 200 for the Chairman, regardless of the number of meetings held within such period, plus an amount equivalent to 3% of the distributed dividends, for the Board as a whole, at a rate of one-ninth for each Director and in proportion to the time each one served as such during the year 2019. If the distributed dividends exceed 50% of the net profits, the Board of Directors’ variable remuneration shall be calculated over a maximum 50% of such profits.
Additionally, the Ordinary Shareholders´ Meeting resolved that those Directors that are members of the Directors Committee receive a gross remuneration of UF 50 for each meeting they attend, plus the amount that, as the percentage of the dividends, is required to complete one third of the total remuneration a Director is entitled to pursuant to article 50 bis of Law Nº 18,046 and Regulation N° 1956 of the CMF. Directors that are members and observers of the Audit Committee receive a gross monthly remuneration of UF 50.
The remunerations of Directors and Chief Executives of the Company are composed as follows:
Directors’ remunerations:
| For the years ended as of December 31, | ||
2019 (*) | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Audit's Committee | 47,386 | 29,185 | 23,222 |
Directors' Committee | 47,154 | 35,179 | 23,470 |
Attendance meetings fee | 1,266,892 | 952,490 | 962,074 |
Dividend Participation | 6,038,934 | 2,270,840 | 2,137,753 |
|
Chief Executives’ remunerations:
| For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Directors' Committee | 13,650 | 16,457 | 14,195 |
Attendance meetings fee | 190,080 | 178,913 | 177,927 |
Dividend Participation | 18,541 | 22,144 | 32,692 |
|
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The Chief Executives’ Remuneration as of December 31, 2019 amounted to ThCh$ 7,993,975 (ThCh$ 7,308,365 in 2018 and ThCh$ 6,449,061 in 2017). The Company grants to the Chief Executives annual bonuses, which have an optional, discretional and variable nature, not contractual and assigned according to compliance of individual and corporate goals and based on the incomes of the year.
The inventories balances are detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Finished products | 83,163,323 | 83,843,751 |
In process products | 3,539,351 | 3,109,463 |
Raw material | 129,926,627 | 127,732,091 |
In transit raw material | 10,556,865 | 8,488,881 |
Materials and products | 6,494,675 | 6,206,087 |
Realizable net value estimate and obsolescence | (1,246,380) | (1,318,036) |
Total | 232,434,461 | 228,062,237 |
The Company wrote off a total of ThCh$ 1,962,689, ThCh$ 3,296,095 and ThCh$ 2,981,075 against net realizable value and obsolescence for the years ended as of December 31, 2019, 2018 and 2017, respectively.
Additionally, the Company presents an estimate for inventory impairment which includes amounts related to low turnover, technical obsolescence and/or products recalled from the market.
The movement of net realizable value and obsolescence estimate is detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Initial balance | (1,318,036) | (1,538,133) |
Inventories write-down estimation | (1,642,147) | (3,081,986) |
Estimates resulting from business combinations (1) | (210,816) | (101,244) |
Inventories recognised as an expense | 1,962,689 | 3,296,095 |
Business combinations effect | (38,070) | 107,232 |
Total | (1,246,380) | (1,318,036) |
(1)SeeNote 15 – Business Combinations, letter c).
As of December 31, 2019 and 2018, the Company does not have any inventory pledged as guarantee for financial obligations.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The Company recorded under Current biological assets the agricultural activities (grapes) derived from production of plantations that will be destined to be an input to the following process of the wine production.
The costs associated to the agricultural activities (grapes) are accumulated to the harvest date.
The valuation of current biological assets is described inNote 2 - Summary of significant accounting policies, 2.10.
The movement ofcurrent biological assetsis detailed as follows:
ThCh$ | |
As of January 1 2018 | |
Historic cost | 8,157,688 |
Book Value | 8,157,688 |
As of December 31, 2018 | |
Acquisitions | 20,871,261 |
Decreases due to harvesting | (20,634,418) |
Other increases (decreases) (1) | 95,342 |
Changes | 332,185 |
Book Value | 8,489,873 |
As of December 31, 2018 | |
Historic cost | 8,489,873 |
Book Value | 8,489,873 |
As of December 31, 2019 | |
Acquisitions | 14,028,209 |
Decreases due to harvesting | (13,153,317) |
Other increases (decreases) (1) | 94,306 |
Changes | 969,198 |
Book Value | 9,459,071 |
As of December 31, 2019 | |
Historic cost | 9,459,071 |
Book Value | 9,459,071 |
(1) Mainly corresponds to the financial effect of the application IAS 29 “Financial reporting in hyperinflationary economies”.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
a)International Business Operating segment
- | During September 2015, the Board of subsidiary Saenz Briones & Cía. S.A.I.C. authorized the sale of property located in Luján de Cuyo city, Province of Mendoza, Argentina. At the date of issuance of these Consolidated Financial Statements the administration is still committed with a sale plan for this property. In order to to seek out a buyer and keep high probabilities to sale it the subsidiary has changed the Real Estate Broker. |
b)Wine Operating segment
- | In 2015, the Board of subsidiary Viña Valles de Chile S.A. (legal and continuing successor of Viña Misiones de Rengo S.A. after the merge performed on June 1, 2013) authorized the sale of certain fixed assets located in Rengo city, Provincia de Cachapoal, Sexta Región. Due to the aforementioned these assets were classified as Non-current assets classified as held for sale. At the date of issuance of these Consolidated Financial Statements these assets, by an amount of ThCh$ 1.884.958, were reclassified as PPE considering all the requirements stablished by IFRS 5 Non-current assets classifies as held for sale. |
- | During the last quarter of 2009, the Board of Tamarí S.A. (merged with Finca la Celia S.A. legal and continuing successor as of April 1, 2011) authorized the sale of fixed assets which includes the winery with facilities for processing and storage of wines as well as of acres that surround it and the guest house for an amount of ThCh$ 529.415. During 2010, the Company hired a specialist broker for such assets. Later, on December 13, 2011 a contract was signed for the sale of these assets, receiving payments for US$ 150.000 and a guarantee for US$ 700.000. |
At the date of issuance of these Consolidated Financial Statementsthis transaction is presented net of impairment provision in Trade and other current receivables.
As described inNote 2 - Summary of significant accounting policies, 2.18, non-current assets of disposal groups classified as held for sale have been recorded at the lower of carrying amount and fair value less cost to sale on December 31, 2019:
Assets held for sale are detailed as follows:
Non-current assets of disposal groups classified as held for sale | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Land | 228,181 | 1,894,078 |
Constructions | 144,985 | 718,203 |
Machinery | 9,972 | 168,326 |
Total | 383,138 | 2,780,607 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
a) Bebidas Bolivianas BBO S.A.
On May 7, 2014, the Company acquired 34% of the stock rights of Bebidas Bolivianas BBO S.A. a Bolivian closed stock company that produces soft drinks and beers in three factories located in the cities of Santa Cruz de la Sierra and Nuestra Señora de la Paz.The amount of this transaction wasUS$ 24.303.000, equivalents toThCh$ 13,776,885. On December 9, 2015, the Company paid an increased of capital for an amount of US$ 2,720,000, equivalents to ThCh$ 1,921,245. On June 8, 2016 and November 10, 2016, the Company paid an increased of capital for an amount of US$ 2,221,696, equivalents to ThCh$ 1,510,420 and US$ 1,019,970, equivalents to ThCh$ 663,951, respectively. This transaction did not change the percentage of participation because both partners concurred in proportion to their current participation.
Subsequently, on August 9, 2018, the Company acquired an additional 17% of the shares of BBOfor an amount of US$ 8,500,000, equivalents to ThCh$ 5,457,935, remaining with a 51% stake in BBO, on this date the Company proceeded to consolidate this business.
The Company has determined the fair values of assets and liabilities for this business combination (seeNote 1 – General information, letter D).
On September 20, 2018, the Company paid committed capital of US$ 1,530,029 (equivalent to ThCh$ 1,044,688) in BBO. This transaction did not change the percentage of participation because both partners concurred in proportion to their current participation.
On June 28, 2019 and on July 11, 2019 the subsidiary CCU Inversiones II Ltda. made capital contributions to Bebidas Bolivianas BBO S.A. for an amount of US$ 1,249,713 (equivalent toThCh$ 849,630) and an amount of US$ 178,305 (equivalents to ThCh$ 122,210) respectively.This transaction did not change the percentage of participation because both partners concurred in proportion to their current participation.
b) Cervecera Guayacán SpA.
On August 31, 2018, the subsidiary Cervecería Kunstmann S.A. (CK) acquired an additional 30.0004% of the stock rights of Cervecera Guayacán SpA., for an amount of ThCh$ 361,560, equivalent to 39,232 shares and the subscription and payment of ThCh$ 470,711, equivalent to 49,038 shares. As a consequence above mentioned CK has the 50.0004% stake in Cervecera Guayacán SpA.
The Company has determined the fair values of assets and liabilities for this business combination (seeNote 1 - General information, letter D).
c) Bodega San Juan S.A.U.
In December 2018, the subsidiary Viña San Pedro Tarapacá S.A. (VSPT) signed an agreement to acquire a part of thePernod Ricard wine business in Argentina. The purchase agreement, subject to local regulatory approval, included the Argentine wine brands Graffigna, Colón and Santa Silvia, which represent approximately 1.5 million boxes of 9-liter wine bottles per year. Bodegas Graffigna has a winery warehouse in the province of San Juan, two fields in the same province, and a field in Mendoza.
On January 28, 2019, the Argentine subsidiary Finca La Celia S.A. established the company Bodega San Juan S.A.U. making a capital contribution of ARS 100,000, in order to use it as a vehicle for the acquisition of the Graffigna, Colón and Santa Silvia wine business of Pernod Ricard Argentina S.R.L., in addition to the purchase of Graffigna winery and the Pocito vineyards, Cañada Honda and La Consulta.
On May 31, 2019, the subsidiary VSPT made a capital contribution to the subsidiary Finca La Celia S.A. by US$ 14,000,000, equivalent toThCh$ 9,910,040 and on the same date the subsidiary Finca La Celia S.A. made a capital contribution to Bodega San Juan S.A.U. for US$ 2,806,820, equivalent toThCh$ 1,986,836.
The financial income composition for the year ended as of December 31, 2016, 2015 y 2014, is as follows:contributions indicated above were used to purchase assets from Pernod Ricard Argentina S.R.L.
Financial Results | For the years ended as of December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Financial income | 5,680,068 | 7,845,743 | 12,136,591 |
Financial cost | (20,307,238) | (23,101,329) | (22,957,482) |
Foreign currency exchange differences | 456,995 | 957,565 | (613,181) |
Result as per adjustment units | (2,246,846) | (3,282,736) | (4,159,131) |
Total | (16,417,021) | (17,580,757) | (15,593,203) |
The detail of other income by function is as follows:
Other income by function | For the years ended as of December 31, | |||
| 2016 | 2015 | 2014 | |
| ThCh$ | ThCh$ | ThCh$ | |
Sales of fixed assets | 1,882,883 | 2,541,619 | 1,978,208 | |
Lease | 382,934 | 245,285 | 364,388 | |
Sales of glass | 549,787 | 672,203 | 836,098 | |
Others | 2,328,550 | 3,118,137 | (1) 22,285,022 | |
Total | 5,144,154 | 6,577,244 | 25,463,716 |
(1) Under this amount includes,For the positive one-time effect compensations received by our Argentine subsidiary CICSA for an amount 227,245 thousands of Argentine pesos (equivalent to MUS$ 34,200), foracquisition described above, the termination provisional fair values of the contract which allowed us to importassets and distribute on an exclusive basis, Corona and Negra Modelo beers in Argentina and the license for the production and distribution of Budweiser beer in Uruguay.liabilities have been determined(seeNote 1 – General information, letter D).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
d) Cervecería Szot SpA.
On August 30, 2019, the subsidiary Cervecería Kunstmann S.A. (CK) acquired an additional 5,001% of Cervecería Szot SpA. coming from the purchase of 5,001 shares, equivalent toThCh$ 6,156. As a result of the aforementioned, CK reached a total interest of 50.001% on said subsidiary.
For the acquisition described above, the provisional fair values of the assets and liabilities have been determined (seeNote 1 – General information, letter D).
As of December 31, 2019, the Company has no other business combinations.
Joint ventures and Associates
As ofDecember 31, 2019 and 2018, the Company recorded investments qualifying as joint venture and associates.
The detailshare value of other gains (losses) items isinvestments in joint ventures and associates are detailed as follows:
Other gains (losses) | For the years ended as of December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Results derivative contracts (1) | (10,134,414) | 9,839,675 | 4,152,548 |
Marketable securities to fair value | 84,133 | 36,280 | (103,306) |
Other | 1,704,374 | (1,363,955) | (12,303) |
Total | (8,345,907) | 8,512,000 | 4,036,939 |
| Percentage of participation | As of December 31, 2019 | As of December 31, 2018 |
% | ThCh$ | ThCh$ | |
Cervecería Austral S.A. | 50,00 | 8,607,390 | 7,327,949 |
Foods Compañía de Alimentos CCU S.A. (1) | 50,00 | 1,709,803 | 12,012,276 |
Central Cervecera de Colombia S.A.S. | 50,00 | 25,334,386 | 40,681,482 |
Zona Franca Central Cervecera S.A.S. | 50,00 | 99,278,045 | 80,766,534 |
Total joint ventures |
| 134,929,624 | 140,788,241 |
Other companies |
| 1,168,438 | 1,229,540 |
Total associated |
| 1,168,438 | 1,229,540 |
Total |
| 136,098,062 | 142,017,781 |
(1) Under this concept the Company received cash flows amounting ThCh$ 9,698,871, ThCh$ 5,419,700 and ThCh$ 927,149 corresponding to 2016, 2015 and 2014, respectevily and these were recorded
The above mentioned values include goodwill generated in the Consolidated Cash Flow Statement, under Operational activities, in line item Other cash movements.
Cash and cash equivalent balances were as follows,associate, which are presented net of any impairment loss:
| As of December 31, 2016 | As of December 31, 2015 | As of December 31, 2014 |
| ThCh$ | ThCh$ | ThCh$ |
Cash | 106,203 | 12,712 | 12,708 |
Overnight deposits | 1,978,738 | 462,873 | 1,319,399 |
Bank balances | 41,276,555 | 42,370,367 | 30,853,126 |
Time deposits | 14,955,778 | 32,639,373 | 99,373,117 |
Investments in mutual funds | 24,772 | - | - |
Securities purchased under resale agreements | 75,447,904 | 117,068,914 | 83,216,526 |
Total | 133,789,950 | 192,554,239 | 214,774,876 |
|
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ | |
Cervecería Austral S.A. |
| 1,894,770 | 1,894,770 |
Total |
| 1,894,770 | 1,894,770 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The currency composition of cashresult accrued in joint ventures and cash equivalents atDecember 31, 2016, isassociates are detailed as follows:
| Chilean Peso | US Dollar | Euro | Argentine Peso | Uruguayan Peso | Paraguayan Guaraní | Others | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Cash | 100,921 | 788 | - | 4,494 | - | - | - | 106,203 |
Overnight deposits | - | 1,978,738 | - | - | - | - | - | 1,978,738 |
Bank balances | 27,164,331 | 6,258,367 | 786,887 | 2,158,115 | 1,136,782 | 3,269,045 | 503,028 | 41,276,555 |
Time deposits | 14,955,778 | - | - | - | - | - | - | 14,955,778 |
Investments in mutual funds | - | - | - | 24,772 | - | - | - | 24,772 |
Securities purchased under resale agreements | 75,447,904 | - | - | - | - | - | - | 75,447,904 |
Total | 117,668,934 | 8,237,893 | 786,887 | 2,187,381 | 1,136,782 | 3,269,045 | 503,028 | 133,789,950 |
| For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Cervecería Austral S.A. | 1,930,395 | 1,638,811 | 952,235 |
Foods Compañía de Alimentos CCU S.A. | 897,526 | 792,376 | 165,905 |
Central Cervecera de Colombia S.A.S. | (18,755,448) | (11,804,950) | (8,646,651) |
Zona Franca Central Cervecera S.A.S. | (562,416) | (391,465) | 87,583 |
Total joint ventures | (16,489,943) | (9,765,228) | (7,440,928) |
Bebidas Bolivianas BBO S.A. (1) | - | (921,812) | (1,459,916) |
Other companies (2) | 58,184 | (128,480) | (13,253) |
Total associated | 58,184 | (1,050,292) | (1,473,169) |
Total | (16,431,759) | (10,815,520) | (8,914,097) |
(1)SeeNote 15 – Business combinations, letter a).
(2)SeeNote 15 – Business combinations, letter b).
The currency composition of cashChanges in investments in joint ventures and cash equivalents at December 31, 2015, isassociates are detailed as follows:
| Chilean Peso | US Dollar | Euro | Argentine Peso | Uruguayan Peso | Paraguayan Guaraní | Others | Total |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Cash | 10,675 | 39 | - | 1,998 | - | - | - | 12,712 |
Overnight deposits | - | 462,873 | - | - | - | - | - | 462,873 |
Bank balances | 21,964,295 | 4,922,732 | 955,840 | 5,699,756 | 948,816 | 7,519,619 | 359,309 | 42,370,367 |
Time deposits | 32,639,373 | - | - | - | - | - | - | 32,639,373 |
Securities purchased under resale agreements | 117,068,914 | - | - | - | - | - | - | 117,068,914 |
Total | 171,683,257 | 5,385,644 | 955,840 | 5,701,754 | 948,816 | 7,519,619 | 359,309 | 192,554,239 |
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Balance at the beginning of year | 142,017,781 | 99,270,280 |
Other payments to acquire interests in joint ventures | 13,549,638 | 59,505,559 |
Participation in the joint ventures and associates (loss) | (16,431,759) | (10,815,520) |
Capital decrease (1) | (11,200,000) | - |
Dividends received | (614,591) | (423,994) |
Business combinations (2) | (241,885) | (14,144,241) |
Others | 9,018,878 | 8,625,697 |
Total | 136,098,062 | 142,017,781 |
(1)SeeNote 16 – Investments accounted for using equity method, number (2).
The currency composition of cash and cash equivalents at December 31, 2014, is(2)SeeNote 15 – Business combinations.
Significant matters regarding investments accounted for using the equity method are detailed as follows:
| Chilean Peso | Unidad de Fomento | US Dollar | Euro | Argentine Peso | Uruguayan Peso | Paraguayan Guaraní | Others | Totales |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Cash | 9,939 | - | 420 | - | 2,349 | - | - | - | 12,708 |
Overnight deposits | - | - | 1,319,399 | - | - | - | - | - | 1,319,399 |
Bank balances | 8,790,934 | - | 4,738,935 | 974,179 | 11,726,073 | 536,097 | 3,753,420 | 333,488 | 30,853,126 |
Time deposits | 90,962,579 | 8,410,538 | - | - | - | - | - | - | 99,373,117 |
Investments in mutual funds | - | - | - | - | - | - | - | - | - |
Securities purchased under resale agreements | 83,216,526 | - | - | - | - | - | - | - | 83,216,526 |
Totales | 182,979,978 | 8,410,538 | 6,058,754 | 974,179 | 11,728,422 | 536,097 | 3,753,420 | 333,488 | 214,774,876 |
(1) Cervecería Austral S.A.
A closed stock company that operates as a beer manufacturing facility in the southern end of Chile, which is the southernmost brewery in the world.
(2)Foods Compañía de Alimentos CCU S.A. (Foods)
Foods, is a closed stock company that participated in the business of snacks and foods in Chile. At the end of 2015, Foods sold the Calaf and Natur brands to Empresas Carozzi S.A. In addition Foods was the main shareholder of Alimentos Nutrabien S.A. and owned the Nutra Bien brand. On December 17, 2018, Foods and subsidiary CCU Inversiones S.A. sold 100% of the shares of Alimentos Nutrabien S.A. to Ideal S.A.
On November 18, 2019 at the Ordinary Shareholders Meeting, it was agreed to decrease the capital of the company by an amount of ThCh$ 22,400,000, leaving a final capital of ThCh$ 12,144,358. This decrease was paid in proportion to the number of shares held by each shareholder as of the date of said Meeting.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
(3) Central Cervecera de Colombia S.A.S. and Zona Franca Central Cervecera S.A.S.
On November 10, 2014, CCU, directly and through its subsidiaries CCU Inversiones II Limitada, and Grupo Postobón have established a joint arrangements through a company named Central Cervecera de Colombia S.A.S. (the "Company"), in which CCU and Grupo Postobón participate as equal shareholders. The purpose of this Company is the beer and non-alcoholic drinks production, marketing and distribution based on malt (Products).
Subsequently, on August 16, 2017, CCU, through its subsidiary CCU Inversiones ll Limitada, acquired 50% of the shares of a company incorporated in Colombia called Zona Franca Central Cervecera S.A.S. (ZF CC), which relates to a joint agreements and that qualifies as a joint operations, in which CCU and Grupo Postobón participate as equal shareholders. The amount of this transaction was US$ 10,204, equivalents to ThCh$ 6,432. The purpose of ZF CC is acting exclusively as industrial user of one or more free trade zones; manufacturing and selling products of its own brands and through licenses to CCC. CCC markets these products.
For the purposes above, previous associations involves the construction of a beer production plant, with an annual total capacity of 3,000,000 hectoliters.
The compositionParties will also invest in CCC and ZF CC an approximate amount of time deposits is as follows:US$ 200,000,000 in equal parts, following a gradual investment plan agreed by the parties.
As of December 31, 2016:2019 and 2018, the total amount contributed to CCC and ZF CC was US$ 255,734,458 (equivalents to ThCh$ 166,698,958) and US$ 236,857,949 (equivalents to ThCh$ 153,149,320), respectively.
Financial Institution | Issue date | Maturity date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | |||||
Banco Santander | 12-27-2016 | 01-05-2017 | CLP | 1,250,550 | 0.33 |
Banco Santander | 12-28-2016 | 01-10-2017 | CLP | 2,400,792 | 0.33 |
Banco Santander | 12-29-2016 | 01-25-2017 | CLP | 5,701,292 | 0.34 |
Banco Consorcio | 12-28-2016 | 01-26-2017 | CLP | 5,401,782 | 0.33 |
Banco Francés | 12-12-2016 | 01-11-2017 | $ ARG | 201,362 | 1.60 |
Total |
|
|
| 14,955,778 |
|
The Company does not have any contingent liabilities related to joint ventures and associates as December 31, 2019.
As of December 31, 2015:2019 and 2018, the significant items of the financial statements of 100% of joint ventures and associates are summarized as follows:
Financial Institution | Issue date | Maturity date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | |||||
Banco Consorcio | 11-30-2015 | 01-06-2016 | CLP | 3,512,658 | 0.35 |
Banco Consorcio | 12-29-2015 | 01-20-2016 | CLP | 800,181 | 0.34 |
Banco Consorcio | 12-29-2015 | 01-25-2016 | CLP | 2,850,665 | 0.35 |
Banco Consorcio | 12-14-2015 | 01-12-2016 | CLP | 37,568 | 0.32 |
Banco Consorcio | 12-29-2015 | 01-29-2016 | CLP | 2,500,600 | 0.36 |
Banco Consorcio | 12-21-2015 | 01-20-2016 | CLP | 460,521 | 0.34 |
Banco de Crédito e Inversiones | 12-15-2015 | 01-08-2016 | CLP | 7,762,889 | 0.33 |
Banco Santander | 12-21-2015 | 01-20-2016 | CLP | 6,407,467 | 0.35 |
Banco Santander | 12-23-2015 | 01-20-2016 | CLP | 1,251,133 | 0.34 |
Banco Santander | 12-24-2015 | 01-11-2016 | CLP | 1,651,271 | 0.33 |
Banco Santander | 12-28-2015 | 01-25-2016 | CLP | 3,301,122 | 0.34 |
HSBC Bank Chile | 12-17-2015 | 01-14-2016 | CLP | 2,103,298 | 0.33 |
Total |
|
|
| 32,639,373 |
|
| Joint ventures | Joint ventures |
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Assets and Liabilities |
|
|
Current assets | 135,905,220 | 206,761,242 |
Non-current assets | 319,779,443 | 246,997,507 |
Current liabilities | 122,826,437 | 172,143,127 |
Non-current liabilities | 65,850,124 | 2,893,856 |
|
|
|
| Joint ventures | Associates | ||
| For the years ended as of December 31, | |||
| 2019 | 2018 | 2017 | 2017 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Income Statement (Summarized) |
|
| ||
Net sales | 124,808,755 | 70,296,729 | 57,417,288 | 19,760,918 |
Operating result | (42,670,725) | (21,173,985) | (18,606,383) | (4,086,973) |
Net income for year | (31,752,130) | (19,886,274) | (14,352,788) | (4,462,733) |
Other comprehensive income | (49,363,608) | (24,720,721) | (27,052,015) | (5,761,515) |
Depreciation and amortization | (752,201) | (2,656,715) | (2,618,567) | (2,818,923) |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
As of December 31, 2014
The intangible assets movement are detailed as follows:
Financial Institution | Issue date | Maturity date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | |||||
Banco Consorcio | 11-25-2014 | 01-09-2015 | CLP | 5,018,600 | 0.31 |
Banco Consorcio | 12-24-2014 | 01-19-2015 | CLP | 4,002,707 | 0.29 |
Banco Consorcio | 12-22-2014 | 01-20-2015 | CLP | 230,186 | 0.27 |
Banco Consorcio | 12-22-2014 | 01-20-2015 | CLP | 700,588 | 0.28 |
Banco de Chile | 11-06-2014 | 02-05-2015 | CLP | 3,016,500 | 0.30 |
Banco de Chile | 11-25-2014 | 01-09-2015 | CLP | 8,430,240 | 0.30 |
Banco de Chile | 12-11-2014 | 01-12-2015 | CLP | 2,054,168 | 0.31 |
Banco de Chile | 12-26-2014 | 02-10-2015 | CLP | 2,001,000 | 0.30 |
Banco de Chile | 12-30-2014 | 02-10-2015 | CLP | 3,000,300 | 0.30 |
Banco de Chile | 11-06-2014 | 02-05-2015 | UF | 3,039,750 | 1.60 |
Banco de Crédito e Inversiones | 10-28-2014 | 01-08-2015 | CLP | 3,472,080 | 0.30 |
Banco de Crédito e Inversiones | 12-16-2014 | 01-23-2015 | CLP | 8,011,600 | 0.29 |
Banco de Crédito e Inversiones | 10-15-2014 | 01-08-2015 | CLP | 10,079,567 | 0.31 |
Banco de Crédito e Inversiones | 12-26-2014 | 02-10-2015 | CLP | 2,301,073 | 0.28 |
Banco Internacional | 12-16-2014 | 01-23-2015 | CLP | 3,005,700 | 0.38 |
Banco Itaú | 10-29-2014 | 01-27-2015 | CLP | 5,331,387 | 0.28 |
Banco Santander | 11-20-2014 | 01-08-2015 | CLP | 4,518,450 | 0.30 |
Banco Santander | 11-28-2014 | 01-15-2015 | CLP | 5,618,480 | 0.30 |
Banco Santander | 12-03-2014 | 01-08-2015 | CLP | 2,306,440 | 0.30 |
Banco Santander | 12-24-2014 | 01-19-2015 | CLP | 4,703,180 | 0.29 |
Banco Santander | 12-26-2014 | 02-10-2015 | CLP | 4,002,000 | 0.30 |
Banco Santander | 12-30-2014 | 02-10-2015 | CLP | 2,100,203 | 0.29 |
Banco Santander | 12-03-2014 | 01-08-2015 | CLP | 150,420 | 0.30 |
Banco Santander | 12-11-2014 | 01-07-2015 | CLP | 1,803,360 | 0.28 |
Banco Security | 12-22-2014 | 01-23-2015 | CLP | 2,702,430 | 0.30 |
Banco Security | 12-23-2014 | 01-30-2015 | CLP | 2,401,920 | 0.30 |
BancoEstado | 10-29-2014 | 01-27-2015 | UF | 5,370,788 | 0.28 |
Total |
|
|
| 99,373,117 |
|
| Trademarks | Software programs | Water rights | Distribution rights | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
As of January 1, 2018 |
|
|
|
|
|
Historic cost | 63,804,999 | 31,499,321 | 2,250,027 | 659,730 | 98,214,077 |
Accumulated amortization | - | (20,674,588) | - | (507,009) | (21,181,597) |
Book Value | 63,804,999 | 10,824,733 | 2,250,027 | 152,721 | 77,032,480 |
|
|
|
|
|
|
As of December 31, 2018 |
|
|
|
|
|
Additions (1) | 16,647,981 | 3,431,842 | 784,900 | - | 20,864,723 |
Additions for business combinations (cost) (2) | 7,168,245 | 67,119 | - | - | 7,235,364 |
Divestitures (cost) | - | - | (92,415) | - | (92,415) |
Amortization of year | - | (2,999,205) | - | (39,751) | (3,038,956) |
Conversion effect | (1,251,533) | (164,197) | - | (44,251) | (1,459,981) |
Effect of conversion (amortization) | - | (212,119) | - | (23,841) | (235,960) |
Others increase (decreased) (3) | 18,117,445 | 323,268 | - | 218,174 | 18,658,887 |
Changes | 40,682,138 | 446,708 | 692,485 | 110,331 | 41,931,662 |
Book Value | 104,487,137 | 11,271,441 | 2,942,512 | 263,052 | 118,964,142 |
|
|
|
|
|
|
As of December 31, 2018 |
|
|
|
|
|
Historic cost | 104,487,137 | 35,157,353 | 2,942,512 | 833,653 | 143,420,655 |
Accumulated amortization | - | (23,885,912) | - | (570,601) | (24,456,513) |
Book Value | 104,487,137 | 11,271,441 | 2,942,512 | 263,052 | 118,964,142 |
|
|
|
|
|
|
As of December 31, 2019 |
|
|
|
|
|
Additions | - | 7,624,915 | 268,321 | - | 7,893,236 |
Additions for business combinations (cost) (2) | 393,946 | - | - | - | 393,946 |
Amortization of year | - | (3,363,211) | - | (99,933) | (3,463,144) |
Conversion effect | (12,069,829) | (478,931) | - | (121,562) | (12,670,322) |
Effect of conversion (amortization) | - | 188,764 | - | 37,420 | 226,184 |
Others increase (decreased) (3) | 13,535,980 | 605,356 | - | 133,288 | 14,274,624 |
Changes | 1,860,097 | 4,576,893 | 268,321 | (50,787) | 6,654,524 |
Book Value | 106,347,234 | 15,848,334 | 3,210,833 | 212,265 | 125,618,666 |
|
|
|
|
|
|
As of December 31, 2019 |
|
|
|
|
|
Historic cost | 106,347,234 | 42,908,693 | 3,210,833 | 845,379 | 153,312,139 |
Accumulated amortization | - | (27,060,359) | - | (633,114) | (27,693,473) |
Book Value | 106,347,234 | 15,848,334 | 3,210,833 | 212,265 | 125,618,666 |
(1) Corresponds mainly to the brands mentioned inNote 1 – General information, letter C).
(2) SeeNote 15 – Business combinations.
(3) Corresponds to the financial effect of the application IAS 29 "Financial reporting in hyperinflationary economies”.
There are no restrictions or pledges on intangible assets.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The composition of Securities purchased under resale agreements iscash generating units associated to thetrademarks are detailed as follows:
As of December 31, 2016:
Financial Institution | Securities purchased (*) | Issue date | Maturity date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | ||||||
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-28-2016 | 01-04-2017 | CLP | 3,531,124 | 0.32 |
BanChile Corredores de Bolsa S.A. | BancoEstado | 12-28-2016 | 01-04-2017 | CLP | 3,602,675 | 0.32 |
BanChile Corredores de Bolsa S.A. | Scotiabank Sudamericano | 12-28-2016 | 01-04-2017 | CLP | 2,044,419 | 0.32 |
BanChile Corredores de Bolsa S.A. | Banco Santander | 12-28-2016 | 01-04-2017 | CLP | 674,935 | 0.32 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-28-2016 | 01-06-2017 | CLP | 1,679,525 | 0.32 |
BanChile Corredores de Bolsa S.A. | BancoEstado | 12-28-2016 | 01-06-2017 | CLP | 1,205,429 | 0.32 |
BanChile Corredores de Bolsa S.A. | Scotiabank Sudamericano | 12-28-2016 | 01-06-2017 | CLP | 1,116,326 | 0.32 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-29-2016 | 01-06-2017 | CLP | 1,427,025 | 0.31 |
BanChile Corredores de Bolsa S.A. | BancoEstado | 12-29-2016 | 01-06-2017 | CLP | 1,725,807 | 0.31 |
BanChile Corredores de Bolsa S.A. | Scotiabank Sudamericano | 12-29-2016 | 01-06-2017 | CLP | 5,799,890 | 0.31 |
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones | 12-29-2016 | 01-06-2017 | CLP | 1,549,449 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Sudamericano | 12-29-2016 | 01-06-2017 | CLP | 3,916,539 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú | 12-29-2016 | 01-06-2017 | CLP | 6,085,662 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | BancoEstado | 12-29-2016 | 01-10-2017 | CLP | 2,400,528 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones | 12-29-2016 | 01-10-2017 | CLP | 6,019,097 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | BBVA Chile | 12-29-2016 | 01-10-2017 | CLP | 3,933,092 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | BancoEstado | 12-30-2016 | 01-10-2017 | CLP | 1,600,149 | 0.28 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú | 12-30-2016 | 01-10-2017 | CLP | 3,000,280 | 0.28 |
BancoEstado S.A. Corredores de Bolsa | BBVA Chile | 12-29-2016 | 01-10-2017 | CLP | 1,350,297 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco BICE | 12-29-2016 | 01-05-2017 | CLP | 105,017 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-29-2016 | 01-10-2017 | CLP | 500,110 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander | 12-29-2016 | 01-10-2017 | CLP | 3,500,770 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-29-2016 | 01-16-2017 | CLP | 4,000,880 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-29-2016 | 01-20-2017 | CLP | 1,917,467 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | BBVA Chile | 12-29-2016 | 01-20-2017 | CLP | 82,974 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-29-2016 | 01-03-2017 | CLP | 250,055 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | BancoEstado | 12-29-2016 | 01-05-2017 | CLP | 6,101,342 | 0.33 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones | 12-27-2016 | 01-03-2017 | CLP | 925,383 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | BBVA Chile | 12-29-2016 | 01-05-2017 | CLP | 725,160 | 0.33 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-28-2016 | 01-16-2017 | CLP | 872,178 | 0.32 |
BanChile Corredores de Bolsa S.A. | BancoEstado | 12-28-2016 | 01-16-2017 | CLP | 435,612 | 0.32 |
BanChile Corredores de Bolsa S.A. | Scotiabank Sudamericano | 12-28-2016 | 01-16-2017 | CLP | 1,865,909 | 0.32 |
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones | 12-28-2016 | 01-16-2017 | CLP | 1,241,355 | 0.32 |
BanChile Corredores de Bolsa S.A. | Banco Santander | 12-28-2016 | 01-16-2017 | CLP | 261,444 | 0.32 |
Total |
|
|
|
| 75,447,904 |
|
Segment | Cash Generating Unit | As of December 31, 2019 | As of December 31, 2018 |
(CGU) | ThCh$ | ThCh$ | |
Chile | Embotelladoras Chilenas Unidas S.A. | 32,109,965 | 31,659,575 |
| Manantial S.A. | 1,166,000 | 1,166,000 |
| Compañía Pisquera de Chile S.A. | 1,363,782 | 1,363,782 |
| Cervecería Kunstmann S.A. (3) (5) | 1,091,223 | 1,091,223 |
| Sub-Total | 35,730,970 | 35,280,580 |
International Business | CCU Argentina S.A. and subsidiaries (1) | 38,839,911 | 36,807,884 |
| Marzurel S.A., Coralina S.A. and Milotur S.A. | 2,482,090 | 2,651,576 |
| Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A. | 3,542,203 | 3,558,832 |
| Bebidas Bolivianas BBO S.A. (2) | 5,864,121 | 6,363,540 |
| Sub-Total | 50,728,325 | 49,381,832 |
Wines | Viña San Pedro Tarapacá S.A. (4) | 19,887,939 | 19,824,725 |
| Sub-Total | 19,887,939 | 19,824,725 |
Total |
| 106,347,234 | 104,487,137 |
(*) All financial instruments acquired under resale agreements, correspond to time deposits and are subject to a fixed interest rate.(1)SeeNote 1 – General Information, letter C).
(2)SeeNote 15 – Business combinations, letter a).
(3)SeeNote 15 – Business combinations, letter b).
(4)SeeNote 15 – Business combinations, letter c).
(5)SeeNote 15 – Business combinations, letter d).
Management has not found any evidence of impairment of intangible assets. The same methodology described inNote 18 - Goodwill, has been used fortrademarks with indefinite useful lives.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The goodwill movement is detailed as follows:
| |
ThCh$ | |
As of January 1, 2018 | |
Historic cost | 94,617,474 |
Book Value | 94,617,474 |
As of December 31, 2018 | |
Additions for business combinations (1) | 10,832,577 |
Other increases (decreases) (2) | 21,881,066 |
Conversion effect | (4,286,216) |
Changes | 28,427,427 |
Book Value | 123,044,901 |
As of December 31, 2018 | |
Historic cost | 123,044,901 |
Book Value | 123,044,901 |
As of December 31, 2019 | |
Additions for business combinations (1) | 306,691 |
Other increases (decreases) (2) | 9,153,712 |
Conversion effect | (7,549,866) |
Changes | 1,910,537 |
Book Value | 124,955,438 |
As of December 31, 2019 | |
Historic cost | 124,955,438 |
Book Value | 124,955,438 |
As(2) Corresponds to the financial effect of December 31, 2015:the application IAS 29 "Financial reporting in hyperinflationary economies”.
Financial Institution | Securities purchased (*) | Issue date | Maturity date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | ||||||
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-24-2015 | 01-08-2016 | CLP | 3,731,991 | 0.32 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-28-2015 | 01-08-2016 | CLP | 4,253,623 | 0.31 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-28-2015 | 01-20-2016 | CLP | 19,557 | 0.30 |
BanChile Corredores de Bolsa S.A. | Banco de Crédito e Inversiones | 12-28-2015 | 01-08-2016 | CLP | 8,828,519 | 0.31 |
BanChile Corredores de Bolsa S.A. | BancoEstado | 12-24-2015 | 01-08-2016 | CLP | 4,674,281 | 0.32 |
BanChile Corredores de Bolsa S.A. | BancoEstado | 12-28-2015 | 01-08-2016 | CLP | 3,923,128 | 0.31 |
BanChile Corredores de Bolsa S.A. | BancoEstado | 12-28-2015 | 01-20-2016 | CLP | 449 | 0.30 |
BancoEstado S.A. Corredores de Bolsa | Banco BICE | 12-29-2015 | 01-14-2016 | CLP | 980,345 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-28-2015 | 01-04-2016 | CLP | 4,693,648 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-29-2015 | 01-08-2016 | CLP | 7,565,908 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | Banco de Chile | 12-29-2015 | 01-14-2016 | CLP | 4,219,808 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | Banco de Crédito e Inversiones | 12-28-2015 | 01-04-2016 | CLP | 3,999,302 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú | 12-30-2015 | 01-07-2016 | CLP | 200,021 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú | 12-30-2015 | 01-14-2016 | CLP | 2,749,535 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú | 12-30-2015 | 01-14-2016 | CLP | 750,078 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú | 12-28-2015 | 01-07-2016 | CLP | 2,600,806 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Banco Itaú | 12-29-2015 | 01-01-2016 | CLP | 1,300,277 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | Banco Santander | 12-29-2015 | 01-14-2016 | CLP | 3,079,945 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | Banco Security | 12-28-2015 | 01-04-2016 | CLP | 5,779,339 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Banco Security | 12-29-2015 | 01-08-2016 | CLP | 241,899 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | Banco Security | 12-29-2015 | 01-14-2016 | CLP | 1,919,498 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | BancoEstado | 12-28-2015 | 01-04-2016 | CLP | 4,837,882 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | BancoEstado | 12-29-2015 | 01-08-2016 | CLP | 140,839 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | BancoEstado | 12-29-2015 | 01-14-2016 | CLP | 10,702,283 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | BancoEstado | 12-23-2015 | 01-12-2016 | CLP | 195,156 | 0.30 |
BancoEstado S.A. Corredores de Bolsa | BBVA Chile | 12-28-2015 | 01-04-2016 | CLP | 1,003,626 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | BBVA Chile | 12-29-2015 | 01-08-2016 | CLP | 353,294 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | BBVA Chile | 12-30-2015 | 01-14-2016 | CLP | 9,801,762 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Sudamericano | 12-29-2015 | 01-14-2016 | CLP | 652,718 | 0.32 |
BancoEstado S.A. Corredores de Bolsa | Scotiabank Sudamericano | 12-28-2015 | 01-04-2016 | CLP | 2,443,254 | 0.31 |
BancoEstado S.A. Corredores de Bolsa | BancoEstado | 12-29-2015 | 01-08-2016 | CLP | 800,000 | 0.32 |
BBVA Corredores de Bolsa S.A. | BBVA Chile | 12-22-2015 | 01-11-2016 | CLP | 350,326 | 0.31 |
Valores Security S.A. C. de B. | Banco BICE | 12-22-2015 | 01-07-2016 | CLP | 110,651 | 0.34 |
Valores Security S.A. C. de B. | Banco Central de Chile | 12-28-2015 | 01-04-2016 | CLP | 4,856,917 | 0.32 |
Valores Security S.A. C. de B. | Banco Central de Chile | 11-30-2015 | 01-06-2016 | CLP | 4,053,610 | 0.34 |
Valores Security S.A. C. de B. | Banco Consorcio | 12-28-2015 | 01-04-2016 | CLP | 24,999 | 0.32 |
Valores Security S.A. C. de B. | Banco de Crédito e Inversiones | 12-28-2015 | 01-04-2016 | CLP | 119,401 | 0.32 |
Valores Security S.A. C. de B. | Banco Itaú | 12-28-2015 | 01-04-2016 | CLP | 4,234,301 | 0.32 |
Valores Security S.A. C. de B. | Banco Security | 11-30-2015 | 01-06-2016 | CLP | 1,725,673 | 0.34 |
Valores Security S.A. C. de B. | Banco Security | 12-28-2015 | 01-04-2016 | CLP | 2,707,819 | 0.32 |
Valores Security S.A. C. de B. | Banco Security | 12-22-2015 | 01-07-2016 | CLP | 14,478 | 0.34 |
Valores Security S.A. C. de B. | BancoEstado | 11-30-2015 | 01-06-2016 | CLP | 241,798 | 0.34 |
Valores Security S.A. C. de B. | BancoEstado | 12-28-2015 | 01-04-2016 | CLP | 401,100 | 0.32 |
Valores Security S.A. C. de B. | BancoEstado | 12-22-2015 | 01-07-2016 | CLP | 125,126 | 0.34 |
Valores Security S.A. C. de B. | BBVA Chile | 12-28-2015 | 01-04-2016 | CLP | 1,659,944 | 0.32 |
Total |
|
|
|
| 117,068,914 |
|
(*) All financial instruments acquired under resale agreements, correspond to time deposits and are subject to a fixed interest rate.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
AsFor the purpose of December 31, 2014:impairment testing, goodwill acquired in a business combination is allocated as of the acquisition date to each of the CGUs, or groups of CGUs that is expected to benefit from the business combination synergies. The carrying amount of goodwill assigned to the CGUs within the Company’s segments is detailed as follows:
Financial Institution | Securities purchased (*) | Issue date | Maturity date | Currency | Amount | Monthly interest rate (%) |
ThCh$ | ||||||
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-16-2014 | 01-15-2015 | CLP | 3,004,500 | 0.30 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-16-2014 | 01-20-2015 | CLP | 10,015,000 | 0.30 |
BanChile Corredores de Bolsa S.A. | Banco de Chile | 12-17-2014 | 01-09-2015 | CLP | 2,002,613 | 0.28 |
BanChile Corredores de Bolsa S.A. | Banco Santander | 12-16-2014 | 01-15-2015 | CLP | 8,012,000 | 0.30 |
BanChile Corredores de Bolsa S.A. | Banco Santander | 12-17-2014 | 01-09-2015 | CLP | 2,002,613 | 0.28 |
BanChile Corredores de Bolsa S.A. | Scotiabank Sudamericano | 12-17-2014 | 01-09-2015 | CLP | 1,001,307 | 0.28 |
BanChile Corredores de Bolsa S.A. | Scotiabank Sudamericano | 12-22-2014 | 01-23-2015 | CLP | 1,401,176 | 0.28 |
BanChile Corredores de Bolsa S.A. | Scotiabank Sudamericano | 12-16-2014 | 01-15-2015 | CLP | 4,006,000 | 0.30 |
Banco Estado S.A. Corredores de Bolsa | BancoEstado | 12-17-2014 | 01-08-2015 | CLP | 600,784 | 0.28 |
Banco Estado S.A. Corredores de Bolsa | BancoEstado | 12-19-2014 | 01-08-2015 | CLP | 250,280 | 0.28 |
Banco Estado S.A. Corredores de Bolsa | BancoEstado | 12-26-2014 | 01-08-2015 | CLP | 2,501,167 | 0.28 |
Banco Estado S.A. Corredores de Bolsa | BancoEstado | 12-30-2014 | 01-20-2015 | CLP | 2,250,203 | 0.27 |
Banco Estado S.A. Corredores de Bolsa | BancoEstado | 12-24-2014 | 01-08-2015 | CLP | 2,001,307 | 0.28 |
Banco Estado S.A. Corredores de Bolsa | BancoEstado | 12-23-2014 | 01-06-2015 | CLP | 450,336 | 0.28 |
Banco Estado S.A. Corredores de Bolsa | BancoEstado | 12-29-2014 | 01-08-2015 | CLP | 650,122 | 0.28 |
BBVA Corredores de Bolsa Ltda. | BBVA Banco Bhif | 12-29-2014 | 01-22-2015 | CLP | 2,900,561 | 0.29 |
BBVA Corredores de Bolsa Ltda. | BBVA Banco Bhif | 12-30-2014 | 02-10-2015 | CLP | 5,000,483 | 0.29 |
BBVA Corredores de Bolsa Ltda. | BBVA Banco Bhif | 12-15-2014 | 01-08-2015 | CLP | 2,604,021 | 0.29 |
BBVA Corredores de Bolsa Ltda. | BBVA Banco Bhif | 12-16-2014 | 01-08-2015 | CLP | 1,101,595 | 0.29 |
BBVA Corredores de Bolsa Ltda. | BBVA Banco Bhif | 12-17-2014 | 01-08-2015 | CLP | 250,338 | 0.29 |
BBVA Corredores de Bolsa Ltda. | BBVA Banco Bhif | 12-18-2014 | 01-08-2015 | CLP | 1,301,634 | 0.29 |
BBVA Corredores de Bolsa Ltda. | BBVA Banco Bhif | 12-22-2014 | 01-08-2015 | CLP | 550,479 | 0.29 |
BBVA Corredores de Bolsa Ltda. | BBVA Banco Bhif | 12-23-2014 | 01-08-2015 | CLP | 1,100,851 | 0.29 |
Valores Security S.A. C. de B. | Banco BICE | 11-26-2014 | 01-08-2015 | CLP | 87,863 | 0.31 |
Valores Security S.A. C. de B. | Banco BICE | 12-17-2014 | 01-23-2015 | CLP | 484,241 | 0.28 |
Valores Security S.A. C. de B. | Banco BICE | 12-29-2014 | 01-06-2015 | CLP | 2,920,853 | 0.29 |
Valores Security S.A. C. de B. | Banco Central de Chile | 11-18-2014 | 01-07-2015 | CLP | 288,293 | 0.29 |
Valores Security S.A. C. de B. | Banco Central de Chile | 12-01-2014 | 01-20-2015 | CLP | 1,246,441 | 0.31 |
Valores Security S.A. C. de B. | Banco Central de Chile | 12-17-2014 | 01-23-2015 | CLP | 28,349 | 0.28 |
Valores Security S.A. C. de B. | Banco Central de Chile | 11-26-2014 | 01-08-2015 | CLP | 1,166,177 | 0.31 |
Valores Security S.A. C. de B. | Banco Central de Chile | 12-29-2014 | 01-08-2015 | CLP | 1,000,193 | 0.29 |
Valores Security S.A. C. de B. | Banco Consorcio | 12-29-2014 | 01-15-2015 | CLP | 100,759 | 0.28 |
Valores Security S.A. C. de B. | Banco Consorcio | 12-29-2014 | 01-06-2015 | CLP | 400,077 | 0.29 |
Valores Security S.A. C. de B. | Banco de Crédito e Inversiones | 11-18-2014 | 01-07-2015 | CLP | 886,510 | 0.29 |
Valores Security S.A. C. de B. | Banco Itaú | 11-18-2014 | 01-07-2015 | CLP | 1,037,652 | 0.29 |
Valores Security S.A. C. de B. | Banco Itaú | 11-26-2014 | 01-08-2015 | CLP | 174,866 | 0.31 |
Valores Security S.A. C. de B. | Banco Itaú | 12-01-2014 | 01-20-2015 | CLP | 418,344 | 0.31 |
Valores Security S.A. C. de B. | Banco Itaú | 12-17-2014 | 01-23-2015 | CLP | 1,512,069 | 0.28 |
Valores Security S.A. C. de B. | Banco Itaú | 12-29-2014 | 01-15-2015 | CLP | 788,389 | 0.28 |
Valores Security S.A. C. de B. | Banco Santander | 12-01-2014 | 01-20-2015 | CLP | 413,433 | 0.31 |
Valores Security S.A. C. de B. | Banco Security | 11-18-2014 | 01-07-2015 | CLP | 3,839,782 | 0.29 |
Valores Security S.A. C. de B. | Banco Security | 11-26-2014 | 01-08-2015 | CLP | 1,180,497 | 0.31 |
Valores Security S.A. C. de B. | Banco Security | 12-01-2014 | 01-20-2015 | CLP | 630,151 | 0.31 |
Valores Security S.A. C. de B. | Banco Security | 12-17-2014 | 01-23-2015 | CLP | 3,998,068 | 0.28 |
Valores Security S.A. C. de B. | Banco Security | 12-29-2014 | 01-15-2015 | CLP | 1,318,189 | 0.28 |
Valores Security S.A. C. de B. | Banco Security | 12-29-2014 | 01-06-2015 | CLP | 577,769 | 0.29 |
Valores Security S.A. C. de B. | BancoEstado | 11-18-2014 | 01-07-2015 | CLP | 976,860 | 0.29 |
Valores Security S.A. C. de B. | BancoEstado | 12-17-2014 | 01-23-2015 | CLP | 47,422 | 0.28 |
Valores Security S.A. C. de B. | BBVA Banco Bhif | 12-17-2014 | 01-23-2015 | CLP | 438,345 | 0.28 |
Valores Security S.A. C. de B. | BBVA Banco Bhif | 12-29-2014 | 01-15-2015 | CLP | 469,734 | 0.28 |
Valores Security S.A. C. de B. | BBVA Banco Bhif | 12-29-2014 | 01-06-2015 | CLP | 1,102,267 | 0.29 |
Valores Security S.A. C. de B. | Scotiabank Sudamericano | 12-29-2014 | 01-15-2015 | CLP | 723,563 | 0.28 |
Total |
|
|
|
| 83,216,526 |
|
Segment | Cash Generating Unit | As of December 31, 2019 | As of December 31, 2018 |
(CGU) | ThCh$ | ThCh$ | |
Chile | Embotelladoras Chilenas Unidas S.A. | 25,257,686 | 25,257,686 |
| Manantial S.A. | 8,879,245 | 8,879,245 |
| Compañía Pisquera de Chile S.A. | 9,808,550 | 9,808,550 |
| Los Huemules S.R.L. | 5,892 | 8,679 |
| Cervecería Kunstmann S.A. | 456,007 | 456,007 |
| Cervecería Szot SpA. (1) | 202,469 | - |
| Sub-Total | 44,609,849 | 44,410,167 |
International Business | CCU Argentina S.A. and subsidiaries | 26,014,868 | 24,863,266 |
| Marzurel S.A., Coralina S.A. and Milotur S.A. | 4,422,841 | 4,839,916 |
| Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A. | 5,214,846 | 5,236,732 |
| Bebidas Bolivianas BBO S.A. (2) | 12,276,890 | 11,278,676 |
| Sub-Total | 47,929,445 | 46,218,590 |
Wines | Viña San Pedro Tarapacá S.A. | 32,416,144 | 32,416,144 |
| Sub-Total | 32,416,144 | 32,416,144 |
Total |
| 124,955,438 | 123,044,901 |
(*) All financial instruments acquired under resale agreements, correspond
(1)SeeNote 15 – Business combinations, letter d).
(2)SeeNote 15 – Business combinations, letter a).
Goodwill assigned to time deposits and arethe CGUs is subject to impairment test on an annually basis or more frequently if there are signs of potential impairment. These signs may include a fixed interest rate.significant change in the economic environment that could affect the business scenario, new legal provisions, operational performance indicators or the disposal of an important part of a CGU. The impairment loss is recognized for the amount by which the carrying amount of the CGU exceeds its recoverable amount. The recoverable value of each CGU is determined as the highest amount between its value in use and its fair value minus the cost of selling. The management considers that the value in use approach, determined by a discounted cash flow model, is the most reliable method to determine the recoverable values of the CGU.
The following table shows the most relevant inputs for each CGU in where there is a relevant Goodwill and / or intangible assets with indefinite useful life assigned:
| Chile | Argentina | Uruguay | Paraguay | Bolivia |
| |||||
Estimated CAPEX for the year 2020 ThCh$ | 138,497 | 39,347 | 919 | 827 | 2,324 |
Perpetual growth | 3.00% | 2.20% | 3.00% | 2.20% | 4.50% |
Discount rate | 7.53% | 17.25% | 9.31% | 10.25% | 10.00% |
|
|
|
|
|
|
The following describes some considerations applied when determining the corresponding values in use of the CGUs that have Goodwill and / or intangible assets with indefinite useful life assigned:
Projection period: A five-year horizon is considered for all units / brands. An exceptionally longer period of time (no longer than ten years), is considered for those units / brands that require a longer maturation period.
Cash Flow: To determine the value in use, the Company has used cash flow projections in line with the time horizon described above, based on budgets, strategic plans and projections reviewed by management for the same period of time. Given the maturity of our business, these budgets have been historicaly consistent with the results.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The total accumulatedManagement’s cash flows paid in business combinationsflow projection included significant judgements and acquisitions of associates are as follows:assumptions relating to perpetual growth rates and discount rates.
|
| For the years ended as of December 31, | ||
| 2016 | 2015 | 2014 | |
| ThCh$ | ThCh$ | ThCh$ | |
Total disbursement per business acquisition |
|
|
|
|
Cash flow used in the purchase of non-controling interests (1) |
| 2,174,370 | 1,921,245 | 13,776,885 |
Other cahs payment to acquire interests in joint ventures (2) |
| 27,043,481 | 42,163,032 | 1,445,478 |
Cahs flow used for control of subsidiaries or other business (3) |
| 19,111,686 | - | - |
Payment for changes in ownership interests in subidiaries (4) |
| 641,489 | - | 8,369 |
Total |
| 48,971,026 | 44,084,277 | 15,230,732 |
Perpetual growth: Although the Company expects a higher volume and price growth in the medium and long term, a nominal growth of 3% has been assumed for the perpetuity in Chilean units, which is a conservative assumption considering the historical capacity and nature of the business where the company operates. In the case of Paraguay and Argentina, a perpetuity rate of 2.2% is used, consistent with the expected long-term growth for these countries. For Bolivia, a perpetuity rate of 4.5% equivalent to long-term inflation is used. In the case of Uruguay, a perpetuity rate of 3.0% is used, which is composed by the average inflation rate of the United States of America mentioned above, plus an 80% of Uruguay's potential GDP growth in the long term (1.0% - 1.1%).
(1)Discount rate: Corresponds to an increasedthe nominal WACC (Weighted Average Cost of capital made in 2016 and 2015 and the acquisitions made during 2014Capital) rate of Bebidas Bolivianas BBO S.A. (seeNote 19).each country.
(2)Corresponds to an increased of capital made in 2016, 2015 and 2014 of Central Cervecera de Colombia S.A.S. (seeNote 19)and
According to the sensitivities calculated, the Administration determines that there is no reasonably possible change in the assumptions tested that could cause the carrying amount paidexceeds the recoverable value. As of December 31, 2019, the Administration has not noted signs of impairment in proportion to the creation of the company Promarca Internacional SpA. (SeeNote 1, letter a)). In 2015 corrsponds to the payment of 50% of the acquisitions of Bebidas Carozzi CCU SpA. (seeNote 1).Goodwill or Intangible assets with indefinite useful lives.
(3)Corresponds to acquisition of additional interests in Manantial S.A. through its subsidiaries Aguas CCU-Nestlé Chile S.A. and Embotelladoras Chilenas Unidas S.A. (seeNote 1, point (1)).
(4)In 2016 corresponds to the payment for ownership on Artisan SRL (Paraguay) (seeNote 8, letter a)).
The accounts receivables – trade and other receivables were as follows:
| As of December 31, 2016 | As of December 31, 2015 | ||
| Current | Non current | Current | Non current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Accounts receivables: |
|
|
|
|
ChileOperating segment (1) | 145,670,490 | - | 136,203,740 | - |
International business Operating segment | 63,600,881 | - | 52,591,935 | - |
Wines Operating segment | 42,958,093 | - | 43,333,189 | - |
Others accounts receivables (2) | 32,375,234 | 3,563,797 | 24,033,944 | - |
Impairment loss estimate | (3,837,914) | - | (3,936,871) | - |
Total | 280,766,784 | 3,563,797 | 252,225,937 | - |
(1)From the third quarter of 2016 onwards, the Chile Operating segment incorporated in their management the business activities performed by the Strategic Service Units (SSU), which include Transportes CCU Limitada, Comercial CCU S.A., CRECCU S.A. and Fábrica de Envases Plásticos S.A. As of December 2015, the account receivables of the Strategic Service Units were disclosed under item Others for an amount of ThCh$ 47,871,339, however for comparability purposes these account receivable have been reclassifficated to the Chile Operating segment.
(2)As of December 31, 2016, this item mainly includes ThCh$ 526,959 in short-term and ThCh$ 2,898,277 in long-term related to de account receivable to the sale of 49% that subsidiriary CPCh maintained in Compañía Pisquera Bauzá S.A. (seeNote 24).
The Company’s accounts receivable are denominated in the following currencies:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Chilean Peso | 179,896,747 | 158,757,937 |
Argentine Peso | 56,773,947 | 48,535,814 |
US Dollar | 24,449,473 | 25,498,590 |
Euro | 7,025,446 | 7,463,166 |
Unidad de Fomento | 3,613,395 | 7,102 |
Uruguayan Pesos | 5,304,719 | 4,074,908 |
Paraguayan Guaraní | 6,010,193 | 6,111,636 |
Others currencies | 1,256,661 | 1,776,784 |
Total | 284,330,581 | 252,225,937 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The detail of the accounts receivable maturities as ofDecember 31, 2016, isProperty, plant and equipment movements are detailed as follows:
| Total | Current balance | Overdue balances | |||
0 a 3 months | 3 a 6 months | 6 a 12 months | More than 12 months | |||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Accounts receivables: |
|
|
|
|
|
|
ChileOperating segment | 145,670,490 | 134,545,838 | 8,090,616 | 1,136,211 | 638,417 | 1,259,408 |
International business Operating segment | 63,600,881 | 55,230,423 | 7,521,071 | 130,299 | 275,300 | 443,788 |
Wines reportable Operating segment | 42,958,093 | 39,499,120 | 3,028,707 | 208,628 | 137,671 | 83,967 |
Others accounts receivables | 32,375,234 | 31,897,595 | 186,213 | 291,426 | - | - |
Sub Total | 284,604,698 | 261,172,976 | 18,826,607 | 1,766,564 | 1,051,388 | 1,787,163 |
Impairment loss estimate | (3,837,914) | - | (1,130,545) | (478,707) | (542,389) | (1,686,273) |
Total current | 280,766,784 | 261,172,976 | 17,696,062 | 1,287,857 | 508,999 | 100,890 |
Others accounts receivables | 3,563,797 | 3,563,797 | - | - | - | - |
Total non-current | 3,563,797 | 3,563,797 | - | - | - | - |
| Land, buildings and construction | Machinery and equipment | Bottles and containers | Other Equipment | Assets under construction | Furniture, accessories and vehicles | Under production vines | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
As of January 1, 2018 |
|
|
|
|
|
|
|
|
Historic cost | 622,388,974 | 485,977,017 | 159,541,057 | 142,280,575 | 108,606,889 | 79,194,908 | 29,367,600 | 1,627,357,020 |
Accumulated depreciation | (179,320,875) | (280,432,996) | (86,748,741) | (94,621,343) | - | (53,842,782) | (14,476,855) | (709,443,592) |
Book Value | 443,068,099 | 205,544,021 | 72,792,316 | 47,659,232 | 108,606,889 | 25,352,126 | 14,890,745 | 917,913,428 |
|
|
|
|
|
|
|
|
|
As of December 31, 2018 |
|
|
|
|
|
|
|
|
Additions | - | - | - | - | 123,230,196 | - | - | 123,230,196 |
Additions of historic cost by business combination | 12,734,666 | 7,481,173 | 4,940,095 | 3,656,444 | 99,432 | 824,392 | - | 29,736,202 |
Additions of accumulated depreciation by business combination | (762,783) | (7,432,623) | (2,384,378) | (2,509,968) | - | (752,521) | - | (13,842,273) |
Transfers | 39,838,515 | 45,234,574 | 26,616,253 | 16,798,523 | (137,622,837) | 6,919,683 | 2,215,289 | - |
Conversion effect historic cost | (5,754,382) | (14,801,093) | (20,321,228) | (6,309,411) | (1,509,220) | (594,460) | (159,909) | (49,449,703) |
Write off (cost) | (72,907) | (2,578,367) | (3,449,791) | (13,306,471) | - | (1,797,179) | - | (21,204,715) |
Write off (depreciation) | 5,707 | 2,397,406 | 2,541,051 | 13,063,328 | - | 1,270,646 | - | 19,278,138 |
Capitalized interests | - | - | - | - | 609,921 | - | - | 609,921 |
Depreciation | (17,172,212) | (27,289,843) | (23,911,356) | (14,882,856) | - | (6,025,870) | (1,017,002) | (90,299,139) |
Conversion effect depreciation | 707,133 | 6,290,990 | 12,688,447 | 5,358,799 | - | 288,185 | 92,393 | 25,425,947 |
Others increase (decreased) (1) | 26,662,381 | 31,149,984 | 19,091,618 | 2,850,058 | 4,240,542 | 290,325 | 673,686 | 84,958,594 |
Divestitures (cost) | (2,476,636) | (790,001) | (5,687,343) | (2,573,198) | (226,716) | (4,051,693) | (1,206,401) | (17,011,988) |
Divestitures (depreciation) | 85,208 | 264,080 | 4,249,122 | 2,417,657 | - | 3,960,623 | 945,333 | 11,922,023 |
Changes | 53,794,690 | 39,926,280 | 14,372,490 | 4,562,905 | (11,178,682) | 332,131 | 1,543,389 | 103,353,203 |
Book Value | 496,862,789 | 245,470,301 | 87,164,806 | 52,222,137 | 97,428,207 | 25,684,257 | 16,434,134 | 1,021,266,631 |
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|
|
|
|
|
|
|
|
As of December 31, 2018 |
|
|
|
|
|
|
|
|
Historic cost | 693,438,996 | 552,095,601 | 180,757,354 | 143,550,263 | 97,428,207 | 80,890,915 | 30,862,740 | 1,779,024,076 |
Accumulated depreciation | (196,576,207) | (306,625,300) | (93,592,548) | (91,328,126) | - | (55,206,658) | (14,428,606) | (757,757,445) |
Book Value | 496,862,789 | 245,470,301 | 87,164,806 | 52,222,137 | 97,428,207 | 25,684,257 | 16,434,134 | 1,021,266,631 |
|
|
|
|
|
|
|
|
|
As of December 31, 2019 |
|
|
|
|
|
|
|
|
Additions | - | - | - | - | 131,852,714 | - | - | 131,852,714 |
Additions of historic cost by business combination | 8,271,085 | 2,605,523 | 2,672 | - | - | - | - | 10,879,280 |
Additions of accumulated depreciation by business combination | (5,168) | (14,806) | (838) | - | - | - | - | (20,812) |
Transfers | 39,314,971 | 29,945,516 | 19,737,192 | 18,915,984 | (117,631,917) | 7,304,360 | 2,413,894 | - |
Conversion effect historic cost | (11,615,913) | (18,521,702) | (18,784,647) | (5,216,819) | (1,119,515) | (299,589) | (244,966) | (55,803,151) |
Write off (cost) | (916,048) | (1,686,432) | (5,447,699) | (19,566,224) | - | (18,177,535) | - | (45,793,938) |
Write off (depreciation) | 772,278 | 1,250,400 | 4,464,153 | 19,540,873 | - | 18,095,047 | - | 44,122,751 |
Capitalized interests | - | - | - | - | 909,256 | - | - | 909,256 |
Depreciation (2) | (22,502,711) | (32,380,334) | (23,542,865) | (15,756,612) | - | (6,904,318) | (1,132,431) | (102,219,271) |
Conversion effect depreciation | 399,539 | 2,071,105 | 5,068,567 | 1,712,436 | - | 152,781 | - | 9,404,428 |
Others increase (decreased) (1) | 13,715,717 | 24,772,155 | 15,358,642 | 3,240,126 | 5,731,215 | 269,831 | 273,374 | 63,361,060 |
Divestitures (cost) | (1,861) | (40,001) | (405,192) | (5,835,237) | (583,270) | (8,872) | (428,543) | (7,302,976) |
Divestitures (depreciation) | 1,609 | 2,064 | 336,276 | 5,758,846 | - | 6,986 | - | 6,105,781 |
Additions by IFRS 16 | 16,411,597 | 2,879,880 | - | - | - | 1,480,925 | - | 20,772,402 |
Changes | 43,845,095 | 10,883,368 | (3,213,739) | 2,793,373 | 19,158,483 | 1,919,616 | 881,328 | 76,267,524 |
Book Value | 540,707,884 | 256,353,669 | 83,951,067 | 55,015,510 | 116,586,690 | 27,603,873 | 17,315,462 | 1,097,534,155 |
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|
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|
|
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|
|
As of December 31, 2019 |
|
|
|
|
|
|
|
|
Historic cost | 760,199,222 | 592,555,555 | 190,100,694 | 133,582,436 | 116,586,690 | 72,083,918 | 31,942,579 | 1,897,051,094 |
Accumulated depreciation | (219,491,338) | (336,201,886) | (106,149,627) | (78,566,926) | - | (44,480,045) | (14,627,117) | (799,516,939) |
Book Value | 540,707,884 | 256,353,669 | 83,951,067 | 55,015,510 | 116,586,690 | 27,603,873 | 17,315,462 | 1,097,534,155 |
The detail
(1)Corresponds to the financial effect of the accounts receivable maturities asapplication IAS 29 "Financial reporting in hyperinflationary economies”.
(2)Includes depreciation of December 31, 2015, is as follows:the right of use assets according to IFRS16. SeeNote 4 - Accounting changes, letter a).
| Total | Current balance | Overdue balances | |||
| 0 a 3 months | 3 a 6 months | 6 a 12 months | More than 12 months | ||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Accounts receivables: |
|
|
|
|
|
|
ChileOperating segment | 136,203,740 | 124,024,627 | 10,108,821 | 659,670 | 511,993 | 898,629 |
International business Operating segment | 52,591,935 | 45,600,898 | 5,839,178 | 226,648 | 321,512 | 603,699 |
Wines reportable Operating segment | 43,333,189 | 40,022,791 | 2,715,939 | 193,781 | 299,921 | 100,757 |
Others accounts receivables | 24,033,944 | 22,204,897 | 370,715 | 982,963 | 475,369 | - |
Sub Total | 256,162,808 | 231,853,213 | 19,034,653 | 2,063,062 | 1,608,795 | 1,603,085 |
Impairment loss estimate | (3,936,871) | - | (888,274) | (280,839) | (1,168,592) | (1,599,166) |
Total | 252,225,937 | 231,853,213 | 18,146,379 | 1,782,223 | 440,203 | 3,919 |
The Company markets its products through retail, wholesale clients, chains and supermarkets. As ofDecember 31, 2016, the accounts receivable from the three most important supermarket chains in Chile and Argentina represent 27.1% (29.1% in 2015) of the total accounts receivable.
As indicated in the Risk management note (Note 5), for Credit Risk purposes, the Company acquires credit insurance policies to cover approximately 90% and 99% of the significant accounts receivable balances domestic and export, respectively, of the total of the account receivables. Regarding amounts aged more than 6 months and for which no allowances have been constituted, they correspond mainly to amounts already covered by the credit insurance policies. In addition, there are amounts overdue within ranges for which, in accordance with current policies are only partially impaired for, based on a case by case analysis.
For the above mentioned, management estimates that it does not require establishing allowances for further deterioration, in addition to those already constituted based on an aging analysis of these balances.
The write-offs of our doubtful clients are once all pre-trial and judicial, efforts have been made and exhausted all means of payment, with the proper demonstration of the insolvency of customers. This process of punishment normally takes more than 1 year.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The movementbalance of the impairment losses provision for accounts receivableland at the end of each year is as follows:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Balance at the beginning of year | (3,936,871) | (3,153,132) |
Impairment estimate for accounts receivable | (1,352,722) | (1,883,258) |
Uncollectible accounts | 219,222 | 264,618 |
Back of unused provisions | 1,031,841 | 557,106 |
Effect of translation into presentation currency | 200,616 | 277,795 |
Total | (3,837,914) | (3,936,871) |
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Land | 265,724,058 | 249,548,928 |
Total | 265,724,058 | 249,548,928 |
Capitalized interest as of December 31, 2019, amounted ThCh$ 909,256 (ThCh$ 609,921 in 2018 and ThCh$ 1,042,045 in 2017)), using an annually capitalization rate of 3.68% (3.71% in 2018 and 4.25% in 2017).
The Company, through its subsidiary Viña San Pedro Tarapacá S.A., has biological assets corresponding to vines that produce grapes. The vines are segmented into those under formation and those under production, and they are grown both on leased and owned land. The grapes harvested from these vines are used in the manufacturing of wine, which is marketed both in the domestic market and abroad.
As ofDecember 31, 2019, the Company maintained approximately 5,080 hectares of which 4,046 are for vines in production stage. Of the total hectares mentioned above, 3,710 correspond to own land and 336 to leased land.
The vines under formation are recorded at historic cost, and only start being depreciated when they are transferred to the production phase, which occurs in the majority of cases in the third year after plantation, when they start producing grapes commercially (in volumes that justify their production-oriented handling and later harvest).
During 2019, the production in plant vines yield was approximately 52.9 million kilos of grapes (52.4 million kilos of grapes in 2018).
By the nature of business of the Company, in the value of the assets it is not considered to start an allowance for cost of dismantling, removal or restoration.
In relation to the impairment losses of property, plant and equipment, the Management has not perceived evidence of impairment with respect to these at December 31, 2019.
The depreciation for the year ended as of December 31, 2019 and 2018, recognized in net incomes and other assets is as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Recognized in net incomes | 99,466,718 | 87,569,949 |
Recognized in others assets | 2,752,553 | 2,729,190 |
Total | 102,219,271 | 90,299,139 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Transactions between the Company and its subsidiaries occur in the normal course of operations and have been eliminated during the consolidation process.Assets under leases:
The amounts indicated as transactions in the following table relatecarrying amount of land and buildings,machinery, equipment and accessories and other properties, plant and equipment relates to trade operations with related companies, which are under similar terms than what a third party would get respect to price and payment conditions. There are no uncollectible estimates decreasing accounts receivable or guarantees provided to related companies.
Balances and transactions with related companies consist of the following:
(1) Business operations agreed upon in Chilean Pesos. Companies not under a current trade account agreement not accrue interest and have payment terms of 30 days.
(2) Business operations agreed upon in Chilean Pesos. The remaining balance accrues interest at 90-days active bank rate (TAB) plus an annual spread. Interests is paid or charged against the trade current account.
(3) Business operations in foreign currencies, not covered by a current trade account, that do not accrue interest and have payment terms of 30 days. Balances are presented at the closing exchange rate.
(4) An agreement between the subsidiary Compañía Pisquera de Chile S.A. with Cooperativa Agrícola Control Pisquero de Elqui and Limarí Ltda. due to differences resulting from the contributions made by the latter. It establishes a 3% annual interest over capital, with annual payments to be made in eight instalments of UF 1,124 each. Beginning February 28, 2007 and UF 9,995 bullet payment at the last contribution date. In accordance with the contract,Cooperativa Agrícola Control Pisquero de Elqui and Limarí Ltda.renew the contract for a period of nine years. Consequently, the UF 9,995 will pay in ten instalments of UF 1,200 each one and a final payment of UF 2,050, beginning February 28, 2015.
(5) An agreement of grape supply between the subsidiary Compañía Pisquera de Chile S.A. with Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. These contracts stipulate a 3% annual interest on the capital, with a term of eight years, and annual payments due on May 31, 2018 and May 31,2020.lease agreements.
The transaction schedule includes all the transactions made with related parties.
The detailmovement of the accounts receivable and payable from related companiesassets for right of use as of December 31, 2016 and 2015,2019 is as follows:
| Land and buildings | Machinery | Fixtures and accessories | Other properties, plants and equipment | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
As of January 1, 2019 |
|
|
|
|
|
Historic cost | 13,585,966 | 206,968 | - | 49,863 | 13,842,797 |
Accumulated depreciation | (1,334,818) | (181,824) | - | (6,095) | (1,522,737) |
Book Value (*) | 12,251,148 | 25,144 | - | 43,768 | 12,320,060 |
As of December 31, 2019 |
|
|
|
|
|
Conversion effect historic cost | - | - | (4,542) | - | (4,542) |
Depreciation | 86,001 | 3,427 | (1,947) | - | 87,481 |
Conversion effect depreciation | - | - | 1,879 | 68 | 1,947 |
Others increase (decreased) (1) | (1,672,077) | (8,750) | 14,111 | (923) | (1,667,639) |
Additions of right of use assets | 16,406,527 | 2,907,407 | 1,400,812 | 57,656 | 20,772,402 |
Depreciation of right of use assets | (3,670,669) | (1,495,128) | (504,841) | (34,950) | (5,705,588) |
Changes | 11,149,782 | 1,406,956 | 905,472 | 21,851 | 13,484,061 |
Book Value | 23,400,930 | 1,432,100 | 905,472 | 65,619 | 25,804,121 |
As of December 31, 2019 |
|
|
|
|
|
Historic cost | 28,320,416 | 3,105,625 | 1,410,382 | 106,596 | 32,943,019 |
Accumulated depreciation | (4,919,486) | (1,673,525) | (504,910) | (40,977) | (7,138,898) |
Book Value | 23,400,930 | 1,432,100 | 905,472 | 65,619 | 25,804,121 |
(1)It corresponds mainly to the financial effect of the application of IAS 29 “Financial Information in Hyperinflationary Economies.
(*) Corresponds to the financial leases obligations under IAS 17.
InNote 21 – Other financial liabilities, letter B)includes the detail of the lease agreements, and it also reconciles the total amount of the future minimum lease payments and their current value as regards such assets.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Accounts receivable from related companies
Current:
Tax ID | Company | Country of origin | Ref. | Relationship | Transaction | Currency | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |||||||
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | (3) | Associated | Sales of products | USD | 42,006 | 78,810 |
0-E | Pepsi Cola Panamericana S.R.L. | Perú | (3) | Associated with the controller | Sales of products | USD | 1,149 | 1,149 |
76,028,758-K | Norgistics Chile S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | - | 110 |
76,029,109-9 | Inversiones Chile Chico Ltda. | Chile | (1) | Related to the controller | Billed services | CLP | 526 | 5,353 |
76,178,803-5 | Viña Tabalí S.A. | Chile | (1) | Related to the controller | Billed services | CLP | 10,513 | 29,817 |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | (1) | Related to the controller | Sales of products | CLP | 120,458 | 142,789 |
77,755,610-K | Comercial Patagona Ltda. | Chile | (1) | Joint venture | Sales of products | CLP | 1,035,566 | 738,270 |
77,755,610-K | Comercial Patagona Ltda. | Chile | (1) | Joint venture | Rental of cranes | CLP | 3,215 | 2,875 |
78,780,780-1 | Operaciones y Servicios Enex Ltda. | Chile | (1) | Related to the controller | Sales of products | CLP | 13,058 | 90,323 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (5) | Shareholder to subsidiary | Advance purchase | CLP | 14,393 | 1,065,214 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (1) | Shareholder to subsidiary | Sales of products | CLP | 7,450 | 24,027 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (4) | Shareholder to subsidiary | Loan | U.F. | 30,542 | 29,589 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (5) | Shareholder to subsidiary | Sales of products | U.F. | 76,620 | 74,529 |
90,081,000-8 | Compañía Chilena de Fósforos S.A. | Chile | (1) | Shareholder to subsidiary | Sales of products | CLP | 2,575 | 5,651 |
90,160,000-7 | Compañía Sud Americana de Vapores S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | 458 | 522 |
90,703,000-8 | Nestlé Chile S.A. | Chile | (1) | Shareholder to subsidiary | Sales of products | CLP | 14,747 | - |
91,021,000-9 | Invexans S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | 4,552 | 3,723 |
91,705,000-7 | Quiñenco S.A. | Chile | (1) | Shareholder Controller | Sales of products | CLP | 1,937 | 3,070 |
92,011,000-2 | Empresa Nacional de Energía ENEX S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | - | 2,136 |
92,048,000-4 | SAAM S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | 1,437 | - |
93,920,000-2 | Antofagasta Minerals S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | 3,479 | 4,198 |
94,625,000-7 | Inversiones Enex S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | 258,306 | 203,349 |
96,427,000-7 | Inversiones y Rentas S.A. | Chile | (1) | Controller | Sales of products | CLP | - | 12,664 |
96,536,010-7 | Inversiones Consolidadas Limitada | Chile | (1) | Related to the controller | Sales of products | CLP | 1,513 | 1,409 |
96,571,220-8 | Banchile Corredores de Bolsa S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | 3,096 | 1,073 |
96,591,040-9 | Empresas Carozzi S.A. | Chile | (1) | Shareholder of joint operation | Sales of products | CLP | 76,704 | 301,882 |
96,645,790-2 | Socofin S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | - | 10 |
96,819,020-2 | Agrícola El Cerrito S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | 30 | 30 |
96,847,140-6 | Inmobiliaria Norte Verde S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | 30 | 40 |
96,919,980-7 | Cervecería Austral S.A. | Chile | (1) | Joint venture | Sales of products | CLP | 255,330 | 29,502 |
97,004,000-5 | Banco de Chile | Chile | (1) | Related to the controller | Sales of products | CLP | 120,547 | 126,435 |
99,525,700-9 | Las Margaritas S.A. | Chile | (1) | Related to the controller | Sales of products | CLP | - | 47 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Sales of products | CLP | 73,511 | 358,428 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Transport service | CLP | 39,669 | 881,499 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Interests | CLP | 219,835 | 219,647 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Sales service | CLP | 96,572 | 118,292 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Shared service | CLP | 243,689 | 182,822 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Collection service | CLP | 312 | 49,646 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (2) | Joint venture | Remittanse send | CLP | 750,000 | - |
Total |
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|
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| 3,523,825 | 4,788,930 |
Non Current:
Tax ID | Company | Country of origin | Ref. | Relationship | Transaction | Currency | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |||||||
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | (4) | Shareholder to subsidiary | Loan | U.F. | 190,040 | 209,330 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limari Ltda. | Chile | (4) | Shareholder to subsidiary | Sales of products | U.F. | 166,625 | 236,608 |
Total |
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| 356,665 | 445,938 |
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Accounts payable to related companies
Current:
Tax ID | Company | Country of origin | Ref. | Relationship | Transaction | Currency | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |||||||
0-E | Amstel Brouwerijen B.V. | Holanda | (3) | Related to the controller | License and technical assiStance | Euros | 64,932 | 246,334 |
0-E | Banco Amambay S.A. | Holanda | (3) | Associated | Commissions | PYG | 34 | - |
0-E | Grafica y Editorial Intersuda S.A. | Holanda | (3) | Related to the controller | Purchase of products | PYG | 1,604 | - |
0-E | Heineken Brouwerijen B.V. | Holanda | (3) | Related to the controller | License and technical assistance | Euros | 3,344,215 | 6,568,594 |
0-E | Heineken Brouwerijen B.V. | Holanda | (3) | Related to the controller | Purchase of products | Euros | 787,873 | 307,118 |
0-E | Heineken Nederland Supply | Francia | (3) | Related to the controller | License and technical assistance | Euros | - | 37,772 |
0-E | Heineken supply chain B.V. | Francia | (3) | Related to the controller | Purchase of products | Euros | - | 11,647 |
0-E | Nestlé Waters Management & Tecnology S.A.S. | Uruguay | (3) | Related to the controller | Purchase of products | Euros | - | 12,191 |
0-E | Nestlé Waters Marketing & Distribution S.A.S. | Chile | (3) | Related to the controller | Purchase of products | Euros | - | 21,861 |
0-E | Pespsi Cola Manufacturing Co. of Uruguay S.R.L. | Chile | (3) | Related to the controller | Purchase of products | USD | - | 151,578 |
0-E | Watt's Alimentos S.A. | Chile | (3) | Related to the controller | Purchase of products | USD | 2,196 | - |
76,115,132-0 | Canal 13 S.p.A. | Chile | (1) | Related to the controller | Marketing services | CLP | 333,658 | 21,100 |
76,481,675-7 | Cerveceria Szot S.p.A. | Chile | (1) | Related to the controller | Purchase of products | CLP | 4,930 | - |
77,051,330-8 | Cervecería Kunstmann Ltda. | Paraguay | (1) | Shareholder to subsidiary | Purchase of products | CLP | 6,691 | 15,707 |
77,755,610-K | Comercial Patagona Ltda. | Chile | (1) | Joint venture | Marketing services | CLP | 37,889 | 24,694 |
78,105,460-7 | Alimentos Nutrabien S.A. | Chile | (1) | Joint venture | Purchase of products | CLP | 315 | 212 |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | (1) | Shareholder to subsidiary | Purchase of products | CLP | 846,035 | 1,195,665 |
81,805,700-8 | Cooperativa AgrÍcola Control Pisquero de Elqui y Limarí Ltda. | Chile | (1) | Shareholder to subsidiary | Purchase of products | CLP | 41,667 | - |
84,356,800-9 | Watt´s S.A. | Chile | (1) | Shareholder of joint operation | Purchase of products | CLP | - | 13,205 |
89,010,400-2 | Alusa Chile S.A. | Chile | (1) | Related to the controller | Purchase of products | CLP | - | 437,884 |
92,011,000-2 | Empresa Nacional de Energía Enex S.A. | Chile | (1) | Related to the controller | Electric service | CLP | 124,255 | - |
94,058,000-5 | Servicios Aeroportuarios Aerosan S.A. | Chile | (1) | Related to the controller | Transport service | CLP | 1,273 | 193 |
96,591,040-9 | Empresas Carozzi S.A. | Chile | (1) | Shareholder of joint operation | Purchase of products | CLP | 1,930,063 | - |
96,689,310-9 | Transbank S.A. | Chile | (1) | Related to the controller | Commission | CLP | 2,955 | 25,911 |
96,798,520-1 | Saam Extraportuarios S.A. | Chile | (1) | Related to the controller | Transport service | CLP | - | 17 |
96,810,030-0 | Radiodifusion S.p.A | Chile | (1) | Related to the controller | Marketing services | CLP | 19,018 | - |
96,894,740-0 | Banchile Factoring S.A. | Chile | (1) | Related to the controller | Factoring service | CLP | 78,591 | - |
96,919,980-7 | Cervecería Austral S.A. | Chile | (1) | Joint venture | Purchase of products | CLP | 1,462,888 | 414,400 |
97,004,000-5 | Banco de Chile | Chile | (1) | Related to the controller | Billed services | CLP | 41,001 | 2,431 |
99,540,870-8 | Aguas de Antofagasta S.A. | Chile | (1) | Related to the controller | Water service | CLP | - | 36,879 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Purchase of products | CLP | 36,834 | 63,212 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Consignation sales | CLP | 217,689 | 2,015,613 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | (1) | Joint venture | Discount fleet | CLP | 143,465 | - |
Total |
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|
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| 9,530,071 | 11,624,218 |
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Most significant transactions and effects on results:
The following are the most significant transactions with related entities that are not subsidiaries of the Company and their effect on the Consolidated Statement of Income:
Tax ID | Company | Country of origin | Relationship | Transaction | For the years ended as of December 31, | |||||
2016 | 2015 | 2014 | ||||||||
Amounts | (Charges)/Credits (Effect on Income) | Amounts | (Charges)/Credits (Effect on Income) | Amounts | (Charges)/Credits (Effect on Income) | |||||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||
0-E | Amstel Brouwerijen B.V | Holanda | Related to the controller | License and technical assistance | 165,995 | (165,995) | 229,967 | (229,967) | 161,865 | (161,865) |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | Associated | Sales of products | 396,076 | 150,509 | 209,292 | 79,531 | - | - |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | Associated | Contribution of capital | 2,174,370 | - | 1,921,245 | - | - | - |
0-E | Central Cervecera de Colombia S.A.S. | Colombia | Joint operation | Contribution of capital | 22,943,861 | - | 19,941,532 | - | - | - |
0-E | Heineken Brouwerijen B.V. | Holanda | Related to the controller | License and technical assistance | 9,445,557 | (9,445,557) | 9,331,241 | (9,331,241) | 6,338,435 | (6,338,435) |
0-E | Heineken Brouwerijen B.V. | Holanda | Related to the controller | Billing services | 82,475 | (52,266) | 27,904 | (27,904) | 95,533 | (95,533) |
0-E | Heineken Brouwerijen B.V. | Holanda | Related to the controller | Purchase of products | - | - | 71,107 | - | 295,899 | - |
0-E | Heineken Brouwerijen B.V. | Holanda | Related to the controller | Sales of products | 161,220 | 120,915 | - | - | 208,932 | 79,394 |
0-E | Nestle Waters S.A. | Italy | Shareholder to subsidiary | Royalty paid | 432,535 | (432,535) | 308,527 | (308,527) | 204,010 | (204,010) |
76,115,132-0 | Canal 13 S.p.A. | Chile | Related to the controller | Advertising | 3,427,941 | (2,661,759) | 1,554,332 | (405,349) | 3,318,107 | (1,196,948) |
76,178,803-5 | ViñaTabalí S.A. | Chile | Related to the controller | Billed services | 52,470 | 52,470 | 50,787 | 50,787 | 64,321 | 64,321 |
76,313,970-0 | Inversiones Irsa Ltda. | Chile | Controller | Dividends paid | 4,132,618 | - | 4,089,832 | - | - | - |
77,051,330-8 | Cervecería Kunstmann Ltda. | Chile | Shareholder to subsidiary | Sales of products | 522,566 | 418,052 | 405,652 | 324,522 | 317,990 | 254,392 |
77,755,610-K | Comercial Patagona Ltda. | Chile | Joint venture | Sales of products | 4,259,983 | 1,746,594 | 2,679,985 | 1,098,794 | 1,410,939 | 578,485 |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | Shareholder to subsidiary | Purchase of products | 10,083,606 | - | 8,692,744 | - | - | - |
78,259,420-6 | Inversiones PFI Chile Ltda. | Chile | Shareholder to subsidiary | Billed services | 3,234,158 | 3,234,158 | 2,649,644 | 2,649,644 | - | - |
78,780,780-1 | Operaciones y Servicios Enex Ltda. | Chile | Related to the controller | Sales of products | 224,387 | 183,997 | 328,256 | 262,605 | - | - |
79,985,340-K | Cervecera Valdivia S.A. | Chile | Shareholder to subsidiary | Dividends paid | 633,668 | - | 489,942 | - | 511,172 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder to subsidiary | Loan | 28,256 | 6,815 | 29,589 | 5,827 | 27,681 | 7,975 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder to subsidiary | Sales of products | 76,619 | 9,285 | 74,529 | 8,487 | 71,616 | 11,411 |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder to subsidiary | Purchase of grape | 4,255,971 | - | 6,226,156 | - | 5,027,758 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder to subsidiary | Sales of products | - | - | 8,071 | 6,457 | - | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder to subsidiary | Dividends paid | 599,123 | - | 791,836 | - | 617,964 | - |
81,805,700-8 | Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. | Chile | Shareholder to subsidiary | Billed services | - | - | 181,437 | 181,437 | - | - |
89,010,400-2 | Alusa Chile S.A. | Chile | Related to the controller | Purchase of products | 3,223,272 | - | 2,665,007 | - | 1,562,351 | - |
90,081,000-8 | Compañía Chilena de Fósforo S.A. | Chile | Shareholder to subsidiary | Dividends paid | 1,273,753 | - | 4,055,034 | - | 1,637,775 | - |
90,703,000-8 | Nestlé Chile S.A. | Chile | Shareholder to subsidiary | Dividends paid | 3,530,565 | - | 2,704,376 | - | 2,581,736 | - |
91,705,000-7 | Quiñenco S.A. | Chile | Shareholder to Controller | Sales of products | 13,984 | 11,186 | 14,509 | 14,509 | - | - |
93,920,000-2 | Antofagasta Minerals S.A. | Chile | Related to the controller | Sales of products | 35,532 | 28,069 | - | - | - | - |
94,625,000-7 | Inversiones Enex S.A | Chile | Related to the controller | Sales of products | 1,161,918 | 906,296 | 636,707 | 496,631 | - | - |
96,657,690-7 | Inversiones Punta Brava S.A. | Chile | Related to the controller | Sales of products | - | - | 1,587 | 1,270 | - | - |
96,427,000-7 | Inversiones y Rentas S.A. | Chile | Controller | Office lease | 11,463 | 11,463 | 11,006 | 11,006 | 10,539 | 10,539 |
96,427,000-7 | Inversiones y Rentas S.A. | Chile | Controller | Dividends paid | 32,109,822 | - | 31,777,378 | - | 32,701,972 | - |
96,571,220-8 | Banchile Corredores de Bolsa S.A. | Chile | Related to the controller | Investments | 61,400,000 | - | 225,840,000 | - | 315,790,000 | 797,953 |
96,571,220-8 | Banchile Corredores de Bolsa S.A. | Chile | Related to the controller | Investment Rescue | 170,500,000 | 402,369 | 231,800,000 | 583,333 | - | - |
96,591,040-9 | Empresas Carozzi S.A. | Chile | Shareholder of joint operation | Sales of products | 311,666 | 249,322 | - | - | - | - |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Sales of products | 62,444 | 27,788 | 36,560 | 16,269 | 315,650 | 126,260 |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Purchase of products | 5,438,419 | - | 4,776,140 | - | 3,525,715 | - |
96,919,980-7 | Cervecería Austral S.A. | Chile | Joint venture | Billed services | 234,327 | 234,327 | 425,165 | 425,165 | 231,038 | 231,038 |
97,004,000-5 | Banco de Chile | Chile | Related to the controller | Sales of products | 87,772 | 48,800 | 39,148 | 25,446 | 60,472 | 21,165 |
97,004,000-5 | Banco de Chile | Chile | Related to the controller | Derivatives | 35,318,178 | 2,006,627 | 105,973,453 | 1,708,487 | 2,595,060 | (1,637) |
97,004,000-5 | Banco de Chile | Chile | Related to the controller | Investments | 61,400,000 | - | 204,050,000 | - | 181,200,794 | 1,427,444 |
97,004,000-5 | Banco de Chile | Chile | Related to the controller | Leasing paid | 87,457 | 2,266 | 123,316 | (23,901) | 224,872 | (24,155) |
97,004,000-5 | Banco de Chile | Chile | Related to the controller | Investment Rescue | 61,400,000 | 247,101 | 219,500,000 | 770,364 | - | - |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Remittanse received | - | - | 33,298,001 | - | 31,367,766 | - |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Remittanse send | 750,000 | - | 27,189,651 | - | 31,144,541 | - |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Interests | - | - | 287,243 | 287,243 | 363,945 | 363,945 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Sales of products | 5,973 | 2,745 | 13,540 | 6,223 | 15,097 | 9,511 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Billed services | 1,553,943 | 1,553,943 | 7,633,582 | 7,633,582 | 6,990,442 | 6,990,442 |
99,542,980-2 | Foods Compañía de Alimentos CCU S.A. | Chile | Joint venture | Consignation sales | 5,115,078 | - | 24,067,498 | - | 23,303,360 | - |
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Remuneration of the Management key employees
The Company is managed by a Board of Directors comprised of 9 members, each of whom is in office for a 3-year term and may be re-elected.
The Board was appointed at the Ordinary Shareholders´ Meeting held on April 13, 2016, being elected Messrs. Andrónico Luksic Craig, Francisco Pérez Mackenna, Pablo Granifo Lavín, Rodrigo Hinzpeter Kirberg, Marc Busain, Carlos Molina Solís, Didier Debrosse, José Miguel Barros van Hövell tot Westerflier y Vittorio Corbo Lioi, the latter independent according to article 50 bis of Law Nº18,046. The Chairman and the Vice Chairman, as well as the members of the Audit Committee were appointed at the Board of Directors´ meeting held on April 13, 2016. At the same meeting, and according to article 50 bis of Law N° 18,046, the independent Director Mr. Vittorio Corbo Lioi appointed the other members of the Directors Committee, which is composed of Directors Messrs. Pérez, Molina y Corbo. Additionally, Messrs. Corbo y Molina were appointed as members of the Audit Committee, both meeting the independence criteria under the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 and the New York Stock Exchange Rules. The Board of Directors also resolved that Directors Messrs. Pérez y Barros shall participate in the Audit Committee´s meetings as observers.
As agreed to at the Ordinary Shareholders´ Meeting held on April 13, 2016, the remuneration of the Directors consists on a gross monthly fee for attendance to Board Meetings of UF 100 per Director, and UF 200 for the Chairman, independent of the number of meetings held within such period, plus an amount equivalent to 3% of the distributed dividends, for the whole Board, at a rate of one-ninth for each Director and in proportion to the time each one served as such during the year 2016. If the distributed dividends exceed 50% of the net profits, the Board of Directors’ variable remuneration shall be calculated over a maximum 50% of such profits.
Additionally, those Directors that are members of the Directors Committee receive a gross remuneration of UF 34 for each meeting they attend, plus the amount that, as the percentage of the dividends, is required to complete one third of the total remuneration a Director is entitled to, pursuant to article 50 bis of Law Nº 18,046 and Regulation N° 1956 of the SVS. Directors that are members of the Audit Committee receive a gross monthly remuneration of UF 25.
According to the above, as of December 31, 2016, the Directors received ThCh$ 3,215,759 (ThCh$ 2,976,684 in 2015 and ThCh$ 2,746,921 in 2014) in meeting attendance fees and dividend participation. In addition, ThCh$ 212,665 (ThCh$ 191,416 in 2015 and ThCh$ 117,342 in 2014) were paid as meeting attendance fees and dividend participation to the Senior Management of the Parent Company.
As of December 31, 2016, the remuneration corresponding to the key personal was ThCh$ 7,565,658 (ThCh$ 5,497,192 in 2015 and ThCh$ 5,191,018 in 2014).The Company grants annual discretionary and variable bonuses to the top key employees, which are not subject to an agreement and are decided on the basis of the compliance with individual and corporate goals and depending on the year results.
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The inventory balances were as follows:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Finished products | 76,323,417 | 50,873,881 |
In process products | 1,935,157 | 1,828,386 |
Raw material | 113,232,691 | 113,716,967 |
In transit raw material | 4,460,822 | 3,707,440 |
Materials and products | 5,675,945 | 5,926,122 |
Realizable net value estimate and obsolescence | (2,337,354) | (1,825,381) |
Total | 199,290,678 | 174,227,415 |
The Company wrote off a total of ThCh$ 2,012,748, ThCh$ 2,057,704 and ThCh$ 1,369,096 relating to inventory shrinkage and obsolescence for the year endedDecember 31, 2016, 2015 y 2014, respectively.
Additionally, an estimate for obsolescence inventories include amounts related to low turnover, technical obsolescence and product recalls from the market.
Movement of Realizable net value and obsolescence estimate is as follows:
| As of December 31, 2016 | As of December 31, 2015 | As of December 31, 2014 |
| |||
| ThCh$ | ThCh$ | ThCh$ |
Initial balance | (1,825,381) | (2,589,518) | (1,286,695) |
Inventories write-down estimation | (2,551,828) | (1,469,233) | (2,682,310) |
Inventories recognised as an expense | 2,012,748 | 2,057,704 | 1,369,096 |
Business combination effect | 27,107 | 175,666 | 10,391 |
Total | (2,337,354) | (1,825,381) | (2,589,518) |
As ofDecember 31, 2016, 2015 and 2014, the Company does not have any inventory pledged as guarantee against financial obligations.
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The Company recorded under Biological current assets the agricultural activities (grapes) derived from production of plantations that will be destined to be an input to the following process of the wine production.
The costs associated to the agricultural activities (grapes) are accumulated to the harvest date.
The valuation of Biological current assets is described inNote 2, 2.10.
The movement of Biological current assets were as follows:
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The Company maintained the following other non-financial assets:Investment property movements are detailed as follows:
| As of December 31, 2016 | As of December 31, 2015 | ||
| Current | Non current | Current | Non current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Insurance paid | 3,038,856 | - | 3,512,317 | - |
Advertising | 5,819,736 | 2,567,939 | 4,822,197 | 2,652,382 |
Advances to suppliers | 5,269,826 | - | 7,438,102 | - |
Guarantees paid | 50,590 | 227,738 | 99,493 | 228,749 |
Consumables | 433,570 | - | 526,645 | - |
Dividends receivable | 245,073 | - | 150,343 | - |
Recoverable taxes (1) | - | 1,231,414 | - | 1,303,925 |
Cost of subsidiaries acquired (2) | - | 641,489 | - | - |
Other | 1,001,486 | 700,631 | 1,105,276 | 1,035,898 |
Total | 15,859,137 | 5,369,211 | 17,654,373 | 5,220,954 |
| Lands | Buildings | Total |
ThCh$ | ThCh$ | ThCh$ | |
As of January 1, 2018 |
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Historic cost | 4,458,835 | 2,131,827 | 6,590,662 |
Depreciation | - | (765,303) | (765,303) |
Book Value | 4,458,835 | 1,366,524 | 5,825,359 |
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As of December 31, 2018 |
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Additions | - | 3,613 | 3,613 |
Depreciation | - | (49,728) | (49,728) |
Conversion effect (depreciation) | (429,377) | (269,737) | (699,114) |
Conversion effect | - | 68,416 | 68,416 |
Other increases (decreases) (1) | 2,695,795 | 871,615 | 3,567,410 |
Changes | 2,266,418 | 624,179 | 2,890,597 |
Book Value | 6,725,253 | 1,990,703 | 8,715,956 |
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As of December 31, 2018 |
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Historic cost | 6,725,253 | 2,737,318 | 9,462,571 |
Depreciation | - | (746,615) | (746,615) |
Book Value | 6,725,253 | 1,990,703 | 8,715,956 |
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As of December 31, 2019 |
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Additions | - | 132,462 | 132,462 |
Divestitures | (695,289) | - | (695,289) |
Depreciation | - | (64,088) | (64,088) |
Conversion effect (depreciation) | (1,042,090) | (391,483) | (1,433,573) |
Conversion effect | - | 23,854 | 23,854 |
Other increases (decreases) (1) | 1,191,644 | 442,308 | 1,633,952 |
Changes | (545,735) | 143,053 | (402,682) |
Book Value | 6,179,518 | 2,133,756 | 8,313,274 |
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As of December 31, 2019 |
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Historic cost | 6,179,518 | 2,920,605 | 9,100,123 |
Depreciation | - | (786,849) | (786,849) |
Book Value | 6,179,518 | 2,133,756 | 8,313,274 |
(1) Corresponds to the tax profit minimum and VAT credit exporter, both registeredfinancial effect of the application IAS 29 Financial reporting in the argentine subsidiaries, whose term of recovery is estimated over a year.
(2)See Note 1, (2).hyperinflationary economies.
Investment accountedproperty includes seventeen land properties, two offices and one apartment, situated in Chile, which are maintained for byappreciation purposes, with one apartment for being leased and generating ThCh$ 3,825 revenue during year 2019 (ThCh$ 158,235 in 2018 and ThCh$ 193,839 in 2017). Additionally, there are four properties in Argentina, which are leased and generated an income for ThCh$ 104,334 for year 2019 (ThCh$ 97,312 in 2018 and ThCh$ 135,064 in 2017). In addition, the equity method
Joint venturesexpenses associated with such investment properties amounted to ThCh$ 67,096 for the year ended as of December 31, 2019 (ThCh$ 50,874 in 2018 and Associates
As ofDecember 31, 2016 and 2015, the Company recorded investments qualifying as joint venture and associates.ThCh$ 60,452 in 2017).
The sharemarket valuation of investment properties exceeds 100% of the book value.
The fair value, of investment property that represent 96% of the investments in joint ventures and associatescarrying amount is as follows:ThCh$ 10,939,073.
| Percentage of participation | As of December 31, 2016 | As of December 31, 2015 |
% | ThCh$ | ThCh$ | |
Cervecería Austral S.A. (1) | 50.00 | 5,548,458 | 5,043,071 |
Foods Compañía de Alimentos CCU S.A. (2) | 50.00 | 5,624,391 | 11,582,085 |
Central Cervecera de Colombia S.A.S. (3) | 50.00 | 35,449,038 | 18,718,832 |
Total joint ventures |
| 46,621,887 | 35,343,988 |
Bebidas Bolivianas BBO S.A. (4) | 34.00 | 17,281,665 | 14,276,937 |
Other companies |
| 501,394 | 374,338 |
Total associates |
| 17,783,059 | 14,651,275 |
Total |
| 64,404,946 | 49,995,263 |
Management has not detected any evidence of impairment of investment property.
The Company does not maintain any pledge or restriction over investment property items.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The above mentioned values include the goodwill generated through the acquisition of the following joint venture and associate, which are presented net of any impairment loss:
|
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ | |
Cervecería Austral S.A. |
| 1,894,770 | 1,894,770 |
Bebidas Bolivianas BBO S.A. |
| 9,032,617 | 7,648,453 |
Total |
| 10,927,387 | 9,543,223 |
The results accruedDebts and financial liabilities classified according to the type of obligation and their classifications in joint ventures and associatesthe Consolidated Financial Statements are detailed as follows:
| For the years ended as of December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Cervecería Austral S.A. | 754,326 | 247,180 | 157,836 |
Foods Compañía de Alimentos CCU S.A. | (519,536) | (1,251,392) | (334,771) |
Central Cervecera de Colombia S.A.S. | (3,969,699) | (2,668,179) | - |
Total joint ventures | (3,734,909) | (3,672,391) | (176,935) |
Bebidas Bolivianas BBO S.A. | (1,805,548) | (1,557,886) | (1,019,011) |
Other companies | (20,065) | 2,142 | - |
Total associates | (1,825,613) | (1,555,744) | (1,019,011) |
Total | (5,560,522) | (5,228,135) | (1,195,946) |
| As of December 31, 2019 | As of December 31, 2018 | ||
| Current | Non-current | Current | Non-current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Bank borrowings (*) | 42,447,438 | 99,749,082 | 38,160,178 | 75,200,804 |
Bonds payable (*) | 6,744,739 | 133,806,947 | 4,081,175 | 135,281,303 |
Leases liabilities (*) / Financial leases obligations (*) | 4,857,097 | 28,213,259 | 365,972 | 17,546,162 |
Derivative financial instruments (**) | 240,394 | - | 4,997,124 | - |
Derivative hedge liabilities (**) | 805,306 | - | 1,194,502 | 157,028 |
Deposits for return of bottles and containers | 13,290,754 | - | 13,967,995 | - |
Total | 68,385,728 | 261,769,288 | 62,766,946 | 228,185,297 |
Changes in investments in joint ventures and associates during such periods are as follows:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Balance at the beginning of year | 49,995,263 | 31,998,620 |
Business combination effect | 25,118,232 | 23,387,006 |
Participation in the joint ventures and associates (loss) | (5,560,522) | (5,228,135) |
Dividends received | (245,073) | (150,343) |
Increase (decrease) through changes in ownership interests | (5,426,209) | - |
Others | 523,255 | (11,885) |
Total | 64,404,946 | 49,995,263 |
Following are the significant matters regarding the investments accounted by the equity method:
(1) See(1) Cervecería Austral S.A.Note 5 – Risk administration.
(2) SeeNote 7 – Financial instruments.
(*) Includes leases recognized by IFRS 16, SeeNote 4 - Accounting changes, letter a).
A closed stock company that operates a beer manufacturing facility in the southern end of Chile, being the southernmost brewery in the world.
(2) Foods Compañía de Alimentos CCU S.A.
A closed stock company devoted to the production and marketing of food products such as like cookies and other baked goods, caramels, candy and cereal, among others.
On November 26, 2015, Foods signed an agreement of sale with Empresas Carozzi S.A., under which the first sold to the second machinery, equipment and brands related to products marketed under the brands Natur and Calaf. The amount of this transaction was ThCh$ 14,931,000 and CCU recognized a net loss after taxes for an amount of ThCh$ 1,034,638, corresponding to their participation.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
On December 16, 2016, FoodsThe maturities and the subsidiary CCU Inversiones S.A., proceeded to acquire 49,99999% and 0.0001%, respectivelyinterest rates of the shares of Alimentos Nutrabien S.A. As a consequence above mentioned the only shareholders direct of that company are: (i) Food´s with 99.99999% of the share capital, and (ii) CCU investments S.A. with a 0.0001% of the share capital, respectively. The amount of this transaction was UF 545.000, equivalent toThCh$14.352.706.these obligations are detailed as follows:
(3) Central Cervecera de Colombia S.A.S.Current loan and financial obligation
On November 10, 2014, CCU, directly and through its subsidiaries CCU Inversiones II Limitada, and Postobón have established a joint arrangements through a company named Central Cervecera de Colombia S.A.S. (the "Company"), in which CCU and Postobón participate as equal shareholders. The purposeAs of this Company is the beer and non-alcoholic drinks production, marketing and distribution based on malt. The Parties will invest in the Company an approximate amount of US$ 400,000,000, following a gradual investment plan conditioned to the fulfillment of certain milestones. Asof December 31, 20162019 CCU Inversiones II Limitada paid US$ 68,078,797 (US$ 33,901,562 in 2015). The partnership involves the construction of a beer production plant, with an annual total capacity of 3,000,000 hectoliters.
Committed capital payments have been made on the following dates: November 20, 2014, for US$ 2,411,019 (equivalents to ThCh$ 1,445,478; March 25 and 7 July, 2015 forUS$ 7,749,931 and US$ 23,740,612 (equivalents to ThCh$ 4,833,244 and ThCh$ 15,108,288, respectively and on August 30, 2016 was a new increased in capital for an amount of US$ 34,177,235 (equivalents to ThCh$ 22,943,861).
(4) Bebidas Bolivianas BBO S.A.:
|
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|
|
|
|
| Maturity (*) |
|
|
| |
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ |
| (%) |
Bank borrowings |
|
|
|
|
|
|
|
|
|
| |
76,035,409-0 | Cervecera Guayacán SpA. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | UF | 2,037 | 2,629 | 4,666 | Monthly | 4.87 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | - | 10,715,017 | 10,715,017 | At maturity | 2.20 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | USD | - | 11,370,518 | 11,370,518 | At maturity | 2.47 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 97,018,000-1 | Scotiabank Chile | Chile | USD | - | 7,629,611 | 7,629,611 | At maturity | 3.08 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. (1) | Chile | 97,018,000-1 | Scotiabank Chile | Chile | USD | - | 9,089 | 9,089 | At maturity | 2.90 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | USD | - | 45,102 | 45,102 | At maturity | 3.64 |
91,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | - | 319,034 | 319,034 | At maturity | 4.56 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 13,500 | 4,500 | 18,000 | Monthly | 6.00 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 22,500 | - | 22,500 | Monthly | 5.76 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 9,761 | 3,286 | 13,047 | Monthly | 6.12 |
96,711,590-8 | Manantial S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 22,183 | 30,027 | 52,210 | Monthly | 5.14 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 16,667 | 11,113 | 27,780 | Monthly | 4.44 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 20,834 | 27,776 | 48,610 | Monthly | 4.42 |
96,711,590-8 | Manantial S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 25,468 | - | 25,468 | Monthly | 4.92 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 41,300 | - | 41,300 | Monthly | 4.92 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 30,880 | 20,791 | 51,671 | Monthly | 4.73 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 39,281 | 53,063 | 92,344 | Monthly | 4.42 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 31,200 | 83,600 | 114,800 | Monthly | 5.16 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 300,155 | - | 300,155 | Monthly | 0.31 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 997,853 | - | 997,853 | Monthly | 2.34 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 45,100 | - | 45,100 | At maturity | 4.92 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 6,384 | 400,000 | 406,384 | At maturity | 4.56 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 296,906 | 299,397 | 596,303 | Monthly | 5.02 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | - | 14,896 | 14,896 | At maturity | 3.83 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,018,000-1 | Scotiabank Chile | Chile | CLP | - | 8,444 | 8,444 | At maturity | 4.00 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,018,000-1 | Scotiabank Chile | Chile | CLP | - | 1,589,137 | 1,589,137 | Semiannual | 3.45 |
99,586,280-8 | Compañía Pisquera de Chile S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 322,400 | - | 322,400 | At maturity | 4.68 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Patagonia | Argentina | ARS | 4,385,390 | - | 4,385,390 | At maturity | 55.00 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Patagonia | Argentina | ARS | 2,474,461 | - | 2,474,461 | At maturity | 53.00 |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | 0-E | Banco Mercantil Santa Cruz S.A. | Bolivia | BOB | 41,808 | - | 41,808 | Quarterly | 5.00 |
0-E | Milotur S.A. | Uruguay | 0-E | Banco Itaú | Uruguay | UI | 332,747 | 331,593 | 664,340 | Monthly | 4.80 |
Total |
|
|
|
|
|
| 9,478,815 | 32,968,623 | 42,447,438 |
|
|
On May(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreementNote 7 2014,– Financial instruments the Company acquired 34% of the stock rights of Bebidas Bolivianas.
BBOS.A. a Bolivian and a closed stock company that produces soft drinks and beers in three plants located in Santa Cruz de la Sierra and Nuestra Señora de la Paz cities.(*)The amount of this transaction was ThCh$ 13,776,885. On December 9, 2015,based on the Company paid an increased of capital for an amount of US$ 2,720,000 (equivalents to ThCh$ 1,921,244)undiscounted contractual flows is found inNote 5 – Risk administration. On June 8, 2016 and November 17, 2016, the Company paid an increased of capital for an amount of US$ 2,221,696 (equivalents to ThCh$ 1,510,420) and US$ 1,019,971 (equivalents to ThCh$ 663,951), respectively.
The Company does not have any contingent liabilities related to joint ventures and associates as December 31, 2016.
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|
| Maturity (*) |
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| |
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Total | Type of amortization | Interest Rate |
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|
|
|
|
| ThCh$ | ThCh$ | ThCh$ |
| (%) |
Lease liabilities |
|
|
|
|
|
|
|
|
|
| |
79,862,750-3 | Transportes CCU Limitada | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | UF | 22,133 | 66,397 | 88,530 | Monthly | 2.14 |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 99,012,000-5 | Consorcio Nacional de Seguros S.A. | Chile | UF | 93,127 | 284,229 | 377,356 | Monthly | 3.95 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Supervielle | Argentina | ARS | 541 | 631 | 1,172 | Monthly | 17.00 |
Subtotal |
|
|
|
|
|
| 115,801 | 351,257 | 467,058 |
|
|
90,413,000-1 | CCU and subsidiaries | Chile | - | Suppliers of PPE | Chile | Euros | 25,324 | 81,810 | 107,134 | Monthly | 1.48 |
90,413,000-1 | CCU and subsidiaries | Chile | - | Suppliers of PPE | Chile | USD | 104,848 | 495,766 | 600,614 | Monthly | 4.73 |
90,413,000-1 | CCU and subsidiaries | Chile | - | Suppliers of PPE | Chile | CLP | 133,037 | 483,206 | 616,243 | Monthly | 4.56 |
90,413,000-1 | CCU and subsidiaries | Chile | - | Suppliers of PPE | Chile | UF | 492,185 | 1,596,949 | 2,089,134 | Monthly | 1.92 |
0-E | CCU and subsidiaries | Argentina | - | Suppliers of PPE | Argentina | ARS | 26,841 | 76,616 | 103,457 | Monthly | 62.00 |
0-E | CCU and subsidiaries | Argentina | - | Suppliers of PPE | Argentina | USD | 329,178 | 490,070 | 819,248 | Monthly | 10.16 |
0-E | CCU and subsidiaries | Uruguay | - | Suppliers of PPE | Uruguay | UI | 13,553 | 40,656 | 54,209 | Monthly | 5.95 |
Subtotal leases by IFRS 16 (**) |
|
|
|
|
| 1,124,966 | 3,265,073 | 4,390,039 |
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| |
Total |
|
|
|
|
|
| 1,240,767 | 3,616,330 | 4,857,097 |
|
|
(*)The amount based on the undiscounted contractual flows is found inNote 5 – Risk administration.
(**) The interest rates for IFRS 16 correspond to average rates.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The summarized financial information of these companies as ofDecember 31, 2016, 2015 and 2014 and the figures for each entity 100% of each in summary form are as follows:
| Joint ventures | Associated | Joint ventures | Associated | Joint ventures | Associated |
| For the years ended as of December 31, | |||||
| 2016 | 2015 | 2014 | |||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Income Statement (Summarized) |
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|
|
|
|
|
Net sales | 63,926,397 | 19,733,853 | 59,187,508 | 18,310,272 | 46,399,652 | 8,470,716 |
Operating result | (11,913,526) | (4,159,093) | (6,796,020) | (4,039,249) | 212,503 | (2,882,721) |
Net income for year | (7,287,727) | (4,712,596) | (6,803,143) | (4,573,734) | (392,427) | (2,920,431) |
Other comprehensive income | (3,451,487) | (7,965,214) | (2,494,511) | - | 1,312,608 | 3,719,889 |
Depreciation and amortization | (2,104,820) | (2,698,849) | (1,998,935) | (534,485) | (1,936,455) | (1,091,414) |
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|
|
|
|
|
|
| As of December 31, 2016 | As of December 31, 2015 | As of December 31, 2015 | |||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Assets and Liabilities |
|
|
|
|
|
|
Current assets | 64,587,798 | 7,602,940 | 57,908,034 | 9,326,003 | 15,625,609 | 6,987,602 |
Non-current assets | 50,994,744 | 30,504,073 | 29,453,402 | 31,393,842 | 39,076,178 | 17,664,655 |
Current liabilities | 23,043,784 | 5,886,879 | 6,233,586 | 6,086,146 | 17,550,702 | 4,467,768 |
Non-current liabilities | 2,350,385 | 7,789,367 | 3,720,129 | 9,494,421 | 2,725,097 | 5,244,421 |
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| Maturity (*) |
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| |
Debtor Tax ID | Company | Debtor country | Registration | ID No. Instrument | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Total | Type of amortization | Interest Rate |
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|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ |
| (%) |
Bonds payable |
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|
|
|
|
|
|
|
|
| |
90,413,000-1 | Compañía Cervecerías Unidas S.A. (1) | Chile | Bond H | 573 23/03/2009 | Chile | UF | 661,567 | 5,128,436 | 5,790,003 | Semiannual | 4.25 |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | Bond J | 898 28/06/2018 | Chile | UF | - | 954,736 | 954,736 | Semiannual | 2.90 |
Total |
|
|
|
|
|
| 661,567 | 6,083,172 | 6,744,739 |
|
|
(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreementNote 7 – Financial instruments.
(*)The amount based on the undiscounted contractual flows is found inNote 5 – Risk administration.
As of December 31, 2018:
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|
| Maturity (*) |
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| |
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Total | Type of amortization | Interest Rate |
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|
|
|
| ThCh$ | ThCh$ | ThCh$ |
| (%) |
Bank borrowings |
|
|
|
|
|
|
|
|
|
| |
76,035,409-0 | Cervecera Guayacán SpA. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | UF | 1,091 | 3,578 | 4,669 | Monthly | 4.87 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | UF | - | 10,535,493 | 10,535,493 | At maturity | 2.70 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | USD | - | 5,670,991 | 5,670,991 | At maturity | 2.90 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 97,018,000-1 | Scotiabank Chile | Chile | USD | - | 10,576,858 | 10,576,858 | At maturity | 2.96 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. (1) | Chile | 97,018,000-1 | Scotiabank Chile | Chile | USD | 11,007 | - | 11,007 | At maturity | 3.38 |
91,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | - | 309,108 | 309,108 | At maturity | 4.56 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | UF | 10,829 | 7,300 | 18,129 | Monthly | 5.48 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 13,500 | 40,500 | 54,000 | Monthly | 6.00 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 18,868 | 18,666 | 37,534 | Monthly | 5.88 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 22,500 | 67,500 | 90,000 | Monthly | 5.76 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 16,666 | 50,000 | 66,666 | Monthly | 4.44 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 20,833 | 62,501 | 83,334 | Monthly | 4.42 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 31,200 | 93,600 | 124,800 | Monthly | 5.16 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 41,700 | 125,100 | 166,800 | Monthly | 4.92 |
96,711,590-8 | Manantial S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 73,030 | 224,475 | 297,505 | Monthly | 4.92 |
96,711,590-8 | Manantial S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 28,669 | 64,826 | 93,495 | Monthly | 5.02 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 39,951 | 90,476 | 130,427 | Monthly | 4.73 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 37,588 | 115,166 | 152,754 | Monthly | 4.42 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 9,192 | 28,382 | 37,574 | Monthly | 6.12 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 45,100 | - | 45,100 | At maturity | 4.92 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 6,536 | - | 6,536 | At maturity | 4.56 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 210,510 | 647,019 | 857,529 | Monthly | 5.02 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | - | 1,026,099 | 1,026,099 | At maturity | 3.64 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,018,000-1 | Scotiabank Chile | Chile | CLP | - | 2,016,815 | 2,016,815 | At maturity | 3.98 |
99,586,280-8 | Compañía Pisquera de Chile S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 326,560 | - | 326,560 | At maturity | 4.68 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco de la Nación Argentina | Argentina | ARS | 226,995 | 278,924 | 505,919 | Monthly | 32.50 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Galicia | Argentina | ARS | 506,614 | 545,956 | 1,052,570 | Quarterly | 23.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco BBVA | Argentina | ARS | 736,905 | - | 736,905 | At maturity | 64.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | USD | 245,193 | - | 245,193 | At maturity | 6.20 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | USD | - | 208,701 | 208,701 | At maturity | 4.30 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | USD | 210,949 | - | 210,949 | At maturity | 5.25 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | USD | 210,101 | - | 210,101 | At maturity | 6.50 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | ARS | 388,865 | - | 388,865 | At maturity | 49.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | ARS | 238,536 | - | 238,536 | At maturity | 66.50 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco San Juan | Argentina | ARS | - | 643,278 | 643,278 | Quarterly | 68.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco San Juan | Argentina | ARS | - | 136,453 | 136,453 | Quarterly | 68.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco San Juan | Argentina | ARS | - | 116,959 | 116,959 | Quarterly | 68.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco San Juan | Argentina | ARS | - | 38,986 | 38,986 | Quarterly | 68.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Superville | Argentina | USD | - | 210,829 | 210,829 | At maturity | 6.00 |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | 0-E | Banco Mercantil Santa Cruz S.A. | Bolivia | BOB | 38,735 | - | 38,735 | Quarterly | 5.00 |
0-E | Milotur S.A. | Uruguay | 0-E | Banco Itaú | Uruguay | UI | 110,633 | 326,783 | 437,416 | Monthly | 4.80 |
Total |
|
|
|
|
|
| 3,878,856 | 34,281,322 | 38,160,178 |
|
|
(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreementNote 7 – Financial instruments.
(*)The amount based on the undiscounted contractual flows is found inNote 5 – Risk administration.
|
|
|
|
|
|
| Maturity (*) |
|
|
| |
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ |
| (%) |
Financial leases obligations |
|
|
|
|
|
|
|
|
|
| |
76,077,848-6 | Cervecera Belga de la Patagonia S.A. | Chile | 97,015,000-5 | Banco Santander | Chile | UF | 2,090 | 5,639 | 7,729 | Monthly | 6.27 |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 99,012,000-5 | Consorcio Nacional de Seguros S.A. | Chile | UF | 87,629 | 267,426 | 355,055 | Monthly | 3.95 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Supervielle | Argentina | ARS | 797 | 2,391 | 3,188 | Monthly | 17.00 |
Total |
|
|
|
|
|
| 90,516 | 275,456 | 365,972 |
|
|
|
|
|
|
|
|
| Maturity (*) |
|
|
| |
Debtor Tax ID | Company | Debtor country | Registration | ID No. Instrument | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ |
| (%) |
Bonds payable |
|
|
|
|
|
|
|
|
|
| |
90,413,000-1 | Compañía Cervecerías Unidas S.A. (1) | Chile | Bond H | 573 03/23/2009 | Chile | UF | 665,357 | 2,486,177 | 3,151,534 | Semiannual | 4.25 |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | Bond J | 898 06/28/2018 | Chile | UF | 929,641 | - | 929,641 | Semiannual | 2.90 |
Total |
|
|
|
|
|
| 1,594,998 | 2,486,177 | 4,081,175 |
|
|
(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreementNote 7 – Financial instruments.
(*)The amount based on the undiscounted contractual flows is found inNote 5 – Risk administration.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The intangible assets movement during the years ended as of December 31, 2015Non-current loan and 2016 was as follows:
| Trademarks | Software programs | Water rights | Distribution rights | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
As of January 1, 2015 |
|
|
|
|
|
Historic cost | 58,720,268 | 21,353,252 | 1,914,139 | 1,046,487 | 83,034,146 |
Accumulated amortization | - | (14,281,717) | - | (95,534) | (14,377,251) |
Book Value | 58,720,268 | 7,071,535 | 1,914,139 | 950,953 | 68,656,895 |
|
|
|
|
|
|
As of December 31, 2015 |
|
|
|
|
|
Additions | - | 3,160,435 | - | 104,739 | 3,265,174 |
Additions by business combination (1) | 7,747,581 | - | - | - | 7,747,581 |
Transfers (2) | (3,266,332) | - | - | - | (3,266,332) |
Divestitures (cost) | - | (3,748) | - | - | (3,748) |
Divestitures (amortization) | - | 3,748 | - | - | 3,748 |
Amortization of year | - | (1,814,784) | - | (126,877) | (1,941,661) |
Conversion effect | (2,235,479) | (297,814) | - | (247,219) | (2,780,512) |
Effect of conversion (amortization) | - | 164,652 | - | 22,210 | 186,862 |
Book Value | 60,966,038 | 8,284,024 | 1,914,139 | 703,806 | 71,868,007 |
|
|
|
|
|
|
As of December 31, 2015 |
|
|
|
|
|
Historic cost | 60,966,038 | 24,212,125 | 1,914,139 | 904,007 | 87,996,309 |
Accumulated amortization | - | (15,928,101) | - | (200,201) | (16,128,302) |
Book Value | 60,966,038 | 8,284,024 | 1,914,139 | 703,806 | 71,868,007 |
|
|
|
|
|
|
As of December 31, 2016 |
|
|
|
|
|
Additions | 40,000 | 4,533,631 | 219,163 | - | 4,792,794 |
Additions by business combination (1) | 5,614,575 | - | - | - | 5,614,575 |
Divestitures (cost) | - | (167,825) | (42,243) | - | (210,068) |
Divestitures (amortization) | - | 197,910 | - | - | 197,910 |
Amortization of year | - | (2,472,425) | - | (389,166) | (2,861,591) |
Conversion effect | (1,714,990) | (213,166) | - | (140,990) | (2,069,146) |
Effect of conversion (amortization) | - | 130,442 | - | 215,927 | 346,369 |
Book Value | 64,905,623 | 10,292,591 | 2,091,059 | 389,577 | 77,678,850 |
|
|
|
|
|
|
As of December 31, 2016 |
|
|
|
|
|
Historic cost | 64,905,623 | 28,364,765 | 2,091,059 | 763,017 | 96,124,464 |
Accumulated amortization | - | (18,072,174) | - | (373,440) | (18,445,614) |
Book Value | 64,905,623 | 10,292,591 | 2,091,059 | 389,577 | 77,678,850 |
(1) SeeNote 1, letter a)and d).
(2) SeeNote 24, letter a).financial obligation
As ofDecember 31, 2019:
There are no restriction or any pledge against on intangible assets.
|
|
|
|
|
|
| Maturity (*) |
|
|
| ||
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| (%) |
Bank borrowings |
|
|
|
|
|
|
|
|
|
|
| |
76,035,409-0 | Cervecera Guayacán SpA. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | UF | 16,327 | 16,330 | 28,619 | 61,276 | Monthly | 4.87 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. (1) | Chile | 97,018,000-1 | Scotiabank Chile | Chile | USD | 8,685,384 | - | - | 8,685,384 | At maturity | 2.90 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | USD | 10,445,830 | - | - | 10,445,830 | At maturity | 3.64 |
91,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 39,902,607 | - | - | 39,902,607 | At maturity | 4.56 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,018,000-1 | Scotiabank Chile | Chile | CLP | 1,000,000 | - | - | 1,000,000 | At maturity | 4.00 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,018,000-1 | Scotiabank Chile | Chile | CLP | 3,333,334 | 3,333,334 | 1,666,667 | 8,333,335 | Semiannual | 3.45 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 2,000,000 | - | - | 2,000,000 | At maturity | 4.92 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 2,000,000 | - | - | 2,000,000 | At maturity | 3.83 |
99,586,280-8 | Compañía Pisquera de Chile S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 16,000,000 | - | - | 16,000,000 | At maturity | 4.68 |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | 0-E | Banco Mercantil Santa Cruz S.A. | Bolivia | BOB | 2,469,892 | 4,939,784 | - | 7,409,676 | Quarterly | 5.00 |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | 0-E | Banco Mercantil Santa Cruz S.A. | Bolivia | BOB | 922,478 | 1,844,956 | 922,478 | 3,689,912 | Quarterly | 5.00 |
0-E | Milotur S.A. | Uruguay | 0-E | Banco Itaú | Uruguay | UI | 221,062 | - | - | 221,062 | Monthly | 4.80 |
Total |
|
|
|
|
|
| 86,996,914 | 10,134,404 | 2,617,764 | 99,749,082 |
|
|
(*)The amount based on the undiscounted contractual flows is found inNote 5 – Risk administration.
|
|
|
|
|
|
| Maturity (*) |
|
|
| ||
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| (%) |
Lease liabilities |
|
|
|
|
|
|
|
|
|
|
| |
79,862,750-3 | Transportes CCU Limitada | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | UF | 182,302 | 125,892 | - | 308,194 | Monthly | 2.14 |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 99,012,000-5 | Consorcio Nacional de Seguros S.A. | Chile | UF | 794,931 | 852,210 | 15,993,556 | 17,640,697 | Monthly | 3.95 |
Subtotal |
|
|
|
|
|
| 977,233 | 978,102 | 15,993,556 | 17,948,891 |
|
|
90,413,000-1 | CCU and subsidiaries | Chile | - | Suppliers of PPE | Chile | Euros | 202,592 | 59,089 | - | 261,681 | Monthly | 1.48 |
90,413,000-1 | CCU and subsidiaries | Chile | - | Suppliers of PPE | Chile | USD | 838,782 | 603,084 | 1,839,685 | 3,281,551 | Monthly | 4.73 |
90,413,000-1 | CCU and subsidiaries | Chile | - | Suppliers of PPE | Chile | UF | 2,255,024 | 1,121,035 | 1,903,125 | 5,279,184 | Monthly | 1.92 |
90,413,000-1 | CCU and subsidiaries | Chile | - | Suppliers of PPE | Chile | CLP | 725,207 | 154,917 | 44,034 | 924,158 | Monthly | 4.56 |
0-E | CCU and subsidiaries | Argentina | - | Suppliers of PPE | Argentina | ARS | 116,255 | - | - | 116,255 | Monthly | 62.00 |
0-E | CCU and subsidiaries | Argentina | - | Suppliers of PPE | Argentina | USD | 355,915 | 26,769 | - | 382,684 | Monthly | 10.16 |
0-E | CCU and subsidiaries | Uruguay | - | Suppliers of PPE | Uruguay | UI | 18,855 | - | - | 18,855 | Monthly | 5.95 |
Subtotal leases by IFRS 16 (**) |
|
|
|
|
| 4,512,630 | 1,964,894 | 3,786,844 | 10,264,368 |
|
| |
Total |
|
|
|
|
|
| 5,489,863 | 2,942,996 | 19,780,400 | 28,213,259 |
|
|
(*)The amount based on the undiscounted contractual flows is found inNote 5 – Risk administration.
(**) The interest rates for IFRS 16 correspond to average rates.
|
|
|
|
|
|
| Maturity (*) |
|
|
| ||
Debtor Tax ID | Company | Debtor country | Registration | ID No. Instrument | Creditor country | Currency | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| (%) |
Bonds payable |
|
|
|
|
|
|
|
|
|
|
| |
90,413,000-1 | Compañía Cervecerías Unidas S.A. (1) | Chile | Bond H | 573 23/03/2009 | Chile | UF | 10,249,998 | 10,259,097 | 28,266,218 | 48,775,313 | Semiannual | 4.25 |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | Bond J | 898 28/06/2018 | Chile | UF | - | - | 85,031,634 | 85,031,634 | Semiannual | 2.90 |
Total |
|
|
|
|
|
| 10,249,998 | 10,259,097 | 113,297,852 | 133,806,947 |
|
|
(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreementNote 7 – Financial instruments.
(*)The amount based on the undiscounted contractual flows is found inNote 5 – Risk administration.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The detailAs of the Trademarks appears below:December 31, 2018:
Operating segment | Cash Generating Unit | As of December 31, 2016 | As of December 31, 2015 |
(CGU) | ThCh$ | ThCh$ | |
Chile | Embotelladoras Chilenas Unidas S.A. | 31,476,163 | 25,861,588 |
| Manantial S.A. | 1,166,000 | 1,166,000 |
| Compañía Pisquera de Chile S.A. | 1,363,782 | 1,363,782 |
| Compañía Cerveceria Kunstmann S.A. | 286,744 | 286,518 |
| Subtotal | 34,292,689 | 28,677,888 |
International Business | CCU Argentina S.A. and subsidiaries | 4,774,066 | 6,171,061 |
| Marzurel S.A., Coralina S.A. and Milotur S.A. | 2,822,016 | 2,932,762 |
| Bebidas del Paraguay S.A. y Distribuidora del Paraguay S.A. | 3,234,664 | 3,440,608 |
| Subtotal | 10,830,746 | 12,544,431 |
Wines | Viña San Pedro Tarapacá S.A. | 19,782,188 | 19,743,719 |
| Subtotal | 19,782,188 | 19,743,719 |
Total |
| 64,905,623 | 60,966,038 |
|
|
|
|
|
|
| Maturity (*) |
|
|
| ||
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| (%) |
Bank borrowings |
|
|
|
|
|
|
|
|
|
|
| |
76,035,409-0 | Cervecera Guayacán SpA. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | UF | 10,049 | 11,077 | 43,764 | 64,890 | Monthly | 4.87 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. (1) | Chile | 97,018,000-1 | Scotiabank Chile | Chile | USD | 8,059,332 | - | - | 8,059,332 | At maturity | 3.38 |
91,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | - | 39,826,440 | - | 39,826,440 | At maturity | 4.56 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 18,000 | - | - | 18,000 | Monthly | 6.00 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 22,500 | - | - | 22,500 | Monthly | 5.76 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 13,048 | - | - | 13,048 | Monthly | 6.12 |
96,711,590-8 | Manantial S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 52,210 | - | - | 52,210 | Monthly | 5.02 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 27,780 | - | - | 27,780 | Monthly | 4.44 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 48,610 | - | - | 48,610 | Monthly | 4.42 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 41,300 | - | - | 41,300 | Monthly | 4.92 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 51,671 | - | - | 51,671 | Monthly | 4.73 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú Corpbanca | Chile | CLP | 92,344 | - | - | 92,344 | Monthly | 4.42 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 114,800 | - | - | 114,800 | Monthly | 5.16 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 2,000,000 | - | - | 2,000,000 | At maturity | 4.92 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 400,000 | - | - | 400,000 | At maturity | 4.56 |
96,981,310-6 | Cervecería Kunstmann S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | 520,654 | - | - | 520,654 | Monthly | 5.02 |
99,586,280-8 | Compañía Pisquera de Chile S.A. | Chile | 97,030,000-7 | Banco del Estado de Chile | Chile | CLP | - | 16,000,000 | - | 16,000,000 | At maturity | 4.68 |
0-E | Bebidas Bolivianas BBO S.A. | Bolivia | 0-E | Banco Mercantil Santa Cruz S.A. | Bolivia | BOB | 1,743,952 | 1,743,952 | 3,487,900 | 6,975,804 | Quarterly | 5.00 |
0-E | Milotur S.A. | Uruguay | 0-E | Banco Itaú | Uruguay | UI | 871,421 | - | - | 871,421 | Monthly | 4.80 |
Total |
|
|
|
|
|
| 14,087,671 | 57,581,469 | 3,531,664 | 75,200,804 |
|
|
Management has not identified any evidence of impairment of intangible assets. Respect to trademarks with indefinite useful life, used the same methodology which(1) This obligation is designated inhedged by a Cross Currency Interest Rate Swap agreementNote 217 – Financial instruments.
(*)The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.
|
|
|
|
|
|
| Maturity (*) |
|
|
| ||
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| (%) |
Financial leases obligations |
|
|
|
|
|
|
|
|
|
|
| |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 99,012,000-5 | Consorcio Nacional de Seguros S.A. | Chile | UF | 747,756 | 801,372 | 15,995,307 | 17,544,435 | Monthly | 3.95 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Supervielle | Argentina | ARS | 1,727 | - | - | 1,727 | Monthly | 17.00 |
Total |
|
|
|
|
|
| 749,483 | 801,372 | 15,995,307 | 17,546,162 |
|
|
(*)The amount based on the undiscounted contractual flows is found inNote 5 – Risk administration.
|
|
|
|
|
|
| Maturity (*) |
|
|
| ||
Debtor Tax ID | Company | Debtor country | Registration | ID No. Instrument | Creditor country | Currency | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Type of amortization | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| (%) |
Bonds payable |
|
|
|
|
|
|
|
|
|
|
| |
90,413,000-1 | Compañía Cervecerías Unidas S.A. (1) | Chile | Bond H | 573 03/23/2009 | Chile | UF | 9,976,415 | 9,984,905 | 32,519,081 | 52,480,401 | Semiannual | 4.25 |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | Bond J | 898 06/28/2018 | Chile | UF | - | - | 82,800,902 | 82,800,902 | Semiannual | 2.90 |
Total |
|
|
|
|
|
| 9,976,415 | 9,984,905 | 115,319,983 | 135,281,303 |
|
|
(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreementNote 7 - Financial instruments.
(*)The amount based on the undiscounted contractual flows is found inNote 5 - Risk administration.
Details of the fair value of bank borrowings, financial leases obligations and bonds payable are described inNote 7 - Financial instruments.
The effective interest rates of bond obligations are as follows:
Bonds Serie H | 4.27% |
Bonds Serie J | 2.89% |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Debts and financial liabilities are stated in several currencies and they accrue fixed and variable interest rates. These obligations classified by currency and interest type (excluding the effect of cross currency interest rate swap agreements) are detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 | ||
| Fixed Interest Rate | Variable Interest Rate | Fixed Interest Rate | Variable Interest Rate |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
US Dollar | 35,640,020 | 7,629,611 | 17,333,622 | 8,070,339 |
Chilean Pesos | 86,598,796 | - | 65,221,552 | - |
Argentinean Pesos | 2,695,345 | 4,385,390 | 3,357,467 | 505,919 |
Unidades de Fomento (*) | 166,400,723 | - | 167,823,319 | - |
Euros | 368,815 | - | - | - |
Unidad indexada (**) | 958,466 | - | 1,308,837 | - |
Boliviano | 11,141,396 | - | 7,014,539 | - |
Total | 303,803,561 | 12,015,001 | 262,059,336 | 8,576,258 |
(**) The unidad Indexada (UI) is an Uruguayan inflation-indexed, Uruguayan peso-denominated monetary unit. The UI rate is set daily in advance based on changes in the previous month’s inflation rate.
The goodwill movements duringterms and conditions of the years endedmain interest accruing obligations as of December 31, 20162019, are detailed as follows:
A)Bank Borrowings
Banco del Estado de Chile - Bank Loans
a) On July 27, 2012, the subsidiary Compañía Pisquera Chile S.A. (CPCh) signed a bank loan with the Banco del Estado de Chile for a total of ThCh$ 16,000,000, with maturity on July 27, 2017.
This loan accrues interest at an annual fixed rate of 6.86% and 2015an effective rate of 7.17%. The subsidiary amortized interest semi-annually, and the capital amortization consists of a single payment at the end of the established term.
On July 27, 2017 this loan was as follows:renewed for 5 years, with maturity on July 27, 2022.
This loan accrues interest at an annual fixed rate of 4.68%. The Subsidiary amortized interest semi-annually, and the capital amortization consists of a single payment at the end of the established term.
This obligation is subject to certain reporting obligations in addition to complying with the following financial ratios,which will be measured on the half-yearly financial statements of CPCh:
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(1) SeeNote 1, letter d).
(2) SeeNote 24, letter a). In addition, this loan obliges CPCh to comply with certain restrictions of affirmative nature, including maintaining insurance, maintaining the ownership of essential assets, and also to comply with certain restrictions, such as not to pledge, mortgage or grant any kind of encumbrance or real right over any fixed asset with an individual accounting value higher than UF 10,000, except under the terms established by the agreement, among other.
Goodwill from investments acquired As of December 31, 2019, the Subsidiary was in business combinations is assigned ascompliance with the financial covenants and specific requirements of the acquisition date to the Cash Generating Units (CGU), or group of CGUs that it is expected will benefit from the business combination synergies. The book value of the goodwill of the investments assigned to the CGUs inside the Company segments are:this loan.
Operating segment | Cash Generating Unit | As of December 31, 2016 | As of December 31, 2015 |
(CGU) | ThCh$ | ThCh$ | |
Chile | Embotelladoras Chilenas Unidas S.A. | 25,257,686 | 25,257,686 |
| Manantial S.A. | 8,879,245 | 8,879,245 |
| Compañía Pisquera de Chile S.A. | 9,808,550 | 9,808,550 |
| Los Huemules S.R.L. | 47,443 | 47,443 |
| Subtotal | 43,992,924 | 43,992,924 |
International Business | CCU Argentina S.A. and subsidiaries | 6,851,916 | 8,864,698 |
| Marzurel S.A., Coralina S.A. and Milotur S.A. | 7,260,675 | 7,701,975 |
| Bebidas del Paraguay S.A. y Distribuidora del Paraguay S.A. | 6,141,364 | 6,514,631 |
| Subtotal | 20,253,955 | 23,081,304 |
Wines | Viña San Pedro Tarapacá S.A. | 32,416,144 | 32,416,144 |
| Subtotal | 32,416,144 | 32,416,144 |
Total |
| 96,663,023 | 99,490,372 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
b) On October 15, 2014, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco del Estado de Chile for a total of UF 380,000, (equivalent to ThCh$ 9,206,290) maturing on October 15, 2019.
Goodwill assigned to The subsidiary amortizes interest semi-annually and capital amortization consists of a single payment at the CGUend of the established term.
On October 15, 2019 the subsidiary Viña San Pedro Tarapacá S.A. renegotiated this loan, by an amount of ThCh$ 10,664,833, at a fixed interest rate maturing on April 10, 2020.
c)On July 15, 2015, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Banco del Estado de Chile for a total of ThCh$ 4,000,000, at a fixed interest rate maturing on July 14, 2020.
The subsidiary amortizes interest and capital monthly until the end of the established term.
d)On April 13, 2017, Compañía Cervecerías Unidas S.A. signed a bank loan with Banco del Estado de Chile for a total of ThCh$ 40,000,000, at a fixed interest rate, maturing on April 13, 2022.
The Company amortizes interest semi-annually, and the capital amortization consists in a single payment at the end of the established term.
This obligation is subject to impairment tests annually orcertain reporting obligations in addition to complying with the following financial ratios:
a.Maintain at the end of each semester an indebtedness ratio measured over the consolidated financial statements not higher than 1.5, defined as the ratio of Total Adjusted Liabilities and Total Adjusted Equity. The Total Adjusted Liabilities are defined as Total Consolidated Liabilities less Dividends provisioned, according to policy included in the Statement of Changes in Equity, plus the amount of all guarantees issued by the Company and its subsidiaries that are cautioned by real guarantees, except as noted in the contract. Total Adjusted Equity is defined as Total Equity plus Dividends provisioned account, according to policy included in the Statement of Changes in Equity.
b.Maintain a higher frequencyFinancial Expense Coverage measured at the end of each semester and retroactively for periods of 12 months, not less than 3, calculated as the ratio of Adjusted ORBDA1 and Finance Costs account. Adjusted ORBDA means ORBDA as calculated by the Company in case there are indications that anyaccordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: (i) the sum of Gross Margin and Other income by function accounts; (ii) less (absolute numbers) Distribution costs, Administrative expenses and Other expenses by function accounts; and (iii) plus (absolute numbers) Depreciation and Amortization recorded on the Note Nature of the CGU could experience impairment. The recoverable amountcosts and expenses.
c.Maintain at the end of each CGU is determinedsemester, assets free of liens for an amount equal to at least 1.2, defined as the higherratio of valueTotal Assets free of lien and Finance Debt free of lien. Total Assets free of lien are defined as Total Assets less assets pledged as collateral for cautioned obligations of third parties. Finance Debt free of lien are defined as the sum of Bank loan, Bonds payable and Lease obligations contained under Note Other financial liabilities.
d.Maintain at the end of each semester a minimum equity of ThCh$ 312,516,750, meaning Equity Attributable to Equity Holders of the Parent plus the Dividends provisioned account, according to policy included in usethe Statement of Changes in Equity.
e.To maintain, either directly or fair value less costs to sell. To determineindirectly, ownership over more than 50% of the value in use,subscribed and paid-up shares and over the Company has used cash flow projections overvoting rights of the following companies: Cervecera CCU Chile Ltda. and Embotelladoras Chilenas Unidas S.A.
f.Maintain a 5-year span, based on the budgets and projections reviewed by Managementnominal installed capacity for the same termproduction manufacturing of beer and with an average grown-rate of 3%. The rates used to discount the projected cash flows reflect the market assessmentsoft drinks, equal or higher altogether than 15.9 million hectoliters a year.
g.To maintain, either directly or through a subsidiary, ownership of the specific risks related to the corresponding CGU. The pre-tax discount rates used range from a 9.5% to 12.8%. Given the materialitytrademark "CRISTAL", denominative for beer class 32 of the amounts involved, it wasinternational classifier, and not considered relevant to describe additional information in this Note. A reasonable change in assumptions would not result in an impairmenttransfer its use, except to goodwill.its subsidiaries.
As of December 31, 2016,2019, the Company has not identified any evidence of impairment of goodwill.was in compliance with the financial covenants required for this loan.
1ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
e)On July 3, 2017, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco del Estado de Chile for a total of US$ 8,000,000, (ThCh$ 6,277,920) at a fixed interest rate, maturing on July 3, 2018.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On July 3, 2018,this loan was paid.
f)On April 23, 2018, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco del Estado de Chile for a total of US$ 8,000,000, (ThCh$ 6,277,920) at a fixed interest rate, maturing on April 23, 2019.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On April 23, 2019, this loan was paid.
g)On April 17, 2018, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Banco del Estado de Chile for a total of ThCh$ 1,000,000, at a fixed interest rate, maturing on April 17, 2019.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On April 17, 2019 this loan was paid.
h)On April 26, 2018, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco del Estado de Chile for a total of ThCh$ 3,500,000, at a fixed interest rate, maturing on May 25, 2018.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On May 25, 2018 the loan was renewed, maturing on July 3, 2018.
On July 3, 2018,this loan was paid.
Banco de Chile – Bank Loans
a)On July 7, 2016, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco de Chile for a total of ThCh$ 7,271,000, at a fixed interest rate, maturing on July 3, 2017.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
This debt was changed to US$ and a fixed interest rate through a currency CLP-US$ and interest rate swap agreements (Cross Currency Interest Rate Swap). For details of the Company’s hedge strategies seeNote 5 – Risk administration and Note 7 – Financial instruments.
On July 3, 2017, this loan was paid.
b)On April 20, 2016, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Banco de Chile for a total of ThCh$ 2,000,000, at a fixed interest rate, maturing on April 20, 2018.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On April 20, 2018, the loan was renewed, maturing on July 19, 2018.
On July 19, 2018, the loan was renewed, maturing on July 19, 2021.
c)On August 25, 2016, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Banco de Chile for a total of ThCh$ 400,000, at a fixed interest rate, maturing on August 24, 2018.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On August 24, 2018, the loan was renewed, maturing on August 24, 2020.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Scotiabank Chile – Bank Loans
a)On June 17, 2015, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Scotiabank Chile for a total of US$ 7,871,500, (ThCh$ 6,177,081). It accrues interest at a compound floating rate Libor at 90 days plus a fixed margin, maturing on June 18, 2018.
The subsidiary pays quarterly interest and amortization of capital consists of a single payment at the end of the established term.
The interest rate risk to which the subsidiary is exposed as result of this loan is mitigated by the use of cross interest rate swap agreements (interest rate fixed). For details of the Company’s hedge strategies seeNote 5 - Risk administrationandNote 7 - Financial instruments.
On June 18, 2018,this loan was paid.
b)On June 18, 2018, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Scotiabank Chile for a total of US$ 11,600,000, (ThCh$ 9,102,984). It accrues interest at a compound floating rate Libor at 90 days plus a fixed margin, maturing on June 18, 2021.
The subsidiary pays quarterly interest and amortization of capital consists of a single payment at the end of the deadline.
The interest rate risk to which the subsidiary is exposed as result of this loan is mitigated by the use of cross interest rate swap agreements (interest rate fixed). For details of the Company’s hedge strategies seeNote 5 – Risk administrationand Note 7 – Financial instruments.
c)On April 20, 2016, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Scotiabank Chile for a total of ThCh$ 2,000,000, at a fixed interest rate, maturing on April 20, 2017.
The subsidiary amortizes interest semi-annually and capital amortization consists in a single payment at the end of the established term.
On April 20, 2017 the loan was renewed, maturing on April 22, 2019.
On April 22, 2019, this loan was paid.
d)On July 3, 2018, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Scotiabank Chile for a total of US$ 15,000,000, (ThCh$ 11,771,100) at a fixed interest rate, maturing on July 3, 2019.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On July 3, 2019, this loan was paid.
e)On May 23, 2019, Sociedad Viña San Pedro Tarapacá S.A. signed a bank loan with Scotiabank Chile for a total of US$ 10,000,000, (ThCh$ 7,847,400) at a fixed interest rate, maturing on May 20, 2020.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
f)On April 17, 2019, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Scotiabank Chile for a total of ThCh$ 1,000,000 at a fixed interest rate, maturing on April 16, 2021.
The subsidiary amortizes interest semi-annually and capital amortization consists in a single payment at the end of the established term.
g)On December 9, 2019, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Scotiabank Chile for a total of ThCh$ 10,000,000 at a fixed interest rate, maturing on December 9, 2025.
The subsidiary amortizes interest and capital semi-annually with a first payment on June 9, 2020.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Scotiabank Azul Chile (Former Banco BBVA Chile) – Bank Loans
a) On January 29, 2018, Compañía Cervecerías Unidas S.A. signed a bank loan with Scotiabank Azul Chile for a total of ThCh$ 60,000,000, at a fixed interest rate, maturing on May 29, 2018.
The Company amortizes interest monthly and capital consists in a single payment at the end of the established term.
On May 29, 2018, the loan was renewed, maturing on July 27, 2018.
On July 27, 2018, the loan was renewed, maturing on August 24, 2018.
On August 24, 2018,this loan was paid.
b) On July 3, 2018, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Scotiabank Azul Chile for a total of ThCh$ 4,500,000, at a fixed interest rate, maturing on December 3, 2018.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On December 3, 2018,this loan was paid.
Banco Consorcio – Bank Loans
a) On May 17, 2018, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco Consorcio for a total of ThCh$ 6,000,000, at a fixed interest rate, maturing on July 3, 2018.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
On July 3, 2018,this loan was paid.
Banco Itaú Corpbanca– Bank Loans
a)On April 23, 2019, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco Itaú Corpbanca for a total of US$ 14,000,000, (ThCh$ 910,986,360) at a fixed interest rate, maturing on April 22, 2022.
The subsidiary amortizes interest semi-annually and capital amortization consists in a single payment at the end of the established term.
b)On April 22, 2019, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Banco Itau Corpbanca for a total of ThCh$ 2,000,000 at a fixed interest rate, maturing on April 21, 2021.
The subsidiary amortizes interest semi-annually and capital amortization consists in a single payment at the end of the established term.
c)On July 3, 2019, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco Itaú Corpbanca for a total of US$ 15,000,000, (ThCh$ 11,771,100) at a fixed interest rate, maturing on July 2, 2020.
The subsidiary amortizes interest and capital in a single payment at the end of the established term.
d)On May 10, 2015, the subsidiary Cervecera Guayacán SpA. signed a bank loan with Banco Itaú Corpbanca for a total of UF 3,067, (ThCh$ 86,827) at a fixed interest rate, maturing on May 10, 2030.
The subsidiary amortizes interest and capital monthly with a first payment on June 10, 2015.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Banco BBVA Francés S.A. – Bank Loan with Compañía Industrial Cervecera S.A. (CICSA)
a)On June 18, 2014, the subsidiary CICSA signed a bank loan with BBVA Bank for a total of 90 million argentinean pesos, maturing on November 18, 2017.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization quarterly.
On November 18, 2017, this loan was paid.
Banco de la Nación Argentina – Bank Loan with Compañía Industrial Cervecera S.A. (CICSA)
a)On December 28, 2012, CICSA signed a bank loan for a total of 140 million of argentinean pesos, maturing on November 26, 2019, and whose loan is delivered in two stages, where the first was carried out on December 28, 2012, for a total of 56 million argentinean pesos and the second on June 28, 2013, for a total of 84 million of Argentinean pesos.
This loan accrues interest at an annual rate of 15% fixed by first 36 months.Having completed that term, accrues interest at a compound floating rate BADLAR in pesos plus a fixed spread of 400 basis points and to this effect will be taken BADLAR rate published by the Central Bank of the Republic of Argentina, corresponding to five working days prior to the start of the period, subject to the condition that does not exceed the lending rate of portfolio general of Banco de la Nación Argentina, in whose case shall apply this. Interest will be paid monthly.
The subsidiary amortizes capital in 74 consecutive and equal, once the grace period of 10 months from the date of disbursement.
This loan is guaranteed by CCU S.A., through a Stand By issued by the Banco del Estado de Chile to Banco de la Nación Argentina (seeNote 34 - Contingencies and commitments).
b)On April 20, 2015, the subsidiary CICSA signed a bank loan for a total of 24 million of argentinean pesos, maturing on April 4, 2018.
This loan accrues interestat a compound floating rate BADLAR in pesos plus a fixed spread of 500 basis points and subject to the condition that does not exceed the lending rate of portfolio general of Banco de la Nación Argentina, in whose case shall apply this. Interest will be paid monthly.
The subsidiary amortizes capital in 30 monthly, once the grace period of 6 months from de date of disbursement.
On April 4, 2018,this loan was paid.
c) On May 26, 2017, the subsidiary CICSAsigned a bank loan for a total of 60 million of argentinean pesos, maturing on May 22, 2018.
This loan accrues a fixed interest at an annual rate of 20%. The subsidiary amortizes monthly interest and capital amortization consists of a single payment at the end of the established term.
On May 26, 2018,this loan was paid.
Banco de Galicia y Buenos Aires S.A.; Banco Santander Río S.A. – Syndicated Bank Loan with Compañía Industrial Cervecera S.A. (CICSA)
On April 20, 2015, the subsidiary CICSA signed a syndicated bank loan for a total of 150 million argentinean pesos, maturing on April 20, 2018.
On September 15, 2016 the subsidiary signed an addendum to the original contract in order to increase the loan capital to 183.33 million argentinean pesos, modify the interest rate, the maturity and schedule of repayment of capital and dates of payment, being the new maturity on September 15, 2019.
On July 14, 2017, the subsidiary signed a new addendum to the original contract in order to modify the interest rate to fixed interest at an annual nominal rate of 23%. The rest of the conditions remained unchanged.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The proportional participation of banks lenders is as follows:
(a) Banco de Galicia y Buenos Aires S.A., with 91.66 million argentinean pesos of pro rata participation.
(b)Banco Santander Río, with 91.66 million argentinean pesos of pro rata participation.
This loan accrues interest at an annual rate fixed of 23%whose payment will make monthly. CICSA amortized capital in 24 consecutive and variable monthly installments once completed the 12-month grace period from the date of signature of the addendum.
This loan obliges the subsidiary to meet specific requirements and financial covenants related to their Consolidated Financial Statements, which according to agreement of the parties are as follows:
a.Maintain a capability of repayment measure at the end of each quarter less than or equal to 3, calculated as the financial debt over Adjusted ORBDA2.AdjustedORBDA meansORBDA as calculated by the Company in accordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: Operating result before Interest, Income taxes, Depreciation and Amortization for the period of 12 months immediately prior to the date of calculation.
b.Maintain a Financial Expense Coverage measured at the end of each quarter and retroactively for periods of 12 months, not less than 2.5, calculated as the ratio of AdjustedORBDA (as defined in paragraph (a)) and Financial Costs account.
c.Maintain at the end of each quarter an indebtedness ratio not higher than 1.5, defined as the ratio Financial Liabilities over the Equity meaning the Equity at the time of calculation, as it arises from their Financial Statements and in accordance with generally accepted accounting principles in the Republic of Argentina.
d.Maintain at the end of each quarter a minimum Equity of 600 million of argentinean pesos.
On September 16, 2019, this loan was paid.
Banco Mercantil Santa Cruz S.A. – Bank loans
a) On June 26, 2017, the subsidiary Bebidas Bolivianas BBO S.A.signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 68,877,500 Bolivian, at a fixed interest rate, maturing on May 1, 2027.
The subsidiary amortizes quarterly interest and and capital amortization begins on September 10, 2019 in a quarterly basis.
b) On December 18, 2017,the subsidiary Bebidas Bolivianas BBO S.A.signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 6,860,000 Bolivian, at a fixed interest rate, maturing on December 13, 2018.
The subsidiary amortizes interest and capital quarterly.
On September 14, 2018, the loan was paid.
c) On May 14, 2018,the subsidiary Bebidas Bolivianas BBO S.A.signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 6,860,000 Bolivian, at a fixed interest rate, maturing on May 9, 2019.
The subsidiary amortizes interest and capital quarterly.
On September 27, 2018, the loan was paid.
d) On June 22, 2018,the subsidiary Bebidas Bolivianas BBO S.A.signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 6,180,400 Bolivian, at a fixed interest rate, maturing on December 13, 2019.
The subsidiary amortizes interest and capital quarterly.
2ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
On September 20, 2018, the loan was paid.
e)On May 31, 2019, the subsidiary Bebidas Bolivianas BBO S.A. signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 34,300,000 bolivians at a fixed interest rate, maturing on April 8, 2029.
The subsidiaryBebidas Bolivianas BBO S.A. pays quarterly interest and capital amortization will begin on August 18, 2021 also quarterly.
Banco Itaú – Bank loans
a)On February 20, 2018, the subsidiary Milotur S.A. signed a bank loan with Banco Itaú for a total of UI 15,139,864.80 at a fixed interest rate, maturing on February 20, 2021.
The subsidiary amortizes interest monthly and capital will be payed at the end of the established term.
B)Lease liabilities
The most significant financial lease agreements are as follows:
CCU S.A.
In December, 2004, the Company sold a piece of land previously classified as investment property. As part of the transaction, the Company leased eleven floors of a building under construction on the mentioned piece of land.
The building was completed during 2007, and on June 28, 2007, the Company entered into a 25-years lease agreement with Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A., for a total amount of UF 688,635.63, with an annual interest rate of 7.07%. The current value of the agreement amounted to ThCh$ 10,403,632 as of December 31, 2007. The agreement also grants CCU the right or option to acquire the assets contained in the agreement (real estate, furniture and facilities) as from month 68 of the lease. The lease rentals committed are according to the conditions prevailing in the market.
In 2004 the Company recognized a ThCh$ 3,108,950 gain for the building portion not leased by the Company, and a ThCh$ 2,276,677 liability deferred through completion of the building, when the Company recorded the transaction as financial lease.
On February 28, 2018, the Company carries out an amendment to the contract with Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A., recording a balance debt of UF 608,375, with 3.95% annual interest and maturity on February 5, 2048.
These Consolidated Financial Statements have modifications according the adoption of IFRS 16 (SeeNote 4 – Accounting changes). As a consequense of the aforementioned the Company has recognized a financial liability, equivalent to the present value of the associated payments to the operational agreements with an amount over than US$ 5,000 (equivalent to ThCh$ 3,743) and a term over than 12 months.
Below is the detail of future payments and the value lease liabilities, whose analysis is within the scope of IFRS 16 (seeNote 4 - Accounting changes):
| As of December 31, 2019 | ||
Gross Amount | Interest | Value | |
ThCh$ | ThCh$ | ThCh$ | |
0 to 3 months | 1,393,064 | 152,297 | 1,240,767 |
3 months to 1 year | 4,581,643 | 965,313 | 3,616,330 |
Over 1 year to 3 years | 6,652,459 | 1,162,596 | 5,489,863 |
Over 3 years to 5 years | 4,049,398 | 1,106,402 | 2,942,996 |
Over 5 years | 26,579,745 | 6,799,345 | 19,780,400 |
Total | 43,256,309 | 10,185,953 | 33,070,356 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
| As of December 31, 2018 | ||
Gross Amount | Interest | Value | |
ThCh$ | ThCh$ | ThCh$ | |
0 to 3 months | 241,724 | 151,208 | 90,516 |
3 months to 1 year | 725,183 | 449,727 | 275,456 |
Over 1 year to 3 years | 1,911,683 | 1,162,200 | 749,483 |
Over 3 years to 5 years | 1,909,956 | 1,108,584 | 801,372 |
Over 5 years | 23,078,634 | 7,083,327 | 15,995,307 |
Total | 27,867,180 | 9,955,046 | 17,912,134 |
Bonds Payable
Series E Bonds – CCU S.A.
On October 18, 2004, under number 388 the Company recorded in the Securities Record the issue of 20-year term public bonds for a total UF 2,000,000 maturing on December 1, 2024. This issue was placed in the local market on December 1, 2004, with a discount amounting to ThCh$ 897,857. This obligation accrues interests at a fixed annual rate of 4.0%, and it amortizes interest and capital semi-annually.
On December 17, 2010, took place the Board of Bondholders Serie E, which decided to modify the issued Contract of those bonds in order to update certain references and adapt it to the new IFRS accounting standards. The amendment of the issued Contract is dated December 21, 2010 and has the repertory No. 35738-2010 in the Notary of Ricardo San Martín Urrejola. Because of these changes, the commitment of the Company is to comply with certain financial ratios that will be calculated only on the Consolidated Financial Statements. These financial ratios and other conditions are as follows:
a.Maintain at the end of each quarter an indebtedness ratio measured over the consolidated financial statements not higher than 1.5, defined as the ratio of Total Adjusted Liabilities and Total Adjusted Equity. Total Adjusted Liabilities is defined as Total Liabilities less Dividends provisioned, according to policy included in the Statement of Changes in Equity, plus the amount of all guarantees granted by the Issuer or its subsidiaries that are cautioned by real guarantees, except as noted in the contract. Total Adjusted Equity is defined as Total Equity plus Dividends provisioned, according to policy included in the Statement of Changes in Equity.
b.Maintain a Financial Expense Coverage measured at the end of each quarter and retroactively for periods of 12 months, not less than 3, calculated as the ratio of Adjusted ORBDA3 and Financial Costs account. Adjusted ORBDA means ORBDA as calculated by the Company in accordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: (i) the sum of Gross Margin and Other income by function accounts; (ii) less (absolute numbers) Distribution costs, Administrative expenses and Other expenses by function accounts; and (iii) plus (absolute numbers) Depreciation and Amortization recorded on the Note Nature of the costs and expenses.
c.Maintain at the end of each quarter, assets free of liens for an amount equal to at least 1.2, defined as the ratio of Total Assets free of lien and Total Adjusted Liabilities free of lien. Is defined as Total Assets free of lien are defined as Total Assets less assets pledged as collateral for cautioned obligations of third parties. Total Adjusted Liabilities free of lien are defined as Total Liabilities less Dividends provisioned according to policy contained in the Statement of Changes in Equity.
d.Maintain at the end of each quarter a minimum equity of ThCh$ 312,516,750, meaning Equity Attributable to Equity Holders of the Parent plus the Dividends provisioned account, according to policy contained in the Statement of Changes in Equity. This requirement will increase in the amount resulting from each revaluation of property, plant and equipment to be performed by the Issuer.
e.To maintain, either directly or indirectly, ownership over more than 50% of the subscribed and paid-up shares and over the voting rights of the following companies: Cervecera CCU Chile Limitada, Embotelladoras Chilenas Unidas S.A. and Viña San Pedro Tarapacá S.A., except in the cases and under the terms established in the agreement.
3ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
f.To maintain, either directly or through a subsidiary, ownership of the trademark "CRISTAL", denominative for beer class 32 of the international classifier, and not to transfer its use, except to its subsidiaries.
g.Not to make investments in facilities issued by related parties, except in the cases and under the terms established in the agreement.
h.Neither sells nor transfer assets from the issuer and its subsidiaries representing over 25% of the assets total of the consolidated financial statements.
On October 8, 2018, the Company redeemed all of the Series E Bonds, before their scheduled maturity, in accordance with the provisions of: the Fifth Clause No. 10 and other applicable terms of the Issuance Contract; General Standard No. 30 of the CMF; and the Securities Market Law. The bonds were redeemed, according to the value of the Unidad de Fomento on the day of the early redemption, at the value equivalent to the unpaid balance of the capital, plus interest accrued and not paid in the period comprised between the day following the expiration date of the last installment of interest paid and the date set for the redemption, amounting to a total of UF 659,199.6 (equivalent to ThCh$ 18,043,633).
Series H Bonds – CCU S.A.
On March 23, 2009, under number 573, the Company recorded in the Securities Record the issue of bonds Series H for UF 2 million, with 21 years terms. Emission was placed in the local market on April 2, 2009. The issuance of the Bond H was UF 2 million with maturity on March 15, 2030, with a discount amounting to ThCh$ 156,952, and accrues interest at an annual fixed rate of 4.25%, with amortizes interest and capital semi-annually.
By deed dated December 27, 2010 issued in the Notary of Ricardo San Martín Urrejola, under repertoires No. 36446-2010, were amended Issue Contract Series H, in order to update certain references and to adapt to the new IFRS accounting rules.
The current issue was subscribed with Banco Santander Chile as representative of the bond holders and as paying bank, and it requires that the Company complies with the following financial covenants on its Consolidated Financial Statements and other specific requirements:
a.Maintain at the end of each quarter an indebtedness ratio measured over the consolidated financial statements not higher than 1.5, defined as the ratio of Total Adjusted Liabilities and Total Adjusted Equity. The Total Adjusted Liabilities are defined as Total Liabilities less Dividends provisioned, according to policy included in the Statement of Changes in Equity, plus the amount of all guarantees, debts or obligations of third parties not within the liability and outside the Issuer or its subsidiaries that are cautioned by real guarantees granted by the Issuer or its subsidiaries. Total Adjusted Equity is defined as Total Equity plus Dividends provisioned account, according to policy included in the Statement of Changes in Equity.
b.Maintain a Financial Expense Coverage measured at the end of each quarter and retroactively for periods of 12 months, not less than 3, calculated as the ratio of Adjusted ORBDA4 and Financial Costs account. Adjusted ORBDA means ORBDA as calculated by the Company in accordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: (i) the sum of Gross Margin and Other income by function accounts; (ii) less (absolute numbers) Distribution costs, Administrative expenses and Other expenses by function accounts; and (iii) plus (absolute numbers) Depreciation and Amortization recorded on the Note Nature of the cost and expenses.
c.Maintain at the end of each quarter, assets free of liens for an amount equal to, at least, 1.2, defined as the ratio of Total Assets free of lien and Financial Debt free of lien. Total Assets free of lien are defined as Total Assets less assets pledged as collateral for cautioned obligations of third parties. Financial Debt free of lien is defined as the sum of lines Bank Loans, Bonds payable and Finance lease obligations contained in Note Other financial liabilities of the Consolidated Financial Statements.
d.Maintain at the end of each quarter a minimum equity of ThCh$ 312,516,750, meaning Equity Attributable to Equity Holders of the Parent plus the Dividends provisioned account, according to policy included in the Statement of Changes in Equity. This requirement will increase in the amount resulting from each revaluation of property, plant and equipment to be performed by the Issuer.
4ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
e.To maintain, either directly or indirectly, ownership over more than 50% of the subscribed and paid-up shares and over the voting rights of the following companies: Cervecera CCU Chile Limitada and Embotelladoras Chilenas Unidas S.A.
f.Maintain a nominal installed capacity for the production manufacturing of beer and soft drinks, equal or higher altogether than 15.9 million hectoliters a year, except in the cases and under the terms of the contract.
g.To maintain, either directly or through a subsidiary, ownership of the trademark "CRISTAL", denominative for beer class 32 of the international classifier, and not to transfer its use, except to its subsidiaries.
h.Not to make investments in facilities issued by related parties, except in the cases and under the terms established in the agreement.
The inflationary risk associated to the interest rate in which this Bond H is exposed, is mitigated by the use of cross interest rate swap agreements (interest rate fixed). For details of the Company’s hedge strategies seeNote 5 – Risk administrationandNote 7 - Financial instruments.
As ofDecember 31, 2019, the Company was in compliance with the financial covenants required for this public issue.
Series J Bonds – CCU S.A.
On June 28, 2018, CCU S.A. registered in the Securities Register, under the number 898, the issuance of its Series J Bond, bearer and dematerialized, for a total of UF 3 million with maturity on August 10, 2043. The Series J bonds will accrue on the unpaid capital expressed in Unidades de Fomento, an annual interest of 2.9%, compounded, due, calculated on the basis of equal semesters of 180 days, equivalent to 1.4396% semi-annual. Interest will accrue as of August 10, 2018, will be paid semiannually as of February 10, 2019 and the capital will be paid at the end of the bond term.
The issue was subscribed with Banco BICE as the representative of the bond holders and the payer bank and requires the Company to comply with the following financial indicators with respect to its Interim Consolidated Financial Statements and other specific requirements:
a.Maintain at the end of each quarter a level of consolidated net financial debt, reflected in each of its quarterly Consolidated Financial Statements, not greater than 1.5 times, defined as the ratio between Net Financial Debt and Total Adjusted Equity. The Net Financial Debt is defined as the difference between / x / the unpaid amount of the "Financial Debt", that is, the sum of the accounts, current and non-current, Bank loans, Obligations with the public and Obligations for financial leases , contained in the Note Other financial liabilities, and / and / the balance of the item Cash and cash equivalents. Total Adjusted Equity, which is defined as the sum of / x / Total Equity and / and / the sum of the accounts Interim Dividends, Dividends provisioned according to policy, as well as all other accounts related to the provision of dividends, contained in the Consolidated Statement of Changes in the Issuer's Equity.
b.The Issuer must maintain a consolidated financial expense coverage of not less than three times, defined as the ratio between ORBDA and Financial Expenses. ORBDA5 is the sum of the accounts Gross margin and Other income per function, minus the accounts Distribution expenses, Administrative expenses and Other expenses per function and plus the Depreciation and Amortization line recorded in the Note Costs and Expenses by Nature. Financial Expenses refers to the account of the same name referred to in the Consolidated Statement of Income by Function. The Consolidated Financial Expenses Coverage Ratio will be calculated for the period of twelve consecutive months prior to the date of the corresponding Consolidated Financial Statements, including the closing month of said Consolidated Financial Statements.
c.Maintain an Adjusted Equity at a consolidated level for an amount of at least equal to ThCh$ 312,516,750. For these purposes, Adjusted Equity corresponds to the sum of / i / the Equity account attributable to the owners of the controlling entity in the Consolidated Statement of Financial Position, and / ii / the sum of the accounts Interim Dividends, Dividends provisioned according to policy, as well as all other accounts relating to the provision of dividends, contained in the Consolidated Statement of Changes in Equity.
d.Maintain Lien-Free Assets for an amount equal to at least 1.2 times the unpaid amount of the Financial Debt without collateral. For these purposes, the assets and debts will be valued at book value. The following shall be understood: / a / Assets Free of Liens is the difference between / i / the Total Assets account in the Consolidated Statement of FinancialPosition, and / ii / the assets given as guarantees indicated in the Note on Contingencies and Commitments of the Consolidated Financial Statements; and / b / Financial Debt is defined in the Issuance Contract.
5ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
e.Maintain, directly or indirectly, the ownership of more than fifty percent of the social rights and of the subscribed and paid shares, respectively, of: / a / Cervecera CCU Chile Limitada and / b / Embotelladoras Chilenas Unidas S.A.
f.Not sell, nor allow the sale of, nor assign the ownership of, nor transfer and / or in any way alienate, either through a transaction or a series of transactions, directly or indirectly, assets of the Company’s property and/or its subsidiaries necessary to maintain in Chile, directly and / or through one or more Subsidiaries, a nominal installed capacity for the production, without distinction of Beers and / or non-alcoholic Beverages and / or Nectars and / or Mineral and / or Packaged Waters, hereinafter the "Essential Businesses" ", Equal to and not inferior to, either with respect to one or more of the aforementioned categories or all of them together, 15.9 million hectoliters per year.
g.To maintain, directly or through a Subsidiary, the ownership of the trademark "CRISTAL", brand or word, for beer, in class 32 of the International Classifier of Products and Services for the registration of trademarks.
h.Not to make investments in instruments issued by "related parties" other than the Company’s Subsidiaries, nor to carry out other operations outside its normal line of business, under conditions different from those established in the contract.
As of December 31, 2019, the Company was in compliance with the financial covenants required for this public issue.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
D) Reconciliation of liabilities arising from financing activities
| As of December 31, 2018 | Flows | Accrual of interest | Change in foreign currency and unit per adjustment | Others | As of December 31, 2019 | ||
| Payments | Acquisitions | ||||||
| Principal | Interest | ||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Other financial liabilities |
|
|
|
|
|
|
|
|
Current | ||||||||
Bank borrowings | 38,160,178 | (24,502,019) | (12,402,773) | 25,347,785 | 12,639,856 | (446,694) | 3,651,105 | 42,447,438 |
Bond payable | 4,081,175 | (2,547,487) | (4,734,806) | - | 4,758,356 | 66,887 | 5,120,614 | 6,744,739 |
Lease liabilities (1) | 365,972 | (6,416,902) | (727,334) | - | 1,334,118 | 1,420,466 | 8,880,777 | 4,857,097 |
Total others financial liabilities current | 42,607,325 | (33,466,408) | (17,864,913) | 25,347,785 | 18,732,330 | 1,040,659 | 17,652,496 | 54,049,274 |
Non-current | ||||||||
Bank borrowings | 75,200,804 | - | - | 25,641,701 | - | 2,557,682 | (3,651,105) | 99,749,082 |
Bond payable | 135,281,303 | - | - | - | - | 3,646,258 | (5,120,614) | 133,806,947 |
Lease liabilities (1) | 17,546,162 | - | - | - | - | 463,687 | 10,203,410 | 28,213,259 |
Total others financial liabilities non-current | 228,028,269 | - | - | 25,641,701 | - | 6,667,627 | 1,431,691 | 261,769,288 |
Total Other financial liabilities | 270,635,594 | (33,466,408) | (17,864,913) | 50,989,486 | 18,732,330 | 7,708,286 | 19,084,187 | 315,818,562 |
(1) Includes leases recognized by IFRS 16,See Note 4 - Accounting changes, letter a).
| As of December 31, 2017 | Flows | Accrual of interest | Change in foreign currency and unit per adjustment | Others | As of December 31, 2018 | ||
| Payments | Acquisitions | ||||||
| Principal | Interest | ||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Other financial liabilities |
|
|
|
|
|
|
|
|
Current | ||||||||
Bank borrowings | 24,623,746 | (93,311,712) | (7,329,217) | 92,681,410 | 7,751,402 | (2,102,985) | 15,847,534 | 38,160,178 |
Bond payable | 3,306,135 | (2,737,203) | (2,911,224) | - | 3,882,088 | 90,527 | 2,450,852 | 4,081,175 |
Financial leases obligations | 176,586 | (1,071,050) | (1,919) | - | 675,796 | (56,632) | 643,191 | 365,972 |
Total others financial liabilities current | 28,106,467 | (97,119,965) | (10,242,360) | 92,681,410 | 12,309,286 | (2,069,090) | 18,941,577 | 42,607,325 |
Non-current | ||||||||
Bank borrowings | 73,886,831 | (207,714) | - | 8,828,143 | - | 396,858 | (7,703,314) | 75,200,804 |
Bond payable | 69,476,612 | (16,408,664) | - | 82,498,034 | - | 2,914,363 | (3,199,042) | 135,281,303 |
Financial leases obligations | 17,638,289 | (6,412) | - | - | - | 557,476 | (643,191) | 17,546,162 |
Total others financial liabilities non-current | 161,001,732 | (16,622,790) | - | 91,326,177 | - | 3,868,697 | (11,545,547) | 228,028,269 |
Total Other financial liabilities | 189,108,199 | (113,742,755) | (10,242,360) | 184,007,587 | 12,309,286 | 1,799,607 | 7,396,030 | 270,635,594 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
| As of December 31, 2016 | Flows | Accrual of interest | Change in foreign currency and unit per adjustment | Others | As of December 31, 2017 | ||
| Payments | Acquisitions | ||||||
| Principal | Interest | ||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Other financial liabilities |
|
|
|
|
|
|
|
|
Current | ||||||||
Bank borrowings | 39,079,561 | (22,241,073) | (7,146,384) | 16,477,169 | 7,492,719 | (3,435,455) | (5,602,791) | 24,623,746 |
Bond payable | 3,250,023 | - | (3,051,269) | - | 3,166,139 | 52,599 | (111,357) | 3,306,135 |
Financial leases obligations | 215,950 | (1,405,266) | (8,422) | - | 1,209,294 | 948 | 164,082 | 176,586 |
Total others financial liabilities current | 42,545,534 | (23,646,339) | (10,206,075) | 16,477,169 | 11,868,152 | (3,381,908) | (5,550,066) | 28,106,467 |
Non-current | ||||||||
Bank borrowings | 29,606,398 | (844,687) | - | 41,300,000 | (306,747) | (1,470,924) | 5,602,791 | 73,886,831 |
Bond payable | 70,836,716 | (2,668,458) | - | - | - | 1,196,997 | 111,357 | 69,476,612 |
Financial leases obligations | 17,500,919 | (8,962) | - | - | - | 292,593 | (146,261) | 17,638,289 |
Total others financial liabilities non-current | 117,944,033 | (3,522,107) | - | 41,300,000 | (306,747) | 18,666 | 5,567,887 | 161,001,732 |
Total Other financial liabilities | 160,489,567 | (27,168,446) | (10,206,075) | 57,777,169 | 11,561,405 | (3,363,242) | 17,821 | 189,108,199 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Trade and other payables are detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 | ||
| Current | Non-current | Current | Non-current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Suppliers | 248,608,507 | - | 247,335,760 | - |
Notes payable | 2,081,089 | 26,550 | 3,973,183 | 12,413 |
Trade an other current payables | 250,689,596 | 26,550 | 251,308,943 | 12,413 |
Withholdings payable | 55,965,962 | - | 52,071,225 | - |
Trade accounts payable withholdings | 55,965,962 | - | 52,071,225 | - |
Total | 306,655,558 | 26,550 | 303,380,168 | 12,413 |
Provisions recorded in the consolidated statement of financial position are detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 | ||
Current | Non-current | Current | Non-current | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Litigation | 193,764 | 367,614 | 405,069 | 488,562 |
Others | 2,847,166 | 164,347 | - | 6,937,197 |
Total | 3,040,930 | 531,961 | 405,069 | 7,425,759 |
The changes in provisions are detailed as follows:
| Litigation (1) | Others | Total | ||
ThCh$ | ThCh$ | ThCh$ | |||
As of January 1, 2018 |
| 1,300,695 |
| 289,469 | 1,590,164 |
As of December 31, 2018 |
|
|
|
|
|
Incorporated |
| 560,355 |
| 6,731,027 | 7,291,382 |
Used |
| (344,749) |
| - | (344,749) |
Released |
| (102,277) |
| (11,975) | (114,252) |
Conversion effect |
| (520,393) |
| (71,324) | (591,717) |
Changes |
| (407,064) |
| 6,647,728 | 6,240,664 |
As of December 31, 2018 |
| 893,631 |
| 6,937,197 | 7,830,828 |
As of December 31, 2019 |
|
|
|
|
|
Incorporated |
| 493,097 |
| 3,172,465 | 3,665,562 |
Used |
| (461,968) |
| - | (461,968) |
Released |
| (129,623) |
| (7,063,046) | (7,192,669) |
Conversion effect |
| (233,759) |
| (35,103) | (268,862) |
Changes |
| (332,253) |
| (3,925,684) | (4,257,937) |
As of December 31, 2019 |
| 561,378 |
| 3,011,513 | 3,572,891 |
(1)SeeNote 34 – Contingencies and commitments.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The maturities of provisions at December 31, 2019, are detailed as follows:
| Litigation | Others | Total | ||
ThCh$ | ThCh$ | ThCh$ | |||
Less than one year |
| 193,764 |
| 2,847,166 | 3,040,930 |
Between two and five years |
| 238,429 |
| 164,347 | 402,776 |
Over five years |
| 129,185 |
| - | 129,185 |
Total |
| 561,378 |
| 3,011,513 | 3,572,891 |
The maturities of provisions at December 31, 2018, are detailed as follows:
| Litigation | Others | Total | ||
ThCh$ | ThCh$ | ThCh$ | |||
Less than one year |
| 405,069 |
| - | 405,069 |
Between two and five years |
| 314,784 |
| 6,937,197 | 7,251,981 |
Over five years |
| 173,778 |
| - | 173,778 |
Total |
| 893,631 |
| 6,937,197 | 7,830,828 |
The provisions for Litigation and Other - current and non-current correspond to estimates made by the Administration, intended to cover eventual effects that may derive from the resolution of trials/claims or uncertainties to which the Company is exposed. Such trails/claims or uncertainties derive from transactions that are part of the normal course of CCU's business and the countries where it operates and whose details and scopes are not fully public knowledge, so that its detailed exposition could affect the interests of the Company and the progress of the resolution of these, according to the legal reserves of each administrative and judicial procedure. Therefore, based on the provisions of IAS 37 "Provisions, contingent liabilities and contingent assets", paragraph 92, although the amounts provisioned in relation to these trials/claims or uncertainties are indicated, no further detail of the same at the closing of these Financial Statements.
Significant litigation proceedings which the Company is exposed to at a consolidated level are detailed inNote 34 - Contingencies and commitments.
Management believes that based on the development of such proceedings to date, the provisions established on a case by case basis are adequate to cover the possible adverse effects that could arise from these proceedings.
Taxes receivables are detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Refundable tax previous year | 5,484,216 | 11,884,421 |
Taxes under claim (1) | - | 968,195 |
Argentinean tax credits | 1,140,073 | 440,172 |
Monthly provisions | 8,136,478 | 3,686,905 |
Payment of absorbed profit provision | 4,830 | - |
Other credits | 366,693 | 322,736 |
Total | 15,132,290 | 17,302,429 |
(1)This item includes claims for refund of first category taxes (Provisional payment of absorbed profit) for an amount of ThCh$ 968,195 as of December 31, 2018, that was presented in April 2014 from the commercial year 2013, which was recovered the second quarter of 2019.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Current tax assets non-current
Taxes receivables are detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Taxes under claim (1) | - | 1,173,281 |
Others (2) | 2,305,129 | 97,660 |
Total | 2,305,129 | 1,270,941 |
(1)This item includes claims for refund of first category taxes (Provisional payment of absorbed profit) that was presented in April 2010 from the commercial year 2009.
(2)Corresponds to the minimum presumed income tax of Argentine subsidiaries, whose recovery period is estimated to be more than one year.
Current tax liabilities
Taxes payable are detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Chilean Tax income (expense) | 12,928,404 | 71,587,790 |
Monthly provisional payments | 6,133,335 | 3,946,196 |
Chilean direct taxes | 165,936 | 101,474 |
Other | 1,276,699 | 249,989 |
Total | 20,504,374 | 75,885,449 |
Tax expense
The income tax and deferred tax expense for the years ended as of December 31, 2019, 2018 and 2017, are detailed as follows:
| For the years ended as of December 31, | ||
| 2019 | 2018 | 2017 |
| ThCh$ | ThCh$ | ThCh$ |
Income as per deferred tax related to the origin and reversal of temporary differences | (8,160,347) | 9,930,675 | (500,800) |
Prior year adjustments | (1,390,633) | 484,985 | 569,212 |
Effect of change in tax rates | - | 23,903 | (50,071) |
Tax benefits (loss) | 11,804,310 | (1,795,446) | 611,282 |
Total deferred tax expense | 2,253,330 | 8,644,117 | 629,623 |
Current tax expense | (43,516,068) | (144,929,220) | (47,841,130) |
Prior period adjustments | 1,286,824 | 158,286 | (1,154,469) |
Total expenses (income) for current taxes | (42,229,244) | (144,770,934) | (48,995,599) |
(Loss) Income from income tax | (39,975,914) | (136,126,817) | (48,365,976) |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Deferred taxes related to items charged or credited directly to the Consolidated Statement of Comprehensive Income are detailed as follows:
| For the years ended as of December 31, | ||
| 2019 | 2018 | 2017 |
| ThCh$ | ThCh$ | ThCh$ |
Net income from cash flow hedge | 93,416 | (16,196) | 728 |
Actuarial gains and losses deriving from defined benefit plans | 1,097,001 | 408,928 | (73,169) |
Charge to equity | 1,190,417 | 392,732 | (72,441) |
Effective Rate
The Company’s income tax expense as ofDecember 31, 2019, 2018 and 2017 represents 21.54%, 29.71% and 24.62%, respectively of income before taxes. The following is reconciliation between such effective tax rate and the statutory tax rate valid in Chile.
| For the years ended as of December 31, | |||||
2019 | 2018 | 2017 | ||||
ThCh$ | Rate % | ThCh$ | Rate % | ThCh$ | Rate % | |
Income before taxes | 185,621,574 |
| 458,211,348 |
| 196,474,395 |
|
Income tax using the statutory rate | (50,117,825) | 27.00 | (123,717,064) | 27.00 | (50,100,971) | 25.50 |
Adjustments to reach the effective rate |
|
|
|
|
|
|
Tax effect of permanent differences, net | 9,105,693 | (4.91) | (14,596,485) | 3.19 | 4,071,180 | (2.07) |
Effect of change in tax rate | - | - | 23,903 | (0.01) | (50,071) | 0.03 |
Effect of tax rates in Argentina and Uruguay | 1,140,027 | (0.61) | 1,519,558 | (0.33) | (1,700,857) | 0.86 |
Prior year adjustments | (103,809) | 0.06 | 643,271 | (0.14) | (585,257) | 0.30 |
Income tax, as reported | (39,975,914) | 21.54 | (136,126,817) | 29.71 | (48,365,976) | 24.62 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Deferred taxes
Deferred tax assets and liabilities included in the Consolidated Financial Statements are detailed as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Deferred taxes assets |
|
|
Accounts receivable impairment provision | 1,216,921 | 1,406,961 |
Other non-tax expenses | 7,984,991 | 8,825,378 |
Benefits to staff | 3,785,361 | 3,468,874 |
Inventory impairment provision | 283,440 | 352,183 |
Severance indemnity | 8,649,423 | 6,829,816 |
Inventory valuation | 2,311,192 | 2,143,768 |
Intangibles | 294,209 | 241,802 |
Other assets | 22,334,415 | 14,883,181 |
Tax loss carryforwards | 14,888,509 | 3,782,552 |
Subtotal by deferred tax assets | 61,748,461 | 41,934,515 |
Deferred tax liabilities offset | (7,219,813) | (4,243,427) |
Total assets from deferred taxes | 54,528,648 | 37,691,088 |
|
|
|
Deferred taxes liabilities |
|
|
Property, plant and equipment depreciation | 74,003,316 | 51,471,109 |
Agricultural operation expenses | 6,123,595 | 7,150,018 |
Manufacturing indirect activation costs | 5,786,780 | 5,743,496 |
Intangibles | 17,505,666 | 16,614,440 |
Land | 25,775,281 | 25,408,185 |
Other liabilities | 9,607,733 | 6,356,350 |
Subtotal by deferred tax liabilities | 138,802,371 | 112,743,598 |
Deferred tax assets offset | (7,219,813) | (4,243,427) |
Total liabilities from deferred taxes | 131,582,558 | 108,500,171 |
Total | (77,053,910) | (70,809,083) |
No deferred taxes have been recorded for temporary differences between the taxes and accounting value generated by investments in subsidiaries; consequently deferred tax is not recognized for the translation adjustments or investments in joint ventures and associates.
In accordance with current tax laws in Chile, tax losses do not expire and can be applied indefinitely. Argentina, Uruguay and Paraguay tax losses expire after 5 years and Bolivia tax losses expire after 3 years.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
Changes in deferred tax assets are detailed as follows:
Analysis of the deferred tax movement during the year |
|
As of January 1, 2018 | (53,998,782) |
Deferred taxes related to credited items (charged) directly to equity (1) | (23,732,154) |
Deferred taxes from tax loss carry forwards absorption | 8,644,117 |
Conversion effect | (1,036,695) |
Deferred taxes against equity | 408,928 |
Deferred taxes from business combinations | (805,010) |
Other deferred movements taxes | (289,487) |
Changes | (16,810,301) |
As of December 31, 2018 | (70,809,083) |
As of January 1, 2019 | |
Deferred taxes related to credited items (charged) directly to equity | (9,909,958) |
Deferred taxes from tax loss carry forwards absorption | 2,253,330 |
Conversion effect | 2,461,738 |
Deferred taxes against equity | 1,097,001 |
Deferred taxes from business combinations | (2,146,938) |
Changes | (6,244,827) |
As of December 31, 2019 | (77,053,910) |
(1) Corresponds to the financial effect of the application IAS 29 "Financial reporting in hyperinflationary economies.
On September 29, 2014 Act No. 20,780 was published in Chile, regarding the so called “Tax reform” which introduces amendments, among others, to the Income tax system. The said Act provides that corporations will apply by default the "Partially Integrated System", unless a future Extraordinary Shareholders Meeting agrees to opt for the "Attributed Income Regime”. The Act provides for the "Partially Integrated System" a gradual increase in the First Category Income tax rate, going from 20% to 21% for the business year 2014, to 22.5% for the business year 2015, to 24% for the business year 2016, to 25.5% for the business year 2017 and to 27% starting 2018 business year.
Additionally, in Argentina a Tax Reform No. 27,430 was approved by the government, which, amongst other measures, increases the excise tax on several beverages, including beer from 8% to 14% on the producer price, that applies as of March 1st, 2018, and also gradually reduces for the reporting year 2018 the corporate income tax rate from 35% to 25% (30% for the year 2018 and 2019, and 25% as the year 2020). The effects as of December 31st, 2017 were recognized, without affecting significantly the Consolidated Financial Statements. Additionally, on earnings distributed as dividends a retention will apply that will gradually increase from 0% to 13% (7% for the year 2018 and 2019, and 13% as the year 2020), applicable as of the reporting results 2018.
This law also provides an option to revalue fixed assets excluding vehicles, on their values as of December 31, 2017, and it must be applied to all assets that belong to the same category. This revaluation can then be deducted as depreciation or as a tax cost when the good is sold. In the case of annual recurring depreciation, the remaining useful life of the assets to be re-evaluated can never be less than 5 years. In the case of sale in the first two years, the value of the revaluation to be considered is reduced by 60% (first year) or 30% (second year). These revalued assets will also be updated by inflation beginning from January 2018. In order to qualify for this benefit, a special tax must be paid on the revaluation value for December 31, 2017, with a rate ranging from 8% to 10%, depending on the category to which the revalued asset belongs. The Company has decided to use this option. As a result of the above, the Company has determined to record, in these Consolidated Financial Statements, a Net gain equivalent to ThCh$ 6,821,753.
On December 21, 2019, the law N° 27,541 called the Law of Social Solidarity and Productive Reactivation in the Public Emergency" which modifies some articles of law N° 27,430 was postponed. This change mainly postpones one more year (for the year 2020) the increase of the income tax rate of 30% and the withholding tax rate on dividends of 7%, setting up the income tax rate in 25% and the withholding tax rate in 13% on dividends.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, 2019 | ![]() |
The movementCompany grants short term and employment termination benefits as part of Property, plantits compensation policies.
The Parent Company and equipmentits subsidiaries have collective agreements with their employees, which establish the compensation and/or short–term and long-term benefits for their staff, the main features of which are described below:
§ | Short-term benefits are generally based on combined plans or agreements, designed to compensate benefits received, such as paid vacation, annual performance bonuses and compensation through annuities. |
§ | Long-term benefits are plans or agreements mainly intended to cover the post-employment benefits generated at the end of the labor relationship, be it by voluntary resignation or death of personnel hired. |
The cost of such benefits is charged against income, in the “Personnel Expense” item.
As ofDecember 31, 2019 and 2018, the total staff benefits recorded in the Consolidated Statement of Financial Position is detailed as follows:
| Land, buildings and contruction | Machinery and equipment | Bottles and containers | Other Equipment | Assets under contruction | Furniture, accesories and vehicles | Assets under finance lease | Under production vines | Total |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
As of January 1, 2015 |
|
|
|
|
|
|
|
|
|
Historic cost | 557,500,819 | 388,454,274 | 189,538,674 | 111,860,840 | 101,859,601 | 56,290,001 | 16,367,167 | 30,037,467 | 1,451,908,843 |
Accumulated depreciation | (136,838,685) | (233,259,470) | (101,755,979) | (73,303,551) | - | (39,158,230) | (2,620,547) | (13,716,739) | (600,653,201) |
Book Value | 420,662,134 | 155,194,804 | 87,782,695 | 38,557,289 | 101,859,601 | 17,131,771 | 13,746,620 | 16,320,728 | 851,255,642 |
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As of December 31, 2015 |
|
|
|
|
|
|
|
|
|
Additions | - | - | - | - | 123,581,249 | - | - | - | 123,581,249 |
Transfers | 24,332,658 | 53,855,456 | 21,539,178 | 12,777,031 | (121,954,867) | 8,596,245 | 8,750 | 845,549 | - |
Conversion effect historic cost | (6,736,100) | (10,797,668) | (11,546,968) | (4,002,063) | (460,019) | (511,782) | (2,578) | (180,003) | (34,237,181) |
Write off (cost) | (747,359) | (289,708) | (3,742,613) | (1,918,945) | - | (1,156,594) | (18,734) | - | (7,873,953) |
Write off (depreciation) | 394,898 | 184,171 | 3,456,971 | 1,909,228 | - | 636,696 | 12,858 | - | 6,594,822 |
Capitalized interests | - | - | - | - | 1,086,976 | - | - | - | 1,086,976 |
Depreciation | (16,319,675) | (23,241,987) | (20,568,254) | (9,738,483) | - | (6,504,278) | (290,871) | (1,009,087) | (77,672,635) |
Conversion effect depreciation | 828,924 | 4,905,696 | 5,480,844 | 2,894,015 | - | 353,900 | 256 | 81,519 | 14,545,154 |
Others increase (decreased) | 264,777 | 368,742 | 783,920 | 226,420 | (2,018,429) | 150,953 | (23,262) | - | (246,879) |
Divestitures (cost) | (416,892) | (1,536,631) | (11,721,918) | (1,758,026) | - | (1,512,864) | (283) | (1,063,451) | (18,010,065) |
Divestitures (depreciation) | 489,274 | 1,193,606 | 10,980,342 | 1,624,423 | - | 965,423 | 165 | 629,647 | 15,882,880 |
Transfers to Assets Held for Sale (Cost) | (2,682,692) | - | - | - | - | - | - | - | (2,682,692) |
Transfers to Assets Held for Sale (Depreciation) | 443,892 | - | - | - | - | - | - | - | 443,892 |
Book Value | 420,513,839 | 179,836,481 | 82,444,197 | 40,570,889 | 102,094,511 | 18,149,470 | 13,432,921 | 15,624,902 | 872,667,210 |
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As of December 31, 2015 |
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|
|
|
|
|
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|
|
Historic cost | 569,642,008 | 428,398,944 | 185,024,437 | 117,920,217 | 102,094,511 | 60,844,400 | 16,447,490 | 29,639,562 | 1,510,011,569 |
Accumulated depreciation | (149,128,169) | (248,562,463) | (102,580,240) | (77,349,328) | - | (42,694,930) | (3,014,569) | (14,014,660) | (637,344,359) |
Book Value | 420,513,839 | 179,836,481 | 82,444,197 | 40,570,889 | 102,094,511 | 18,149,470 | 13,432,921 | 15,624,902 | 872,667,210 |
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As of December 31, 2016 |
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|
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|
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|
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|
Additions | - | - | - | - | 128,518,969 | - | - | - | 128,518,969 |
Transfers | 22,834,409 | 40,559,020 | 26,734,419 | 11,477,889 | (115,555,005) | 12,571,079 | - | 1,378,189 | - |
Conversion effect historic cost | (5,161,938) | (9,794,457) | (10,440,956) | (3,309,017) | (716,066) | (63,653) | (1,927) | (100,704) | (29,588,718) |
Write off (cost) | (421,820) | (1,114,726) | (963,296) | (602,003) | 164,887 | (1,425,485) | - | - | (4,362,443) |
Write off (depreciation) | 16,882 | 1,045,213 | 1,211,494 | 557,191 | - | 809,775 | - | - | 3,640,555 |
Capitalized interests | - | - | - | - | 853,832 | - | - | - | 853,832 |
Depreciation | (16,446,343) | (22,298,558) | (20,154,538) | (9,709,915) | - | (9,495,693) | (235,007) | (1,025,552) | (79,365,606) |
Conversion effect depreciation | 1,743,342 | 4,080,872 | 3,082,501 | 4,139,993 | - | 252,389 | 578 | 66,872 | 13,366,547 |
Others increase (decreased) | (40,372) | 1,960,728 | (1,217,118) | (313,368) | (779,982) | 792,760 | (620,991) | - | (218,343) |
Divestitures (cost) | (1,973,792) | (4,671,503) | (919,611) | (105,417) | - | (479,526) | - | (1,480,301) | (9,630,150) |
Divestitures (depreciation) | 1,366,357 | 4,474,718 | 699,573 | 23,026 | - | 375,766 | - | 1,010,409 | 7,949,849 |
Book Value | 422,430,564 | 194,077,788 | 80,476,665 | 42,729,268 | 114,581,146 | 21,486,882 | 12,575,574 | 15,473,815 | 903,831,702 |
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As of December 31, 2016 |
|
|
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Historic cost | 584,830,357 | 453,656,276 | 196,174,306 | 129,190,151 | 114,581,146 | 70,251,593 | 13,926,785 | 29,436,746 | 1,592,047,360 |
Accumulated depreciation | (162,399,793) | (259,578,488) | (115,697,641) | (86,460,883) | - | (48,764,711) | (1,351,211) | (13,962,931) | (688,215,658) |
Book Value | 422,430,564 | 194,077,788 | 80,476,665 | 42,729,268 | 114,581,146 | 21,486,882 | 12,575,574 | 15,473,815 | 903,831,702 |
As of December 31, 2019 | As of December 31, 2018 | |||
Current | Non-current | Current | Non-current | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Short term benefits | 27,356,205 | - | 31,600,044 | - |
Employment termination benefits | - | 33,571,138 | 194,119 | 26,901,088 |
Total | 27,356,205 | 33,571,138 | 31,794,163 | 26,901,088 |
Short-term benefits are mainly comprised of recorded vacation (on accruals basis), bonuses and share compensation. Such benefits are recorded when the obligation is accrued and are usually paid within a 12-month periods, consequently, they are not discounted.
The total short-term benefits recorded in the Consolidated Statement of Financial Position are detailed as follows:
Short-Term Employees’ Benefits | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Vacation | 11,500,170 | 10,518,298 |
Bonus and compensation | 15,856,035 | 21,081,746 |
Total | 27,356,205 | 31,600,044 |
The Company records staff vacation cost on an accrual basis.
The Company records a liability for the payment of an irrevocable severance indemnity, originated by collective and individual agreements entered into with certain groups of employees. Such obligation is determined by means of the current value of the benefit accrued cost, a method that considers several factors for the calculation such as estimates of future continuance, mortality rates, future salary increases and discount rates. The Company periodically evaluates the above-mentioned factors based on historical data and future projections, making adjustments that apply when checking changes sustained trend. The so-determined value is presented at the current value by using the severance benefits accrued method. The discount rate is determined by reference to market interest rates curves for high quality entrepreneurial bonds.
The discount rate in Chile was 4,50% (5,69% in 2018) and in Argentina 49,14% (34,62% in 2018).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The obligation recorded for severance indemnity is detailed as follows:
Severance Indemnity | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Current | - | 194,119 |
Non-current | 33,571,138 | 26,901,088 |
Total | 33,571,138 | 27,095,207 |
The change in the severance indemnity is detailed as follows:
Severance Indemnity |
|
Balance as of January 1, 2018 | 23,699,115 |
Current cost of service | 2,154,071 |
Interest cost | 1,742,273 |
Actuarial (Gain) losses | 1,322,754 |
Paid-up benefits | (1,640,831) |
Past service cost | 306,746 |
Business combinations (1) | 776,718 |
Conversion effect | (1,281,341) |
Others | 15,702 |
Changes | 3,396,092 |
As of December 31, 2018 | 27,095,207 |
Current cost of service | 2,457,762 |
Interest cost | 1,750,514 |
Actuarial (Gain) losses | 4,086,158 |
Paid-up benefits | (1,773,734) |
Past service cost | 930,906 |
Conversion effect | (787,975) |
Others | (187,700) |
Changes | 6,475,931 |
As of December 31, 2019 | 33,571,138 |
(1)SeeNote 15 – Business combinations, letter a).
The balancefigures recorded in the Consolidated Statement of the land at the end of each year isIncome, are detailed as follows:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Land | 226,136,602 | 227,849,584 |
Total | 226,136,602 | 227,849,584 |
Capitalized interest as of December 31, 2016, amounted to ThCh$ 853,832 (ThCh$ 1,086,976 in 2015), using an annually capitalization rate of 4.17% for both years.
The Company, through its subsidiaries Viña San Pedro Tarapacá S.A., has biological assets corresponding to vines that produce grapes. The vines are segmented into those under formation and those under production, and they are grown both on leased and owned land. The grapes harvested from these vines are used in the manufacturing of wine, which is marketed both in the domestic market and abroad.
As ofDecember 31, 2016, the Company maintained approximately 4,208 of which 3,787 hectares are for vines in production stage. Of the total hectares mentioned above, 3,455 correspond to own land and 332 to leased land.
The vines under formation are recorded at historic cost, and only start being depreciated when they are transferred to the production phase, which occurs in the majority of cases in the third year after plantation, when they start producing grapes commercially (in volumes that justify their production-oriented handling and later harvest).
During 2016, the production plant vines yield approximately 49.8 million kilos of grapes (60.1 million kilos of grapes in 2015).
As part of the risk administration activities, the subsidiaries use insurance agreements for the damage caused by nature or other to their biological assets. In addition, either productive or under formation vines are not affected by title restrictions of any kind, nor have they been pledged as a guarantee for financial liabilities.
By the nature of business of the Company, in the value of the assets it is not considered to start an allowance for cost of dismantling, removal or restoration.
In relation to the impairment losses of property, plant and equipment, the Managment has not perceived evidence of impairment with respect to these at December 31, 2016.
Assets under finance lease:
The book value of land and buildings relates to finance lease agreements for the Company and its subsidiaries. Such assets will not be owned by the Company until the corresponding purchase options are exercised.
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Land | 3,130,181 | 3,037,571 |
Buildings | 9,217,312 | 9,333,443 |
Machinery and equipment | 228,081 | 1,061,907 |
Total | 12,575,574 | 13,432,921 |
Expense recognized for severance indemnity | For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Current cost of service | 2,457,762 | 2,154,071 | 1,942,099 |
Past service cost | 930,906 | 306,746 | 604,337 |
Non-provided paid benefits | 3,959,881 | 6,547,694 | 6,023,869 |
Other | 70,747 | 175,005 | 269,377 |
Total expense recognized in Consolidated Statement of Income | 7,419,296 | 9,183,516 | 8,839,682 |
InNote 26, letter B)includes the detail of the lease agreements, and it also reconciles the total amount of the future minimum lease payments and their current value as regards such assets, the purchase options originated at CCU S.A., Compañía Cervecera Kunstmann S.A. and Manantial S.A.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Note 23Actuarial AssumptionsInvestment Property
ChangesAs mentioned inNote 2 - Summary of significant accounting policies, 2.20, the severance payment obligation is recorded at its actuarial value. The main actuarial assumptions used for the calculation of the severance indemnity obligation are detailed as follows:
Actuarial Assumptions | Chile | Argentina | ||||
As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2019 | As of December 31, 2018 | |||
Mortality table | RV_2014 | RV-2014 | Gam,83 | Gam,83 | ||
Annual interest rate | 4,50% | 5,69% | 49,14% | 34,62% | ||
Voluntary employee turnover rate | 1,9% | 1,9% | "ESA 77 Adjusted" - 50% | "ESA 77 Adjusted" - 50% | ||
Company’s needs rotation rate | 5,3% | 5,3% | "ESA 77 Adjusted" -50 % | "ESA 77 Adjusted" - 50% | ||
Salary increase (*) | 3,7% | 3,7% | 45,11% | 28,27% | ||
Estimated retirement age for (*) | Officers |
| 60 | 60 | 60 | 60 |
Other | Male | 65 | 65 | 65 | 65 | |
Female | 60 | 60 | 60 | 60 |
(*)Average of the Company.
Sensitivity Analysis
The Following is a sensitivity analysis based on increased (decreased) of 1 percent on the discount rate:
Sensitivity Analysis | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
1% increase in the Discount Rate (Gain) | 2,126,263 | 1,623,794 |
1% decrease in the Discount Rate (Loss) | (2,479,498) | (1,880,258) |
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Personnel expense
The amounts recorded in the movementConsolidated Statement of the investment property during the years ended as of December 31, 2015 and 2016 isIncome are detailed as follows:
| Lands | Buildings | Total |
ThCh$ | ThCh$ | ThCh$ | |
As of January 1, 2015 |
|
|
|
Historic cost | 5,860,457 | 2,775,205 | 8,635,662 |
Depreciation | - | (718,049) | (718,049) |
Book Value | 5,860,457 | 2,057,156 | 7,917,613 |
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As of December 31, 2015 |
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|
|
Additions | - | 4,148 | 4,148 |
Transfers from PPE (cost) | (275,000) | - | (275,000) |
Depreciation | - | (60,450) | (60,450) |
Conversion effect (depreciation) | (488,315) | (291,928) | (780,243) |
Conversion effect | - | 31,934 | 31,934 |
Book Value | 5,097,142 | 1,740,860 | 6,838,002 |
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|
As of December 31, 2015 |
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|
|
Historic cost | 5,097,142 | 2,487,425 | 7,584,567 |
Depreciation | - | (746,565) | (746,565) |
Book Value | 5,097,142 | 1,740,860 | 6,838,002 |
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|
As of December 31, 2016 |
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|
|
Additions | - | 11,036 | 11,036 |
Divestitures | (2,563) | - | (2,563) |
Depreciation | - | (41,055) | (41,055) |
Conversion effect (depreciation) | (364,940) | (218,986) | (583,926) |
Conversion effect | - | 32,333 | 32,333 |
Book Value | 4,729,639 | 1,524,188 | 6,253,827 |
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|
As of December 31, 2016 |
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|
|
Historic cost | 4,729,639 | 2,279,475 | 7,009,114 |
Depreciation | - | (755,287) | (755,287) |
Book Value | 4,729,639 | 1,524,188 | 6,253,827 |
Personal expense | For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Salaries | 168,117,881 | 159,246,822 | 151,944,702 |
Employees’ short-term benefits | 27,469,694 | 31,528,110 | 27,588,955 |
Total expenses for short-term employee benefits | 195,587,575 | 190,774,932 | 179,533,657 |
Employments termination benefits | 7,419,296 | 9,183,516 | 8,839,682 |
Other staff expense | 34,115,503 | 32,183,184 | 32,485,170 |
Total (1) | 237,122,374 | 232,141,632 | 220,858,509 |
Investment property includes twenty land properties, two offices(1)See Note 29 – Natures of cost and one apartment, situated in Chile, which are maintained for appreciation purposes, with one land property, two offices and one apartment of them being leased and generating ThCh$ 251,545 revenue during year 2016 (ThCh$ 172,243 in 2015 and ThCh$ 153,283 in 2014)expense. Additionally, there are three land properties in Argentina, which are leased and generated an income for ThCh$ 131,389 for year 2016 (ThCh$ 127,093 in 2015 and ThCh$ 117,661 in 2014). In addition, the expenses associated with such investment properties amounted to ThCh$ 71,090 for the year ended as of December 31, 2016 (ThCh$ 120,340 in 2015 and ThCh$ 190,670 in 2014).
The fair value, of investment property that represent 90% of the book value, is ThCh$ 18,249,882.
Management has not detected any evidence of impairment of Investment property.
The Company does not maintain any pledge or restriction over investment property items.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
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As described inNote 2, 2.18, non-current assets held for sale have been recorded at the lower of carrying amount less cost to sale.
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AtDecember 31, 2016 and 2015, the items of assets held for saleThe total Other non-financial liabilities are the following:detailed as follows:
Assets of disposal group held for sale | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Land | 1,816,348 | 1,855,980 |
Contructions | 504,207 | 544,863 |
Machinerys | 57,332 | 74,109 |
Joint agreement (Trademarks, goodwill, net of deferred taxes) (1) | - | 3,844,364 |
Total | 2,377,887 | 6,319,316 |
| As of December 31, 2019 | As of December 31, 2018 |
| ThCh$ | ThCh$ |
Parent dividend provisioned by the board (1) | - | 51,730,402 |
Parent dividend provisioned according to policy | 37,358,131 | 101,714,994 |
Outstanding parent dividends | 948,439 | 684,158 |
Subsidiaries dividends according to policy | 8,416,207 | 7,502,145 |
Total dividends payable | 46,722,777 | 161,631,699 |
Income received in advance (2) | 1,312,595 | 2,497,811 |
Others | 324,395 | 426,030 |
Total | 48,359,767 | 164,555,540 |
Current | 48,359,767 | 164,555,540 |
Total | 48,359,767 | 164,555,540 |
(1) Under this ítem include ThCH$ 2,856,245 related to GoodwillSeeNote 1 – Common Shareholders’ Equity, dividends.
(2)SeeNote 1 – General information, letter C).
Tax accounts receivable
The detail of the taxes receivables is the following:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Refundable tax previous year | 4,436,810 | 3,296,151 |
Taxes under claim (1) | 2,141,476 | 2,138,675 |
Argentinean tax credits | 2,532,114 | 3,756,333 |
Monthly provisions | 18,860,164 | 4,592,593 |
Payment of absorbed profit provision | 75,141 | 33,276 |
Other credits | 1,377,774 | 1,447,192 |
Total | 29,423,479 | 15,264,220 |
(1)This item include claims for refund of first category taxes (Provisional payment of absorved profit) for an amount of ThCh$ 968,168 that was presented in April 2014 from the commercial year 2013 and claim to ThCh$ 1,173,281 presented in April 2010 from the commercial year 2009.
Taxes accounts payable
The detail of taxes payable taxes is as follows:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Chilean income taxes | 7,033,363 | 7,689,139 |
Monthly provisional payments | 4,365,187 | 3,488,085 |
Chilean unique taxes | 68,824 | 224,045 |
Estimated Argentine minimum gain subsidiaries taxes | 339,060 | 796,755 |
Total | 11,806,434 | 12,198,024 |
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Tax expense
The detail of the income tax and deferred tax expense for the years ended as ofDecember 31, 2016, 2015 and 2014, is as follows:
| For the years ended as of December 31, | ||
| 2016 | 2015 | 2014 |
| ThCh$ | ThCh$ | ThCh$ |
Income as per deferred tax related to the origin and reversal of temporary differences | (878,629) | (454,933) | 992,342 |
Prior year adjustments | 3,838,136 | 3,204,656 | 4,763,242 |
Effect of change in tax rates | (856,612) | (1,066,964) | (14,520,287) |
Tax benefits (loss) | (765,292) | 248,559 | 527,447 |
Total deferred tax expense | 1,337,603 | 1,931,318 | (8,237,256) |
Current tax expense | (31,285,976) | (48,168,474) | (34,522,795) |
Prior period adjustments | (298,010) | (3,877,360) | (3,913,449) |
(Loss) Income from income tax | (30,246,383) | (50,114,516) | (46,673,500) |
(1) On September 29, 2014 Act No. 20,780 was published in Chile, regarding the so called “Tax reform” which introduces amendments, among others, to the Income tax system. The said Act provides that corporations will apply by default the "Partially Integrated System", unless a future Extraordinary Shareholders Meeting agrees to opt for the "Attributed Income Regime”. The Act provides for the "Partially Integrated System" a gradual increase in the First Category Income tax rate, going from 20% to 21% for the business year 2014, to 22.5% for the business year 2015, to 24% for the business year 2016, to 25.5% for the business year 2017 and to 27% starting 2018 business year.
The difference between assets and liabilities for deferred taxes which occur as a direct effect of the increase in the First Category Income tax rate introduced by Act No. 20,780, has been accounted against to Net income. As of December 31, 2014, the total effect registered against the Net income was an amount of ThCh$ 14,520,287.
The deferred taxes related to items charged or credited directly to Consolidated Statement of Comprehensive Income are as follows:
| For the years ended as of December 31, | ||
| 2016 | 2015 | 2014 |
| ThCh$ | ThCh$ | ThCh$ |
Net income from cash flow hedge | (20,648) | (17,563) | 39,470 |
Actuarial gains and losses deriving from defined benefit plans | 659,198 | 314,541 | 501,689 |
Charge to equity | 638,550 | 296,978 | 541,159 |
Effective Rate
The Company’s income tax expense as ofDecember 31, 2016, 2015 y 2014 represents 17.70%, 26.30% and 27.90%, respectively of income before taxes. The following is reconciliation between such effective tax rate and the statutory tax rate valid in Chile.
| For the years ended as of December 31, | |||||
2016 | 2015 | 2014 | ||||
ThCh$ | Rate (%) | ThCh$ | Rate (%) | ThCh$ | Rate (%) | |
Income before taxes | 170,328,270 | - | 190,640,106 | - | 167,168,082 | - |
Income tax using the statutory rate | (40,878,785) | 24.00 | (42,894,024) | 22.50 | (35,105,297) | 21.00 |
Adjustments to reach the effective rate |
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Tax effect of permanent differences, net | 10,357,858 | (6.10) | (3,202,337) | 1.70 | (133,385) | 0.10 |
Effect of change in tax rate | (856,612) | 0.50 | (1,066,964) | 0.50 | (14,520,287) | 8.60 |
Effect of tax rates in Argentina and Uruguay | (1,308,482) | 0.80 | (2,278,489) | 1.20 | 2,235,676 | (1.30) |
Prior year adjustments | 2,439,638 | (1.40) | (672,702) | 0.40 | 849,793 | (0.50) |
Income tax, as reported | (30,246,383) | 17.70 | (50,114,516) | 26.30 | (46,673,500) | 27.90 |
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Deferred taxes
Deferred tax assets and liabilities included in the Balance Sheet were as follows:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Movement of deferred tax assets |
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Accounts receivable impairment provision | 861,158 | 714,251 |
Other non-tax expenses | 11,303,607 | 12,808,597 |
Employee benefits | 2,166,999 | 1,930,430 |
Inventory impairment provision | 1,554,362 | 499,611 |
Severance indemnity | 4,937,161 | 5,044,561 |
Inventory valuation | 2,337,591 | 1,454,638 |
Amortization of intangibles | 206,616 | 2,517,835 |
Other assets | 3,536,574 | 3,856,366 |
Tax loss carryforwards | 4,960,567 | 5,703,304 |
Total assets from deferred taxes | 31,864,635 | 34,529,593 |
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Deferred taxes liabilities |
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Fixed assets depreciation | 36,617,407 | 40,338,573 |
Capitalized software expense | 2,271,445 | 1,852,161 |
Agricultural operation expense | 5,698,674 | 4,348,021 |
Manufacturing indirect activation costs | 4,865,509 | 3,867,574 |
Intangibles | 10,054,490 | 10,012,031 |
Land | 23,726,645 | 26,511,916 |
Other liabilities | 3,555,781 | 3,307,567 |
Total liabilities from deferred taxes | 86,789,951 | 90,237,843 |
Total | (54,925,316) | (55,708,250) |
No deferred taxes have been recorded for the temporary differences between the taxes and accounting value generated by investments in subsidiaries; consequently deferred tax is not recognized for the Translation Adjustments or investments in Joint Ventures and Associates.
In accordance with current tax laws in Chile, taxable losses do not expire and can be applied indefinitely. Regarding Argentina, taxable losses expire after 5 years.
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DebtsSubscribed and financial liabilities classified based onpaid-up Capital
As of December 31, 2019, December 31, 2018 and December 31, 2017, the typeCompany’s capital shows a balance of obligationThCh$ 562,693,346, divided into 369,502,872 shares of common stock without face value, entirely subscribed and their classifications inpaid-up. The Company has issued only one series of common shares. Such common shares are registered for trading at the consolidated balance sheet areSantiago Stock Exchange and the Chilean Electronic Stock Exchange, and at the New York Stock Exchange /NYSE), evidenced by ADS (American Depositary Shares), with an equivalence of two shares per ADS (See Note 1 - General information).
The Company has not issued any others shares or convertible instruments during the period, thus changing the number of outstanding shares as follows:of December 31, 2019 and 2018 and 2017.
Capital Management
The main purpose, when managing shareholder’s capital, is to maintain an adequate credit risk profile and a healthy capital ratio, allowing the access of the Company to the capitals market for the development of its medium and long term purposes and, at the same time, to maximize shareholder’s return.
Earnings per share
The basic earnings per share is calculated as the ratio between the net income (loss) for the period attributable to equity holders of the parent and the weighted average number of valid outstanding shares during such term.
The diluted earnings per share is calculated as the ratio between the net income (loss) for the period attributable to equity holders of the parent and the weighted average additional common shares that would have been outstanding if it had become all ordinary potential dilutive shares.
| As of December 31, 2016 | As of December 31, 2015 | ||
| Current | Non current | Current | Non current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Bank borrowings (*) | 39,079,561 | 29,606,398 | 27,714,998 | 48,335,093 |
Bonds payable (*) | 3,250,023 | 70,836,716 | 3,155,239 | 71,352,994 |
Financial leases obligations (*) | 215,950 | 17,500,919 | 321,416 | 17,238,458 |
Deposits for return of bottles and containers | 13,015,723 | - | 12,503,170 | - |
Derivatives financial instruments (**) | 11,118,676 | - | 171,470 | - |
Hedging derivatives (**) | - | - | 107,698 | - |
Total | 66,679,933 | 117,944,033 | 43,973,991 | 136,926,545 |
(*) SeeNote 5.
(**) SeeNote 6.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The maturitiesinformation used for the calculation of the earnings as per each basic and interest rates of such obligations arediluted share is as follows:
Earnings per share | For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
Equity holders of the controlling company (ThCh$) | 130,141,692 | 306,890,792 | 129,607,353 |
Weighted average number of shares | 369,502,872 | 369,502,872 | 369,502,872 |
Basic earnings per share (in Chilean pesos) | 352.21 | 830.55 | 350.76 |
Equity holders of the controlling company (ThCh$) | 130,141,692 | 306,890,792 | 129,607,353 |
Weighted average number of shares | 369,502,872 | 369,502,872 | 369,502,872 |
Diluted earnings per share (in Chilean pesos) | 352.21 | 830.55 | 350.76 |
As ofDecember 31, 2016:2019, 2018 and 2017, the Company has not issued any convertible or other kind of instruments creating diluting effects.
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Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Amortization rate | Interest Rate |
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Bank borrowings |
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0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Superville | Argentina | USD | 136,115 | - | - | - | - | 136,115 | At maturity | 3.50 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Superville | Argentina | USD | 135,537 | - | - | - | - | 135,537 | At maturity | 3.50 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Superville | Argentina | USD | 217,353 | - | - | - | - | 217,353 | At maturity | 3.50 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Superville | Argentina | USD | - | 54,032 | - | - | - | 54,032 | At maturity | 4.25 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Macro | Argentina | USD | - | 200,933 | - | - | - | 200,933 | At maturity | 1.85 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | USD | 201,628 | - | - | - | - | 201,628 | At maturity | 2.70 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | USD | - | 133,909 | - | - | - | 133,909 | At maturity | 2.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | $ARG | 1,436 | 1,589 | - | - | - | 3,025 | Quarter | 15.25 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | $ARG | 433,258 | - | - | - | - | 433,258 | At maturity | 36.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | $ARG | 228,734 | - | - | - | - | 228,734 | At maturity | 29.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | $ARG | 340,659 | - | - | - | - | 340,659 | At maturity | 28.50 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | $ARG | - | 518,917 | - | - | - | 518,917 | At maturity | 26.75 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco San Juan | Argentina | $ARG | 367,243 | - | - | - | - | 367,243 | Quarter | 30.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco San Juan | Argentina | $ARG | 9,178 | 400,250 | - | - | - | 409,428 | Quarter | 27.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco San Juan | Argentina | $ARG | 425 | 84,263 | - | - | - | 84,688 | Quarter | 23.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | BBVA | Argentina | $ARG | 524,538 | - | - | - | - | 524,538 | At maturity | 27.50 |
0-E | Finca La Celia S.A. | Argentina | 0-E | BBVA | Argentina | $ARG | 50,045 | - | - | - | - | 50,045 | At maturity | 27.00 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | $ARG | 290,342 | - | - | - | - | 290,342 | At maturity | 27.75 |
0-E | Finca La Celia S.A. | Argentina | 0-E | Banco Patagonia | Argentina | $ARG | 74,763 | - | - | - | - | 74,763 | At maturity | 27.50 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. (1) | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 57,821 | 7,271,000 | - | - | - | 7,328,821 | At maturity | 4.40 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. | Chile | 97,030,000-7 | Banco Estado | Chile | UF | 157,295 | - | 10,012,233 | - | - | 10,169,528 | At maturity | 2.70 |
91,041,000-8 | Viña San Pedro Tarapacá S.A. (1) | Chile | 97,018,000-1 | Scotiabank | Chile | USD | 3,151 | - | 5,269,733 | - | - | 5,272,884 | At maturity | 1.79 |
99,586,280-8 | Compañía Pisquera de Chile S.A | Chile | 97,030,000-7 | Banco Estado | Chile | CLP | 457,454 | 16,000,000 | - | - | - | 16,457,454 | At maturity | 6.86 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | UF | 16,333 | 50,142 | 46,143 | - | - | 112,618 | Monthly | 4.80 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | UF | 9,264 | 28,576 | 57,305 | - | - | 95,145 | Monthly | 5.48 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | UF | 7,599 | 5,124 | - | - | - | 12,723 | Monthly | 5.36 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 13,500 | 40,500 | 108,000 | 18,000 | - | 180,000 | Monthly | 6.00 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 19,000 | 57,000 | 12,667 | - | - | 88,667 | Monthly | 7.59 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 14,000 | 42,000 | 88,667 | - | - | 144,667 | Monthly | 5.88 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 22,500 | 67,500 | 180,000 | 22,500 | - | 292,500 | Monthly | 5.76 |
96,711,590-8 | Manantial S.A. | Chile | 76,645,030-K | Banco Itaú | Chile | CLP | 8,111 | 25,086 | 72,892 | 13,047 | - | 119,136 | Monthly | 6.12 |
96,711,590-8 | Manantial S.A. | Chile | 97,030,000-7 | Banco Estado | Chile | CLP | - | 205,849 | - | - | - | 205,849 | Monthly | 4.92 |
96,711,590-8 | Manantial S.A. | Chile | 97,030,000-7 | Banco Estado | Chile | CLP | 67,488 | 203,111 | 580,563 | - | - | 851,162 | Monthly | 4.92 |
96,711,590-8 | Manantial S.A. | Chile | 97,030,000-7 | Banco Estado | Chile | CLP | 19,030 | 58,392 | 167,461 | 52,210 | - | 297,093 | Monthly | 5.02 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 37,500 | 112,500 | 37,510 | - | - | 187,510 | Monthly | 5.04 |
96,711,590-8 | Manantial S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | - | 255,037 | - | - | - | 255,037 | Monthly | 4.68 |
0-E | Milotur S.A. | Uruguay | 0-E | Banco Itaú | Uruguay | UYI | 406,353 | 638,554 | 696,605 | - | - | 1,741,512 | Monthly | 6.00 |
96,981,310-6 | Compañia Cervecera Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | 21,408 | - | 2,000,000 | - | - | 2,021,408 | At maturity | 5.35 |
96,981,310-6 | Compañia Cervecera Kunstmann S.A. | Chile | 97,018,000-1 | Scotiabank | Chile | CLP | 18,000 | 2,000,000 | - | - | - | 2,018,000 | At maturity | 4.50 |
96,981,310-6 | Compañia Cervecera Kunstmann S.A. | Chile | 97,004,000-5 | Banco de Chile | Chile | CLP | - | 6,656 | 400,000 | - | - | 406,656 | At maturity | 4.68 |
96,981,310-6 | Compañia Cervecera Kunstmann S.A. | Chile | 97,030,000-7 | Banco Estado | Chile | CLP | 190,490 | 584,272 | 1,672,625 | 520,654 | - | 2,968,041 | Monthly | 5.02 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco BNA | Argentina | $ARG | 251,181 | 717,375 | 1,912,999 | - | - | 2,881,555 | Monthly | 15.00 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Macro | Argentina | $ARG | 34,300 | 23,406 | - | - | - | 57,706 | Monthly | 15.25 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco BBVA | Argentina | $ARG | 421,179 | 421,652 | - | - | - | 842,831 | Quarter | 26.00 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco BNA | Argentina | $ARG | 103,106 | 303,347 | 134,821 | - | - | 541,274 | Monthly | 25.19 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Galicia | Argentina | $ARG | 68,826 | 789,966 | 5,529,763 | - | - | 6,388,555 | Quarter | 30.50 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Citibank | Argentina | $ARG | 30,190 | - | - | - | - | 30,190 | At maturity | 25.66 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco HSBC | Argentina | $ARG | 2,109,794 | - | - | - | - | 2,109,794 | At maturity | 25.25 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco BBVA | Argentina | $ARG | 1,392 | - | - | - | - | 1,392 | At maturity | 26.12 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Macro | Argentina | $ARG | 12 | - | - | - | - | 12 | At maturity | 25.53 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Santander Rio | Argentina | $ARG | 199,954 | - | - | - | - | 199,954 | At maturity | 25.00 |
0-E | Saenz Briones y Cía. S.A. | Argentina | 0-E | Banco Citibank | Argentina | $ARG | 1,138 | - | - | - | - | 1,138 | At maturity | 26.50 |
Sub-total |
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| 7,778,623 | 31,300,938 | 28,979,987 | 626,411 | - | 68,685,959 |
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(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreement(Note 6Distributable net income
)In accordance with Circular No 1945 from the CMF on November 4, 2009, the Board of Directors agreed that the net distributable income for the year 2009 will be that reflected in the financial statements attributable to equity holders of the parents,without adjusting it. The above agreement remains in effect for the year ended December 31, 2019.
Dividends
The Company’s dividends policy consists of annually distributing at least 50% of the net distributable profit of the year.
As of December 31, 2019, 2018 and 2017, the Company has distributed the following dividends:
Dividend Nº | Payment Date | Type of Dividend | Dividends per Share ($) | Related to FY |
252 | 01-06-2017 | Interim | 66,0000 | 2016 |
253 | 04-26-2017 | Final | 110,32236 | 2016 |
254 | 01-05-2018 | Interim | 70,0000 | 2017 |
255 | 04-26-2018 | Final | 108,88833 | 2017 |
256 | 01-04-2019 | Interim | 140,0000 | 2018 |
257 | 04-29-2019 | Final | 358,33030 | 2018 |
258 | 12-26-2019 | Interim | 75,0000 | 2019 |
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On December 6, 2017, at the Board Director Meeting it was agreed to pay the interim Dividend No. 254, amounting to ThCh$ 25,865,201 corresponding to Ch$ 70 per share. This dividend was paid on January 5, 2018.
On April 11, 2018, at the Shareholders’ Meeting it was agreed to pay the final Dividend No. 255, amounting to ThCh$ 40,234,551 corresponding to the 31.04% of Net income attributable to Equity holders of the parent, equivalent to Ch$ 108.88833 per share. This dividend was paid on April 26, 2018.
On December 5, 2018, at the Ordinary Board Director Meeting it was agreed to pay the interim Dividend No. 256, amounting to ThCh$ 51,730,402 corresponding to Ch$ 140 per share. This dividend was paid on January 4, 2019.
In the Ordinary Shareholders’ Meeting of Compañía Cervecerías Unidas S.A., on April 17, 2019, it was agreed, with charge to the profits of the year 2018, the distribution of a final Dividend No. 257 of Ch$ 358.
(*) SeeNote 533030 per share, increasing the non-discounted contractual cash flows.amount total to distribute to ThCh$ 132,404,074. This dividend was paid as of April 29, 2019.
On December 4, 2019, at the Ordinary Board Director Meeting it was agreed to pay the interim Dividend No. 258, amounting to ThCh$ 27,712,715 corresponding to Ch$ 75 per share. This dividend was paid on December 26, 2019.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Consolidated Statement of Comprehensive Income
Comprehensive income and expenses are detailed as follows:
Other Income and expense charged or credited against net equity | Gross Balance | Tax | Net Balance |
ThCh$ | ThCh$ | ThCh$ | |
Gains (losses) on cash flow hedges (1) | 345,986 | (93,416) | 252,570 |
Gains (losses) on exchange differences on translation (1) | 17,077,670 | - | 17,077,670 |
Reserve of Actuarial gains and losses on defined benefit plans | (4,127,305) | 1,107,699 | (3,019,606) |
Total comprehensive income As of December 31, 2019 | 13,296,351 | 1,014,283 | 14,310,634 |
Other Income and expense charged or credited against net equity | Gross Balance | Tax | Net Balance |
ThCh$ | ThCh$ | ThCh$ | |
Gains (losses) on cash flow hedges (1) | 63,008 | (16,196) | 46,812 |
Gains (losses) on exchange differences on translation (1) | 37,990,079 | - | 37,990,079 |
Reserve of Actuarial gains and losses on defined benefit plans | (1,263,781) | 339,533 | (924,248) |
Total comprehensive income As of December 31, 2018 | 36,789,306 | 323,337 | 37,112,643 |
Other Income and expense charged or credited against net equity | Gross Balance | Tax | Net Balance |
ThCh$ | ThCh$ | ThCh$ | |
Cash flow hedge (1) | (5,661) | 728 | (4,933) |
Conversion differences of subsidiaries abroad (1) | (34,786,480) | - | (34,786,480) |
Reserve of Actuarial gains and losses on defined benefit plans | 19,669 | (47,228) | (27,559) |
Total comprehensive income As of December 31, 2017 | (34,772,472) | (46,500) | (34,818,972) |
Reserves affecting other comprehensive incomes
The movement of comprehensive income and expense is detailed as follows:
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Debtor Tax ID | Company | Debtor country | Registration or ID No. Instrument | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Amortization rate | Interest Rate | |
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| |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 388 18/10/2004 Bono Serie E | Chile | UF | - | 2,612,294 | 5,125,926 | 5,298,895 | 7,904,394 | 20,941,509 | Semiannual | 4.00 | |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | 573 23/03/2009 Bono Serie H | Chile | UF | 637,729 | - | 2,345,596 | 9,540,856 | 40,621,049 | 53,145,230 | Semiannual | 4.25 | |
Sub-total |
|
|
|
|
|
| 637,729 | 2,612,294 | 7,471,522 | 14,839,751 | 48,525,443 | 74,086,739 |
|
|
a)As of December 31, 2019:
|
|
|
|
|
|
| Maturity |
|
| |||||
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Amortization rate | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| % |
Financial leases obligations |
|
|
|
|
|
|
|
|
|
|
|
|
| |
0-E | Finca La Celia S.A | Argentina | - | Banco Supervielle | Argentina | $ARG | 981 | 3,017 | 1,464 | - | - | 5,462 | At maturity | 17.50 |
96,711,590-8 | Manantial S.A. | Chile | - | Banco de Creditos e Inversiones | Chile | UF | 14,369 | 3,837 | - | - | - | 18,206 | Monthly | 3.13 |
96,711,590-8 | Manantial S.A. | Chile | - | Banco de Chile | Chile | UF | 6,054 | 8,072 | - | - | - | 14,126 | Monthly | 8.65 |
96,711,590-8 | Manantial S.A. | Chile | - | Banco Security | Chile | UF | 4,489 | 8,755 | - | - | - | 13,244 | Monthly | 9.25 |
90,413,000-1 | Compañía Cervecerías Unidas S.A. | Chile | - | Consorcio Nacional de Seguros S.A | Chile | UF | 13,759 | 42,717 | 125,221 | 130,838 | 17,131,641 | 17,444,176 | Monthly | 7.07 |
96,981,310-6 | Compañía Cervecera Kunstmann S.A | Chile | 97,030,000-7 | BancoEstado | Chile | UF | 25,436 | 77,942 | 98,688 | - | - | 202,066 | Monthly | 4.33 |
76,077,848-6 | Cervecera Belga de la Patagonia S.A. | Chile | 97,015,000-5 | Banco Santander de Chile | Chile | UF | - | 6,522 | - | 13,067 | - | 19,589 | Monthly | 6.27 |
Sub-total |
|
|
|
|
|
| 65,088 | 150,862 | 225,373 | 143,905 | 17,131,641 | 17,716,869 |
|
|
Total |
|
|
|
|
|
| 8,481,440 | 34,064,094 | 36,676,882 | 15,610,067 | 65,657,084 | 160,489,567 |
|
|
Changes | Reserve of exchange differences on translation | Reserve of cash flow hedges | Reserve of Actuarial gains and losses on defined benefit plans | Total other reserves |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Conversion of joint ventures and foreign subsidiaries | (70,932,096) | 345,986 | (4,127,305) | (74,713,415) |
Deferred taxes | - | (93,416) | 1,107,699 | 1,014,283 |
Inflation adjustment of subsidiaries in Argentina | 88,009,766 | - | - | 88,009,766 |
Total changes in equity | 17,077,670 | 252,570 | (3,019,606) | 14,310,634 |
Equity holders of the parent | 16,122,893 | 249,503 | (2,887,580) | 13,484,816 |
Non-controlling interests | 954,777 | 3,067 | (132,026) | 825,818 |
Total changes in equity | 17,077,670 | 252,570 | (3,019,606) | 14,310,634 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
b)As of December 31, 2015:2018:
Changes | Reserve of exchange differences on translation | Reserve of cash flow hedges | Reserve of Actuarial gains and losses on defined benefit plans | Total other reserves |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Conversion of joint ventures and foreign subsidiaries | (55,755,054) | 63,008 | (1,263,781) | (56,955,827) |
Deferred taxes | - | (16,196) | 339,533 | 323,337 |
Inflation adjustment of subsidiaries in Argentina | 93,745,133 | - | - | 93,745,133 |
Total changes in equity | 37,990,079 | 46,812 | (924,248) | 37,112,643 |
Equity holders of the parent | 35,487,433 | 51,944 | (882,063) | 34,657,314 |
Non-controlling interests | 2,502,646 | (5,132) | (42,185) | 2,455,329 |
Total changes in equity | 37,990,079 | 46,812 | (924,248) | 37,112,643 |
c)As of December 31, 2017:
Changes | Reserve of exchange differences on translation | Reserve of cash flow hedges | Reserve of Actuarial gains and losses on defined benefit plans | Total other reserves |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Conversion of joint ventures and foreign subsidiaries | (34,786,480) | (5,661) | 19,669 | (34,772,472) |
Deferred taxes | - | 728 | (47,228) | (46,500) |
Total changes in equity | (34,786,480) | (4,933) | (27,559) | (34,818,972) |
Equity holders of the parent | (32,982,829) | (10,837) | (32,794) | (33,026,460) |
Non-controlling interests | (1,803,651) | 5,904 | 5,235 | (1,792,512) |
Total changes in equity | (34,786,480) | (4,933) | (27,559) | (34,818,972) |
Other Reserves
|
|
|
|
|
|
| Maturity (*) |
|
| |||||
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Amortization rate | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| % |
Bank borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
| |
0-E | Finca La Celia S.A | Argentina | O-E | Banco Supervielle | Argentina | USD | - | 128,459 | - | - | - | 128,459 | At maturity | 6.00 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco Patagonia | Argentina | $ARG | 272,706 | - | - | - | - | 272,706 | At maturity | 28.00 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco Patagonia | Argentina | $ARG | 106,222 | - | - | - | - | 106,222 | At maturity | 28.50 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco Patagonia | Argentina | $ARG | 420,665 | - | - | - | - | 420,665 | At maturity | 28.00 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco Patagonia | Argentina | $ARG | 1,857 | 7,389 | 3,095 | - | - | 12,341 | At maturity | 15.25 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco Patagonia | Argentina | $ARG | 506,450 | - | - | - | - | 506,450 | At maturity | 27.50 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco San Juan | Argentina | $ARG | 151,260 | - | - | - | - | 151,260 | At maturity | 29.00 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco San Juan | Argentina | $ARG | - | 486,804 | - | - | - | 486,804 | Quarter | 29.00 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco Patagonia | Argentina | $ARG | 405,927 | - | - | - | - | 405,927 | At maturity | 25.00 |
0-E | Finca La Celia S.A | Argentina | O-E | Banco BBVA | Argentina | $ARG | 535,283 | - | - | - | - | 535,283 | At maturity | 29.50 |
0-E | Viña San Pedro Tarapaca S.A. (1) | Argentina | O-E | Banco de Chile | Argentina | USD | 28,782 | 3,150,341 | - | - | - | 3,179,123 | At maturity | 1.92 |
91.041.000-8 | Viña San Pedro Tarapaca S.A. (2) | Chile | 97.004.000-5 | Banco de Chile | Chile | USD | 66,496 | 7,101,600 | - | - | - | 7,168,096 | At maturity | 1.90 |
91.041.000-8 | Viña San Pedro Tarapaca S.A. | Chile | 97.004.000-5 | Banco Estado | Chile | UF | - | 56,243 | - | 9,739,054 | - | 9,795,297 | At maturity | 2.70 |
91.041.000-8 | Viña San Pedro Tarapaca S.A. (1) | Chile | 97.030.000-7 | Scotiabank | Chile | USD | - | 2,977 | 5,590,024 | - | - | 5,593,001 | At maturity | 1.15 |
91.041.000-8 | Compañía Pisquera de Chile S.A | Chile | 97.018.000-1 | Banco Estado | Chile | CLP | 449,879 | - | 15,978,778 | - | - | 16,428,657 | At maturity | 6.86 |
99.586.280-8 | Manantial S.A. | Chile | 97.030.000-7 | Banco de Chile | Chile | UF | 15,123 | 46,470 | 109,544 | - | - | 171,137 | At maturity | 4.80 |
96.711.590-8 | Manantial S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | UF | 8,529 | 26,304 | 75,692 | 16,855 | - | 127,380 | Monthly | 5.48 |
96.711.590-8 | Manantial S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | UF | 7,004 | 21,588 | 12,375 | - | - | 40,967 | Monthly | 5.36 |
96.711.590-8 | Manantial S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | CLP | 13,500 | 40,500 | 108,000 | 72,000 | - | 234,000 | Monthly | 6.00 |
96.711.590-8 | Manantial S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | CLP | 19,000 | 57,000 | 88,668 | - | - | 164,668 | Monthly | 7.59 |
96.711.590-8 | Manantial S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | CLP | 14,000 | 42,000 | 112,000 | 32,667 | - | 200,667 | Monthly | 5.88 |
96.711.590-8 | Manantial S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | CLP | 22,500 | 67,500 | 180,000 | 112,500 | - | 382,500 | Monthly | 5.76 |
96.711.590-8 | Manantial S.A. | Chile | 97.004.000-5 | Banco Itaú | Chile | CLP | 23,690 | 56,839 | - | - | - | 80,529 | Monthly | 6.66 |
96.711.590-8 | Manantial S.A. | Chile | 76.645.030-K | Banco Itaú | Chile | CLP | 7,704 | 23,532 | 68,516 | 50,621 | - | 150,373 | Monthly | 6.12 |
96.711.590-8 | Manantial S.A. | Chile | 76.645.030-K | Banco Estado | Chile | CLP | 200,000 | - | - | - | - | 200,000 | Monthly | 5.26 |
96.711.590-8 | Manantial S.A. | Chile | 76.645.030-K | Banco Estado | Chile | CLP | 254,313 | - | - | - | - | 254,313 | Monthly | 4.38 |
96.711.590-8 | Manantial S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | CLP | 35,843 | 36,436 | - | - | - | 72,279 | At maturity | 7.56 |
96.711.590-8 | Manantial S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | CLP | - | 150,000 | - | - | - | 150,000 | At maturity | 5.40 |
96.711.590-8 | Manantial S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | CLP | - | 255,510 | - | - | - | 255,510 | Monthly | 4.22 |
96.711.590-8 | Manantial S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | CLP | 18,029 | 55,418 | 158,974 | 138,117 | - | 370,538 | Monthly | 5.02 |
96.711.590-8 | Milotur S.A. | Chile | 97.030.000-7 | Nuevo Banco Comercial | Chile | USD | 25,991 | 71,036 | - | - | - | 97,027 | At maturity | 5.50 |
96.711.590-8 | Milotur S.A. | Chile | 97.030.000-7 | Banco Itaú | Chile | UYI | - | 344,850 | 1,701,800 | - | - | 2,046,650 | Monthly | 6.00 |
0-E | Compañia Cervecera Kunstmann S.A. | Uruguay | O-E | Banco Estado | Uruguay | CLP | - | 515,083 | - | - | - | 515,083 | Monthly | 4.34 |
0-E | Compañia Cervecera Kunstmann S.A. | Uruguay | O-E | Banco Estado | Uruguay | CLP | - | 618,100 | - | - | - | 618,100 | Monthly | 4.34 |
96.981.310-6 | Compañia Cervecera Kunstmann S.A. | Chile | 97.030.000-7 | Banco de Chile | Chile | CLP | - | 1,030,538 | - | - | - | 1,030,538 | At maturity | 4.38 |
96.981.310-6 | Compañia Cervecera Kunstmann S.A. | Chile | 97.030.000-7 | Scotiabank | Chile | USD | 7,229 | 453,561 | - | - | - | 460,790 | At maturity | 1.90 |
96.981.310-6 | Compañia Cervecera Kunstmann S.A. | Chile | 97.004.000-5 | Banco Estado | Chile | CLP | 180,724 | 555,208 | 1,589,858 | 1,378,183 | - | 3,703,973 | At maturity | 5.02 |
96.981.310-6 | Compañia Cervecera Kunstmann S.A. | Chile | 97.018.000-1 | Scotiabank | Chile | CLP | - | 1,028,447 | - | - | - | 1,028,447 | At maturity | 4.08 |
96.981.310-6 | Compañía Industrial Cervecera S.A. | Chile | 97.030.000-7 | Banco BNA | Chile | $ARG | 345,777 | 927,294 | 2,472,784 | 1,236,392 | - | 4,982,247 | Monthly | 15.00 |
96.981.310-6 | Compañía Industrial Cervecera S.A. | Chile | 97.018.000-1 | Banco BNA | Chile | $ARG | 173,166 | 392,114 | 697,088 | - | - | 1,262,368 | At maturity | 25.19 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco BBVA | Argentina | $ARG | 560,011 | 1,633,640 | 1,089,584 | - | - | 3,283,235 | Quarter | 26.00 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Galicia | Argentina | $ARG | 1,272,502 | 1,815,157 | 5,446,285 | - | - | 8,533,944 | Monthly | 29.40 |
0-E | Compañía Industrial Cervecera S.A. | Argentina | 0-E | Banco Macro | Argentina | $ARG | 44,130 | 136,150 | 75,639 | - | - | 255,919 | Monthly | 15.25 |
0-E | Saenz Briones y Cía. S.A. | Argentina | 0-E | Banco Citibank | Argentina | $ARG | 65,596 | 121,022 | - | - | - | 186,618 | Quarter | 15.25 |
Sub-total |
|
|
|
|
|
| 6,259,888 | 21,455,110 | 35,558,704 | 12,776,389 | - | 76,050,091 |
|
|
The reserves that are a part of the Company’s equity are as follows:
(1)Currency Translation Reserves: This obligationreserve originated from the translation of foreign subsidiaries’ and joint ventures financial statements which functional currency is hedged bydifferent from the presentation currency of the Consolidated Financial Statements and inflation adjustment of subsidiaries in Argentina. As of December 31, 2019, 2018 and 2017, it amounts to a Cross Currency Interest Rate Swap agreement(Note 6).negative reserve of ThCh$ 101,931,435 ThCh$ 118,054,328 and ThCh$ 153,541,761, respectively.
(2)Hedge reserve: This obligationreserve originated from the hedge accounting application of financial liabilities. The reserve is hedged byreversed at the end of the hedge agreement, or when the transaction ceases qualifying hedge accounting, whichever is first. The reserve effects are transferred to income. As of December 31, 2019, 2018 and 2017, it amounts to a Cross Currency Rate Swap agreement(Note 6).
(*) SeeNote 5 the non-discounted contractual cash flows.positive reserve of ThCh$ 329,691, ThCh$ 80,188 and ThCh$ 28,244 respectively, net of deferred taxes.
Actuarial gains and losses on defined benefit plans reserves: As of December 31, 2019, 2018 and 2017 the amount recorded is a negative reserve of ThCh$ 7,728,154, ThCh$ 4,840,574 and ThCh$ 3,958,511, respectively, net of deferred taxes.
Other reserves: As of December 31, 2019, 2018 and 2017 the amount is a negative reserve of ThCh$ 28,172,631, ThCh$ 28,233,512 and ThCh$ 20,603,251, respectively. Such reserves relate mainly to the following concepts:
- | Adjustment due to re-assessment of fixed assets carried out in 1979 (increased for ThCh$ 4,087,396). |
- | Price level restatement of paid-up capital registered as of December 31, 2008, according to CMF Circular Letter Nª456 (decreased for ThCh$ 17,615,333). |
- | Difference in purchase of shares of the subsidiary Viña San Pedro Tarapacá S.A. made during year 2012 and 2013 (decreased for ThCh$ 9,779,475). |
- | Difference in purchase of shares of the subsidiary Manantial S.A. made during year 2016 (decreased for ThCh$ 7,801,153). |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
- |
|
- | Difference in purchase of shares of the subsidiary Viña San Pedro Tarapacá S.A. made during year 2018 and 2017 (decreased for ThCh$ 13,054,114 and ThCh$ 2,075,441, respectively). |
Non-controlling Interests are detailed as follows:
a.Equity
Equity | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Viña San Pedro Tarapacá S.A. | 40,970,994 | 39,007,270 |
Bebidas del Paraguay S.A. | 18,930,090 | 18,803,673 |
Aguas CCU-Nestlé Chile S.A. | 26,718,238 | 24,118,966 |
Cervecería Kunstmann S.A. | 7,221,111 | 8,118,212 |
Compañía Pisquera de Chile S.A. | 5,368,951 | 5,109,395 |
Saenz Briones & Cía. S.A.I.C. | 1,164,303 | 1,179,410 |
Distribuidora del Paraguay S.A. | 4,777,051 | 4,445,452 |
Bebidas Bolivianas BBO S.A. (1) | 8,579,344 | 7,075,032 |
Other | 1,142,971 | 1,131,825 |
Total | 114,873,053 | 108,989,235 |
(1)SeeNote 15 – Business combinations, letter a).
b.Result
| For the years ended as of December 31, | ||
Result | 2019 | 2018 | 2017 |
| ThCh$ | ThCh$ | ThCh$ |
Aguas CCU-Nestlé Chile S.A. | 7,590,887 | 7,587,140 | 7,814,358 |
Viña San Pedro Tarapacá S.A. | 3,775,811 | 2,520,768 | 6,223,423 |
Cervecería Kunstmann S.A. | 3,111,069 | 2,772,074 | 1,979,976 |
Compañía Pisquera de Chile S.A. | 1,283,694 | 1,154,401 | 954,046 |
Saenz Briones & Cía. S.A.I.C. | (69,465) | 42,787 | 33,027 |
Distribuidora del Paraguay S.A. | 324,839 | 1,431,158 | 906,728 |
Bebidas del Paraguay S.A. | 221,498 | 210,568 | 580,406 |
Bebidas Bolivianas BBO S.A. (1) | (568,189) | (552,816) | - |
Other | (166,176) | 27,659 | 9,102 |
Total | 15,503,968 | 15,193,739 | 18,501,066 |
|
|
| Registration or ID No. Instrument |
|
| Maturity |
|
| ||||||
Debtor Tax ID | Company | Debtor country | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Amortization rate | Interest Rate | ||
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| % | ||
Bonds payable |
|
|
|
|
|
|
|
|
|
|
|
|
| |
90.413.000-1 | Compañía Cervecerías Unidas S.A. | Chile | 388 18/10/2004 BONO SERIE E | Chile | UF | - | 2,539,921 | 4,953,915 | 5,095,419 | 10,251,636 | 22,840,891 | Semiannual | 4.00 | |
90.413.000-1 | Compañía Cervecerías Unidas S.A. | Chile | 573 23/03/2009 BONO SERIE H | Chile | UF | 615,318 | - | - | 2,252,581 | 48,799,443 | 51,667,342 | Semiannual | 4.25 | |
Sub-total |
|
|
|
|
|
| 615,318 | 2,539,921 | 4,953,915 | 7,348,000 | 59,051,079 | 74,508,233 |
|
|
(1)SeeNote 15 – Business combinations, letter a).
|
|
|
|
|
|
| Maturity |
|
| |||||
Debtor Tax ID | Company | Debtor country | Lending party Tax ID | Creditor name | Creditor country | Currency | 0 to 3 months | 3 months to 1 year | Over 1 year to 3 years | Over 3 years to 5 years | Over 5 years | Total | Amortization rate | Interest Rate |
|
|
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| % |
Financial leases obligations |
|
|
|
|
|
|
|
|
|
|
|
|
| |
0-E | Finca La Celia S.A | Argentina | O-E | Banco Supervielle | Argentina | $ARG | 1,267 | 3,900 | 6,147 | - | - | 11,314 | Monthly | 17.50 |
96.711.590-8 | Manantial S.A. | Chile | 97.000.600-6 | Banco de Creditos e Inversiones | Chile | UF | 5,371 | 16,386 | 9,292 | - | - | 31,049 | Monthly | 5.06 |
96.711.590-8 | Manantial S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | UF | 10,764 | 16,845 | 13,524 | - | - | 41,133 | Monthly | 9.31 |
96.711.590-8 | Manantial S.A. | Chile | 97.053.000-2 | Banco Security | Chile | UF | 21,598 | 25,628 | 12,867 | - | - | 60,093 | Monthly | 6.81 |
90.413.000-1 | Compañía Cervecerías Unidas S.A. | Chile | 99.012.000-5 | Consorcio Nacional de Seguros S.A | Chile | UF | 12,499 | 38,806 | 113,757 | 225,991 | 16,628,473 | 17,019,526 | Monthly | 7.07 |
96.981.310-6 | Compañía Cervecera Kunstmann S.A | Chile | 97.004.000-5 | Banco de Chile | Chile | UF | 42,822 | 23,183 | 12,799 | - | - | 78,804 | Monthly | 5.58 |
96.981.310-6 | Compañía Cervecera Kunstmann S.A | Chile | 97.030.000-7 | BancoEstado | Chile | UF | 23,716 | 72,672 | 196,552 | - | - | 292,940 | Monthly | 4.33 |
76.077.848-6 | Cervecera Belga de la Patagonia S.A. | Chile | 97.015.000-5 | Banco Santander de Chile | Chile | UF | 1,455 | 4,504 | 13,097 | 5,959 | - | 25,015 | Monthly | 6.27 |
Sub-total |
|
|
|
|
|
| 119,492 | 201,924 | 378,035 | 231,950 | 16,628,473 | 17,559,874 |
|
|
Total |
|
|
|
|
|
| 6,994,698 | 24,196,955 | 40,890,654 | 20,356,339 | 75,679,552 | 168,118,198 |
|
|
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Detailsc.The Summarized financial information of the fair value of bank borrowings, financial leases obligations and bonds payable are described inNote 6.non controlling interest is detailed as follows:
The effective interest rates of bond obligations are as follows:
| As of December 31, 2019 | As of December 31, 2018 |
| ||
| ||
| ||
| ThCh$ | ThCh$ |
Assets and Liabilities | ||
Current assets | 762,824,893 | 711,482,809 |
Non-current assets | 922,672,059 | 829,511,196 |
Current liabilities | 438,802,486 | 399,409,388 |
Non-current liabilities | 207,501,667 | 149,602,171 |
|
|
|
Dividends paid | 10,969,709 | 3,212,105 |
|
|
|
The debts and financial liabilities are stated in several currencies and they accrue fixed and variablemain significant Non-controlling interest rates. The details of such obligations classified as per currency and interest type (excluding the effect of cross currency interest rate swap agreements) are as follows:
| As of December 31, 2016 | As of December 31, 2015 | ||
| Fixed Interest Rate | Variable Interest Rate | Fixed Interest Rate | Variable Interest Rate |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
US Dollar | 1,079,507 | 5,272,884 | 686,276 | 15,940,220 |
Chilean Pesos | 33,822,001 | - | 25,840,175 | - |
Argentine Pesos | 11,515,546 | 4,869,957 | 17,146,915 | 4,266,388 |
Unidades de Fomento | 102,188,160 | - | 102,191,574 | - |
UYI | 1,741,512 | - | 2,046,650 | - |
Total | 150,346,726 | 10,142,841 | 147,911,590 | 20,206,608 |
The terms and conditions of the main interest accruing obligations as of December 31, 2016, were as follows:
A)Bank Borrowings
Banco Estado – Bank Loans
a) On July 27, 2012, the subsidiary Compañíis represented by Viña Pisquera ChileSan Pedro Tarapacá S.A. (CPCh) signed a bank loan with the Banco Estado for a total of ThCh$ 16,000,000, for a period of 5 years, with maturity on July 27, 2017.
This loan accrues interest at an annual fixed rate of 6.86% and an effective rate of 7.17%. The Company amortizes interest semi-annually, and the capital amortization consists of a single payment at the end of the established term.
This obligation is subject to certain reporting obligations in addition to complying with the following financial ratios,which will be measured on the half-yearly financial statements of CPCh:balances:
| As of December 31, 2019 | As of December 31, 2018 |
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Assets and Liabilities | ||
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| ThCh$ | ThCh$ |
Assets and Liabilities | ||
Current assets | 161,149,880 | 156,118,074 |
Non-current assets | 219,742,431 | 185,841,247 |
Current liabilities | 90,203,962 | 80,877,682 |
Non-current liabilities | 49,601,667 | 31,550,148 |
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-Maintain
| For the years ended as of December 31, | ||
Result | 2019 | 2018 | 2017 |
| ThCh$ | ThCh$ | ThCh$ |
Net sales | 212,321,758 | 206,518,731 | 204,453,782 |
Net income of year | 22,218,101 | 14,833,018 | 17,715,119 |
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Dividends paid by Viña Financial Expense Coverage not less than 3, calculated asSan Pedro Tarapacá S.A. amounted to ThCh$ 7,416,023, ThCh$ 9,070,285 and ThCh$ 13,602,317, for the relationship between Gross Margin less Marketing costs, Distributionyears ended December 31, 2019, 2018 and Administration expenses, plus Other income by function, less Other expenses by function, plus Depreciation and Amortization, divided by Financial costs.2017, respectively.
-Maintain a debt ratio of no more than 2.5, measured as Total liabilities divided by Equity.
-Maintain an Equity higher than UF 770,000.
In addition, this loan obliges CPCh to comply with certain restrictions of affirmative nature, including maintaining insurance, maintaining the ownership of essential assets, and also to comply with certain restrictions, such as not to pledge, mortgage or grant any kind of encumbrance or real right over any fixed asset with an individual accounting value higher than UF 10,000, except under the terms established by the agreement, among other.
As of December 31, 2016, the Company was in compliance with the financial covenants and specific requirements of this loan.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
b) On April 25, 2012, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco Estado for a total
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interestOperational cost and capital amortization consists of a single payment at the end of the established term.
On April 27, 2016, this loan was paid.
c) On April 25, 2013, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco Estado for a total of ThCh$ 600,000, maturing on April 25, 2014. It was renewed for one year, maturing on April 25, 2015. Subsequently this loan was renewed for one year, maturing on April 27, 2016.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization consists of a single payment at the end of the established term.
On April 27, 2016, this loan was paid.
d) On June 16, 2014, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco Estado for a total of 6,200,000 euros, maturing on June 16, 2015.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization consists of a single payment at the end of the established term.
On June 17, 2015, payment of the loan was made.
e)On October 15, 2014, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco Estado for a total of UF 380,000, maturing on October 15, 2019.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest semi-annually and capital amortization consists of a single payment at the end of the established term.
f)On December 3, 2014, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco Estado for a total of ThCh$ 1,300,000, maturing on March 31, 2015.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization consists of a single payment at the end of the established term.
On May 29, 2015 the loan was renewed for a term of 3 months, maturing on July 28, 2015.
On July 17, 2015, payment of the loan was made.
g)On July 15, 2015, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco Estado for a total of ThCh$ 4,000,000, maturing on July 14, 2020.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization consists of a single payment at the end of the established term.
h)On May 26, 2016, the subsidiary Aguas CCU-Nestlé Chile S.A. signed a bank loan with Banco Estado for a total of ThCh$ 5,300,000, maturing on November 22, 2016.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization consists of a single payment at the end of the established term.
On November 22, 2016, payment of the loan was made.
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Banco de Chile – Bank Loans
a)On July 11, 2011, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco de Chile for a total of US$ 4,436,100, maturing on July 11, 2016.
This loan accrues interest at a compound floating rate Libor plus 180 days plus a fixed margin. The subsidiary amortizes interest semi-annually, and capital amortization consists of a single payment at the end of the established term.
This debt was changed to Euros and a fixed interest rate through a currency US$-Euro and interest rate swap agreements (Cross Currency Interest Rate Swap). For details of the Company`s hedge strategies seeNote 5 and 6.
On July 11, 2016, payment of the loan was made.
b) On July 7, 2011, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco de Chile for a total of US$ 10,000,000, maturing on July 7, 2016.
This loan accrues interest at a compound floating rate Libor plus 180 days plus a fixed margin. The subsidiary amortizes interest semi-annually, and capital amortization consists of a single payment at the end of the established term.
The interest rate risk to which the subsidiary is exposed as result of this loan is mitigatedexpenses grouped by the use of cross interest rate swap agreements (interest rate fixed). For details of the Company`s hedge strategies seeNote 5 and 6.
On July 7, 2016, payment of the loan was made.
The aforementioned loans oblige the Company to comply with the same covenants as the Series A Bond as indicated in letter D)Restrictions in this Note.
c) On July 7, 2016, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco de Chile for a total of ThCh$ 7,271,000, maturing on July 2, 2017.
This loan accrued interest at an annual rate. The subsidiary amortizes interest and capital consists of a single payment at the end of the established term.
This debt was changed to Euros and a fixed interest rate through a currency CLP-US$ and interest rate swap agreements (Cross Currency Interest Rate Swap). For details of the Company`s hedge strategies seeNote 5 and 6.
d) On April 24, 2014, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco de Chile for a total of ThCh$ 1,000,000, maturing on April 24, 2015.
This loan accrued interest at an annual rate. The subsidiary amortizes interest and capital consists of a single payment at the end of the established term.
On April 24, 2015 the loan was renewed for a term of 1 year, maturing on April 21, 2016.
On April 22, 2016, payment of the loan was made.
e) On April 24, 2015, the subsidiary Compañía Cervecera Kunstmann SA He signed a bank loan with Banco de Chile for a total of ThCh$ 600,000 for a period of three months expiring on July 24, 2015.
This loan bears interest at a fixed interest rate. The subsidiary pays the interest and principal in a single payment at the end of the deadline.
On July 24, 2015, payment of the loan was made.
f) On April 20, 2016, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco de Chile for a total of ThCh$ 2,000,000, maturing on April 20, 2018.
This loan accrued interest at an annual rate. The subsidiary amortizes interest and capital consists of a single payment at the end of the established term.
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g) On August 25, 2016, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco de Chile for a total of ThCh$ 400,000, maturing on August 24, 2018.
This loan accrued interest at an annual rate. The subsidiary amortizes interest and capital consists of a single payment at the end of the established term.
Banco Scotiabank – Bank Loans
a) On June 21, 2013, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco Scotiabank for a total of US$ 8,000,000, maturing on June 22, 2015.
This loan accrues interest at a compound floating rate Libor plus 90 days plus a fixed margin. The subsidiary amortizes interest quarterly and capital amortization consists of a single payment at the end of the established term.
The interest rate risk to which the subsidiary is exposed as result of this loan is mitigated by the use of cross interest rate swap agreements (interest rate fixed). For details of the Company`s hedge strategies seeNote 5 and 6.
On June 22, 2015, payment of the loan was made.
b) On September 4, 2014, the subsidiary Compañía Cervecera Kunstmann S.A. signed a bank loan with Banco Scotiabank for a total of US$ 638,674, maturing on September 4, 2016.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest semi-annually and capital amortization consists of a single payment at the end of the established term.
On August 24, 2016, payment of the loan was made.
c) On June 17, 2015, the subsidiary Viña San Pedro Tarapacá S.A. it signed a bank loan with Scotiabank for a total of US$ 7,871,500, with a term of three years maturing on June 18, 2018.
This loan bears interest at a floating interest rate composed dollar Libor at 90 days plus a fixed margin. The company pays quarterly interest and amortization of capital consists of a single payment at the end of the deadline.
The interest rate risk to which the subsidiary is exposed as result of this loan is mitigated by the use of cross interest rate swap agreements (interest rate fixed). For details of the Company`s hedge strategies seeNote 5 and6.
The aforementioned loans oblige the Company to comply with the covenants indicated in letter D) Restriction in this Note.
d) On April 24, 2015, the subsidiary Compañía Cervecera Kunstmann SA He signed a bank loan with Scotiabank for a total of US$ 1,000,000, with a term of one year expiring at April 22, 2016.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest semi-annually and capital amortization consists of a single payment at the end of the established term.
On April 22, 2016, payment of the loan was made.
e) On April 20, 2016, the subsidiary Compañía Cervecera Kunstmann SA He signed a bank loan with Scotiabank for a total of ThCh$ 2,000,000, with a term of one year expiring at April 20, 2017.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest semi-annually and capital amortization consists of a single payment at the end of the established term.
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Banco Santander Chile – Bank Loans
a) On June 17, 2013, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco Santander Chile for a total of US$ 8,000,000, maturing on June 17, 2014.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization consists of a single payment at the end of the established term.
On June 17, 2014, this loan was paid.
b) On June 17, 2013, the subsidiary Viña San Pedro Tarapacá S.A. signed a bank loan with Banco Santander Chile for a total of 6,200,000 Euros, maturing on June 17, 2014.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization consists of a single payment at the end of the established term.
On June 17, 2014, this loan was paid.
BBVA Banco Francés S.A.; HSBC Bank Argentina S.A.; Banco de Galicia y Buenos Aires S.A.; La Sucursal de Citibank NA established in Argentinian Republic; Banco de La Provincia de Buenos Aires – Syndicated Bank Loan with Compañía Industrial Cervecera S.A. (CICSA)
On October 5, 2012, the subsidiary CICSA signed a syndicated bank loan for a total of 187.5 million Argentine Pesos, maturing on October 5, 2015.
The proportional participation of banks lenders isnature are detailed as follows:
a)BBVA Bank French S.A., with 55 million Argentine Pesos of pro rata participation.
b)Banco de la Provincia de Buenos Aires, with 54 million Argentine Pesos.
c)HSBC Bank Argentina S.A., with 43.5 million Argentine Pesos of pro rata participation.
d)Banco de Galicia y Buenos Aires S.A., with 20 million Argentine Pesos of pro rata participation.
e)Citibank NA established in Argentinian Republic, with 15 million Argentine Pesos of pro rata participation.
This loan accrues interest at an annual rate of 15.01% whose payment is made monthly. The subsidiary amortizes capital in 9 consecutive and equal quarterly quotes, once the grace period of 12 months from the date of disbursement.
This loan obliges the subsidiary to meet specific requirements and financial covenants related to their Consolidated Financial Statements, which according to agreement of the parties are as follows:
a)Maintain a capability of repayment measure at the end of each quarter less than or equal to 3, calculated as the financial debt over Adjusted EBITDA1.Adjusted EBITDA means EBITDA as calculated by the Company in accordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: Operating result before Interest, Income taxes, Depreciation and Amortization for the period of 12 months immediately prior to the date of calculation.
b)Maintain a Financial Expense Coverage measured at the end of each quarter and retroactively for periods of 12 months, not less than 2.5, calculated as the ratio of Adjusted EBITDA (as defined in paragraph (a)) and Financial Costs account.
c)Maintain at the end of each quarter an indebtedness ratio not higher than 1.5, defined as the ratio Financial Liabilities over the Equity meaning the Equity at the time of calculation, as it arises from their Financial Statements and in accordance with generally accepted accounting principles in the Argentinian Republic.
d)Maintain at the end of each quarter a minimum Equity of 600 million of Argentine Pesos.
1EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
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As of December 31, 2016, the Company was in compliance with the financial covenants and specific requirements of this loan.
Banco de la Nación Argentina – Bank Loan with Compañía Industrial Cervecera S.A. (CICSA)
a)On December 28, 2012, CICSA signed a bank loan for a total of 140 million of Argentine pesos for a period of 7 years, maturing on November 26, 2019, and whose loan is delivered in two stages, where the first was carried out on December 28, 2012, for a total of 56 million argentine pesos and the second on June 28, 2013, for a total of 84 million of Argentine pesos.
This loan accrues interest at an annual rate of 15% fixed by first 36 months.Having completed that term, accrues interest at a compound floating rate BADLAR in pesos plus a fixed spread of 400 basis points and to this effect will be taken BADLAR rate published by the Central Bank of the Argentina Republic, corresponding to five working days prior to the start of the period, subject to the condition that does not exceed the lending rate of portfolio general of Banco de la Nación Argentina, in whose case shall apply this.
The subsidiary amortizes capital in 74 consecutive and equal, once the grace period of 10 months from the date of disbursement.
This loan is guaranteed by CCU S.A., through a Stand By issued by the Banco Estado de Chile in favor of Banco de la Nación Argentina (seeNote 34).
b) On April 20, 2015, the subsidiary CICSA signed a bank loan for a total of 24 million of argentine pesos, maturing on April 4, 2018.
This loan accrues interestat a compound floating rate BADLAR in pesos plus a fixed spread of 500 basis points and subject to the condition that does not exceed the lending rate of portfolio general of Banco de la Nación Argentina, in whose case shall apply this.
The subsidiary amortizes capital in 30 monthly, once the grace period of 6 months from de date of disbursement.
This loan is guaranteed by CCU S.A., through a Stand By issued by the Banco Estado de Chile (seeNote 34).
c) On June 26, 2015, the subsidiary CICSA signed a bank loan for a total of 30 million of argentine pesos, maturing on December 26, 2015.
This loan accrues a fixed interest at an annual rate of 23%. The subsidiary amortizes monthly interest and the capital amortization in 6 monthly.
Banco BBVA Francés S.A. – Bank Loan with Compañía Industrial Cervecera S.A. (CICSA)
On June 18, 2014, the subsidiary CICSA signed a bank loan with BBVA Bank for a total of 90 million argentine pesos, maturing on June 19, 2017.
This loan accrues a fixed interest at an annual rate. The subsidiary amortizes interest and capital amortization quarterly.
Banco de Galicia y Buenos Aires S.A.; Banco Santander Río S.A.; – Syndicated Bank Loan with Compañía Industrial Cervecera S.A. (CICSA)
On April 20, 2015, the subsidiary CICSA signed a syndicated bank loan for a total of 150 million argentine pesos, maturing on April 20, 2018.
The proportional participation of banks lenders is as follows:
(a) Banco de Galicia y Buenos Aires S.A., with 75 million argentine pesos of pro rata participation.
(b)Banco Santander Río, with 75 million argentine pesos of pro rata participation.
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This loan accrues interest at an annual rate of 29.4% fixed by first 12 months and thereafteraccrues interest at a compound floating rate BADLAR in pesos plus a fixed spread of 360 basis points and the payments will be quarterly. The capital amortization will payment in 9 quarterly,once the grace period of 12 months from de date of disbursement.
This loan obliges the subsidiary to meet specific requirements and financial covenants related to their Consolidated Financial Statements, which according to agreement of the parties are as follows:
a)Maintain a capability of repayment measure at the end of each quarter less than or equal to 3, calculated as the financial debt over Adjusted EBITDA2.Adjusted EBITDA means EBITDA as calculated by the Company in accordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: Operating result before Interest, Income taxes, Depreciation and Amortization for the period of 12 months immediately prior to the date of calculation.
b)Maintain a Financial Expense Coverage measured at the end of each quarter and retroactively for periods of 12 months, not less than 2.5, calculated as the ratio of Adjusted EBITDA (as defined in paragraph (a)) and Financial Costs account.
c)Maintain at the end of each quarter an indebtedness ratio not higher than 1.5, defined as the ratio Financial Liabilities over the Equity meaning the Equity at the time of calculation, as it arises from their Financial Statements and in accordance with generally accepted accounting principles in the Argentinian Republic.
d)Maintain at the end of each quarter a minimum Equity of 600 million of Argentine Pesos.
As of December 31, 2016, the Company was in compliance with the financial covenants and specific requirements of this loan.
B)Financial Lease Obligations
The most significant financial lease agreements are as follows:
CCU S.A.
In December, 2004, the Company sold a piece of land previously classified as investment property. As part of the transaction, the Company leased eleven floors of a building under construction on the mentioned piece of land.
The building was completed during 2007, and on June 28, 2007, the Company entered into a 25-years lease agreement with Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A., for a total amount of UF 688,635.63, with an annual interest rate of 7.07%. The current value of the agreement amounted to ThCh$ 10,403,632 as of December 31, 2007. The agreement also grants CCU the right or option to acquire the assets contained in the agreement (real estate, furniture and facilities) as from month 68 of the lease. The lease rentals committed are according to the conditions prevailing in the market. For Chilean GAAP purposes, in 2004 the Company recognized a ThCh$ 3,108,950 gain for the building portion not leased by the Company, and a ThCh$ 2,276,677 liability deferred through completion of the building, when the Company recorded the transaction as financial lease.
2EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
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Compañía Cervecera Kunstmann S.A., Manantial S.A. and Finca La Celia S.A.:
Other lease agreements are as follows:
Type | Institution | Contract Date | Currency | ThCh$ | Number of quotas | Annual Interest | Purchase option (UF) |
Compañía Cervecera Kunstmann S.A. | |||||||
Production Plant | Banco de Chile | 19-04-05 | UF | 20.489 | 168 | 8.30% | 302 |
Land Lote 2C | Banco de Chile | 26-06-07 | UF | 7.716 | 121 | 5.80% | 85 |
Land Lote 2D | Banco de Chile | 25-03-08 | UF | 15.000 | 97 | 4.30% | 183 |
Land Lote 13F1 | Banco Estado | 10-10-12 | UF | 22.341 | 72 | 4.33% | 348 |
Manantial S.A. | |||||||
Dispensers | Banco de Crédito e Inversiones | 04-01-12 | UF | 4.275 | 37 | 5.06% | 116 |
Dispensers | Banco de Chile | 05-12-11 | UF | 1.073 | 37 | 5.98% | 311 |
Vehicles | Banco de Chile | 27-08-12 | UF | 1.265 | 25 | 12.63% | 51 |
Computers | Banco Security | 23-08-11 | UF | 2.387 | 37 | 6.99% | 65 |
Dispensers | Banco Security | 09-08-11 | UF | 20.845 | 37 | 6.62% | 563 |
Finca La Celia S.A. | |||||||
Automotor | Banco Supervielle | 10-06-14 | $ARG | 10.814 | 45 | 17.50% | 6.250 |
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The following is a detail of future payments and the current value of the financial lease obligations as ofDecember 31, 2015:
Lease Minimum Future Payments | As of December 31, 2016 | ||
Gross Amount | Interest | Amount | |
ThCh$ | ThCh$ | ThCh$ | |
0 to 3 months | 368,052 | 302,964 | 65,088 |
3 months to 1 year | 1,050,810 | 899,948 | 150,862 |
Over 1 year to 3 years | 2,603,315 | 2,377,942 | 225,373 |
Over 3 years to 5 years | 2,305,704 | 2,161,799 | 143,905 |
Over 5 years | 28,638,952 | 11,507,311 | 17,131,641 |
Total | 34,966,833 | 17,249,964 | 17,716,869 |
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C)Bonds Payable
Series A Bonds – Subsidiary Viña San Pedro Tarapacá S.A.
On June 13, 2005, the subsidiary Viña San Pedro Tarapacá S.A. recorded in the Securities Record a bond issue for a total UF 1,500,000 at a 20-years term maturing on July 15, 2025. Such issue was placed in the local market on July 20, 2005, with a premium amounting to ThCh$ 227,378. This obligation accrues interest at a fixed annual rate of 3.8% and amortizes interest and capital semi-annually.
On December 17, 2010, took place the Board of Bondholders Serie A, which decided to modify the issued Contract of such bonds in order to update certain references and adapt it to the new IFRS accounting standards. The amendment of the issued Contract is dated December 21, 2010 and has the repertory No. 35739-2010 in the Notary of Ricardo San Martín Urrejola. Because of these changes, the commitment of this subsidiary is to comply with certain financial ratios that will be calculated only on the Consolidated Financial Statements. These financial ratios and other conditions are describe in letter D).
On July 21, 2011 the subsidiary made a partial prepayment for 750 Series A Bonds (of the 1,500 issued) equivalent to UF 513,750, according to Section Twelve of Clause Four for the Issue Contract Bond issued by public deed dated April 28, 2005. Additionally, the subsidiary recognized in the Consolidated Income Statement of that date an expenditure of ThCh$ 103,735, for expenses associated with the issuance of this debt.
On November 7, 2014, the subsidiary made a total prepayment for Series A Bonus for an amount of ThCh$ 9,778,759 and recognized in the Consolidated Income Statement of that date an expenditure of ThCh$ 117,200.
At the time of this total prepayment, the subsidiary was in compliance with the financial covenants required for this public issue detailed in letter D).
Series E Bonds – CCU S.A.
On October 18, 2004, under number 388 the Company recorded in the Securities Record the issue of 20-year term public bonds for a total UF 2,000,000 maturing on December 1, 2024. This issue was placed in the local market on December 1, 2004, with a discount amounting to ThCh$ 897,857. This obligation accrues interests at a fixed annual rate of 4.0%, and it amortizes interest and capital semi-annually.
On December 17, 2010, took place the Board of Bondholders Serie E, which decided to modify the issued Contract of those bonds in order to update certain references and adapt it to the new IFRS accounting standards. The amendment of the issued Contract is dated December 21, 2010 and has the repertory No. 35738-2010 in the Notary of Ricardo San Martín Urrejola. Because of these changes, the commitment of the Company is to comply with certain financial ratios that will be calculated only on the Consolidated Financial Statements. These financial ratios and other conditions are as follows:
(a)Maintain at the end of each quarter an indebtedness ratio measured over the consolidated financial statements not higher than 1.5, defined as the ratio of Total Adjusted Liabilities and Total Adjusted Equity. Total Adjusted Liabilities is defined as Total Liabilities less Dividends provisioned, according to policy included in the Statement of Changes in Equity, plus the amount of all guarantees granted by the Issuer or its subsidiaries that are cautioned by real guarantees, except as noted in the contract. Total Adjusted Equity is defined as Total Equity plus Dividends provisioned, according to policy included in the Statement of Changes in Equity.
(b)Maintain a Financial Expense Coverage measured at the end of each quarter and retroactively for periods of 12 months, not less than 3, calculated as the ratio of Adjusted EBITDA and Financial Costs account. Adjusted EBITDA means EBITDA as calculated by the Company in accordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: (i) the sum of Gross Margin and Other income by function accounts; (ii) less (absolute numbers) Distribution costs, Administrative expenses and Other expenses by function accounts; and (iii) plus (absolute numbers) Depreciation and Amortization recorded on the Note Nature of the costs and expenses.
(c)Maintain at the end of each quarter, assets free of liens for an amount equal to at least 1.2, defined as the ratio of Total Assets free of lien and Total Adjusted Liabilities free of lien. Is defined as Total Assets free of lien are defined as Total Assets less assets pledged as collateral for cautioned obligations of third parties. Total Adjusted Liabilities free of lien are defined as Total Liabilities less Dividends provisioned according to policy contained in the Statement of Changes in Equity.
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(d)Maintain at the end of each quarter a minimum equity of ThCh$ 312,516,750, meaning Equity Attributable to Equity Holders of the Parent plus the Dividends provisioned account, according to policy contained in the Statement of Changes in Equity. This requirement will increase in the amount resulting from each revaluation of property, plant and equipment to be performed by the Issuer.
(e)To maintain, either directly or indirectly, ownership over more than 50% of the subscribed and paid-up shares and over the voting rights of the following companies: Cervecera CCU Chile Limitada, Embotelladoras Chilenas Unidas S.A. and Viña San Pedro Tarapacá S.A., except in the cases and under the terms established in the agreement.
(f)To maintain, either directly or through a subsidiary, ownership of the trademark "CRISTAL", denominative for beer class 32 of the international classifier, and not to transfer its use, except to its subsidiaries.
(g)Not to make investments in facilities issued by related parties, except in the cases and under the terms established in the agreement.
(h)Neither sells nor transfer assets from the issuer and its subsidiaries representing over 25% of the assets total of the consolidated financial statements.
As ofDecember 31, 2016 and December 31, 2015, the Company was in compliance with the financial covenants required for this public issue.
Series H and I Bonds – CCU S.A.
On March 23, 2009, the Company recorded in the Securities Record the issue of bonds Series H and I for a combined total of UF 5 million, with 5 and 21 years terms, respectively. Emissions of both series were placed in the local market on April 2, 2009. The issuance of the Bond I was UF 3 million with maturity on March 15, 2014, with a discount amounting to ThCh$ 413,181, and accrues interest at an annual fixed rate of 3.0%, with amortize interest semi-annually and excluding the capital (bullet). The issuance of the Bond H was UF 2 million with maturity on March 15, 2030, with a discount amounting to ThCh$ 156,952, and accrues interest at an annual fixed rate of 4.25%, with amortizes interest and capital semi-annually.
By deed dated December 27, 2010 issued in the Notary of Ricardo San Martín Urrejola, under repertoires No. 36446-2010 and 36447-2010, were amended Issue Contract Series H and I, respectively, in order to update certain references and to adapt to the new IFRS accounting rules.
The current issue was subscribed with Banco Santander Chile as representative of the bond holders and as paying bank, and it requires that the Company complies with the following financial covenants on its Consolidated Financial Statements and other specific requirements:
(a)Maintain at the end of each quarter an indebtedness ratio measured over the consolidated financial statements not higher than 1.5, defined as the ratio of Total Adjusted Liabilities and Total Adjusted Equity. The Total Adjusted Liabilities are defined as Total Liabilities less Dividends provisioned, according to policy included in the Statement of Changes in Equity, plus the amount of all guarantees, debts or obligations of third parties not within the liability and outside the Issuer or its subsidiaries that are cautioned by real guarantees granted by the Issuer or its subsidiaries. Total Adjusted Equity is defined as Total Equity plus Dividends provisioned account, according to policy included in the Statement of Changes in Equity.
(b)Maintain a Financial Expense Coverage measured at the end of each quarter and retroactively for periods of 12 months, not less than 3, calculated as the ratio of Adjusted EBITDA and Financial Costs account. Adjusted EBITDA means EBITDA as calculated by the Company in accordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: (i) the sum of Gross Margin and Other income by function accounts; (ii) less (absolute numbers) Distribution costs, Administrative expenses and Other expenses by function accounts; and (iii) plus (absolute numbers) Depreciation and Amortization recorded on the Note Nature of the cost and expenses.
(c)Maintain at the end of each quarter, assets free of liens for an amount equal to, at least, 1.2, defined as the ratio of Total Assets free of lien and Financial Debt free of lien. Total Assets free of lien are defined as Total Assets less assets pledged as collateral for cautioned obligations of third parties. Financial Debt free of lien is defined as the sum of lines Bank Loans, Bonds payable and Finance lease obligations contained in Note Other financial liabilities of the Consolidated Financial Statements.
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(d)Maintain at the end of each quarter a minimum equity of ThCh$ 312,516,750, meaning Equity Attributable to Equity Holders of the Parent plus the Dividends provisioned account, according to policy included in the Statement of Changes in Equity. This requirement will increase in the amount resulting from each revaluation of property, plant and equipment to be performed by the Issuer.
(e)To maintain, either directly or indirectly, ownership over more than 50% of the subscribed and paid-up shares and over the voting rights of the following companies: Cervecera CCU Chile Limitada and Embotelladoras Chilenas Unidas S.A.
(f)Maintain a nominal installed capacity for the production manufacturing of beer and soft drinks, equal or higher altogether than 15.9 million hectolitres a year, except in the cases and under the terms of the contract.
(g)To maintain, either directly or through a subsidiary, ownership of the trademark "CRISTAL", denominative for beer class 32 of the international classifier, and not to transfer its use, except to its subsidiaries.
(h)Not to make investments in facilities issued by related parties, except in the cases and under the terms established in the agreement.
On March 17, 2014, the Company paid the total Serie I Bonds, equivalent UF 3,000,000.
As ofDecember 31, 2016 and December 31, 2015, the Company was in compliance with the financial covenants required for this public issue.
D) Restriction of subsidiary Viña San Pedro Tarapacá S.A.
The subsidiary Viña San Pedro Tarapacá S.A. mustcomply with certain financial ratios that will be calculated only on its Consolidated Financial Statements. These financial ratios and other conditions are as follows:
(a)Control over subsidiaries representing at least 30% of the consolidated Adjusted EBITDA of the issuer. Adjusted EBITDA. Adjusted EBITDA means EBITDA as calculated by the Company in accordance with particular debt instruments in order to measure such instruments’ financial covenants and is defined as: (i) the sum of Gross Margin and Other income by function accounts; (ii) less (absolute numbers) Distribution costs, Administrative expenses and Other expenses by function accounts; and (iii) plus (absolute numbers) Depreciation and Amortization recorded in the Note Nature of the costs and expenses.
(b)Not to enter into investments in instruments issued by related parties different from its subsidiaries.
(c)Neither sells nor transfers essential assets that jeopardize the continuance of its current purpose.
(d)Maintain at the end of each quarter an indebtedness ratio measured over the consolidated financial statements not higher than 1.2, defined as the ratio of Total Adjusted Liabilities and Total Adjusted Equity. The Total Adjusted Liabilities is defined as Total Liabilities less Dividends provisioned, according to policy contained in the Statement of Changes in Equity, plus the amount of all guarantees, debts or obligations of third parties not within the liabilities and outside the Issuer or its subsidiaries that are cautioned by real guarantees granted by the Issuer or its subsidiaries. Total Adjusted Equity is defined as Total Equity plus Dividends provisioned, according to policy contained in the Statement of Changes in Equity.
(e)Maintain a Financial Expense Coverage measured at the end of each quarter and retroactively for periods of 12 months, not less than 3, calculated as the ratio of Adjusted EBITDA (as defined in paragraph (a)) and Financial Costs account.
(f)Maintain at the end of each quarter a minimum equity of ThCh$ 83,337,800, meaning Equity Attributable to Equity Holders of the Parent plus the Dividends provisioned account, according to policy included in the Statement of Changes in Equity. This requirement will increase in the amount resulting from each revaluation of property, plant and equipment to be performed by the Issuer.
As ofDecember 31, 2016 and December 31, 2015, the subsidiary was in compliance with the financial covenants required for this public issue.
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As ofDecember 31, 2016 and 2015, the total Accounts payable-trade and other payables are as follows:
| As of December 31, 2016 | As of December 31, 2015 | ||
| Current | Non current | Current | Non current |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Suppliers | 210,160,789 | - | 179,926,026 | - |
Notes payable | 2,121,496 | 1,082,898 | 3,930,657 | 1,645,098 |
Withholdings payable | 47,395,567 | - | 43,880,120 | - |
Total | 259,677,852 | 1,082,898 | 227,736,803 | 1,645,098 |
As ofDecember 31, 2016 and 2015, the total provisions recorded in the consolidated statement of financial position are as follows:
| As of December 31, 2016 | As of December 31, 2015 | ||
Current | Non current | Current | Non current | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Litigation | 409,164 | 839,079 | 503,440 | 839,934 |
Others | - | 484,441 | - | 636,584 |
Total | 409,164 | 1,323,520 | 503,440 | 1,476,518 |
The following was the change in provisions during the years ended December 31, 2015 and 2016:
| Litigation (1) | Others | Total | ||
ThCh$ | ThCh$ | ThCh$ | |||
As of January 1, 2015 |
| 1,023,895 |
| 1,596,196 | 2,620,091 |
As of December 31, 2015 |
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Incorporated |
| 792,724 |
| 888 | 793,612 |
Used |
| (222,139) |
| - | (222,139) |
Released |
| (31,005) |
| (801,778) | (832,783) |
Conversion effect |
| (220,101) |
| (158,722) | (378,823) |
As of December 31, 2015 |
| 1,343,374 |
| 636,584 | 1,979,958 |
As of December 31, 2016 |
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Incorporated |
| 551,167 |
| 22,219 | 573,386 |
Used |
| (267,704) |
| (14,173) | (281,877) |
Released |
| (124,336) |
| (67,271) | (191,607) |
Conversion effect |
| (254,258) |
| (92,918) | (347,176) |
As of December 31, 2016 |
| 1,248,243 |
| 484,441 | 1,732,684 |
| For the years ended as of December 31, | ||
Costs and expenses by nature | 2019 | 2018 | 2017 |
| ThCh$ | ThCh$ | ThCh$ |
Direct cost | 694,307,741 | 650,386,343 | 586,223,676 |
Personnel expense (1) | 237,122,374 | 232,141,632 | 220,858,509 |
Transportation and distribution | 245,696,284 | 243,907,283 | 235,265,049 |
Advertising and promotion | 117,889,341 | 118,003,908 | 129,603,036 |
Depreciation and amortization | 105,020,934 | 93,289,194 | 92,199,504 |
Materials and maintenance | 49,356,159 | 46,610,947 | 46,172,647 |
Energy | 29,922,632 | 29,309,465 | 25,940,847 |
Leases | 12,798,957 | 17,727,367 | 15,929,047 |
Other expenses | 122,202,733 | 111,639,503 | 117,992,179 |
Total | 1,614,317,155 | 1,543,015,642 | 1,470,184,494 |
(1) SeeNote 34.
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The maturities of provisions at December 31, 2016, were as follows:
| Litigation | Others | Total | ||
ThCh$ | ThCh$ | ThCh$ | |||
Less than one year |
| 409,164 |
| - | 409,164 |
Between two and five years |
| 423,863 |
| 484,441 | 908,304 |
Over five years |
| 415,216 |
| - | 415,216 |
Total |
| 1,248,243 |
| 484,441 | 1,732,684 |
Litigation25 - Employee benefits.
The detail of significant litigation proceedings to which the Company is exposed at a consolidated level is described inNote 34.
Management believes based on the development of such proceedings to date, the provisions established on a case by basis are adequate to cover the eventual adverse effects that could arise from these proceedings.
As ofDecember 31, 2016 and 2015, the total Other non-financial liabilities are as follows:
| As of December 31, 2016 | As of December 31, 2015 |
| ThCh$ | ThCh$ |
Parent dividend provisioned by the board | 24,387,190 | 24,387,190 |
Parent dividend provisioned according to policy | 34,841,553 | 36,016,878 |
Outstanding parent dividends | 915,585 | 723,259 |
Subsidiaries dividends according to policy | 11,192,210 | 9,725,015 |
Others | 33,434 | 89,802 |
Total | 71,369,972 | 70,942,144 |
Current | 71,369,972 | 70,942,144 |
Total | 71,369,972 | 70,942,144 |
The Company grants short term and employment termination benefitsOther income by function is detailed as part of its compensation policies.follows:
The Parent Company and its subsidiaries maintain collective agreements with their employees, which establish the compensation and/or short–term and long-term benefits for their staff, the main features of which are described below:
For the years ended as of December 31, | |||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Sales of fixed assets | 5,084,269 | 2,464,820 | 1,641,317 |
Rental income | 315,325 | 266,335 | 535,555 |
Sale of glass | 934,863 | 731,111 | 1,334,123 |
Claims recovery | 82,896 | 831,230 | 761,290 |
Advance term license (1) | - | 213,400,487 | - |
Other (1) | 16,167,357 | 10,761,071 | 2,445,617 |
Total | 22,584,710 | 228,455,054 | 6,717,902 |
i. Short-term benefits(1)See brands inNote 1 – General information, letter C). Additionally, it is worth mentioning that the payments they have received from ABI are generally based on combined plans or agreements, designed to compensate benefits received, such as paid vacation, annual performance bonuses and compensation through annuities.
ii. Long-term benefits are plans or agreements mainly intended to cover the post-employment benefits generated at the end of the labour relationship, be it by voluntary resignation or death of personnel hired.
The cost of such benefits is charged against income,presented in the “Personnel Expense” item.Consolidated Statement of Cash Flows, in Operating Activities, under the heading "Other charges for operating activities."
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Other gains (losses) items are detailed as follows:
Other gain and (loss) | For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Results derivative contracts (1) | 4,830,982 | 5,108,327 | (8,010,204) |
Marketable securities to fair value | (275,172) | (132,420) | 293,413 |
Bargain purchase gain (2) | 3,043,107 | - | - |
Other | (4,442,118) | (946,280) | - |
Total | 3,156,799 | 4,029,627 | (7,716,791) |
(1) |
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(2) | Corresponds to the higher value originated by the business combination explained inNote 1 - General information, letter D) number (9). |
As ofDecember 31, 2016 and 2015, the total staff benefits recorded in the Consolidated Statement of
The financial results composition is detailed as follows:
Employees’ Benefits | As of December 31, 2016 | As of December 31, 2015 | ||
Current | Non current | Current | Non current | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Short term benefits | 22,517,220 | - | 21,617,103 | - |
Employment termination benefits | 321,008 | 21,832,415 | 94,956 | 18,948,603 |
Total | 22,838,228 | 21,832,415 | 21,712,059 | 18,948,603 |
Financial results | For the years ended as of December 31, | ||
2019 | 2018 | 2017 | |
ThCh$ | ThCh$ | ThCh$ | |
Finance income | 13,117,641 | 15,794,456 | 5,050,952 |
Finance costs | (27,720,203) | (23,560,662) | (24,166,313) |
Foreign currency exchange differences | (9,054,155) | 3,299,657 | (2,563,019) |
Result as per adjustment units | (8,255,001) | 742,041 | (110,539) |
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Employees’ Bonuses
Short-term benefits are mainly comprised of recorded vacation (on accruals basis), bonuses and share compensation. Such benefits are recorded when the obligation is accrued and are usually paid within a 12-month periods, consequently, they are not discounted.
As ofDecember 31, 2016 and 2015, the total short-term benefits recorded in the Consolidated Statement of Financial Position are as follows:
Short-Term Employees’ Benefits | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Vacation | 9,405,040 | 8,442,610 |
Bonus and compensation | 13,112,180 | 13,174,493 |
Total | 22,517,220 | 21,617,103 |
The Company records the staff vacation cost on an accrual basis.
Severance Indemnity
The Company records a liability for the payment of an irrevocable severance indemnity, originated by collective and individual agreements entered into with certain groups of employees. Such obligation is determined by means of the current value of the benefit accrued cost, a method that considers several factors for the calculation such as estimates of future continuance, mortality rates, future salary increases and discount rates. The Company periodically evaluates the above-mentioned factors based on historical data and future projections, making adjustments that apply when checking changes sustained trend. The so-determined value is presented at the current value by using the severance benefits accrued method. The discount rate is determined by reference to market interest rates curves for high quality entrepreneurial bonds. The discount rate in Chile was 5.52% (6.36% in 2015) and in Argentina 31.88% (39.26% in 2015).
As ofDecember 31, 2016, the obligation recorded for severance indemnity is as follows:
Severance Indemnity | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Current | 321,008 | 94,956 |
Non-current | 21,832,415 | 18,948,603 |
Total | 22,153,423 | 19,043,559 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
The change in the severance indemnity during the year ended as of December 31, 2015 and 2016 was as follows:
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The figures recorded in the Consolidated Statement of Income as ofDecember 31, 2016, 2015 y 2014, are as follows:
Expense recognized for severance indemnity | For the years ended as of December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Current cost of service | 1,650,484 | 1,023,969 | 601,053 |
Past service cost | 342,039 | 131,204 | 1,090,429 |
Non-provided paid benefits | 7,851,201 | 4,377,570 | 5,916,192 |
Other | 1,114,112 | 646,502 | 335,808 |
Total expense recognized in Consolidated Statement of Income | 10,957,836 | 6,179,245 | 7,943,482 |
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Actuarial Assumptions
As mentioned inNote 2.20– Employees’ Benefits, the severance payment obligation is recorded at its actuarial value. The main actuarial assumptions used for the calculation of the severance indemnity obligation as ofDecember 31, 2016 and 2015, are as follows:
Actuarial Assumptions | Chile | Argentina | ||||
As of December 31, | As of December 31, | As of December 31, | As of December 31, | |||
2016 | 2015 | 2016 | 2015 | |||
Mortality table | RV-2014 | RV-2004 | Gam '83 | Gam'83 | ||
Annual interest rate | 5.52% | 6.36% | 31.88% | 39.26% | ||
Voluntary employee turnover rate | 1.9% | 1.9% | “ESA 77 Ajustada - 50%” | “ESA 77 Ajustada - 50%” | ||
Company’s needs rotation rate | 5.3% | 5.3% | “ESA 77 Ajustada - 50%” | “ESA 77 Ajustada - 50%” | ||
Salary increase (*) | 3.7% | 3.7% | 26.25% | 33.32% | ||
Estimated retirement age for (*) | Officers |
| 60 | 60 | 60 | 60 |
Other | Male | 65 | 65 | 65 | 65 | |
Female | 60 | 60 | 60 | 60 |
Sensitivity Analysis
The Following is a sensitivity analysis based on increased (decreased) of 1 percent on the discount rate:
Sensitivity Analysis | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
1% increase in the Discount Rate (Gain) | 1,421,484 | 1,164,165 |
1% decrease in the Discount Rate (Loss) | (1,649,255) | (1,344,213) |
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Personnel expense
The amounts recorded in the Consolidated Statement of Income for the years ended as ofDecember 31, 2016, 2015 and 2014, are as follows:
Personnel expense | For the years ended as of December 31, | ||
2016 | 2015 | 2014 | |
ThCh$ | ThCh$ | ThCh$ | |
Salaries | 145,766,757 | 138,359,074 | 119,623,310 |
Employees’ short-term benefits | 23,189,206 | 24,693,325 | 18,128,043 |
Employments termination benefits | 10,957,836 | 6,179,245 | 7,943,482 |
Other staff expense | 30,971,754 | 28,683,507 | 23,636,629 |
Total (1) | 210,885,553 | 197,915,151 | 169,331,464 |
(1)See Note 9.
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The detail of Non-controlling Interests is the following:
a.Equity
Equity | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Viña San Pedro Tarapacá S.A. | 75,092,267 | 72,512,897 |
Bebidas del Paraguay S.A. | 17,828,260 | 20,403,140 |
Aguas CCU-Nestlé Chile S.A. | 16,440,129 | 19,891,176 |
Compañía Cervecera Kunstmann S.A. | 5,740,305 | 4,979,490 |
Compañía Pisquera de Chile S.A. | 4,717,811 | 4,699,612 |
Manantial S.A. (1) | - | 3,767,028 |
Saenz Briones & Cía. S.A. | 799,111 | 962,286 |
Distribuidora del Paraguay S.A. | 2,197,241 | 1,949,490 |
Los Huemules S.R.L. (1) | - | 395,469 |
Other | 179,300 | 145,185 |
Total | 122,994,424 | 129,705,773 |
(1)SeeNote8.
b.Result
| For the years ended as of December 31, | ||
Result | 2016 | 2015 | 2014 |
| ThCh$ | ThCh$ | ThCh$ |
Aguas CCU-Nestlé Chile S.A. | 8,377,672 | 7,052,867 | 5,408,750 |
Viña San Pedro Tarapacá S.A. | 9,887,477 | 9,182,843 | 6,003,439 |
Compañía Cervecera Kunstmann S.A. | 1,636,906 | 1,267,335 | 966,212 |
Manantial S.A. | - | 861,072 | 684,427 |
Compañía Pisquera de Chile S.A. | 790,152 | 592,506 | 889,482 |
Saenz Briones & Cía. S.A. | 11,184 | 128,407 | (58,433) |
Distribuidora del Paraguay S.A. | 255,683 | 1,144,911 | 429,527 |
Bebidas del Paraguay S.A. | 576,986 | (486,790) | 253,516 |
Los Huemules S.R.L. | - | (45,370) | (48,171) |
Sidra La Victoria S.A. | - | - | 175 |
Other | 88,339 | 19,674 | 24,547 |
Total | 21,624,399 | 19,717,455 | 14,553,471 |
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c.Summarized financial information of non controlling interest:
| As of December 31, 2016 | As of December 31, 2015 |
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| ThCh$ | ThCh$ |
Assets and Liabilities | ||
Current assets | 601,165,755 | 566,432,064 |
Non-current assets | 716,889,536 | 727,700,381 |
Current liabilities | 368,293,544 | 336,696,932 |
Non-current liabilities | 146,234,462 | 218,031,963 |
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Dividends paid | 9,803,978 | 5,956,500 |
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The main significant Non-controlling interest is represented by Viña San Pedro Tarapacá S.A. with the following balances:
| As of December 31, 2016 | As of December 31, 2015 |
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| ThCh$ | ThCh$ |
Assets and Liabilities | ||
Current assets | 145,866,023 | 142,945,036 |
Non-current assets | 171,099,295 | 165,343,429 |
Current liabilities | 70,351,438 | 70,099,022 |
Non-current liabilities | 33,795,671 | 32,681,398 |
Net sales | 201,402,052 | 189,515,048 |
Net income of year | 28,021,996 | 26,024,999 |
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Dividends paid by Viña San Pedro amounted to ThCh$ 17,682,375, ThCh$ 13,474,959, and ThCh$ 5,436,350, for the years ended December 31, 2016; 2015, and 2014, respectively.
Subscribed and paid-up CapitalCurrent assets are denominated in the following currencies:
As of December 31, 2016 and December 31, 2015, the Company’s capital shows a balance of ThCh$ 562,693,346, divided into 369,502,872 shares of common stock without face value, entirely subscribed and paid-up. The Company has issued only one series of common shares. Such common shares are registered for trading at the Santiago Stock Exchange, the Chilean Electronic Stock Exchange and the Valparaíso Stock Exchange, and at the New York Stock Exchange /NYSE), evidenced by ADS (American Deposcitary Shares), with an equivalence of two shares per ADS (See Note 1).
The Company has not issued any others shares or convertible instruments during the period, thus changing the number of outstanding shares as of December 31, 2016 and 2015.
Capital Management
The main purpose, when managing shareholder’s capital, is to maintain an adequate credit risk profile and a healthy capital ratio, allowing the access of the Company to the capitals market for the development of its medium and long term purposes and, at the same time, to maximize shareholder’s return.
CURRENT ASSETS | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Current assets |
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Cash and cash equivalents | 196,369,224 | 319,014,050 |
CLP | 152,203,454 | 260,844,976 |
USD | 25,497,806 | 19,026,630 |
Euros | 2,592,865 | 954,640 |
ARS | 7,473,053 | 33,207,046 |
UYU | 1,384,395 | 548,975 |
PYG | 2,763,191 | 2,495,748 |
BOB | 3,323,553 | 1,259,765 |
Others currencies | 1,130,907 | 676,270 |
Other financial assets | 9,815,358 | 22,745,469 |
CLP | 1,411,002 | 1,284,308 |
USD | 8,221,686 | 20,990,836 |
Euros | 171,824 | 438,369 |
Others currencies | 10,846 | 31,956 |
Other non-financial assets | 22,395,591 | 18,861,414 |
CLP | 14,650,054 | 14,998,511 |
UF | 435,913 | 282,494 |
USD | 1,320,765 | 860,506 |
Euros | 4,785 | 5,078 |
ARS | 5,434,632 | 2,061,473 |
UYU | 79,070 | 72,792 |
PYG | 312,473 | 434,399 |
BOB | 157,899 | 146,161 |
Trade and other current receivables | 300,013,940 | 320,702,339 |
CLP | 181,492,816 | 191,891,137 |
UF | 1,280,465 | 1,394,916 |
USD | 35,796,040 | 34,113,849 |
Euros | 9,709,996 | 10,152,559 |
ARS | 56,518,792 | 65,748,507 |
UYU | 4,350,677 | 5,128,068 |
PYG | 7,183,907 | 8,588,066 |
BOB | 1,919,063 | 1,340,388 |
Others currencies | 1,762,184 | 2,344,849 |
Accounts receivable from related parties | 3,278,685 | 3,048,841 |
CLP | 3,118,442 | 2,959,696 |
UF | 82,180 | 79,231 |
USD | 77,375 | 9,480 |
PYG | 688 | 434 |
Inventories | 232,434,461 | 228,062,237 |
CLP | 183,592,686 | 181,084,437 |
USD | - | 198,068 |
ARS | 34,513,163 | 34,392,396 |
UYU | 1,826,086 | 2,403,427 |
PYG | 8,107,700 | 7,669,975 |
BOB | 4,394,826 | 2,313,934 |
Biological assets | 9,459,071 | 8,489,873 |
CLP | 8,568,831 | 7,914,384 |
ARS | 890,240 | 575,489 |
Current tax assets | 15,132,290 | 17,302,429 |
CLP | 8,908,539 | 13,262,197 |
ARS | 6,029,315 | 3,922,627 |
UYU | 194,436 | 117,605 |
Non-current assets of disposal groups classified as held for sale | 383,138 | 2,780,607 |
CLP | - | 1,884,958 |
ARS | 383,138 | 895,649 |
Total current assets | 789,281,758 | 941,007,259 |
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CLP | 553,945,824 | 676,124,604 |
UF | 1,798,558 | 1,756,641 |
USD | 70,913,672 | 75,199,369 |
Euros | 12,479,470 | 11,550,646 |
ARS | 111,242,333 | 140,803,187 |
UYU | 7,834,664 | 8,270,867 |
PYG | 18,367,959 | 19,188,622 |
BOB | 9,795,341 | 5,060,248 |
Others currencies | 2,903,937 | 3,053,075 |
Total current assets by currencies | 789,281,758 | 941,007,259 |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Consolidated Statement of Comprehensive Income
As of December 31, 2016, 2015 and 2014,Non-Current assets are denominated in the detail of the comprehensive income and expense of the term is as follows:following currencies:
Other Income and expense charged or credited against net equity | Gross Balance | Tax | Net Balance |
ThCh$ | ThCh$ | ThCh$ | |
Cash flow hedge (1) | 84,962 | (20,648) | 64,314 |
Conversion differences of subsidiaries abroad (1) | (27,280,176) | - | (27,280,176) |
Actuarial gains and losses on defined benefit plans reserves | (2,355,384) | 659,198 | (1,696,186) |
Total comprehensive income as of december 31, 2016 | (29,550,598) | 638,550 | (28,912,048) |
Other Income and expense charged or credited against net equity | Gross Balance | Tax | Net Balance |
ThCh$ | ThCh$ | ThCh$ | |
Cash flow hedge (1) | 80,693 | (17,563) | 63,130 |
Conversion differences of subsidiaries abroad (1) | (29,678,944) | - | (29,678,944) |
Actuarial gains and losses on defined benefit plans reserves | (939,433) | 314,541 | (624,892) |
Total comprehensive income as of december 31, 2015 | (30,537,684) | 296,978 | (30,240,706) |
Other Income and expense charged or credited against net equity | Gross Balance | Tax | Net Balance |
ThCh$ | ThCh$ | ThCh$ | |
Cash flow hedge (1) | (155,258) | 39,470 | (115,788) |
Conversion differences of subsidiaries abroad (1) | (4,629,683) | - | (4,629,683) |
Actuarial gains and losses on defined benefit plans reserves | (1,884,054) | 501,689 | (1,382,365) |
Total comprehensive income As of December 31, 2014 | (6,668,995) | 541,159 | (6,127,836) |
NON-CURRENT ASSETS | As of December 31, 2019 | As of December 31, 2018 |
ThCh$ | ThCh$ | |
Non-current assets |
|
|
Other financial assets | 4,670,538 | 3,325,079 |
UF | 4,571,984 | 3,325,079 |
Euros | 98,554 | - |
Trade and other non-current receivables | 3,224,627 | 3,363,123 |
CLP | 353,862 | 88,306 |
UF | 1,962,249 | 1,283,676 |
ARS | 680,438 | 1,804,963 |
PYG | 228,078 | 186,178 |
Other non-financial assets | 7,042,297 | 5,007,150 |
CLP | 2,887,597 | 4,278,605 |
USD | 187,185 | 173,693 |
ARS | 3,953,224 | 540,495 |
PYG | 14,291 | 14,357 |
Accounts receivable from related parties | 118,122 | 190,865 |
UF | 118,122 | 190,865 |
Investments accounted for using the equity method | 136,098,062 | 142,017,781 |
CLP | 15,251,038 | 19,407,798 |
USD | 120,237,275 | 122,031,829 |
ARS | 609,749 | 578,154 |
Intangible assets other than goodwill | 125,618,666 | 118,964,142 |
CLP | 73,452,410 | 67,739,510 |
ARS | 39,888,291 | 37,960,927 |
UYU | 2,624,125 | 2,912,675 |
PYG | 3,686,290 | 3,848,057 |
BOB | 5,967,550 | 6,502,973 |
Goodwill | 124,955,438 | 123,044,901 |
CLP | 77,020,100 | 76,817,632 |
ARS | 26,020,761 | 24,871,945 |
UYU | 4,422,841 | 4,839,916 |
PYG | 5,214,846 | 5,236,732 |
BOB | 12,276,890 | 11,278,676 |
Property, plant and equipment (net) | 1,097,534,155 | 1,021,266,631 |
CLP | 873,378,864 | 830,151,351 |
ARS | 167,553,390 | 142,669,147 |
UYU | 15,013,733 | 14,890,634 |
PYG | 21,686,062 | 18,030,887 |
BOB | 19,902,106 | 15,524,612 |
Investment property | 8,313,274 | 8,715,956 |
CLP | 3,614,497 | 4,332,690 |
ARS | 4,698,777 | 4,383,266 |
Deferred tax assets | 54,528,648 | 37,691,088 |
CLP | 43,093,811 | 32,989,545 |
ARS | 10,018,983 | 2,955,530 |
UYU | 273,198 | 223,831 |
PYG | 47,859 | 47,456 |
BOB | 1,094,797 | 1,474,726 |
Current tax assets non-current | 2,305,129 | 1,270,941 |
CLP | 2,276,104 | 1,172,749 |
ARS | 29,025 | 98,192 |
Total non-current assets | 1,564,408,956 | 1,464,857,657 |
|
|
|
|
|
|
CLP | 1,091,328,283 | 1,036,978,186 |
UF | 6,652,355 | 4,799,620 |
USD | 120,424,460 | 122,205,522 |
Euros | 98,554 | - |
ARS | 253,452,638 | 215,862,619 |
UYU | 22,333,897 | 22,867,056 |
PYG | 30,877,426 | 27,363,667 |
BOB | 39,241,343 | 34,780,987 |
Total non-current assets by currencies | 1,564,408,956 | 1,464,857,657 |
(1)These concepts will be reclassified to the Statement of Income when its settled.
The movement of comprehensive income and expense is as follows:
a)As of December 31, 2016:
Changes | Currency translation | Hedge reserves | Actuarial gains and | Total other |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Increase (Decrease) | (27,280,176) | (399,558) | (2,355,384) | (30,035,118) |
Deferred taxes | - | 89,982 | 659,198 | 749,180 |
Reclassification to the result by function | - | 484,521 | - | 484,521 |
Reclassification of deferred taxes related to other reserves | - | (110,631) | - | (110,631) |
Total changes in equity | (27,280,176) | 64,314 | (1,696,186) | (28,912,048) |
Equity holders of the parent | (25,123,546) | 41,607 | (1,623,299) | (26,705,238) |
Non-controlling interests | (2,156,630) | 22,707 | (72,887) | (2,206,810) |
Total changes in equity | (27,280,176) | 64,314 | (1,696,186) | (28,912,048) |
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
b)As of December 31, 2015:
Changes | Currency translation difference | Hedge reserves | Actuarial gains and losses on defined benefit plans reserves | Total other reserves |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Increase (Decrease) | (29,678,944) | 593,993 | (939,433) | (30,024,384) |
Deferred taxes | - | (145,800) | 314,541 | 168,741 |
Reclassification to the result by function | - | (513,298) | - | (513,298) |
Reclassification of deferred taxes related to other reserves | - | 128,235 | - | 128,235 |
Total changes in equity | (29,678,944) | 63,130 | (624,892) | (30,240,706) |
Equity holders of the parent | (27,652,528) | 40,844 | (589,731) | (28,201,415) |
Non-controlling interests | (2,026,416) | 22,286 | (35,161) | (2,039,291) |
Total changes in equity | (29,678,944) | 63,130 | (624,892) | (30,240,706) |
Income per share
The basic income per share is calculated asCurrent liabilities are denominated in the ratio between the net income (loss) of the term corresponding to shares holders and the weighted average number of valid outstanding shares during such term.
The diluted earnings per share is calculated as the ratio between the net income (loss) for the period attributable to shares holders and the weighted average additional common shares that would have been outstanding if it had become all ordinary potential dilutive shares.
As of December 31, 2016, 2015 y 2014, the information used for the calculation of the income as per each basic and diluted share is as follows:following currencies:
Income per share | For the years ended as of December 31, | ||
2016 | 2015 | 2014 | |
Equity holders of the controlling company (ThCh$) | 118,457,488 | 120,808,135 | 106,238,450 |
Weighted average number of shares | 369,502,872 | 369,502,872 | 369,502,872 |
Basic income per share (in Chilean pesos) | 320.59 | 326.95 | 287.52 |
Equity holders of the controlling company (ThCh$) | 118,457,488 | 120,808,135 | 106,238,450 |
Weighted average number of shares | 369,502,872 | 369,502,872 | 369,502,872 |
Diluted income per share (in Chilean pesos) | 320.59 | 326.95 | 287.52 |
CURRENT LIABILITIES | As of December 31, 2019 | As of December 31, 2018 | ||
Until 90 days | More the 91 days until 1 year | Until 90 days | More the 91 days until 1 year | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Current liabilities |
|
|
|
|
Other financial liabilities | 12,051,690 | 56,334,038 | 11,197,060 | 51,569,886 |
CLP | 2,816,224 | 27,718,532 | 1,579,060 | 19,510,742 |
UF | 1,271,049 | 8,033,376 | 1,695,546 | 13,302,035 |
USD | 594,829 | 20,040,156 | 4,509,884 | 16,667,379 |
Euros | 94,247 | 92,478 | 1,153,302 | - |
ARS | 6,887,233 | 77,247 | 2,098,712 | 1,762,947 |
UI | 346,300 | 372,249 | 110,633 | 326,783 |
BOB | 41,808 | - | 38,735 | - |
Others currencies | - | - | 11,188 | - |
Trade and other current payables | 302,997,598 | 3,657,960 | 297,834,912 | 5,545,256 |
CLP | 174,164,421 | 1,250,912 | 177,575,915 | 1,796,915 |
USD | 44,197,074 | 1,940,430 | 43,335,127 | 2,746,757 |
Euros | 7,212,069 | 451,610 | 4,921,252 | 974,462 |
ARS | 67,565,461 | - | 63,786,646 | 612 |
UYU | 2,490,915 | - | 2,202,163 | - |
PYG | 2,991,595 | 14,942 | 2,367,325 | 26,444 |
BOB | 4,046,335 | - | 3,302,514 | - |
Others currencies | 329,728 | 66 | 343,970 | 66 |
Accounts payable to related parties | 8,908,578 | 70,856 | 6,651,051 | 285,859 |
CLP | 3,366,289 | 70,856 | 4,042,438 | - |
USD | 3,167,473 | - | 903,988 | 285,859 |
Euros | 2,172,056 | - | 1,619,082 | - |
PYG | 11,950 | - | 11,267 | - |
BOB | 30,565 | - | 11,879 | - |
Others currencies | 160,245 | - | 62,397 | - |
Other current provisions | 2,998,462 | 42,468 | 271,812 | 133,257 |
CLP | 2,847,167 | 42,468 | 5,380 | 133,257 |
ARS | 151,295 | - | 266,432 | - |
Current tax liabilities | 6,759,999 | 13,744,375 | 56,895,995 | 18,989,454 |
CLP | 5,575,556 | 13,661,546 | 3,932,875 | 18,989,454 |
ARS | 882,944 | 82,829 | 52,201,867 | - |
UYU | 188,335 | - | 249,988 | - |
PYG | 113,164 | - | 511,265 | - |
Provisions for employee benefits | 12,695,440 | 14,660,765 | 16,181,182 | 15,612,981 |
CLP | 6,067,859 | 14,660,765 | 5,530,208 | 15,612,981 |
ARS | 5,703,223 | - | 9,839,822 | - |
UYU | 393,672 | - | 383,167 | - |
PYG | 208,769 | - | 271,167 | - |
BOB | 321,917 | - | 156,818 | - |
Other non-financial liabilities | 1,311,982 | 47,047,785 | 2,479,960 | 162,075,580 |
CLP | - | 47,047,785 | - | 162,075,580 |
USD | 1,311,982 | - | 2,467,789 | - |
ARS | - | - | 12,171 | - |
Total current liabilities | 347,723,749 | 135,558,247 | 391,511,972 | 254,212,273 |
|
|
|
|
|
|
|
|
|
|
CLP | 194,837,516 | 104,452,864 | 192,665,876 | 218,118,929 |
UF | 1,271,049 | 8,033,376 | 1,695,546 | 13,302,035 |
USD | 49,271,358 | 21,980,586 | 51,216,788 | 19,699,995 |
Euros | 9,478,372 | 544,088 | 7,693,636 | 974,462 |
ARS | 81,190,156 | 160,076 | 128,205,650 | 1,763,559 |
UYU | 3,072,922 | - | 2,835,318 | - |
PYG | 3,325,478 | 14,942 | 3,161,024 | 26,444 |
UI | 346,300 | 372,249 | 110,633 | 326,783 |
BOB | 4,440,625 | - | 3,509,946 | - |
Others currencies | 489,973 | 66 | 417,555 | 66 |
Total current liabilities by currency | 347,723,749 | 135,558,247 | 391,511,972 | 254,212,273 |
As of December 31, 2016, 2015 y 2014, the Company has not issued any convertible or other kind of instruments creating diluting effects.
Distributable net Income
In accordance with Circular No 1945 from the SVS on November 4, 2009, the Board of Directors agreed that the net distributable profit for the year 2009 will be that reflected in the financial statements attributable to equity holders of the parents,without adjustment it. The above agreement remains in effect for the year ended December 31, 2016.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Dividends
The Company’s dividend policy consists of annually distributing at least 50% of the net distributable profit of the year.
As of December 31, 2016, 2015 and 2014, the Company has distributedNon-Current liabilities are denominated in the following dividends:currencies:
Dividend Nº | Payment Date | Type of Dividend | Dividends per Share | Related to FY |
247 | 17-04-2014 | Final | 103.48857 | 2013 |
248 | 09-01-2015 | Interim | 63.0000 | 2014 |
249 | 23-04-2015 | Final | 98.78138 | 2014 |
250 | 08-01-2016 | Interim | 66.0000 | 2015 |
251 | 22-04-2016 | Final | 97.47388 | 2015 |
252 | 05-01-2017 | Interim | 66.0000 | 2016 |
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|
|
|
|
NON-CURRENT LIABILITIES | As of December 31, 2019 | As of December 31, 2018 | ||||
More than 1 year until 3 years | More than 3 year until 5 years | Over 5 years | More than 1 year until 3 years | More than 3 year until 5 years | Over 5 years | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Non-current liabilities |
|
|
|
|
|
|
Other financial liabilities | 102,736,775 | 23,336,497 | 135,696,016 | 24,970,597 | 68,367,746 | 134,846,954 |
CLP | 64,961,148 | 3,488,251 | 1,710,701 | 3,412,966 | 55,837,517 | 43,764 |
UF | 13,498,582 | 12,374,564 | 131,223,152 | 10,724,171 | 10,786,277 | 131,315,290 |
USD | 20,325,911 | 629,853 | 1,839,685 | 8,059,332 | - | - |
Euros | 202,592 | 59,089 | - | 157,028 | - | - |
ARS | 116,255 | - | - | 1,727 | - | - |
UI | 239,917 | - | - | 871,421 | - | - |
BOB | 3,392,370 | 6,784,740 | 922,478 | 1,743,952 | 1,743,952 | 3,487,900 |
Trade and other non-current payables | 3,430 | - | 23,120 | 5,142 | - | 7,271 |
CLP | - | - | 23,120 | - | - | 7,271 |
BOB | 3,430 | - | - | 5,142 | - | - |
Other non- current provisions | 181,318 | 221,458 | 129,185 | 6,970,327 | 281,654 | 173,778 |
CLP | 2,752 | - | - | 6,750,083 | - | - |
ARS | 44,491 | 221,458 | 129,185 | 81,026 | 281,654 | 173,778 |
UYU | 134,075 | - | - | 139,218 | - | - |
Deferred tax liabilities | 34,461,423 | 14,884,675 | 82,236,460 | 23,241,269 | 14,084,656 | 71,174,246 |
CLP | 30,680,639 | 12,364,153 | 60,223,544 | 20,302,096 | 12,761,025 | 56,936,976 |
ARS | 3,773,135 | 2,515,423 | 18,082,144 | 2,839,763 | 1,315,431 | 10,490,282 |
UYU | - | - | 883,439 | 46,754 | - | 897,718 |
PYG | 7,649 | 5,099 | 459,957 | 52,656 | 8,200 | 422,346 |
BOB | - | - | 2,587,376 | - | - | 2,426,924 |
Provisions employee benefits | 1,149,024 | - | 32,422,114 | 1,258,674 | - | 25,642,414 |
CLP | - | - | 29,164,931 | - | - | 22,959,627 |
ARS | - | - | 3,257,183 | - | - | 2,682,787 |
PYG | 382,348 | - | - | 391,302 | - | - |
BOB | 766,676 | - | - | 867,372 | - | - |
Total non-current liabilities | 138,531,970 | 38,442,630 | 250,506,895 | 56,446,009 | 82,734,056 | 231,844,663 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
CLP | 95,644,539 | 15,852,404 | 91,122,296 | 30,465,145 | 68,598,542 | 79,947,638 |
UF | 13,498,582 | 12,374,564 | 131,223,152 | 10,724,171 | 10,786,277 | 131,315,290 |
USD | 20,325,911 | 629,853 | 1,839,685 | 8,059,332 | - | - |
Euros | 202,592 | 59,089 | - | 157,028 | - | - |
ARS | 3,933,881 | 2,736,881 | 21,468,512 | 2,922,516 | 1,597,085 | 13,346,847 |
UYU | 134,075 | - | 883,439 | 185,972 | - | 897,718 |
PYG | 389,997 | 5,099 | 459,957 | 443,958 | 8,200 | 422,346 |
UI | 239,917 | - | - | 871,421 | - | - |
BOB | 4,162,476 | 6,784,740 | 3,509,854 | 2,616,466 | 1,743,952 | 5,914,824 |
Total non-current liabilities by currency | 138,531,970 | 38,442,630 | 250,506,895 | 56,446,009 | 82,734,056 | 231,844,663 |
On April 9, 2014, at the General Shareholders Meeting it was agreed to pay the final Dividend No. 247, amounting to ThCh$ 38,239,323 corresponding to $ 103.48857 per share. This dividend was paid on April 17, 2014.
On April 15, 2015, at the General Shareholders Meeting it was agreed to pay the final Dividend No. 249, amounting to ThCh$ 36,500,004 corresponding to $ 98.78138 per share. This dividend was paid on April 23, 2015.
On April 13, 2016, at the General Shareholders Meeting it was agreed to pay the final Dividend No. 250, amounting to ThCh$ 36,016,878 corresponding to $ 97.47388 per share. This dividend was paid on April 22, 2016.
Other Reserves
The reserves that are a part of the Company’s equity are as follows:
Currency Translation Reserves: This reserve originated mainly from the translation of foreign subsidiaries’ financial statements which functional currency is different from the presentation currency of the Consolidated Financial Statements. As of December 31, 2016, it amounts to a negative reserve of ThCh$ 120,558,932 (ThCh$ 95,435,386 in 2015 and ThCh$ 67,782,858 in 2014).
Hedge reserve: This reserve originated from the hedge accounting application of financial liabilities for. The reserve is reversed at the end of the hedge agreement, or when the transaction ceases qualifying hedge accounting, whichever is first. The reserve effects are transferred to income. As of December 31, 2016, it amounts to a negative reserve of ThCh$ 39,081 (ThCh$ 2,526 in 2015 and ThCh$ 43,370 in 2014), net of deferred taxes.
Actuarial gains and losses on defined benefit plans reserves: This reserve originates from January 1, 2013, due application of the amendment to IAS 19. The amount recorded is a negative reserve of ThCh$ 3,925,717 (ThCh$ 2,302,418 in 2015 and ThCh$ 1,712,687 in 2014), net of deferred taxes.
Other reserves: As of December 31, 2016, 2015 y 2014 the amount is a negative reserve of ThCh$ 18,527,810, ThCh$ 5,486,086 and ThCh$ 5,511,629, respectively. Such reserves relate mainly to the following concepts:
- Adjustment due to re-assessment of fixed assets carried out in 1979 (increased ofr ThCh$ 4,087,396).
- Price level restatement of paid-up capital registered as of December 31, 2008, according to SVS Circular Letter Nª456 (decreased for ThCh$ 17,615,333).
- Difference in purchase of shares of the subsidiary Viña San Pedro Tarapacá S.A. made during year 2012 and 2013 (Note 1) (decreased for ThCh$ 9,779,475).
- Difference in purchase of shares of the subsidiary Manantial S.A. made during year 2016 (Note 1) (decreased for ThCh$ 7,801,153).
- Difference in purchase of shares of the Alimentos Nutrabien S.A. made during year 2016 (Note 1) (decreased for ThCh$5,426,209).
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
Current assets are denominated in the following currencies:
CURRENT ASSETS | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Current assets |
|
|
Cash and cash equivalents | 133,789,950 | 192,554,239 |
CLP | 117,668,934 | 171,683,257 |
USD | 8,237,893 | 5,385,644 |
Euros | 786,887 | 955,840 |
$ARG | 2,187,381 | 5,701,754 |
UYU | 1,136,782 | 948,816 |
PYG | 3,269,045 | 7,519,619 |
Other currencies | 503,028 | 359,309 |
Other financial assets | 8,406,491 | 13,644,105 |
CLP | 548,700 | 1,052,312 |
USD | 7,604,996 | 12,495,117 |
Euros | 160,875 | 57,833 |
PYG | 80,846 | 7,261 |
Other currencies | 11,074 | 31,582 |
Other non-financial assets | 15,859,137 | 17,654,373 |
CLP | 11,994,895 | 12,083,128 |
UF | 139,776 | 29,882 |
USD | 683,933 | 972,718 |
Euros | 85,753 | 723,216 |
$ARG | 2,641,862 | 3,780,430 |
UYU | 86,842 | 7,789 |
PYG | 226,076 | 57,210 |
Accounts receivable - trade and other receivables | 280,766,784 | 252,225,937 |
CLP | 179,861,356 | 158,757,937 |
UF | 676,843 | 7,102 |
USD | 24,449,473 | 25,498,590 |
Euros | 7,025,446 | 7,463,166 |
$ARG | 56,347,636 | 48,535,814 |
UYU | 5,304,719 | 4,074,908 |
PYG | 5,844,650 | 6,111,636 |
Other currencies | 1,256,661 | 1,776,784 |
Accounts receivable from related companies | 3,523,825 | 4,788,930 |
CLP | 3,373,508 | 4,604,853 |
UF | 107,162 | 104,118 |
USD | 43,155 | 79,959 |
Inventories | 199,290,678 | 174,227,415 |
CLP | 168,749,946 | 147,189,195 |
USD | 287,776 | 2,474,304 |
Euros | 25,634 | 237,848 |
$ARG | 25,104,485 | 18,850,888 |
UYU | 1,590,709 | 1,645,888 |
PYG | 3,532,128 | 3,829,292 |
Biological assets | 7,948,379 | 7,633,340 |
CLP | 7,370,852 | 7,130,962 |
$ARG | 577,527 | 502,378 |
Tax receivables | 29,423,479 | 15,264,220 |
CLP | 26,525,628 | 11,080,218 |
$ARG | 2,897,851 | 4,184,002 |
Non-current assets held for sale | 2,377,887 | 6,319,316 |
CLP | 2,046,179 | 5,890,543 |
$ARG | 331,708 | 428,773 |
Total current assets | 681,386,610 | 684,311,875 |
|
|
|
|
|
|
CLP | 518,139,998 | 519,472,405 |
UF | 923,781 | 141,102 |
USD | 41,307,226 | 46,906,332 |
Euros | 8,084,595 | 9,437,903 |
$ARG | 90,088,450 | 81,984,039 |
UYU | 8,119,052 | 6,677,401 |
PYG | 12,952,745 | 17,525,018 |
Other currencies | 1,770,763 | 2,167,675 |
Total current assets by currencies | 681,386,610 | 684,311,875 |
|
Non-Current assets are denominated in the following currencies:
NON-CURRENT ASSETS | As of December 31, 2016 | As of December 31, 2015 |
ThCh$ | ThCh$ | |
Non-current assets |
|
|
Other financial assets | 203,784 | 80,217 |
Euros | 203,784 | 80,217 |
Accounts receivable non-current | 3,563,797 | - |
CLP | 35,391 | - |
UF | 2,936,552 | - |
$ARG | 426,311 | - |
PYG | 165,543 | - |
Other non-financial assets | 5,369,211 | 5,220,954 |
CLP | 3,177,139 | 3,034,450 |
USD | 669,470 | 80,137 |
$ARG | 1,519,236 | 1,839,876 |
PYG | 3,366 | 266,491 |
Accounts receivable from related companies | 356,665 | 445,938 |
UF | 356,665 | 445,938 |
Investments accounted for using the equity method | 64,404,946 | 49,995,263 |
CLP | 64,005,129 | 49,884,870 |
$ARG | 399,817 | 110,393 |
Intangible assets different than goodwill | 77,678,850 | 71,868,007 |
CLP | 64,981,854 | 57,749,615 |
$ARG | 5,508,504 | 7,039,283 |
UYU | 3,247,094 | 3,296,510 |
PYG | 3,941,398 | 3,782,599 |
Goodwill | 96,663,023 | 99,490,372 |
CLP | 76,382,543 | 76,382,543 |
USD | 13,402,038 | 14,216,606 |
$ARG | 6,878,442 | 8,891,223 |
Property, plant and equipment (net) | 903,831,702 | 872,667,210 |
CLP | 787,734,139 | 763,339,926 |
USD | 26,072 | - |
Euros | 971,382 | - |
$ARG | 82,920,719 | 76,412,324 |
UYU | 15,436,334 | 13,747,872 |
PYG | 16,743,056 | 19,167,088 |
Investment property | 6,253,827 | 6,838,002 |
CLP | 5,015,603 | 4,401,400 |
$ARG | 1,238,224 | 2,436,602 |
Deferred tax assets | 31,864,635 | 34,529,593 |
CLP | 29,547,881 | 29,392,503 |
$ARG | 2,108,426 | 5,032,803 |
UYU | 156,714 | 10,801 |
PYG | 51,614 | 93,486 |
Total non-current assets | 1,190,190,440 | 1,141,135,556 |
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CLP | 1,030,879,679 | 984,185,307 |
UF | 3,293,217 | 445,938 |
USD | 14,097,580 | 14,296,743 |
Euros | 1,175,166 | 80,217 |
$ARG | 100,999,679 | 101,762,504 |
UYU | 18,840,142 | 17,055,183 |
PYG | 20,904,977 | 23,309,664 |
Total non-current assets by currencies | 1,190,190,440 | 1,141,135,556 |
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Current liabilities are denominated in the following currencies:
CURRENT LIABILITIES | As of December 31, 2016 | As of December 31, 2015 | ||
Until 90 days | More the 91 days until 1 year | Until 90 days | More the 91 days until 1 year | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Current liabilities |
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Other financial liabilities | 19,600,116 | 47,079,817 | 7,223,935 | 36,750,056 |
CLP | 946,301 | 39,944,625 | 1,239,182 | 17,035,281 |
UF | 892,328 | 2,843,982 | 764,199 | 2,888,550 |
USD | 11,280,437 | 388,874 | 303,416 | 10,957,905 |
Euros | 523,079 | - | 52,368 | - |
$ARG | 5,542,674 | 3,263,782 | 4,862,819 | 5,523,470 |
UYI | 406,353 | 638,554 | - | 344,850 |
Other currencies | 8,944 | - | 1,951 | - |
Account payable - trade and other payables | 258,298,853 | 1,378,999 | 226,844,826 | 891,977 |
CLP | 166,920,713 | 303,060 | 148,162,838 | 303,060 |
UF | 30,798 | - | 9,933 | - |
USD | 18,281,460 | 937,822 | 17,676,381 | 566,572 |
Euros | 8,160,258 | - | 6,402,517 | - |
$ARG | 59,603,954 | - | 47,686,146 | - |
UYU | 3,309,074 | - | 2,607,826 | - |
PYG | 1,638,181 | 138,117 | 3,874,709 | 22,345 |
Other currencies | 354,415 | - | 424,476 | - |
Accounts payable to related companies | 9,530,071 | - | 11,624,218 | - |
CLP | 5,329,217 | - | 4,267,123 | - |
USD | 2,196 | - | 151,578 | - |
Euros | 4,197,020 | - | 7,205,517 | - |
PYG | 1,638 | - | - | - |
Other short-term provisons | 339,072 | 70,092 | 382,152 | 121,288 |
CLP | - | 70,092 | - | 121,288 |
$ARG | 339,072 | - | 382,152 | - |
Tax liabilities | 7,544,398 | 4,262,036 | 3,664,162 | 8,533,862 |
CLP | 5,316,283 | 4,262,036 | 3,487,812 | 5,802,277 |
USD | 22,183 | - | - | 26,747 |
$ARG | 1,966,866 | - | - | 2,704,838 |
UYU | 239,066 | - | 176,350 | - |
Employee benefits provisions | 22,255,693 | 582,535 | 21,388,736 | 323,323 |
CLP | 16,579,716 | 582,535 | 16,558,870 | 323,323 |
$ARG | 5,367,378 | - | 4,437,159 | - |
UYU | 308,599 | - | 392,707 | - |
Other non-financial liabilities | 24,421,940 | 46,948,032 | 28,440,259 | 42,501,885 |
CLP | 24,388,426 | 46,948,032 | 28,350,457 | 42,501,885 |
$ARG | 33,514 | - | 89,802 | - |
Total current liabilities | 341,990,143 | 100,321,511 | 299,568,288 | 89,122,391 |
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CLP | 219,480,656 | 92,110,380 | 202,066,282 | 66,087,114 |
UF | 923,126 | 2,843,982 | 774,132 | 2,888,550 |
USD | 29,586,276 | 1,326,696 | 18,131,375 | 11,551,224 |
Euros | 12,880,357 | - | 13,660,402 | - |
$ARG | 72,853,458 | 3,263,782 | 57,458,078 | 8,228,308 |
UYU | 3,856,739 | - | 3,176,883 | - |
PYG | 1,639,819 | 138,117 | 3,874,709 | 22,345 |
UYI | 406,353 | 638,554 | - | 344,850 |
Other currencies | 363,359 | - | 426,427 | - |
Total current liabilities by currency | 341,990,143 | 100,321,511 | 299,568,288 | 89,122,391 |
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Non-Current liabilities are denominated in the following currencies:
NON-CURRENT LIABILITIES | As of December 31, 2016 | As of December 31, 2015 | ||||
More than 1 year until 3 years | More than 3 year until 5 years | More than 5 years | More than 1 year until 3 years | More than 3 year until 5 years | More than 5 years | |
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |
Non-current liabilities |
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Other financial liabilities | 36,676,882 | 15,610,067 | 65,657,084 | 40,890,654 | 20,356,339 | 75,679,552 |
CLP | 5,320,385 | 626,411 | - | 18,284,794 | 1,784,088 | - |
UF | 17,811,112 | 14,983,656 | 65,657,084 | 5,523,414 | 17,335,859 | 75,679,552 |
USD | 5,269,733 | - | - | 5,590,024 | - | - |
$ARG | 7,579,047 | - | - | 9,790,622 | 1,236,392 | - |
UYI | 696,605 | - | - | 1,701,800 | - | - |
Other accounys payable | 1,082,898 | - | - | 1,098,985 | 546,113 | - |
CLP | 808,160 | - | - | 808,161 | 404,081 | - |
UF | 6,950 | - | - | 6,760 | - | - |
USD | 267,788 | - | - | 284,064 | 142,032 | - |
Other long term provisions | 507,259 | 401,054 | 415,207 | 712,806 | 410,073 | 353,639 |
CLP | - | 49,996 | - | - | 49,996 | 15,000 |
$ARG | 258,278 | 351,058 | 415,207 | 396,987 | 360,077 | 338,639 |
UYU | 248,981 | - | - | 314,991 | - | - |
PYG | - | - | - | 828 | - | - |
Deferred tax liabilities | 26,487,686 | 7,963,522 | 52,338,743 | 21,787,421 | 8,622,777 | 59,827,645 |
CLP | 26,183,335 | 7,767,522 | 48,824,727 | 21,175,080 | 8,219,255 | 53,911,744 |
$ARG | 287,582 | 191,721 | 2,048,919 | 601,313 | 400,875 | 4,288,716 |
UYU | - | - | 1,015,197 | - | - | 1,154,787 |
PYG | 16,769 | 4,279 | 449,900 | 11,028 | 2,647 | 472,398 |
Employee benefits provisons | 335,925 | - | 21,496,490 | 643,905 | - | 18,304,698 |
CLP | - | - | 18,481,842 | - | - | 15,369,150 |
$ARG | - | - | 3,014,648 | - | - | 2,935,548 |
PYG | 335,925 | - | - | 643,905 | - | - |
Total non-current liabilities | 65,090,650 | 23,974,643 | 139,907,524 | 65,133,771 | 29,935,302 | 154,165,534 |
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CLP | 32,311,880 | 8,443,929 | 67,306,569 | 40,268,035 | 10,457,420 | 69,295,894 |
UF | 17,818,062 | 14,983,656 | 65,657,084 | 5,530,174 | 17,335,859 | 75,679,552 |
USD | 5,537,521 | - | - | 5,874,088 | 142,032 | - |
$ARG | 8,124,907 | 542,779 | 5,478,774 | 10,788,922 | 1,997,344 | 7,562,903 |
UYU | 248,981 | - | 1,015,197 | 314,991 | - | 1,154,787 |
PYG | 352,694 | 4,279 | 449,900 | 655,761 | 2,647 | 472,398 |
UYI | 696,605 | - | - | 1,701,800 | - | - |
Total non-current liabilities by currency | 65,090,650 | 23,974,643 | 139,907,524 | 65,133,771 | 29,935,302 | 154,165,534 |
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Operating lease agreements
The total amount of the Company’s obligations towith third parties relating to lease operating and services agreements that may notcannot be terminated is detailed as follows:
Lease operating and services agreements not to be terminated As of December 31, 2019 As of December 31, 2018 ThCh$ ThCh$ Within 1 year 56.054.644 56.311.446 Between 1 and 5 years 54.935.377 59.404.285 Over 5 years 11.824.929 22.661.389 Total (1) 122.814.950 138.377.120 (1)In 2019 under this disclosure there are commitments related to service contracts, short-term and low-value lease agreements. |
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Purchase and supply agreements
The total amount of the Company’s obligations to third parties relating to purchase and supply agreements as of December 31, 20162019 is detailed as follows:
Purchase and supply agreements | Purchase and supply agreements | Purchase and contract related to wine and grape | Purchase and supply agreements | Purchase and contract related to wine and grape |
ThCh$ | ThCh$ | |||
Within 1 year | 128,703,020 | 8,713,649 | 238,823,373 | 15,242,253 |
Between 1 and 5 years | 292,815,491 | 9,521,391 | 1,144,214,818 | 11,727,826 |
Over 5 years | 44,412,317 | 157,459 | 75,941,390 | - |
Total | 465,930,828 | 18,392,499 | 1,458,979,581 | 26,970,079 |
Capital investment commitments
As of December 31, 2016,2019, the Company had capital investment commitments related to Property, Plant and Equipment and Intangibles (software) for approximately ThCh$ 54,115,404.44,678,091.
Litigation
The following are the most significant proceedings faced by the Company and its subsidiaries in Chile, including all thosepresent a possible risk of occurrence and causes whose committed amounts, individually, are more than ThCh$ 25,000.Those25,000 and US$ 15,000 for cases of foreign subsidiaries.Those losses contingencies for which an estimate cannot be made have been also considered.
Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
ProceedingsTrials and claim
Subsidiary | Court |
| Description | Status | Estimated accrued loss contingency | |
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| ThCh$ | |
Embotelladoras Chilenas Unidas S.A. | Court of Appeal. | Debt payment lawsuit. | Opposition to execution is pending. | ThCh$ 101,377 | ||
Compañía Industrial Cervecera S.A. (CICSA) |
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| Labor |
| US$ | |
Compañía Industrial Cervecera S.A. (CICSA) |
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Compañía Industrial Cervecera S.A. (CICSA) |
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| Labor |
| US$ | |
Compañía Industrial Cervecera S.A. (CICSA) |
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Compañía Industrial Cervecera S.A. (CICSA) |
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| Labor |
| US$ | |
Compañía Industrial Cervecera S.A. (CICSA) |
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| US$ | |
Compañía Industrial Cervecera S.A. (CICSA) |
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| US$ | |
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| Evidentiary stage. | US$ |
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Compañía Cervecerías Unidas S.A. and subsidiaries Notes to the Consolidated Financial Statements December 31, | ![]() |
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The Company and its subsidiaries have established provisions to allow for such contingencies for ThCh$ 1,248,243561,378 and ThCh$ 1,343,374,893,631, as of December 31, 20162019 and 2015,2018, respectively (See Note 2823 – Other provisions).
Tax processes
At the date of issue of these consolidated financial statements, there areis notax litigation that involveinvolves significant passive or taxes in claim different to mentioned inNote 2524 – Income Tax.
Guarantees
As of December 31, 2016, the subsidiary Viña San Pedro Tarapacá S.A. (VSPT) has2019, CCU and its subsidiaries have not granted direct guarantees as part of its commontheir usual financing operations. Nevertheless, its VSPT has entered intoHowever, indirect guarantees as joint guarantors of financing operations by Finca La Celia S.A. subsidiary,have been constituted, in the Republicform of Argentina.
A summarystand-by and general security product of thefinancing. The main terms of the indirect guarantees granted appearsconstituted are detailed below:
The subsidiary Finca La Celia S.A.joint venture Central Cervecera de Colombia S.A.S. (CCC) maintains financial debt with local banks in Argentina,Colombia, guaranteed by VSPTthe subsidiary CCU Inversiones II Ltda. through stand-by letters issued by Banco Estado deScotiabank Chile and they are within the financing policy framework approved by Board of Directors, according to the following detail:
Institution | Amount | Due date |
Banco | USD |
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Banco | USD |
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Banco | USD |
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The mentionedindirect associate Bodega San Isidro S.R.L. maintains financial debt with local bank in Peru, which is endorsed by the subsidiary Compañía Pisquera de Chile (CPCh) through a stand-by letters wereletter issued by VSPT according to the maturity of the financial debts negotiated with the Argentine banks, and they areBanco del Estado de Chile, this is within the financing policy framework approved by VSPTthe Board, of Directors.
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The loan obtained by the subsidiary CICSA in Argentina,and is detailed as described inNote 27, is guaranteed by CCU S.A. through a stand- by unrestricted, 1 year term, renewable for equal period during the term of the loan.follow:
Institution | Amount | Due date |
Banco Crédito de | USD | December |
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On July 11, 2013, the subsidiary in Argentina Saenz Briones & Cía. S.A. (SB) has signed a loan agreement with the Citibank Bank of Argentina, which restricted its ability to distribute profits in each year. The loan was by 10,000,000 argentine pesos and whose return was agreed in 9 (nine) quotes with different maturities. Until SB not pay this loan, plus interest or commissions, fees and expenses, may not make any payment to its shareholders (including, without limitation, distribution of profits or dividends, advances, withdrawals from account or similar, as well as any payment made in connection with rebuy it, rescue or redemption of all or part of its shares) for an amount that exceeds the 50% of the profits that the SB is legally empowered to distribute as dividends with regard to each of its years. It should be noted, for the purposes of the above restriction, that the last date of maturity of the loan is July 11, 2016.
Distribution of CCU´s main environmental costsin the Industrial Units, accumulated to September 2016:
-Industrial Waste Water Treatment (IWWT):52,8 %
These expenses are mainly related to the maintenance and control of the respective Industrial Waste Water Treatment Plants (IWWT).
-Solid Industrial Residues (SIR):33,4 %
These expenses are related to the handling and disposal of Solid Industrial Residues (SIR), including hazardous Waste (ResPel) and valorisation of recyclable residues.
-Gas Emission Expenses:1,2 %
These expenses are related to the calibration and verification of monitoring and operational instrumentation of stationary sources (mainly industrial boilers and electric generators) and their respective emissions, in order to provide compliance to rules and central and local government regulations.
-Other Environmental Expenses:12,6 %
These expenses are related to the verification and compliance of Food Safety, Environmental Management and Operational Health & Safety Management Standards (ISO 22.000, ISO 14.001 and ISO 18.001 OHSAS respectively) in CCU´s industrial sites and distribution centers, which are in different stages of implementation and certification. The implementation and certification of those three standards is a corporate goal of CCU S.A.
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The main expensesof each year, detailed by project, are the following:
Company that made the disbursement | Project | Expenses | For the years ended as of December 31, | |
2016 | 2015 | |||
ThCh$ | ThCh$ | |||
CCU Chile Ltda. | IWWT | Maintenance and control of the Industrial Waste Water Treatment Plants (IWWT). | 1,319,489 | 1,160,516 |
| SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 666,781 | 607,091 |
| Gases | Management of atmospheric emissions | 21,655 | 26,031 |
| Others | Management of internal and external regulatory compliance. | 233,364 | 173,115 |
CCU Argentina S.A. | IWWT | Maintenance and control of the Industrial Waste Water Treatment Plants (IWWT). | 820,999 | 1,089,788 |
| SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 560,710 | 602,247 |
| Gases | Management of atmospheric emissions | 21,847 | 2,857 |
| Others | Management of internal and external regulatory compliance. | 141,379 | 167,668 |
Cía. Cervecera Kunstmann S.A. | IWWT | Maintenance and control of the Industrial Waste Water Treatment Plants (IWWT). | 86,515 | 87,069 |
| SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 40,150 | 10,633 |
| Others | Management of internal and external regulatory compliance. | 45,876 | 45,781 |
Cía. Pisquera de Chile S.A. | IWWT | Maintenance and control of the Industrial Waste Water Treatment Plants (IWWT). | 237,994 | 224,045 |
| SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 43,059 | 78,746 |
| Others | Management of internal and external regulatory compliance. | 12,582 | 15,628 |
Transportes CCU Limitada | IWWT | Maintenance and control of the Industrial Waste Water Treatment Plants (IWWT). | 9,792 | 18,687 |
| SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 288,856 | 196,114 |
| Gases | Management of atmospheric emissions | 13,356 | 17,297 |
| Others | Management of internal and external regulatory compliance. | 141,138 | 130,044 |
VSPT S.A. | IWWT | Maintenance and control of the Industrial Waste Water Treatment Plants (IWWT). | 454,828 | 381,893 |
| SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 165,697 | 172,089 |
| Others | Management of internal and external regulatory compliance. | 10,916 | 5,227 |
Embotelladora Chilenas Unidas S.A. | IWWT | Maintenance and control of the Industrial Waste Water Treatment Plants (IWWT). | 593,414 | 665,990 |
| SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 421,771 | 53,539 |
| Gases | Management of atmospheric emissions | 156,295 | 96,019 |
| Others | Management of internal and external regulatory compliance. | 14,305 | 10,233 |
Aguas CCU-Nestlé Chile S.A. | IWWT | Maintenance and control of the Industrial Waste Water Treatment Plants (IWWT). | 35,550 | 29,057 |
| SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 3,910 | 3,661 |
| Others | Management of internal and external regulatory compliance. | 69,330 | 50,904 |
Fábrica de Envases Plásticos S.A. | SIR | Solid waste (SIR) and hazardous waste (ResPel) management. | 21,410 | 19,326 |
| Gases | Management of atmospheric emissions | 129,487 | 137,359 |
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The main disbursements (investment) of each year, detailed by by project, are the following:
Company that made the disbursement | Project | Concept | Status [Finished, In process] | As of December 31, 2016 | As of December 31, 2015 | ||
Disbursements made | Amount committed future periods | Estimated Completion Date Disbursements | Disbursements made | ||||
ThCh$ | ThCh$ | ThCh$ | |||||
CCU Chile Ltda. | IWWT | IWWT Temuco Stage II; IWWT expansion (Screw) Temuco | Processing | 2,854,428 | 156,383 | Dec - 17 | 181,077 |
| SIR | Changing and increasing containers for glass and rubbish | Finished | 37,602 | - | Finished | 194,875 |
| Gases | Change Fuel FO6 to GNL Temuco, Upgrade Odor Control, Thermal Plant Improvements Quilicura, Videoconferencing rooms. | Processing | 265,248 | 103,093 | Dec - 17 | 35,728 |
| Others | DS 10 and RE 43 compliance; Emergency Brigade and Anti Fire Protection System | Processing | 108,188 | 352,424 | Dec - 17 | 124,162 |
CCU Argentina S.A. | IWWT | IWWT Stage 2 and 3, Salta | Processing | 217,401 | 134,386 | Dec - 17 | 60,003 |
| Gases | Boiler 1 Economizer, Luján | Finished | 227,079 | 29,780 | Finished | - |
| Others | Fire Network in Distribution Center SV; Compromises ISO 22 K/14K/18 K OSHAS Luján | Processing | 32,360 | 25,076 | Dec - 17 | 56,131 |
Cía. Cervecera | IWWT | New IWWT PTR – IC Technology | Processing | 2,050,705 | 548,710 | Dec - 17 | 2,958,767 |
Kunstmann S.A. | Others | DIA; Increase installed power; Equipment protection structures | Processing | 33,835 | 278,000 | Dec - 17 | - |
Cía. Pisquera de Chile S.A. | IWWT | IWWT, Change of Hidroeyectors, Water plant and dam, IWWT improvement in Salamanca and Sotaquí, New Sewer Plant, Water process meters. | Finished | 133,879 | 6,864 | Finished | 9,712 |
| SIR | Improved sludge system; Containers for glass | Finished | 20,224 | 1,610 | Finished | - |
| Others | Requirement for ISO Standards in Salamanca, Monte Patria, Sotaquí and Pisco Elqui; DS 10 compliance in Salamanca and Montepatria | Processing | 268,003 | 379,547 | Dec - 17 | - |
Transportes CCU Limitada | SIR | Ceiling of waste area in Distribution Center Llay Llay | Processing | - | 57,224 | Dec - 17 | - |
| Gases | LED lightning in Distribution Center Talca | Processing | 81,355 | 43,939 | Dec - 17 | - |
| Others | Access to DC Copiapó and Acoustic closure in DC Cervecería Stgo. | Processing | 138,743 | 103,057 | Dec - 17 | - |
VSPT S.A. | IWWT | Sewage plant; Degassing Pond Improvement | Finished | 76,285 | - | Finished | 50,356 |
| SIR | Solid Packing Separator | Finished | 3,128 | - | Finished | - |
| Gases | Electric Power Generator to IWWT, Power Meters | Finished | 19,296 | - | Finished | - |
| Others | Fire network Molina, DS 10 compliance, Standardization 5 dining rooms, Autonomous Breathing Equipment | Finished | 220,005 | - | Finished | 85,825 |
Embotelladora Chilenas Unidas S.A. | Gases | Condensate recovery, Meters and Monitoring of Consumption, Mantle Insulation of Boilers, Heat recovery compressor discharge, Upgrade exhaust gas analyzer, Upgrade System Control and Installation System Lighting. | Processing | 54,282 | 29,402 | Dec - 17 | 33,684 |
| Others | Safety Acid Injection; Standardization Kitchen ECCUSA; Autonomous Breathing Equipment to Stgo. and Antofagasta | Processing | 112,904 | 27,843 | Dec - 17 | 5,992 |
Aguas CCU-Nestlé Chile S.A. | IWWT | IWWT Coinco | Processing | 559,569 | 410,347 | Dec - 17 | 27,756 |
| Gases | Lighting lines 1, 2 y 3, Steam networks, Solar Lighting | Finished | 21,425 | - | Finished | - |
| Others | Warehouse Flammable Coinco, RE 43 and DS 594 compliance. | Processing | 28,694 | 222,221 | Dec - 17 | 12,600 |
Fábrica de Envases Plásticos S.A. | Gases | Control of electrical variables, change of lighting. | Processing | 187,373 | 22,404 | Dec - 17 | 47,711 |
| Others | Risk Mitigation, Reduction weight of PET Bottles, Bathroom Expansion, Various SIG -OCA, Ammonia Sensors | Processing | 158,522 | 47,436 | Dec - 17 | 61,401 |
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a) | The Consolidated Financial Statements of CCU S.A., have been approved by the Board of Directors on February 26, 2020. |
b) | There are no others subsequent events between the closing date and the filing date of these Financial Statements (February 26, 2020) that could significantly affect their interpretation. |
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a)The Consolidated Financial Statements of CCU S.A. have been approved by the Board Directors on February 27, 2017.
b)There are no others subsequent events between the closing date and the filing date of these Financial Statements (February 27, 2017) that could significantly affect their interpretation.
F-123F-137