COGS per hectoliter increased 2.5 percent driven by packaging innovation, brand premiumization and brewing material costs, partially offset by cost savings initiatives.
MG&A costs increased 3.1 percent, due to slightly increased marketing spending related to the Miller64 brand re-launch and increased spending behind new products and packaging innovations, partially offset by lower information systems costs.
Depreciation and amortization expenses for MillerCoors in the second quarter were $73.0 million and additions to tangible and intangible assets totaled $47.6 million.
Central Europe Business (Pro forma U.S. GAAP) (4)Central Europe pro forma underlying pretax income decreased 36.6 percent to $46.2 million in the quarter. Positive volume and net pricing were more than offset by unfavorable foreign currency movements, geographic and channel mix, and input cost inflation. These results reflect a negative impact on underlying earnings of approximately $9 million from foreign currency fluctuations. Central Europe pro forma sales volume increased 1.4 percent. Overall MCCE market share was up slightly in the quarter. Pro forma net sales per hectoliter increased 2 percent in local currency due to positive net pricing. Pro forma COGS per hectoliter increased 11 percent in local currency, primarily driven by increased sales of innovative products and packages and input cost inflation, particularly malt, utilities and fuel. Pro forma MG&A expenses increased 8 percent in local currency, due to increased marketing behind product innovation and increased bad debt expenses. United Kingdom Business U.K. underlying pretax income decreased 19.3 percent to $28.0 million in the quarter, due to lower volume, higher pension expense and higher marketing investment, partly offset by lower general and administrative costs. These results reflect a negative impact on underlying earnings of approximately $1 million from a 3.1 percent depreciation of the British Pound versus the U.S. Dollar.
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