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United Breweries Co. Inc. – ‘6-K’ for 9/30/22

On:  Tuesday, 11/15/22, at 10:17am ET   ·   For:  9/30/22   ·   Accession #:  1292814-22-4491   ·   File #:  1-14906

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/15/22  United Breweries Co. Inc.         6-K         9/30/22    1:4.8M                                   MZ Technologies/FA

Current, Quarterly or Annual Report by a Foreign Issuer   —   Form 6-K   —   SEA’34

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Current, Quarterly or Annual Report by a Foreign    HTML   4.78M 
                Issuer                                                           


Document Table of Contents

Page (sequential)   (alphabetic) Top
 
11st Page  –  Filing Submission
"Table of Contents
"Interim CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Assets)
"Interim CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Liabilities and equity)
"Interim CONSOLIDATED STATEMENT OF INCOME
"Interim CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
"Interim CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
"Interim CONSOLIDATED STATEMENT OF CASH FLOW
"Note 1 General Information
"Note 2 Summary of significant accounting policies
"2.1
"Basis of preparation
"2.2
"Basis of consolidation
"2.3
"Financial information as per operating segments
"2.4
"Foreign currency and adjustment units
"2.5
"Cash and cash equivalents
"2.6
"Other financial assets
"2.7
"Financial instruments
"2.8
"Financial asset impairment
"2.9
"Inventories
"2.10
"Current biological assets
"2.11
"Other non-financial assets
"2.12
"Property, plant and equipment
"2.13
"Leases
"2.14
"Investment properties assets
"2.15
"Intangible assets other than goodwill
"2.16
"Goodwill
"2.17
"Impairment of non-financial assets other than goodwill
"2.18
"Non-current assets of disposal groups classified as held for sale
"2.19
"Income taxes
"2.20
"Employees benefits
"2.21
"Provisions
"2.22
"Revenue recognition
"2.23
"Commercial agreements with distributors and supermarket chains
"2.24
"Cost of sales of products
"2.25
"Other incomes by function
"2.26
"Other expenses by function
"2.27
"Distribution expenses
"2.28
"Administrative expenses
"2.29
"Environment liabilities
"Note 3 Estimates and application of professional judgment
"Note 4 Accounting changes
"Note 5 Risk Administration
"Note 6 Financial Information as per operating segments
"Note 7 Financial Instruments
"Note 8 Cash and cash equivalents
"Note 9 Other non-financial assets
"Note 10 Trade and other receivables
"Note 11 Accounts and transactions with related parties
"Note 12 Inventories
"Note 13 Biological assets
"Note 14 Non-current assets of disposal groups classified as held for sale
"Note 15 Business Combinations
"Note 16 Investments accounted for using equity method
"Note 17 Intangible assets other than goodwill
"Note 18 Goodwill
"Note 19 Property, plant and equipment
"Note 20 Investment Property
"Note 21 Other financial liabilities
"Note 22 Right of use assets and Lease liabilities
"102
"Note 23 Trade and other payables
"109
"Note 24 Other provisions
"Note 25 Income taxes
"110
"Note 26 Employee Benefits
"114
"Note 27 Other non-financial liabilities
"117
"Note 28 Common Shareholders' Equity
"Note 29 Non-controlling Interests
"121
"Note 30 Nature of cost and expense
"123
"Note 31 Other income by function
"Note 32 Other Gains (Losses)
"124
"Note 33 Financial results
"Note 34 Effects of changes in currency exchange rate
"125
"Note 35 Contingencies and Commitments
"129
"Note 36 Subsequent Events
"131

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 6-K

     Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934

COMPAÑÍA 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, 23rd floor, Santiago, Chile
(Address of principal executive offices)
 _________________________________________

Securities registered or to be registered pursuant to section 12(b) of the Act.

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F ___

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ___ No X

 C: 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPAÑÍA CERVECERÍAS UNIDAS S.A. AND SUBSIDIARIES

 

Interim CONSOLIDATED FINANCIAL STATEMENTS

(Figures expressed in thousands of Chilean pesos)

 

As of and for the nine-months period ended September 30, 2022

 

 

 

 

 

 

 

 

 

 C: 
 
 

INDEX

 

     
Interim CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Assets) 4
Interim CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Liabilities and equity) 5
Interim CONSOLIDATED STATEMENT OF INCOME 6
Interim CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 7
Interim CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 8
Interim CONSOLIDATED STATEMENT OF CASH FLOW 9
Note 1 General Information 10
Note 2 Summary of significant accounting policies 20
2.1 Basis of preparation 20
2.2 Basis of consolidation 21
2.3 Financial information as per operating segments 22
2.4 Foreign currency and adjustment units 22
2.5 Cash and cash equivalents 24
2.6 Other financial assets 24
2.7 Financial instruments 24
2.8 Financial asset impairment 27
2.9 Inventories 27
2.10 Current biological assets 27
2.11 Other non-financial assets 28
2.12 Property, plant and equipment 28
2.13 Leases 28
2.14 Investment properties assets 29
2.15 Intangible assets other than goodwill 29
2.16 Goodwill 29
2.17 Impairment of non-financial assets other than goodwill 30
2.18 Non-current assets of disposal groups classified as held for sale 30
2.19 Income taxes 31
2.20 Employees benefits 31
2.21 Provisions 31
2.22 Revenue recognition 32
2.23 Commercial agreements with distributors and supermarket chains 32
2.24 Cost of sales of products 33
2.25 Other incomes by function 33
2.26 Other expenses by function 33
2.27 Distribution expenses 33
2.28 Administrative expenses 33
2.29 Environment liabilities 33
Note 3 Estimates and application of professional judgment 34
Note 4 Accounting changes 34
Note 5 Risk Administration 35
Note 6 Financial Information as per operating segments 42
Note 7 Financial Instruments 48
Note 8 Cash and cash equivalents 55
Note 9 Other non-financial assets 59
Note 10 Trade and other receivables 60
Note 11 Accounts and transactions with related parties 63

 

 C: 
 
 

 

     
Note 12 Inventories 70
Note 13 Biological assets 71
Note 14 Non-current assets of disposal groups classified as held for sale 72
Note 15 Business Combinations 72
Note 16 Investments accounted for using equity method 73
Note 17 Intangible assets other than goodwill 76
Note 18 Goodwill 78
Note 19 Property, plant and equipment 81
Note 20 Investment Property 83
Note 21 Other financial liabilities 84
Note 22 Right of use assets and Lease liabilities 102
Note 23 Trade and other payables 109
Note 24 Other provisions 109
Note 25 Income taxes 110
Note 26 Employee Benefits 114
Note 27 Other non-financial liabilities 117
Note 28 Common Shareholders’ Equity 117
Note 29 Non-controlling Interests 121
Note 30 Nature of cost and expense 123
Note 31 Other income by function 123
Note 32 Other Gains (Losses) 124
Note 33 Financial results 124
Note 34 Effects of changes in currency exchange rate 125
Note 35 Contingencies and Commitments 129
Note 36 Subsequent Events 131

 

 C: 
 
 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Interim Consolidated Statement of Financial Position

(Figures expressed in thousands of Chilean pesos)

 
   

 

Interim CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Assets)

 

AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

 

 

ASSETS Notes As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Current assets      
Cash and cash equivalents 8 635,484,232 265,568,125
Other financial assets 7 52,407,238 23,851,496
Other non-financial assets 9 41,645,123 29,330,418
Trade and other current receivables 10 387,713,357 372,995,729
Accounts receivable from related parties 11 4,794,889 5,307,264
Inventories 12 512,074,311 353,427,061
Biological assets 13 8,613,303 12,546,705
Current tax assets 25 42,560,188 26,062,856
Total current assets other than non-current assets of disposal groups classified as held for sale   1,685,292,641 1,089,089,654
Non-current assets of disposal groups classified as held for sale 14 2,446,877 2,282,720
Total Non-current assets of disposal groups classified as held for sale   2,446,877 2,282,720
Total current assets   1,687,739,518 1,091,372,374
       
Non-current assets      
Other financial assets 7 36,509,564 31,252,095
Other non-financial assets 9 11,106,533 8,266,355
Trade and other non-current receivables 10 3,423,369 3,801,244
Accounts receivable from related parties 11 42,506 104,197
Investments accounted for using equity method 16 158,637,795 138,114,480
Intangible assets other than goodwill 17 184,239,395 151,943,693
Goodwill 18 145,440,821 131,172,835
Property, plant and equipment (net) 19 1,370,320,579 1,222,261,454
Investment property 20 11,472,054 9,551,614
Right of use assets 22 36,100,609 28,335,983
Deferred tax assets 25 32,393,538 30,571,219
Non-current tax assets 25 2,453 3,094
Total non-current assets   1,989,689,216 1,755,378,263
Total Assets   3,677,428,734 2,846,750,637
 C: 

 

F- C: 
 

The accompanying notes 1 to 36 are an integral part of these Interim Consolidated Financial Statements.

Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Interim Consolidated Statement of Financial Position

(Figures expressed in thousands of Chilean pesos)

 
   

Interim CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Liabilities and equity)

 

AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

 

 

 

LIABILITIES AND EQUITY Notes As of September 30, 2022 As of December 31, 2021
LIABILITIES   ThCh$ ThCh$
Current liabilities      
Other financial liabilities 21 197,103,405 101,426,359
Current lease liabilities 22 9,066,122 6,152,361
Trade and other current payables 23 489,575,842 515,522,729
Accounts payable to related parties 11 30,964,613 26,208,319
Other current provisions 24 2,385,461 2,544,973
Current tax liabilities 25 13,176,660 35,066,792
Provisions for employee benefits 26 39,538,109 50,677,101
Other non-financial liabilities 27 44,894,099 43,516,630
Total current liabilities   826,704,311 781,115,264
Non-current liabilities      
Other financial liabilities 21 1,135,862,341 458,269,843
Non-current lease liabilities 22 32,758,366 29,009,023
Trade and other non-current payables 23 39,332 29,457
Other non-current provisions 24 451,047 451,079
Deferred tax liabilities 25 127,645,463 118,085,671
Provisions for employee benefits 26 39,981,377 34,274,997
Total non-current liabilities   1,336,737,926 640,120,070
Total liabilities   2,163,442,237 1,421,235,334
       
EQUITY      
Equity attributable to equity holders of the parent 28    
Paid-in capital   562,693,346 562,693,346
Other reserves   9,496,381 (87,255,912)
Retained earnings   819,618,718 832,180,798
Total equity attributable to equity holders of the parent   1,391,808,445 1,307,618,232
Non-controlling interests 29 122,178,052 117,897,071
Total Shareholders' Equity   1,513,986,497 1,425,515,303
Total Liabilities and Shareholders' Equity   3,677,428,734 2,846,750,637

 

 

 C: 

 

F-5 
 

The accompanying notes 1 to 36 are an integral part of these Interim Consolidated Financial Statements.

Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Interim Consolidated Statement of Income

(Figures expressed in thousands of Chilean pesos)

 
   

Interim CONSOLIDATED STATEMENT OF INCOME

 

 

 

 

INTERIM CONSOLIDATED STATEMENT OF INCOME Notes For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Net sales 6 1,943,073,350 1,662,363,668 684,105,535 622,729,627
Cost of sales 30 (1,101,649,221) (859,986,129) (391,714,494) (330,148,397)
Gross margin   841,424,129 802,377,539 292,391,041 292,581,230
Other income by function 31 3,477,496 9,236,814 1,548,689 4,108,153
Distribution costs 30 (363,732,891) (292,958,876) (132,334,847) (111,353,565)
Administrative expenses 30 (136,101,573) (108,993,810) (54,960,501) (41,787,512)
Other expenses by function 30 (207,312,087) (203,779,194) (73,113,137) (72,084,366)
Other gains (losses) 32 5,854,226 8,001,718 1,328,953 7,304,058
Income from operational activities   143,609,300 213,884,191 34,860,198 78,767,998
Finance income 33 17,533,727 9,506,947 4,680,264 2,689,372
Finance costs 33 (53,112,031) (23,013,331) (23,375,161) (8,903,459)
Share of net income (loss) of joint ventures and associates accounted for using the equity method 16 (7,897,144) (3,361,894) (3,495,437) (1,013,287)
Gains (losses) on exchange differences 33 (17,932,005) (7,249,717) (8,095,775) (4,483,454)
Result as per adjustment units 33 (431,319) 1,349,090 4,641,027 551,589
Income before taxes   81,770,528 191,115,286 9,215,116 67,608,759
Income tax expense 25 640,840 (52,361,800) 10,185,069 (20,856,945)
Net income of period   82,411,368 138,753,486 19,400,185 46,751,814
           
Net income attributable to:          
Equity holders of the parent   71,315,404 125,519,804 17,226,082 42,168,070
Non-controlling interests 29 11,095,964 13,233,682 2,174,103 4,583,744
Net income of period   82,411,368 138,753,486 19,400,185 46,751,814
Basic earnings per share (Chilean pesos) from:          
Continuing operations   193.00 339.70 46.62 114.12
Diluted earnings per share (Chilean pesos) from:          
Continuing operations   193.00 339.70 46.62 114.12
           

 

 

 C: 

 

F-6 
 

The accompanying notes 1 to 36 are an integral part of these Interim Consolidated Financial Statements.

Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Interim Consolidated Statement of Comprehensive Income

(Figures expressed in thousands of Chilean pesos)

 
   

Interim CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

 

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Notes For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Net income of period   82,411,368 138,753,486 19,400,185 46,751,814
Other comprehensive income          
Components of other comprehensive income (loss) that will not be reclassified to income for the year, before taxes          
Gains (losses) from defined benefit plans 28 (5,620,801) 2,289,533 (4,334,430) 3,385,164
Other comprehensive income (loss) that will not be reclassified to income for the year, before taxes   (5,620,801) 2,289,533 (4,334,430) 3,385,164
Components of other comprehensive income (loss) that will be reclassified to income for the year, before taxes          
Gains (losses) on exchange differences on translation 28 104,808,956 78,591,003 14,341,114 61,563,353
Gains (losses) on cash flow hedges 28 1,125,809 1,499,556 (1,282,258) 2,051,490
Other comprehensive income (loss) that will be reclassified to income for the year, before taxes   105,934,765 80,090,559 13,058,856 63,614,843
Other comprehensive income (loss), before tax   100,313,964 82,380,092 8,724,426 67,000,007
Income taxes related to components of other comprehensive income (loss) that will not be reclassified to income for the period          
Income tax relating to defined benefit plans 28 1,516,579 (598,861) 1,170,297 (916,015)
Income taxes related to components of other comprehensive income (loss) that will not be reclassified to income for the period   1,516,579 (598,861) 1,170,297 (916,015)
Income taxes related to components of other comprehensive income (loss) that will be reclassified to income for the period          
Income tax relating to cash flow hedges 28 (303,968) (407,931) 346,210 (556,953)
Income taxes related to components of other comprehensive income (loss) that will be reclassified to income for the period   (303,968) (407,931) 346,210 (556,953)
Total other comprehensive income (loss)   101,526,575 81,373,300 10,240,933 65,527,039
Comprehensive income               183,937,943             220,126,786 29,641,118 112,278,853
Comprehensive income attributable to:          
Equity holders of the parent (1)               167,965,072             201,824,579 27,424,869 104,216,193
Non-controlling interests   15,972,871 18,302,207 2,216,249 8,062,660
Total Comprehensive income               183,937,943             220,126,786 29,641,118 112,278,853

 

 

(1)Correspond to the income for the period in the event that no income or expense had been recorded directly against shareholders’ equity.

 

 

 C: 

 

F-7 
 

The accompanying notes 1 to 36 are an integral part of these Interim Consolidated Financial Statements.

Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Interim Consolidated Statement of Changes in Equity

(Figures expressed in thousands of Chilean pesos)

 
   

Interim CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

INTERIM 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 Reserve 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, 2021 562,693,346 (153,975,058) 3,297,873 (9,026,175) (28,220,816) (187,924,176) 921,805,285 1,296,574,455 112,244,220 1,408,818,675
Changes                    
Final dividends  (1) - - - - - - (24,038,068) (24,038,068) - (24,038,068)
Interim dividends according to policy (3) - - - - - - (62,759,902) (62,759,902) - (62,759,902)
Other increase (decrease) in Equity (5) - - - - - - - - (11,545,856) (11,545,856)
Total comprehensive income (loss) (6) - 73,388,933 1,323,125 1,592,717 - 76,304,775 125,519,804 201,824,579 18,302,207 220,126,786
Increase (decrease) through changes in ownership interests in subsidiaries  (7) - - - - (5,860,183) (5,860,183) - (5,860,183) (2,324,236) (8,184,419)
Total changes in equity - 73,388,933 1,323,125 1,592,717 (5,860,183) 70,444,592 38,721,834 109,166,426 4,432,115 113,598,541
AS OF SEPTEMBER 30, 2021 562,693,346 (80,586,125) 4,620,998 (7,433,458) (34,080,999) (117,479,584) 960,527,119 1,405,740,881 116,676,335 1,522,417,216
Balanced as of January 1, 2021 562,693,346 (153,975,058) 3,297,873 (9,026,175) (28,220,816) (187,924,176) 921,805,285 1,296,574,455 112,244,220 1,408,818,675
Changes                    
Final dividends  (1) - - - - - - (24,038,068) (24,038,068) - (24,038,068)
Interim dividends (2) - - - - - - (73,900,574) (73,900,574) - (73,900,574)
Interim dividends according to policy (3) - - - - - - (25,680,792) (25,680,792) - (25,680,792)
Eventual dividends (4) - - - - - - (165,167,784) (165,167,784) - (165,167,784)
Other increase (decrease) in Equity (5) - - - - - - - - (16,003,620) (16,003,620)
Total comprehensive income (loss) (6) - 102,229,659 1,812,733 3,580,153 - 107,622,545 199,162,731 306,785,276 26,909,648 333,694,924
Increase (decrease) through changes in ownership interests in subsidiaries  (7) - - - - (6,954,281) (6,954,281) - (6,954,281) (5,253,177) (12,207,458)
Total changes in equity - 102,229,659 1,812,733 3,580,153 (6,954,281) 100,668,264 (89,624,487) 11,043,777 5,652,851 16,696,628
AS OF DECEMBER 31, 2021 (Auditados) 562,693,346 (51,745,399) 5,110,606 (5,446,022) (35,175,097) (87,255,912) 832,180,798 1,307,618,232 117,897,071 1,425,515,303
Balanced as of January 1, 2022 562,693,346 (51,745,399) 5,110,606 (5,446,022) (35,175,097) (87,255,912) 832,180,798 1,307,618,232 117,897,071 1,425,515,303
Changes                    
Final dividends  (1) - - - - - - (48,219,782) (48,219,782) - (48,219,782)
Interim dividends according to policy (3) - - - - - - (35,657,702) (35,657,702) - (35,657,702)
Other increase (decrease) in Equity (5) - - - - - - - - (12,799,251) (12,799,251)
Total comprehensive income (loss) (6) - 102,130,761 706,289 (3,879,851) (2,307,531) 96,649,668 71,315,404 167,965,072 15,972,871 183,937,943
Increase (decrease) through changes in ownership interests in subsidiaries  (7) - - - - 102,625 102,625 - 102,625 (540,760) (438,135)
Increase (decrease) for other contribitions from owners (8) - - - - - - - - 1,648,121 1,648,121
Total changes in equity - 102,130,761 706,289 (3,879,851) (2,204,906) 96,752,293 (12,562,080) 84,190,213 4,280,981 88,471,194
AS OF SEPTEMBER 30, 2022 562,693,346 50,385,362 5,816,895 (9,325,873) (37,380,003) 9,496,381 819,618,718 1,391,808,445 122,178,052 1,513,986,497

 

 

(1)Corresponds to the difference between the final dividend and CCU’s policy of distributing a minimum dividend of at least 50% of income (Note 28 - Common Shareholders’ Equity).
(2)Corresponds to interim dividend N° 262 paid on October 29, 2021, as agreed at the Ordinary Board of Directors' Meeting held on October 6th 2021.
(3)Corresponds to the difference between CCU’s policy to distribute a minimum dividend of at least 50% of the income (Note 28 - Common Shareholders’ Equity) and the interim dividends declared or payed as of December 31 of each year.
(4)Corresponds to eventual dividend No. 263 that was paid on December 3, 2021, against retained earnings (Note 28 - Equity attributable to owners of the parent company).
(5)Mainly related to dividends of Non-controlling interest.
(6)See Note 28 - Common Shareholders’ Equity.
(7)See Note 1 – General information, letter C, numbers (3) and (4).
(8)See Note 1 – General information, letter C, number (11).

 

 

 C: 

 

F-8 
 

The accompanying notes 1 to 36 are an integral part of these Interim Consolidated Financial Statements.

Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Interim Consolidated Statement of Cash Flow

(Figures expressed in thousands of Chilean pesos)

 
   

Interim CONSOLIDATED STATEMENT OF CASH FLOW

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CASH FLOW Notes For the nine periods ended as of September 30,
2022 2021
ThCh$ ThCh$
Cash flows from operating activities      
Classes of cash receipts from operating activities:      
Proceeds from goods sold and services rendered   2,461,818,362 2,156,445,322
Other proceeds from operating activities   28,562,929 19,335,971
Classes of cash payments from operating activities:      
Payments of operating activities   (1,848,201,052) (1,373,983,115)
Payments of salaries   (283,842,426) (221,889,753)
Other payments for operating activities   (321,755,488) (304,515,242)
Cash flow from operations   36,582,325 275,393,183
Dividends received   391,579 1,074,595
Interest paid   (35,793,763) (20,450,136)
Interest received   17,556,893 9,501,038
Income tax paid   (56,486,507) (59,418,262)
Other cash movements 32 15,878,229 (3,701,859)
Net cash inflow from operating activities   (21,871,244) 202,398,559
       
Cash flows from investing activities      
Cash flows used to purchase non-controlling interests 8 (29,428,835) -
Loan to related entities   - 56,724
Other payments to acquire interests in joint ventures 8 - (5,791,718)
Proceeds from sales of property, plan and equipment   2,711,527 90,964
Purchase of property, plant and equipment   (133,227,560) (104,707,151)
Purchases of intangibles assets   (15,223,269) (2,130,064)
Net cash (outflow) from investing activities   (175,168,137) (112,481,245)
       
Cash flows from financing activities      
Proceeds from changes in ownership interests in subsidiaries that do not result in loss of control 8 (438,105) (8,709,120)
Proceeds from long-term loans and bonds   597,147,437 3,000,000
Proceeds from short-term loans and bonds   67,509,667 6,793,452
Total proceeds from loans and bonds   664,657,104 9,793,452
Loan and bonds payments   (29,812,400) (39,735,556)
Proceeds from issuing shares   1,648,121 -
Payments of lease liabilities   (7,019,786) (5,695,907)
Payments of loan from related parties   (25,000) -
Dividends paid   (113,595,537) (56,960,133)
Other cash movements   130,322 6,080,317
Net cash (outflow) inflow from financing activities   515,544,719 (95,226,947)
       
Net (decrease) increase in cash and cash equivalents   318,505,338 (5,309,633)
Effects of exchange rate changes on cash and cash equivalents   51,410,769 (8,557,152)
Increase (decrease) in cash and cash equivalents   369,916,107 (13,866,785)
       
Cash and cash equivalents at beginning of the year   265,568,125 396,389,016
Cash and cash equivalents at end of the year 8 635,484,232 382,522,231
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The accompanying notes 1 to 36 are an integral part of these Interim Consolidated Financial Statements.

Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
   

Note 1 General Information

 

A)Company information

 

Compañía Cervecerías Unidas S.A. (hereinafter also “CCU”, the Company or “the Parent Company”) was incorporated in Chile as an open stock company, and is registered in the Securities Registry of the Comisión para el Mercado Financiero (CMF) under Nº 0007, and consequently, the Company is overseen by the CMF. The Company’s shares are traded in Chile on the Santiago Stock Exchange and Electronic Stock Exchange. The Company is also registered with the United States of America Securities and Exchange Commission (SEC) and its American Depositary Shares (ADS)’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, whereby there was a change in the ADS ratio from 5 common shares for each ADS to 2 common shares for each AgDS, effective as of December 20, 2012.

 

Compañía Cervecerías Unidas S.A. is a diversified beverage company, with operations mainly in Chile, Argentina, Uruguay, Paraguay, Colombia and Bolivia. CCU is the largest Chilean brewer, the second largest brewer in Argentina, the second largest producer of soft drinks in Chile, the second largest producer of wines in Chile, the largest producer of bottled water, nectars, sports drinks and iced tea in Chile and one of the largest producers of pisco in Chile. It also participates in the Home and Office Delivery ("HOD") business, a home delivery business of purified water in bottles through the use of dispensers; in the rum industry, other liquors, recently in ciders in Chile. It participates in the cider, liquor and wine industry in Argentina. It also participates in the mineral water, soft drinks, water, nectars and beer distribution industry in Argentina, Uruguay, Paraguay, Colombia and Bolivia.

 

Compañía Cervecerías Unidas S.A. is under the control of Inversiones y Rentas S.A. (IRSA), which is the direct and indirect owner of 65.87% of the Company’s 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 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.

 

As of September 30, 2022, the Company had a total 9,340 employees detailed as follows:

 

  Number of employes
  Parent company Consolidated
Senior Executives 10 14
Managers and Deputy Managers 86 456
Other workers 305 8,870
Total 401 9,340

 

The Interim Consolidated Financial Statements include: Statement of Financial 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 of the Consolidated Statement of Financial Position and respective explanatory notes are presented compared with the balances as of December 31, 2021 and the Consolidated Statement of Changes in Shareholders' Equity, Consolidated Statement of Income by Function, Consolidated Statement of Comprehensive Income, Consolidated Statement of Cash Flows and respective explanatory notes are presented compared with balances as of September 30, 2021.

 

These Interim 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. and its subsidiaries. All amounts have been rounded to thousand Chilean pesos, except when otherwise indicated.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

The Company’s functional currency and presentation currency is the Chilean peso, except for some subsidiaries in Chile, United States, Argentine, Uruguay, Paraguay, Bolivia and United Kingdom that use the US Dollar, Argentine peso, Uruguayan Peso, Paraguayan guaraní, Bolivianand Sterling Pound, respectively. The functional currency of joint operations in Chile and Colombia and associates in Argentine and Perú, are the Chilean peso and Colombian peso, Argentine peso and the Sol, respectively. However they use the Chilean peso as the presentation currency for consolidation purposes.

 

Subsidiaries whose functional currencies are not the Chilean peso and are not a currency from a country which economy has been classified as hyperinflationary, 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 Gains (losses) on 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. (See Note 2 –Summary of significant accounting policies, (2.4)).

 

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 correspond to national products produced, marketed, and distributed by Cervecera CCU which include the following brands among others; Cristal, Escudo, Royal Guard, Morenita, Dorada, Andes, Bavaria, and Stones in its Lemon, Maracuyá and Red Citrus varieties. The international licensing brands are mostly produced while others are imported. All are marketed and distributed by Cervecera CCU including among others, Heineken, Sol, Coors, Blue Moon, Birra Moretti and Edelweiss brands. The Craft brands of beers (Austral, Polar Imperial, Patagonia, Kunstmann, Szot, Guayacán, D´olbek, Mahina and Volcanes del Sur) are created and mostly produced in their original breweries and in partnership with Cervecera CCU marketed and distributed by the Company.

 

In the Chile operating segment, in the non-alcoholic beverage’s category, CCU has the Bilz, Pap, Kem, Kem Xtreme, Nobis, Pop, 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, Crush, Canada Dry Limón Soda, Canada Dry Ginger Ale, Canada Dry Agua Tónica, Nestlé Pura Vida, 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 a license for the Vivo and Caricia brands.

 

Additionally, in the Chile operating segment, in the pisco and cocktails categories, CCU owns the Mistral, Tres Erres, Campanario, Horcón Quemado, Control Valle del Encanto, Espíritu de los Andes, La Serena, Iceberg, Hard Fresh, 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 Kantal, 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 and distributes the Villa Pehuenia brand and Sidra 1888.

 

On August 8th 2019 CCU announced that its subsidiary Compañía Pisquera de Chile S.A. (“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. and the Barsol brand. That sales process initiated by CPCh did not take place, because the terms and conditions described in the offers presented by the interested parties were not feasible or satisfactory.

 

In Argentina, CCU produces beer in its plants located in Salta, Santa Fe and Luján. Its main brands are Schneider, Imperial, Palermo, Santa Fé, Salta, Córdoba, Isenbeck, Norte and Iguana. At the same time, it is the holder of exclusive license for the production and marketing of Miller Genuine Draft, 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. Besides, participates in the cider business, with control of Sáenz Briones, marketing the leading market brands “Sidra Real”, “La Victoria” and “1888” in addition to the Pehuenia brand. Also participates in the spirits business, which are market under El Abuelo brand, in addition of importing pisco from Chile. Its wine portfolio includethe sale and distribution of the Eugenio Bustos and La Celia brands. Since June 2019 has incorporated to its wine portfolio Colón, Graffina and Santa Silvia brands belonging to Finca La Celia (subsidiary in Argentina of the Chilean subsidiary Viña San Pedro de Tarapacá S.A. (“VSPT”)).

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F-11 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

On April 28, 2022, the Company through its subsidiary Compañía Cervecerías Unidas Argentina S.A. (CCU-A) acquired 49% of the ownership of Aguas Danone de Argentina S.A. ("ADA"), which includes the business of pure waters, flavored waters and powdered juices with its brands Villavicencio, Villa del Sur, Levité, Ser and Brío.

 

In the Wine Operating Segment, CCU through its subsidiary VSPT has an extensive portfolio of wine brands produced by the eight wineries that make up the group. Among them are: Altaïr, Cabo de Hornos, Sideral, 1865, Castillo de Molina, Epica, Gato (in domestic market) and GatoNegro (in export market) from Viña San Pedro, the Reserva and Gran Reserva lines of Viña Tarapacá and its Blue and Black labels; Viña Leyda in its Reserva, Single Vineyard and Lot series; Misiones de Rengo Varietal, Reserva, Cuvée, Gran Reserva Black, Mision, and its Sparkling line; in addition to Alpaca, Reservado and Siglo de Oro Reserva de Viña Santa Helena; and in the sparkling category, Viñamar in its expressions Traditional Method, Extra Brut, Rosé, Moscato, Brut, Unique Brut, Unique Moscato, ICE and Zero Dealcoholized, and, finally, Manquehuito in the coolers category. In Argentina, the brands La Celia, Graffigna, Colón and Santa Silvia acquired in May 2019, as indicated in the paragraph of brands in Argentina.

 

In Uruguay, the Company participates in the mineral water business with the Nativa and Nix brands, soft drinks with the Nix brand and nectars with Watt's brand, in isotonic drinks with the FullSport brands. In addition, it sells imported beer under the Heineken, Schneider, Imperial, Escudo Silver, Kuntsmann, Miller, and Amstel. Recently the wine category, it participates with the brands with Misiones de Rengo, Eugenio Bustos and La Celia brands all imported.

 

In Paraguay, the Company participates in the non-alcoholic and alcoholic drinks business. Its portfolio of non-alcoholic brands consists of Pulp, Watt's, Puro Sol, La Fuente and the FullSport isotonic drinks. These brands include our own licensed and imported brands. The Company in the alcoholic drinks business is the owner of Sajonia beer brand and imports Heineken, Amstel, Paulaner, Sol, and Blue Moon brands. Since January 2020, they opened a wine category with brands Misiones de Rengo and La Celia.

 

In Bolivia, as of May 2014, CCU participates in the non-alcoholic and alcoholic beverages business through its subsidiary Bebidas Bolivianas BBO S.A. (BBO). Within the portfolio of non-alcoholic beverages, BBO has the Mendocina, Sinalco, Real, De la Sierra and Natur-all brands. These brands include their own and licensed brands. On the other hand, the alcoholic beverages include Real, Capital, Cordillera and Uyuni brands. Aditionally, BBO markets the imported beer Kunstmann and Heineken brands.

 

Since November 2014 in Colombia, CCU participated in the beer business through its joint venture with Central Cervecera de Colombia S.A.S. (CCC). CCC has an exclusive licensing contract for importing, distributing, and producing Heineken beer in Colombia. In October 2015, Coors and Coors Light brands were incorporated into CCC’s brand portfolio through licensing contracts 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 together 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. Furthermore, since October 2019, Colombia started to import and market the Kunstmann brand. Finally at the end of 2019, CCC started with the local production of Heineken beer. In October 2021, the local production of the Sol brand began.

 

 

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F-12 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The described licenses are detailed as follows:

 

Main brands under license
Licenses Validity Date
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) 10 years renewables
Amstel in Paraguay (1) September 2024
Amstel in Uruguay (17) In process
Austral in Chile (4) July 2024
Blue Moon in Chile (5) December 2025
Blue Moon in Paraguay (17) In process
Coors in Chile (6) December 2025
Crush, Canada Dry (Ginger Ale, Agua Tónica and Limón Soda) in Chile (7) December 2023
Fernet Branca, Brancamenta, Punt E Mes, Borghetti, Carpano Rosso and Carpano Bianco December 2024
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
Kunstmann in Colombia (1) July 2025
Mas in Uruguay (16) December 2028
Miller in Argentina (11) December 2026
Miller and Miller Genuine Draft in Colombia (14) December 2026
Miller in Uruguay (7) July 2026
Nestlé Pura Vida in Chile (7) December 2022
Patagonia in Chile Indefinitely
Paulaner in Paraguay April 2025
Pepsi, Seven Up and Mirinda in Chile December 2043
Polar Imperial in Chile Indefinitely
Red Bull in Chile (12) Indefinitely
Sol in Chile and Argentina (10) 10 years renewables
Sol in Colombia (3) March 2028
Sol in Paraguay January 2023
Té Lipton in Chile December 2030
Tecate in Colombia (3) March 2028
Warsteiner in 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 successive 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 agreeemente 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 benn 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 periods 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 expiration of the term, the parties will negotiate its renewal for another 5 years.
(16)Renewable contract for successive periods of 10 years.
(17)Distribution started; distribution contract under negotiation.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

C)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 September 30, 2022 As of December 31, 2021
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. (***) 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. (10) 76,248,389-0 Chile Chilean Pesos - - - 100.0000
Bebidas CCU-PepsiCo SpA. (***) 76,337,371-1 Chile Chilean Pesos - 49.9888 49.9888 49.9888
CCU Inversiones II SpA. (1) (8) (9) 76,349,531-0 Chile US Dollar 99.9511 0.0489 100.0000 100.0000
Cervecería Szot SpA. (***) 76,481,675-7 Chile Chilean Pesos - 25.0006 25.0006 25.0006
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. (2) 76,572,360-4 Chile US Dollar 65.1854 34.8068 99.9922 99.9922
Promarca Internacional SpA. (***) 76,574,762-7 Chile US Dollar - 49.9917 49.9917 49.9917
CCU Inversiones S.A. (4) 76,593,550-4 Chile Chilean Pesos 99.0242 0.9533 99.9775 99.9775
Inversiones Internacionales SpA. 76,688,727-9 Chile US Dollar - 80.0000 80.0000 80.0000
Promarca S.A. (***) 76,736,010-K Chile Chilean Pesos - 49.9917 49.9917 49.9917
La Barra S.A. (14) 77,148,606-1 Chile Chilean Pesos 99.0000 1.0000 100.0000 100.0000
Mahina SpA. (***) 77,248,551-4 Chile Chilean Pesos - 25.0458 25.0458 25.0458
Volcanes del Sur S.A. (13) 77,622,887-7 Chile Chilean Pesos - 74.9503 74.9503 -
Transportes CCU Ltda. 79,862,750-3 Chile Chilean Pesos 98.0000 2.0000 100.0000 100.0000
Fábrica de Envases Plásticos S.A. 86,150,200-7 Chile Chilean Pesos 95.8904 4.1080 99.9984 99.9984
Millahue S.A. 91,022,000-4 Chile Chilean Pesos 99.9621 - 99.9621 99.9621
Viña San Pedro Tarapacá S.A. (*) (4) 91,041,000-8 Chile Chilean Pesos - 84.6824 84.6824 84.4969
Manantial S.A. 96,711,590-8 Chile Chilean Pesos - 50.5519 50.5519 50.5519
Viña Altaïr SpA. 96,969,180-9 Chile Chilean Pesos - 84.6824 84.6824 84.4969
Cervecería Kunstmann S.A. 96,981,310-6 Chile Chilean Pesos 50.0007 - 50.0007 50.0007
Cervecera CCU Chile Ltda. (12) 96,989,120-4 Chile Chilean Pesos 99.8064 0.1935 99.9999 99.9999
Embotelladoras Chilenas Unidas S.A. 99,501,760-1 Chile Chilean Pesos 98.8000 1.1834 99.9834 99.9834
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
Cía. Cervecerías Unidas Argentina S.A. 0-E Argentina Argentine Pesos - 99.9937 99.9937 99.9937
Compañía Industrial Cervecera S.A. (3) 0-E Argentina Argentine Pesos - 99.9950 99.9950 99.9950
Finca La Celia S.A. (5) 0-E Argentina Argentine Pesos - 84.6824 84.6824 84.4969
Los Huemules S.R.L. 0-E Argentina Argentine Pesos - 74.9979 74.9979 74.9979
Sáenz Briones y Cía. S.A.I.C. (3) 0-E Argentina Argentine Pesos - 99.9369 99.9369 99.9369
Bebidas Bolivianas BBO S.A. (11) 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
VSPT US LLC (6) 0-E United States US Dollar - 84.6824 84.6824 84.4969
VSPT UK Ltd. (7) 0-E United Kingdom Sterling Pound - 84.6824 84.6824 -
Bebidas del Paraguay S.A. (**) 0-E Paraguay Paraguayan Guaranies - 50.0050 50.0050 50.0050
Distribuidora del Paraguay S.A. (**) 0-E Paraguay Paraguayan Guaranies - 49.9590 49.9590 49.9590
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 - 49.5049 49.5049 49.5049
Andrimar 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
Milotur S.A. 0-E Uruguay Uruguayan Pesos - 100.0000 100.0000 100.0000
               

 

 

(*) Listed company in Chile.

(**) See Note 1 – General Information, letter C), 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.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

In addition to what is shown in the preceding table, the following are the percentages of participation with voting rights, in each of the subsidiaries. Each shareholder has one vote per share owned or represented. The percentage of participation with voting rights represents the sum of the direct participation and indirect participation through a subsidiary.

 

Subsidiary Tax ID Country of origin Functional currency Share percentage with voting rights
As of September 30, 2022 As of December 31, 2021
% %
Aguas CCU-Nestlé Chile S.A. 76,007,212-5 Chile Chilean Pesos 50.0917 50.0917
Cervecera Guayacán SpA. (***) 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. (10) 76,248,389-0 Chile Chilean Pesos - 100.0000
Bebidas CCU-PepsiCo SpA. (***) 76,337,371-1 Chile Chilean Pesos 49.9888 49.9888
CCU Inversiones II SpA. (1) (8) (9) 76,349,531-0 Chile US Dollar 100.0000 100.0000
Cervecería Szot SpA. (***) 76,481,675-7 Chile Chilean Pesos 25.0006 25.0006
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. (2) 76,572,360-4 Chile US Dollar 99.9922 99.9922
Promarca Internacional SpA. (***) 76,574,762-7 Chile US Dollar 49.9917 49.9917
CCU Inversiones S.A. (4) 76,593,550-4 Chile Chilean Pesos 99.9775 99.9775
Inversiones Internacionales SpA. 76,688,727-9 Chile US Dollar 80.0000 80.0000
Promarca S.A. (***) 76,736,010-K Chile Chilean Pesos 49.9917 49.9917
La Barra S.A. (14) 77,148,606-1 Chile Chilean Pesos 100.0000 100.0000
Mahina SpA. (***) 77,248,551-4 Chile Chilean Pesos 25.0458 25.0458
Volcanes del Sur S.A. (13) 77,622,887-7 Chile Chilean Pesos 74.9503 -
Transportes CCU Ltda. 79,862,750-3 Chile Chilean Pesos 100.0000 100.0000
Fábrica de Envases Plásticos S.A. 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. (*) (4) 91,041,000-8 Chile Chilean Pesos 84.6824 84.4969
Manantial S.A. 96,711,590-8 Chile Chilean Pesos 50.5519 50.5519
Viña Altaïr SpA. 96,969,180-9 Chile Chilean Pesos 84.6824 84.4969
Cervecería Kunstmann S.A. 96,981,310-6 Chile Chilean Pesos 50.0007 50.0007
Cervecera CCU Chile Ltda. (12) 96,989,120-4 Chile Chilean Pesos 100.0000 100.0000
Embotelladoras Chilenas Unidas S.A. 99,501,760-1 Chile Chilean Pesos 99.9834 99.9834
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
Cía. Cervecerías Unidas Argentina S.A. 0-E Argentina Argentine Pesos 100.0000 100.0000
Compañía Industrial Cervecera S.A. (3) 0-E Argentina Argentine Pesos 100.0000 100.0000
Finca La Celia S.A. (5) 0-E Argentina Argentine Pesos 84.6824 84.4969
Los Huemules S.R.L. 0-E Argentina Argentine Pesos 74.9979 74.9979
Sáenz Briones y Cía. S.A.I.C. (3) 0-E Argentina Argentine Pesos 100.0000 100.0000
Bebidas Bolivianas BBO S.A. (11) 0-E Bolivia Bolivians 51.0000 51.0000
International Spirits Investments USA LLC 0-E United States US Dollar 80.0000 80.0000
VSPT US LLC (6) 0-E United States US Dollar 84.6824 84.4969
VSPT UK Ltd. (7) 0-E United Kingdom Sterling Pound 84.6824 -
Bebidas del Paraguay S.A. (**) 0-E Paraguay Paraguayan Guaranies 50.0050 50.0050
Distribuidora del Paraguay S.A. (**) 0-E Paraguay Paraguayan Guaranies 49.9590 49.9590
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 49.5049 49.5049
Andrimar 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
Milotur S.A. 0-E Uruguay Uruguayan Pesos 100.0000 100.0000
           

 

(*) Listed company in Chile.

(**) See Note 1 – General Information, letter C), 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.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The main movements in the ownership of the subsidiaries included in these Interim consolidated financial statements are the following:

 

(1) CCU Inversiones II SpA.

 

On August 18, 2021 the Company made a capital contribution to subsidiary CCU Inversiones II SpA. in the amount of US$ 7,500,000 (equivalent to ThCh$ 5,922,150).

 

Through public deed dated September 30, 2021, the Company and CCU Inversiones S.A., as the only partners of CCU Inversiones II SpA., agreed to turn this company into a joint-stock company (SpA.).

 

At the Extraordinary Shareholders’ Meeting of CCU Inversiones II SpA., held on November 30, 2021, the merger of Southern Breweries S.C.S. was agreed, by its incorporation into CCU Inversiones II SpA.

 

Under this merger, the capital of CCU Inversiones II SpA is fully subscribed and paid-in for a total of US$ 281,834,863, divided into 219,486,075 registered shares, of the same and unique series, and without nominal value, in which CCU S.A. has a participation of 58.8429%, CCU Inversiones S.A. has a participation of 0.0489%, Inversiones Invex CCU Tres Limitada has a participation of 41.1070% and Inversiones CCU Lux S.à r.l. has a participation of 0.0012%.

 

As a result of the above mentioned, CCU Inversiones II SpA. is the sole shareholder of CCU Inversiones III SpA. as the latter was previously owned by Southern Breweries S.C.S.

 

On December 31, 2021, by resolution of the sole shareholder, the merger of CCU Inversiones III SpA. was agreed, by its incorporation into CCU Inversiones II SpA.

 

Under this merger, CCU Inversiones II SpA., will acquire all the assets, authorizations, permits, obligations and liabilities of CCU Iversiones III SpA., and will succeed it in all its rights and obligations. As a result of the merger, all the capital of the Absorbed Company will be incorporated into the Absorbing Company, which it will be dissolved without the need of its liquidation. The latter did not generate effects at the CCU S.A. consolidated level.

 

(2) Inversiones Invex CCU Ltda.

 

On June 1, 2021, the Company agreed to the division of this subsidiary, with the establishment of a new, limited liability company called Inversiones Invex SB Limitada. For division purposes the share capital of Inversiones Invex CCU Ltda. was reduced from US$ 306,466,817 to US$ 185,322,809 (equivalent ThCH$ 221,302,753 and ThCh$ 133,823,454).

 

Through public deed dated August 2, 2021, the liquidation of Inversiones Invex SB Ltda. was agreed upon and materialized on July 31, 2021. In the dissolution agreement for that company its assets and liabilities were transferred to its partners, Inversiones Invex Tres Ltda., CCU Inversiones S.A. and CCU S.A. The latter did not generate effects at the CCU S.A. consolidated level.

 

(3) Compañía Industrial Cervecera S.A. y Sáenz Briones y Cía. S.A.I.C.

 

On April 16, 2021, subsidiary Compañía Industrial Cervecera S.A., acquired 481,643 shares of the stock rights of Argentinean company Sáenz Briones y Cía. S.A.I.C., by buying two minority shareholders, consequently leaving it with a 94.2138% interest in that company.

 

The amount disbursed for this transaction was ThCh$ 3,540,618 (337 million Argentine pesos) and the effect on equity recognized in the Company due to this change in interest amounted to ThCh$ 2,845,888.

 

On July 13, 2021, subsidiary Compañía Industrial Cervecera S.A., acquired 160,548 shares of the stock rights of Argentinean company Sáenz Briones y Cía. S.A.I.C., by buying one minority shareholders. Consequently, it now has a 95.6345% interest in said company.

 

The amount disbursed for this transaction was ThCh$ 1,168,183 (122 million Argentine pesos) and the effect on equity recognized in the Company due to this change in interest was ThCh$ 1,086,489.

 

On August 9, 2021, subsidiary Compañía Industrial Cervecera S.A., acquired 481,920 shares of the stock rights of Argentinean company Sáenz Briones y Cía. S.A.I.C., by buying one minority shareholders. Consequently, it now has a 99.9419% interest in that company.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

The amount disbursed for this transaction was ThCh$ 3,636,863 (390 million Argentine pesos) and the effect on equity recognized in the Company due to this change in interest was ThCh$ 3,267,148.

 

(4) CCU Inversiones S.A. y Viña San Pedro Tarapacá S.A.

 

On September 10, 2021 and October 4, 2021, subsidiary CCU Inversiones S.A. acquired an additional 0.4485% and 1.0670% of subsidiary Viña San Pedro Tarapacá S.A. for the amount of ThCh$ 1,167,074 and ThCh$ 2,694,720, equivalent to 179,274,015 and 424,365,414 shares, which generated an equity effect of ThCh$ 245,244, reaching a direct shareholding of 84.5159%.

 

On September 7, 2022, the subsidiary CCU Inversiones S.A. acquired an additional 0.1856% of the subsidiary Viña San Pedro Tarapacá S.A. for ThCh$ 438,105, equivalent to 74,000,000 shares, reaching a direct participation of 84.7015%, which generated an effect on the Company’s equity of ThCh$ 102,625.

 

(5) Finca La Celia S.A. and Bodega San Juan S.A.U.

 

On December 21, 2020, the boards of Finca La Celia S.A. and Bodega San Juan S.A.U. approved to execute a merger process of both companies, in which Finca La Celia S.A. absorbed Bodega San Juan S.A.U. the latter being dissolved without liquidation, with effect from January 1, 2021. This process did not have a significant effect on its financial statements. In order to the merge takes place, all the formal and applicable requirements and stages established by Argentine regulations must be met, and it will must be approved in the last instance by the General Inspection of Justice of the City of Buenos Aires, Argentina. The Management estimates that this process will not generate significant effects on its Financial Statements. The last instance mentioned above as of September 30, 2022, is still in process.

 

(6) VSPT US LLC

 

On August 9, 2021, the Company through its subsidiary Viña San Pedro Tarapacá S.A. established the company VSPT US LLC in the United States, the latter with a corporate purpose of marketing, sales and distribution of wine. The company capital amounts to US$ 400,000 (equivalent ThCh$ 337,876), which was paid-in on November 2, 2021.

 

(7) VSPT UK Ltd.

 

On June 1, 2022 the company VSPT UK Ltd. was incorporated in United Kingdom, whose corporate purpose is the commercialization of wines. On June 1, 2022 the capital of the company was paid in, which amounts to £ 1 (equivalent to $ 1,135.30)

 

(8) Inversiones CCU Lux S.à r.l.

 

On August 30, 2021 through a share transfer contract, CCU Inversiones II SpA. sold its interest in subsidiary CCU Lux
S.à r.l. to the Company for ThCh$ 127,567 (US$ 163,554).

 

On December 16, 2021, before Luxembourg public notary, the Company, in its capacity as sole shareholder of Inversiones CCU Lux S.à r.l., owner of all its 163,554 shares with a nominal value of US$ 1.00 each, (equivalent to ThCh$ 138,779), resolved the dissolution of Inversiones CCU Lux S.à r.l., in accordance with the laws of the Grand Duchy of Luxembourg. Consequently, Inversiones CCU Lux S.à r.l. was dissolved effective on December 16, 2021, automatically passing all its assets and liabilities to its sole shareholder Compañía Cervecerías Unidas S.A. The latter did not generate effects at the CCU S.A. consolidated level.

 

(9) CCU Inversiones III SpA.

 

Through a resolution, without the form of a shareholders’ meeting, granted on December 29, 2021, CCU Inversiones II SpA., in its capacity as sole shareholder of CCU Inversiones III SpA., resolved to approve a dividend distribution of US$ 17,133,000, equivalent to ThCh $14,664,820 charged against retained earnings.

 

On this same date, and according to the Conventional Compensation document between CCU Inversiones III SpA. and CCU Inversiones II SpA., the parties agreed the prepayment of the current financial obligation through the dividend mentioned above.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Related to the above mentioned, CCU Inversiones II SpA. prepaid the Loan in advance for the sum of US$ 17,133,000, of which US$ 1,098,278 (equivalent to ThCh$ 940,060) corresponds to accrued interest and US$ 16,034,722 (equivalent to ThCh$ 13,724,760) corresponds to capital.

 

Subsequently, on December 31, 2021, by resolution of the sole shareholder, the merger of CCU Inversiones III SpA. was agreed, by its incorporation into CCU Inversiones II SpA., date on which CCU Inversiones III SpA., was dissolved. The latter did not generate effects at the CCU S.A. consolidated level.

 

(10) Inversiones CCU Tres Ltda.

 

By public deed dated May 26, 2022, Compañía Cervecerías Unidas S.A. and CCU Inversiones S.A., as sole and current partners of Inversiones Invex CCU Tres Limitada, approved an amendment to the bylaws, which establishes a duration of Inversiones Invex CCU Tres Limitada until June 30, 2022. Consequently, the company was dissolved on July 1, 2022, date on which its assets were assigned to its partners. CCU S.A. received the assets corresponding to the investments in Inversiones Invex CCU Ltda. and CCU Inversiones II SpA. amounting to ThCh$ 136,109,435 and ThCh$ 3,481,557, respectively, and cash of ThCh$ 596,021, while CCU Inversiones S.A. received cash of ThCh$ 20.

 

Since the dissolution of Inversiones Invex CCU Tres Limitada on June 30, 2022, CCU S.A. has a 99.9511% interest and CCU Inversiones S.A. maintains its 0.0489% interest.

 

(11) Bebidas Bolivianas BBO S.A.

 

On April 26 and June 13, 2022, the subsidiary CCU Inversiones II SpA. made capital contributions to Bebidas Bolivianas BBO S.A. in the amount of US$ 1,019,971 and US$ 1,019,971 (equivalent to ThCh$ 786,483 and ThCh$ 861,638) respectively. Since both partners participated in proportion to the current shareholding, the percentages of participation were maintained.

 

(12) Cervecera CCU Chile Ltda.

 

On August 16, 2022, the Company made a capital increase to the subsidiary Cervecera CCU Chile Ltda. in the amount of ThCh$ 6,750,000. As only CCU participated in this capital increase, the participation in Cervecera CCU Chile Ltda. is 99.81% for CCU and 0.19% for Millahue S.A.

 

(13) Volcanes del Sur S.A.

 

On August 24, 2022, the subsidiaries Cervecería Kunstmann S.A. and Cervecera CCU Chile Ltda. jointly acquired brands of Volcanes del Sur S.A. for ThCh$ 12,950,000. This transaction generated a direct participation in Volcanes del Sur S.A. of 50.1% for Cervecería Kunstmann S.A. and 49.9% for Cervecera CCU Chile Ltda.

 

(14) La Barra S.A.

 

At the Extraordinary Shareholders' Meeting of La Barra S.A., held on September 2, 2022, it was approved to carry out a capital increase for a total of ThCh$ 4,500,000, equivalent to 4,500,000,000 shares. The Company and the subsidiary Cervecera CCU Chile Ltda. will materialize this capital increase according to their percentage of participation (99% and 1%, respectively). As of September 30,2022 the contribution is subscribed and unpaid. The effective payment date was October 7, 2022.

 

Subsidiaries with direct or indirect participation of less than 50%

 

These Interim 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.

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Joint operations:

 

The joint arrangements that qualify as joint operations are as follows:

 

(a) Promarca S.A.

 

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 September 30, 2022, Promarca S.A. recorded a profit of ThCh$ 5,779,567 (ThCh$ 4,148,089 as of September 30, 2021), 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 September 30, 2022, BCP recorded a profit of ThCh$ 3,784,827 (ThCh$ 1,846,277 as of September 30, 2021) 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 September 30, 2022, BCCCU recorded a loss of ThCh$ 130,601 (ThCh$ 108,385 as of September 30, 2021).

 

The companies mentioned above, letter a) to c), meet the conditions stipulated in IFRS 11 to be considered "joint operations", since the primary assets in both entities are trademarks, the contractual arrangements establishes that the parties to the joint arrangement share all interests in the assets relating to the arrangement in a specified proportion and their income is 100% from royalties charged to the joint operators for the sale of products using these trademarks.

 

D)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.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

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.

 

Status of the Transaction as of September 30, 2022

 

In accordance with Section III mentioned above, CCU-A will receive annual payments of up to US$ 28,000,000 equivalent to ThCh$ 17,107,440, before taxes, from ABI within a period of up to 3 years, depending on the volume and the time it takes for the transition of production and/or commercialization of the Brands to CCU-A. This will be reflected in our state of income, as this obligation is fulfilled. As of September 30, 2022, there is no income from this item (US$ 4,703,062 as of September 30, 2021, equivalent to ThCh$ 3,818,416).

 

 

 

Note 2    Summary of significant accounting policies

 

Significant accounting policies adopted for the preparation of these Interim Consolidated Financial Statements are described below:

 

2.1Basis of preparation

 

The accompanying interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standard Board (IASB), which have been uniformly applied in the periods presented.

 

The Interim Consolidated Financial Statements have been prepared on a historical basis, as modified by the subsequent valuation of financial assets and financial liabilities (including derivative instruments) at fair value.

 

The preparation of the Interim Consolidated 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. See Note 3 - Estimates and application of professional judgment for disclosure of significant accounting estimates and judgments. At the date of issuance of these Interim Consolidated Financial Statements, new Standards, Improvements, Amendments and Interpretations to existing standards have been issued, although these have not yet become effective, and the Company has not adopted in advance or applied whenever applicable.

 

The application of new accounting pronouncements as of January 1, 2021, had no significant effect on the Company's consolidated financial statements.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

These standards are required to be applied by the following dates:

 

Next Standard Improvements and Amendments Mandatory for years beginning in:
Amendments to IAS 1 - IAS 8 Presentation of financial statements, and accounting policies, changes in accounting estimates and errors. January 1, 2023
Amendments to IAS 12 Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction. January 1, 2023
IFRS 17 Insurance contracts. January 1, 2023
IFRS 17 - IFRS 9 Initial application and comparative information. January 1, 2023
Amendments to IAS 1 Presentation of financial statements and accouting policies,classification and liquidation of labialities January 1, 2024
     

 

The Company estimates the adoption of these new Standards, Improvements, Amendments and Interpretations mentioned in the table above will not have a material impact on the Consolidated Financial Statements.

 

2.2Basis of consolidation

 

Subsidiaries

 

Subsidiaries are entities over which the Company has power to direct their financial and operating policies, which generally is the result of ownership of more 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 Interim Consolidated Financial Statements is considered. Subsidiaries are consolidated from the date on which control was obtained by the Company, and 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, regardless 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.

 

 

Joint operations

 

As explained in Note 1- General information, for the joint arrangements that qualify as joint operations, the Company recognizes its share of the assets, liabilities and income in respect to its interest in the joint operations in accordance with IFRS 11.

 

Intercompany transaction

 

Intercompany transactions, balances and unrealized gains from transactions between the Company’s entities are eliminated in consolidation. Unrealized losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. Whenever necessary, the accounting policies of subsidiaries are amended to ensure uniformity with the policies adopted by the Company.

 

Non-controlling Interest

 

Non-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 non-controlling interest are each disclosed separately in the Interim Consolidated Statement of Income after net income.

 

Investments accounted for 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 entities in which the investor does not have significant influence and are not a subsidiary or a joint venture.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The Company accounts for its participation in joint arrangements that qualify as joint ventures and in associates using the equity method. The financial statements of the joint venture are prepared for the same year, under accounting policies consistent with those of the Company. Adjustments are made to agree any difference in accounting policies that may exist with the Company’s accounting policies.

 

Whenever the Company contributes or sells assets to companies under joint control or associates, any income or loss arising from the transaction is recognized based on how the asset is realized. When the Company purchases assets from those companies, it does not recognize its share in the income or loss of the joint venture in respect to such transaction until the asset is sold or realized.

2.3Financial information as per operating segments

 

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 (See Note 6 - 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, Gains (losses) on 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.

 

Corporate revenues and expenses are presented separately within the Other.

 

2.4Foreign currency and adjustment units

 

Presentation and functional currency

 

The Company and subsidiaries 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 U.S., Argentinian, Uruguayan, Paraguayan and Bolivian and United Kingdom subsidiaries is the US Dollar, Argentine Peso, Uruguayan Peso, Paraguayan Guarani, Bolivian and Sterling Pound, respectively. The functional currency of the joint venture in Chile and Colombia and associate in Argentine and Perú is the Chilean Peso, Colombian Peso and Argentine Peso and the 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 Interim 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 Gains (losses) on exchange differences arising, both from the liquidation of foreign currency transactions, as well as from the valuation of foreign currency monetary assets and liabilities, are included in the Statement of income, in Gains (losses) on 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.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

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 using the exchange rates prevailing at the date of the Interim Consolidated Financial Statements and Gains (losses) on exchange differences originated by the conversion of assets and liabilities, are recorded under Reserve of exchange differences on translation within Other equity reserves. Incomes, costs and expenses are translated at the average monthly exchange rate for the respective 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.

 

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 of 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, 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 a hyperinflationary economy be restated in accordance with IAS 29 before being converted at the closing exchange rate on the reporting date and to be included in the consolidated financial statements.

 

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 Gains (losses) derived from net monetary position of the subsidiaries in Argentina are presented below, which are recorded in Result as per adjustment units:

 

  For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Gains (losses) derived from net monetary position (934,411) 2,541,139 2,748,204 901,639
         

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The exchange rates of the primary foreign currencies, adjustment units and index used in the preparation of the consolidated financial statements are detailed as follows:

 

Chilean Pesos as per unit of foreign currency or adjustable unit As of September 30, 2022 As of December 31, 2021 As of September 30, 2021
Ch$ Ch$ Ch$
Foreign currencies          
US Dollar USD   960.24 844.69 811.90
Cumulative monthly avarege US Dollar Averange USD   858.59 759.27 783.63
Euro EUR   939.85 955.64 939.48
Argentine Peso ARS   6.52 8.22 8.22
Uruguayan Peso UYU   23.01 18.91 18.91
Canadian Dollar CAD   696.13 660.79 639.39
Sterling Pound GBP   1,069.31 1,139.32 1,092.88
Paraguayan Guarani PYG   0.14 0.12 0.12
Swiss Franc CHF   974.57 923.66 869.46
Bolivian BOB   137.97 121.36 116.65
Australian Dollar AUD   616.96 612.23 585.70
Danish Krone DKK   126.42 128.51 126.35
Brazilian Real BRL   179.17 151.68 148.77
Colombian Peso COP   0.21 0.21 0.21
Adjustment units          
Unidad de fomento (*) UF   34,258.23 30,991.74 30,088.37
Unidad indexada  (**) UI   128.65 98.26 95.58
           

 

(*) 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 September 30, 2022 As of December 31, 2021 As of September 30, 2021  
 
Argentina Consumer Price Index                      970.36 578.87 523.15  
Index percentage variation of Argentina Consumer Price Index     66.6% 50.0% 35.6%  
             

 

 

2.5Cash and cash equivalents

 

Cash and cash equivalents include available cash, bank balances, time deposits at financial entities, investments in mutual funds and financial instruments acquired under resale agreements, as well as highly liquid short-term investments, all at a fixed interest rate, normally with original maturity of up to three months.

 

2.6Other financial assets

 

Other financial assets include money market securities, derivative contracts with financial institutions and time deposits with maturities of more than 90 days.

 

2.7Financial instruments

 

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.

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Financial assets

 

The Company recognizes a financial asset in its Interim Consolidated Statement of Financial Position as follows:

 

As of the date of initial recognition, management classifies its financial assets: (i) at fair value through profit and loss (ii) Trade and other current receivables and (iii) hedging derivatives. The classification depends on the purpose for which the financial assets were acquired. For instruments not classified at fair value through Income, any cost attributable to the transaction is recognized as part of the asset’s value.

 

The fair value of instruments that are actively traded in formal markets is determined by the traded price on the Interim Financial Statement closing date. For investments without an active market, fair value is determined using valuation techniques 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 flows and (iv) other valuation models.

 

After initial recognition, the Company values the financial assets as described below:

 

Trade and other current receivables

 

Trade receivable credits or accounts are recognized according to their invoice value.

 

The Company purchases credit insurance covering approximately 90% of individually significant accounts receivable balances for the domestic market and the international market, of total trade receivable, respectively, net of a 10% deductible.

 

An impairment of accounts receivable balances is recorded when there is 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 is 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.

 

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 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.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Financial liabilities

 

The Company recognizes a financial liability in its InterimConsolidated Statement of Financial Position as follows:

 

Interest-bearing loans and financial obligations

 

Interest-bearing loans and financial obligations are initially recognized at the fair value of the resources obtained, less incurred costs that are directly attributable to the transaction. After initial recognition, interest-bearing loans and obligations are measured at amortized cost. The difference between the net amount received and the value to be paid is recognized in the Interim Consolidated Statement of Income over the term of the loan, using the effective interest rate method.

 

Interest paid and accrued related to loans and obligations used to finance its operations are presented under Finance costs.

 

Interest-bearing loans and obligations maturing within twelve months are classified as current liabilities, unless the Company has the unconditional right to defer payment of the obligation for at least twelve months after the closing date of the Interim Consolidated Financial Statement.

 

Trade and other payables

 

Trade and other payables are initially recognized at 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 Interim 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.

 

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 for the purpose of selling them in the short term.

 

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 in 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%.

 

The total fair value of a hedging derivative 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 Interim 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 Interim 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 Interim 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 Interim 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 Interim Consolidated Statement of Income.

 

Derivative instruments are classified as held for trading unless they are classified as hedge instruments.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

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.

 

2.8Financial asset impairment

 

As of each Interim consolidated financial statement date the Company assesses whether a financial asset or 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 Interim Consolidated Statement of Income, as Administrative expenses.

 

If the impairment loss amount decreases during subsequent period and such decrease can be objectively related to an event occurred after recognition of the impairment, the previously recognized impairment loss is reversed.

 

Any subsequent impairment reversal is recognized in Income provided that the carrying amount of the asset does not exceed its value as of the date the impairment was recognized.

 

2.9Inventories

 

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 for 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.

 

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.

 

2.10Current biological assets

 

Under current Biological assets, the Company includes the costs associated with agricultural activities (grapes), which are capitalized up to the harvesting date, when they become part of the inventory cost for subsequent processes. The Company considers that the costs associated with agricultural activities represent a reasonable approximation to their fair value.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

2.11Other non-financial assets

 

Other non-financial assets mainly include prepayments 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 paid guarantees related with leases and materials to be consumed related to industrial safety implements.

 

2.12Property, plant and equipment

 

Property, plant and equipment items are recorded at their historic cost, less accumulated depreciation and impairment losses. The cost includes both 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 to the Company, and costs may be reasonably measured. Subsequent disbursements related to repairs and maintenance are recorded as expenses when incurred.

 

Depreciation of property, plant and equipment items, including assets under financial lease, is calculated on a straight-line basis over the estimated useful lives of 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 Interim Financial Statement closing date, if necessary.

 

The estimated useful lives of property, plant and equipment 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) 5 to 8
Glass containers,  plastic and containers 3 to 12
Vines in production 30
   

 

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 Interim Consolidated Statement of Income.

 

Biological assets held by Viña San Pedro Tarapacá S.A. (VSPT) and its subsidiaries consist of vines in formation and in production. Harvested grapes are used for subsequent wine production.

 

Vines under production are valued at the historic cost, less depreciation and any impairment loss.

 

Depreciation of vines in production is recorded using the straight-line method over the 30-year estimated average production life, which is periodically assessed. Vines in formation are not depreciated until they start producing.

 

Costs incurred in acquiring and planting new vines are capitalized.

 

When the carrying amount of a property, plant and equipment item exceeds its recoverable value, it is immediately written down to its recoverable amount (See Note 2 - Summary of significant accounting policies 2.17).

 

2.13Leases

 

Lease contracts are recorded by recognizing an asset for the right to use the assets subject to operational lease contracts recorded under Right of use assets and a liability recorded under Current lease liabilities, which are 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.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

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, 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.

 

Prior to the adoption of IFRS 16, the Company classified leases as finance leases when all the risks and rewards associated with the ownership of the assets 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 minimum payments or 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 cost of the period. In case of operating leases, the expense was accounted based on the duration of the lease agreement for the value of the accrued service.

 

2.14Investment properties assets

 

Investment property consist of land and buildings held by the Company for the purpose of generating appreciation and not to be used in the normal course of business, and are recorded at historical cost less any impairment loss. Depreciation of investment property, excluding land, is calculated using the straight-line method over the estimated useful life of the asset, taking into account their estimated residual value.

 

2.15Intangible assets other than goodwill

 

Commercial trademarks

 

The Company’s commercial trademarks are intangible assets with indefinite useful lives that are presented at historical cost, less any impairment loss. The Company believes that through investing in marketing, trademarks maintain their value, consequently they are considered as having indefinite useful lives and they are not amortizable. These assets are tested for impairment annually or more frequently if events or circumstances indicate potential impairment (See Note 2 - Summary of significant accounting policies 2.17).

 

Software program

 

Software program licenses are capitalized at the value of the costs incurred in their acquisition and in preparing the software for use. Such costs are amortized over their estimated useful lives (4 to 7 years). The maintenance costs of software programs are recognized as an expense in the year in which they are incurred.

 

Water rights

 

Water rights acquired by the Company correspond to the right to use existing water from natural sources, and are recorded at their attributed cost as of the date of transition to IFRS. Since such rights are perpetual they are not amortizable, however they are tested for impairment annually, or more frequently if events or circumstances indicate potential impairment (See Note 2 - Summary of significant accounting policies 2.17).

 

Distribution rights

 

Corresponds to rights acquired to distribute different products. These rights are amortized over their estimated useful lives.

 

Research and development

 

Research and development expenses are recognized in the period incurred.

 

2.16Goodwill

 

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquire and the acquisition date fair value of any previous equity interest in the acquire over the fair value of the identifiable net assets 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.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

For the purpose of impairment testing, goodwill is allocated to each of the Cash Generating Units (CGUs), or groups of CGUs, that is expected to benefit from the synergies of a business combination. Each unit or group of units (See Note 18 - Goodwill) to which the goodwill is allocated represents the lowest level within the entity at which goodwill is monitored for internal management purposes, which is not larger than a business segment. The CGUs to which the goodwill is assigned are tested for impairment annually or more frequently if events or changes in circumstances indicate potential impairment.

 

An impairment loss is recognized for the amount by which the carrying amount of the CGU exceeds its recoverable amount. The recoverable amount of the CGU is the higher of value in use and the fair value less costs to sell.

 

An impairment loss is first allocated to goodwill to reduce its carrying amount, and then to other assets in the CGU. Once recognized, impairment losses are not subsequently reversed.

 

Goodwill that forms part of the carrying amount of an investment in a joint venture is not separately 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 investment may be impaired.

2.17Impairment of non-financial assets other than goodwill

 

The Company annually assesses the existence of non-financial asset impairment indicators. When indicators exist, the Company estimates the recoverable amount of the impaired asset. If it cannot 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 lives which are not amortized, the Company performs all required testing to ensure that the carrying amount does not exceed the recoverable value.

 

The recoverable value is defined as the fair value, less selling cost or value in use, whichever is higher. Value in use is determined by estimating future cash flows associated to the asset or to 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. If the carrying amount of the asset exceeds its recoverable amount, the Company records an impairment loss in the Statement of Income.

 

For the rest of non-financial assets other than goodwill and intangibles with indefinite useful lives, the Company assesses the existence of impairment indicators when an event or change in business circumstances indicates that the carrying amount of the asset may not be recoverable and impairment is recognized when the carrying amount is higher than the recoverable value.

 

The Company annually assesses whether 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 carrying amount is increased, if necessary. Such increase is recognized in the Interim Consolidated 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. The increase in the asset due to reversal of the impairment loss is limited to the amount that would have been recorded had the impairment not occurred.

 

2.18Non-current assets of disposal groups classified as held for sale

 

The Company register as non-current assets of disposal groups classified as held for sale as Property, plant and equipment expected to be sale, for which active sale negotiations have begun.

 

These assets are measured at the lower of their carrying amount and the estimated fair value, less selling costs. From the moment in which the assets are classified as non-current assets of disposal group classified held for sale they are no longer depreciated.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

2.19Income taxes

 

The income tax account is composed of current income tax associated to legal income tax obligations and deferred taxes recognized in accordance with IAS 12. Income tax is recognized in the Interim Consolidated Statement of Income by Function, except when it is related to items recorded directly 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 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 carrying 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 on temporary differences arising from investments in subsidiaries and associates, except in 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 arising from tax losses are recognized provided it is likely that in the future there will be taxable profits against which deductible temporary differences can be 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 tax authority.

 

2.20Employees benefits

 

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 value by 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 Interim Consolidated Statement of Income.

 

According to the amendment of IAS 19, the actuarial gains and losses are recognized directly in Interim Consolidated Statemen of Comprehensive Income, under Equity and, according to the accounting policies of the Company, financial costs related to the severance indemnity are directly recorded under financial cost in the Interim Consolidated Statement of Income.

 

2.21Provisions

 

Provisions are recognized when: (i) the Company has a current 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 Interim Consolidated Financial Statement closing date, are Management’s best estimates, and consider the necessary disbursements to liquidate the obligation.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The concepts used by the Company to establish provisions charged against income correspond mainly to civil, labor and taxation proceedings that could affect the Company (See Note 24 - Other provisions).

 

2.22Revenue recognition

 

Revenue is recognized when it is likely that economic benefits will flow to the Company and these can be reliably measured. Income is measured at the fair value of the economic benefits received or to be received, and is presented net of valued added tax, specific taxes, returns, discounts and rebates. Goods sold are recognized after the Company has transferred to the buyer all the risks and benefits inherent to ownership of the goods, and it do not have the right to dispose of them. In general, this means that sales are recorded when the risks and benefits of ownership are transferred to the customer, pursuant to the terms agreed in the commercial 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, nectars, wines, cider and spirits, products that are distributed through retail establishments, wholesale distributors and supermarket chains, 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 and once the performance obligation is satisfied.

 

Exports

 

In general, the Company’s sales delivery conditions 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 the buyer organizes and pays for transportation, consequently the sales occur 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 merchandise at the port of destination.

 

In case of discrepancies between the commercial agreements and Incoterms, the former 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.

 

2.23Commercial agreements with distributors and supermarket chains

 

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 due to commercial initiatives development (temporary promotions), (iii) payment for services and rendering of counter-services (advertising and promotional agreements, use of preferential spaces and others) and (iv) shared advertising, which corresponds to the Company’s participation in advertising campaigns, promotional magazines and opening of new sales locations.

 

Volume discounts and promotional discounts are recognized as a reduction in the selling 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.

 

Commitments with distributors or importers in the exports area are recognized on the basis of existing trade agreements.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

2.24Cost of sales of products

 

Cost of sales includes the production cost of the products sold and other costs incurred to place inventories at the locations and under the conditions necessary for the sale. Such costs mainly include raw materials costs, packing costs, production staff labor costs, production-related asset depreciation, returnable bottles depreciation, license payments, operating costs and plant and equipment maintenance costs.

 

2.25Other incomes by function

 

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.

 

2.26Other expenses by function

 

Other expenses by function mainly include advertising and promotion expenses, depreciation of assets sold, selling expenses, marketing costs (sets, signs, and neon signs at customer facilities) and marketing and sales staff remuneration and compensation.

 

2.27Distribution expenses

 

Distribution costs include all the necessary costs to deliver products to customers.

 

2.28Administrative expenses

 

Administrative expenses include support unit staff remuneration and compensation, depreciation of offices, equipment, facilities and furniture used for these functions, non-current asset amortization and other general and administrative expenses.

 

2.29Environment liabilities

 

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 reliably calculated.

 

Disbursements related to environmental protection are charged to the Interim Consolidated Statements of Income by Function as incurred, except for investments in infrastructure designed to comply with environmental requirements, which are accounted for following the accounting policies for property, plant and equipment.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 3    Estimates and application of professional judgment

 

The preparation of Financial Statement Consolidated requires estimates and assumptions from Management affecting the amounts included in the Interim Consolidated Financial Statements and their related notes. The estimates made and the assumptions used by the Company are based on 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.

 

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 - Summary of significant accounting policies (2.16) and Note 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) and Note 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) and Note 26 – Employee benefits).
Useful lives of property, plant and equipment (Note 2 - Summary of significant accounting policies (2.12) and Note 19 – Property, plant and equipment) and intangibles (Note 2 - Summary of significant accounting policies (2.15) and Note 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) and Note 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) and Note 24 – Other provisions).
The valuation of current Biological assets (Note 2 - Summary of significant accounting policies (2.10) and Note 13 – Biological assets).

 

Such estimates are based on the best available information of the events analyzed to date in these Interim Consolidated Financial Statements. However, it is possible that events that may occur in the future may result in adjustments to such estimates, which would be recorded prospectively.

 

 

Note 4    Accounting changes

 

During the nine months ended on September 30, 2022 , there have been no changes in the use of accounting principles or relevant changes in any accounting estimates with regard to previous years that have affected these Interim Consolidated Financial Statements.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 5    Risk Administration

 

Risk administration

 

In companies where CCU has a controlling interest, the Company’s Administration and Finance Management Department provides a centralized service for the group’s companies to obtain financing and administration of exchange rates, interest rates, liquidity, inflation, raw materials and credit risks. Such activity operates in accordance with a framework of policies and procedures which is regularly reviewed to ensure it fulfils the purpose of managing the risks by business needs.

 

In companies with a non-controlling interest (VSPT, CPCH, Aguas CCU-Nestlé S.A., Bebidas del Paraguay S.A., Cervecería Kunstmann S.A. and Bebidas Bolivianas BBO S.A.) the responsibility for this service lies with the respective Board of Directors and respective Administration and Finance Management Department. When 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 reviewing significant changes made to risk management policies.

 

In accordance with financial risk policies, the Company uses derivate instruments only for the purpose of hedging exposure to interest rate and exchange rate risks arising from the Company’s operations and its sources of financing, which some of them are treated as hedges for accounting purposes. Transactions with derivate instruments are exclusively carried out by the Administration and Finance staff and the Internal Audit Management Department regularly reviews the control of this function. Relationships with credit rating agencies and monitoring of financial restrictions (covenants) are also managed by the Administration and Finance Management Department.

 

The Company’s main risk exposure is related to exchange rates, interest rates, inflation and raw materials price (commodities), taxes, trade accounts receivable and liquidity. Several types of financial instruments are used to manage the risk originated by these exposures.

 

For each of the following points, where applicable, the sensitivity analysis developed are merely for illustration purposes, since in practice the variables used for this excercise rarely change without affecting each other and without affecting other factors that were considered as constant and which also affect the Company’s financial position and results.

 

Exchange rate risk

 

The Company is exposed to exchange rate risks originated by: a) its net exposure to foreign currency assets and liabilities, b) exports revenues, c) the purchase of raw materials and capital investments 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 on the Chilean peso as compared to the US Dollar, Euro, Argentine Peso, Uruguayan Peso, Paraguayan Guarani, Bolivian Peso and Colombian Peso.

 

As of September 30, 2022, the Company maintained foreign currency obligations amounting to ThCh$ 695,186,162 (ThCh$ 92,940,586 as of December 31, 2021) mostly denominated in US Dollars. Foreign currency obligations ThCh$ 574,374,980 as of September 30, 2022 (ThCh$ 12,405,293 as of December 31, 2021) represent a 44% (2% as of December 31, 2021) of total other financial liabilities. The remaining 56% (98% as of December 31, 2021) is mainly denominated in Unidades de Fomento (inflation-indexed Chilean monetary unit – see inflation risk section) and CLP. In addition, the Company has assets in foreign currency in the amount of ThCh$ 650,917,507 (ThCh$ 106,443,576 as of December 31, 2021) that mainly correspond to cash and cash equivalent and export accounts receivable.

 

Regarding the operations of foreign subsidiaries, the net liability exposure in US Dollars and other currencies amounts to ThCh$ 13,245,295 (ThCh$ 17,526,136 as of December 31, 2021).

 

To protect the value of the net foreign currency assets and liabilities position of its Chilean and Argentinean operations, the Company enters into derivate contracts (currency forwards) to mitigate any variation in the Chilean peso and Argentinean peso as compared to other currencies.

 

As of September 30, 2022 the net exposure in Chile, in US Dollars and other currencies after the use of derivate instruments, is passive in the amount of ThCh$ 5,013,844 (ThCh$ 4,210,943 as of December 31, 2021).

 

As of September 30, 2022 of the Company’s total sales, both in Chile and abroad, 6% (6% as of September 30, 2021) corresponds to export sales in foreign currencies, mainly US Dollars, Euros, British pounds and other currencies and approximately 63% (62% as of September 30, 2021) of total direct costs correspond to raw materials and products purchased in foreign currencies, or indexed to such currencies. The Company does not hedge the possible variations in the expected cash flows from such transactions.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The Company is also exposed to fluctuations in exchange rates related to the conversion from the US Dollar, Argentine Peso, the Uruguayan Peso, the Paraguayan Guaraní, the Bolivian Peso, the British pound, the Peruvian Sol and the Colombian Peso to Chilean Pesos with respect to assets, liabilities, income and expenses of its subsidiaries in Argentina, United States, Uruguay, Paraguay Bolivia and United Kingdom, associates in Argentina and Perú and a joint venture in Colombia. The Company does not hedge the risks associated to the conversion of its subsidiaries, whose effects are recorded in equity.

 

Exchange rate sensitivity analysis

 

The effect of foreign exchange gains (losses) recognized in the Interim Consolidated Statement of Income by Function for the period ended as of September 30, 2022, related to assets and liabilities denominated in foreign currency, was a loss of ThCh$ 17,932,005 (ThCh$ 7,249,717 as of September 30, 2021). Considering the exposure in Chile at September 30, 2022, 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 loss after taxes of ThCh$ 366,011 (ThCh$ 912,040 as of September 30, 2021) associated of the owners of the controller.

 

Considering that approximately 6% of the Company’s sales revenue comes from export sales carried out in Chile (6% as of September 30, 2021), in currencies other than Chilean Peso, and that approximately 63% (62% as of September 30, 2021) 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/gain after taxes of ThCh$ 30,615,955 (ThCh$ 21,328,459 as of September 30, 2021).

 

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 (except for Argentina which uses the end of period exchange rate as the reporting date). The operating income of foreign subsidiaries as of September 30, 2022 was a profits of ThCh$ 20,891,234 (ThCh$ 8,216,333 as of September 30, 2021). 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/gain before taxes of ThCh$ 2,089,123 (ThCh$ 821,633 as of September 30, 2021).

 

The net investment in foreign subsidiaries, associates and joint ventures as of September 30, 2022 amounted to ThCh$ 455,261,021, ThCh$ 26,860,848 and ThCh$ 118,902,797 respectively (ThCh$ 355,930,567, ThCh$ 549,401 and ThCh$ 125,296,382 as of December 31, 2021). Assuming a 10% increase or decrease in the Argentine Peso, Uruguayan Peso, Paraguayan Guarani, Bolivian Peso and Colombian Peso against the Chilean Peso, and maintaining all other variables constant, the increase/decrease would hypothetically result in a Net income gain/loss of ThCh$ 60,102,467 (ThCh$ 48,177,635 as of December 31, 2021) recorded as a credit/charge to equity.

 

The Company does not hedge risks associated to currency conversion of the financial statements of its subsidiaries that have a different functional currency, whose effects are recorded in equity.

 

Interest rate risk

 

Interest rate risk mainly originates from the Company’s financing sources.

 

As of September 30, 2022 and December 31, 2021, the Company had not variable interest debt.

 

To manage interest rate risk, the Company has a policy which seeks to reduce the volatility of its finance cost, and maintain a suitable percentage of its debt in fixed rate instruments. The financial position is mainly set by the use of short-term and long-term, as well as derivate instruments such as cross currency interest rate swaps and cross interest rate swaps.

 

As of September 30, 2022 and December 31, 2021, after considering the effect of interest rates and currency swaps, a 100% of the Company’s debt is at fixed interest rates

 

The term and conditions of the Company’s obligations with financial institutions as of September 30, 2022, including exchange rates, interest rate, maturities and effective interest rates, are detailed in Note 21 – Other financial liabilities.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Interest rate sensitivity analysis

 

The total financial cost recognized in the Interim Consolidated Statement of Income by Function for the period ended as of September 30, 2022, related to short and long-term debt amounted to ThCh$ 53,112,031 (ThCh$ 23,013,331 al September 30, 2021).

 

Inflation risk

 

The Company maintains 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 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. (See Note 2 – Summary of significant accounting polices (2.4)).

 

Inflation sensitivity analysis

 

Income from indexation units recognized in the Interim Consolidated Statement of Income by Function for the period ended as of September 30, 2022, related to UF indexed short and long-term debt and the application of Hyperinflation Accounting in Argentina, is a loss of ThCh$ 431,319 (income of ThCh$ 1,349,090 as of September 30, 2021). Assuming a reasonably possible 3% increase (decrease) in the Unidad de Fomento and 10% of inflation 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$ 380,019 (ThCh$ 3,273,508 as of September 30, 2021).

 

Raw material Price risk

 

The main exposure to raw materials price variation is related to barley, malt, and cans 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.

 

Malt and cans

 

In Chile, the Company obtains its malt supply from both local producers and the international market. Long-term supply agreements are entered into with local producers where the barley price is set annually according to market prices, which are used to determine the price of malt according to the agreements.

 

The purchase commitments made expose the Company to raw materials price fluctuation risk. CCU Argentina acquires malt from local producers. These raw materials represent approximately 6% (8% as of September 30, 2021) of the direct cost of the Chile Operating segment.

 

As of September 30, 2022 in the Chile Operation segment, the cost of cans represented approximately 24% of direct costs (21% as of September 30, 2021). In the International Business Operating segment, the cost of cans represented approximately 38% of direct raw materials costs as of September 30, 2022 (37% as of September 30, 2021).

 

Concentrates, sugar and plastic containers

 

The main raw materials used in the production of non-alcoholic beverages are concentrated, which are mainly acquired from licenses, sugar and plastic resin for the manufacturing of plastic bottles and containers. The Company is exposed to price fluctuation risks involving these raw materials, which jointly represent approximately 27% (29% as of September 30, 2021) of the direct cost of the Chile Operating segment.

 

The Company does not engage in hedging raw materials purchases.

 

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Grapes and wine

 

The main raw materials used by subsidiary Viña San Pedro Tarapacá S.A. (from now VSPT) for wine production are grapes harvested from its own vineyards and grapes and wine acquired from third parties through long-term and spot contracts. In the last 12 months, approximately 27% (26% as of December 31, 2021) of VSPT’s total wine supply came from its own vineyards. Regarding our export market, and considering our focus on this market, approximately 45% (42% as of December 31, 2021) of our wine supply for export came from our own vineyards.

 

The remaining 73% (74% as of December 31, 2021) supply was purchased from third parties through long-term and spot contracts. In the last 12 months, the subsidiary VSPT acquired 59% (61% as of December 31, 2021) of the necessary grapes and wine from third parties through spot contracts. Additionally, the long-term transactions were 15% (15% as of December 31, 2021) of the total supply.

 

We should consider that as of September 30, 2022 wine represents 59% (60% as of September 30, 2021) of the total direct cost of the Wine Operating segment, and supplies purchased from third parties represented 35% (36% as of September 30, 2021).

 

Raw material Price sensitivity analysis

 

Total direct costs in the Interim Consolidated Statement of Income by Function for the period ended as of September 30, 2022 amounted to ThCh$ 852,094,709 (ThCh$ 674,519,604 as of September 30, 2021). 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$ 43,687,587 (ThCh$ 34,813,947 as of September 30, 2021) for the Chile Operating segment, ThCh$ 17,315,929 (ThCh$ 12,656,577 as of September 30, 2021) for the International Business Operating segment and ThCh$ 8,905,439 (ThCh$ 7,493,235 as of September 30, 2021) for the Wine operating segment.

 

Credit risk

 

The credit risk which the Company is exposed to originates from: a) trade accounts receivable from retail customers, whole sale distributors and supermarket chains in the domestic market; b) accounts receivable from exports; and c) financial instruments maintained with Banks and financial institutions, such as demand deposits, mutual fund investments, instrument acquired under resale commitments and derivatives.

 

Domestic market

 

The credit risk related to trade accounts receivable from domestic markets is managed by the Credit and Collections Management Department, and is monitored by the Credit Committee of each business unit.

 

The domestic market mainly refers to accounts receivables in Chile and represents 57% of total trade accounts receivable (66% as of December 31, 2021). The Company has a wide base of customers that are subject to the policies, procedures and controls established by the Company. Credit limits are established for all customers on the basis of an internal rating and their payment behavior. Outstanding trade accounts receivable are regularly monitored. In addition, the Company purchases credit insurance that covers 90% of individually significant accounts receivable balances, coverage that as of September 30, 2022 is equivalent to 84% (85% as of December 31, 2021) of total accounts receivable.

 

Overdue, but not impaired, trade accounts receivables represent customers that are less than 28 days overdue (18 as of December 31, 2021).

 

As of September 30, 2022, the Company has approximately 1,147 customers (1,409 as of December 31, 2021) with more than Ch$ 10 million in debt each, which altogether represent approximately 86% (88% as of December 31, 2021) of total trade accounts receivable. There are 251 customers (276 customers as of December 31, 2021) with balances in excess of Ch$ 50 million each, representing approximately 76% (78% as of December 31, 2021) of the total accounts receivable. The 91% (91% as of December 31, 2021) of those accounts receivable are covered by credit insurance.

 

The Company sells its products through retail customers, wholesale distributors and supermarket chains, with a credit worthiness of 99% (100% as of December 31, 2021).

 

As of September 30, 2022 the Company has no significant guarantees from its customers.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

The Company believes that no additional credit risk provisions other than the individual and collective provisions determined as of September 30, 2022 , that amount to ThCh$ 5,385,172 (ThCh$ 5,820,206 as of December 31, 2021), are needed since a large percentage of these are covered by insurance (See Note 10 – Trade and other receivable).

 

Exports market

 

The credit risk related to accounts receivable from exports is managed by the Head of Credit and Collections and is monitored by the Administration and Finance Management Department. VSPT’s export trade accounts receivable represent 17% of total trade accounts receivable (12% as of December 31, 2021). VSPT has a wide base of customers, in more than eighty countries, which are subject to the policies, procedures and controls established by VSPT. In addition, VSPT acquires credit insurance to cover 90% of individually significant accounts receivable(96% as of December 31, 2021). This coverage accounts for more than 82% (88% as of December 31, 2021) of total accounts receivable are covered. Pending payments of trade accounts receivable are regularly monitored. Apart from the credit insurance, having diversified sales in different countries decreases the credit risk.

 

As of September 30, 2022 there were 78 customers (71 customers as of December 31, 2021) with more than ThCh$ 65,000 of debt each, which represent 97% (93% as of December 31, 2021) of VSPT´s total export market accounts receivable.

 

Regarding VSPT’s export customers, overdue, but no impaired, trade accounts receivables are customers that are less than 12 days overdue (28 days average as of December 31, 2021).

 

The Company believes that no credit risk provisions are necessary other than the individual and collective provisions determined as of September 30, 2022. See analysis of accounts receivable aging and losses due to impairment of accounts receivables (See Note 10 – Trade and other receivable).

 

Financial investments and derivatives

 

Financial investments correspond to time deposits, which are financial instruments acquired with repurchase agreements at fixed interest rate, maturing in less than three months placed in financial institutions in Chile, so there are not exposed to significant market risk. Derivatives are measured at fair value and traded 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 September 30, 2022 the effect is not material.

 

Tax risk

 

Our businesses are subject to different taxes in the countries we operate, 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.

 

Liquidity risk

 

The Company manages liquidity risk at a consolidated level. Cash flows from operating activities are the main source of liquidity. Additionally, the Company has the ability to issue debt and equity instruments in the capitals market based on our needs.

 

In order to manage short-term liquidity, the Company considers projected cash flows for a twelve-month moving period and maintains cash and cash equivalents available to meet its obligations.

 

Based on current operating performance and its liquidity position, the Company estimates that cash flows from operation activities and available cash will be sufficient to finance working capital, capital investments, interest payments, dividend payment and debt payment requirement for the next 12-months period and in the foreseeable future.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The Company’s financial liabilities maturities as of September 30, 2022 and December 31, 2021 based on non-discounted contractual cash flows are summarized as follows:

 

 

As of September 30, 2022 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 291,915,878 55,330,087 121,095,516 57,384,258 92,738,885 5,924,099 332,472,845
Bond payable 1,017,397,181 5,448,896 29,700,021 168,799,288 117,166,859 976,886,864 1,298,001,928
Lease liabilities 41,824,488 2,794,743 7,427,432 11,813,168 5,183,582 26,895,892 54,114,817
Deposits for retum of bottles and containers 12,524,698 - 12,524,698 - - - 12,524,698
Sub-Total 1,363,662,245 63,573,726 170,747,667 237,996,714 215,089,326 1,009,706,855 1,697,114,288
Derivatives              
Derivatives not designated as hedges 812,963 812,963 - - - - 812,963
Derivatives designated as hedges 10,315,026 2,298,991 7,209,030 2,731,671 - - 12,239,692
Sub-Total 11,127,989 3,111,954 7,209,030 2,731,671 - - 13,052,655
Total 1,374,790,234 66,685,680 177,956,697 240,728,385 215,089,326 1,009,706,855 1,710,166,943

 

(*) See current and non-current book value in Note 7 – Financial Instruments.

 

 

 

As of December 31, 2021 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 190,661,800 4,505,654 74,860,895 112,655,890 10,390,245 2,727,799 205,140,483
Bond payable 347,828,044 5,163,114 7,667,710 59,816,383 116,282,352 237,482,947 426,412,506
Lease liabilities 35,161,384 1,959,601 5,372,094 10,310,033 3,927,456 24,202,014 45,771,198
Deposits for return of bottles and containers 11,980,948 - 11,980,948 - - - 11,980,948
Sub-Total 585,632,176 11,628,369 99,881,647 182,782,306 130,600,053 264,412,760 689,305,135
Derivatives              
Derivatives not designated as hedges 411,954 411,954 - - - - 411,954
Derivatives designated as hedges 8,813,456 799,211 4,245,323 883,649 3,153,183 - 9,081,367
Sub-Total 9,225,410 1,211,165 4,245,323 883,649 3,153,183 - 9,493,321
Total 594,857,586 12,839,534 104,126,970 183,665,955 133,753,236 264,412,760 698,798,456

 

(*) See current and non-current book value in Note 7 – Financial Instruments.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Risk from health crises

 

A health crisis, pandemic or the outbreak of disease at a global or regional level, such as the 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, interrupt our supply chain, limit our production and distribution capacity, and/or generate a contraction in the demand for our products, as happened during the period of higher restrictions during the second and third quarter of 2020. Despite progress in vaccination efforts, global economic activity remains uncertain and cannot be predicted with confidence. Further, new variants of COVID-19 could spread globally and cause an increase in COVID-19 cases across several of the jurisdictions where we operate. In November 2021, a new variant, Omicron, which appears to be the most transmissible variant to date, was detected, and has since caused an increase in COVID-19 cases in multiple countries, including some of those where we conduct our operations, and of which the potential severity is currently being evaluated. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 pandemic on our business. An extended period of economic disruption could have a material adverse impact on our business, results of operations, access to sources of liquidity and overall financial condition.

 

Any prolonged restrictive measures put in place to control an outbreak of a contagious disease or other adverse public health developments, including quarantines, medical screenings, travel restrictions and suspension of certain activities, in any of our markets may have a material and adverse effect on our business operations. The extent of the impact of the pandemic on our business and financial condition will depend largely on future developments, including the duration of the pandemic, the impact on capital and financial markets and the related impact on consumers’ and industries’ confidence, all of which are highly uncertain and cannot be accurately predicted based on the impacts observed to date.

 

The Company has contingency plans to protect the health of the people and to maintain the continuity of our operation, but we cannot assure you that these plans will be sufficient to mitigate a material impact on our results and financial position from such events. Specifically, since March 2020, we have implemented a regional plan with three priorities: (i) the safety of our people and the community we interact with, (ii) operation continuity, and (iii) financial health. This has allowed us to continue supplying our clients and consumers with our products and maintaining a safe work environment. At the close of this report, CCU continues selling, producing and distributing its products normally in all the countries where it operates, where restrictive measures continue to be implemented to face the ongoing spread and new variants of COVID-19.

 

The COVID-19 pandemic may continue to have an adverse effect on our ability to attract and retain key personnel and third-party contractors, which in turn could have a material adverse effect on our business, financial condition and results of operations.

 

The COVID-19 pandemic has caused a shortage of talent for certain business functions, which in turn has affected companies from all industries and across the globe, including ours. In the future, we may continue to encounter competition from other companies in our efforts to hire experienced professionals for both key roles and third-party contractor positions, which could make it difficult for us to identify sufficiently skilled and qualified people or to obtain all the necessary expertise locally or at reasonable rates due to the shortage of appropriately qualified individuals. Failure to obtain services from key personnel and/or third-party contractors with critical skills could adversely affect our business, results of operations and financial condition.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Note 6 Financial Information as per operating segments

 

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 Products and services
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.
 

 

Corporate revenues and expenses are presented separately within the 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:

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  
a)Information as per operating segments for the nine-month periods ended September 30, 2022 and 2021:

 

 

 

  Chile International Business Wines Others Total
  2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
  ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$
Sales revenue external customers 1,133,167,456 1,060,365,766 571,982,565 393,819,815 201,754,561 180,225,157 - (80,502) 1,906,904,582 1,634,330,236
Other income 17,713,772 14,801,603 11,525,269 8,753,164 5,409,778 3,609,271 1,519,949 869,394 36,168,768 28,033,432
Sales revenue between segments 15,205,155 13,319,064 1,924,609 3,187,613 17,351,473 8,197,125 (34,481,237) (24,703,802) - -
Net sales 1,166,086,383 1,088,486,433 585,432,443 405,760,592 224,515,812 192,031,553 (32,961,288) (23,914,910) 1,943,073,350 1,662,363,668
  Change % 7.1 - 44.3 - 16.9 - - - 16.9 -
Cost of sales (685,325,851) (541,635,623) (298,849,480) (214,208,389) (139,410,323) (117,384,700) 21,936,433 13,242,583 (1,101,649,221) (859,986,129)
  % of Net sales 58.8 49.8 51.0 52.8 62.1 61.1 - - 56.7 51.7
Gross margin 480,760,532 546,850,810 286,582,963 191,552,203 85,105,489 74,646,853 (11,024,855) (10,672,327) 841,424,129 802,377,539
  % of Net sales 41.2 50.2 49.0 47.2 37.9 38.9 - - 43.3 48.3
MSD&A (1) (376,574,549) (356,961,518) (266,615,475) (190,875,142) (57,431,183) (48,901,067) (4,982,536) (7,880,637) (705,603,743) (604,618,364)
  % of Net sales 32.3 32.8 45.5 47.0 25.6 25.5 - - 36.3 36.4
Other operating income (expenses) (136,369) 588,956 1,122,015 7,131,790 479,010 269,716 470,032 132,836 1,934,688 8,123,298
Adjusted operating result  (2) 104,049,614 190,478,248 21,089,503 7,808,851 28,153,316 26,015,502 (15,537,359) (18,420,128) 137,755,074 205,882,473
  Change % (45.4) - 170.1 - 8.2 - - - (33.1) -
  % of Net sales 8.9 17.5 3.6 1.9 12.5 13.5 - - 7.1 12.4
Net financial expense - - - - - - - - (35,578,304) (13,506,384)
Equity and income of associates and joint ventures - - - - - - - - (7,897,144) (3,361,894)
Gains (losses) on exchange differences - - - - - - - - (17,932,005) (7,249,717)
Results as per adjustment units - - - - - - - - (431,319) 1,349,090
Other gains (losses) - - - - - - - - 5,854,226 8,001,718
Income before taxes                 81,770,528 191,115,286
Tax income (expense)                 640,840 (52,361,800)
Net income for period                 82,411,368 138,753,486
Non-controlling interests                 11,095,964 13,233,682
Net income attributable to equity holders of the parent                 71,315,404 125,519,804
Depreciation and amortization 51,053,519 49,037,336 32,978,754 23,606,743 9,837,934 8,377,437 3,578,044 2,691,263 97,448,251 83,712,779
ORBDA (3) 155,103,133 239,515,584 54,068,257 31,415,594 37,991,250 34,392,939 (11,959,315) (15,728,865) 235,203,325 289,595,252
  Change % (35.2) - 72.1 - 10.5 - - - (18.8) -
  % of Net sales 13.3 22.0 9.2 7.7 16.9 17.9 - - 12.1 17.4
                     

 

 

 

(1)MSD&A included Marketing, Selling, Distribution and Administrative expenses.
(2)Adjusted operating result (for management purposes we have defined it as Net income before net financial expense, gain (losses) of joint venture and associates accounted for using the equity method, gains (losses) on exchange differences, result as per adjustment units and income taxes).
(3)ORBDA (for management purposes we have defined it as Adjusted Operating Result before Depreciation and Amortization).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

b)Information as per operating segments for the three-month periods ended September 30, 2022 and 2021:

 

  Chile International Business Wines Others Total
  2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
  ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$
Sales revenue external customers 367,129,297 369,217,670 227,355,236 179,062,510 75,077,730 65,802,540 - (80,268) 669,562,263 614,002,452
Other income 6,973,899 4,367,940 5,221,771 3,025,600 1,898,905 1,111,699 448,697 221,936 14,543,272 8,727,175
Sales revenue between segments 5,215,687 5,244,504 418,378 3,110,825 7,916,070 3,932,655 (13,550,135) (12,287,984) - -
Net sales 379,318,883 378,830,114 232,995,385 185,198,935 84,892,705 70,846,894 (13,101,438) (12,146,316) 684,105,535 622,729,627
  Change % 0.1 - 25.8 - 19.8 - - - 9.9 -
Cost of sales (227,167,221) (195,901,656) (120,091,110) (97,590,010) (52,665,587) (43,363,052) 8,209,424 6,706,321 (391,714,494) (330,148,397)
  % of Net sales 59.9 51.7 51.5 52.7 62.0 61.2 - - 57.3 53.0
Gross margin 152,151,662 182,928,458 112,904,275 87,608,925 32,227,118 27,483,842 (4,892,014) (5,439,995) 292,391,041 292,581,230
  % of Net sales 40.1 48.3 48.5 47.3 38.0 38.8 - - 42.7 47.0
MSD&A (1) (131,346,648) (121,307,130) (105,711,264) (83,770,559) (21,031,393) (16,953,014) (1,866,557) (2,649,748) (259,955,862) (224,680,451)
  % of Net sales 34.6 32.0 45.4 45.2 24.8 23.9 - - 38.0 36.1
Other operating income (expenses) (43,321) 61,717 529,087 3,347,506 226,636 69,888 383,664 84,050 1,096,066 3,563,161
Adjusted operating result  (2) 20,761,693 61,683,045 7,722,098 7,185,872 11,422,361 10,600,716 (6,374,907) (8,005,693) 33,531,245 71,463,940
  Change % (66.3) - 7.5 - 7.8 - - - (53.1) -
  % of Net sales 5.5 16.3 3.3 3.9 13.5 15.0 - - 4.9 11.5
Net financial expense - - - - - - - - (18,694,897) (6,214,087)
Equity and income of associates and joint ventures - - - - - - - - (3,495,437) (1,013,287)
Foreign currency exchange differences - - - - - - - - (8,095,775) (4,483,454)
Results as per adjustment units - - - - - - - - 4,641,027 551,589
Other gains (losses) - - - - - - - - 1,328,953 7,304,058
Income before taxes                 9,215,116 67,608,759
Tax income (expense)                 10,185,069 (20,856,945)
Net income for period                 19,400,185 46,751,814
Non-controlling interests                 2,174,103 4,583,744
Net income attributable to equity holders of the parent                 17,226,082 42,168,070
Depreciation and amortization 17,185,077 15,951,745 12,078,233 9,746,660 3,311,060 2,803,652 1,501,041 1,506,276 34,075,411 30,008,333
ORBDA (3) 37,946,770 77,634,790 19,800,331 16,932,532 14,733,421 13,404,368 (4,873,866) (6,499,417) 67,606,656 101,472,273
  Change % (51.1) - 16.9 - 9.9 - - - (33.4) -
  % of Net sales 10.0 20.5 8.5 9.1 17.4 18.9 - - 9.9 16.3
                     

 

(1)MSD&A included Marketing, Selling, Distribution and Administrative expenses.
(2)Adjusted operating result (for management purposes we have defined it as Net income before net financial expense, gain (losses) of joint venture and associates accounted for using the equity method, gains (losses) on exchange differences, result as per adjustment units and income taxes).
(3)ORBDA (for management purposes we have defined it as Adjusted Operating Result before Depreciation and Amortization).

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Sales information by geographic location

 

Net sales per geographical location For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Chile (1) 1,330,474,722 1,238,949,283          439,621,926          429,648,794
Argentina (2) 535,988,835 366,609,690          216,326,305          172,141,817
Uruguay 18,651,083 12,836,953              6,328,363              4,374,563
Paraguay 43,229,941 29,743,149            16,463,382            11,546,866
Bolivia 14,728,769 14,224,593              5,365,559              5,017,587
Foreign countries 612,598,628 423,414,385          244,483,609 193,080,833
Total 1,943,073,350 1,662,363,668 684,105,535 622,729,627

 

 

 

(1)Includes net sales correspond to Corporate Support Unit and eliminations between geographical locations. Additionally, includes net sales made in Chile of the Wines Operating segment.
(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.

 

Sales information by customer

 

  For the nine periods ended as of September 30, For the three periods ended as of September 30,
Net Sales 2022 2021 2022 2021
  ThCh$ ThCh$ ThCh$ ThCh$
Domestic sales 1,827,667,446 1,565,325,709 642,119,408 590,821,395
Exports sales 115,405,904 97,037,959 41,986,127 31,908,232
Total 1,943,073,350 1,662,363,668 684,105,535 622,729,627

 

Sales information by product category

 

Sales information by product category For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Alcoholic business 1,321,820,683 1,137,200,984          486,482,480          443,064,247
Non-alcoholic business 585,083,899 497,129,252          183,079,783          170,938,205
Others (1) 36,168,768 28,033,432            14,543,272              8,727,175
Total 1,943,073,350 1,662,363,668 684,105,535 622,729,627

 

(1)Others consist mainly of sales of by-products and packaging including bottles, pallets, and glasses.

 

Depreciation and amortization as per operating segments

 

 

Depreciation and amortization For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Chile operating segment 51,053,519 49,037,336           17,185,077           15,951,745
International Business operating segment 32,978,754 23,606,743           12,078,233              9,746,660
Wines operating segment 9,837,934 8,377,437              3,311,060             2,803,652
Others (1) 3,578,044 2,691,263 1,501,041              1,506,276
Total 97,448,251 83,712,779 34,075,411 30,008,333

 

(1)Includes depreciation and amortization corresponding to the Corporate Support Units.

 

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September 30, 2022

 
  

 

Cash flows Operating Segments

 

Cash flows Operating Segments For the nine periods ended as of September 30,
2022 2021
ThCh$ ThCh$
Cash flows from (used in) Operating activities   (21,871,244) 202,398,559
Chile operating segment   13,443,229 109,234,167
International business operating segment   28,086,460 34,786,333
Wines operating segment   2,700,671 13,687,641
Others (1) (*)   (66,101,604) 44,690,418
       
Cash flows from (used in) Investing Activities   (175,168,137) (112,481,245)
Chile operating segment   (91,912,995) (26,228,251)
International business operating segment   (73,964,376) (44,253,450)
Wines operating segment   (7,888,149) (5,054,142)
Others (1) (*)   (1,402,617) (36,945,402)
       
Cash flows from (used in) Financing Activities   515,544,719 (95,226,947)
Chile operating segment   1,438,409 (100,431,512)
International business operating segment   21,853,128 (2,874,449)
Wines operating segment   (30,296,391) (40,226,809)
Others (1) (*)   522,549,573 48,305,823
       

 

(1)Others include Corporate Support Units.

(*) It includes contribution to joint ventures. See Note 8 - Cash and cash equivalents.

 

Capital expenditures as per operating segments

 

Capital expenditures (property, plant and equipment and software additions) For the nine periods ended as of September 30,
2022 2021
ThCh$ ThCh$
Chile operating segment   83,612,868 51,208,090
International Business operating segment   44,854,771 44,355,139
Wines operating segment   7,908,964 5,088,321
Others (1)   12,074,226 6,185,665
Total   148,450,829 106,837,215

 

(1)Others include the capital investments corresponding to the Corporate Support Units.

 

Assets as per operating segments

 

Assets as per Operating segment As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Chile operating segment 1,679,233,823 1,586,202,143
International Business operating segment 792,648,137 637,642,711
Wines operating segment 452,089,483 442,524,176
Others (1) 753,457,291 180,381,607
Total 3,677,428,734 2,846,750,637

 

(1)Includes assets corresponding to the Corporate Support Units.

 

 

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September 30, 2022

 
  

Assets per geographic location

 

Assets per geographical location As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Chile (1) 2,822,234,666 2,162,818,404
Argentina (2) 714,443,694 557,983,133
Uruguay 31,628,231 27,854,154
Paraguay 66,223,077 60,700,994
Bolivia 42,899,066 37,393,952
Total 3,677,428,734 2,846,750,637

 

 

(1)Includes the assets corresponding to the Corporate Support Units and eliminations between geographic location and investments in associates and joint ventures. Additionally, includes part of Wines Operating segment and excludes its argentine subsidiary Finca La Celia S.A.
(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.

 

Liabilities as per operating segments

 

Liabilities as per Operating segment As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Chile operating segment 865,332,527 737,711,189
International Business operating segment 332,005,373 269,896,961
Wines operating segment 167,866,070 172,223,909
Others (1) 798,238,267 241,403,275
Total 2,163,442,237 1,421,235,334

 

(1)Others include liabilities corresponding to the Corporate Support Units.

 

Operating Segment’s additional information

 

The following is a reconciliation of on Net income for the period, the main comparable IFRS measure to Adjusted Operating Result for the periods ended September 30, 2022 and 2021:

 

  For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Net income of period 82,411,368 138,753,486 19,400,185 46,751,814
Add (Subtract):        
Other gains (losses) (5,854,226) (8,001,718) (1,328,953) (7,304,058)
Finance income (17,533,727) (9,506,947) (4,680,264) (2,689,372)
Finance costs 53,112,031 23,013,331 23,375,161 8,903,459
Share of net income (loss) of joint ventures and associates accounted for using the equity method 7,897,144 3,361,894 3,495,437 1,013,287
Gains (losses) on exchange differences 17,932,005 7,249,717 8,095,775 4,483,454
Result as per adjustment units 431,319 (1,349,090) (4,641,027) (551,589)
Income tax expense (640,840) 52,361,800 (10,185,069) 20,856,945
Adjusted operating result 137,755,074 205,882,473 33,531,245 71,463,940
Depreciation and amortization 97,448,251 83,712,779 34,075,411 30,008,333
ORBDA 235,203,325 289,595,252 67,606,656 101,472,273

 

 

 

 

 

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September 30, 2022

 
  

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 nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Consolidated statement of income        
Distribution costs (363,732,891) (292,958,876) (132,334,847) (111,353,565)
Administrative expenses (136,101,573) (108,993,810) (54,960,501) (41,787,512)
Other expenses by function (207,312,087) (203,779,194) (73,113,137) (72,084,366)
Other expenses included in ´Other expenses by function´ 1,542,808 1,113,516 452,623 544,992
Total MSD&A (705,603,743) (604,618,364) (259,955,862) (224,680,451)

 

The Administration of the Company review the financial situation and result of the all of their joint ventures and associated that is described in Note 16 - Investments accounted for using equity method.

 

 

 

Note 7    Financial Instruments

 

Financial instruments categories

 

The carrying amounts of each financial instrument category are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021

 

 

Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Derivative financial instruments 6,010,939 - 9,838,420 -
Market securities and investments in other companies 14,756,296 - 14,013,076 -
Derivative hedge assets 31,640,003 36,509,564 - 31,252,095
Total other financial assets 52,407,238 36,509,564 23,851,496 31,252,095
Accounts receivable - trade and other receivable (net) 387,713,357 3,423,369 372,995,729 3,801,244
Accounts receivable from related parties 4,794,889 42,506 5,307,264 104,197
Total accounts receivables 392,508,246 3,465,875 378,302,993 3,905,441
Sub-Total financial assets 444,915,484 39,975,439 402,154,489 35,157,536
Cash and cash equivalents 635,484,232 - 265,568,125 -
Total financial assets 1,080,399,716 39,975,439 667,722,614 35,157,536
Bank borrowings 165,097,613 126,818,265 76,169,204 114,492,596
Bonds payable 11,338,507 1,006,058,674 8,087,630 339,740,414
Deposits for return of bottles and containers 12,524,698 - 11,980,948 -
Total financial liabilities measured at amortized cost 188,960,818 1,132,876,939 96,237,782 454,233,010
Derivatives not designated as hedges 812,963 - 411,954 -
Derivatives designated as hedges 7,329,624 2,985,402 4,776,623 4,036,833
Total financial derivative liabilities 8,142,587 2,985,402 5,188,577 4,036,833
Total other financial liabilities (*) 197,103,405 1,135,862,341 101,426,359 458,269,843
Lease Liabilities 9,066,122 32,758,366 6,152,361 29,009,023
Total lease liabilities (**) 9,066,122 32,758,366 6,152,361 29,009,023
Account payable- trade and other payable 489,575,842 39,332 515,522,729 29,457
Accounts payable to related parties 30,964,613 - 26,208,319 -
Total commercial obligations and other accounts payable 520,540,455 39,332 541,731,048 29,457
Total financial liabilities 726,709,982 1,168,660,039 649,309,768 487,308,323
         

 

(*) See Note 21 - Other financial liabilities.

(**) See Note 22 - Lease liabilities.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Fair value of Financial instruments

 

The following tables show fair values, based on financial instrument categories, compared to the carrying amount included in the Interim Consolidated Statements of Financial Position:

 

a)Financial assets and liabilities are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021

 

 

Book Value Fair Value Book Value Fair Value
ThCh$ ThCh$ ThCh$ ThCh$
Derivative financial instruments 6,010,939 6,010,939 9,838,420 9,838,420
Market securities and investments in other companies 14,756,296 14,756,296 14,013,076 14,013,076
Derivative hedge assets 68,149,567 68,149,567 31,252,095 31,252,095
Total other financial assets 88,916,802 88,916,802 55,103,591 55,103,591
Accounts receivable - trade and other receivable (net) 391,136,726 391,136,726 376,796,973 376,796,973
Accounts receivable from related parties 4,837,395 4,837,395 5,411,461 5,411,461
Total accounts receivables 395,974,121 395,974,121 382,208,434 382,208,434
Sub-Total financial assets 484,890,923 484,890,923 437,312,025 437,312,025
Cash and cash equivalents 635,484,232 635,484,232 265,568,125 265,568,125
Total financial assets 1,120,375,155 1,120,375,155 702,880,150 702,880,150
Bank borrowings 291,915,878 291,284,203 190,661,800 193,844,871
Bonds payable 1,017,397,181 873,305,436 347,828,044 328,366,713
Deposits for return of bottles and containers 12,524,698 12,524,698 11,980,948 11,980,948
Total financial liabilities measured at amortized cost 1,321,837,757 1,177,114,337 550,470,792 534,192,532
Derivatives not designated as hedges 812,963 812,963 411,954 411,954
Derivatives designated as hedges 10,315,026 10,315,026 8,813,456 8,813,456
Total financial derivative liabilities 11,127,989 11,127,989 9,225,410 9,225,410
Total other financial liabilities (*) 1,332,965,746 1,188,242,326 559,696,202 543,417,942
Lease Liabilities 41,824,488 41,824,488 35,161,384 35,161,384
Total lease liabilities (**) 41,824,488 41,824,488 35,161,384 35,161,384
Account payable- trade and other payable 489,615,174 489,615,174 515,552,186 515,552,186
Accounts payable to related parties 30,964,613 30,964,613 26,208,319 26,208,319
Total commercial obligations and other accounts payable 520,579,787 520,579,787 541,760,505 541,760,505
Total financial liabilities 1,895,370,021 1,750,646,601 1,136,618,091 1,120,339,831
         

 

(*) See Note 21 - Other financial liabilities.

(**) See Note 22 - Lease liabilities.

 

The carrying amount of cash and cash equivalents, other financial assets, financial derivative liabilities, and lease liabilities approximate their fair value due to their short-term nature or by its valuation methodology while loans receivable and accounts receivable are 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.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

b)Financial instruments by category:

 

As of September 30, 2022 Fair value with changes in income Financial assets measured at amortized cost Hedge derivatives Total
ThCh$ ThCh$ ThCh$ ThCh$
Financial assets        
Derivative financial instruments 6,010,939 - - 6,010,939
Marketable securities and investments in other companies 14,756,296 - - 14,756,296
Derivative hedge assets - - 68,149,567 68,149,567
Total other financial assets 20,767,235 - 68,149,567 88,916,802
Cash and cash equivalents - 635,484,232 - 635,484,232
Trade and other receivable (net) - 391,136,726 - 391,136,726
Accounts receivable from related parties - 4,837,395 - 4,837,395
Total financial assets 20,767,235 1,031,458,353 68,149,567 1,120,375,155

 

 

 

As of September 30, 2022 Fair value with changes in income Hedge derivatives Financial liabilities measured at amortized cost Total
ThCh$ ThCh$ ThCh$ ThCh$
Financial liabilities        
Bank borrowings - - 291,915,878 291,915,878
Bonds payable - - 1,017,397,181 1,017,397,181
Deposits for return of bottles and containers - - 12,524,698 12,524,698
Derivatives not designated as hedges 812,963 - - 812,963
Derivatives designated as hedges - 10,315,026 - 10,315,026
Total Other financial liabilities 812,963 10,315,026 1,321,837,757 1,332,965,746
Leases liabilities - - 41,824,488 41,824,488
Account payable- trade and other payable - - 489,615,174 489,615,174
Accounts payable to related parties - - 30,964,613 30,964,613
Total financial liabilities 812,963 10,315,026 1,884,242,032 1,895,370,021

 

 

 

As of December 31, 2021 Fair value with changes in income Financial assets measured at amortized cost Hedge derivatives Total
ThCh$ ThCh$ ThCh$ ThCh$
Financial assets        
Derivative financial instruments 9,838,420 - - 9,838,420
Marketable securities and investments in other companies 14,013,076 - - 14,013,076
Derivative hedge assets - - 31,252,095 31,252,095
Total other financial assets 23,851,496 - 31,252,095 55,103,591
Cash and cash equivalents - 265,568,125 - 265,568,125
Trade and other receivable (net) - 376,796,973 - 376,796,973
Accounts receivable from related parties - 5,411,461 - 5,411,461
Total financial assets 23,851,496 647,776,559 31,252,095 702,880,150

 

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

As of December 31, 2021 Fair value with changes in income Hedge derivatives Financial liabilities measured at amortized cost Total
ThCh$ ThCh$ ThCh$ ThCh$
Financial liabilities        
Bank borrowings - - 190,661,800 190,661,800
Bonds payable - - 347,828,044 347,828,044
Deposits for return of bottles and containers - - 11,980,948 11,980,948
Derivatives not designated as hedges 411,954 - - 411,954
Derivatives designated as hedges - 8,813,456 - 8,813,456
Total Other financial liabilities 411,954 8,813,456 550,470,792 559,696,202
Leases liabilities - - 35,161,384 35,161,384
Account payable- trade and other payable - - 515,552,186 515,552,186
Accounts payable to related parties - - 26,208,319 26,208,319
Total financial liabilities 411,954 8,813,456 1,127,392,681 1,136,618,091

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Derivative Instruments

 

The 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 period, are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
Number of agreements Nominal amounts thousand Asset Liability Number of agreements Nominal amounts thousand Asset Liability
ThCh$ ThCh$ ThCh$ ThCh$
Cross currency swaps UF/CLP 5 11,363 67,895,836 6,846,501 3 8,000 31,252,095 4,330,917
Less than a year     31,640,003 6,846,501     - 4,330,917
Between 1 and 5 years     20,962,594 -     31,252,095 -
More than 5 years     15,293,239 -     - -
Cross currency interest rate swaps UF/EURO 1 296 253,731 52,869 1 296 - 1,153,698
Less than a year     - 52,869     - 65,288
Between 1 and 5 years     253,731 -     - 1,088,410
Cross currency interest rate swaps UF/USD 1 479 - 3,415,656 1 479 - 3,328,841
Less than a year     - 430,254     - 380,418
Between 1 and 5 years     - 2,985,402     - 2,948,423
Subtotal hedging derivatives 7   68,149,567 10,315,026 5   31,252,095 8,813,456
Forwards USD 26 156,486 5,851,859 775,813 19 132,333 8,231,588 268,328
Less than a year     5,851,859 775,813     8,231,588 268,328
Forwards Euro 6 13,505 124,032 11,692 3 36,187 1,413,219 53,421
Less than a year     124,032 11,692     1,413,219 53,421
Forwards CAD 4 3,140 35,048 14,987 1 1,780 - 67,330
Less than a year     35,048 14,987     - 67,330
Forwards GBP 1 500 - 10,471 2 740 - 19,685
Less than a year     - 10,471     - 19,685
Forwards CHF - - - - 2 3,181 193,613 3,190
Less than a year     - -     193,613 3,190
Subtotal derivatives with effects on income 37   6,010,939 812,963 27   9,838,420 411,954
Total instruments 44   74,160,506 11,127,989 32   41,090,515 9,225,410

 

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).

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

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 in
Note 21 – Other financial liabilities.

 

As of September 30, 2022
Entity Nature of risks covered Rights Obligations Fair value of net asset (liabilities) Maturity
Currency Amount Currency Amount Amount
ThCh$ ThCh$ ThCh$
Banco Santander - Chile Flow interest rate on bonds UF 69,920,882 CLP 61,027,168 8,893,714 03-15-2032
Banco Santander - Chile Flow interest rate on bonds UF 101,317,529 CLP 82,023,282 19,294,247 08-10-2023
Banco Santander - Chile Flow interest rate on bonds UF 94,773,890 CLP 77,487,672 17,286,218 06-01-2023
Scotiabank Chile Flow interest rate on bonds UF 67,503,711 CLP 55,157,956 12,345,755 06-01-2023
Scotiabank Chile Flow interest rate on bonds UF 47,550,502 CLP 44,321,101 3,229,401 03-15-2030
Scotiabank Chile Flow interest rate and exchange rate on bonds UF 15,375,111 USD 18,790,767 (3,415,656) 06-01-2025
Scotiabank Chile Flow interest rate and exchange rate on bonds UF 9,516,270 EUR 9,315,408 200,862 06-02-2025
               
                   

 

As of December 31, 2021
Entity Nature of risks covered Rights Obligations Fair value of net asset (liabilities) Maturity
Currency Amount Currency Amount Amount
ThCh$ ThCh$ ThCh$
Banco Santander - Chile Flow interest rate on bonds UF 97,057,334 CLP 86,696,081 10,361,253 08-10-2023
Banco Santander - Chile Flow interest rate on bonds UF 93,491,832 CLP 83,779,363 9,712,469 06-01-2023
Scotiabank Chile Flow interest rate on bonds UF 62,695,477 CLP 55,848,021 6,847,456 06-01-2023
Scotiabank Chile Flow interest rate and exchange rate on bonds UF 14,695,305 USD 18,024,146 (3,328,841) 06-01-2025
Scotiabank Chile Flow interest rate and exchange rate on bonds UF 9,095,477 EUR 10,249,175 (1,153,698) 06-02-2025
               

 

The Interim Consolidated Statement of Other Comprehensive Income includes under the caption cash flow hedge, for the nine-months ended September 30, 2022 a credit before income taxes of ThCh$ 1,125,809 (ThCh$ 1,499,556 as of September 30, 2021), related to the fair value of Cross Currency Interest Swap and Cross Interest Rate Swap derivatives instruments.

 

Fair value hierarchies

 

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

Fair values obtained through the use of valuation models accepted in the market and based on prices other than 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.

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The fair value of financial instruments recorded at fair value in the Interim Consolidated Financial Statements, is detailed as follows:

 

As of September 30, 2022 Recorded fair value Fair value hierarchy
level 1 level 2 level 3
ThCh$ ThCh$ ThCh$ ThCh$
Derivative financial instruments 6,010,939 - 6,010,939 -
Market securities and investments in other companies 14,756,296 14,756,296 - -
Derivative hedge assets 68,149,567 - 68,149,567 -
Total other financial assets 88,916,802 14,756,296 74,160,506 -
Derivative financial instruments 812,963 - 812,963 -
Derivative hedge liabilities 10,315,026 - 10,315,026 -
Total financial derivative liabilities 11,127,989 - 11,127,989 -
         
         

 

As of December 31, 2021 Recorded fair value Fair value hierarchy
level 1 level 2 level 3
ThCh$ ThCh$ ThCh$ ThCh$
Derivative financial instruments 9,838,420 - 9,838,420 -
Market securities and investments in other companies 14,013,076 14,013,076 - -
Derivative hedge assets 31,252,095 - 31,252,095 -
Total other financial assets 55,103,591 14,013,076 41,090,515 -
Derivative financial instruments 411,954 - 411,954 -
Derivative hedge liabilities 8,813,456 - 8,813,456 -
Total financial derivative liabilities 9,225,410 - 9,225,410 -
         

 

During the nine-month period ended as of September 30, 2022, the Company has not made any significant instrument transfers between levels 1 and 2.

 

Credit quality of financial assets

 

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.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 8    Cash and cash equivalents

 

Cash and cash equivalent balances are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Cash on hand 244,553 182,491
Bank balances 189,967,062 68,131,885
Cash 190,211,615 68,314,376
Time deposits 432,854,316 54,890,333
Securities purchased under resale agreements 12,352,840 109,332,901
Investments in mutual funds 65,461 33,030,515
Short term investments classified as cash equivalents 12,418,301 142,363,416
Cash equivalents 445,272,617 197,253,749
Total 635,484,232 265,568,125

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

The composition of cash and cash equivalents by currency as of September 30, 2022, 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 77,213 4,040 - 13,346 - - 149,954 - 244,553
Bank balances 35,373,092 148,239,376 797,390 1,414,176 1,185,364 1,227,642 307,160 1,422,862 189,967,062
Cash 35,450,305 148,243,416 797,390 1,427,522 1,185,364 1,227,642 457,114 1,422,862 190,211,615
Time deposits - 432,854,316 - - - - - - 432,854,316
Securities purchased under resale agreements 12,352,840 - - - - - - - 12,352,840
Investments in mutual funds - - - 65,461 - - - - 65,461
Short term investments classified as cash equivalents 12,352,840 - - 65,461 - - - - 12,418,301
Cash equivalents 12,352,840 432,854,316 - 65,461 - - - - 445,272,617
Total 47,803,145 581,097,732 797,390 1,492,983 1,185,364 1,227,642 457,114 1,422,862 635,484,232

 

The composition of cash and cash equivalents by currency as of December 31, 2021, 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 62,430 3,524 - 10,256 - - 106,281 - 182,491
Bank balances 48,562,230 8,248,242 2,495,431 3,266,761 1,498,157 1,264,251 318,107 2,478,706 68,131,885
Cash 48,624,660 8,251,766 2,495,431 3,277,017 1,498,157 1,264,251 424,388 2,478,706 68,314,376
Time deposits 16,257,047 24,073,959 - 14,559,327 - - - - 54,890,333
Securities purchased under resale agreements 109,332,901 - - - - - - - 109,332,901
Investments in mutual funds - - - 33,030,515 - - - - 33,030,515
Short term investments classified as cash equivalents 109,332,901 - - 33,030,515 - - - - 142,363,416
Cash equivalents 125,589,948 24,073,959 - 47,589,842 - - - - 197,253,749
Total 174,214,608 32,325,725 2,495,431 50,866,859 1,498,157 1,264,251 424,388 2,478,706 265,568,125

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The composition of time deposits is detailed as follows:

 

As of September 30, 2022:

 

Financial entity Date of placement Due date Currency Amount Monthly interest rate (%)
ThCh$
Citibank - New York 08-19-2022 10-19-2022 USD 48,159,317 0.22
Citibank - New York 09-26-2022 11-28-2022 USD 192,119,911 0.28
Sumitomo Mitsui Banking Corporation - New York 08-25-2022 10-25-2022 USD 144,450,824 0.24
Sumitomo Mitsui Banking Corporation - New York 09-29-2022 11-03-2022 USD 48,124,264 0.27
Total       432,854,316  

 

 

As of December 31, 2021:

 

Financial entity Date of placement Due date Currency Amount Monthly interest rate (%)
ThCh$
Banco BBVA - Argentina 12-23-2021 01-21-2022 ARS 4,142,029 0.03
Banco de Chile 12-29-2021 01-05-2022 USD 5,490,491 0.02
Banco de Chile 12-23-2021 01-04-2022 CLP 3,502,613 0.03
Banco de Chile 12-29-2021 01-13-2022 CLP 4,750,887 0.03
Banco Macro - Argentina 12-13-2021 01-12-2022 ARS 1,255,315 0.03
Banco Patagonia - Argentina 12-16-2021 01-17-2022 ARS 3,338,315 0.03
Banco Patagonia - Argentina 12-28-2021 01-27-2022 ARS 2,476,161 0.03
Banco Santander - Chile 12-27-2021 01-04-2022 CLP 8,003,547 0.03
Banco Santander - Chile 12-27-2021 01-27-2022 USD 6,757,670 0.02
Banco Santander - Chile 12-29-2021 01-27-2022 USD 11,825,798 0.02
Banco Santander Río - Argentina 12-13-2021 01-12-2022 ARS 3,347,507 0.03
Total       54,890,333  

 

The composition of securities purchased under resale agreements is detailed as follows:

 

As of September 30, 2022:

 

 

Financial entity Underlying Asset (Time Deposit) (*) Date of placement Due date Currency Amount Monthly interest rate (%)
ThCh$
Banchile Corredores de Bolsa S.A. Banco Bice - Chile 09-30-2022 10-04-2022 CLP 70,000 0.88
Banchile Corredores de Bolsa S.A. Banco Itaú Corpbanca - Chile 09-30-2022 10-04-2022 CLP 1,270,000 0.88
Banchile Corredores de Bolsa S.A. Banco Santander - Chile 09-30-2022 10-04-2022 CLP 980,000 0.88
Banchile Corredores de Bolsa S.A. Scotiabank Chile 09-30-2022 10-04-2022 CLP 2,180,000 0.88
BancoEstado S.A. Corredores de Bolsa - Chile Banco Central de Chile 09-27-2022 10-06-2022 CLP 2,197,980 0.85
BancoEstado S.A. Corredores de Bolsa - Chile Banco Central de Chile 09-29-2022 10-04-2022 CLP 1,399,999 0.85
BancoEstado S.A. Corredores de Bolsa - Chile Banco Central de Chile 09-29-2022 10-04-2022 CLP 999,885 0.85
BancoEstado S.A. Corredores de Bolsa - Chile Banco Central de Chile 09-30-2022 10-04-2022 CLP 749,817 0.85
BancoEstado S.A. Corredores de Bolsa - Chile Banco Consorcio - Chile 09-30-2022 10-04-2022 CLP 183 0.85
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Chile 09-27-2022 10-06-2022 CLP 3,890 0.85
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Crédito e Inversiones - Chile 09-29-2022 10-04-2022 CLP 398 0.85
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Crédito e Inversiones - Chile 09-29-2022 10-04-2022 CLP 398 0.85
Scotia Corredora de Bolsa Chile S.A. Banco Itaú Corpbanca - Chile 09-29-2022 10-04-2022 CLP 299,650 0.87
Scotia Corredora de Bolsa Chile S.A. Banco Santander - Chile 09-30-2022 10-04-2022 CLP 1,500,000 0.88
Scotia Corredora de Bolsa Chile S.A. Scotiabank Chile 09-29-2022 10-04-2022 CLP 700,640 0.87
Total         12,352,840  

 

(*) All financial instruments acquired under resale agreements, correspond to time deposits and are subject to a fixed interest rate.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

As of December 31, 2021:

 

Financial entity Underlying Asset (Time Deposit) (*) Date of placement Due date Currency Amount Monthly interest rate (%)
ThCh$
BancoEstado S.A. Corredores de Bolsa - Chile Banco Bice - Chile 12-27-2021 01-04-2022 CLP 500,213 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Central de Chile 12-28-2021 01-06-2022 CLP 7,397,112 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Central de Chile 12-27-2021 01-04-2022 CLP 6,992,381 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Consorcio - Chile 12-28-2021 01-06-2022 CLP 133,547 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Consorcio - Chile 12-28-2021 01-06-2022 CLP 2,500,800 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Chile 12-30-2021 01-06-2022 CLP 298,203 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Crédito e Inversiones - Chile 12-28-2021 01-06-2022 CLP 3,086,710 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Chile 12-30-2021 01-06-2022 CLP 3,207,336 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Chile 12-24-2021 01-04-2022 CLP 3,502,532 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Crédito e Inversiones - Chile 12-27-2021 01-04-2022 CLP 900,384 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Chile 12-30-2021 01-06-2022 CLP 2,995,176 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Itaú Corpbanca - Chile 12-30-2021 01-11-2022 CLP 500,055 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Security - Chile 12-27-2021 01-04-2022 CLP 500,213 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Security - Chile 12-28-2021 01-06-2022 CLP 1,500,480 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Itaú Corpbanca - Chile 12-28-2021 01-06-2022 CLP 2,000,640 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco del Estado de Chile 12-28-2021 01-06-2022 CLP 66,161 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Itaú Corpbanca - Chile 12-27-2021 01-04-2022 CLP 1,200,512 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Itaú Corpbanca - Chile 12-30-2021 01-06-2022 CLP 2,500,275 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco de Crédito e Inversiones - Chile 12-28-2021 01-06-2022 CLP 319,990 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Security - Chile 12-30-2021 01-04-2022 CLP 1,000,110 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Itaú Corpbanca - Chile 12-30-2021 01-06-2022 CLP 2,500,275 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Itaú Corpbanca - Chile 12-28-2021 01-06-2022 CLP 1,500,480 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Security - Chile 12-28-2021 01-06-2022 CLP 1,500,480 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Security - Chile 12-30-2021 01-04-2022 CLP 1,000,110 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Banco Security - Chile 12-30-2021 01-11-2022 CLP 1,000,110 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Scotiabank Chile 12-27-2021 01-04-2022 CLP 3,011,885 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Scotiabank Chile 12-30-2021 01-06-2022 CLP 7,000,770 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Scotiabank Chile 12-27-2021 01-04-2022 CLP 300,128 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Scotiabank Chile 12-28-2021 01-06-2022 CLP 10,003,200 0.30
BancoEstado S.A. Corredores de Bolsa - Chile Scotiabank Chile 12-27-2021 01-04-2022 CLP 400,171 0.30
Scotia Corredora de Bolsa Chile S.A. Banco de Crédito e Inversiones - Chile 12-24-2021 01-04-2022 CLP 1,272,246 0.30
Scotia Corredora de Bolsa Chile S.A. Banco Security - Chile 12-30-2021 01-06-2022 CLP 2,977,040 0.30
Scotia Corredora de Bolsa Chile S.A. Banco de Crédito e Inversiones - Chile 12-24-2021 01-04-2022 CLP 446,271 0.30
Scotia Corredora de Bolsa Chile S.A. Banco Itaú Corpbanca - Chile 12-28-2021 01-06-2022 CLP 4,723,523 0.30
Scotia Corredora de Bolsa Chile S.A. Banco de Crédito e Inversiones - Chile 12-24-2021 01-04-2022 CLP 1,284,900 0.30
Scotia Corredora de Bolsa Chile S.A. Banco Bice - Chile 12-30-2021 01-06-2022 CLP 1,980,643 0.30
Scotia Corredora de Bolsa Chile S.A. Banco de Crédito e Inversiones - Chile 12-30-2021 01-06-2022 CLP 2,387,785 0.30
Scotia Corredora de Bolsa Chile S.A. Banco Consorcio - Chile 12-29-2021 01-06-2022 CLP 1,500,320 0.30
Scotia Corredora de Bolsa Chile S.A. Banco de Crédito e Inversiones - Chile 12-28-2021 01-06-2022 CLP 2,778,877 0.30
Scotia Corredora de Bolsa Chile S.A. Banco Consorcio - Chile 12-30-2021 01-06-2022 CLP 4,667,502 0.30
Scotia Corredora de Bolsa Chile S.A. Banco Central de Chile 12-24-2021 01-04-2022 CLP 999,477 0.30
Scotia Corredora de Bolsa Chile S.A. Banco Security - Chile 12-23-2021 01-04-2022 CLP 2,502,133 0.30
Scotia Corredora de Bolsa Chile S.A. Banco Security - Chile 12-24-2021 01-04-2022 CLP 2,501,808 0.30
Scotia Corredora de Bolsa Chile S.A. Scotiabank Chile 12-30-2021 01-06-2022 CLP 4,996,985 0.30
Scotia Corredora de Bolsa Chile S.A. Scotiabank Chile 12-30-2021 01-06-2022 CLP 2,992,312 0.30
Scotia Corredora de Bolsa Chile S.A. Scotiabank Chile 12-28-2021 01-06-2022 CLP 2,000,640 0.30
Total         109,332,901  

 

(*) All financial instruments acquired under resale agreements, correspond to time deposits and are subject to a fixed interest rate.

 

 

Payments for business acquisitions are detailed as follows:

 

  For the nine periods ended as of September 30,
2022 2021
ThCh$ ThCh$
Total disbursement per business acquisition      
Other cash payment to acquire interests in joint ventures (1)   - 5,791,718
Cash flow used for control of subsidiaries or other business (2)   438,105 8,709,120
Cash flow used in the purchase of non-controlling interests (3)   29,428,835 -
Total   29,866,940 14,500,838

 

(1)In 2021 corresponds to capital contributions made to Zona Franca Central Cervecera S.A.S. (See Note 16 – Investments accounted for using equity).
(2)See Note 1 – General Information, letter C, numbers (3) and (4).
(3)See Note 16 – Investments accounted for using equity method number (3).
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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Note 9 Other non-financial assets

 

The Company maintained the following other non-financial assets:

 

  As of September 30, 2022 As of December 31, 2021
Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Insurances paid 8,042,970 - 3,731,652 -
Advertising 12,969,906 10,710,064 12,043,766 7,884,438
Advances to suppliers 15,571,144 - 11,126,150 -
Prepaid expenses 3,275,008 237,369 1,372,181 228,728
Total advances 39,859,028 10,947,433 28,273,749 8,113,166
Guarantees paid 11,223 155,195 11,153 149,284
Consumables 876,051 - 683,951 -
Dividends receivable 898,821 - 361,565 -
Other - 3,905 - 3,905
Total other assets 1,786,095 159,100 1,056,669 153,189
Total 41,645,123 11,106,533 29,330,418 8,266,355

 

 

Nature of each non-financial asset:

 

a)Insurances paid: Annual payments for insurances policies are included, which are capitalized and then 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: Mainly for services, purchase of raw materials and customs agents.

 

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.

 

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.

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Note 10 Trade and other receivables

 

The trade and other receivables are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Chile operating segment 151,022,913 - 187,798,087 -
International business operating segment 77,644,222 - 73,047,039 -
Wines operating segment 71,869,730 - 59,645,896 -
Total commercial debtors 300,536,865 - 320,491,022 -
Impairment loss estimate (5,385,172) - (5,820,206) -
Total commercial debtors - net 295,151,693 - 314,670,816 -
Others accounts receivables (1) 91,462,243 3,423,369 58,324,913 3,801,244
Total other accounts receivable 91,462,243 3,423,369 58,324,913 3,801,244
Total 386,613,936 3,423,369 372,995,729 3,801,244

 

 

(1)In Other non-current account receivables mainly tax receivables from Argentinian subsidiaries are presented.

 

The Company’s accounts receivable are denominated in the following currencies:

 

  As of September 30, 2022 As of December 31, 2021
  ThCh$ ThCh$
Chilean Peso 237,832,276 237,454,591
Argentine Peso 73,401,692 68,951,336
US Dollar 49,653,896 38,729,972
Euro 9,225,396 10,590,738
Unidad de Fomento 2,291,449 4,026,471
Uruguayan Pesos 5,349,790 5,243,169
Paraguayan Guarani 8,950,953 8,056,575
Bolivian 2,511,819 1,527,637
Others currencies 1,919,455 2,216,484
Total 391,136,726 376,796,973

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The detail of the accounts receivable maturities as of September 30, 2022, 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 151,022,913 145,963,297 2,213,919 1,624,661 580,788 640,248
International business operating segment 77,644,222 72,617,240 4,129,601 201,945 134,737 560,699
Wines operating segment 71,869,730 64,790,713 6,705,244 255,046 72,286 46,441
Total commercial debtors 300,536,865 283,371,250 13,048,764 2,081,652 787,811 1,247,388
Impairment loss estimate (5,385,172) (2,583,946) (591,423) (621,301) (511,893) (1,076,609)
Total commercial debtors - net 295,151,693 280,787,304 12,457,341 1,460,351 275,918 170,779
Others accounts receivables 91,462,243 91,168,290 94,512 192,141 - 7,300
Total other accounts receivable 91,462,243 91,168,290 94,512 192,141 - 7,300
Total current 386,613,936 371,955,594 12,551,853 1,652,492 275,918 178,079
Others accounts receivables 3,423,369 3,423,369 - - - -
Total non-current 3,423,369 3,423,369 - - - -

 

 

The detail of the accounts receivable maturities as of December 31, 2021 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 187,798,087 182,192,821 3,474,949 291,779 379,429 1,459,109
International business operating segment 73,047,039 67,503,572 4,478,531 123,302 123,089 818,545
Wines operating segment 59,645,896 54,914,881 4,397,507 277,201 2,039 54,268
Total commercial debtors 320,491,022 304,611,274 12,350,987 692,282 504,557 2,331,922
Impairment loss estimate (5,820,206) (3,146,576) (401,432) (372,848) (353,056) (1,546,294)
Total commercial debtors - net 314,670,816 301,464,698 11,949,555 319,434 151,501 785,628
Others accounts receivables 58,324,913 58,033,614 114,849 176,450 - -
Total other accounts receivable 58,324,913 58,033,614 114,849 176,450 - -
Total current 372,995,729 359,498,312 12,064,404 495,884 151,501 785,628
Others accounts receivables 3,801,244 3,801,244 - - - -
Total non-current 3,801,244 3,801,244 - - - -

 

 

The Company markets its products through wholesale customers, retail and supermarket chains. As of September 30, 2022, the accounts receivable from the three most important supermarket chains in Chile and Argentina represent 23% (30% as of December 31, 2021) of the total accounts receivable.

 

As indicated in the Risk management note (See Note 5 – Risk administration), for Credit Risk purposes, the Company acquires credit insurance policies to cover approximately 90% of the significant accounts receivable balances domestic and export, respectively, of the total of the account receivables.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

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 September 30, 2022 As of December 31, 2021
  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% 374,539,540 (2,583,946) 0.13% 362,644,888 (3,146,576)
0 a 3 months 8.97% 13,143,276 (591,423) 8.97% 12,465,836 (401,432)
3 a 6 months 50.30% 2,273,793 (621,301) 50.30% 868,732 (372,848)
6 a 12 months 100.00% 787,811 (511,893) 100.00% 504,557 (353,056)
More than 12 months 100.00% 1,254,688 (1,076,609) 100.00% 2,331,922 (1,546,294)
Total   391,999,108 (5,385,172)   378,815,935 (5,820,206)

 

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 September 30, 2022 As of December 31, 2021
  ThCh$ ThCh$
Balance at the beginning of year (5,820,206) (6,323,298)
Estimate of expected credit losses up 12 months (556,552) (1,846,559)
Estimate of expected credit losses longer than 12 months (14,797) (33,501)
Impairment provision of accounts receivable (571,349) (1,880,060)
Uncollectible accounts 474,279 1,995,725
Add back of unused provisions 462,176 476,246
Effect of translation into presentation currency 69,928 (88,819)
Total (5,385,172) (5,820,206)

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 11    Accounts and transactions with related parties

 

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 annual, equal and successive instalments of UF 1,200 each and a final payment of UF 2,050, beginning on February 28, 2015.

 

(4)Corresponds to shares of subsidiary Cervecería Szot SpA. from subsidiary Cervecería Kunstmann S.A. sold to Representaciones Chile Beer Kevin Michael Szot E.I.R.L. The total amount of the transaction raised ThCh$ 42,506 for the sale of 15,167 shares. An interest of UF plus 3.79% annually will be applied to the value (base 360 ​​days). The account receivable will be paid by Representaciones Chile Beer Kevin Michael Szot E.I.R.L. to CK in the same proportion of the dividends it will receive from the participation it owns in Cervecería Szot SpA.

 

(5)Corresponds to a mutual agreement agreed in development units between the subsidiary Cervecera Guayacán SpA and Inversiones Río Elqui SpA. for a total of UF 849.32. Its stipulates accrual of interest at 3.72% per year (base on 360 ​​days) from the date on which each disbursement is made and until its payment. On May 30, 2022, the payment of this mutual was made.

 

The transaction table includes the main transactions made with related parties.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

The detail of the accounts receivable and payable from related parties are detailed as follows:

 

Accounts receivable from related parties

 

 

Current:

 

 

Tax ID Company Country of origin Ref. Relationship Transaction Currency As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
6,062,786-K Andrónico Luksic Craig Chile (1) Chairman of CCU Sales of products CLP - 724
6,525,286-4 Francisco Pérez Mackenna Chile (1) Director Sales of products CLP 196 302
6,770,473-8 Armin Kunstmann Telge Chile (1) Chairman of  subsidiary Sales of products CLP 37 58
6,972,382-9 Pablo José Granifo Lavín Chile (1) Director Sales of products CLP - 401
52,000,721-0 Representaciones Chile Beer Kevin Michael Szot E.I.R.L. Chile (4) Shareholder of subsidiary Sale of shares CLP 3,675 2,235
52,000,721-0 Representaciones Chile Beer Kevin Michael Szot E.I.R.L. Chile (1) Shareholder of subsidiary Sales of products CLP 3,507 4,040
76,178,803-5 Viña Tabalí S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 1,338 302
76,275,453-3 Tech Pack S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 23 -
76,363,269-5 Inversiones Alabama Ltda. Chile (1) Related to the controller's shareholder Sales of products CLP 469 469
76,380,217-5 Hapag-Lloyd Chile SpA. Chile (1) Related to the controller's shareholder Sales of products CLP 5,937 1,004
76,455,830-8 DiWatts S.A. Chile (1) Related joint venture shareholder Sales of products CLP 541 548
76,486,051-9 Inversiones Río Elqui SpA. Chile (1) Related to non-controlling subsidiary Sales of products CLP 840 26,481
77,003,342-K Origen Patagónico SpA. Chile (1) Related to non-controlling subsidiary Sales of products CLP 9,265 9,213
77,051,330-8 Cervecería Kunstmann Ltda. Chile (1) Related to non-controlling subsidiary Services provided CLP 66,464 -
77,051,330-8 Cervecería Kunstmann Ltda. Chile (1) Related to non-controlling subsidiary Sales of products CLP 532,418 476,424
77,191,070-K Banchile Corredores de Seguros Ltda. Chile (1) Related to the controller's shareholder Sales of products CLP 288 183
77,755,610-K Comercial Patagona Ltda. Chile (1) Subsidiary of joint venture Sales of products CLP 2,921,083 2,282,642
78,053,790-6 Servipag Ltda. Chile (1) Related to the controller's shareholder Sales of products CLP 1,788 585
78,259,420-6 Inversiones PFI Chile Ltda. Chile (1) Shareholder of joint operation Services provided CLP 2,912 20,427
78,306,560-6 Inmobiliaria e Inversiones Río Claro S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 82 -
81,095,400-0 Sonacol S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 548 282
81,148,200-5 Ferrocarril de Antofagasta a Bolivia S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 3,796 5,053
81,805,700-8 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Chile (1) Shareholder of subsidiary Advance purchase CLP - 952,000
81,805,700-8 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Chile (3) Shareholder of subsidiary Loan UF 71,372 36,710
81,805,700-8 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Chile (1) Shareholder of subsidiary Sales of products CLP 3,769 4,534
84,356,800-9 Watts S.A. Chile (1) Related joint venture shareholder Sales of products CLP 9,478 11,891
90,160,000-7 Compañía Sud Americana de Vapores S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 618 306
90,703,000-8 Nestlé Chile S.A. Chile (1) Shareholder of subsidiary Sales of products CLP 36,100 22,086
91,705,000-7 Quiñenco S.A. Chile (1) Controller's shareholder Sales of products CLP 4,386 3,207
92,011,000-2 Empresa Nacional de Energía Enex S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 2,021 6,585
93,920,000-2 Antofagasta Minerals S.A. Chile (1) Related to the controller's shareholder Sales of products CLP - 1,964
94,625,000-7 Inversiones Enex S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 203,291 279,796
96,536,010-7 Inversiones Consolidadas Ltda. Chile (1) Related to the controller's shareholder Sales of products CLP 642 421
96,571,220-8 Banchile Corredores de Bolsa S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 2,204 1,069
96,591,040-9 Empresas Carozzi S.A. Chile (1) Shareholder of joint operation Sales of products CLP 29,793 23,215
96,610,780-4 Portuaria Corral S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 198 496
96,645,790-2 Socofin S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 443 1,548
96,657,210-8 Transportes Fluviales Corral S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 213 937
96,810,030-0 RDF Media SpA. Chile (1) Related to the controller's shareholder Sales of products CLP 676 303
96,847,140-6 Inmobiliaria Norte Verde S.A. Chile (1) Related to the controller's shareholder Sales of products CLP - 386
96,892,490-7 Administracion y Servicios Generales LQ S.A. Chile (1) Related to the controller's shareholder Sales of products CLP - 158
96,908,930-0 San Vicente Terminal Internacional S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 2,547 2,733
96,908,970-K San Antonio Terminal Internacional S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 967 2,291
96,919,980-7 Cervecería Austral S.A. Chile (1) Joint venture Services provided CLP 592,778 851,941
97,004,000-5 Banco de Chile Chile (1) Related to the controller's shareholder Sales of products CLP 47,578 44,014
99,506,030-2 Muellaje del Maipo S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 4,081 2,600
99,511,240-K Antofagasta Terminal Internacional S.A. Chile (1) Related to the controller's shareholder Sales of products CLP 3,580 2,193
0-E Central Cervecera de Colombia S.A.S. Colombia (2) Joint venture Sales of products USD 17,203 -
0-E Gráfica Editorial Inter-Sudamericana S.A. Paraguay (2) Related to the subsidiary's shareholder Sales of products PYG 401 281
0-E Heineken Brouwerijen B.V. Netherlands (2) Related to the controller's shareholder Services provided Euros 205,343 222,226
Total             4,794,889 5,307,264

 

 

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Non Current:

 

 

Tax ID Company Country of origin Ref. Relationship Transaction Currency As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
52,000,721-0 Representaciones Chile Beer Kevin Michael Szot E.I.R.L. Chile (4) Shareholder of subsidiary Sale of shares CLP 42,506 42,506
81,805,700-8 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Chile (3) Shareholder of subsidiary Loan UF - 61,691
Total             42,506 104,197

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Accounts payable to related parties

Current:

 

 

Tax ID Company Country of origin Ref. Relationship Transaction Currency As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
52,000,721-0 Representaciones Chile Beer Kevin Michael Szot E.I.R.L. Chile (1) Shareholder of subsidiary Services received CLP 16,719 8,836
76,115,132-0 Canal 13 SpA. Chile (1) Related to the controller's shareholder Services received CLP 54,895 254,330
76,380,217-5 Hapag-Lloyd Chile SpA. Chile (1) Related to the controller's shareholder Services received CLP 20,706 20,858
76,455,830-8 DiWatts S.A. Chile (1) Related joint venture shareholder Purchase of products CLP 266,754 202,828
76,486,051-9 Inversiones Río Elqui SpA. Chile (5) Related to non-controlling subsidiary Loan CLP - 25,694
76,486,051-9 Inversiones Río Elqui SpA. Chile (1) Related to non-controlling subsidiary Services received CLP 102 -
76,729,932-K Saam Logistics S.A. Chile (1) Related to the controller's shareholder Services received CLP 549,735 168,431
77,003,342-K Origen Patagónico SpA. Chile (1) Related to non-controlling subsidiary Services received CLP 75 -
77,051,330-8 Cervecería Kunstmann Ltda. Chile (1) Related to non-controlling subsidiary Services received CLP 996 5,157
77,755,610-K Comercial Patagona Ltda. Chile (1) Subsidiary of joint venture Services received CLP 216,997 103,521
78,053,790-6 Servipag Ltda. Chile (1) Related to the controller's shareholder Services received CLP 1,640 1,553
78,259,420-6 Inversiones PFI Chile Ltda. Chile (1) Shareholder of joint operation Purchase of products CLP 3,325,476 1,693,360
81,805,700-8 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Chile (1) Shareholder of subsidiary Services received CLP 1,113 1,015
84,356,800-9 Watts S.A. Chile (2) Related joint venture shareholder Royalty USD 18,289 15,786
90,703,000-8 Nestlé Chile S.A. Chile (1) Shareholder of subsidiary Purchase of products CLP - 13,428
91,705,000-7 Quiñenco S.A. Chile (1) Controller's shareholder Services received CLP - 478
92,011,000-2 Empresa Nacional de Energía Enex S.A. Chile (1) Related to the controller's shareholder Purchase of products CLP 30,038 19,531
94,058,000-5 Servicios Aeroportuarios Aerosan S.A. Chile (1) Related to the controller's shareholder Services received CLP 1,674 5,067
96,591,040-9 Empresas Carozzi S.A. Chile (1) Shareholder of joint operation Purchase of products CLP 1,004,189 215,112
96,798,520-1 SAAM Extraportuarios S.A. Chile (1) Related to the controller's shareholder Services received CLP 8,358 7,604
96,810,030-0 Radiodifusión SpA. Chile (1) Related to the controller's shareholder Services received CLP 11,430 32,576
96,908,930-0 San Vicente Terminal Internacional S.A. Chile (1) Related to the controller's shareholder Services received CLP 20 179
96,908,970-K San Antonio Terminal Internacional S.A. Chile (1) Related to the controller's shareholder Services received CLP 1,556 17,548
96,919,980-7 Cervecería Austral S.A. Chile (1) Joint venture Purchase of products CLP 2,667,674 2,234,632
96,919,980-7 Cervecería Austral S.A. Chile (1) Joint venture Royalty CLP 956,472 965,010
96,591,040-9 Empresas Carozzi S.A. Chile (2) Shareholder of joint operation Purchase of products USD 37,240 52,495
0-E Banco BASA S.A. Paraguay (2) Related to the subsidiary's shareholder Services received PYG 5 -
0-E Central Cervecera de Colombia S.A.S. Colombia (2) Joint venture Services received USD 26,483 26,483
0-E Ecor Ltda. Bolivia (2) Related to the subsidiary's shareholder Services received BOB 3,834 11,466
0-E Emprendimientos Hoteleros S.A.E.C.A. Paraguay (2) Related to the subsidiary's shareholder Services received PYG 1,695 316
0-E Gráfica Editorial Inter-Sudamericana S.A. Paraguay (2) Related to the subsidiary's shareholder Services received PYG 48 -
0-E Heineken Brouwerijen B.V. Netherlands (2) Related to the controller's shareholder Purchase of products USD 1,909,133 6,250,581
0-E Heineken Brouwerijen B.V. Netherlands (2) Related to the controller's shareholder License and technical assistance Euros 16,900,325 13,195,268
0-E Heineken Brouwerijen B.V. Netherlands (2) Related to the controller's shareholder Royalty USD 7,574 -
0-E Heineken Brouwerijen B.V. Netherlands (2) Related to the controller's shareholder Royalty Euros 2,752,274 129,600
0-E Heineken Supply Chain B.V. Netherlands (2) Related to the controller's shareholder Purchase of products Euros - 105,774
0-E Nestlé Waters Management & Technology S.A.S. France (2) Related to the subsidiary's shareholder Services received Euros 26,242 19,953
0-E Nestlé Waters Marketing & Distribution S.A.S. France (2) Related to the subsidiary's shareholder Purchase of products Euros 41,480 41,794
0-E Palermo S.A. Paraguay (2) Related to the subsidiary's shareholder Services received PYG 894 2,520
0-E Paulaner Brauerei Gruppe GmbH & Co. KGaA Germany (2) Related to the subsidiary's shareholder Purchase of products USD - 99,532
0-E Premium Brands S.R.L. Bolivia (2) Related to the subsidiary's shareholder Purchase of products BOB - 728
0-E Société des Produits Nestlé S.A. Switzerland (2) Related to the subsidiary's shareholder Royalty Other currencies 102,478 151,871
0-E Tetra Pak Global Distribution S.A. Switzerland (2) Related to the subsidiary's shareholder Purchase of products USD - 54,099
0-E Zona Franca Central Cervecera S.A.S. Colombia (2) Joint venture Services received USD - 53,305
Total             30,964,613 26,208,319

 


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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Most significant transactions and effects on results:

 

For the nine-months ended September 30, 2022 and 2021, the most significant transactions with related parties are detailed as follows:

 

 

Tax ID Company Country of origin Relationship Transaction 2022 2021
Amounts (Charges)/Credits (Effect on Income) Amounts (Charges)/Credits (Effect on Income)
ThCh$ ThCh$ ThCh$ ThCh$
76,115,132-0 Canal 13 SpA. Chile Related to the controller's shareholder Services received 729,648 (729,648) 1,296,201 (1,296,201)
76,178,803-5 Viña Tabalí S.A. Chile Related to the controller's shareholder Services provided - - 1,800 1,800
76,313,970-0 Inversiones Irsa Ltda. Chile Related to the controller Dividends paid 5,055,998 - 3,518,102 -
76,380,217-5 Hapag-Lloyd Chile SpA. Chile Related to the controller's shareholder Services received 523,183 - 54,930 -
76,460,328-1 Inversiones Diaguitas #33 SpA. Chile Shareholder of subsidiary Sale of land - - 185,000 (16,939)
76,460,328-1 Inversiones Diaguitas #33 SpA. Chile Shareholder of subsidiary Loan payment - - 185,000 -
76,486,051-9 Inversiones Río Elqui SpA. Chile Related to non-controlling subsidiary Loan 25,930 - 25,229 -
76,486,051-9 Inversiones Río Elqui SpA. Chile Related to non-controlling subsidiary Interests 236 (236) 460 (460)
76,486,051-9 Inversiones Río Elqui SpA. Chile Related to non-controlling subsidiary Loan payment 26,088 (1,088) - -
76,729,932-K SAAM Logistics S.A. Chile Related to the controller's shareholder Services received 594,736 - 17,619 -
76,800,322-K Yanghe Chile SpA. Chile Shareholder of subsidiary Dividends paid 2,240,801 - 1,403,236 -
77,051,330-8 Cervecería Kunstmann Ltda. Chile Related to non-controlling subsidiary Services received 94,815 (94,815) 60,899 (60,899)
77,051,330-8 Cervecería Kunstmann Ltda. Chile Related to non-controlling subsidiary Sales of products 546,310 413,434 457,798 318,044
77,755,610-K Comercial Patagona Ltda. Chile Subsidiary of joint venture Services received 424,872 (424,872) 378,912 (378,912)
77,755,610-K Comercial Patagona Ltda. Chile Subsidiary of joint venture Sales of products 8,548,362 5,507,918 7,250,347 4,710,788
78,259,420-6 Inversiones PFI Chile Ltda. Chile Shareholder of joint operation Purchase of products 16,279,209 - 10,641,223 -
78,259,420-6 Inversiones PFI Chile Ltda. Chile Shareholder of joint operation Services received - - 184,143 (184,143)
78,259,420-6 Inversiones PFI Chile Ltda. Chile Shareholder of joint operation Services provided 2,969,327 2,969,327 1,031,108 1,031,108
79,985,340-K Cervecera Valdivia S.A. Chile Shareholder of subsidiary Dividends paid 2,497,851 - 946,874 -
81,805,700-8 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Chile Shareholder of subsidiary Dividends paid 2,655,807 - 1,119,455 -
81,805,700-8 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Chile Shareholder of subsidiary Loan recovery - - 31,495 -
90,703,000-8 Nestlé Chile S.A. Chile Related to the controller Dividends paid 8,447,312 - 6,708,433 -
91,705,000-7 Quiñenco S.A. Chile Controller's shareholder Sales of products 26,441 19,524 12,082 8,078
92,011,000-2 Empresa Nacional de Energía Enex S.A. Chile Related to the controller's shareholder Purchase of products 202,308 (202,308) 93,544 (93,544)
92,011,000-2 Empresa Nacional de Energía Enex S.A. Chile Related to the controller's shareholder Services received 276,156 (276,156) 357,306 (357,306)
92,011,000-2 Empresa Nacional de Energía Enex S.A. Chile Related to the controller's shareholder Purchase of fixed assets 173,828 - - -
93,920,000-2 Antofagasta Minerals S.A. Chile Related to the controller's shareholder Sales of products 1,405 1,104 536 466
94,625,000-7 Inversiones Enex S.A. Chile Related to the controller's shareholder Sales of products 1,335,521 991,051 1,171,996 779,051
96,427,000-7 Inversiones y Rentas S.A. Chile Controller Dividends paid 43,621,855 - 28,139,500 -
96,427,000-7 Inversiones y Rentas S.A. Chile Controller Services provided 7,774 7,774 7,153 7,153
96,571,220-8 Banchile Corredores de Bolsa S.A. Chile Related to the controller's shareholder Investment Rescue 85,838,886 38,886 65,801,786 1,786
96,571,220-8 Banchile Corredores de Bolsa S.A. Chile Related to the controller's shareholder Investments 90,300,000 - 40,500,000 -
96,591,040-9 Empresas Carozzi S.A. Chile Shareholder of joint operation Purchase of products 4,828,267 - 2,790,189 -
96,591,040-9 Empresas Carozzi S.A. Chile Shareholder of joint operation Sales of products 75,254 71,234 73,177 69,766
96,657,690-1 Inversiones Punta Brava S.A. Chile Related to the controller's shareholder Services received 419,372 (419,372) 39,223 (39,223)
96,689,310-9 Transbank S.A. Chile Related to the controller's shareholder Services received 250,138 (250,138) 164,781 (164,781)
96,798,520-1 SAAM Extraportuario S.A. Chile Related to the controller's shareholder Services received 190,324 - 24,639 -
96,810,030-0 Radiodifusión SpA. Chile Related to the controller's shareholder Services received 88,935 (88,935) 223,986 (223,986)
96,919,980-7 Cervecería Austral S.A. Chile Joint venture Royalty 4,463,130 (4,463,130) 4,253,706 (4,253,706)
96,919,980-7 Cervecería Austral S.A. Chile Joint venture Purchase of products 17,654,100 - 15,943,367 -
96,919,980-7 Cervecería Austral S.A. Chile Joint venture Services provided 182,544 182,544 159,354 159,354
96,919,980-7 Cervecería Austral S.A. Chile Joint venture Sales of products 105,167 72,220 40,740 27,734
96,919,980-7 Cervecería Austral S.A. Chile Joint venture Dividends received 373,730 - 1,021,819 -
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Investment Rescue 297,517,696 477,101 300,379,693 298,497
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Derivatives 81,263,068 3,693,457 82,664,228 3,977,041
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Interests 305,421 (305,421) 60,580 (60,580)
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Investments 275,050,110 - 298,890,949 -
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Services received 40,698 (40,698) 316,946 (316,946)
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Sales of products 126,417 117,343 119,464 110,869
0-E Aerocentro S.A. Paraguay Related to the subsidiary's shareholder Sales of products 545 381 428 300
0-E Amstel Brouwerijen B.V. Netherlands Related to the controller's shareholder License and technical assistance 830,503 (830,503) 103,387 (103,387)
0-E Banco BASA S.A. Paraguay Related to the subsidiary's shareholder Sales of products 1,545 1,082 1,359 951
0-E Cadena Farmacenter S.A. Paraguay Related to the subsidiary's shareholder Sales of products 6,612 4,629 160 112
0-E Cementos Concepción S.A.E. Paraguay Related to the subsidiary's shareholder Sales of products 2,746 1,922 806 564
0-E Chajha S.A. Paraguay Related to the subsidiary's shareholder Sales of products 3,472 2,430 2,871 2,010
0-E Cigar Trading S.R.L. Paraguay Related to the subsidiary's shareholder Sales of products 469 328 484 339
0-E Consignataria de Ganado S.A. Paraguay Related to the subsidiary's shareholder Sales of products 382 267 2,786 1,950
0-E Ecor Ltda. Bolivia Related to the subsidiary's shareholder Services received 77,192 (77,192) 76,786 (76,786)
0-E Enex Paraguay S.R.L. Paraguay Related to the subsidiary's shareholder Sales of products 109,507 76,655 43,748 30,623
0-E Emprendimientos Hoteleros S.A.E.C.A. Paraguay Related to the subsidiary's shareholder Sales of products 11,214 7,850 5,843 4,090
0-E Fundación Ramón T. Cartes Paraguay Related to the subsidiary's shareholder Sales of products 702 491 509 356
0-E Ganadera Las Pampas S.A. Paraguay Related to the subsidiary's shareholder Sales of products 2,340 1,638 2,880 2,016
0-E Gráfica Editorial Inter-Sudamericana S.A. Paraguay Related to the subsidiary's shareholder Sales of products 149 104 198 139
0-E Habacorp S.R.L. Paraguay Related to the subsidiary's shareholder Sales of products - - 43 30
0-E Heineken Brouwerijen B.V. Netherlands Related to the controller's shareholder Purchase of products 21,738,816 - 15,579,044 -
0-E Heineken Brouwerijen B.V. Netherlands Related to the controller's shareholder License and technical assistance 11,622,458 (11,622,458) 18,793,675 (18,793,675)
0-E Heineken Brouwerijen B.V. Netherlands Related to the controller's shareholder Services received 145,105 (145,105) 95,543 (95,543)
0-E Inversiones Bebinv S.A. Bolivia Related to the subsidiary's shareholder Capital contribution 1,648,121 - - -
0-E La Misión S.A. Paraguay Related to the subsidiary's shareholder Sales of products 426 298 1,118 782
0-E Palermo S.A. Paraguay Related to the subsidiary's shareholder Sales of products 8,396 5,877 6,272 4,390
0-E Pamplona S.A. Paraguay Related to the subsidiary's shareholder Sales of products 769 538 411 288
0-E Prana S.A. Paraguay Related to the subsidiary's shareholder Sales of products 369 258 1,929 1,350
0-E QSR S.A. Paraguay Related to the subsidiary's shareholder Sales of products 216,870 151,809 21,913 15,339
0-E Saga Gym S.R.L. Paraguay Related to the subsidiary's shareholder Sales of products 220 154 146 102
0-E Societé des Produits Nestlé S.A. Switzerland Related to the subsidiary's shareholder Royalty 144,456 (144,456) 419,288 (419,288)
0-E Tabacalera del Este S.A. Paraguay Related to the subsidiary's shareholder Sales of products 15,749 11,025 13,578 9,504
0-E Water Latam S.L. Spain Associate controller Purchase of shares 29,428,835 - - -
0-E Zona Franca Central Cervecera S.A.S. Colombia Joint venture Capital contribution - - 5,791,718 -
                 

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

For the three-months ended September 30, 2022 and 2021, the most significant transactions with related parties are detailed as follows:

 

Tax ID Company Country of origin Relationship Transaction 2022 2021
Amounts (Charges)/Credits (Effect on Income) Amounts (Charges)/Credits (Effect on Income)
ThCh$ ThCh$ ThCh$ ThCh$
76,115,132-0 Canal 13 SpA. Chile Related to the controller's shareholder Services received 264,936 (264,936) 490,113 (490,113)
76,178,803-5 Viña Tabalí S.A. Chile Related to the controller's shareholder Services provided - - 600 600
76,380,217-5 Hapag-Lloyd Chile SpA. Chile Related to the controller's shareholder Services received 123,756 - 22,857 -
76,460,328-1 Inversiones Diaguitas #33 SpA. Chile Shareholder of subsidiary Sale of land - - 185,000 (16,939)
76,460,328-1 Inversiones Diaguitas #33 SpA. Chile Shareholder of subsidiary Loan payment - - 185,000 -
76,486,051-9 Inversiones Río Elqui SpA. Chile Related to non-controlling subsidiary Interests - - 231 (231)
76,729,932-K SAAM Logistics S.A. Chile Related to the controller's shareholder Services received 240,594 - 14,973 -
77,051,330-8 Cervecería Kunstmann Ltda. Chile Related to non-controlling subsidiary Services received 36,482 (36,482) 21,094 (21,094)
77,051,330-8 Cervecería Kunstmann Ltda. Chile Related to non-controlling subsidiary Sales of products 122,662 92,828 242,203 157,946
77,755,610-K Comercial Patagona Ltda. Chile Subsidiary of joint venture Services received 154,383 (154,383) 149,685 (149,685)
77,755,610-K Comercial Patagona Ltda. Chile Subsidiary of joint venture Sales of products 2,853,346 1,838,480 2,797,040 1,880,537
78,259,420-6 Inversiones PFI Chile Ltda. Chile Shareholder of joint operation Purchase of products 4,044,071 - 4,936,599 -
78,259,420-6 Inversiones PFI Chile Ltda. Chile Shareholder of joint operation Services provided 418,376 418,376 286,371 286,371
81,805,700-8 Cooperativa Agrícola Control Pisquero de Elqui y Limarí Ltda. Chile Shareholder of subsidiary Loan recovery - - 31,495 -
91,705,000-7 Quiñenco S.A. Chile Controller's shareholder Sales of products 9,842 7,268 5,075 3,316
92,011,000-2 Empresa Nacional de Energía Enex S.A. Chile Related to the controller's shareholder Purchase of products 77,494 (77,494) 35,705 (35,705)
92,011,000-2 Empresa Nacional de Energía Enex S.A. Chile Related to the controller's shareholder Services received 96,701 (96,701) 110,030 (110,030)
92,011,000-2 Empresa Nacional de Energía Enex S.A. Chile Related to the controller's shareholder Purchase of fixed assets 173,828 - - -
94,625,000-7 Inversiones Enex S.A. Chile Related to the controller's shareholder Sales of products 410,715 304,779 422,574 277,443
96,427,000-7 Inversiones y Rentas S.A. Chile Controller Services provided 2,685 2,685 2,410 2,410
96,571,220-8 Banchile Corredores de Bolsa S.A. Chile Related to the controller's shareholder Investment Rescue 31,509,410 9,410 8,500,707 707
96,571,220-8 Banchile Corredores de Bolsa S.A. Chile Related to the controller's shareholder Investments 36,000,000 - 8,500,000 -
96,591,040-9 Empresas Carozzi S.A. Chile Shareholder of joint operation Purchase of products 2,684,289 - 1,269,777 -
96,591,040-9 Empresas Carozzi S.A. Chile Shareholder of joint operation Sales of products 10,646 10,077 22,355 21,685
96,657,690-1 Inversiones Punta Brava S.A. Chile Related to the controller's shareholder Services received 203,068 (203,068) - -
96,689,310-9 Transbank S.A. Chile Related to the controller's shareholder Services received 86,269 (86,269) 31,205 (31,205)
96,798,520-1 SAAM Extraportuario S.A. Chile Related to the controller's shareholder Services received 48,671 - 6,669 -
96,810,030-0 Radiodifusión SpA. Chile Related to the controller's shareholder Services received 24,285 (24,285) 81,577 (81,577)
96,919,980-7 Cervecería Austral S.A. Chile Joint venture Royalty 1,260,977 (1,260,977) 1,589,583 (1,589,583)
96,919,980-7 Cervecería Austral S.A. Chile Joint venture Purchase of products 6,312,865 - 5,448,077 -
96,919,980-7 Cervecería Austral S.A. Chile Joint venture Sales of products 27,374 18,798 20,257 13,800
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Investment Rescue 18,839,062 39,062 110,615,244 115,244
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Derivatives 21,337,509 (1,516,601) 82,664,228 3,267,757
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Interests 294,301 (294,301) 14,114 (14,114)
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Investments 18,800,000 - 118,371,400 -
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Services received 1,310 (1,310) 92,172 (92,172)
97,004,000-5 Banco de Chile Chile Related to the controller's shareholder Sales of products 23,630 21,934 44,379 40,883
0-E Aerocentro S.A. Paraguay Related to the subsidiary's shareholder Sales of products 123 86 91 64
0-E Amstel Brouwerijen B.V. Netherlands Related to the controller's shareholder License and technical assistance 509,955 (509,955) 38,421 (38,421)
0-E Banco BASA S.A. Paraguay Related to the subsidiary's shareholder Sales of products 27 19 225 158
0-E Cadena Farmacenter S.A. Paraguay Related to the subsidiary's shareholder Sales of products 2,517 1,762 85 59
0-E Cementos Concepción S.A.E. Paraguay Related to the subsidiary's shareholder Sales of products - - 178 124
0-E Chajha S.A. Paraguay Related to the subsidiary's shareholder Sales of products 169 119 442 309
0-E Cigar Trading S.R.L. Paraguay Related to the subsidiary's shareholder Sales of products 72 50 39 27
0-E Consignataria de Ganado S.A. Paraguay Related to the subsidiary's shareholder Sales of products 210 147 1,393 975
0-E Ecor Ltda. Bolivia Related to the subsidiary's shareholder Services received 13,978 (13,978) 27,101 (27,101)
0-E Enex Paraguay S.R.L. Paraguay Related to the subsidiary's shareholder Sales of products 20,886 14,620 8,875 6,213
0-E Emprendimientos Hoteleros S.A.E.C.A. Paraguay Related to the subsidiary's shareholder Sales of products 1,313 919 197 138
0-E Fundación Ramón T. Cartes Paraguay Related to the subsidiary's shareholder Sales of products 19 13 366 257
0-E Ganadera Las Pampas S.A. Paraguay Related to the subsidiary's shareholder Sales of products 911 638 255 179
0-E Gráfica Editorial Inter-Sudamericana S.A. Paraguay Related to the subsidiary's shareholder Sales of products 43 30 1 1
0-E Habacorp S.R.L. Paraguay Related to the subsidiary's shareholder Sales of products - - 4 2
0-E Heineken Brouwerijen B.V. Netherlands Related to the controller's shareholder Purchase of products 11,623,497 - 3,483,803 -
0-E Heineken Brouwerijen B.V. Netherlands Related to the controller's shareholder License and technical assistance 8,242,086 (8,242,086) 8,312,118 (8,312,118)
0-E Heineken Brouwerijen B.V. Netherlands Related to the controller's shareholder Services received 90,518 (90,518) 48,574 (48,574)
0-E La Misión S.A. Paraguay Related to the subsidiary's shareholder Sales of products 30 21 559 391
0-E Palermo S.A. Paraguay Related to the subsidiary's shareholder Sales of products 15 10 3,136 2,195
0-E Pamplona S.A. Paraguay Related to the subsidiary's shareholder Sales of products - - 34 24
0-E Prana S.A. Paraguay Related to the subsidiary's shareholder Sales of products - - 964 675
0-E QSR S.A. Paraguay Related to the subsidiary's shareholder Sales of products 32,355 22,649 2,272 1,591
0-E Saga Gym S.R.L. Paraguay Related to the subsidiary's shareholder Sales of products 28 19 45 32
0-E Societé des Produits Nestlé S.A. Switzerland Related to the subsidiary's shareholder Royalty 144,456 (144,456) 158,330 (158,330)
0-E Tabacalera del Este S.A. Paraguay Related to the subsidiary's shareholder Sales of products 633 443 4,451 3,116
0-E Water Latam S.L. Spain Associate controller Purchase of shares 343 - - -
0-E Zona Franca Central Cervecera S.A.S. Colombia Joint venture Capital contribution - - 5,791,718 -
                 

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

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 14, 2021, being elected for a period of three years Messrs. Andrónico Luksic Craig, Francisco Pérez Mackenna, Pablo Granifo Lavín, Rodrigo Hinzpeter Kirberg, Carlos Molina Solís, José Miguel Barros van Hövell tot Westerflier, Marc Gross, Rory Cullinan and Vittorio Corbo Lioi, the latter independent according to article 50 bis of Law No. 18,046. The Chairman and the Vice Chairman, as well as the members of the Audit Committee were appointed at the Board of Directors’ meeting held the same date. According to article 50 bis of Law No. 18,046, in the same Board meeting 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 participate in the Audit Committee´s meetings as observers.

 

The Ordinary Shareholders’ Meeting held on April 13, 2022, it was resolved to maintain the Directors’ remuneration agreed at the previous Ordinary Shareholders’ Meeting, which consists of a monthly gross compensation 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 with charge to the Company’s profits, for the whole Board, calculated on a maximum amount equivalent to 50% of the distributable net income for the year, at a rate of one-ninth for each Director and in proportion to the time each one served as such during the year 2022.

 

The aforementioned Shareholders’ Meeting also agreed to maintain the remuneration of Directors that are members of the Directors Committee, consisting of a monthly gross fee for attendance to Directors Committee meetings, independent of the number of meetings held during the period, of UF 50, plus the corresponding percentage of the distributed dividends until completing the additional third established in article 50 bis of Law No. 18,046 on Corporations and Circular No. 1,956 of the Comisión para el Mercado Financiero (Financial Market Commission); and with respect to those Directors who are members of the Audit Committee, and those appointed as observers of the same, a monthly gross fee for attendance to Audit Committee meetings, independent of the number held during the period, of UF 50.

 

At the Board meeting held on October 5, 2022, the Board of Directors took notice of the resignation of Mr. José Miguel Barros van Hövell tot Westerflier from the position of director, effective on October 1, 2022.

 

At the same meeting, and as permitted by Article 32 of Law No. 18,046, the Board unanimously agreed to appoint Ms. María Gabriela Cadenas as a Director, until the next Ordinary Shareholders' Meeting is held.

 

The remunerations of Directors and Chief Executives of the Company are composed as follows:

 

Directors’ remunerations:

 

  For the nine periods ended as of September 30,
2022 2021
ThCh$ ThCh$
Audit's Committee 51,728 53,124
Directors' Committee 57,609 51,971
Attendance meetings fee 1,177,333 1,097,114
Dividend Participation 1,576,626 1,122,095
     

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Chief Executives’ remunerations:

 

 

  For the nine periods ended as of September 30,
2022 2021
ThCh$ ThCh$
Directors' Committee 9,036 14,626
Attendance meetings fee 174,567 167,333
Dividend Participation 36,159 28,064
     

 

The Chief Executives’ Remuneration as of September 30, 2022 amounted to ThCh$ 8,014,201 (ThCh$ 8,066,542 as of September 30, 2021). The Company grants to the Chief Executives annual bonuses, which have an optional and variable nature, not contractual and assigned according to compliance of individual and corporate goals and based on the incomes of the period.

 

 

 

Note 12    Inventaries

 

The inventories balances are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Finished products 183,093,352 120,545,622
In process products 1,535,740 638,700
Raw material 299,859,222 189,700,921
In transit raw material 18,168,848 35,978,861
Materials and products 14,537,247 9,739,510
Realizable net value estimate and obsolescence (5,120,098) (3,176,553)
Total 512,074,311 353,427,061

 

For the nine-month period ended as of September 30, 2022 and 2021, the Company wrote off a total of ThCh$ 1,684,462 and ThCh$ 2,481,901, against net realizable value and obsolescence, 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 September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Initial balance (3,176,553) (3,944,679)
Inventories write-down estimation (3,747,574) (2,902,530)
Inventories recognised as an expense 1,684,462 3,692,846
Business combinations effect 119,567 (22,190)
Total (5,120,098) (3,176,553)

 

As of September 30, 2022 and December 31, 2021, the Company does not have any inventory pledged as guarantee for financial obligations.

 

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Note 13 Biological assets

 

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 in Note 2 - Summary of significant accounting policies, 2.10.

 

The movement of current biological assets is detailed as follows:

 

  ThCh$  
 
As of January 1 2021    
Historic cost 10,595,029  
Book Value 10,595,029  
     
As of December 31, 2021    
Conversion effect (25,384)  
Acquisitions 26,749,931  
Decreases due to harvesting (24,959,872)  
Other increases (decreases) (1) 187,001  
Changes 1,951,676  
Book Value 12,546,705  
     
As of December 31, 2021    
Historic cost 12,546,705  
Book Value 12,546,705  
     
As of September 30, 2022    
Conversion effect (390,350)  
Acquisitions 24,182,384  
Decreases due to harvesting (28,166,149)  
Other increases (decreases) (1) 440,713  
Changes (3,933,402)  
Book Value 8,613,303  
     
As of September 30, 2022    
Historic cost 8,613,303  
Book Value 8,613,303  

 

(1) Mainly corresponds to the financial effect of the application IAS 29 “Financial reporting in hyperinflationary economies”.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Note 14 Non-current assets of disposal groups classified as held for sale

 

a) International Business Operating segment

 

During September 2015, the Board of subsidiary Sáenz 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 Viña Valles de Chile S.A. (“VVCH”) which is Viña San Pedro Tarapacá S.A., authorized the sale of certain fixed assets located in Rengo city, Provincia de Cachapoal, Sexta Región. As of December 21, 2020 the Administration has signed a sale contract and has an active plan for the sale of these assets.

 

As described in Note 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 as of September 30, 2022.

 

Assets held for sale are detailed as follows:

 

Non-current assets of disposal groups classified as held for sale As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Land 1,946,668 1,848,903
Constructions 482,606 420,487
Machinery 17,603 13,330
Total 2,446,877 2,282,720

 

 

Note 15    Business Combinations

 

During for the nine-month period ended September 30, 2022, the Company did not have any business combinations.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Note 16 Investments accounted for using equity method

 

Joint ventures and Associates

 

As of September 30, 2022 and December 31, 2021, the Company recorded investments qualifying as joint venture and associates.

 

The share value of investments in joint ventures and associates are detailed as follows:

 

  Percentage of participation As of September 30, 2022 As of December 31, 2021
% ThCh$ ThCh$
Cervecería Austral S.A. 50.00 12,832,203 12,235,881
Central Cervecera de Colombia S.A.S. 50.00 16,766,836 22,337,040
Zona Franca Central Cervecera S.A.S. 50.00 102,135,962 102,959,342
Total joint ventures   131,735,000 137,532,263
Aguas Danone de Argentina S.A. 49,00 26,267,248 -
Aguas Danone de Origen S.A. 49,00 343 -
Other companies   635,204 582,217
Total associated   26,902,795 582,217
Total   158,637,795 138,114,480

 

 

 

The above mentioned values include goodwill generated in the acquisition of the following joint venture and associate, which are presented net of any impairment loss:

 

    As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Cervecería Austral S.A.   1,894,770 1,894,770
Aguas Danone de Argentina S.A.   3,145,985 -
Total   5,040,755 1,894,770

 

The result accrued in joint ventures and associates are detailed as follows:

 

  For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Central Cervecera de Colombia S.A.S. (5,552,852) (7,508,616) (1,541,943) (2,864,147)
Zona Franca Central Cervecera S.A.S. (719,416) 1,596,623 (1,282,296) 670,352
Cervecería Austral S.A. 1,527,237 2,962,928 744,165 1,177,923
Total joint ventures (4,745,031) (2,949,065) (2,080,074) (1,015,872)
Aguas Danone de Argentina S.A. (3,161,244) - (1,417,509) -
Other companies 9,131 (412,829) 2,146 2,585
Total associated (3,152,113) (412,829) (1,415,363) 2,585
Total (7,897,144) (3,361,894) (3,495,437) (1,013,287)

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Changes in investments in joint ventures and associates are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Balance at the beginning of year 138,114,480 131,106,785
Other payments to acquire interests in joint ventures - 5,791,718
Cash flows used to purchase non-controlling interests 29,428,835 -
Participation in the joint ventures and associates (loss) (7,897,144) 226,026
Dividends received (910,987) (1,651,730)
Others (*) (97,389) 2,641,681
Total 158,637,795 138,114,480

 

(*) Mainly includes effects from the conversion of joint ventures.

 

Significant matters regarding investments accounted for using the equity method are detailed as follows:

 

(1) Cervecería Austral S.A.

 

It is 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) 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 Investments II SpA., and Grupo Postobón have established a joint arrangement 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 Investments 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 operation, 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 involve the construction of a beer production plant, with an annual total capacity of 3,000,000 hectoliters.

 

As of September 30, 2022 and December 31, 2021, the total amount contributed to CCC and ZF CC was US$ 286,949,917 (equivalents to ThCh$ 191,778,048).

 

(3) Aguas Danone de Argentina S.A.

 

On April 28, 2022, CCU through its subsidiary, Compañía Cervecerías Unidas Argentina S.A. acquired 49% of the ownership of Aguas Danone de Argentina S.A. ("ADA"), which includes the business of mineral waters, flavored waters and powdered juices with its brands Villavicencio, Villa del Sur, Levité, Ser and Brío (the "Transaction"). The Transaction included share sales and capital contributions in Argentine pesos totaling US$ 28.8 million (equivalent to ThCh$ 29,428,492).

 

According to a public deed dated April 28, 2022, the subsidiary Compañía Cervecerías Unidas Argentina S.A., acquired 49,000 ordinary, nominative, non-endorsable shares of Aguas de Origen S.A. ("ADO"), at a value of one Argentine peso each, reaching a 49% interest in this company. The effective payment of this acquisition was made on August 26, 2022.

 

It should be noted that Aguas de Origen S.A. ("ADO"), will continue the business of Aguas Danone de Argentina S.A. from December 1, 2022 (effective date of the agreed reorganization) as a result of the spin-off-merger approved by the shareholders' meeting of Aguas Danone de Argentina S.A. and Aguas de Origen S.A. on June 30, 2022.

 

The Company does not have any contingent liabilities related to joint ventures and associates as September 30, 2022.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The following is a summary of significant items in the Interim Financial Statements for associate and joint ventures at the end of each period:

 

 

  Associate Joint ventures
As of September 30, 2022 As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$ ThCh$
Assets and Liabilities      
Current assets 56,220,986 154,743,241 119,216,592
Non-current assets 28,164,740 313,267,478 308,504,421
Current liabilities 29,009,172 125,808,288 94,235,491
Non-current liabilities 8,669,076 80,071,497 62,342,964
       

 

 

 

 

 

 

  Associates Joint ventures
For the nine periods ended as of September 30,
2022 2021 2020
ThCh$ ThCh$ ThCh$
Income Statement (Summarized)      
Net sales 78,193,174 220,931,701 166,149,558
Operating result (6,394,777) (9,081,726) (7,443,736)
Net income for period (12,208,897) (6,894,824) (6,196,061)
Other comprehensive income - 5,893,754 951,040
Depreciation and amortization (4,089,306) (12,674,363) (11,604,042)
       

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 17 Intangible assets other than goodwill

 

The intangible assets movement are detailed as follows:

 

  Trademarks Software programs Water rights Distribution rights Total
ThCh$ ThCh$ ThCh$ ThCh$ ThCh$
As of January 1, 2021          
Historic cost 102,648,435 51,359,792 3,199,349 759,908 157,967,484
Accumulated amortization - (29,085,607) - (624,436) (29,710,043)
Book Value 102,648,435 22,274,185 3,199,349 135,472 128,257,441
           
As of December 31, 2021          
Additions - 5,124,679 - - 5,124,679
Divestitures (cost) - (3,507,642) - - (3,507,642)
Divestitures (amortization) - 3,272,460 - - 3,272,460
Amortization of year - (3,313,510) - (198,686) (3,512,196)
Conversion effect (cost) 2,093,513 182,662 - 31,008 2,307,183
Conversion effect (amotization) - (193,898) - (34,622) (228,520)
Others increase (decreased) (1) 16,901,227 1,239,653 - 2,089,408 20,230,288
Changes 18,994,740 2,804,404 - 1,887,108 23,686,252
Book Value 121,643,175 25,078,589 3,199,349 2,022,580 151,943,693
           
As of December 31, 2021          
Historic cost 121,643,175 54,399,144 3,199,349 2,880,324 182,121,992
Accumulated amortization - (29,320,555) - (857,744) (30,178,299)
Book Value 121,643,175 25,078,589 3,199,349 2,022,580 151,943,693
           
As of September 30, 2022          
Additions (2) 12,950,000 1,854,653 - 613,295 15,417,948
Amortization of period - (3,262,674) - (98,459) (3,361,133)
Conversion effect (cost) (7,923,186) (329,575) - 393,170 (7,859,591)
Conversion effect (amotization) - 11,650 - (17,667) (6,017)
Others increase (decreased) (1) 27,210,979 833,455 - 60,061 28,104,495
Changes 32,237,793 (892,491) - 950,400 32,295,702
Book Value 153,880,968 24,186,098 3,199,349 2,972,980 184,239,395
           
As of September 30, 2022          
Historic cost 153,880,968 56,757,677 3,199,349 3,946,850 217,784,844
Accumulated amortization - (32,571,579) - (973,870) (33,545,449)
Book Value 153,880,968 24,186,098 3,199,349 2,972,980 184,239,395

 

(1)Corresponds to the financial effect of the application IAS 29 "Financial reporting in hyperinflationary economies”.
(2)See Note 1 – General information, letter C), number (13).

 

There are no restrictions or pledges on intangible assets.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

The cash generating units associated to the trademarks are detailed as follows:

 

 

Segment Cash Generating Unit As of September 30, 2022 As of December 31, 2021
(CGU) ThCh$ ThCh$
Chile Embotelladoras Chilenas Unidas S.A. 33,874,972 32,910,686
  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. (1) 15,063,683 2,113,683
  Sub-Total 51,468,437 37,554,151
International Business CCU Argentina S.A. and subsidiaries 67,931,410 51,457,083
  Marzurel S.A., Coralina S.A. and Milotur S.A. 2,845,492 2,337,366
  Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A. 4,135,462 3,747,752
  Bebidas Bolivianas BBO S.A. 7,527,301 6,621,507
  Sub-Total 82,439,665 64,163,708
Wines Viña San Pedro Tarapacá S.A. 19,972,866 19,925,316
  Sub-Total 19,972,866 19,925,316
Total   153,880,968 121,643,175

 

(1)See Note 1 – General information, letter C), number (13).

 

Management has carried out impairment tests, from which no evidence of impairment has emerged. Regarding Trademarks with an indefinite useful life, the same methodology has been used as indicated in Note 18 - Goodwill.

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 18 Goodwill

 

The goodwill movement is detailed as follows:

 

  Goodwill
ThCh$
As of January 1, 2021  
Historic cost 117,190,763
Book Value 117,190,763
   
As of December 31, 2021  
Other increases (decreases) (1) 11,604,421
Conversion effect 2,377,651
Changes 13,982,072
Book Value 131,172,835
   
As of December 31, 2021  
Historic cost 131,172,835
Book Value 131,172,835
   
As of September 30, 2022  
Other increases (decreases) (1) 18,374,162
Conversion effect (4,106,176)
Changes 14,267,986
Book Value 145,440,821
   
As of September 30, 2022  
Historic cost 145,440,821
Book Value 145,440,821

 

(1) Corresponds to the financial effect of the application IAS 29 "Financial reporting in hyperinflationary economies”.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

For the purpose of 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:

 

Segment Cash Generating Unit As of September 30, 2022 As of December 31, 2021
(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. 3,073 3,876
  Cervecería Kunstmann S.A. 456,007 456,007
  Cervecería Szot SpA. 202,469 202,469
  Sub-Total 44,607,030 44,607,833
International Business CCU Argentina S.A. and subsidiaries 45,937,831 34,781,464
  Marzurel S.A., Coralina S.A. and Milotur S.A. 5,317,109 4,066,703
  Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A. 6,012,027 5,491,823
  Bebidas Bolivianas BBO S.A. 11,150,680 9,808,868
  Sub-Total 68,417,647 54,148,858
Wines Viña San Pedro Tarapacá S.A. 32,416,144 32,416,144
  Sub-Total 32,416,144 32,416,144
Total   145,440,821 131,172,835

 

 

Main assumptions for impairment calculation

 

Goodwill assigned to the 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 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 2022 ThCh$ 198,376 51,915 1,316 14,813 1,561  
Perpetual growth 3.00% 2.50% 2.20% 2.20% 4.40%  
Discount rate 9.07% 22.91% 11.09% 10.75% 11.87%  
             

 

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.

 

Management’s cash flow projection included significant judgements and assumptions relating to perpetual growth rates and discount rates.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

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 Uruguay a perpetuity rate of 2.2% is used, consistent with the expected long-term growth for this country. For Bolivia a perpetuity rate of 4.4% equivalent to long-term inflation of the country plus a percentage of the potential long-term GDP are used. In the case of Argentina, a perpetuity rate of 2.5% are used respectively, which are composed by the average inflation rate of the United States of America mentioned above, plus a percentage of the potential long-term GDP in each country.

 

Discount rate: Corresponds to the nominal WACC (Weighted Average Cost of Capital) rate of each country.

 

According to the calculated sensitivities, the Administration determines that there is no reasonably possible change in the assumptions mentioned above that could cause that the book value exceeds the estimated recoverable value as of September 30, 2022.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 19 Property, plant and equipment

 

Property, plant and equipment movements are detailed as follows:

 

 

   Land, buildings and construction  Machinery and equipment  Bottles and containers  Other Equipment  Assets under contruction  Furniture, accessories and vehicles  Under production vines  Total
 ThCh$  ThCh$  ThCh$  ThCh$  ThCh$  ThCh$  ThCh$  ThCh$
As of January 1, 2021                
Historic cost 752,373,292 609,239,605 191,812,594 131,488,537 140,894,537 72,886,303 35,817,543 1,934,512,411
Accumulated depreciation (233,141,001) (351,931,245) (118,407,590) (84,839,180) - (47,972,024) (15,705,491) (851,996,531)
Book Value 519,232,291 257,308,360 73,405,004 46,649,357 140,894,537 24,914,279 20,112,052 1,082,515,880
                 
As of December 31, 2021                
Additions - - - - 164,454,035 - - 164,454,035
Additions of historic cost by business combination 283,992 - - - - - - 283,992
Transfers 14,213,714 64,659,471 15,762,049 12,104,204 (118,443,961) 8,224,711 3,479,812 -
Conversion effect historic cost 5,212,276 4,818,898 (727,586) 1,608,980 (204,892) 565,070 (40,060) 11,232,686
Write off (cost) (693,074) (10,879,482) (22,952,129) (1,079,938) - (426,969) - (36,031,592)
Write off (depreciation) 505,521 10,196,738 22,703,727 1,017,369 - 406,386 - 34,829,741
Capitalized interests - - - - 1,074,074 - - 1,074,074
Depreciation (23,360,994) (36,646,717) (26,493,558) (17,016,861) - (8,141,332) (1,718,025) (113,377,487)
Conversion effect depreciation (718,133) (3,994,158) (2,423) (1,305,000) - (468,613) - (6,488,327)
Others increase (decreased) (1) 23,557,010 29,409,437 16,693,132 4,180,146 7,508,257 1,945,690 569,833 83,863,505
Divestitures (cost) (3,814,205) (4,192,074) (5,339,148) (223,669) - (330,318) (1,344,042) (15,243,456)
Divestitures (depreciation) 3,804,220 4,117,283 5,339,143 217,341 - 326,374 1,344,042 15,148,403
Changes 18,990,327 57,489,396 4,983,207 (497,428) 54,387,513 2,100,999 2,291,560 139,745,574
Book Value 538,222,618 314,797,756 78,388,211 46,151,929 195,282,050 27,015,278 22,403,612 1,222,261,454
                 
As of December 31, 2021                
Historic cost 790,813,382 691,181,931 194,726,856 147,793,572 195,282,050 83,225,686 38,465,102 2,141,488,579
Accumulated depreciation (252,590,764) (376,384,175) (116,338,645) (101,641,643) - (56,210,408) (16,061,490) (919,227,125)
Book Value 538,222,618 314,797,756 78,388,211 46,151,929 195,282,050 27,015,278 22,403,612 1,222,261,454
                 
As of September 30, 2022                
Additions - - - - 136,047,277 - - 136,047,277
Transfers 44,739,973 50,612,074 17,733,528 11,491,397 (136,124,606) 4,678,898 6,868,459 (277)
Conversion effect historic cost (9,323,093) (21,374,084) (16,513,712) (2,713,594) (3,616,151) 126,403 (1,125,087) (54,539,318)
Write off (cost) (15,057) (386,414) (823,714) - - (251,824) - (1,477,009)
Write off (depreciation) 14,752 385,211 823,651 - - 250,864 - 1,474,478
Capitalized interests - - - - 656,587 - - 656,587
Depreciation (18,096,589) (28,976,241) (21,019,006) (12,231,845) - (4,919,860) (1,434,595) (86,678,136)
Conversion effect depreciation 184,075 304,854 6,594,430 1,466,470 - (161,174) - 8,388,655
Others increase (decreased) (1) 35,260,191 56,271,633 26,019,682 3,700,577 17,241,088 386,325 5,559,970 144,439,466
Divestitures (cost) - - - (190,850) - (602,468) - (793,318)
Divestitures (depreciation) - - - 188,800 - 351,920 - 540,720
Changes 52,764,252 56,837,033 12,814,859 1,710,955 14,204,195 (140,916) 9,868,747 148,059,125
Book Value 590,986,870 371,634,789 91,203,070 47,862,884 209,486,245 26,874,362 32,272,359 1,370,320,579
                 
As of September 30, 2022                
Historic cost 875,013,139 832,539,143 291,551,595 169,036,593 209,486,245 87,821,320 50,820,599 2,516,268,634
Accumulated depreciation (284,026,269) (460,904,354) (200,348,525) (121,173,709) - (60,946,958) (18,548,240) (1,145,948,055)
Book Value 590,986,870 371,634,789 91,203,070 47,862,884 209,486,245 26,874,362 32,272,359 1,370,320,579

 

(1)Corresponds to the financial effect of the application IAS 29 "Financial reporting in hyperinflationary economies”.
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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

The balance of the land at the end of each period is as follows:

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Land 288,559,234 275,540,602
Total 288,559,234 275,540,602

 

Capitalized interest as of September 30, 2022 amounted ThCh$ 656,587 (ThCh$ 846,531 as of September 30, 2021), using an annually capitalization rate of 3.64% (2.59% as of September 30, 2021).

 

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 of September 30, 2022, the Company maintained approximately 5,177 hectares of which 4,739 are for vines in production stage. Of the total hectares mentioned above, 4,409 correspond to own land and 330 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 2022, the production in plant vines yield was approximately 58.7 million kilos of grapes (57.7 million kilos of grapes in 2021).

 

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 impairment losses on Property, plant and equipment, Management has analyzed internal and external indicators and has not found evidence of impairment at September 30, 2022.

 

The depreciation for the nine-month period ended as of September 30, 2022 and 2021, recognized in net income and other assets is as follows:

 

 

  As of September 30, 2022 As of September 30, 2021
ThCh$ ThCh$
Recognized in net incomes (*) 85,928,994 75,365,779
Recognized in others assets 749,142 719,612
Total 86,678,136 76,085,391

 

(*) Includes ThCh$ 1,420,432 (ThCh$ 513,498 as of September 30, 2021) of depreciation of agricultural assets (barrels), related to the cost of selling wine.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 20 Investment Property

 

Investment property movements are detailed as follows:

 

  Lands Buildings Total
ThCh$ ThCh$ ThCh$
As of January 1, 2021      
Historic cost 5,693,446 2,837,857 8,531,303
Depreciation - (825,361) (825,361)
Book Value 5,693,446 2,012,496 7,705,942
       
As of December 31, 2021      
Depreciation - (86,129) (86,129)
Conversion effect (cost) (82,337) (32,513) (114,850)
Conversion effect (depreciation) - 2,845 2,845
Other increases (decreases) (1) 1,502,451 541,355 2,043,806
Changes 1,420,114 425,558 1,845,672
Book Value 7,113,560 2,438,054 9,551,614
       
As of December 31, 2021      
Historic cost                  7,113,560                  3,346,699               10,460,259
Depreciation                               -    (908,645) (908,645)
Book Value 7,113,560 2,438,054 9,551,614
       
As of September 30, 2022      
Transfers from PPE (cost) 277 - 277
Depreciation - (68,619) (68,619)
Conversion effect (cost) (934,505) (358,243) (1,292,748)
Conversion effect (depreciation) - 33,528 33,528
Other increases (decreases) (1) 2,378,948 869,054 3,248,002
Changes 1,444,720 475,720 1,920,440
Book Value 8,558,280 2,913,774 11,472,054
       
As of September 30, 2022      
Historic cost 8,558,280 3,857,510 12,415,790
Depreciation - (943,736) (943,736)
Book Value 8,558,280 2,913,774 11,472,054

 

(1) Corresponds to the financial effect of the application IAS 29 Financial reporting in hyperinflationary economies.

 

Investment property includes seventeen land properties, two offices and one apartment, situated in Chile, which are maintained for appreciation purposes, with one apartment for being leased and generating ThCh$ 3,557 revenues during period 2022 (ThCh$ 5,100 as of September 30, 2021). Additionally, there are four properties in Argentina, which are leased and generated an income for ThCh$ 81,302 for period 2022 (ThCh$ 57,516 as of September 30, 2021). In addition, the expenses associated with such investment properties amounted to ThCh$ 70,188 for the period ended as of September 30, 2022 (ThCh$ 64,619 as of September 30, 2021).

 

The market valuation of investment properties exceeds 100% of the book value.

 

The fair value, of investment property that represent 96% of the carrying amount is ThCh$ 16,767,620.

 

Management has not detected any evidence of impairment of investment property.

 

The Company does not maintain any pledge or restriction over investment property items.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Note 21 Other financial liabilities

 

Debts and financial liabilities classified according to the type of obligation and their classifications in the Interim Consolidated Financial Statements are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Bank borrowings (1) 165,097,613 126,818,265 76,169,204 114,492,596
Bonds payable (1) 11,338,507 1,006,058,674 8,087,630 339,740,414
Derivative financial instruments  (2) 812,963 - 411,954 -
Derivative hedge liabilities (2) 7,329,624 2,985,402 4,776,623 4,036,833
Deposits for return of bottles and containers 12,524,698 - 11,980,948 -
Total 197,103,405 1,135,862,341 101,426,359 458,269,843

 

(1) See Note 5 – Risk administration.

(2) See Note 7 – Financial instruments.

 

The maturities and interest rates of these obligations are detailed as follows:

 

Current loans and financial obligations

 

As of September 30, 2022:

 

 

              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 97,004,000-5 Banco de Chile Chile UF 1,576 4,810 6,386 Monthly 3.39
76,035,409-0 Cervecera Guayacán SpA. Chile 97,004,000-5 Banco de Chile Chile UF 2,489 7,593 10,082 Monthly 5.65
76,337,371-1 Bebidas CCU-PepsiCo SpA. Chile 97,018,000-1 Scotiabank Chile Chile CLP - 1,001,638 1,001,638 At maturity 3.20
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP 1,575,333 - 1,575,333 At maturity 8.34
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP 19,929,756 - 19,929,756 At maturity 11.16
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Santander - Chile Chile CLP 10,600,485 - 10,600,485 At maturity 12.08
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP - 94,765,333 94,765,333 At maturity 5.70
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 526,166 526,166 At maturity 9.69
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 74,309 74,309 At maturity 9.03
91,041,000-8 Viña San Pedro Tarapacá S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile USD 2,891,059 - 2,891,059 At maturity 3.40
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,004,000-5 Banco del Estado de Chile Chile CLP - 35,283 35,283 At maturity 8.70
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP 14,396 2,000,000 2,014,396 At maturity 1.60
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP 7,465 1,000,000 1,007,465 At maturity 1.60
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 69,812 69,812 At maturity 8.60
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP - 4,608 4,608 At maturity 3.95
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP 892,306 814,883 1,707,189 Semiannual 3.45
96,989,120-4 Cervecera CCU Chile Ltda. Chile 97,004,000-5 Banco de Chile Chile CLP 8,248,246 - 8,248,246 At maturity 9.98
99,586,280-8 Compañía Pisquera de Chile S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 250,293 250,293 At maturity 8.66
0-E Compañía Industrial Cervecera S.A. Argentina 0-E Santander - Argentina Argentina ARS - 5,360,633 5,360,633 At maturity 46.00
0-E Compañía Industrial Cervecera S.A. Argentina 0-E Citibank - Argentina Argentina ARS - 3,405,129 3,405,129 At maturity 42.00
0-E Compañía Industrial Cervecera S.A. Argentina 0-E BBVA Argentina ARS 3,910,834 - 3,910,834 Dialy 66.50
0-E Compañía Industrial Cervecera S.A. Argentina 0-E BBVA Argentina ARS 1,986,330 - 1,986,330 Dialy 73.00
0-E Finca La Celia S.A. Argentina 0-E Banco Patagonia Argentina ARS - 359,303 359,303 Dialy 71.00
0-E Saenz Briones & Cía. S.A.I.C. Argentina 0-E Santander - Argentina Argentina ARS 994,959 - 994,959 At maturity 46.00
0-E Saenz Briones & Cía. S.A.I.C. Argentina 0-E BBVA Argentina ARS 2,653,436 - 2,653,436 Dialy 73.00
0-E Saenz Briones & Cía. S.A.I.C. Argentina 0-E BBVA Argentina ARS 228,132 - 228,132 Dialy 72.25
0-E Saenz Briones & Cía. S.A.I.C. Argentina 0-E BBVA Argentina ARS 560,537 - 560,537 Dialy 71.50
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 29,280 - 29,280 Quarterly 5.00
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 58,791 - 58,791 Quarterly 5.00
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 4,617 - 4,617 Semiannual 5.50
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB - 275,931 275,931 Semiannual 5.30
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB - 551,862 551,862 Semiannual 5.30
Total             54,590,027 110,507,586 165,097,613    

 

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

 

 

              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 76,233 6,211,872 6,288,105 Semiannual 4.25
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond J 898 06/28/2018 Chile UF 412,195 3,597 415,792 Semiannual 2.90
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond L 897 06/28/2018 Chile UF 51,279 560,287 611,566 Semiannual 1.20
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond M 898 06/28/2018 Chile UF 422,326 184,197 606,523 Semiannual 1.60
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile Bond International 144A/Regulation S United States USD - 2,896,339 2,896,339 Semiannual 3.35
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond P 897 06/28/2018 Chile UF 6,218 113,504 119,722 Semiannual 3.35
91,041,000-8 Viña San Pedro Tarapacá S.A. (2) Chile Bond D 986 12/12/2019 Chile UF 227,207 173,253 400,460 Semiannual 1.00
Total             1,195,458 10,143,049 11,338,507    

 

(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreement. Note 7 – Financial instruments.

(2) This obligation is partially hedged by a Cross Currency Interest Rate Swap agreement. Note 7 – Financial instruments.

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

As of December 31, 2021:

 

              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 97,004,000-5 Banco de Chile Chile UF 1,421 4,264 5,685 Monthly 3.39
76.035.409-0 Cervecera Guayacán SpA. Chile 97,004,000-5 Banco de Chile Chile UF 2,177 6,530 8,707 Monthly 5.65
76.337.371-1 Bebidas CCU-PepsiCo SpA. Chile 97,018,000-1 Scotiabank Chile Chile CLP - 8,182 8,182 At maturity 3.20
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 40,378,828 40,378,828 At maturity 4.56
90.413.000-1 Compañía Cervecerías Unidas S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP - 639,083 639,083 At maturity 5.70
91,041,000-8 Viña San Pedro Tarapacá S.A. Chile 76,645,030-K Banco Itaú Corpbanca Chile USD - 11,896,096 11,896,096 At maturity 3.64
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,004,000-5 Banco de Chile Chile CLP - 2,020,163 2,020,163 At maturity 2.20
96.981.310-6 Cervecería Kunstmann S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 6,313 6,313 At maturity 1.60
96.981.310-6 Cervecería Kunstmann S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 3,422 3,422 At maturity 1.60
96.981.310-6 Cervecería Kunstmann S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP - 1,664,071 1,664,071 Semiannual 3.45
96.981.310-6 Cervecería Kunstmann S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP 28,566 - 28,566 At maturity 3.95
99.586.280-8 Compañía Pisquera de Chile S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP 326,560 16,000,000 16,326,560 At maturity 4.68
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 39,084 - 39,084 Quarterly 5.00
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 68,671 - 68,671 Quarterly 5.00
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 21,498 416,277 437,775 Semiannual 5.95
0-E Finca La Celia S.A. Argentina 0-E Galicia Argentina USD - 254,034 254,034 At maturity 4.75
0-E Finca La Celia S.A. Argentina 0-E Macro Argentina USD - 255,163 255,163 At maturity 5.50
0-E Finca La Celia S.A. Argentina 0-E Patagonia Argentina ARS 1,345,109 - 1,345,109 Daily 37.50
0-E Finca La Celia S.A. Argentina 0-E Bbva Argentina ARS 537,105 - 537,105 Daily 38.00
0-E Finca La Celia S.A. Argentina 0-E Macro Argentina ARS 246,587 - 246,587 Daily 38.00
Total             2,616,778 73,552,426 76,169,204    

 

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

 

 

 

Debtor Tax ID Company Debtor country Registration ID No. Instrument Creditor country Currency Maturity (*)      
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. Chile Bond H 573 23/03/2009 Chile UF 582,445 5,619,575 6,202,020 Semiannual 4.25
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond J 898 28/06/2018 Chile UF 1,042,130 3,258 1,045,388 Semiannual 2.90
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond L 897 28/06/2018 Chile UF 50,459 240,984 291,443 Semiannual 1.20
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond M 898 28/06/2018 Chile UF 55,622 246,436 302,058 Semiannual 1.60
91,041,000-8 Viña San Pedro Tarapacá S.A. (2) Chile Bond D 986 12/12/2019 Chile UF 89,699 157,022 246,721 Semiannual 1.00
Total             1,820,355 6,267,275 8,087,630    

 

(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreement. Note 7 – Financial instruments.

(2) This obligation is partially hedged by a Cross Currency Interest Rate Swap agreement. Note 7 – Financial instruments.

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

 

Non-current loans and financial obligations

 

As of September 30, 2022:

 

 

              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 97,004,000-5 Banco de Chile Chile UF 13,441 14,383 29,739 57,563 Monthly 3.39
76,035,409-0 Cervecera Guayacán SpA. Chile 97,004,000-5 Banco de Chile Chile UF 21,972 24,524 60,979 107,475 Monthly 5.65
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP 29,906,103 - - 29,906,103 At maturity 9.69
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 9,937,568 - 9,937,568 Al vencimiento 9.03
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 40,000,000 - 40,000,000 At maturity 8.34
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,004,000-5 Banco del Estado de Chile Chile CLP 2,000,000 - - 2,000,000 At maturity 8.70
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP - 6,708,274 - 6,708,274 At maturity 8.60
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP 2,991,209 - - 2,991,209 At maturity 3.95
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP 3,299,984 830,140 - 4,130,124 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 - 16,000,000 - 16,000,000 At maturity 8.66
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 1,151,348 3,580,869 - 4,732,217 Quarterly 5.00
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 1,226,008 2,452,016 5,823,540 9,501,564 Quarterly 5.00
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 279,380 466,788 - 746,168 Semiannual 5.50
Total             40,889,445 80,014,562 5,914,258 126,818,265    

 

(*) The amount based on the undiscounted contractual flows is found in Note 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 12,412,478 12,412,478 15,516,539 40,341,495 Semiannual 4.25
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond J 898 06/28/2018 Chile UF 9,592 9,592 102,863,623 102,882,807 Semiannual 2.90
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond L 897 06/28/2018 Chile UF 51,797,576 51,744,088 - 103,541,664 Semiannual 1.20
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond M 898 06/28/2018 Chile UF 491,194 491,194 69,200,100 70,182,488 Semiannual 1.60
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile Bond International 144A/Regulation S United States USD - - 568,587,582 568,587,582 Semiannual 3.35
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond P 897 06/28/2018 Chile UF 49,744 49,744 68,640,639 68,740,127 Semiannual 3.35
91,041,000-8 Viña San Pedro Tarapacá S.A. (2) Chile Bond D 986 12/12/2019 Chile UF 51,782,511 - - 51,782,511 Semiannual 1.00
Total             116,543,095 64,707,096 824,808,483 1,006,058,674    

 

(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreement. Note 7 – Financial instruments.

(2) This obligation is partially hedged by a Cross Currency Interest Rate Swap agreement. Note 7 – Financial instruments.

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

As of December 31, 2021:

 

              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 97,004,000-5 Banco de Chile Chile UF 11,370 11,370 34,210 56,950 Monthly 3.39
76,035,409-0 Cervecera Guayacán SpA. Chile 97,004,000-5 Banco de Chile Chile UF 17,414 17,414 69,268 104,096 Monthly 5.65
76,337,371-1 Bebidas CCU-PepsiCo SpA. Chile 97,018,000-1 Scotiabank Chile Chile CLP 999,642 - - 999,642 At maturity 3.20
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP 89,872,000 - - 89,872,000 At maturity 5.70
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP 2,000,000 - - 2,000,000 At maturity 1.60
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,030,000-7 Banco del Estado de Chile Chile CLP 1,000,000 - - 1,000,000 At maturity 1.60
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP 3,299,984 1,651,429 - 4,951,413 Semiannual 3.45
96,981,310-6 Cervecería Kunstmann S.A. Chile 97,018,000-1 Scotiabank Chile Chile CLP - 2,986,511 - 2,986,511 At maturity 3.95
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 1,012,802 1,350,402 1,799,565 4,162,769 Quarterly 5.00
0-E Bebidas Bolivianas BBO S.A. Bolivia 0-E Banco Mercantil Santa Cruz S.A. Bolivia BOB 3,134,706 4,179,607 1,044,902 8,359,215 Quarterly 5.00
Total             101,347,918 10,196,733 2,947,945 114,492,596    

 

(*) The amount based on the undiscounted contractual flows is found in Note 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. Chile Bond H 573 23/03/2009 Chile UF 11,228,960 11,228,960 19,656,626 42,114,546 Semiannual 4.25
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond J 898 28/06/2018 Chile UF 8,690 8,690 93,059,342 93,076,722 Semiannual 2.90
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond L 897 28/06/2018 Chile UF 403,668 46,891,278 46,588,059 93,883,005 Semiannual 1.20
90,413,000-1 Compañía Cervecerías Unidas S.A. (1) Chile Bond M 898 28/06/2018 Chile UF 444,974 444,974 62,771,570 63,661,518 Semiannual 1.60
91,041,000-8 Viña San Pedro Tarapacá S.A. (2) Chile Bond D 986 12/12/2019 Chile UF 418,726 46,585,897 - 47,004,623 Semiannual 1.00
Total             12,505,018 105,159,799 222,075,597 339,740,414    

 

(1) This obligation is hedged by a Cross Currency Interest Rate Swap agreement. Note 7 – Financial instruments.

(2) This obligation is partially hedged by a Cross Currency Interest Rate Swap agreement. Note 7 – Financial instruments.

(*) The amount based on the undiscounted contractual flows is found in Note 5 - Risk administration.

 

Details of the fair value of bank borrowings, financial leases obligations and bonds payable are described in Note 7 - Financial instruments.

 

The effective interest rates of bond obligations are as follows:

 

Bonds Serie H

4.27%

Bonds Serie J

2.89%

Bonds Serie L

1.21%

Bonds Serie M

0.87%

Bonds International

3.30%

Bonds Serie D

0.53%

Bonds Serie P

3.36%

 

 

The terms and conditions of the main interest accruing obligations as of September 30, 2022, 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 an 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.

 

This loan accrues interest at an annual fixed rate of 4.68%. The Subsidiary pays 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:

 

-Maintain a Financial Expense Coverage not less than 3, calculated as the relationship between Gross Margin less Marketing costs, Distribution and Administration expenses, plus Other income by function, less Other expenses by function, plus Depreciation and Amortization, divided by Financial costs.

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  
-Maintain a debt ratio of no more than 3, 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.

 

On the other hand, the Company, through an agreement dated July 28, 2017, forces to maintain a direct or indirect shareholding of at least 50.1%, which allows it to control its subsidiary Compañía Pisquera de Chile S.A. during the term of this loan.

 

On July 27, 2022 this loan was renewed for 5 years, with maturity on July 27, 2027.

 

This loan bears interest at a annual fixed rate of 8.664%. The company pays interests semiannually and the principal amortization consists of a single payment at the end of the established term.

 

As of September 30, 2022, the subsidiary and CCU were in compliance with the financial covenants.

 

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 as of September 30, 2022) maturing on October 15, 2019.

 

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.

 

On April 13, 2020, 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 13, 2021.

 

The subsidiary amortizes interest and capital in a single payment at the end of the established term.

 

On April 13, 2021, the loan was fully paid.

 

c)On April 16, 2021, 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, 2023.

 

The subsidiary amortizes interest semi-annually and principal in a single payment at the end of the established term.

 

d)On April 21, 2021, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Banco del Estado de Chile for a total of ThCh$ 2,000,000, at a fixed interest rate maturing on April 21, 2023.

 

The subsidiary amortizes interest semi-annually and principal in a single payment at the end of the established term.

 

e)On July 19, 2022, the subsidiary Cervecería Kunstmann S.A. subscribed a bank loan with Banco del Estado de Chile for a total of ThCh$ 2,000,000, at a fixed interest rate, maturing on July 18, 2025.

 

The subsidiary amortizes interest semiannually and the principal in a single payment at the end of the established term.

 

f)On August 11, 2022, the subsidiary Cervecería Kunstmann S.A. subscribed a bank loan with Banco del Estado de Chile for a total of ThCh$ 6,750,000, at a fixed interest rate, maturing on August 11, 2027.

 

The subsidiary amortizes interest semiannually and the principal in a single payment at the end of the established term.

 

g)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.

 

On April 13, 2022, this loan was renewed for a 5-year term, maturing on April 13, 2027.

 

The Company amortizes interest semi-annually, and the capital amortization consists in a single payment at the end of the established term.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

This obligation is subject to certain reporting obligations in addition to complying with the following financial ratios:

 

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, hereinafter “Consolidated Net Financial Debt Level”. To determine the Consolidated Net Financial Debt Level, it will be based on the quarterly Consolidated Financial Statements and the following will be considered: /i/ “Net Financial Debt”, the difference between /x/ the unpaid amount of the “Financial Debt”, which is the sum of the lines, current and non-current, Bank loans, Bonds and Obligations for financial leases, contained in the Note Other financial liabilities and will not be considered for the calculation and determination of Financial Debt Net, the total amount of the liability for the obligation for rights to use assets of the account or subaccount of "IFRS 16", current and non-current, and /y/ the balance of the Cash and Cash Equivalents item contained in the Statement Consolidated Financial Position of the Issuer, and /ii/ “Total Adjusted Equity” the sum of /x/ Total Equity e /y/ the sum of the accounts Provisional Dividends, Dividends provisioned according to policy, as well as all other accounts related to provision of dividends contained in the Statement Consolidated of Changes in the Issuer's Equity.

 

b.The Issuer must maintain a consolidated financial expense coverage of not less than 3 times, defined as the ratio between ROADA and Financial Costs. ROADA is the sum of the accounts Gross Margin and Other Income by Function, less the accounts Distribution Costs, Administrative Expenses and Other Expenses by Function and plus the line Depreciation and Amortization recorded in the Note Costs and Expenses by Nature. For Financial Costs, the account of the same name contained in the Consolidated Statement of Income by Function. The Consolidated Financial Expense Coverage will be calculated for the twelve consecutive months prior to the date of the corresponding Consolidated Financial Statements, including the month of closing of such Consolidated Financial Statements.

 

c.The Issuer shall maintain an Adjusted Shareholders' Equity at the consolidated level of at least ThCh$ 312,516,750. For these purposes, Adjusted Shareholders' Equity corresponds to the sum of /i/ the account Equity attributable to owners of the controlling company contained in the Consolidated Statement of Financial Position, and /ii/ the sum of the accounts Interim Dividends, Dividends provided according to policy, as well as all other accounts related to provision for dividends, contained in the Consolidated Statement of Changes in Shareholders' Equity.

 

d.The Issuer shall maintain unencumbered assets for an amount equal to at least 1.2 times the outstanding amount of unsecured financial debt. For these purposes, assets and debts shall be valued at book value. The term "unencumbered assets" means: /a/ the difference between /i/ the Total Assets account in the Consolidated Statement of Financial Position, and /ii/ the assets pledged as collateral indicated in the Note on Contingencies and Commitments of the Consolidated Financial Statements; and /b/ Financial Debt, the definition given to this term is found in the Indenture.

 

e.The Issuer shall 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 Ltda. and Embotelladoras Chilenas Unidas S.A.

 

f.The Issuer shall not sell, nor allow them to be sold, nor assign ownership and not to transfer and/or in any way dispose of, either through one transaction or a series of transactions, directly or indirectly, assets of its property and those of its subsidiaries necessary to maintain in Chile, directly and/or through one or more subsidiaries, a nominal installed capacity for the production, indistinctly, of Beer and/or Alcoholic Beverages and/or Nectars and/or Mineral and/or Bottled Waters, hereinafter the "Essential Businesses", equal to or not less, either with respect to one or more of the aforementioned categories or all of them together, than 15.9 million hectoliters per year.

 

g.The Issuer shall maintain, directly or through a subsidiary, ownership of the trademark "CRISTAL", word or word, for beer, in class 32 of the International Classifier of Products and Services for the registration of trademarks.

 

h.The Issuer shall not make investments in instruments issued by "related parties" other than its subsidiaries, nor to carry out with them other transactions outside its normal line of business, under conditions other than those established in Title XVI of the Corporations Law.

 

As of September 30, 2022, the Company was in compliance with the financial covenants.

 

h)On July 12, 2022, Compañía Cervecerías Unidas S.A. signed a bank loan with Banco del Estado de Chile for a total of ThCh$ 30,000,000 at a fixed interest rate, maturing on July 12, 2024.
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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 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 certain reporting obligations in addition to complying with the following financial ratios:

 

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, hereinafter “Consolidated Net Financial Debt Level”. To determine the Consolidated Net Financial Debt Level, it will be based on the quarterly Consolidated Financial Statements and the following will be considered: /i/ “Net Financial Debt”, the difference between /x/ the unpaid amount of the “Financial Debt”, which is the sum of the lines, current and non-current, Bank loans, Bonds and Obligations for financial leases, contained in the Note Other financial liabilities and will not be considered for the calculation and determination of Financial Debt Net, the total amount of the liability for the obligation for rights to use assets of the account or subaccount of "IFRS 16", current and non-current, and /y/ the balance of the Cash and Cash Equivalents item contained in the Statement Consolidated Financial Position of the Issuer, and /ii/ “Total Adjusted Equity” the sum of /x/ Total Equity e /y/ the sum of the accounts Provisional Dividends, Dividends provisioned according to policy, as well as all other accounts related to provision of dividends contained in the Statement Consolidated of Changes in the Issuer's Equity.

 

b.The Issuer must maintain a consolidated financial expense coverage of not less than 3 times, defined as the ratio between ROADA and Financial Costs. ROADA is the sum of the accounts Gross Margin and Other Income by Function, less the accounts Distribution Costs, Administrative Expenses and Other Expenses by Function and plus the line Depreciation and Amortization recorded in the Note Costs and Expenses by Nature. For Financial Costs, the account of the same name contained in the Consolidated Statement of Income by Function. The Consolidated Financial Expense Coverage will be calculated for the twelve consecutive months prior to the date of the corresponding Consolidated Financial Statements, including the month of closing of such Consolidated Financial Statements.

 

c.The Issuer shall maintain an Adjusted Shareholders' Equity at the consolidated level of at least ThCh$ 312,516,750. For these purposes, Adjusted Shareholders' Equity corresponds to the sum of /i/ the account Equity attributable to owners of the controlling company contained in the Consolidated Statement of Financial Position, and /ii/ the sum of the accounts Interim Dividends, Dividends provided according to policy, as well as all other accounts related to provision for dividends, contained in the Consolidated Statement of Changes in Shareholders' Equity.

 

d.The Issuer shall maintain unencumbered assets for an amount equal to at least 1.2 times the outstanding amount of unsecured financial debt. For these purposes, assets and debts shall be valued at book value. The term "unencumbered assets" means: /a/ the difference between /i/ the Total Assets account in the Consolidated Statement of Financial Position, and /ii/ the assets pledged as collateral indicated in the Note on Contingencies and Commitments of the Consolidated Financial Statements; and /b/ Financial Debt, the definition given to this term is found in the Indenture.

 

e.The Issuer shall 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 Ltda. and Embotelladoras Chilenas Unidas S.A.

 

f.The Issuer shall not sell, nor allow them to be sold, nor assign ownership and not to transfer and/or in any way dispose of, either through one transaction or a series of transactions, directly or indirectly, assets of its property and those of its subsidiaries necessary to maintain in Chile, directly and/or through one or more subsidiaries, a nominal installed capacity for the production, indistinctly, of Beer and/or Alcoholic Beverages and/or Nectars and/or Mineral and/or Bottled Waters, hereinafter the "Essential Businesses", equal to or not less, either with respect to one or more of the aforementioned categories or all of them together, than 15.9 million hectoliters per year.

 

g.The Issuer shall maintain, directly or through a subsidiary, ownership of the trademark "CRISTAL", word or word, for beer, in class 32 of the International Classifier of Products and Services for the registration of trademarks.

 

h.The Issuer shall not make investments in instruments issued by "related parties" other than its subsidiaries, nor to carry out with them other transactions outside its normal line of business, under conditions other than those established in Title XVI of the Corporations Law.

 

As of September 30, 2022, the Company was in compliance with the financial covenants.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

i)On August 25, 2022, Compañía Cervecerías Unidas S.A. signed a bank loan with Banco del Estado de Chile for a total of ThCh$ 10,000,000 at a fixed interest rate, maturing on August 25, 2027.

 

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 certain reporting obligations in addition to complying with the following financial ratios:

 

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, hereinafter “Consolidated Net Financial Debt Level”. To determine the Consolidated Net Financial Debt Level, it will be based on the quarterly Consolidated Financial Statements and the following will be considered: /i/ “Net Financial Debt”, the difference between /x/ the unpaid amount of the “Financial Debt”, which is the sum of the lines, current and non-current, Bank loans, Bonds and Obligations for financial leases, contained in the Note Other financial liabilities and will not be considered for the calculation and determination of Financial Debt Net, the total amount of the liability for the obligation for rights to use assets of the account or subaccount of "IFRS 16", current and non-current, and /y/ the balance of the Cash and Cash Equivalents item contained in the Statement Consolidated Financial Position of the Issuer, and /ii/ “Total Adjusted Equity” the sum of /x/ Total Equity e /y/ the sum of the accounts Provisional Dividends, Dividends provisioned according to policy, as well as all other accounts related to provision of dividends contained in the Statement Consolidated of Changes in the Issuer's Equity.

 

b.The Issuer must maintain a consolidated financial expense coverage of not less than 3 times, defined as the ratio between ROADA and Financial Costs. ROADA is the sum of the accounts Gross Margin and Other Income by Function, less the accounts Distribution Costs, Administrative Expenses and Other Expenses by Function and plus the line Depreciation and Amortization recorded in the Note Costs and Expenses by Nature. For Financial Costs, the account of the same name contained in the Consolidated Statement of Income by Function. The Consolidated Financial Expense Coverage will be calculated for the twelve consecutive months prior to the date of the corresponding Consolidated Financial Statements, including the month of closing of such Consolidated Financial Statements.

 

c.The Issuer shall maintain an Adjusted Shareholders' Equity at the consolidated level of at least ThCh$ 312,516,750. For these purposes, Adjusted Shareholders' Equity corresponds to the sum of /i/ the account Equity attributable to owners of the controlling company contained in the Consolidated Statement of Financial Position, and /ii/ the sum of the accounts Interim Dividends, Dividends provided according to policy, as well as all other accounts related to provision for dividends, contained in the Consolidated Statement of Changes in Shareholders' Equity.

 

d.The Issuer shall maintain unencumbered assets for an amount equal to at least 1.2 times the outstanding amount of unsecured financial debt. For these purposes, assets and debts shall be valued at book value. The term "unencumbered assets" means: /a/ the difference between /i/ the Total Assets account in the Consolidated Statement of Financial Position, and /ii/ the assets pledged as collateral indicated in the Note on Contingencies and Commitments of the Consolidated Financial Statements; and /b/ Financial Debt, the definition given to this term is found in the Indenture.

 

e.The Issuer shall 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 Ltda. and Embotelladoras Chilenas Unidas S.A.

 

f.The Issuer shall not sell, nor allow them to be sold, nor assign ownership and not to transfer and/or in any way dispose of, either through one transaction or a series of transactions, directly or indirectly, assets of its property and those of its subsidiaries necessary to maintain in Chile, directly and/or through one or more subsidiaries, a nominal installed capacity for the production, indistinctly, of Beer and/or Alcoholic Beverages and/or Nectars and/or Mineral and/or Bottled Waters, hereinafter the "Essential Businesses", equal to or not less, either with respect to one or more of the aforementioned categories or all of them together, than 15.9 million hectoliters per year.

 

g.The Issuer shall maintain, directly or through a subsidiary, ownership of the trademark "CRISTAL", word or word, for beer, in class 32 of the International Classifier of Products and Services for the registration of trademarks.
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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

h.The Issuer shall not make investments in instruments issued by "related parties" other than its subsidiaries, nor to carry out with them other transactions outside its normal line of business, under conditions other than those established in Title XVI of the Corporations Law.

 

As of September 30, 2022, the Company was in compliance with the financial covenants.

 

Banco de Chile – Bank Loans

 

a)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.

 

On July 19, 2021, the loan was renewed maturing on July 19, 2022.

 

On July 19, 2022, it was refinanced through Banco del Estado de Chile, with maturing on July 18, 2025.

 

b)On July 5, 2021, the subsidiary Cervecera Guayacán SpA. subscribed a bank loan with Banco de Chile for a total of UF 2,110 (equivalent to ThCh$ 72,284 as of September 30, 2022), at a fixed interest rate, maturing on June 5, 2031.

 

The subsidiary amortizes interest and principal on a monthly basis, with a first payment on August 5, 2021.

 

c)On December 17, 2021, the subsidiary Cervecera Guayacán SpA. subscribed a bank loan with Banco de Chile for a total of UF 3,663 (equivalent to ThCh$ 125,488 as of September 30, 2022), at a fixed interest rate, maturing on November 17, 2031.

 

The subsidiary amortizes interest and principal on a monthly basis.

 

Scotiabank Chile – Bank Loans

 

a)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 (equivalent to ThCh$ 11,138,784 as of September 30, 2022). 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.

 

This debt was carried at Euro and fixed interest rate, through the contracting of a USD-EUR currency swap and an interest rate swap, respectively. See details of the Company's hedging strategies in Note 5 – Risk administration and Note 7 – Financial instruments.

 

On June 18, 2021, the loan was fully paid.

 

b)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.

 

On April 16, 2021, the loan was fully paid.

 

c)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.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The bank loan mentioned above requires complying certain informational requirements and also compliance with certain financial ratios that are described below:

 

a.A Coverage of Financial Expenses higher than or equal to three times. For these purposes, Financial Expenses Coverage is defined as ORBDA divided by the item “Financial Expenses” of the Consolidated Financial Statements of the Debtor measured over the last 12 months. ORBDA is defined as the Operating Income plus Depreciation for the Year and plus amortization of Intangible Assets.

 

b.A ratio of Net Financial Debt to ORBDA less than or equal to three times. For these purposes the Net Financial Debt is the difference between /i/ the sum of the item “Others Financial Liabilities, Current and Non-Current”; and /ii/ the sum of the item "Cash and Cash Equivalent" in the Consolidated Financial Statements of the Debtor.

 

Additionally, this loan forces the subsidiary to comply with certain negative restrictions, such as not granting real guarantees. These are pledges and mortgages to guarantee its own or third-party obligations without prior authorization and by writing of the Bank for an amount equal to or greater than ten percent of the total fixed assets of the Debtor.

 

As of September 30, 2022, the subsidiary was in compliance with the financial covenants.

 

d)On February 18, 2020, the subsidiary Bebidas CCU-PepsiCo SpA. signed a bank loan with Scotiabank Chile for a total of ThCh$ 2,000,000 at a fixed interest rate and maturity on February 18, 2023. The Company recognized the 50% of this loan in accordance with its participation on this joint operation.

 

The subsidiary amortizes interest semi-annually and capital amortization consists of a single payment at the end of the established term.

 

e)On March 17, 2020, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Scotiabank Chile for a total of ThCh$ 3,000,000 at a fixed interest rate and maturity on March 16, 2025.

 

The subsidiary amortizes interest semi-annually and capital amortization consists of a single payment at the end of the established term.

 

The bank loan mentioned above is required to comply certain informational requirements and also compliance with certain financial ratios that are described below:

 

a.A Coverage of Financial Expenses higher than or equal to three times. For these purposes, Financial Expenses Coverage is defined as ORBDA divided by the item “Financial Expenses” of the Consolidated Financial Statements of the Debtor measured over the last 12 months. ORBDA is defined as the Operating Income plus Depreciation for the Year and plus amortization of Intangible Assets.

 

b.A ratio of Net Financial Debt to ORBDA less than or equal to three times. For these purposes, the Net Financial Debt is the difference between /i/ the sum of the item “Others Financial Liabilities, Current and Non-Current”; and /ii/ the sum of the item "Cash and Cash Equivalent" in the Consolidated Financial Statements of the Debtor.

 

Additionally, this loan forces the subsidiary to comply with certain negative restrictions, such as not granting real guarantees. These are pledges and mortgages to guarantee its own or third-party obligations without prior authorization and by writing the Bank for an amount equal to or greater than ten percent of the total fixed assets of the Debtor.

 

As of September 30, 2022, the subsidiary was in compliance with the financial covenants.

 

f)On October 13, 2021, Compañía Cervecerías Unidas S.A. signed a bank loan with Scotiabank Chile for a total of ThCh$ 90,000,000, at a fixed interest rate, maturing on April 6, 2023.

 

The Company amortizes interest on a monthly basis and the principal amortization consists of a single payment at the end of the established maturity date.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

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 (equivalent to ThCh$ 13,443,360 as of September 30, 2022), 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.

 

On April 22, 2022, the loan was fully paid.

 

b)On April 22, 2019, the subsidiary Cervecería Kunstmann S.A. signed a bank loan with Banco Itaú 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.

 

On April 21, 2021, the loan was fully paid.

 

c)On May 10, 2015, the subsidiary Cervecera Guayacán SpA. entered into a bank loan with Banco Itaú Corpbanca for a total of UF 3,067 (equivalent to ThCh$ 105,070 as of September 30, 2022), at a fixed interest rate, maturing on May 10, 2030.

 

The subsidiary amortizes interest and principal on a monthly basis, with a first payment on June 10, 2015.

 

On July 5, 2021, the loan was fully paid.

 

Banco Mercantil Santa Cruz S.A. – Bank loans

 

a)On June 26, 2017, the subsidiary BBO S.A. signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 68,877,500 bolivians (equivalent to ThCh$ 9,503,029 as of September 30, 2022), at a fixed interest rate, maturing on May 1, 2027.

 

The subsidiary amortizes quarterly interest and and capital amortization began on September 10, 2019 in a quarterly basis.

 

b)On May 31, 2019, the subsidiary BBO S.A. signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 34,300,000 bolivians (equivalent to ThCh$ 4,732,371 as of September 30, 2022), at a fixed interest rate, maturing on April 8, 2029.

 

The subsidiary BBO S.A. pays quarterly interest and capital amortization began on August 18, 2021 also quarterly.

 

c)On May 5, 2020, the subsidiary BBO S.A. signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 13,720,000 bolivians (equivalent to ThCh$ 1,892,948 as of September 30, 2022), at a fixed interest rate and maturing on April 25, 2022.

 

The subsidiary amortizes quarterly interest and and capital amortization began on November 1, 2020 in a quarterly basis.

 

On April 25, 2022, the loan was fully paid.

 

d)On June 30, 2022, the subsidiary BBO S.A. signed a bank loan with Banco Mercantil Santa Cruz S.A. for a total of 5,400,000 bolivians (equivalent to ThCh$ 745,038 as of September 30, 2022), at a fixed interest rate and maturing on May 29, 2028.

 

The subsidiary amortizes quarterly interest and and capital amortization begins on December 16, 2024 in a quarterly basis.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Banco Itaú – Bank loan

 

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 (equivalent to ThCh$ 745,038 as of September 30, 2022), 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.

 

On February 20, 2021, the loan was fully paid.

 

B)Bonds

 

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 (equivalent to ThCh$ 68,516,460 as of September 30, 2022), 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 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 Interim 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 ORBDA[1] 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. These latter obligations are currently presented in a specific item and note.

 

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.

 


[1] ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  
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 inflation risk associated to the interest rate to which Bond H is exposed is mitigated through the use of Cross Currency Swap contracts, which fix the rate. See details of the Company's hedging in Note 7 – Financial Instruments.

 

As of September 30, 2022, the Company was in compliance with the financial covenants.

 

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 (equivalent to ThCh$ 102,774,890 as of September 30, 2022) 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.

 

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, hereinafter “Consolidated Net Financial Debt Level”. To determine the Consolidated Net Financial Debt Level, it will be based on the quarterly Consolidated Financial Statements and the following will be considered: /i/ “Net Financial Debt”, the difference between /x/ the unpaid amount of the “Financial Debt”, which is the sum of the lines, current and non-current, Bank loans, Bonds and Obligations for financial leases, contained in the Note Other financial liabilities and will not be considered for the calculation and determination of Financial Debt Net, the total amount of the liability for the obligation for rights to use assets of the account or subaccount of "IFRS 16", current and non-current, and /y/ the balance of the Cash and Cash Equivalents item contained in the Statement Consolidated Financial Position of the Issuer, and /ii/ “Total Adjusted Equity” the sum of /x/ Total Equity e /y/ the sum of the accounts Provisional Dividends, Dividends provisioned according to policy, as well as all other accounts related to provision of dividends contained in the Statement Consolidated 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[2] and Financial Expenses. ORBDA 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 Financial Position, 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.

[2] ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

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.

 

The inflation risk associated to the interest rate to which Bond J is exposed is mitigated through the use of Cross Currency Swap contracts, which fix the rate. See details of the Company's hedging in Note 7 – Financial Instruments.

 

As of September 30, 2022, the Company was in compliance with the financial covenants.

 

Series L Bonds – CCU S.A.

 

On June 28, 2018 under the number 897, CCU S.A. recorded in the Securities Registry the issuance of a 10-years Bonds line. The issuer may issue one or more series of Bonds directed to the market general.

 

By public complimentary deed on June 10, 2020 the Company recorded in the Securities Record the issue of Bonds Series L for UF 3 million (equivalent to ThCh$ 102,774,690 as of September 30, 2022), maturing on June 1, 2027. The L Series Bonds will accrue on the unpaid capital expressed in UF an interest rate of 1.20% calculated on the basis of equal semesters of 180 days, equivalent to 0.5982% semiannual. The interests will be accrued from June 1, 2020 and will be paid semiannually as from December 1, 2020. The capital will be paid semiannually as from December 1, 2023.

 

The issue was subscribed with Banco BICE 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 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, hereinafter “Consolidated Net Financial Debt Level”. To determine the Consolidated Net Financial Debt Level, it will be based on the quarterly Consolidated Financial Statements and the following will be considered: /i/ “Net Financial Debt”, the difference between /x/ the unpaid amount of the “Financial Debt”, which is the sum of the lines, current and non-current, Bank loans, Bonds and Obligations for financial leases, contained in the Note Other financial liabilities and will not be considered for the calculation and determination of Financial Debt Net, the total amount of the liability for the obligation for rights to use assets of the account or subaccount of "IFRS 16", current and non-current, and /y/ the balance of the Cash and Cash Equivalents item contained in the Statement Consolidated Financial Position of the Issuer, and /ii/ “Total Adjusted Equity” the sum of /x/ Total Equity e /y/ the sum of the accounts Provisional Dividends, Dividends provisioned according to policy, as well as all other accounts related to provision of dividends contained in the Statement Consolidated of Changes in the Issuer's Equity.

 

b.The Issuer must maintain a Consolidated Financial Expense Coverage of no less than three times defined as the ratio between ORBDA[3] and Financial Expenses. ORBDA is defined as the sum of the items Gross margin and Other income per function minus the items Distribution expenses, Administrative expenses, and Other expenses per function registered in the Consolidated Financial Statments of Incomes of the quarterly Consolidated Financial Statement of the issuer, 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 12 consecutive months prior to the date of the corresponding Consolidated Financial Statements including the closing month of said Consolidated Financial Statements.

[3] ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

c.The issuer must 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.The issued must 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 Financial Position, and /ii/ the assets given as guarantees indicated in the Note on Contingencies and Commitments of the Consolidated Financial Statements; and /b/ Fianancial Debt is the definition given to said term in numeral Four letter a/ /i/ of the Fifteenth clause of the Issuance Contract. It is expressly recorded and established that as of the mandatory entry of IFRS 16 on January 1, 2019, which was issued and approved by the International Accounting Standards Board regarding the calculation of Financial Debt that must be made in accordance with numerals Four and Five of Clause Fifteen of the Issuance Contract after said date. The account or respective subaccount refers to the total amount of the liability for obligation for rights of use assets or the name that the Commission defines for this purpose. Due to the entry of the aforementioned standard, it must be disclosed as a financial liability within the items, Other current financial liabilities and Other non-current financial liabilities, which will not be considered, incorporated or used for the calculation and determination of said Financial Debt.

 

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.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 Chapter XVI of open stocks companies law.

The inflation risk associated to the interest rate to which Bond L is exposed is mitigated through the use of Cross Currency Swap contracts, which fix the rate. See details of the Company's hedging in Note 7 – Financial Instruments.

As of September 30, 2022, the Company was in compliance with the financial covenants.

 

Series M Bonds – CCU S.A.

 

On June 28, 2018 under the number 898, CCU S.A. recorded in the Securities Registry the issuance of a 30-years Bonds line. The issuer may issue one or more series of Bonds directed to the market general.

 

As stated in a complementary public deed, dated June 10, 2020, the Series M Bond has been placed, bearer and dematerialized, for a total of UF 2 million (equivalent to ThCh$ 68,516,460 as of September 30, 2022) with maturity on June 1, 2030. The Series M bonds will accrue interest at an annual rate of 1.60% per annum on the unpaid principal expressed in Unidades de Fomento, compounded, due, calculated on the basis of equal semesters of 180 days, equivalent to 0.7968% per semester. Interest will accrue as from June 1, 2020, will be paid semi-annually as from December 1, 2020 and principal will be paid at the end of the bond term.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

The issue was subscribed with Banco BICE as representative of the bond holders and as paying bank. 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 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, hereinafter “Consolidated Net Financial Debt Level”. To determine the Consolidated Net Financial Debt Level, it will be based on the quarterly Consolidated Financial Statements and the following will be considered: /i/ “Net Financial Debt”, the difference between /x/ the unpaid amount of the “Financial Debt”, which is the sum of the lines, current and non-current, Bank loans, Bonds and Obligations for financial leases, contained in the Note Other financial liabilities and will not be considered for the calculation and determination of Financial Debt Net, the total amount of the liability for the obligation for rights to use assets of the account or subaccount of "IFRS 16", current and non-current, and /y/ the balance of the Cash and Cash Equivalents item contained in the Statement Consolidated Financial Position of the Issuer, and /ii/ “Total Adjusted Equity” the sum of /x/ Total Equity e /y/ the sum of the accounts Provisional Dividends, Dividends provisioned according to policy, as well as all other accounts related to provision of dividends contained in the Statement Consolidated 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[4] and Financial Expenses. ORBDA is defined as the sum of the items Gross margin and Other income per function minus the items Distribution expenses, Administrative expenses, and Other expenses per function registered in the Consolidated Financial Statments of Incomes of the quarterly Consolidated Financial Statement of the issuer, 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 12 consecutive months prior to the date of the corresponding Consolidated Financial Statements, including the closing month of said Consolidated Financial Statements.

 

c.The issuer must 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.The issued must 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 Financial Position, and /ii/ the assets given as guarantees indicated in the Note on Contingencies and Commitments of the Consolidated Financial Statements, and /b/ Fianancial Debt is the definition given to said term in numeral Four letter a/ /i/ of the Fifteenth clause of the Issuance Contract. It is expressly recorded and established that as of the mandatory entry of IFRS 16 on January 1, 2019, it was issued and approved by the International Accounting Standards Board. Regarding the calculation of Financial Debt that must be made in accordance with numerals Four and Five of Clause Fifteen of the Issuance Contract after said date, the account or respective subaccount referred to the total amount of the liability for obligation for rights of use assets or the name that the Commission defines for this purpose. Due to the mandatory entry of the aforementioned, the standard must be disclosed as a financial liability within the items Other current financial liabilities and Other non-current financial liabilities, will not be considered, incorporated or used for the calculation and determination of said Financial Debt.

 

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.

 


[4] ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  
g.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 Chapter XVI of open stocks companies law.

 

The inflationary risk associated to the interest rate in which this Bond M is exposed is mitigated by the use of Cross Currency Swap contracts, which fix the rate. See details of the Company's hedging in Note 7 - Financial instruments.

 

As of September 30, 2022, the Company was in compliance with the financial covenants.

 

 

Series P Bonds – CCU S.A.

 

On March 15, 2022 under the number 897, CCU S.A. recorded in the Securities Registry the issuance of a 10-years Bonds line. The issuer may issue one or more series of Bonds directed to the market general.

 

As stated in a complementary public deed, dated March 30, 2022, the Series P Bond has been placed, bearer and dematerialized, for a total of UF 2 million (equivalent to ThCh$ 68,516,460 as of September 30, 2022) with maturity on March 15, 2032. The Series P bonds will accrue interest at an annual rate of 3.35% per annum on the unpaid principal expressed in Unidades de Fomento, compounded, due, calculated on the basis of equal semesters of 180 days, equivalent to 1.6% per semester. Interest will accrue as from March 15, 2022, will be paid semi-annually as from September 15, 2022 and principal will be paid at the end of the bond term.

 

The issue was subscribed with Banco BICE as representative of the bond holders and as paying bank. 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 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, hereinafter “Consolidated Net Financial Debt Level”. To determine the Consolidated Net Financial Debt Level, it will be based on the quarterly Consolidated Financial Statements and the following will be considered: /i/ “Net Financial Debt”, the difference between /x/ the unpaid amount of the “Financial Debt”, which is the sum of the lines, current and non-current, Bank loans, Bonds and Obligations for financial leases, contained in the Note Other financial liabilities and will not be considered for the calculation and determination of Financial Debt Net, the total amount of the liability for the obligation for rights to use assets of the account or subaccount of "IFRS 16", current and non-current, and /y/ the balance of the Cash and Cash Equivalents item contained in the Statement Consolidated Financial Position of the Issuer, and /ii/ “Total Adjusted Equity” the sum of /x/ Total Equity e /y/ the sum of the accounts Provisional Dividends, Dividends provisioned according to policy, as well as all other accounts related to provision of dividends contained in the Statement Consolidated 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[5] and Financial Expenses. ORBDA is defined as the sum of the items Gross margin and Other income per function minus the items Distribution expenses, Administrative expenses, and Other expenses per function registered in the Consolidated Financial Statments of Incomes of the quarterly Consolidated Financial Statement of the issuer, 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 12 consecutive months prior to the date of the corresponding Consolidated Financial Statements, including the closing month of said Consolidated Financial Statements.

 

c.The issuer must 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.

[5] ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

d.The issued must 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 Financial Position, and /ii/ the assets given as guarantees indicated in the Note on Contingencies and Commitments of the Consolidated Financial Statements, and /b/ Fianancial Debt is the definition given to said term in numeral Four letter a/ /i/ of the Fifteenth clause of the Issuance Contract. It is expressly recorded and established that as of the mandatory entry of IFRS 16 on January 1, 2019, it was issued and approved by the International Accounting Standards Board. Regarding the calculation of Financial Debt that must be made in accordance with numerals Four and Five of Clause Fifteen of the Issuance Contract after said date, the account or respective subaccount referred to the total amount of the liability for obligation for rights of use assets or the name that the Commission defines for this purpose. Due to the mandatory entry of the aforementioned, the standard must be disclosed as a financial liability within the items Other current financial liabilities and Other non-current financial liabilities, will not be considered, incorporated or used for the calculation and determination of said Financial Debt.

 

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.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 Chapter XVI of open stocks companies law.

 

The inflationary risk associated to the interest rate in which this Bond P is exposed is mitigated by the use of Cross Currency Swap contracts, which fix the rate. See details of the Company's hedging in Note 7 - Financial instruments.

 

As of September 30, 2022, the Company was in compliance with the financial covenants.

 

Series International – CCU S.A.

 

On January 19, 2022, the Company issued and placed in the international markets bonds in the amount of US$ 600,000,000 (equivalent to ThCh$ 576,144,000 as of September 30, 2022), with an annual interest rate of 3.350%, payable semiannually for a term of 10 years, and payment of principal in one installment at maturity on January 19, 2032, subject to Rule 144 and Regulation S of the U.S. Securities Act of 1933.

 

Series D Bonds – VSPT S.A.

 

On December 12, 2019 under the number 986, VSPT recorded in the Securities Registry the issuance of a 10-years Bonds line. The issuer may issue one or more series of Bonds directed to the market general.

 

By public complimentary deed on June 10, 2020, VSPT recorded in the Securities Record the issue of Bonds Series D for UF 1.5 millions (equivalent to ThCh$ 51,387,345 as of September 30, 2022), maturing on June 1, 2025. The interest and capital will be paid semiannually from December 1, 2020 at a fixed interest rate of 1.00% annually.

 

The issue was subscribed with Banco BICE as representative of the bond holders and as paying bank and requires that the Company comply with the following financial covenants on its 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, hereinafter “Consolidated Net Financial Debt Level”. To determine the Consolidated Net Financial Debt Level, it will be based on the quarterly Consolidated Financial Statements and the following will be considered: /i/ “Net Financial Debt”, the difference between /x/ the unpaid amount of the “Financial Debt”, which is the sum of the lines, current and non-current, Bank loans, Bonds and Obligations for financial leases, contained in the Note Other financial liabilities and will not be considered for the calculation and determination of Financial Debt Net, the total amount of the liability for the obligation for rights to use assets of the account or subaccount of "IFRS 16", current and non-current, and /y/ the balance of the Cash and Cash Equivalents item contained in the Statement Consolidated Financial Position of the Issuer, and /ii/ “Total Adjusted Equity” the sum of /x/ Total Equity e /y/ the sum of the accounts Provisional Dividends, Dividends provisioned according to policy, as well as all other accounts related to provision of dividends contained in the Statement Consolidated of Changes in the Issuer's Equity.
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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

b.The Issuer must maintain a Consolidated Financial Expense Coverage of no less than 2.5 times defined as the ratio between ORBDA[6] and Financial Expenses hereinafter, "Consolidated Financial Expense Coverage". For these purposes the following must be considered: /i/ ORBDA is defined as the sum of the items Gross margin and Other income per function, minus the items Distribution expenses, Administrative expenses and Other expenses per function registered in the Consolidated Financial Statments of Incomes of the quarterly Consolidated Financial Statement of the issuer, plus the Depreciation and Amortization line recorded in the Note Costs and Expenses by Nature. /ii/ 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 12 consecutive months prior to the date of the corresponding Consolidated Financial Statements, including the closing month of said Consolidated Financial Statements.

 

c.The issuer must maintain an Adjusted Equity at a consolidated level for an amount of at least equal to ThCh$ 100,000,000 at the issuing of every quarterly Consolidated Financial Statement. 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, /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 of the issuer.

 

d.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 with related parties, and neither carry out other operations outside its normal line of business.

 

e.It is obliged to record the provisions that arise from adverse contingencies, which in the opinion of the administration should be referred to in the Consolidated Financial Statements.

 

The exchange rate risk to which Bond D is exposed is proportionally mitigated through the use of Cross Currency Swap contracts. See detail of the Company's hedging in Note 7 – Financial Instruments.

As of September 30, 2022, the subsidiary was in compliance with the financial covenants.


[6] ORBDA, for the Company purposes, is defined as Adjusted Operating Result before Depreciation and Amortization.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Note 22 Right of use assets and Lease liabilities

 

The Company has implemented IFRS 16 as of January 1, 2019. This means recognizing the right of use assets for the goods subject to operating lease contracts and a liability equivalent to the present value of the payment associated with the contract.

 

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 item Right of use assets.

 

-The Company mainly has warehouses, offices, vehicles and land leased contracts.

 

-Interest rate used for the measurement of the financial liability: The Company determined the interest rate based on the currency and the term of the lease contracts. The average incremental borrowing interest rate applied to lease liabilities used is 2.71%.

 

-Term of the contract: The Company evaluated the lease clauses, market conditions, costs related to the termination of the contract and early cancellation.

 

Other considerations:

 

1)During the initial measurement of lease agreements, the Company applied exemptions for leases with remaining terms less than 12 months and leases with a value lower than US$ 5,000.

 

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 terms on a case-by-case basis, in those with an option to extend or terminate the lease.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Right of use assets

 

The net book value of lands, buildings, machinery, fixtures and accessories, and other property, plant and equipment corresponds to financial lease contracts. The movement for assets by right of use is as follows:

 

   Land and buildings  Machinery  Fixtures, accessories and other properties, plants and equipment  Total
 ThCh$  ThCh$  ThCh$  ThCh$
As of January 1, 2021        
Historic cost 29,484,749 5,304,754 2,793,335 37,582,838
Accumulated depreciation (8,560,526) (2,695,706) (1,247,254) (12,503,486)
Book Value 20,924,223 2,609,048 1,546,081 25,079,352
Additions 4,918,674 2,381,913 169,190 7,469,777
Conversion effect historic cost (52,237) (95,815) 7,663 (140,389)
Depreciation (*) (4,592,069) (2,382,409) (508,915) (7,483,393)
Conversion effect depreciation 37,941 49,777 (15,418) 72,300
Others increase (decreased) (1) 1,669,918 1,724,214 (55,796) 3,338,336
Derecognition of assets due to right of use - - (545,706) (545,706)
Depreciation of disposals of assets for right of use - - 545,706 545,706
Changes 1,982,227 1,677,680 (403,276) 3,256,631
Book Value 22,906,450 4,286,728 1,142,805 28,335,983
As of January 1, 2022        
Historic cost 34,402,173 10,411,400 1,568,746 46,382,319
Accumulated depreciation (11,495,723) (6,124,672) (425,941) (18,046,336)
Book Value 22,906,450 4,286,728 1,142,805 28,335,983
         
As of September 30, 2022        
Additions 6,938,294 167,961 2,724,499 9,830,754
Conversion effect historic cost (895,896) (1,342,966) 43,236 (2,195,626)
Depreciation (*) (4,665,537) (1,554,197) (1,077,265) (7,296,999)
Conversion effect depreciation 527,895 761,045 (11,618) 1,277,322
Others increase (decreased) (1) 4,032,375 1,192,445 924,356 6,149,176
Derecognition of assets due to right of use (267,849) - - (267,849)
Depreciation of disposals of assets for right of use 267,849 - - 267,849
Changes 5,937,131 (775,712) 2,603,207 7,764,626
Book Value 28,843,581 3,511,016 3,746,012 36,100,609
As of September 30, 2022        
Historic cost 44,112,726 9,980,522 5,583,342 59,676,590
Accumulated depreciation (15,269,145) (6,469,506) (1,837,330) (23,575,981)
Book Value 28,843,581 3,511,016 3,746,012 36,100,609

 

(1)It corresponds mainly to the financial effect of the application of IAS 29 “Financial Information in Hyperinflationary Economies.

(*) This amount includes ThCh$ 627,926 (ThCh$ 527,171 as of September 30, 2021) for depreciation activated by agricultural assets, associated to the cost of sale of wine.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Lease liabilities

 

Lease libialities that accrue interest classified by type of obligation and by their classification in the Consolidated Statement of Financial Position are the following:

 

 

  As of September 30, 2022 As of December 31, 2021
Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Leases liabilities (1) 9,066,122 32,758,366 6,152,361 29,009,023
Total 9,066,122 32,758,366 6,152,361 29,009,023

 

(1)See Note 5 - Risk administration.

 

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.

 

At the time of sale, the Company recognized ThCh$ 3,108,950 as a gain for the building portion not leased by the Company and ThCh$ 2,276,677 as a liability that was deferred until completion of the building. At this time, the Company recorded the transaction as a financial lease.

 

On February 28, 2018, the Company carried 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 2.59% annual interest and maturity on February 5, 2048.

 

The book value, nominal value, and interest rates of these lease liabilities are as follows:

 

Current lease liabilities

 

As of September 30, 2022

 

Lease liabilities at book value:

 

 

              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$   (%)
Lease liabilities                      
79,862,750-3 Transportes CCU Limitada Chile 97,030,000-7 Banco del Estado de Chile Chile UF 43,013 130,106 173,119 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 123,923 378,308 502,231 Monthly 3.95
Subtotal             166,936 508,414 675,350    
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile CLP 225,106 343,178 568,284 Monthly 4.52
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile Euros 29,492 58,984 88,476 Monthly 1.48
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile UF 1,495,874 3,991,765 5,487,639 Monthly 1.74
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile USD 218,944 656,832 875,776 Monthly 3.95
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina ARS 213,720 570,564 784,284 Monthly 57.20
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina USD 100,724 263,259 363,983 Monthly 10.14
0-E CCU and subsidiaries Uruguay - Suppliers of PPE Uruguay UYU 55,582 166,748 222,330 Monthly 0.84
Subtotal (leases IFRS )           2,339,442 6,051,330 8,390,772    
Total             2,506,378 6,559,744 9,066,122    

 

 

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Lease liabilities at nominal value:

 

 

              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
              ThCh$ ThCh$ ThCh$  
Lease liabilities                    
79,862,750-3 Transportes CCU Limitada Chile 97,030,000-7 Banco del Estado de Chile Chile UF 47,263 140,788 188,051 Monthly
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 99,012,000-5 Consorcio Nacional  de Seguros S.A. Chile UF 296,707 890,121 1,186,828 Monthly
Subtotal             343,970 1,030,909 1,374,879  
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile CLP 221,058 357,454 578,512 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile Euros 30,466 60,932 91,398 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile UF 1,525,770 4,092,455 5,618,225 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile USD 254,225 762,677 1,016,902 Monthly
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina ARS 260,091 690,214 950,305 Monthly
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina USD 132,313 352,242 484,555 Monthly
0-E CCU and subsidiaries Uruguay - Suppliers of PPE Uruguay UYU 26,850 80,549 107,399 Monthly
Subtotal (leases IFRS )           2,450,773 6,396,523 8,847,296  
Total             2,794,743 7,427,432 10,222,175  

 

 

As of December 31, 2021

 

Lease liabilities at book value:

 

 

              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                    
79,862,750-3 Transportes CCU Limitada Chile 97,030,000-7 Banco del Estado de Chile Chile UF 39,035 119,031 158,066 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 109,227 333,423 442,650 Monthly 3.95
Subtotal             148,262 452,454 600,716    
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile CLP 252,247 413,615 665,862 Monthly 4.01
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile Euros 29,985 89,956 119,941 Monthly 1.48
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile UF 651,005 1,876,663 2,527,668 Monthly 1.28
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile USD 163,500 490,494 653,994 Monthly 3.84
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina ARS 42,018 116,631 158,649 Monthly 56.00
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina USD 331,849 995,551 1,327,400 Monthly 10.00
0-E CCU and subsidiaries Uruguay - Suppliers of PPE Uruguay UYU 27,294 70,837 98,131 Monthly 10.02
Subtotal (leases IFRS )           1,497,898 4,053,747 5,551,645    
Total             1,646,160 4,506,201 6,152,361    

 

 

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

 

 

Lease liabilities at nominal value:

 

 

              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
              ThCh$ ThCh$ ThCh$  
Financial leases obligations                  
79,862,750-3 Transportes CCU Limitada Chile 97,030,000-7 Banco del Estado de Chile Chile UF 44,628 132,494 177,122 Monthly
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 99,012,000-5 Consorcio Nacional  de Seguros S.A. Chile UF 255,151 765,452 1,020,603 Monthly
Subtotal             299,779 897,946 1,197,725  
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile CLP 300,411 481,610 782,021 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile Euros 30,978 92,933 123,911 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile UF 636,959 1,843,058 2,480,017 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile USD 193,593 580,778 774,371 Monthly
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina ARS 78,072 215,497 293,569 Monthly
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina USD 394,253 1,183,604 1,577,857 Monthly
0-E CCU and subsidiaries Uruguay - Suppliers of PPE Uruguay UYU 25,556 76,668 102,224 Monthly
Subtotal (leases IFRS )           1,659,822 4,474,148 6,133,970  
Total             1,959,601 5,372,094 7,331,695  

 

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Non-current lease liabilities

 

As of September 30, 2022

 

Lease liabilities at book value:

 

 

              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 CCU and subsidiaries Chile 97,030,000-7 Suppliers of PPE Chile UF 196,079 69,723 - 265,802 Monthly 2.14
90,413,000-1 CCU and subsidiaries Chile 99,012,000-5 Suppliers of PPE Chile UF 1,058,707 1,135,961 17,812,307 20,006,975 Monthly 3.95
Subtotal             1,254,786 1,205,684 17,812,307 20,272,777    
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile CLP 171,348 116,497 - 287,845 Monthly 4.52
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile UF 6,287,559 1,865,323 275,514 8,428,396 Monthly 1.74
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile USD 888,502 373,764 1,521,618 2,783,884 Monthly 3.95
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina ARS 701,970 - - 701,970 Monthly 51.33
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina USD 225,816 - - 225,816 Monthly 10.14
0-E CCU and subsidiaries Uruguay - Suppliers of PPE Uruguay UYU 52,274 5,404 - 57,678 Monthly 0.84
Subtotal (leases IFRS )           8,327,469 2,360,988 1,797,132 12,485,589    
Total             9,582,255 3,566,672 19,609,439 32,758,366    

 

 

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

 

 

Lease liabilities at nominal value:

 

 

              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
              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 211,127 89,669 - 300,796 Monthly
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 99,012,000-5 Consorcio Nacional  de Seguros S.A. Chile UF 2,373,656 2,373,656 24,231,074 28,978,386 Monthly
Subtotal             2,584,783 2,463,325 24,231,074 29,279,182  
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile CLP 221,324 140,309 - 361,633 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile UF 6,564,572 1,994,166 354,103 8,912,841 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile USD 1,091,945 547,648 2,310,715 3,950,308 Monthly
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina ARS 856,827 - - 856,827 Monthly
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina USD 304,343 - - 304,343 Monthly
0-E CCU and subsidiaries Uruguay - Suppliers of PPE Uruguay UYU 189,374 38,134 - 227,508 Monthly
Subtotal (leases IFRS )           9,228,385 2,720,257 2,664,818 14,613,460  
Total             11,813,168 5,183,582 26,895,892 43,892,642  

 

 

As of December 31, 2021

 

Lease liabilities at book value:

 

 

 

              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                      
79,862,750-3 Transportes CCU Limitada Chile 97,030,000-7 Banco del Estado de Chile Chile UF 261,722 119,659 - 381,381 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 932,941 1,000,792 16,507,833 18,441,566 Monthly 3.95
Subtotal             1,194,663 1,120,451 16,507,833 18,822,947    
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile CLP 277,646 - - 277,646 Monthly 4.01
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile Euros 59,971 - - 59,971 Monthly 1.48
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile UF 3,337,057 925,258 278,559 4,540,874 Monthly 1.28
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile USD 998,760 447,091 1,461,761 2,907,612 Monthly 3.84
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina ARS 217,856 - - 217,856 Monthly 56.00
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina USD 1,994,342 - - 1,994,342 Monthly 10.00
0-E CCU and subsidiaries Uruguay - Suppliers of PPE Uruguay UYU 144,630 43,145 - 187,775 Monthly 10.02
Subtotal (leases IFRS )           7,030,262 1,415,494 1,740,320 10,186,076    
Total             8,224,925 2,535,945 18,248,153 29,009,023    

 

(*) The amount based on the undiscounted contractual flows is found in Note 5 – Risk administration.

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Lease liabilities at nominal value:

 

              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
              ThCh$ ThCh$ ThCh$ ThCh$  
Financial leases obligations                    
79,862,750-3 Transportes CCU Limitada Chile 97,030,000-7 Banco del Estado de Chile Chile UF 283,368 125,536 - 408,904 Monthly
90,413,000-1 Compañía Cervecerías Unidas S.A. Chile 99,012,000-5 Consorcio Nacional  de Seguros S.A. Chile UF 2,041,204 2,041,204 21,602,745 25,685,153 Monthly
Subtotal             2,324,572 2,166,740 21,602,745 26,094,057  
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile CLP 373,997 - - 373,997 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile Euros 72,281 - - 72,281 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile UF 3,369,640 1,079,613 365,886 4,815,139 Monthly
0-E CCU and subsidiaries Chile - Suppliers of PPE Chile USD 1,229,739 624,745 2,233,383 4,087,867 Monthly
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina ARS 360,458 - - 360,458 Monthly
0-E CCU and subsidiaries Argentina - Suppliers of PPE Argentina USD 2,396,449 - - 2,396,449 Monthly
0-E CCU and subsidiaries Uruguay - Suppliers of PPE Uruguay UYU 182,897 56,358 - 239,255 Monthly
Subtotal (leases IFRS )           7,985,461 1,760,716 2,599,269 12,345,446  
Total             10,310,033 3,927,456 24,202,014 38,439,503  

 

Below is the detail of future payments and the value of lease liabilities:

 

 

  As of September 30, 2022
Gross Amount Interest Value
ThCh$ ThCh$ ThCh$
0 to 3 months 2,794,743 288,365 2,506,378
3 months to 1 year 7,427,432 867,688 6,559,744
Over 1 year to 3 years 11,813,168 2,230,913 9,582,255
Over 3 years to 5 years 5,183,582 1,616,910 3,566,672
Over 5 years 26,895,892 7,286,453 19,609,439
Total 54,114,817 12,290,329 41,824,488

 

 

  As of December 31, 2021
Gross Amount Interest Value
ThCh$ ThCh$ ThCh$
0 to 3 months 1,959,601 313,441 1,646,160
3 months to 1 year 5,372,094 865,893 4,506,201
Over 1 year to 3 years 10,310,033 2,085,108 8,224,925
Over 3 years to 5 years 3,927,456 1,391,511 2,535,945
Over 5 years 24,202,014 5,953,861 18,248,153
Total 45,771,198 10,609,814 35,161,384

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Reconciliation of liabilities arising from financing activities:

 

 

 

    As of December 31, 2021  Flows Accrual of interest Change in foreign currency and unit per adjustment Increase through new leases Others   As of September 30, 2022
 Payments Acquisitions
Principal Interest
ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$
Other financial liabilities                  
Current                  
Bank borrowings 76,169,204 (23,836,658) (2,993,438) 67,509,667 9,654,598 341,073 - 38,253,167 165,097,613
Bond payable 8,087,630 (5,975,742) (16,810,363) - 18,718,175 4,711,169 - 2,607,638 11,338,507
Lease liabilities 6,152,361 (7,019,786) (1,402,882) - 1,343,589 1,530,915 3,759,997 4,701,928 9,066,122
Total others financial liabilities current 90,409,195 (36,832,186) (21,206,683) 67,509,667 29,716,362 6,583,157 3,759,997 45,562,733 185,502,242
Non-current                  
Bank borrowings 114,492,596 - - 49,099,166 - 15,196 - (36,788,693) 126,818,265
Bond payable 339,740,414 - - 548,048,271 - 120,877,627 - (2,607,638) 1,006,058,674
Lease liabilities 29,009,023 - - - - 2,601,039 6,070,757 (4,922,453) 32,758,366
Total others financial liabilities non-current 483,242,033 - - 597,147,437 - 123,493,862 6,070,757 (44,318,784) 1,165,635,305
Total Other financial liabilities 573,651,228 (36,832,186) (21,206,683) 664,657,104 29,716,362 130,077,019 9,830,754 1,243,949 1,351,137,547

 

 

 

 

    As of December 31, 2020  Flows Accrual of interest Change in foreign currency and unit per adjustment Increase through new leases Others   As of September 30, 2021
 Payments Acquisitions
Principal Interest
ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$
Other financial liabilities                  
Current                  
Bank borrowings 37,754,705 (34,336,209) (3,849,624) 6,793,452 4,188,008 1,641,887 - 51,934,306 64,126,525
Bond payable 7,691,023 (5,399,347) (5,870,066) - 4,711,661 312,639 - 5,894,387 7,340,297
Lease liabilities 4,934,639 (5,695,907) (617,258) - 1,077,831 372,301 2,425,972 3,704,101 6,201,679
Total others financial liabilities current 50,380,367 (45,431,463) (10,336,948) 6,793,452 9,977,500 2,326,827 2,425,972 61,532,794 77,668,501
Non-current                  
Bank borrowings 88,151,400 - - 3,000,000 - 28,515 - (50,324,328) 40,855,587
Bond payable 324,725,456 - - - - 11,177,915 - (5,889,532) 330,013,839
Lease liabilities 27,200,272 - - - - 1,177,367 4,647,121 (3,772,783) 29,251,977
Total others financial liabilities non-current 440,077,128 - - 3,000,000 - 12,383,797 4,647,121 (59,986,643) 400,121,403
Total Other financial liabilities 490,457,495 (45,431,463) (10,336,948) 9,793,452 9,977,500 14,710,624 7,073,093 1,546,151 477,789,904



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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Note 23 Trade and other payables

 

Trade and other payables are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Suppliers 421,760,576 - 438,852,587 -
Notes payable 9,426,492 39,332 1,118,474 29,457
Trade an other current payables 431,187,068 39,332 439,971,061 29,457
Withholdings payable 58,388,774 - 75,551,668 -
Trade accounts payable withholdings 58,388,774 - 75,551,668 -
Total 489,575,842 39,332 515,522,729 29,457

 

 

Note 24 Other provisions

 

Provisions recorded in the consolidated statement of financial position are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Litigation 291,272 306,797 244,630 331,957
Others 2,094,189 144,250 2,300,343 119,122
Total 2,385,461 451,047 2,544,973 451,079

 

The changes in provisions are detailed as follows:

 

  Litigation (1) Others Total
ThCh$ ThCh$ ThCh$
As of January 1, 2021   538,388   2,934,595 3,472,983
As of December 31, 2021          
Incorporated   453,743   206,154 659,897
Used   (381,509)   (710,808) (1,092,317)
Released   (21,000)   (25,415) (46,415)
Conversion effect   (13,035)   14,939 1,904
Changes   38,199   (515,130) (476,931)
As of December 31, 2021   576,587   2,419,465 2,996,052
As of September 30, 2022          
Incorporated   369,289   - 369,289
Used   (189,729)   (206,154) (395,883)
Released   (73,078)   - (73,078)
Conversion effect   (85,000)   25,128 (59,872)
Changes   21,482   (181,026) (159,544)
As of September 30, 2022   598,069   2,238,439 2,836,508

 

(1)See Note 35 - Contingencies and commitments.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The maturities of provisions as of September 30, 2022, are detailed as follows:

 

  Litigation Others Total
ThCh$ ThCh$ ThCh$
Less than one year   291,272   2,094,189 2,385,461
Between two and five years   224,642   144,250 368,892
Over five years   82,155   - 82,155
Total   598,069   2,238,439 2,836,508

 

The maturities of provisions as of December 31, 2021, are detailed as follows:

 

  Litigation Others Total
ThCh$ ThCh$ ThCh$
Less than one year   244,630   2,300,343 2,544,973
Between two and five years   221,962   119,122 341,084
Over five years   109,995   - 109,995
Total   576,587   2,419,465 2,996,052

 

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 in
Note 35 - 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.

 

 

Note 25 Income taxes

 

Tax receivables

 

Taxes receivables are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Refundable tax previous year 2,897,093 2,114,087
Tax payments in advance 31,084,770 15,510,712
Benefits for tax losses 7,905,071 7,484,691
Other credits 673,254 953,366
Total 42,560,188 26,062,856

 

 

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Non-current tax receivables

 

Tax receivables are detailed as follows:

 

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Tax on minimum presumed income of Argentine subsidiaries (1) 2,453 3,094
Total 2,453 3,094

 

(1)Corresponds to the minimum presumed income tax of Argentine subsidiaries, whose recovery period is estimated to be more than one year.

 

Current tax liabilities

 

Tax payables are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Income tax 9,033,195 21,256,053
Monthly tax payment in advance 3,038,285 12,699,115
Tax inder Article N°21 36,165 66,617
Other 1,069,015 1,045,007
Total 13,176,660 35,066,792

 

Tax expense

 

The income tax and deferred tax expense for the period ended as of September 30, 2022 and 2021, are detailed as follows:

 

  For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
M$ M$ M$ M$
Income as per deferred tax related to the origin and reversal of temporary differences 13,379,405 7,349,969 12,164,606 4,946,623
Prior year adjustments (1,167,501) 796,753 (32,303) (5,294)
Effect of change in tax rates - (370,850) - (4,524)
Tax loss benefits 17,882,842 (1,726,316) 5,469,184 (2,729,242)
Total deferred tax expense 30,094,746 6,049,556 17,601,487 2,207,563
Current tax expense (29,598,796) (57,798,423) (7,440,829) (23,016,537)
Prior year adjustments 144,890 (612,933) 24,411 (47,971)
Total (expenses) income for current taxes (29,453,906) (58,411,356) (7,416,418) (23,064,508)
 Income tax expense 640,840 (52,361,800) 10,185,069 (20,856,945)

 

 

Deferred taxes related to items charged or credited directly to the Consolidated Statement of Comprehensive Income are detailed as follows:

 

  For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
M$ M$ M$ M$
Net income from cash flow hedge (303,968) (407,931) 346,210 (556,953)
Actuarial gains and losses deriving from defined benefit plans 1,516,579 (598,861) 1,170,297 (916,015)
Charge to equity 1,212,611 (1,006,792) 1,516,507 (1,472,968)

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Efective Rate

 

The Company’s (expense)/income tax expense as of September 30, 2022 and 2021 represents -0,79% and 27,38%, respectively of income before taxes. The following is reconciliation between such effective tax rate and the statutory tax rate valid in Chile.

 

  For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ Tasa % ThCh$ Tasa % ThCh$ Tasa % ThCh$ Tasa %
Income before taxes 81,770,528   191,115,286   9,215,116   67,608,759  
Income tax using the statutory rate (22,078,043) 27.00 (51,601,127) 27.00 (2,488,081) 27.00 (18,254,365) 27.00
Adjustments to reach the effective rate                
Tax effect of permanent differences, net 22,835,711 (27.93) 2,379,440 (1.25) 11,559,595 (125.44) (1,054,356) 1.56
Effect of change in tax rate - - (370,850) 0.19 - - (4,524) 0.01
Derecognition of deferred tax assets not recoverable 896,857 (1.10) (1,824,754) 0.95 814,888 (8.84) (1,023,844) 1.51
Effect of tax rates in foreing subsidiaries 8,926 (0.01) (1,128,329) 0.59 306,559 (3.33) (466,591) 0.69
Prior year adjustments (1,022,611) 1.25 183,820 (0.10) (7,892) 0.09 (53,265) 0.08
Income tax, as reported 640,840  (0.79) (52,361,800) 27.38 10,185,069 (110.52) (20,856,945) 30.85

 

 

Deferred taxes

 

Deferred tax assets and liabilities included in the Interim Consolidated Financial Statements are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
 Deferred taxes assets    
Accounts receivable impairment provision 1,384,989 1,526,101
Other non-tax expenses 27,581,695 17,623,677
Benefits to staff 4,540,027 4,175,349
Inventory impairment provision 1,352,073 871,754
Severance indemnity 10,685,198 9,209,019
Inventory valuation 6,573,152 5,777,024
Intangibles 535,064 466,924
Other assets 14,557,728 27,381,615
Tax loss carryforwards 26,911,931 11,658,387
Subtotal by deferred tax assets 94,121,857 78,689,850
Deferred tax liabilities offset (61,728,319) (48,118,631)
Total assets from deferred taxes 32,393,538 30,571,219
     
Deferred taxes liabilities    
Property, plant and equipment depreciation 106,911,014 88,073,083
Agricultural operation expenses 8,172,287 7,553,603
Manufacturing indirect activation costs 9,348,432 7,104,468
Intangibles 24,701,242 23,053,494
Land 25,095,717 27,899,218
Other liabilities 15,145,090 12,520,436
Subtotal by deferred tax liabilities 189,373,782 166,204,302
Deferred tax assets offset (61,728,319) (48,118,631)
Total liabilities from deferred taxes 127,645,463 118,085,671
Total   (95,251,925) (87,514,452)

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

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.

 

Changes in deferred tax assets are detailed as follows:

 

Analysis of the deferred tax movement during the year ThCh$
As of January 1, 2021 (67,685,234)
Deferred taxes related to credited items (charged) directly to equity (1) (22,236,159)
Deferred Tax Losses Tax absorption (7,485,845)
Deferred taxes from tax loss absorption 11,287,917
Conversion effect 49,002
Deferred taxes against equity (1,444,133)
Changes (19,829,218)
As of December 31, 2021 (87,514,452)
   
As of January 1, 2022  
Deferred taxes related to credited items (charged) directly to equity (1) (40,908,503)
Deferred taxes from tax loss absorption 30,094,746
Conversion effect 1,559,705
Deferred taxes against equity 1,516,579
Changes (7,737,473)
As of September 30, 2022 (95,251,925)

 

(1) Corresponds to the financial effect of the application IAS 29 "Financial reporting in hyperinflationary economies.

 

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 years 2018 and 2019, and 13% as the year 2020), applicable as of the reporting results 2018.

 

On December 21, 2019, the law No. 27,541 called the “Law of Social Solidarity and Productive Reactivation in the Public Emergency" which modifies some articles of law No. 27,430 was enacted. It 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 from the year 2021.

 

On June 16, 2021, Law No. 27,630 was enacted, which again modifies the income tax rates for fiscal years beginning on or after January 1, 2021. The application of this new law did not have significant effects on these consolidated financial statements.

 

The companies will determine the amount of the tax using the following scale:

 

Net cumulative taxable income Will pay ARS $ Plus % of On the excess of
More than ARS $ To  ARS $ ARS $
- 7,604,949 - 25% -
7,604,949 76,049,486 1,901,237 30% 7,604,949
76,049,486 From now on 22,434,598 35% 76,049,486
         

 

The withholding rate for dividend payments is maintained at 7%.

 

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

 

Note 26 Employee Benefits

 

The Company grants short term and employment termination benefits as part of its compensation policies.

 

The Parent Company and its 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 of September 30, 2022 and December 31, 2021, the total staff benefits recorded in the Interim Consolidated Statement of Financial Position is detailed as follows:

 

Employees’ Benefits As of September 30, 2022 As of December 31, 2021
Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Short term benefits 39,178,306 - 49,699,243 -
Employment termination benefits 359,803 39,981,377 977,858 34,274,997
Total 39,538,109 39,981,377 50,677,101 34,274,997

 

Short - term benefits

 

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 Interim Consolidated Statement of Financial Position are detailed as follows:

 

Short-Term Employees’ Benefits As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Vacation 17,081,479 16,934,429
Bonus and compensation 22,096,827 32,764,814
Total 39,178,306 49,699,243

 

The Company records 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 5.73% and the Argentina 61.23% for the period ended September 30, 2022 (in Chile 6.97% and the Argentina 61.23% in December 31, 2021).

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Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The obligation recorded for severance indemnity is detailed as follows:

 

Severance Indemnity As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Current 359,803 977,858
Non-current 39,981,377 34,274,997
Total 40,341,180 35,252,855

 

 

The change in the severance indemnity is detailed as follows:

 

Severance Indemnity ThCh$  
 
Balance as of January 1, 2021 41,643,938  
Current cost of service 2,988,782  
Interest cost 3,279,881  
Actuarial (Gain) losses (5,216,580)  
Paid-up benefits (6,210,075)  
Past service cost 469,558  
Conversion effect 105,928  
Others (1,808,577)  
Changes (6,391,083)  
As of December 31, 2021 35,252,855  
Current cost of service 2,989,291  
Interest cost 2,083,432  
Actuarial (Gain) losses 5,620,801  
Paid-up benefits (5,642,876)  
Past service cost 401,684  
Conversion effect (364,007)  
Changes 5,088,325  
As of September 30, 2022 40,341,180  

 

 

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Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

The figures recorded in the Interim Consolidated Statement of Income, are detailed as follows:

 

Expense recognized for severance indemnity For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Current cost of service 2,989,291 2,988,782 1,030,924 427,908
Past service cost 401,684 469,558 77,687 (92,135)
Non-provided paid benefits 5,563,671 3,480,645 2,181,958 692,644
Other 325,471 697,962 (298,974) 441,247
Total expense recognized in Consolidated Interim Statement of Income 9,280,117 7,636.947 2,991,595 1,469,664

 

Actuarial Assumptions

 

As mentioned in Note 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 September 30, 2022 As of December 31, 2021 As of September 30, 2022 As of December 31, 2021  
 
Mortality table RV-2014 RV-2014 Gam '83 Gam '83  
Annual interest rate 5.73% 6.97% 61.23% 61.23%  
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% 52.10% 52.10%  
Estimated retirement age for (*) Officers   60 60 60 60  
Other Male 65 65 65 65  
Female 60 60 60 60  

 

(*) Weighted 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 September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
1% increase in the Discount Rate (Gain) 2,449,924 1,833,192
1% decrease in the Discount Rate (Loss) (3,029,745) (2,101,740)
     

 

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September 30, 2022

 
  

 

Personnel expense

 

The amounts recorded in the Interim Consolidated Statement of Income are detailed as follows:

 

Personal expense For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Salaries 186,756,892 154,946,416 64,831,947 54,915,138
Employees’ short-term benefits 27,642,039 24,551,307 10,127,637 10,580,187
Total expenses for short-term employee benefits 214,398,931 179,497,723 74,959,584 65,495,325
Employments termination benefits 9,280,117 7,636,947 2,991,595 1,469,664
Other staff expense 38,502,715 30,459,590 13,435,187 11,484,541
Total (1) 262,181,763 217,594,260 91,386,366 78,449,530

 

(1) See Note 30 - Natures of cost and expense.

 

 

Note 27 Other non-financial liabilities

 

The total Other non-financial liabilities are detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Parent dividend provisioned according to policy 35,657,702 25,680,792
Outstanding parent dividends (1) 1,277,316 6,079,036
Subsidiaries dividends according to policy 7,614,105 11,327,951
Total dividends payable 44,549,123 43,087,779
Income received in advance 5,443 6,866
Others 339,533 421,985
Total 44,894,099 43,516,630
Current 44,894,099 43,516,630
Total 44,894,099 43,516,630

 

 

(1)See Note 28 – Common Shareholders’ Equity, dividends.

 

 

Note 28 Common Shareholders’ Equity

 

Subscribed and paid-up Capital

 

As of September 30, 2022 and December 31, 2021 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 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 letter A)).

 

The Company has not issued any others shares or convertible instruments during the period, thus changing the number of outstanding shares as September 30, 2022 and December 31, 2021.

 

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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.

 

The information used for the calculation of the earnings as per each basic and diluted share is as follows:

 

Earnings per share For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
Equity holders of the controlling company (ThCh$) 71,315,404 125,519,804 17,226,082               42,168,070
Weighted average number of shares 369,502,872 369,502,872 369,502,872             369,502,872
Basic earnings per share (in Chilean pesos) 193.00 339.70 46.62 114.12
Equity holders of the controlling company (ThCh$) 71,315,404 125,519,804 17,226,082               42,168,070
Weighted average number of shares 369,502,872 369,502,872 369,502,872             369,502,872
Diluted earnings per share (in Chilean pesos) 193.00 339.70 46.62 114.12

 

 

As of September 30, 2022 and December 31, 2021, 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 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 period ended September 30, 2022.

 

Dividends

 

The Company’s dividends policy consists of annually distributing at least 50% of the net distributable profit of the year.

 

As of September 30, 2022 and December 31, 2021 the Company has distributed the following dividends:

 

Dividend Nº Payment Date Type of Dividend Dividends per Share ($) Related to FY
261 04-23-2021 Final 139.16548 2020
262 10-29-2021 Interim 200.0000 2021
263 12-03-2021 Eventual 447.0000 Retained earnings
264 04-28-2022 Final 200.0000 2021
         

 

At the Ordinary Shareholders' Meeting of Compañía Cervecerías Unidas S.A. held on April 14, 2021, the shareholders agreed to the distribution of a final Dividend No. 261 in the amount of Ch$ 139.16548 per share, for a total amount to be distributed of ThCh $ 51,422,043 charged to 2020 profits. This dividend was paid on April 23, 2021.

 

In the Ordinary Session of the Board of Directors’ Meeting of Compañía Cervecerías Unidas S.A., dated October 6, 2021, it was agreed, charged to the profits of the 2021 fiscal year, the distribution of an Interim Dividend No. 262 of Ch$ 200 per share, ascending the total amount to distribute to ThCh$ 73,900,574. This dividend was paid on October 29, 2021.

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September 30, 2022

 
  

 

At the Extraordinary Shareholders' Meeting of Compañía Cervecerías Unidas S.A., dated November 24, 2021, the distribution of an Eventual Dividend No. 263 of Ch$ 447 per share was approved, with a charge to retained earnings, raising the total amount to be distributed to ThCh$ 165,167,784. This dividend was paid on December 3, 2021.

 

At the Ordinary Shareholders' Meeting of Compañía Cervecerías Unidas S.A. held on April 13, 2022, the shareholders approved the distribution of a final Dividend No. 264 of Ch$ 200 per share, for a total amount to be distributed of ThCh $ 73,900,574 charged against 2021’s Net income. This dividend was paid on April 28, 2022.

 

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) 1,125,809 (303,968) 821,841
Gains (losses) on exchange differences on translation (1) 104,808,956 - 104,808,956
Reserve of Actuarial gains and losses on defined benefit plans (5,620,801) 1,516,579 (4,104,222)
Total comprehensive income As of September 30, 2022 100,313,964 1,212,611 101,526,575
       
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) 1,499,556 (407,931) 1,091,625
Gains (losses) on exchange differences on translation (1) 78,591,003 - 78,591,003
Reserve of Actuarial gains and losses on defined benefit plans 2,289,533 (598,861) 1,690,672
Total comprehensive income As of September 30, 2021 82,380,092 (1,006,792) 81,373,300

 

(1)These concepts will be reclassified to the Statement of Income when it’s settled.

 

 

Reserves affecting other comprehensive income

 

The movement of other comprehensive income is detailed as follows:

 

a)As of September 30, 2022:

 

Changes Reserve of exchange differences on translation Reserve of cash flow hedges Reserve of Actuarial gains and losses on defined benefit plans Other reserves Total other reserves
ThCh$ ThCh$ ThCh$   ThCh$
Conversion of joint ventures and foreign subsidiaries (71,000,751) - - 1,492,971 (69,507,780)
Cash flow hedges - 1,125,809 - - 1,125,809
Gains (losses) from defined benefit plans - - (5,620,801) - (5,620,801)
Deferred taxes - (303,968) 1,516,579 - 1,212,611
Inflation adjustment of subsidiaries in Argentina 178,117,353 - - (3,800,617) 174,316,736
Total changes in equity 107,116,602 821,841 (4,104,222) (2,307,646) 101,526,575
Equity holders of the parent 102,130,761 706,289 (3,879,851) (2,307,531) 96,649,668
Non-controlling interests 4,985,841 115,552 (224,371) (115) 4,876,907
Total changes in equity 107,116,602 821,841 (4,104,222) (2,307,646) 101,526,575

 

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September 30, 2022

 
  

 

b)As of September 30, 2021:

 

Changes Reserve of exchange differences on translation Reserve of cash flow hedges Reserve of Actuarial gains and losses on defined benefit plans Other reserves Total other reserves
ThCh$ ThCh$ ThCh$ ThCh$ ThCh$
Conversion of joint ventures and foreign subsidiaries 13,300,879 - - - 13,300,879
Cash flow hedges - 1,499,556 - - 1,499,556
Gains (losses) from defined benefit plans - - 2,289,533 - 2,289,533
Deferred taxes - (407,931) (598,861) - (1,006,792)
Inflation adjustment of subsidiaries in Argentina 65,290,124 - - - 65,290,124
Total changes in equity 78,591,003 1,091,625 1,690,672 - 81,373,300
Equity holders of the parent 73,388,933 1,323,125 1,592,717 - 76,304,775
Non-controlling interests 5,202,070 (231,500) 97,955 - 5,068,525
Total changes in equity 78,591,003 1,091,625 1,690,672 - 81,373,300

 

c)As of December 31, 2021:

 

Changes Reserve of exchange differences on translation Reserve of cash flow hedges Reserve of Actuarial gains and losses on defined benefit plans Other reserves Total other reserves
ThCh$ ThCh$ ThCh$ ThCh$ ThCh$
Conversion of joint ventures and foreign subsidiaries 15,703,753 - - - 15,703,753
Cash flow hedges - 2,168,254 - - 2,168,254
Gains (losses) from defined benefit plans - - 5,216,580 - 5,216,580
Deferred taxes - (585,430) (1,444,133) - (2,029,563)
Inflation adjustment of subsidiaries in Argentina 93,585,219 - - - 93,585,219
Total changes in equity 109,288,972 1,582,824 3,772,447 - 114,644,243
Equity holders of the parent 102,229,659 1,812,733 3,580,153 - 107,622,545
Non-controlling interests 7,059,313 (229,909) 192,294 - 7,021,698
Total changes in equity 109,288,972 1,582,824 3,772,447 - 114,644,243

 

Other Reserves

 

The reserves that are a part of the Company’s equity are as follows:

 

Reserve of exchange differences on translation: This reserve originated from the translation of foreign subsidiaries’ and joint ventures financial statements which functional currency is different from the presentation currency of the Interim Consolidated Financial Statements and inflation adjustment of subsidiaries in Argentina. As of September 30, 2022, December 31, 2021 and September 30, 2021, it amounts to a reserve of ThCh$ 50,385,363, and negative reserve of ThCh$ 51,745,399 and ThCh$ 80,586,125, respectively.

 

Reserve of cash flow hedges: These reserves originate from the application of hedge accounting for financial instruments used as hedges. Hedging reserves are reversed at the end of the term of the derivative contracts or when the transaction ceases to qualify as hedge accounting, whichever occurs first. The effects of the Hedging reserves are reflected in to income statement. As of September 30, 2022, December 31, 2021 and September 30, 2021 the amounts in the balance related to Hedging reserves are ThCh$ 5,816,895, ThCh$ 5,110,606 and ThCh$ 4,620,998, net of deferred taxes.

 

Reserve of Actuarial gains and losses on defined benefit plans: This reserve is originated from January 1, 2013, as a result of the application of the Amendment to IAS No. 19 and whose effect as of September 30, 2022, December 31, 2021 and September 30, 2021 is a negative reserve of ThCh$ 9,325,873, ThCh$ 5,446,022 and ThCh$ 7,433,458 respectively, net of deferred taxes.

 

 

 

 

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September 30, 2022

 
  

Other reserves: As of September 30, 2022, December 31, 2021 and September 30, 2021, the amount is a negative reserve of ThCh$ 37,380,003, ThCh$ 35,175,097 and ThCh$ 34,080,999, respectively. Such reserves relate mainly to the following concepts:

 

-Adjustment due to re-assessment of fixed assets carried out in 1979 respectively (increase of ThCh$ 4,087,396).
-Price level restatement of paid-up capital registered as of December 31, 2008, according to CMF Circular Letter No. 456 (decrease of ThCh$ 17,615,333).
-Difference in purchase of shares of the subsidiary Viña San Pedro Tarapacá S.A. made during year 2012 and 2013 (increase of ThCh$ 9,779,475).
-Difference in purchase of shares of the subsidiary Manantial S.A. made during year 2016 (decrease of ThCh$ 7,801,153).
-Difference in purchase of shares of the Alimentos Nutrabien S.A. made during year 2016 (decrease of ThCh$ 5,426,209). On December 17, 2018 Food's and subsidiary CCU Investments S.A. sold their participation over Alimentos Nutrabien S.A. The aforementioned effect was accounted in result of the period.
-Difference in purchase of shares of the subsidiary Viña San Pedro Tarapacá S.A. made during year 2018 and 2017 (decrease of ThCh$ 13,054,114 and ThCh$ 2,075,441, respectively).
-Difference in purchase of shares of Sáenz Briones y Cía. S.A.I.C. carried out on April 16, July 13 and August 9, 2021 (decrease of ThCh$ 7,199,525).
-Difference in purchase of shares of Viña San Pedro Tarapacá S.A. carried out on September 10 and October 4, 2021 (increase of ThCh$ 245,244).
-Difference in purchase of shares of Viña San Pedro Tarapacá S.A. carried out on September 7, 2022 (increase of ThCh$ 102,625).

 

 

Note 29 Non-controlling Interests

 

Non-controlling Interests are detailed as follows:

 

a.Equity

 

Equity As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Viña San Pedro Tarapacá S.A. (1) 43,481,919 41,853,583
Bebidas del Paraguay S.A. 23,023,138 20,355,904
Aguas CCU-Nestlé Chile S.A. 24,759,573 27,202,887
Cervecería Kunstmann S.A. 9,708,874 8,291,359
Compañía Pisquera de Chile S.A. 6,916,323 6,322,425
Sáenz Briones & Cía. S.A.I.C. (2) 13,679 10,550
Distribuidora del Paraguay S.A. 4,482,764 4,549,059
Bebidas Bolivianas BBO S.A. 7,951,256 7,360,489
Other 1,840,526 1,950,815
Total 122,178,052 117,897,071

 

 

(1)See Note 1 – General information, letter C, number (4).
(2)See Note 1 – General information, letter C, number (3).

 

 

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b.Result

 

Result For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Aguas CCU-Nestlé Chile S.A. 3,771,135 5,990,579 596,764 1,684,523
Viña San Pedro Tarapacá S.A. 3,546,356 2,863,517 1,264,251 1,156,687
Cervecería Kunstmann S.A. 2,704,982 3,375,400 549,857 955,601
Compañía Pisquera de Chile S.A. 3,111,442 2,534,797 905,425 1,161,483
Sáenz Briones & Cía. S.A.I.C. (261) (106,351) 1,113 (3,304)
Distribuidora del Paraguay S.A. (939,456) (952,970) (762,121) (161,657)
Bebidas del Paraguay S.A. 918,371 631,296 481,306 198,544
Bebidas Bolivianas BBO S.A. (1,952,363) (1,202,035) (788,428) (445,218)
Other (64,242) 99,449 (74,064) 37,085
Total 11,095,964 13,233,682 2,174,103 4,583,744

 

 

 

c.The Summarized financial information of non-controlling interest is detailed as follows:

 

  As of September 30, 2022 As of December 31, 2021
 
 
 
  ThCh$ ThCh$
Assets and Liabilities    
Current assets 1,272,952,418 1,271,667,358
Non-current assets 1,205,339,269 1,122,289,748
Current liabilities 678,265,291 695,152,024
Non-current liabilities 249,897,218 224,560,856
     
Dividends paid 16,332,005 12,191,624
     

 

The main significant non-controlling interest is represented by Viña San Pedro Tarapacá S.A. with the following balances:

 

Assets and Liabilities As of September 30, 2022 As of December 31, 2021  
 
 
 
ThCh$ ThCh$  
Assets and Liabilities      
Current assets 216,763,163 218,573,041  
Non-current assets 235,326,321 223,951,135  
Current liabilities 89,103,453 97,431,197  
Non-current liabilities 78,762,617 74,792,712  
       

 

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September 30, 2022

 
  

 

 

 

Result For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Net sales 224,515,812 192,031,553 84,892,705 70,846,894
Net income of year 22,930,112 16,888,420 8,191,741 6,844,876
         

 

Dividends paid by Viña San Pedro Tarapacá S.A. amounted to ThCh$ 17,906,526 and ThCh$ 11,167,838, for the periods ended September 30, 2022 and 2021, respectively.

 

 

Note 30 Nature of cost and expense

 

Operational cost and expenses grouped by nature are detailed as follows:

 

Costs and expenses by nature For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Direct cost 852,094,709 674,519,604 303,451,883 259,841,679
Personnel expense (1) 262,181,763 217,594,260 91,386,366 78,449,530
Transportation and distribution 276,398,338 217,411,935 100,650,204 83,704,045
Advertising and promotion 101,449,855 109,608,397 41,822,793 40,106,018
Depreciation and amortization 97,448,251 83,712,779 34,075,411 30,008,333
Materials and maintenance 56,542,183 44,907,652 20,007,204 17,388,931
Energy 40,324,830 24,108,525 15,925,147 10,016,908
Leases 20,404,730 12,565,844 6,962,547 4,211,574
Other expenses 101,951,113 81,289,013 37,841,424 31,646,822
Total 1,808,795,772 1,465,718,009 652,122,979 555,373,840

 

(1)See Note 26 - Employee benefits.

 

 

Note 31 Other income by function

 

Other income by function is detailed as follows:

 

 

Other incomes by function For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Sales of fixed assets 508,229 287,390 337,552 106,608
Rental income 607,363 96,806 362,526 38,858
Sale of glass and waste 1,110,437 386,795 430,592 174,838
Insurance claims recovery 27,242 158,560 13,475 470
Other (1) 1,224,225 8,307,263 404,544 3,787,379
Total 3,477,496 9,236,814 1,548,689 4,108,153

 

 

(1)In 2021, corresponds mainly corresponds to the effects of the early termination of the license agreement in Argentina of the "Budweiser" brand, signed between Compañía Cervecerías Unidas Argentina S.A. and Anheuser-Busch InBev S.A./N.V. in 2018. See Note 1 – General information, letter D).

 

 

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September 30, 2022

 
  

 

Note 32 Other Gains (Losses)

 

Other gains (losses) items are detailed as follows:

 

Other gain and (loss) For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Results derivative contracts (1) 5,936,680 7,554,443 1,355,787 7,335,880
Marketable securities to fair value (82,454) 25,391 (26,834) (35,820)
Other - 421,884 - 3,998
Total 5,854,226 8,001,718 1,328,953 7,304,058

 

(1)Under this concept there are ThCh$ 10,165,169 received (net) and ThCh$ 3,769,846 paid (net), as of September 30, 2022 and 2021, espectively, and these were recorded in the Consolidated Cash Flow Statement, under Operational activities, in line item Other cash movements.

 

 

Note 33 Financial results

 

The financial results composition is detailed as follows:

 

Financial results For the nine periods ended as of September 30, For the three periods ended as of September 30,
2022 2021 2022 2021
ThCh$ ThCh$ ThCh$ ThCh$
Finance income 17,533,727 9,506,947 4,680,264 2,689,372
Finance costs (53,112,031) (23,013,331) (23,375,161) (8,903,459)
Foreign currency exchange differences (17,932,005) (7,249,717) (8,095,775) (4,483,454)
Result as per adjustment units (431,319) 1,349,090 4,641,027 551,589
         

 

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September 30, 2022

 
  

 

Note 34 Effects of changes in currency exchange rate

 

Current assets are denominated in the following currencies:

 

 

 

CURRENT ASSETS As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Current assets    
Cash and cash equivalents 635,484,232 265,568,125
CLP 47,803,145 174,214,608
USD 581,097,732 32,325,725
Euros 797,390 2,495,431
ARS 1,492,983 50,866,859
UYU 1,185,364 1,498,157
PYG 1,227,642 1,264,251
BOB 457,114 424,388
Others currencies 1,422,862 2,478,706
Other financial assets 52,407,238 23,851,496
CLP 4,165,863 4,951,009
UF 31,640,002 -
USD 2,862,875 12,617,110
Euros 1,273,837 1,413,219
PYG 12,464,661 4,676,545
Others currencies - 193,613
Other non-financial assets 41,645,123 29,330,418
CLP 24,670,436 18,165,719
UF 992,025 865,893
USD 780,534 2,007,542
Euros 372,737 250,923
ARS 14,443,034 7,767,165
UYU 93,244 62,771
PYG 186,090 91,262
BOB 107,023 119,143
Trade and other current receivables 387,713,357 372,995,729
CLP 237,832,276 237,176,084
UF 45,468 2,133,884
USD 49,653,896 38,729,972
Euros 9,225,396 10,590,738
ARS 72,223,908 67,465,436
UYU 5,349,790 5,243,169
PYG 8,951,349 7,912,325
BOB 2,511,819 1,527,637
Others currencies 1,919,455 2,216,484
Accounts receivable from related parties 4,794,889 5,307,264
CLP 4,500,570 5,048,047
UF 71,372 36,710
USD 17,203 -
Euros 205,343 222,226
PYG 401 281
Inventories 512,074,311 353,427,061
CLP 411,700,753 275,580,687
ARS 83,100,725 61,172,359
UYU 3,229,367 3,001,911
PYG 10,194,697 10,178,822
BOB 3,848,769 3,493,282
Biological assets 8,613,303 12,546,705
CLP 6,687,310 10,664,235
ARS 1,925,993 1,882,470
Current tax assets 42,560,188 26,062,856
CLP 33,433,864 24,527,676
ARS 8,727,493 1,265,406
UYU 398,831 269,774
Non-current assets of disposal groups classified as held for sale 2,446,877 2,282,720
CLP 1,770,546 1,770,547
ARS 676,331 512,173
Total current assets 1,687,739,518 1,091,372,374
     
     
CLP 772,564,763 752,098,612
UF 32,748,867 3,036,487
USD 634,412,240 85,680,349
Euros 11,874,703 14,972,537
ARS 182,590,467 190,931,868
UYU 10,256,596 10,075,782
PYG 33,024,840 24,123,486
BOB 6,924,725 5,564,450
Others currencies 3,342,317 4,888,803
Total current assets by currencies 1,687,739,518 1,091,372,374
 C: 

 

F-125 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Non-Current assets are denominated in the following currencies:

 

NON-CURRENT ASSETS As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Non-current assets    
Other financial assets 36,509,564 31,252,095
UF 36,509,564 31,252,095
Trade and other non-current receivables 3,423,369 3,801,244
CLP - 278,507
UF 2,245,981 1,892,587
ARS 1,177,784 1,485,900
PYG (396) 144,250
Other non-financial assets 11,106,533 8,266,355
CLP 4,130,792 4,598,606
USD 237,370 208,483
ARS 6,716,315 3,443,466
UYU 4,623 -
PYG 17,433 15,800
Accounts receivable from related parties 42,506 104,197
CLP 42,506 42,506
UF - 61,691
Investments accounted for using the equity method 158,637,795 138,114,480
CLP 12,465,718 11,940,978
ARS 26,676,023 327,719
Others currencies 119,496,054 125,845,783
Intangible assets other than goodwill 184,239,395 151,943,693
CLP 96,761,009 83,780,136
ARS 69,725,846 53,325,198
UYU 5,152,044 4,270,840
PYG 5,017,130 3,873,161
BOB 7,583,366 6,694,358
Goodwill 145,440,821 131,172,835
CLP 77,023,174 77,023,977
ARS 45,937,831 34,781,464
UYU 5,317,109 4,066,703
PYG 6,012,027 5,491,823
BOB 11,150,680 9,808,868
Property, plant and equipment (net) 1,370,320,579 1,222,261,454
CLP 941,881,112 900,582,971
ARS 359,855,203 262,731,306
UYU 15,257,033 12,260,718
PYG 25,018,711 21,570,803
BOB 28,308,520 25,115,656
Investment property 11,472,054 9,551,614
CLP 3,458,085 3,478,999
ARS 8,013,969 6,072,615
Right of use assets 36,100,609 28,335,983
CLP 31,493,718 23,306,752
ARS 4,329,132 4,722,012
UYU 277,759 307,219
Deferred tax assets 32,393,538 30,571,219
CLP 30,481,909 29,421,681
USD 1,050,877 693,404
ARS 411,841 87,385
UYU 448,911 368,749
Current tax assets non-current 2,453 3,094
ARS 2,453 3,094
Total non-current assets 1,989,689,216 1,755,378,263
     
     
CLP 1,197,738,023 1,134,455,113
UF 38,755,545 33,206,373
USD 1,288,247 901,887
ARS 522,846,397 366,980,159
UYU 26,457,479 21,274,229
PYG 36,064,905 31,095,837
BOB 47,042,566 41,618,882
Others currencies 119,496,054 125,845,783
Total non-current assets by currencies 1,989,689,216 1,755,378,263

 

 

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F-126 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Current liabilities are denominated in the following currencies:

 

 

CURRENT LIABILITIES As of September 30, 2022 As of December 31, 2021
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 57,974,514 139,128,891 5,638,793 95,787,566
CLP 42,770,761 118,410,751 1,144,868 76,242,185
UF 1,199,524 7,259,113 1,823,953 6,278,069
USD 3,513,665 3,479,800 268,328 12,785,711
Euros 38,192 26,369 53,421 65,288
ARS 10,334,226 9,125,065 2,128,801 -
BOB 92,688 827,793 129,253 416,277
Others currencies 25,458 - 90,169 36
Current lease liabilities 2,506,378 6,559,744 1,646,160 4,506,201
CLP 225,106 343,178 252,247 413,615
UF 1,662,810 4,500,179 799,267 2,329,117
USD 319,668 920,091 495,349 1,486,045
Euros 29,492 58,984 29,985 89,956
ARS 213,720 570,564 42,018 116,631
UYU 55,582 166,748 27,294 70,837
Trade and other current payables 486,719,478 2,856,364 512,732,980 2,789,749
CLP 258,415,663 2,575,570 346,709,386 2,318,545
USD 72,156,399 232,116 37,817,444 114,479
Euros 17,956,568 9,006 10,139,173 303,037
ARS 126,006,792 - 109,041,520 -
UYU 2,462,495 - 3,207,481 -
PYG 4,647,464 39,672 1,703,480 53,688
BOB 5,063,388 - 4,114,496 -
Others currencies 10,709 - - -
Accounts payable to related parties 30,964,613 - 26,208,319 -
CLP 9,136,619 - 5,996,748 -
USD 1,998,719 - 6,552,281 -
Euros 19,720,321 - 13,492,389 -
PYG 2,642 - 2,836 -
BOB 3,834 - 12,194 -
Others currencies 102,478 - 151,871 -
Other current provisions 291,272 2,094,189 450,784 2,094,189
CLP 197,325 2,094,189 340,100 2,094,189
ARS 93,947 - 110,684 -
Current tax liabilities 7,483,598 5,693,062 24,966,542 10,100,250
CLP 6,967,607 5,686,918 11,625,210 10,100,250
ARS 492 6,144 12,805,154 -
UYU 316,428 - 270,980 -
PYG 199,071 - 265,198 -
Provisions for employee benefits 16,452,612 23,085,497 46,514,137 4,162,964
CLP 2,405,611 23,085,497 31,845,397 4,162,964
ARS 11,425,592 - 13,285,500 -
UYU 929,258 - 561,556 -
PYG 793,221 - 460,306 -
BOB 898,930 - 361,378 -
Other non-financial liabilities 5,443 44,888,656 6,866 43,509,764
CLP - 44,888,656 - 43,509,764
USD 5,443 - 6,866 -
Total current liabilities 602,397,908 224,306,403 618,164,581 162,950,683
         
         
CLP 320,118,692 197,084,759 397,913,956 138,841,512
UF 2,862,334 11,759,292 2,623,220 8,607,186
USD 77,993,894 4,632,007 45,140,268 14,386,235
Euros 37,744,573 94,359 23,714,968 458,281
ARS 148,074,769 9,701,773 137,413,677 116,631
UYU 3,763,763 166,748 4,067,311 70,837
PYG 5,642,398 39,672 2,431,820 53,688
BOB 6,058,840 827,793 4,617,321 416,277
Others currencies 138,645 - 242,040 36
Total current liabilities by currency 602,397,908 224,306,403 618,164,581 162,950,683
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F-127 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Non-Current liabilities are denominated in the following currencies:

 

 

NON-CURRENT LIABILITIES As of September 30, 2022 As of December 31, 2021
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 160,417,942 144,721,658 830,722,741 114,736,586 118,509,715 225,023,542
CLP 38,197,296 73,475,982 - 97,171,626 4,637,940 -
UF 116,578,508 64,746,003 256,311,619 12,533,802 105,188,583 222,179,075
USD 2,985,402 - 568,587,582 747,267 2,201,157 -
Euros - - - 136,383 952,026 -
BOB 2,656,736 6,499,673 5,823,540 4,147,508 5,530,009 2,844,467
Non-current lease liabilities 9,582,255 3,566,672 19,609,439 8,224,925 2,535,945 18,248,153
CLP 171,348 116,497 - 277,646 - -
UF 7,542,345 3,071,007 18,087,821 4,531,720 2,045,709 16,786,392
USD 1,114,318 373,764 1,521,618 2,993,102 447,091 1,461,761
Euros - - - 59,971 - -
ARS 701,970 - - 217,856 - -
UYU 52,274 5,404 - 144,630 43,145 -
Trade and other non-current payables 34,301 5,031 - 19,333 10,124 -
CLP 20,032 - - 19,333 - -
UF 14,269 5,031 - - 10,124 -
Other non- current provisions 162,267 206,625 82,155 133,291 207,794 109,994
ARS - 206,625 82,155 - 207,794 109,994
UYU 162,267 - - 133,291 - -
Deferred tax liabilities 36,741,520 15,561,347 75,342,596 34,182,696 13,619,993 70,282,982
CLP 24,975,844 7,717,563 32,153,030 28,097,076 9,562,912 45,514,148
ARS 11,756,744 7,837,829 39,760,350 6,077,525 4,051,684 21,810,152
UYU - - 965,689 - - 777,325
PYG 8,932 5,955 537,125 8,095 5,397 486,768
BOB - - 1,926,402 - - 1,694,589
Provisions employee benefits 890,100 - 39,091,277 8,888 - 34,266,109
CLP - - 36,617,404 - - 32,099,446
ARS - - 2,473,873 - - 2,166,663
BOB 890,100 - - 8,888 - -
Total non-current liabilities 207,828,385 164,061,333 964,848,208 157,305,719 134,883,571 347,930,780
             
             
CLP 63,364,520 81,310,042 68,770,434 125,565,681 14,200,852 77,613,594
UF 124,135,122 67,822,041 274,399,440 17,065,522 107,244,416 238,965,467
USD 4,099,720 373,764 570,109,200 3,740,369 2,648,248 1,461,761
Euros - - - 196,354 952,026 -
ARS 12,458,714 8,044,454 42,316,378 6,295,381 4,259,478 24,086,809
UYU 214,541 5,404 965,689 277,921 43,145 777,325
PYG 8,932 5,955 537,125 8,095 5,397 486,768
BOB 3,546,836 6,499,673 7,749,942 4,156,396 5,530,009 4,539,056
Total non-current liabilities by currency 207,828,385 164,061,333 964,848,208 157,305,719 134,883,571 347,930,780

 

 

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F-128 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

Note 35 Contingencies and Commitments

 

Services agreements

 

The total amount of the Company’s obligations with third parties relating to services agreements that cannot be terminated is detailed as follows:

 

Lease operating and services agreements not to be terminated As of September 30, 2022 As of December 31, 2021
ThCh$ ThCh$
Within 1 year 97,994,889 67,601,086
Between 1 and 5 years 85,275,722 92,254,016
Over 5 years 6,632,056 -
Total 189,902,667 159,855,102

 

 

Purchase and supply agreements

 

The total amount of the Company’s obligations to third parties relating to purchase and supply agreements as of September 30, 2022 is detailed as follows:

 

Purchase and supply agreements Purchase and supply agreements Purchase and contract related to wine and grape
ThCh$ ThCh$
Within 1 year 362,334,662 6,268,036
Between 1 and 5 years 998,799,250 12,293,668
Over 5 years 102,470,850 -
Total 1,463,604,762 18,561,704

 

Capital investment commitments

 

As of September 30, 2022 the Company had capital investment commitments related to Property, Plant and Equipment and Intangibles (software) for approximately ThCh$ 61,455,574.

 

Litigation

 

The following are the most significant proceedings faced by the Company and its subsidiaries in Chile and abroad, including all those present a possible risk of occurrence and causes whose committed amounts, individually, are more than ThCh$ 25,000 in the case of chilean companies and US$ 15,000 for cases of foreign subsidiaries. Those losses contingencies for which an estimate cannot be made have been also considered.

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F-129 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

Trials and claim

 

 

Subsidiary Court Description Status Estimated accrued loss contingency
Transportes CCU Ltda. Court of Appeal Compensation for damages Appeal of sentence ThCh$ 60,000
Compañía Industrial Cervecera S.A. (CICSA) Administrative Courts Administrative claims of several municipalities for advertising and publicity fees. Proceeding in administrative or judicial stage US$ 98,000
Sáenz Briones & Cía. S.A.I.C. Labur Court Laboral trial Evidentiary stage US$ 60,000
Bebidas del Paraguay S.A. Labur Court Laboral trial The closing of the extraordinary evidence period was requested US$ 23,124
Distribuidora del Paraguay S.A. Labur Court Laboral trial The lawsuit was contested and the Exception of Prescription was opposed US$ 61,325
         

 

The Company and its subsidiaries have established provisions to allow for such contingencies for ThCh$ 598,069 and ThCh$ 576,587 as of September 30, 2022 and December 31, 2021, respectively (See Note 24 – Other provisions).

 

Tax processes

 

At the date of issue of these interim consolidated financial statements, there is no tax litigation that involves significant passive or taxes in claim different to mentioned in Note 25 – Income Tax.

 

Guarantees

 

As of September 30, 2022, CCU and its subsidiaries have not granted direct guarantees as part of their usual financing operations. However, indirect guarantees have been constituted, in the form of stand-by and general security product of financing. The main terms of the indirect guarantees constituted are detailed below:

 

-The joint venture Central Cervecera de Colombia S.A.S. (CCC) maintains financial debt with local banks in Colombia, guaranteed by the subsidiary CCU Investments II SpA. through stand-by letters issued by Scotiabank Chile and they are within the financing policy framework approved by Board of Directors, according to the following detail:

 

Institution Amount Due date
Banco Colpatria US$ 27,200,000 June 24, 2023
Banco Colpatria US$ 4,000,000 July 21, 2023
Banco Colpatria US$ 13,500,000 August 31, 2023
Banco Colpatria US$ 4,289,340 September 6, 2023
     

 

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F-130 
Table of Contents 
 

Compañía Cervecerías Unidas S.A. and subsidiaries

Notes to the Interim Consolidated Financial Statements

September 30, 2022

 
  

 

-The indirect 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 S.A. through a stand-by letter issued by the Banco del Estado de Chile, this is within the financing policy approved by the Board, and is detailed as follow:

 

Institution Amount Due date
Banco Crédito de Perú US$ 2,600,000 December 21, 2022
     

 

 

-Additionally, the Company presents the following guarantees:

 

a)Through private instrument dated May 20, 2021, the Company undertakes to maintain a direct or indirect shareholding that allows it to control its Uruguayan subsidiary Milotur S.A., until whichever happens first of: (i) a period of 3 years from the date of the aforementioned document or (ii) the fulfillment by Milotur S.A. of all its obligations under the credit agreement or agreements that have been signed by it with Citigroup Inc., or one of its agencies, subsidiaries or related companies, for a total amount of up to UYU 30,000,000 (Uruguayan pesos) and up to US$ 1,000,000 in its equivalent in other currencies.

 

b)The Company, through a private notarized document dated July 28, 2017, is required to maintain a direct or indirect participation of at least 50.1% of its subsidiary Compañía Pisquera de Chile S.A., allowing the Company to control its subsidiary during the period of validity of the bank loan with Banco del Estado de Chile for a total of ThCh $ 16,000,000, maturing on July 27, 2027.

 

 

Note 36 Subsequent Events

 

a)The Interim Consolidated Financial Statements of CCU S.A., have been approved by the Board of Directors on
November 8, 2022.

 

b)There are no others subsequent events between the closing date and the filing date of these Financial Statements that could significantly affect their interpretation.

 

 

 

F-131 

 

 C: 
 
 

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Compañía Cervecerías Unidas S.A.
(United Breweries Company, Inc.)

  /s/ Felipe Dubernet      
  Chief Financial Officer 
 

 

Date: November 14, 2022

 



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