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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
AND NONCONTROLLING INTERESTS
(IN MILLIONS)
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| | | Molson Coors Beverage Company Stockholders' Equity | | |
| | | | Common stock | | Exchangeable | | | | | | Accumulated
other | | Common Stock
held in | | Non |
| | | | issued | | shares issued | | Paid-in- | | Retained | | comprehensive | | treasury | | controlling |
| | Total | | Class A | | Class B | | Class A | | Class B | | capital | | earnings | | income (loss) | | Class B | | interests(1) |
| Balance as of December 31, 2021 | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | | |
| Exchange of shares | | | | — | | | — | | | — | | | () | | | | | | — | | | — | | | — | | | — | |
| Shares issued under equity compensation plan | () | | | — | | | — | | | — | | | — | | | () | | | — | | | — | | | — | | | — | |
| Amortization of share-based compensation | | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | — | | | — | |
| Purchase of noncontrolling interest | () | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | — | | | () | |
| Net income (loss) including noncontrolling interests | () | | | — | | | — | | | — | | | — | | | — | | | () | | | — | | | — | | | () | |
| Other comprehensive income (loss), net of tax | () | | | — | | | — | | | — | | | — | | | — | | | — | | | () | | | — | | | () | |
| Share repurchase program | () | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | () | | | — | |
| Contributions from noncontrolling interests | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | |
| Distributions and dividends to noncontrolling interests | () | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | () | |
| Dividends declared | () | | | — | | | — | | | — | | | — | | | — | | | () | | | — | | | — | | | — | |
| Balance as of December 31, 2022 | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | | |
| Exchange of shares | | | | — | | | — | | | () | | | () | | | | | | — | | | — | | | — | | | — | |
| Shares issued under equity compensation plan | | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | — | | | — | |
| Amortization of share-based compensation | | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | — | | | — | |
| Purchase of noncontrolling interest | () | | | — | | | — | | | — | | | — | | | () | | | — | | | — | | | — | | | () | |
| Deconsolidation of VIE | () | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | () | |
| Net income (loss) including noncontrolling interests | | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | | |
| Other comprehensive income (loss), net of tax | | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | | |
| Share repurchase program | () | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | () | | | — | |
| Contributions from noncontrolling interests | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | |
| Distributions and dividends to noncontrolling interests | () | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | () | |
| Dividends declared | () | | | — | | | — | | | — | | | — | | | — | | | () | | | — | | | — | | | — | |
| Balance as of December 31, 2023 | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | | |
| Exchange of shares | | | | — | | | — | | | | | | () | | | | | | — | | | — | | | | | — | |
| Shares issued under equity compensation plan | () | | | — | | | — | | | — | | | — | | | () | | | — | | | — | | | — | | | — | |
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| | | Molson Coors Beverage Company Stockholders' Equity | | |
| | | | Common stock | | Exchangeable | | | | | | Accumulated
other | | Common Stock
held in | | Non |
| | | | issued | | shares issued | | Paid-in- | | Retained | | comprehensive | | treasury | | controlling |
| | Total | | Class A | | Class B | | Class A | | Class B | | capital | | earnings | | income (loss) | | Class B | | interests(1) |
| Amortization of share-based compensation | | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | — | | | — | |
| Purchase of noncontrolling interest | | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | — | | | () | |
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See Note 3, "Investments" for further information regarding our equity method investments. There are no related parties that own interests in our equity method investments as of December 31, 2024.
years. Certain of our lease agreements contain options to extend or early terminate the agreement. The lease term used to calculate the right-of-use ("ROU") asset and lease liability at commencement includes the impacts of options to extend or terminate the lease when it is reasonably certain that we will exercise that option. When determining whether it is reasonably certain that we will exercise an option at commencement, we consider various existing economic factors, including real estate strategies, the nature, length and terms of the agreement, as well as the uncertainty of the condition of leased equipment at the end of the lease term. Assumptions made at the commencement date are re-evaluated upon occurrence of certain events requiring a lease modification. Additionally, for certain equipment leases involving groups of similar leased assets with similar lease terms, we apply a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities.The discount rate used to calculate the present value of the future minimum lease payments is the rate implicit in the lease, when readily determinable. As the rate implicit in the lease is rarely readily determinable, we use our incremental borrowing rate relative to the leased asset in all other cases.
% ownership interest. Since the exercise was irrevocable, the NCI became mandatorily redeemable at that time and should have been reclassified to accounts payable and other current liabilities. These errors resulted in a reclassification of $ million from noncontrolling interests, of which $ million was reclassified to accounts payable and other current liabilities for CBPL and $ million was reclassified to redeemable noncontrolling interests for the other immaterial investments in our consolidated balance sheets. In addition, the errors resulted in a cumulative understatement of $ million to net income attributable to NCI and a corresponding cumulative overstatement to net income attributable to MCBC in our consolidated statements of operations. The errors were corrected through an out of period adjustment as of and for the three months ended September 30, 2024. Management assessed the impact of the errors and deemed them to not be material to any prior periods or 2024 results. In October 2024, we obtained the final redemption value and as a result, during the third quarter of 2024, we recorded an adjustment of $ million to increase the mandatorily redeemable NCI liability prior to its final settlement, with the adjustment recorded to interest expense.Other than the addition of redeemable noncontrolling interest discussed in Note 3, "Investments" there was no material activity to redeemable NCI for the years ended December 31, 2024, 2023, or 2022. Subsequent Events
Effective February 1, 2025, we obtained exclusive rights via a license agreement to produce, market and sell Fever-Tree products in the U.S. In connection with this agreement, we acquired the shares of the Fever-Tree USA, Inc. entity, with the immaterial acquisition to be accounted for as a business combination and consideration to be allocated primarily to working capital balances. Further, we made an investment of approximately $ million in Fever-Tree Drinks Plc, a listed entity on the London Stock Exchange (LSE:FEVR). The investment will be accounted for at fair value under ASC 321.
per share, to be paid on March 14, 2025, to shareholders of Class A and Class B common stock of record on February 27, 2025. Shareholders of exchangeable shares will receive the CAD equivalent of dividends declared on Class A and Class B common stock.2.
3.
% ownership interest. The transaction was finalized on October 21, 2024, resulting in a cash payment of $ million which was recorded as a cash outflow from financing activities. See further discussion of this transaction in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies".During the third quarter of 2023, we sold our % controlling interest in Truss to Tilray Brands for an immaterial amount and recognized a loss of $ million within other operating income (expense), net in our consolidated statement of operations upon deconsolidation of the business. During the second quarter of 2023, HEXO Corp, our joint venture partner in Truss, was acquired by Tilray Brands and this transaction had no impact on Molson Coors' ownership in the joint venture or on our consolidated results. Prior to the sale of our controlling interest, Truss was recorded as a consolidated VIE in the comparative periods presented.
Both BRI and BDL have outstanding third party debt which is guaranteed by their respective shareholders. As a result, we have a guarantee liability of $ million and $ million recorded as of December 31, 2024 and December 31, 2023, respectively, which is presented within accounts payable and other current liabilities on the consolidated balance sheets and represents our proportionate share of the outstanding balance of these debt instruments. The offset to the guarantee liability was recorded as an adjustment to our respective equity method investment within the consolidated balance sheets. The resulting change in our equity method investments during the year due to movements in the guarantee represents a non-cash investing activity.
Equity Method Investments
BRI
BRI is a beer distribution and retail network for the Ontario region of Canada, with majority of the ownership residing with Molson Canada 2005, Labatt Breweries of Canada LP (a subsidiary of ABI) and Sleeman Breweries Ltd. (a subsidiary of Sapporo International). We hold a % ownership interest in BRI. BRI charges the brewers service fees which are based on costs incurred, net of other revenues earned, and is allocated in accordance with the operating agreement to its owners based on volume of products sold in the Ontario market. Attributable income (loss) from our ownership of BRI is recorded to cost of goods sold in the consolidated statements of operations. Based on the existing structure, control is shared and we do not anticipate becoming the primary beneficiary in the foreseeable future.
See "Affiliate Transactions" below for BRI affiliate due to and due from balances as of December 31, 2024 and December 31, 2023, respectively, related to trade receivables and payables for sales to external customers and costs incurred by BRI offset by administrative fees charged and paid by MCBC (which may be in a payable or receivable position depending on the amount under or over charged).
BDL
BDL is a distribution operation owned by Molson Canada 2005 and Labatt Breweries of Canada LP (a subsidiary of ABI) that, pursuant to an operating agreement, acts as an agent for the distribution of their products in the western provinces of Canada. The owners share equal voting control of this business. We hold a % ownership interest in BDL.
BDL charges the owners service fees that are designed so the entity operates at break-even profit levels and annually, operates on a cash neutral basis. This service fee is based on costs incurred, net of other revenues earned, and is allocated in accordance with the operating agreement to the owners based on volume of products sold in these provinces. Attributable income (loss) from our ownership of BDL is recorded to cost of goods sold in the consolidated statements of operations. See "Affiliate Transactions" section below for BDL affiliate due to and due from balances as of December 31, 2024 and December 31, 2023, respectively, related to trade receivables and payables for sales to external customers and costs incurred by BDL offset by administrative fees charged and paid by MCBC (which may be in a payable or receivable position depending on the amount under or over charged).
%, on a fully diluted basis. The increase in ownership resulted in the transition of accounting for our investment from the fair value method under ASC 321 to equity method investment accounting under ASC 323 on a prospective basis and the cash outflow associated with the investment is reflected within other in the investing activities section of the consolidated statement of cash flows. Subsequent to the investment, the carrying value of our recorded ownership investment exceeded our ratable portion of underlying equity in the net assets of ZOA and this basis difference was fully allocated to equity method goodwill. On October 31, 2024, we cancelled our existing warrant to purchase additional shares in ZOA and instead entered into a separate subscription agreement. Through this new subscription agreement, we increased our investment in ZOA for cash consideration of $ million, bringing our ownership interest to % subsequent to the closing of the transaction. We have recorded the transaction as a business combination, with ZOA included in our consolidated financial statements from the date of acquisition within the Americas reporting segment. The acquisition is aligned with our strategy to expand beyond beer.
Upon consolidation, we recognized a gain of $ million in other operating income (expense), net in the consolidated statements of operations, representing the difference between the fair value and the carrying value of our previously held equity interest on the acquisition date.
The acquisition resulted in the recognition of $ million of goodwill, which is partially deductible for tax purposes by the partnership members. Our share of the tax deductible goodwill is $ million. The goodwill is attributable to anticipated synergies from further leveraging of the Company’s distribution and supply chain network and scale. The acquisition also resulted in the recognition of $ million of a definite-lived brand intangible asset to be amortized over a -year life, with the remainder primarily allocated to working capital balances and $ million of cash, of which $ million was related to investment proceeds retained by ZOA. Additionally, noncontrolling interest of $ million was recognized at fair value and is recorded as redeemable noncontrolling interest on the consolidated balance sheets. Based on the contractual terms of the agreement, we have the ability to exercise a call option to purchase the shares of certain noncontrolling interest holders at fair value beginning in 2027. In the event we do not exercise our call option at the end of our call option window, these noncontrolling interest holders have a drag along right that would require us to sell our interest in ZOA along with their interest to a willing third party.
The fair value of the redeemable noncontrolling interest and our previously held equity interest was determined based on the estimated fair value of the shares at the time of the transaction, based on the utilization of an option pricing model for a hypothetical liquidation scenario and supported by the calculated enterprise value under a discounted cash flow method under the income approach, with estimated future cash flows of the entity discounted using a rate of return reflecting the entity’s presumed risk. As the inputs are not observable in the market, these represent Level 3 measurements.
Pro forma results of operations have not been presented as the impact is not material to our results of operations or financial position.
Other
We have certain other immaterial equity investments we enter into from time to time that align with our organizational strategies and growth initiatives.
The total balance of our equity method investments was $ million and $ million as of December 31, 2024 and December 31, 2023, respectively. Our equity method investments are all within the Americas segment and are included in other assets on the consolidated balance sheets. These investments are not considered significant for disclosure of financial information on either an individual or aggregated basis and there were no significant undistributed earnings as of December 31, 2024 or December 31, 2023, for any of these companies. We consider each of our equity method investments to be affiliates.
| | $ | | | | $ | | | | $ | | |
| BDL | | | | | | | | | | | |
| Other | | | | | | | | | | | |
| Total | $ | | | | $ | | | | $ | | | | $ | | |
Consolidated VIEs
CBPL was a consolidated VIE until the third quarter of 2024 upon acquisition of the remaining interest in the entity and Truss was a consolidated VIE until the third quarter of 2023 when the business was sold.
Rocky Mountain Metal Container
RMMC, a Colorado limited liability company, is a joint venture with Ball Corporation in which we hold a % interest. Our U.S. business has a can and end supply agreement with RMMC. Under this agreement, we purchase substantially all of the output of RMMC. RMMC manufactures cans and ends at our facilities, which RMMC is operating under a use and license agreement. As RMMC is a limited liability company ("LLC") classified as a partnership for U.S. tax purposes, the income tax consequences flow to the joint venture partners. Beginning on December 31, 2026, Ball has an option to sell its ownership interest to us and we have the right to purchase Ball's interest.
Rocky Mountain Bottle Company
RMBC, a Colorado limited liability company, is a joint venture with Owens-Brockway Glass Container, Inc. in which we hold a % interest. Our U.S. business has a supply agreement with RMBC under which we agree to purchase output approximating the agreed upon annual plant capacity of RMBC. RMBC manufactures bottles at our facilities, which RMBC is operating under a lease agreement. As RMBC is classified as a partnership for U.S. tax purposes, the income tax consequences flow to the joint venture partners.
| | $ | | | | $ | | | | $ | | | | Other | $ | | | | $ | | | | $ | | | | $ | | |
As of December 31, 2024, for RMMC/RMBC, $ million and $ million were recorded in inventories, net and property, plant and equipment, net, respectively, on the consolidated balance sheets. As of December 31, 2023, for RMMC/RMBC, $ million and $ million were recorded in inventories, net and property, plant and equipment, net, respectively on the consolidated balance sheets.
4.
| | $ | | | | Work in process | | | | | |
| Raw materials | | | | | |
| Packaging materials | | | | | |
Inventories, net | $ | | | | $ | | |
5.
| | $ | | | | Buildings and improvements | | | | | |
| Production and office equipment | | | | | |
| Software | | | | | |
| Construction in progress | | | | | |
| Other | | | | | |
| Total property, plant and equipment cost | | | | | |
| Less: accumulated depreciation | () | | | () | |
| Property, plant and equipment, net | $ | | | | $ | | |
million, $ million and $ million for the years ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively. Depreciation expense for the year ended December 31, 2024, included $ million of accelerated depreciation in excess of normal depreciation related to the wind down or sale of certain of our U.S. craft businesses and related facilities.
6.
| | $ | | | | $ | | | Acquisition(2) | | | | | | | | |
| Foreign currency translation, net | | | | | | | | |
| Balance as of December 31, 2023 | $ | | | | $ | | | | $ | | |
Acquisition(2) | | | | | | | | |
Divestitures(3) | () | | | | | | () | |
| Foreign currency translation, net | () | | | | | | () | |
| Balance as of December 31, 2024 | $ | | | | $ | | | | $ | | |
(1)Accumulated impairment losses for the Americas segment was $ million as of December 31, 2024 and December 31, 2023. The EMEA&APAC goodwill balance was fully impaired during the year ended December 31, 2020 with an accumulated impairment loss of $ million.
- | $ | | | | $ | () | | | $ | | | | License agreements and distribution rights | - | | | | | () | | | | |
| Other | - | | | | | () | | | | |
| Intangible assets not subject to amortization | | | | | | | |
| Brands | Indefinite | | | | | — | | | | |
| Distribution networks | Indefinite | | | | | — | | | | |
| Other | Indefinite | | | | | — | | | | |
| Total | | | $ | | | | $ | () | | | $ | | |
The following table presents details of our intangible assets, other than goodwill, as of December 31, 2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| Useful life | | Gross | | Accumulated
amortization | | Net |
| | (Years) | | (In millions) |
| Intangible assets subject to amortization | | | | | | | |
| Brands | - | | $ | | | | $ | () | | | $ | | |
| License agreements and distribution rights | - | | | | | () | | | | |
| Other | - | | | | | () | | | | |
| Intangible assets not subject to amortization | | | | | | | |
| Brands | Indefinite | | | | | — | | | | |
| Distribution networks | Indefinite | | | | | — | | | | |
| Other | Indefinite | | | | | — | | | | |
| Total | | | $ | | | | $ | () | | | $ | | |
The decrease in the gross carrying amount of intangible assets from December 31, 2023 to December 31, 2024, was driven by the disposal of brands related to certain of our U.S. craft businesses, partially offset by the acquisition of the ZOA brand and other not material acquisition activity. The amount is also impacted by foreign exchange rates, as a significant amount of intangible assets, other than goodwill, are denominated in foreign currencies.
| | 2026 | | $ | | |
| 2027 | | $ | | |
| 2028 | | $ | | |
| 2029 | | $ | | |
Amortization expense of intangible assets was $ million, $ million and $ million for the years ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively. This expense was primarily presented within MG&A in our consolidated statements of operations.
Annual 2024 Impairment Assessment
We completed our required annual goodwill and indefinite-lived intangible asset impairment testing as of October 1, 2024, the first day of our fourth quarter, using a combination of a discounted cash flow analysis and market approach in the determination of fair value and concluded that the fair value of the Americas reporting unit was in excess of its carrying value and therefore goodwill impairment charge was recorded.
The fair value of the Americas reporting unit decreased in the current year primarily due to lower market multiples and lower forecasted cash flow projections, with the decreases largely driven by more challenging U.S. industry expectations. This was partially offset by a decrease to the discount rate as a result of fluctuations in the interest rate environment. Specifically, the discount rate used in developing our annual fair value estimates for the Americas reporting unit in the current year was % based on market-specific factors, as compared to % used as of the October 1, 2023 annual testing date.
The Americas reporting unit continues to be at a heightened risk of future impairment as the fair value exceeded its respective carrying value by less than %. We continue to focus on growing our core power brand net sales, aggressively premiumizing our portfolio and scaling and expanding beyond beer. While progress has been made on these strategies over recent years, including the strengthening of our core brands, the growth targets included in management’s forecasted future cash flows are inherently at risk given that the strategies are still in progress. Additionally, the fair value determinations are sensitive to changes in the beer industry environment, broader macroeconomic conditions and market multiples or discount rates that could negatively impact future analyses, including the impacts of cost inflation, increases to interest rates and other external industry factors impacting our business. The key assumptions used to derive the estimated fair values of our reporting units represent Level 3 measurements.
Indefinite-Lived Intangible Assets
As of the October 1, 2024 testing date, the fair values of the Coors brands in the Americas (inclusive of our Coors brand in the U.S. and Coors distribution agreement in Canada), the Miller brands in the U.S., the Carling brands in the U.K. and the Staropramen brands in EMEA&APAC are sufficiently in excess of their respective carrying values as of the annual testing date, with each having over % cushion of fair value over book value.
We utilized Level 3 fair value measurements in our impairment analysis of our indefinite-lived intangible assets. An excess earnings approach is used to determine the fair values of these assets as of the testing date. The future cash flows used in the analysis are based on internal cash flow projections based on our long range plans and include significant assumptions by management as noted below.
Separately, we performed a qualitative assessment of our water rights indefinite-lived intangible assets in the U.S. to determine whether it was more likely than not that the fair values of these assets were greater than their respective carrying amounts. Based on this qualitative assessment, we determined that a full quantitative analysis was not necessary.
goodwill impairment charge was recorded.In conjunction with the annual 2023 goodwill impairment analysis, we also evaluated the indefinite-lived and definite-lived intangible assets within our Americas and EMEA&APAC reporting units and concluded that the carrying value of the Staropramen family of brands in EMEA&APAC was determined to be in excess of its fair value such that a partial impairment loss of $ million was recorded within other operating income (expense), net. The decline in fair value in 2023 was impacted by reductions in management forecasts as well as macroeconomic factors including an increase in the discount rate. No other impairments were recorded for our other indefinite-lived or definite-lived intangible assets.
Definite-Lived Intangible Assets and Other Long-Lived Assets
We continuously monitor the performance of our definite-lived assets for potential triggering events suggesting an impairment review should be performed. Due to a reduction in forecasted cash flows associated with one of our asset groups, we identified this as a triggering event during the fourth quarter of 2024 and performed a recoverability test for the long-lived assets at the asset group level but concluded that the recoverability test passed and no impairment was recorded. No other material triggering events were identified in either the year ended December 31, 2024 or 2023 related to definite-lived intangible assets or other long-lived assets.
7.
| | $ | | | Accrued rebates and discounts | | | | | |
| Accrued compensation | | | | | |
| Accrued excise and other non-income related taxes | | | | | |
| Accrued interest | | | | | |
| Returnable container deposit liabilities | | | | | |
Operating lease liabilities | | | | | |
Other(1) | | | | | |
| Accounts payable and other current liabilities | $ | | | | $ | | |
8.
| | $ | | | | $ | | | | Finance lease expense | | | | | | | | |
| Total lease expense | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | Operating cash flows for finance leases | $ | | | | $ | | | | $ | | |
| Financing cash flows for finance leases | $ | | | | $ | | | | $ | | |
| Supplemental non-cash information on right-of-use assets obtained in exchange for new lease liabilities | | | | | |
| Operating leases | $ | | | | $ | | | | $ | | |
| Finance leases | $ | | | | $ | | | | $ | | |
| | $ | | | | Current operating lease liabilities | Accounts payable and other current liabilities | $ | | | | $ | | |
| Non-current operating lease liabilities | Other liabilities | | | | | |
| Total operating lease liabilities | | $ | | | | $ | | |
| | | | |
| Finance Leases | | | | |
| Finance lease right-of-use assets | Property, plant and equipment, net | $ | | | | $ | | |
| Current finance lease liabilities | Current portion of long-term debt and short-term borrowings | $ | | | | $ | | |
| Non-current finance lease liabilities | Long-term debt | | | | | |
| Total finance lease liabilities | | $ | | | | $ | | |
The weighted-average remaining lease term and discount rate as of December 31, 2024 were as follows: | | | | | | | | | | | |
| Weighted-Average Remaining Lease Term (Years) | | Weighted-Average Discount Rate |
| Operating leases | | | % |
| Finance leases | | | % |
| | $ | | | | 2026 | | | | | |
| 2027 | | | | | |
| 2028 | | | | | |
| 2029 | | | | | |
| Thereafter | | | | | |
| Total lease payments | $ | | | | $ | | |
| Less: interest | () | | | () | |
| Present value of lease liabilities | $ | | | | $ | | |
9.
million % senior notes due July 2024(1)(2)$ | | | | $ | | | CAD million % senior notes due July 2026(2)(3) | | | | | |
$ billion % senior notes due July 2026(2) | | | | | |
EUR million % senior notes due June 2032(4) | | | | | |
$ billion % senior notes due May 2042(5) | | | | | |
$ billion % senior notes due July 2046(2) | | | | | |
| Finance leases | | | | | |
| Other | | | | | |
| Less: unamortized debt discounts and debt issuance costs | () | | | () | |
| Total long-term debt (including current portion) | | | | | |
| Less: current portion of long-term debt | () | | | () | |
| Total long-term debt | $ | | | | $ | | |
| | | |
|
|
Short-term borrowings(6) | | | | | |
| Current portion of long-term debt | | | | | |
| Current portion of long-term debt and short-term borrowings | $ | | | | $ | | |
(1)We repaid our EUR million % senior notes upon maturity on July 15, 2024, using the cash proceeds from our EUR million % senior notes issued on May 29, 2024, and cash on hand.
(2)These senior notes were issued in 2016 in order to partially fund the financing of the MillerCoors acquisition (USD Notes, EUR Notes and CAD Notes). Total remaining debt issuance costs capitalized in connection with these senior notes including underwriting fees, discounts and other financing related costs, were $ million as of December 31, 2024, and are being amortized over the respective and remaining terms.
(3)We entered into forward starting interest rate swap agreements to hedge interest rate volatility for a period until the swaps were settled on September 18, 2015. We are amortizing a portion of the resulting loss from AOCI to interest expense over the remaining term of the CAD million % senior notes maturing July 2026 ("2026 CAD notes"), up to the full term of the interest rate swaps. The amortizing loss resulted in an increase in our effective cost of borrowing compared to the stated coupon rates by % on the 2026 CAD notes. See Note 10, "Derivative Instruments and Hedging Activities" for further details on the forward starting interest rate swaps. (4)On May 29, 2024, MCBC issued EUR million % senior notes with a maturity of June 15, 2032 ("EUR 2032 Senior Notes"). The issuance resulted in total proceeds of $ million, net of underwriting fees and discounts. Total debt discounts and debt issuance costs capitalized in connection with these senior notes, including underwriting fees, were approximately $ million and are being amortized over the term of the EUR 2032 Senior Notes. The EUR 2032 Senior Notes began accruing interest upon issuance, with interest payments due annually. Additionally, upon issuance we designated the EUR 2032 Senior Notes as a hedge of our investment in a EUR functional currency subsidiary. See Note 10, "Derivative Instruments and Hedging Activities" for further details. (5)On May 3, 2012, we issued approximately $ billion of senior notes with $ billion remaining due in 2042. The total remaining debt issuance costs capitalized in connection with these senior notes, including the underwriting fees and discounts, were $ million as of December 31, 2024, and are being amortized over the remaining term of the 2042 senior notes.
million in bank overdrafts and $ million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $ million. As of December 31, 2023, we had $ million in bank overdrafts and $ million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $ million.In addition, we have CAD, GBP and USD overdraft facilities under which we had outstanding borrowings as of December 31, 2024 or December 31, 2023.
•CAD unlimited overdraft facility at CAD Prime plus %
•GBP million overdraft facility at GBP Base Rate plus %
•USD million overdraft facility at USD Prime plus %
Debt Fair Value Measurements
We utilize market approaches to estimate the fair value of certain outstanding borrowings by discounting anticipated future cash flows derived from the contractual terms of the obligations and observable market interest and foreign exchange rates. As of December 31, 2024 and December 31, 2023, the fair value of our outstanding long-term debt (including the current portion of long-term debt) was approximately $ billion and $ billion, respectively. All senior notes are valued based on significant observable inputs and classified as Level 2 in the fair value hierarchy. The carrying values of all other outstanding long-term borrowings and our short-term borrowings approximate their fair values and are also classified as Level 2 in the fair value hierarchy.
Revolving Credit Facility and Commercial Paper
On June 3, 2024, we amended our existing $ billion multi-currency revolving credit facility to, among other things, extend the maturity date from June 26, 2028 to June 26, 2029. The amendment did not change the borrowing capacity of the revolving credit facility, which allows us to issue a maximum aggregate amount of $ billion in commercial paper or other borrowings at any time at variable interest rates. The $ million sub-facility available for the issuance of letters of credit remains unchanged. We use this facility from time to time to leverage cash needs to fund the repayment of debt upon maturity and for working capital or general purposes.
We had borrowings drawn on the amended and restated multi-currency revolving credit facility and commercial paper borrowings as of December 31, 2024 and December 31, 2023.
Debt Covenants
Under the terms of each of our debt facilities, we must comply with certain restrictions. These include customary events of default and specified representations, warranties and covenants, as well as covenants that restrict our ability to incur certain additional priority indebtedness (certain thresholds of secured consolidated net tangible assets), certain leverage threshold percentages, create or permit liens on assets, and restrictions on mergers, acquisitions and certain types of sale lease-back transactions.
Under the amended and restated $ billion revolving credit facility, we are required to maintain a maximum leverage ratio, calculated as net debt to EBITDA (as defined in the amended and restated multi-currency revolving credit facility agreement) of x, measured as of the last day of each fiscal quarter through maturity of the credit facility. As of December 31, 2024 and December 31, 2023, we were in compliance with all of these restrictions and covenants, have met such financial ratios, and have met all debt payment obligations. All of our outstanding senior notes as of December 31, 2024, rank pari-passu.
| | 2026 | | | |
| 2027 | | | |
| 2028 | | | |
| 2029 | | | |
| Thereafter | | | |
| Total | | $ | | |
| | $ | | | | $ | | | | Interest capitalized | () | | | () | | | () | |
| Interest expensed | $ | | | | $ | | | | $ | | |
10.
million % senior notes maturing June 15, 2032. Concurrent with the issuance of these senior notes, we designated the principal of the senior notes as a net investment hedge of our investment in a EUR functional currency subsidiary in order to hedge a portion of the related foreign currency translational impacts and, accordingly, we have and will continue to record the changes in the carrying value due to fluctuations in the spot rate to AOCI. See Note 9, "Debt" for further discussion of the EUR million % senior notes. In 2016, we issued EUR million % senior notes which matured on July 15, 2024, to partially fund the MillerCoors acquisition. Concurrent with the issuance of these senior notes, we designated the principal of the senior notes as a net investment hedge of our investment in our Europe business in order to hedge a portion of the foreign currency translational impacts and, accordingly, recorded the changes in the carrying value due to fluctuations in the spot rate to AOCI until it was de-designated on May 29, 2024. Upon de-designation, the associated net investment hedge was discontinued. The accumulated gains and losses associated with the settled net investment hedge will remain in AOCI until a liquidation or deconsolidation event at which point the accumulated gains and losses will be reclassified into earnings.
Forward Starting Interest Rate Swaps
During 2018, we entered into forward starting interest rate swaps with a notional amount totaling $ billion with termination dates of July 2021, May 2022 and July 2026. The swaps had effective dates mirroring the terms of the forecasted debt issuances. Under the agreements, we are required to early terminate these swaps at the time we expect to issue the related forecasted debt. We designated these contracts as cash flow hedges. As a result, the unrealized mark-to-market gains or losses are recorded to AOCI until termination at which point the realized gain or loss of these swaps at issuance of the hedged debt are reclassified from AOCI and amortized to interest expense over the term of the hedged debt.
In June 2021, we early terminated our $ million forward starting interest rate swap that was originally set to terminate in July 2021. This forward starting interest rate swap was rolled forward to May 2022 through a cashless settlement. The new May 2022 forward starting interest rate swap was incremental to our existing May 2022 forward starting interest rate swap that was executed in 2018, both of which were hedging our forecasted debt issuance expected to occur during 2022. In late April 2022, the forward starting interest rate swaps associated with the $ million % senior notes that we repaid upon maturity on May 1, 2022 were terminated and settled. The immaterial loss on settlement of the swaps was recorded through interest expense during the second quarter of 2022.
In 2015, we entered into forward starting interest rate swaps with a notional of CAD million in order to manage our exposure to the volatility of interest rates associated with the future interest payments on the forecasted CAD debt issuances. The swaps had a termination date of September 2025 mirroring the terms of initially forecasted CAD debt issuances. Under these agreements, we were required to early terminate these swaps at the approximate time we issued the previously forecasted debt. We designated these swaps as cash flow hedges and accordingly, a portion of the CAD million ($ million at settlement) loss on the swaps was reclassified from AOCI and amortized to interest expense over the remaining term of the 2026 CAD senior notes up to the full term of the swaps. Additionally, in 2023 we repaid our CAD million % senior notes upon maturity which resulted in an acceleration of amortization of the loss for an immaterial amount. The remaining unamortized portion of the loss in AOCI as of December 31, 2024, was $ million.
Foreign Currency Forwards
We have financial foreign exchange forward contracts in place to manage our exposure to foreign currency fluctuations. We hedge foreign currency exposure related to certain royalty agreements, exposure associated with the purchase of production inputs and imports that are denominated in currencies other than the entity's functional currency and certain other foreign exchanges exposures. These contracts have been designated as cash flow hedges of forecasted foreign currency transactions. We use foreign currency forward contracts to hedge these future forecasted transactions up to a month horizon.
In the second quarter of 2023, we entered into approximately CAD million (approximately $ million USD) of foreign exchange forward contracts to manage our exposure to foreign currency fluctuations related to the repayment of our CAD million % senior notes that matured on July 15, 2023. These contracts were not designated in hedge accounting relationships; as such, changes in the fair value were recorded in other non-operating income (expense), net in the consolidated statements of operations. These contracts settled on July 12, 2023 in advance of the senior notes repayment for an immaterial amount.
months out in the future for use in our supply chain, in line with our risk management policy. Further, we hedge forecasted purchases of barley based on crop year and physical inventory management. For purposes of measuring segment operating performance, the unrealized changes in fair value of the swaps not designated in hedge accounting relationships are reported in Unallocated outside of the segment specific operating results until such time that the exposure we are managing is realized. At that time, we reclassify the gain or loss from Unallocated to the respective operating segment, allowing our operating segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility.Derivative Fair Value Measurements
We utilize market approaches to estimate the fair value of our derivative instruments by discounting anticipated future cash flows derived from the derivative's contractual terms and observable market interest, foreign exchange and commodity rates. The fair values of our derivatives also include credit risk adjustments to account for our counterparties' credit risk, as well as our own non-performance risk, as appropriate.
| | $ | | | | Foreign currency forwards | | | | () | |
| Commodity swaps and options | | | | () | |
| Total | $ | | | | $ | | |
As of December 31, 2024 and December 31, 2023, we had no significant transfers between Level 1 and Level 2. New derivative contracts transacted during 2024 were all included in Level 2.
Results of Period Derivative Activity
| | Other non-current assets | | $ | | | | Other liabilities | | $ | | | | Foreign currency forwards | $ | | | | Other current assets | | | | | Accounts payable and other current liabilities | | | |
| | | Other non-current assets | | | | | Other liabilities | | | |
| Total derivatives designated as hedging instruments | | | | $ | | | | | | $ | | |
| Derivatives not designated as hedging instruments | | | | | | |
Commodity swaps(1) | $ | | | | Other current assets | | $ | | | | Accounts payable and other current liabilities | | $ | () | |
| | | Other non-current assets | | | | | Other liabilities | | () | |
Commodity options(1) | $ | | | | Other current assets | | | | | Accounts payable and other current liabilities | | () | |
| | | |
| | | |
| Total derivatives not designated as hedging instruments | | $ | | | | | | $ | () | |
| | Other non-current assets | | $ | | | | Other liabilities | | $ | | | | Foreign currency forwards | $ | | | | Other current assets | | | | | Accounts payable and other current liabilities | | () | |
| | | Other non-current assets | | | | | Other liabilities | | () | |
| Total derivatives designated as hedging instruments | | | | $ | | | | | | $ | () | |
| Derivatives not designated as hedging instruments | | | | | | |
Commodity swaps(1) | $ | | | | Other current assets | | $ | | | | Accounts payable and other current liabilities | | $ | () | |
| | | Other non-current assets | | | | | Other liabilities | | () | |
Commodity options(1) | $ | | | | Other current assets | | | | | Accounts payable and other current liabilities | | () | |
| Total derivatives not designated as hedging instruments | | $ | | | | | | $ | () | |
| | Interest income (expense), net | | $ | () | | | Foreign currency forwards | | | | | Cost of goods sold | | | |
| | | | Other non-operating income (expense), net | | () | |
| Total | | $ | | | | | | $ | | |
| For the year ended December 31, 2023 | | | | | | |
| Forward starting interest rate swaps | | $ | | | | Interest income (expense), net | | $ | () | |
| Foreign currency forwards | | () | | | Cost of goods sold | | | |
| | | | Other non-operating income (expense), net | | () | |
| Total | | $ | () | | | | | $ | () | |
| For the year ended December 31, 2022 | | | | | | |
| Forward starting interest rate swaps | | $ | | | | Interest income (expense), net | | $ | () | |
| Foreign currency forwards | | | | | Cost of goods sold | | | |
| | | | Other non-operating income (expense), net | | () | |
| Total | | $ | | | | | | $ | () | |
million % senior notes due 2024 | $ | | | EUR million % senior notes due 2032 | | $ | | |
| Total | | $ | | |
| For the year ended December 31, 2023 | | |
EUR million % senior notes due 2024 | | $ | () | |
|
| For the year ended December 31, 2022 | | |
EUR million % senior notes due 2024 | | $ | | |
|
As of December 31, 2024, we expect net gains of approximately $ million (pretax) recorded in AOCI will be reclassified into earnings within the next months. For derivatives designated in cash flow hedge relationships, the maximum length of time over which forecasted transactions are hedged as of December 31, 2024, is approximately years.
) |
|
|
|
|
| For the year ended December 31, 2023 | | | | |
| Commodity swaps | | Cost of goods sold | | $ | () | |
|
| Foreign currency swaps | | Other non-operating income (expense), net | | | |
|
|
| Total | | | | $ | () | |
| For the year ended December 31, 2022 | | | | |
| Commodity swaps | | Cost of goods sold | | $ | | |
|
|
|
|
| 11.
million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively. Additionally, the U.S. postretirement health plan qualifies for the federal subsidy under the Medicare Prescription Drug Improvement and Modernization Act of 2003 (“the Act”) because the prescription drug benefits provided under our postretirement health plan for Medicare eligible retirees generally require lower premiums from covered retirees and have lower co-payments and deductibles than the benefits provided in Medicare Part D and, accordingly, are actuarially equivalent to or better than the benefits provided under the Act. The benefits paid, including prescription drugs, were $ million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively. There were no subsidies received for the years ended December 31, 2024, 2023 and 2022.
of our Canadian pension plans which transferred approximately $ million of pension plan liabilities, along with the associated administration of benefits, to an insurance company using the plan's respective pension plan assets. These transactions had no impact on the amount, timing or form of the retirement benefit payments to the affected retirees and beneficiaries. As a result of the transaction, we reduced the respective pension plan liabilities and assets and remeasured any remaining pension plan liabilities and assets using updated actuarial assumptions. We elected the practical expedient to perform the remeasurement as of the nearest calendar month-end date, which was September 30, 2024. A total settlement loss of $ million was recorded to other pension and postretirement benefit (costs), net in the consolidated statements of operations during the third quarter of 2024. See the impacts of the pension plan remeasurement and settlement on AOCI in Note 15, "Accumulated Other Comprehensive Income (Loss)". | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Other pension and postretirement (benefit) cost, net | | | | | | | | | | | | | | | | | |
| Interest cost | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Expected return on plan assets, net of expenses | () | | | | | | () | | | () | | | | | | () | | | () | | | | | | () | |
| Amortization of prior service (benefit) cost | | | | () | | | () | | | | | | () | | | () | | | | | | () | | | () | |
| Amortization of net actuarial (gain) loss | | | | () | | | () | | | | | | () | | | () | | | | | | () | | | () | |
Curtailment, settlement or special termination benefit (gain) loss(1) | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Expected participant contributions | | | | | | | | | | () | | | | | | () | | | () | | | | | | () | |
| Total other pension and postretirement (benefit) cost, net | | | | () | | | | | | () | | | () | | | () | | | () | | | | | | () | |
| Net periodic pension and OPEB (benefit) cost | $ | | | | $ | () | | | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | () | | | $ | | | | $ | () | |
(1)The pension settlement loss recognized for the year ended December 31, 2024, was $ million which was recorded as a result of the purchase of annuity contracts for of our Canadian pension plans.
The pension settlement charge recognized for the year ended December 31, 2022, primarily consisted of a settlement loss of $ million that was recorded as a result of the annuity purchase for a certain Canadian pension plan, partially offset by a settlement gain of $ million that was recorded as a result of the annuity purchase for a portion of our U.S. qualified pension plan.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | Service cost, net of expected employee contributions | | | | | | | | | | | | | | | | | |
| Interest cost | | | | | | | | | | | | | | | | | |
| Actual employee contributions | | | | | | | | | | | | | | | | | |
| Actuarial (gain) loss | () | | | () | | | () | | | | | | | | | | |
| Plan amendments | | | | () | | | () | | | | | | | | | | |
| Benefits paid | () | | | () | | | () | | | () | | | () | | | () | |
| Curtailment, settlement and special termination | () | | | | | | () | | | | | | | | | | |
| Foreign currency exchange rate change | () | | | () | | | () | | | | | | | | | | |
| Benefit obligation at end of year | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Change in plan assets | | | | | | | | | | | |
| Prior year fair value of assets | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Actual return on plan assets | () | | | | | | () | | | | | | | | | | |
| Employer contributions | () | | | | | | | | | () | | | | | | | |
| Actual employee contributions | | | | | | | | | | | | | | | | | |
| Curtailment, settlement and special termination | () | | | | | | () | | | | | | | | | | |
| Benefits and plan expenses paid | () | | | () | | | () | | | () | | | () | | | () | |
| Foreign currency exchange rate change | () | | | | | | () | | | | | | | | | | |
| Fair value of plan assets at end of year | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Funded status | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | () | | | $ | () | |
| Amounts recognized in the Consolidated Balance Sheets | | | | | | | | | | | |
| Other non-current assets | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Accounts payable and other current liabilities | () | | | () | | | () | | | () | | | () | | | () | |
| Pension and postretirement benefits | () | | | () | | | () | | | () | | | () | | | () | |
| Net amounts recognized | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | () | | | $ | () | |
The accumulated benefit obligation for our defined benefit pension plans were approximately $ billion and $ billion as of December 31, 2024 and December 31, 2023, respectively.
As of December 31, 2024 and December 31, 2023, certain defined benefit pension plans in the U.S., Canada and the U.K. were overfunded as a result of our ongoing de-risking strategy.
| | $ | | | | Projected benefit obligation | $ | | | | $ | | |
| Fair value of plan assets | $ | | | | $ | | |
Information for OPEB plans with an accumulated postretirement benefit obligation in excess of plan assets has been disclosed above in "Obligations and Changes in Funded Status" as all of our OPEB plans are unfunded.
| | $ | () | | | $ | | | | $ | | | | $ | () | | | $ | | | | Net prior service (benefit) cost | | | | () | | | () | | | | | | () | | | | |
| Total not yet recognized | $ | | | | $ | () | | | $ | | | | $ | | | | $ | () | | | $ | | |
Assumptions
Periodic pension and OPEB cost is actuarially calculated annually for each individual plan based on data available and assumptions made at the beginning of each year. Assumptions used in the calculation include the discount rate selected and disclosed at the end of the previous year as well as other assumptions detailed in the table below.
% | % | | % | | % | | % | | % | | Rate of compensation increase | % | | N/A | | % | | N/A | | % | | N/A |
| Expected return on plan assets | % | | N/A | | % | | N/A | | % | | N/A |
| Health care cost trend rate | N/A | | Ranging ratably from % in 2024 to % in 2040 | | N/A | | Ranging ratably from % in 2023 to % in 2040 | | N/A | | Ranging ratably from % in 2022 to % in 2040 |
Benefit obligations are actuarially calculated annually at the end of each year based on the assumptions detailed in the table below. Obligations under the OPEB plans are determined by the application of the terms of medical, dental, vision and life insurance plans, together with relevant actuarial assumptions and health care cost trend rates. %
| % | | % | | % | | Rate of compensation increase | % | | N/A | | % | | N/A |
| Health care cost trend rate | N/A | | Ranging ratably from % in 2025 to % in 2040 | | N/A | | Ranging ratably from % in 2024 to % in 2040 |
The change to the weighted-average discount rates used for our defined benefit pension plans and postretirement plans as of December 31, 2024, from December 31, 2023, was primarily due to an increase in interest rates in 2024, particularly for our U.S. and U.K. plans.
Investment Strategy
The obligations of our defined benefit pension plans in the U.S., Canada and the U.K. are supported by assets held in trusts for the payment of future benefits. The business segments are obligated to adequately fund these asset trusts. The underlying investments within our defined benefit pension plans include cash and short-term instruments, debt securities, investment funds and other investments. Investment allocations reflect the customized strategies of the respective plans.
% | % | | Fixed income | % | | % |
|
| Real estate | % | | % |
| Annuities and longevity swap | % | | % |
| Other | % | | % |
Significant Concentration Risks
We periodically evaluate our defined benefit pension plan assets for concentration risks. As of December 31, 2024, we did not have any individual underlying asset position that composed a significant concentration of each plan's overall assets. However, we currently have significant plan assets invested in U.K., U.S. and Canadian government fixed income holdings. A provisional credit rating downgrade for any of these governments could negatively impact the asset values.
Further, as our benefit plans maintain exposure to non-government investments, a significant system-wide increase in credit spreads would also negatively impact the plan asset values. In general, equity and fixed income risks have been mitigated by company-specific concentration limits and by utilizing multiple equity managers. We do have significant amounts of assets invested with individual fixed income and hedge fund managers, therefore, the plans use outside investment consultants to aid in the oversight of these managers and fund performance.
Valuation Techniques
We use a variety of industry accepted valuation techniques to value our plan assets. The techniques vary depending upon instrument type. Whenever possible, we prioritize the use of observable market data in our valuation processes. We use market, income and cost approaches to value our plan assets as of period end. See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" for additional information on our fair value methodologies and accounting policies. We have not changed our fair value techniques used to value plan assets this year.
| | $ | | | | $ | | | | $ | | | | |
| Bank deposits, short-term bills and notes | | | | | | | | | | | |
| Debt | | | | | | | |
| Government debt securities | | | | | | | | | | | |
| |
| Interest and inflation linked assets | | | | | | | | | | | |
| |
| |
| |
| |
| |
Annuities and longevity swap | | | | | | | |
| Buy-in annuities and longevity swap | | | | | | | | | | | |
| Other | | | | | | | |
| |
| Repurchase agreements | () | | | () | | | | | | | |
| Recoverable taxes | | | | | | | | | | | |
| |
|
| Private equity funds | | |
| Hedge funds | | |
| Total fair value of plan assets | $ | | |
| | $ | | | | $ | | | | $ | | | | |
| Bank deposits, short-term bills and notes | | | | | | | | | | | |
| Debt | | | | | | | |
| Government debt securities | | | | | | | | | | | |
| Corporate debt securities | | | | | | | | | | | |
| Interest and inflation linked assets | | | | | | | | | | | |
| Collateralized debt securities | | | | | | | | | | | |
| Annuities and longevity swap | | | | | | | |
| Buy-in annuities and longevity swap | | | | | | | | | | | |
| Other | | | | | | | |
| |
| Repurchase agreements | () | | | () | | | | | | | |
| Recoverable taxes | | | | | | | | | | | |
| Private equity | | | | | | | | | | | |
| |
|
| Foreign exchange translation (loss) gain | () | |
| Balance as of December 31, 2024 | $ | | |
Expected Cash Flows
Defined benefit pension plan contributions in future years will vary based on a number of factors, including actual plan asset returns and interest rates. We fund pension plans to meet the requirements set forth in applicable employee benefits laws. We took and continue to take steps to reduce our exposure to our pension obligations. Such steps include the closure of the U.K. and U.S. pension plans to future earnings of service credit, benefit modifications in certain Canada plans and the entering into of buy-in and buy-out contracts for certain plans. We may also voluntarily increase funding levels to meet financial goals. Our U.K. pension plan is subject to a statutory valuation for funding purposes every . The most recent valuation as of June 30, 2022, indicated that the plan does not have a funding deficit relative to the plan's statutory funding objective, and therefore, no MCBC contributions are currently required.
For the year ended December 31, 2025, we expect to make contributions to our defined benefit pension plans of approximately $ million and benefit payments under our OPEB plans of approximately $ million based on foreign exchange rates as of December 31, 2024. Additionally, we anticipate utilizing approximately $ million of surplus from certain Canadian defined benefit pension plans to fund employer contributions to certain Canadian defined contribution plans. Plan funding strategies are influenced by employee benefits, tax laws and plan governance documents.
| | $ | | | | 2026 | | | | | | |
| 2027 | | | | | | |
| 2028 | | | | | | |
| 2029 | | | | | | |
| 2030-2034 | | | | | | |
% to % of eligible compensation (certain employees were also eligible for additional employer contributions). In addition, U.S. union employees are eligible to participate in a qualified defined contribution plan which provides for employer contributions based on factors associated with various collective bargaining agreements. The employer contributions to the U.K. plans can range up to % of employee compensation and in Canada plans range from % to %. Both employee and employer contributions are made in cash in accordance with participant investment elections. We recognized costs associated with defined contribution plans of $ million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively.
12.
| | $ | | | | $ | | | | Foreign | | | | () | | | () | |
| Total | $ | | | | $ | | | | $ | () | |
| | $ | | | | $ | | | | State | | | | | | | | |
| Foreign | | | | | | | () | |
| Total current tax (benefit) expense | $ | | | | $ | | | | $ | | |
| Deferred | | | | | |
| Federal | $ | | | | $ | | | | $ | | |
| State | | | | | | | () | |
| Foreign | () | | | () | | | () | |
| Total deferred tax (benefit) expense | $ | | | | $ | | | | $ | () | |
| Total income tax (benefit) expense | $ | | | | $ | | | | $ | | |
% | | $ | | | | | % | | $ | | | | | % | | $ | () | | | State income taxes, net of federal benefits | | % | | | | | | % | | | | | | % | | () | |
| Effect of foreign tax rates | () | % | | () | | | () | % | | () | | | | % | | () | |
| Effect of foreign tax law and rate changes | () | % | | () | | | | % | | | | | () | % | | | |
| Effect of unrecognized tax benefits | | % | | | | | | % | | | | | () | % | | | |
| Change in valuation allowance | | % | | | | | | % | | | | | | % | | () | |
| Acquisition related permanent items | () | % | | () | | | | % | | | | | | % | | | |
| Goodwill impairment | | % | | | | | | % | | | | | () | % | | | |
| Other, net | | % | | | | | | % | | | | | () | % | | | |
| Effective tax rate / Tax (benefit) expense | | % | | $ | | | | | % | | $ | | | | () | % | | $ | | |
The higher effective tax rate for the year ended December 31, 2024 when compared to the U.S federal statutory rate was primarily related to the impact of a valuation allowance that was recorded on deferred tax assets as a result of the sale of certain U.S. craft businesses in the third quarter of 2024. The sale resulted in the realization of a capital loss for U.S. federal tax purposes. We believe it is unlikely that the deferred tax asset generated by the capital loss will be recognized, and as a result, a $ million valuation allowance was recorded. The effective tax rate was further impacted by the net effect of acquisition-related permanent items, including: (i) the non-taxable gain of $ million recognized upon the consolidation of ZOA in the fourth quarter of 2024, and (ii) the $ million of non-deductible interest expense recorded in the third quarter of 2024 to increase the mandatorily redeemable NCI liability of CBPL to the final redemption value.
The higher effective tax rate for the year ended December 31, 2023 when compared to the U.S. federal statutory rate was not significant and was due to the impacts of state income taxes, foreign tax rates and the impact of a foreign statutory tax rate change enacted in the fourth quarter of 2023.
The lower effective tax rate for the year ended December 31, 2022 when compared to the U.S. federal statutory rate was primarily due to the impact of the $ million partial goodwill impairment, recorded within our Americas segment in the fourth quarter of 2022, which related to goodwill not deductible for tax purposes.
Recently, intergovernmental entities such as the Organization for Economic Development ("OECD") and European Union ("EU") have proposed changes to the existing tax laws of member countries, including model rules introduced by the OECD for a new 15% global minimum tax. In December 2022, the EU member states agreed to incorporate the 15% global minimum tax into their respective domestic laws effective for fiscal years beginning on or after December 31, 2023. In addition, several non-EU countries, including Canada and the U.K., have proposed and/or adopted legislation consistent with the OECD global minimum tax framework. The global minimum tax, which is now effective in countries with enacted legislation, did not materially impact our financial or cash tax position in the twelve months ended December 31, 2024. We continue to evaluate the impact on future periods as previously-enacting countries issue related guidance and additional countries consider adoption of the global minimum tax rules.
Our foreign businesses operate in jurisdictions with statutory income tax rates that differ from the U.S. federal statutory rate. Specifically, the statutory income tax rates in the countries in Europe in which we operate range from % to %, and Canada has a combined federal and provincial statutory income tax rate of approximately %.
| | $ | | | | Pension and postretirement benefits | | | | | |
|
|
|
| Tax credit carryforwards | | | | | |
| Tax loss carryforwards | | | | | |
|
|
| Accrued liabilities and other | | | | | |
|
| Valuation allowance | () | | | () | |
| Deferred tax assets | $ | | | | $ | | |
| Deferred tax liabilities | | | |
| Fixed assets | | | | | |
| Partnerships and investments | | | | | |
|
| Intangible assets | | | | | |
| Derivative instruments | | | | | |
| Accrued liabilities and other | | | | | |
| Deferred tax liabilities | $ | | | | $ | | |
| Net deferred tax liabilities | $ | | | | $ | | |
Our deferred tax valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax loss carryforwards from operations in various jurisdictions. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that the deferred tax assets will not be realized. We have evaluated the realizability of our deferred tax assets in each jurisdiction by assessing the adequacy of expected taxable income, including the reversal of existing temporary differences, historical and projected operating results and the availability of prudent and feasible tax planning strategies. Based on this analysis, we have determined that the valuation allowances recorded in each period presented are appropriate. The higher valuation allowance for the year ended December 31, 2024 related to the realization of a capital loss for U.S. federal tax purposes following the sale of certain of our U.S. craft businesses. We believe it is unlikely that the capital loss will be recognized, and as a result, a $ million valuation allowance against the related deferred tax asset was recorded in the third quarter of 2024.
As of December 31, 2024, we have deferred tax assets for U.S. tax loss and credit carryforwards that expire between 2025 and 2044 of $ million and U.S. tax losses that may be carried forward indefinitely of $ million. We have foreign tax loss and credit carryforwards that expire between 2025 and 2044 of $ million and foreign tax losses that may be carried forward indefinitely of $ million.
| | $ | | | | Foreign deferred tax assets | | | | | |
| Foreign deferred tax liabilities | | | | | |
| Net deferred tax liabilities | $ | | | | $ | | |
The total foreign deferred tax assets above are presented within other assets on the consolidated balance sheets and domestic and foreign deferred tax liabilities above are presented within deferred tax liabilities on the consolidated balance sheets. The deferred tax liability amounts as of December 31, 2024 and December 31, 2023 excluded $ million and $ million, respectively, of unrecognized tax benefits that have been recorded as a reduction of deferred tax assets, which was presented within deferred tax liabilities due to jurisdictional netting on the consolidated balance sheets.
| | $ | | | | $ | | | | Additions for tax positions related to the current year | | | | | | | | |
| Additions for tax positions of prior years | | | | | | | | |
| Reductions for tax positions related to the current year | () | | | () | | | | |
| Reductions for tax positions of prior years | () | | | () | | | | |
| Settlements | () | | | | | | () | |
| Release due to statute expirations | () | | | () | | | () | |
| Foreign currency adjustment | () | | | | | | () | |
| Balance at end of year | $ | | | | $ | | | | $ | | |
Our remaining unrecognized tax benefits as of December 31, 2024, related to tax years that were open to examination. As of December 31, 2024 and December 31, 2023, we had remaining unrecognized tax benefits recorded within other liabilities in our consolidated balance sheets of $ million and $ million, respectively. The remaining balance of our unrecognized tax benefits was recorded within deferred tax liabilities in our consolidated balance sheets. Annual tax provisions included amounts considered sufficient to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued. We recognized immaterial interest and penalties related to unrecognized tax benefits as part of income taxes on our consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022. If we were to prevail on all uncertain tax positions, the reversal of this accrual, inclusive of interest and penalties, would result in a benefit of $ million. As of December 31, 2024, we do not anticipate material changes to our remaining unrecognized tax benefit position within the next 12 months.
We file income tax returns in most of the federal, state and provincial jurisdictions in the U.S., Canada and various countries in Europe. Tax years through 2013 are closed in the U.S. In Canada, tax years through 2019 are closed or have been settled through examination except for issues relating to intercompany cross-border transactions, which are separately closed or have been settled through examination for tax years through 2016. Tax years through 2014 are closed for most European jurisdictions in which we operate, with statutes of limitations varying from to years for most jurisdictions.
When cash is available after satisfying working capital needs and all other business obligations, we may distribute current earnings and the associated cash from a foreign subsidiary to its U.S. parent, and record the tax impact associated with the distribution. However, to the extent current earnings of our foreign operations exist and are not otherwise distributed or planned to be distributed, such earnings accumulate. These accumulated earnings are not considered permanently reinvested in our foreign operations. The taxes associated with any future repatriation of undistributed earnings are anticipated to be insignificant.
13.
million outstanding in letters of credit with financial institutions. These letters primarily expire throughout 2025 and $ million of the letters contain a feature that automatically renews the letter for an additional year if no cancellation notice is submitted. These letters of credit are being maintained as security for deferred compensation payments, reimbursements to insurance companies, reimbursements to the trustee for pension payments, deductibles or retention payments made on our behalf, various payments due to governmental agencies, operations of underground storage tanks and other general business purposes and are not included on our consolidated balance sheets. Guarantees and Indemnities
We guarantee indebtedness and other obligations to banks and other third parties for some of our equity method investments and consolidated subsidiaries. As of December 31, 2024 and December 31, 2023, the consolidated balance sheets include liabilities related to these guarantees of $ million and $ million, respectively. See Note 3, "Investments" for further detail.
million, with the indemnity limited to settlement amounts in excess of amounts disclosed for existing contingencies at the date of sale and reduced by any subsequent settlements including offsetting impacts of any favorable amounts. Related to the purchased tax credits, we settled a portion of our tax credit indemnity obligation during 2010. The maximum potential claims amount for the remainder of the purchased tax credits was $ million as of December 31, 2024. Our estimates for a recorded liability consider a number of scenarios for the ultimate resolution of these issues, the probabilities of which are influenced not only by legal developments in Brazil but also by management's intentions with regard to various alternatives that could present themselves leading to the ultimate resolution of these issues. The liabilities are impacted by changes in estimates regarding amounts that could be paid, the timing of such payments, adjustments to the probabilities assigned to various scenarios and foreign currency exchange rates. Our indemnity may cover certain fees and expenses that Kaiser incurs to manage any cases finally determined to be unsuccessful through the administrative and judicial systems. Based on our assessment of the probability of these indemnities, we have recorded an immaterial amount as of December 31, 2024.
Future settlement procedures and related negotiation activities associated with these contingencies are largely outside of our control. Due to the uncertainty involved with the ultimate outcome and timing of these contingencies, significant adjustments to the carrying values of the indemnity obligations have been recorded to date and additional future adjustments may be required. These liabilities are denominated in Brazilian Reais and are therefore, subject to foreign exchange gains or losses. As a result, these foreign exchange gains and losses are recorded within other non-operating income (expense), net.
Purchase Obligations
We have various long-term supply contracts and distribution agreements with unaffiliated third parties and our joint venture partners to purchase materials used in production and packaging and to provide distribution services. Certain supply contracts provide that we purchase certain minimum levels of materials throughout the terms of the contracts. Additionally, we have various long-term non-cancelable commitments for advertising, sponsorships and promotions, including marketing at sports arenas, stadiums and other venues and events.
| | $ | | | | 2026 | | | | | | |
| 2027 | | | | | | |
| 2028 | | | | | | |
| 2029 | | | | | | |
| Thereafter | | | | | | |
| Total | | $ | | | | $ | | |
Total purchases under our long-term unconditional, non-cancellable supply and distribution contracts were approximately $ billion, during each of the years ended December 31, 2024, 2023 and 2022.
million and $ million as of December 31, 2024 and December 31, 2023, respectively. While we cannot predict the eventual aggregate cost for litigation, other disputes and environmental matters in which we are currently involved, we believe adequate reserves have been provided for losses that are probable and estimable. Additionally, as noted below, there are certain loss contingencies that we deem reasonably possible for which a range of loss is not estimable at this time; for all other matters, we believe that any reasonably possible losses in excess of the amounts accrued are immaterial to our consolidated financial statements.We are involved in other disputes and legal actions arising in the ordinary course of our business. While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, other than as noted, none of these disputes or legal actions are expected to have a material impact on our business, consolidated financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business.
On February 12, 2018, Stone Brewing Company filed a trademark infringement lawsuit in federal court in the Southern District of California against Molson Coors Beverage Company USA LLC ("MCBC USA"), a wholly owned subsidiary of our Company, alleging that the Keystone brand had “rebranded” itself as “Stone” and was marketing itself in a manner confusingly similar to Stone Brewing Company's registered Stone trademark. Stone Brewing Company sought treble damages and disgorgement of MCBC USA's profit from Keystone sales. MCBC USA subsequently filed an answer and counterclaims against Stone Brewing Company. On May 31, 2018, Stone Brewing Company filed a motion to dismiss MCBC USA's counterclaims and for a preliminary injunction seeking to bar MCBC USA from continuing to use “STONE” on Keystone Light cans and related marketing materials. In March 2019, the court denied Stone Brewing Company’s motion for preliminary injunction and its motion to dismiss MCBC USA's counterclaims. The jury trial began on March 7, 2022. The jury returned a verdict in which it concluded that trademark infringement had occurred and awarded Stone Brewing Company $ million in damages. The jury also found that no "willful" trademark infringement had occurred. The trial court subsequently denied Stone Brewing Company’s motion for permanent injunction, motion for disgorgement of profits and motion for treble damages. Judgment was entered on September 8, 2022. Both parties filed post-trial motions, including MCBC USA’s renewed motion for judgment as a matter of law or, in the alternative, a new trial and/or remittitur and Stone Brewing Company’s motion for partial new trial of equitable issues. The court denied both parties' post-trial motions on September 25, 2023. On October 24, 2023, MCBC USA filed a notice of appeal in the 9th Circuit Court of Appeals, oral argument was heard in November 2024, and on December 30, 2024, the 9th Circuit affirmed the judgment. As of December 31, 2024 and December 31, 2023, the Company had a recorded accrued liability of $ million within accounts payable and other current liabilities and $ million within other liabilities, respectively, on our consolidated balance sheets reflecting the best estimate of probable loss in this case based on the judgment plus associated post-judgment interest. On January 29, 2025, the Company paid $ million in final resolution of this matter.
Regulatory Contingencies
The Province of Ontario and Molson Canada 2005, a wholly owned indirect subsidiary of our Company, Labatt Brewing Company Limited, Sleeman Breweries Ltd. (collectively, the "Representative Owners") and BRI, operating under the name The Beer Store ("TBS") are parties to a Master Framework Agreement ("MFA") that dictates the terms of the beer distribution and retail systems in the Province of Ontario. In December 2023, the Province of Ontario notified the Representative Owners and TBS that it would not be renewing the MFA after the initial term expires on December 31, 2025. An Early Implementation Agreement ("EIA") was entered into on May 23, 2024, between the Province of Ontario, the Representative Owners and TBS concerning the intended features of the future marketplace for beer distribution and retail systems in the Province of Ontario. The EIA was effective July 18, 2024, with provisions continuing until December 31, 2030, except certain provisions which end December 31, 2025. TBS shall remain the primary distributor of beer to all retailers from the commencement date of the EIA to the end of the agreement, December 31, 2030. In summary, the EIA removed grocery store pack size restrictions on beer, wine, cider and ready-to-drink alcoholic beverages as of July 18, 2024, in addition to allowing for the expansion of licensed sale of beer, wine and ready-to-drink alcoholic beverages to all convenience stores which began on September 5, 2024 and all eligible grocery and big-box grocery stores which began on October 31, 2024.
million through reimbursement of costs incurred in connection with the early implementation and to TBS in connection with the operation of the agreed upon retail footprint through December 31, 2025. The EIA requires TBS to maintain at least retail locations in Ontario to support recycling, cash and carry and to preserve employment through June 30, 2025. Subsequently, TBS has the right to close retail locations to reduce the number of retail locations to a minimum of by December 31, 2025. From January 1, 2026, onward, TBS will have full discretion to maintain an adequate number of retail locations determined by TBS in its sole and absolute discretion. Due to the anticipated increased competition from grocery stores and convenience stores, TBS anticipates closing stores during the year ended December 31, 2025, in line with the allowable reduction under the EIA with future closures dependent on the evolution of the expanded retail marketplace. We continue to evaluate the impacts of the EIA and the expected future marketplace for beer distribution and retail systems in the Province of Ontario on our results of operations.Environmental
When we determine it is probable that a liability for environmental matters or other legal actions exists and the amount of the loss is reasonably estimable, an estimate of the future costs is recorded as a liability in the financial statements. Costs that extend the life, increase the capacity or improve the safety or efficiency of our assets or are incurred to mitigate or prevent future environmental contamination may be capitalized. Other environmental costs are expensed when incurred. Total environmental expenditures recognized for the years ended December 31, 2024, 2023 and 2022 were immaterial to our consolidated statements of operations.
Americas
Our Canada brewing operations are subject to provincial environmental regulations and local permit requirements. Our Longueuil, Chilliwack and Toronto breweries have water treatment facilities to pre-treat wastewater before it goes to the respective local governmental facility for final treatment. We have environmental programs in Canada including organization, monitoring and verification, regulatory compliance, reporting, education and training and corrective action.
In Canada, we sold a chemical specialties business in 1996. We are still responsible for certain aspects of environmental remediation, undertaken or planned, at those chemical specialties business locations. We have established provisions for the costs of these remediation programs.
In the U.S., we were previously notified that we are or may be a potentially responsible party ("PRP") under the Comprehensive Environmental Response, Compensation and Liability Act or similar state laws for the cleanup of sites where hazardous substances have allegedly been released into the environment. We cannot predict with certainty the total costs of cleanup, our share of the total cost, the extent to which contributions will be available from other parties, the amount of time necessary to complete the cleanups or insurance coverage.
Lowry
We are one of a number of entities named by the Environmental Protection Agency ("EPA") as a PRP at the Lowry Superfund site in Colorado. This landfill is owned by the City and County of Denver ("Denver") and is managed by Waste Management of Colorado, Inc. ("Waste Management"). In 1990, we recorded a of $ million, a portion of which was put into a trust in 1993 as part of a settlement with Denver and Waste Management regarding the then-outstanding litigation. Our settlement was based on an assumed remediation cost of $ million (in 1992 adjusted dollars). We are obligated to pay a portion of future costs in excess of that amount.
Waste Management provides us with updated annual cost estimates through 2032. We review these cost estimates in the assessment of our accrual related to this issue. Our expected liability is based on our best estimates available.
Based on the assumptions utilized, the present value and gross amount of the costs as of December 31, 2024 are approximately $ million and $ million, respectively. Cost estimates were discounted using a % risk-free rate of return. We did not assume any future recoveries from insurance companies in the estimate of our liability and none are expected.
Considering the estimates extend through the year 2032 and the related uncertainties at the site, including what additional remedial actions may be required by the EPA, new technologies and what costs we are required to cover, the estimate of our liability may change as further facts develop. We cannot predict the amount of any such change, but additional accruals in the future are possible.
14.
| | | | | | | | | | | Shares issued under equity compensation plans | — | | | | | | — | | | — | |
| Purchase of treasury shares | — | | | () | | | — | | | — | |
| Shares exchanged for common stock | — | | | | | | — | | | () | |
| |
| Balance as of December 31, 2022 | | | | | | | | | | | |
| Shares issued under equity compensation plans | — | | | | | | — | | | — | |
| Purchase of treasury shares | — | | | () | | | — | | | — | |
| Shares exchanged for common stock | — | | | | | | — | | | () | |
| |
| Balance as of December 31, 2023 | | | | | | | | | | | |
| Shares issued under equity compensation plans | — | | | | | | — | | | — | |
| Purchase of treasury shares | — | | | () | | | — | | | — | |
| Shares exchanged for common stock | — | | | | | | — | | | () | |
| |
| Balance as of December 31, 2024 | | | | | | | | | | | |
Exchangeable Shares
The Class A exchangeable shares and Class B exchangeable shares were issued by Molson Coors Canada Inc., a wholly-owned subsidiary of our Company. The exchangeable shares are substantially the economic equivalent of the corresponding shares of Class A and Class B common stock that a Molson Inc. shareholder would have received in the merger of Adolph Coors Company with Molson Inc. in February 2005, if the holder had elected to receive shares of Molson Coors common stock. Exchangeable shareholders receive the CAD equivalent of dividends declared on Class A and B common stock on the date of declaration. Holders of exchangeable shares also receive, through a voting trust, the benefit of Molson Coors voting rights, entitling the holder to vote on the same basis and in the same circumstances as one corresponding share of Molson Coors common stock.
vote for each share held, without the ability to cumulate votes on the election of directors. Our Class B common stock has fewer voting rights than our Class A common stock and holders of our Class A common stock have the ability to effectively control or have a significant influence over company actions requiring stockholder approval. Specifically, holders of Class B common stock voting together as a single class have the right to elect directors of the Molson Coors Board of Directors, as well as the right to vote on certain additional matters as outlined in the Restated Certificate of Incorporation (as amended, the "Certificate"), such as merger agreements that require approval under applicable law, sales of all or substantially all of our assets to unaffiliated third parties, proposals to dissolve MCBC, and certain amendments to the Certificate that require approval under applicable law, each as further described and limited by the Certificate. The Certificate also provides that holders of Class A common stock and Class B common stock shall vote together as a single class, on an advisory basis, on any proposal to approve the compensation of MCBC's named executive officers.Conversion Rights
The Certificate provides for the right of holders of Class A common stock to convert their stock into Class B common stock on a -for-one basis at any time. The exchangeable shares are exchangeable at any time, at the option of the holder on a -for-one basis for corresponding shares of Molson Coors common stock. Therefore, a portion of our authorized and unissued Class A and Class B common shares are reserved to meet exchange requirements.
Share Repurchase Program
On September 29, 2023, our Board approved a new share repurchase program authorizing the repurchase of up to an aggregate of $ billion of our Company's Class B common stock excluding brokerage commissions and excise taxes, with an expected program term of . This repurchase program replaces and supersedes any repurchase program previously approved by our Board, including the program approved during the first quarter of 2022. The number, price, structure and timing of the repurchases under the program, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs, restrictions under our debt arrangements and other factors. Share repurchases may be made in the open market, in structured transactions, or in privately negotiated transactions. The repurchase authorization does not oblige us to acquire any particular amount of our Company's Class B common stock. The Board may suspend, modify or terminate the repurchase program at any time without prior notice.
| | | | | | Aggregate cost (in millions) | $ | | | | $ | | | | $ | | |
15.
) | | $ | () | | | $ | () | | | $ | () | | | $ | () | | | Foreign currency translation adjustments | () | | | — | | | | | | — | | | () | |
Cumulative translation adjustment reclassified from other comprehensive income (loss)(1) | | | | — | | | — | | | — | | | | |
| Gain (loss) recognized on net investment hedges | | | | — | | | — | | | — | | | | |
| Unrealized gain (loss) recognized on derivative instruments | — | | | | | | — | | | — | | | | |
| Derivative instrument activity reclassified from other comprehensive income (loss) | — | | | | | | — | | | — | | | | |
| Net change in pension and other postretirement benefit assets and liabilities recognized in other comprehensive income (loss) | — | | | — | | | () | | | — | | | () | |
| Pension and other postretirement activity reclassified from other comprehensive income (loss) | — | | | — | | | () | | | — | | | () | |
| Ownership share of unconsolidated subsidiaries' other comprehensive income (loss) | — | | | — | | | — | | | | | | | |
| Tax benefit (expense) | () | | | () | | | | | | () | | | () | |
| | | |
| | | |
| As of December 31, 2022 | $ | () | | | $ | | | | $ | () | | | $ | () | | | $ | () | |
| Foreign currency translation adjustments | | | | — | | | | | | — | | | | |
Cumulative translation adjustment reclassified from other comprehensive income (loss)(2) | () | | | — | | | — | | | — | | | () | |
| Gain (loss) recognized on net investment hedges | () | | | — | | | — | | | — | | | () | |
| Unrealized gain (loss) recognized on derivative instruments | — | | | () | | | — | | | — | | | () | |
| Derivative instrument activity reclassified from other comprehensive income (loss) | — | | | | | | — | | | — | | | | |
| Net change in pension and other postretirement benefit assets and liabilities recognized in other comprehensive income (loss) | — | | | — | | | () | | | — | | | () | |
| Pension and other postretirement activity reclassified from other comprehensive income (loss) | — | | | — | | | () | | | — | | | () | |
| Ownership share of unconsolidated subsidiaries' other comprehensive income (loss) | — | | | — | | | — | | | | | | | |
| Tax benefit (expense) | | | | | | | | | | () | | | | |
| | | |
| | | |
| As of December 31, 2023 | $ | () | | | $ | | | | $ | () | | | $ | () | | | $ | () | |
| Foreign currency translation adjustments | () | | | — | | | — | | | — | | | () | |
Cumulative translation adjustment reclassified from noncontrolling interest to accumulated other comprehensive income (loss)(3) | () | | | — | | | — | | | — | | | () | |
| | | |
| Gain (loss) recognized on net investment hedges | | | | — | | | — | | | — | | | | |
| Unrealized gain (loss) recognized on derivative instruments | — | | | | | | — | | | — | | | | |
| Derivative instrument activity reclassified from other comprehensive income (loss) | — | | | () | | | — | | | — | | | () | |
Net change in pension and other postretirement benefit assets and liabilities recognized in other comprehensive income (loss) | — | | | — | | | () | | | — | | | () | |
Pension and other postretirement activity reclassified from other comprehensive income (loss)(4) | — | | | — | | | | | | — | | | | |
| Ownership share of unconsolidated subsidiaries' other comprehensive income (loss) | — | | | — | | | — | | | () | | | () | |
| Tax benefit (expense) | () | | | () | | | () | | | | | | () | |
| | | |
| | | |
| As of December 31, 2024 | $ | () | | | $ | | | | $ | () | | | $ | () | | | $ | () | |
(1)As a result of the completion of the sale of our non-operating India entity during the year ended December 31, 2022, the associated cumulative foreign currency translation adjustments were reclassified from AOCI and recognized within other operating income (expense), net.
(2)As a result of the sale of our interest in Truss, the associated cumulative foreign currency translation adjustment was reclassified from AOCI. The impact of the cumulative foreign currency translation adjustment was recorded in other operating income (expense), net, as a component of the loss on sale when the entity was disposed during the third quarter of 2023.
million recorded as a result of the purchase of annuity contracts for of our Canadian pension plans which transferred pension plan liabilities, along with the associated administration of benefits, to an insurance company using the plan's respective pension plan assets during the third quarter of 2024. See further discussion of this transaction in Note 11. "Employee Retirement Plans and Postretirement Benefits."We have significant levels of net assets denominated in currencies other than USD due to our operations in foreign countries, and therefore we recognize OCI gains and/or losses when those items are translated to USD. The foreign currency translation adjustment losses during 2024 were primarily due to the weakening of the CAD and certain currencies of our Europe operations versus the USD. The foreign currency translation adjustment gains during 2023 were primarily due to the strengthening of the CAD, GBP, EUR and certain other currencies of our Europe operations versus the USD. The foreign currency translation adjustment losses during 2022 were primarily due to the weakening of the CAD, GBP, EUR and certain other currencies of our Europe operations versus the USD.
) | | $ | () | | | $ | () | | | Interest expense, net | | Foreign currency forwards | | | | | | | | | | Cost of goods sold |
| Foreign currency forwards | () | | | () | | | () | | | Other non-operating income (expense), net |
| |
| Total income (loss) reclassified, before tax | | | | () | | | () | | | |
| Income tax benefit (expense) | () | | | | | | | | | |
| Net income (loss) reclassified, net of tax | $ | | | | $ | () | | | $ | () | | | |
| | | | | | | |
| Amortization of defined benefit pension and other postretirement benefit plan items | | | | | | | |
| Prior service benefit (cost) | $ | | | | $ | | | | $ | | | | Other pension and postretirement benefits (costs), net |
| Net actuarial gain (loss) and settlement | () | | | | | | | | | Other pension and postretirement benefits (costs), net |
| Total income (loss) reclassified, before tax | () | | | | | | | | | |
| Income tax benefit (expense) | | | | () | | | () | | | |
| Net income (loss) reclassified, net of tax | $ | () | | | $ | | | | $ | | | | |
| | | | | | | |
| Other reclassifications from AOCI | | | | | | | |
| Cumulative translation adjustment resulting from sale of disposal groups | $ | | | | $ | | | | $ | () | | | Other operating income (expense), net |
| |
| |
| |
| Net income (loss) reclassified, net of tax | $ | | | | $ | | | | $ | () | | | |
| | | | | | | |
| Total income (loss) reclassified, net of tax | $ | () | | | $ | | | | $ | () | | | |
16.
share-based compensation plan, the MCBC Incentive Compensation Plan (the "Incentive Compensation Plan"), as of December 31, 2024 and all outstanding awards fall under this plan.Incentive Compensation Plan
We issue the following types of awards related to shares of Class B common stock to certain directors, officers and other eligible employees, pursuant to the Incentive Compensation Plan: RSUs, DSUs, PSUs and stock options.
RSU awards are issued based upon the market value equal to the price of our Class B common stock at the date of grant and generally vest over a period of . During the years ended December 31, 2024, 2023 and 2022, we granted million, million and million RSUs, respectively, with a weighted-average market value of $, $ and $ each, respectively. Prior to vesting, RSUs have no voting rights but participate in dividends.
DSU awards, under the Directors' Stock Plan pursuant to the Incentive Compensation Plan, are granted based on elections made by non-employee directors of MCBC that enable them to receive all or one-half of their annual cash retainer in the form of DSUs or stock. The DSU awards are issued at the market value equal to the price of our stock at the date of the grant. The DSUs are paid in shares of stock upon termination of service. Prior to vesting, DSUs have no voting rights but participate in dividends. During the years ended December 31, 2024, 2023 and 2022, we granted a small number of DSUs.
PSU awards are granted with a target value established at the date of grant and vest upon completion of a service requirement. The settlement amount of the PSUs is determined based on market and performance metrics, which include our total shareholder return performance relative to the stock market index defined by each award and specified internal performance metrics designed to drive greater shareholder return. PSU compensation expense is based on fair values assigned to the market and performance metrics upon grant. For the PSUs granted in 2022 and 2023, the market metric is based upon a Monte Carlo model, with the market metric remaining constant throughout the vesting period of while the performance metric is based upon the market value equal to the price of our stock at the date of grant, varying based on a multiplier tied to projected performance metric attainment. Beginning in 2024, we granted PSU awards that had a performance metric with a market metric modifier, for which a fair value was assigned for the award upon grant utilizing a Monte Carlo model and total expense is based on the projected performance metric attainment. During the years ended December 31, 2024, 2023 and 2022, we granted million, million and million PSUs, respectively, each with a weighted-average fair value of $, $ and $, respectively.
Stock options are granted with an exercise price equal to the market value of a share of Class B common stock on the date of grant. Stock options have a term of and generally vest over . Beginning in 2024, the pool of recipients for stock options expanded to include additional employees. During the years ended December 31, 2024, 2023 and 2022, we granted million, million and million options, respectively, each with a weighted-average fair value of $, $ and $, respectively.
Beginning with awards granted in 2020, RSU and PSU awards entitle participants to receive dividends earned during the vesting period, subject to the performance, vesting and other conditions, including forfeiture, applicable to the respective awards.
| | $ | | | | $ | | | | Tax benefit | () | | | () | | | () | |
| After-tax share-based compensation expense | $ | | | | $ | | | | $ | | |
As of December 31, 2024, there was $ million of total unrecognized compensation cost from all share-based compensation arrangements granted under the Incentive Compensation Plan related to unvested awards. This total compensation expense is expected to be recognized over a weighted-average period of years.
| $ | | | | $ | | Granted | | | $ | | | | $ |
| Vested | () | | $ | | () | | $ |
| Forfeited | () | | $ | | | | $ |
| Adjustment for performance results achieved | | | $ | | | | $ |
| Non-vested as of December 31, 2024 | | | $ | | | | $ |
The total intrinsic values of RSUs and DSUs vested during the years ended December 31, 2024, 2023 and 2022 were $ million, $ million and $ million, respectively.
| $ | | | | $ | | | | Granted | | | $ | | | | |
| Exercised | () | | $ | |
| | |
| Forfeited | | | $ | |
| | |
| |
| Outstanding as of December 31, 2024 | | | $ | | | | $ | | |
| Expected to vest as of December 31, 2024 | | | $ | | | | $ | | |
| Exercisable as of December 31, 2024 | | | $ | | | | $ | | |
The total intrinsic values of exercises during the years ended December 31, 2024, 2023 and 2022 were $ million, $ million and $ million, respectively. Total tax benefits realized, including excess tax benefits, from share-based awards vested or exercised during the years ended December 31, 2024, 2023 and 2022 was $ million, $ million and $ million, respectively.
The shares of Class B common stock to be issued under our equity plans are made available from authorized and unissued MCBC Class B common stock. As of December 31, 2024, there were million shares of MCBC Class B common stock available for issuance under the Incentive Compensation Plan.
% | % | | % | | Dividend yield | % | | % | | % |
| Volatility range | % - % | | % - % | | % - % |
| Weighted-average volatility | % | | % | | % |
| Expected term (years) | | | | | |
| Weighted-average fair value | $ | | $ | | $ |
% | % | | % | | Volatility range | % - % | | % - % | | % - % |
| Weighted-average volatility | % | | % | | % |
| Expected term (years) | | | | | |
| Weighted-average fair market value | $ | | $ | | $ |
The risk-free interest rates utilized for periods throughout the expected term of the PSUs are based on a zero-coupon U.S. Department of Treasury security yield at the time of grant. Expected volatility is based on historical volatility of our stock as well as the stock of our peer firms, as shown within the volatility range above, for a period from the grant date consistent with the expected term. The expected term of PSUs is calculated based on the grant date to the end of the performance period. No dividend yield is utilized in the model as participants are entitled to dividends earned during the vesting period of each respective award.
17.
) | | $ | () | | | $ | () | | | Asset abandonment and other restructuring costs | () | | | | | | () | |
Intangible and tangible asset impairments, excluding goodwill(2) | | | | () | | | () | |
Gains (losses) on disposals and other(1)(3) | | | | | | | | |
| Other operating income (expense), net | $ | () | | | $ | () | | | $ | () | |
(1)During the year ended December 31, 2024, we made the decision to wind down or sell certain of our U.S. craft businesses and related facilities and recorded employee-related and asset abandonment charges, including accelerated depreciation in excess of normal depreciation of $ million. In addition, we recognized a loss of $ million related to the disposal of the sold businesses. We expect to continue to incur incremental restructuring charges during the first quarter of 2025 through completion of wind down and closure of certain remaining U.S. craft facilities. Remaining charges are estimated to total approximately $ million to $ million, consisting primarily of accelerated depreciation.
(2)During the year ended December 31, 2023, we recognized a partial impairment charge of $ million to our indefinite-lived intangible asset related to the Staropramen family of brands within our EMEA&APAC segment. The indefinite-lived intangible asset was measured at fair value primarily using a market approach with Level 3 inputs.
During the year ended December 31, 2022, we identified a triggering event related to the former Truss joint venture asset group within our Americas segment and recognized an impairment loss of $ million, of which $ million was attributable to the noncontrolling interest. The asset group was measured at fair value primarily using a market approach with Level 3 inputs.
million representing the difference between the fair value and the carrying value of our previously held equity interest on the acquisition date. % controlling interest in Truss in Canada to Tilray Brands and recognized a loss of $ million upon deconsolidation of the business.
18.
reporting segments is the President and Chief Executive Officer. The primary measure of profitability is income (loss) before income taxes. The CODM assesses income (loss) before income taxes to compare current results to budgeted and prior year results at the segment level to assess segment performance. This metric is also used to evaluate the income (loss) generated from segment assets and deciding whether to reinvest in the segment, reallocate resources to another segment, or for other purposes such as dividends or share repurchases.Reporting Segments
Americas
The Americas segment consists of our production, marketing and sales of our owned brands and partner brands in the U.S., Canada and various countries in Latin America. We have contract brewing agreements to brew, package, market, distribute and/or sell certain products in the Americas as well as joint venture arrangements in Canada to distribute and sell beer in Ontario and the western provinces of Canada.
EMEA&APAC
The EMEA&APAC segment consists of our production, marketing and sales of our owned brands and partner brands in the U.K., Central Europe and various other European countries, along with certain countries within the Middle East, Africa and Asia Pacific. The EMEA&APAC segment includes the sale of factored brands in the U.K. which occurs when we distribute beer, wine, spirits and other products owned and produced by other companies to the on-premise channel such as bars and restaurants.
Unallocated
We also have certain activity that is not allocated to our segments, which has been reflected as Unallocated below. Specifically, Unallocated primarily includes certain financing-related activities such as interest expense and interest income, foreign exchange gains and losses on intercompany balances as well as realized and unrealized changes in fair value on derivative instruments not designated in hedging relationships related to financing and other treasury-related activities. Unallocated activity also includes the unrealized changes in fair value on our commodity swaps not designated in hedging relationships recorded within cost of goods sold, which are later reclassified when realized to the segment in which the underlying exposure resides. Additionally, only the service cost component of net periodic pension and OPEB cost is reported within each operating segment and all other components remain in Unallocated.
Summarized Financial Information
No single customer accounted for more than 10% of our consolidated net sales for the years ended December 31, 2024, 2023 or 2022.
Consolidated net sales represent sales to third-party external customers less excise taxes. Inter-segment transactions impacting net sales and income (loss) before income taxes eliminate upon consolidation and are primarily related to the Americas segment royalties received from and sales to the EMEA&APAC segment.
| | $ | | | | $ | | | | $ | () | | | $ | | | | Cost of goods sold | () | | | () | | | | | | | | | () | |
| Marketing and sales expenses | () | | | () | | | | | | | | | () | |
| General and administrative expenses | () | | | () | | | | | | | | | () | |
| Other operating income (expense), net | () | | | | | | | | | | | | () | |
| Equity income (loss) | | | | | | | | | | | | | | |
| Interest expense | () | | | () | | | () | | | | | | () | |
| Interest income | | | | | | | | | | | | | | |
Other segment items(1) | | | | () | | | () | | | | | | () | |
| Income (loss) before income taxes | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
| Income tax benefit (expense) | | | | | | | | | () | |
| Net income (loss) | | | | | | | | | | |
| Net (income) loss attributable to noncontrolling interests | | | | | | | | | () | |
| Net income (loss) attributable to MCBC | | | | | | | | | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, 2023 |
| | Americas | | EMEA&APAC | | Unallocated | | Inter-segment net sales eliminations | | Consolidated |
| | (In millions) |
| Net sales | $ | | | | $ | | | | $ | | | | $ | () | | | $ | | |
| Cost of goods sold | () | | | () | | | () | | | | | | () | |
| Marketing and sales expenses | () | | | () | | | | | | | | | () | |
| General and administrative expenses | () | | | () | | | | | | | | | () | |
| Other operating income (expense), net | | | | () | | | | | | | | () | |
| Equity income (loss) | | | | | | | | | | | | | | |
| Interest expense | () | | | () | | | () | | | | | | () | |
| Interest income | | | | | | | | | | | | | | |
Other segment items(1) | () | | | () | | | | | | | | | | |
| Income (loss) before income taxes | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | | |
| Income tax benefit (expense) | | | | | | | | | () | |
| Net income (loss) | | | | | | | | | | |
| Net (income) loss attributable to noncontrolling interests | | | | | | | | | () | |
| Net income (loss) attributable to MCBC | | | | | | | | | $ | | |
| | $ | | | | $ | | | | $ | () | | | $ | | | | Cost of goods sold | () | | | () | | | () | | | | | | () | |
| Marketing and sales expenses | () | | | () | | | | | | | | | () | |
| General and administrative expenses | () | | | () | | | | | | | | | () | |
| Goodwill impairment | () | | | | | | | | | | | | () | |
| Other operating income (expense), net | () | | | () | | | | | | | | | () | |
| Equity income (loss) | | | | | | | | | | | | | | |
| Interest expense | () | | | () | | | () | | | | | | () | |
| Interest income | | | | | | | | | | | | | | |
Other segment items(1) | () | | | () | | | | | | | | | | |
| Income (loss) before income taxes | $ | | | | $ | | | | $ | () | | | $ | | | | $ | () | |
| Income tax benefit (expense) | | | | | | | | | () | |
| Net income (loss) | | | | | | | | | () | |
| Net (income) loss attributable to noncontrolling interests | | | | | | | | | | |
| Net income (loss) attributable to MCBC | | | | | | | | | $ | () | |
(1)Other segment items include other pension and postretirement benefit (cost), net and other non-operating income (expense), net.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | EMEA&APAC | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | Canada | | | | | | | | |
| United Kingdom | | | | | | | | |
Other countries(1) | | | | | | | | |
| Consolidated net sales | $ | | | | $ | | | | $ | | |
(1)Reflects net sales within certain countries in Europe, Latin America, the Middle East, Africa and Asia. No individual country within the other countries line has total net sales exceeding 10% of total consolidated net sales.
| | $ | | | | Canada | | | | | |
| United Kingdom | | | | | |
Other countries(1) | | | | | |
Consolidated property, plant and equipment, net and operating ROU assets | $ | | | | $ | | |
(1)Reflects property, plant and equipment, net and operating ROU assets within certain countries in Europe, Latin America, Africa and Asia. No individual country within the other countries line has total property, plant and equipment, net or operating ROU assets exceeding % of total consolidated property, plant and equipment, net or operating ROU assets, respectively.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024, to provide reasonable assurance that information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applies its judgment in assessing the costs and benefits of such disclosure controls and procedures that, by their nature, can only provide reasonable assurance regarding management's control objectives. Also, we have investments in certain unconsolidated entities that we do not control or manage.
Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our Chief Executive Officer and our Chief Financial Officer, with assistance from other members of management, assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the framework and criteria established in Internal Control—Integrated Framework (2013 Framework), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2024.
An independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2024, as stated in their report which appears in Part II—Item 8 Financial Statements and Supplementary Data.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Other than as set forth below, during the three months ended December 31, 2024, no directors or officers or a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.
, , our , into a pre-arranged stock trading plan intended to qualify as a Rule 10b5-1 trading arrangement (the "Hattersley 10b5-1 Sales Plan"). The Hattersley 10b5-1 Sales Plan provides for the potential exercise of vested stock options and the associated sale of up to shares of the Company's Class B common stock generated from the exercise of the aforementioned options between February 27, 2025 and . Further, the Hattersley 10b5-1 Sales Plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.ITEM 9C. DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Incorporated by reference to our definitive proxy statement for our 2025 annual meeting of stockholders, which will be filed no later than 120 days after December 31, 2024.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference to our definitive proxy statement for our 2025 annual meeting of stockholders, which will be filed no later than 120 days after December 31, 2024.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Incorporated by reference to our definitive proxy statement for our 2025 annual meeting of stockholders, which will be filed no later than 120 days after December 31, 2024.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Incorporated by reference to our definitive proxy statement for our 2025 annual meeting of stockholders, which will be filed no later than 120 days after December 31, 2024.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Incorporated by reference to our definitive proxy statement for our 2025 annual meeting of stockholders, which will be filed no later than 120 days after December 31, 2024.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)Financial Statements, Financial Statement Schedules and Exhibits
The following are filed or incorporated by reference as a part of this Annual Report on Form 10-K:
(1)Management's Report
Report of Independent Registered Public Accounting Firm
Consolidated Statements of Operations for the years ended December 31, 2024, December 31, 2023 and December 31, 2022
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, December 31, 2023 and December 31, 2022
Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023
Consolidated Statements of Cash Flows for the years ended December 31, 2024, December 31, 2023 and December 31, 2022
Consolidated Statements of Stockholders' Equity and Noncontrolling Interests for the years ended December 31, 2024, December 31, 2023 and December 31, 2022
Notes to Consolidated Financial Statements
(2)Schedule II—Valuation and Qualifying Accounts for the years ended December 31, 2024, December 31, 2023 and December 31, 2022
(3)Exhibit list
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Incorporated by Reference | | Filed/Furnished Herewith |
| Exhibit Number | | | Document Description | | Form | | Exhibit | | Filing Date | | |
| 3.1 | | | | | 10-K | | 3.1 | | February 12, 2020 | | |
| 3.2 | | | | | 8-K | | 3.1 | | May 23, 2022 | | |
| 4.1.1 | | | | | 10-K | | 4.1.1 | | February 12, 2020 | | |
| 4.1.2 | | | | | 10-K | | 4.1.2 | | February 12, 2020 | | |
4.2.1 | | | | | 8-K | | 4.1 | | May 3, 2012 | | |
4.2.2 | | | | | 8-K | | 4.2 | | May 3, 2012 | | |
4.2.3 | | | | | 10-Q | | 4.8 | | August 8, 2012 | | |
4.2.4 | | | | | 8-K | | 4.3 | | June 28, 2016 | | |
4.2.5 | | |
| | 10-Q | | 4.9 | | November 1, 2016 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Incorporated by Reference | | Filed/Furnished Herewith |
| Exhibit Number | | | Document Description | | Form | | Exhibit | | Filing Date | | |
4.2.6 | | |
| | 10-Q | | 4.10 | | November 1, 2016 | | |
4.2.7 | | | | | 10-K | | 4.2.7 | | February 14, 2017 | | |
4.2.8 | | |
| | 10-K | | 4.1.8 | | February 14, 2018 | | |
4.2.9 | | | | | 10-Q | | 4.1 | | October 29, 2020 | | |
4.2.10 | | | | | 8-K | | 4.2 | | May 3, 2012 | | |
4.3 | | | Registration Rights Agreement, dated as of February 9, 2005, by and among Adolph Coors Company, Pentland Securities (1981) Inc., 4280661 Canada Inc., Nooya Investments Ltd., Lincolnshire Holdings Limited, 4198832 Canada Inc., BAX Investments Limited, 6339522 Canada Inc., Barleycorn Investments Ltd., DJS Holdings Ltd., 6339549 Canada Inc., Hoopoe Holdings Ltd., 6339603 Canada Inc., and The Adolph Coors, Jr. Trust dated September 12, 1969. | | 8-K | | 99.2 | | February 15, 2005 | | |
| 4.4.1 | | | | | 8-K | | 4.1 | | July 7, 2016 | | |
| 4.4.2 | | | | | 8-K | | 4.2 | | July 7, 2016 | | |
| 4.4.3 | | | | | 8-K | | 4.3 | | July 7, 2016 | | |
| 4.4.4 | | |
| | 10-Q | | 4.14 | | November 1, 2016 | | |
| 4.4.5 | | |
| | 10-Q | | 4.15 | | November 1, 2016 | | |
| 4.4.6 | | | | | 10-K | | 4.5.6 | | February 14, 2017 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Incorporated by Reference | | Filed/Furnished Herewith |
| Exhibit Number | | | Document Description | | Form | | Exhibit | | Filing Date | | |
| 4.4.7 | | | | | 10-K | | 4.8.7 | | February 14, 2018 | | |
| 4.4.8 | | | | | 10-Q | | 4.3 | | October 29, 2020 | | |
| 4.4.9 | | | | | 8-K | | 4.3 | | July 7, 2016 | | |
| 4.4.10 | | | | | 8-K | | 4.3 | | July 7, 2016 | | |
| 4.5.1 | | | | | 8-K | | 4.9 | | July 7, 2016 | | |
| 4.5.2 | | | | | 8-K | | 4.10 | | July 7, 2016 | | |
| 4.5.3 | | |
| | 10-Q | | 4.7 | | November 1, 2016 | | |
| 4.5.4 | | |
| | 10-Q | | 4.8 | | November 1, 2016 | | |
| 4.5.5 | | | | | 10-K | | 4.11.5 | | February 14, 2017 | | |
| 4.5.6 | | | | | 10-K | | 4.14.6 | | February 14, 2018 | | |
| 4.5.7 | | | | | 10-Q | | 4.4 | | October 29, 2020 | | |
| 4.5.8 | | | | | 8-K | | 4.10 | | July 7, 2016 | | |
| 4.6.1 | | | | | 8-K | | 4.1 | | May 29, 2024 | | |
| 4.6.2 | | | | | 8-K | | 4.2 | | May 29, 2024 | | |
| 4.6.3 | | | | | 8-K | | 4.2 | | May 29, 2024 | | |
4.7 | | |
| | | | | | | | X |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Incorporated by Reference | | Filed/Furnished Herewith |
| Exhibit Number | | | Document Description | | Form | | Exhibit | | Filing Date | | |
4.8 | | | | | | | | | | | X |
| 10.1 | * | | | | 10-Q | | 10.7 | | August 8, 2012 | | |
| 10.2.1 | * | | | | 8-K | | 10.1 | | May 28, 2021 | | |
| 10.2.2 | * | |
| | 10-K | | 10.2.4 | | February 14, 2017 | | |
| 10.2.3 | * | | | | 10-K | | 10.7.8 | | February 12, 2015 | | |
| 10.2.4 | * | | | | 10-K | | 10.2.7 | | February 23, 2022 | | |
| 10.2.5 | * | | | | 10-Q | | 10.4 | | April 30, 2024 | | |
| 10.2.6 | * | | | | 10-Q | | 10.7 | | April 30, 2024 | | |
| 10.2.7 | * | | | | 10-Q | | 10.10 | | April 30, 2024 | | |
| 10.2.8 | * | | | | 10-Q | | 10.6 | | May 2, 2023 | | |
| 10.2.9 | * | | | | 10-K | | 10.2.9 | | February 23, 2022 | | |
| 10.2.10 | * | | | | 10-K | | 10.2.10 | | February 23, 2022 | | |
| 10.2.11 | * | | | | 10-Q | | 10.2 | | April 30, 2024 | | |
| 10.2.12 | * | | | | 10-Q | | 10.5 | | April 30, 2024 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Incorporated by Reference | | Filed/Furnished Herewith |
| Exhibit Number | | | Document Description | | Form | | Exhibit | | Filing Date | | |
| 10.2.13 | * | | | | 10-Q | | 10.8 | | April 30, 2024 | | |
| 10.2.14 | * | | | | 10-K | | 10.2.11 | | February 23, 2022 | | |
| 10.2.15 | * | | | | 10-Q | | 10.1 | | May 3, 2022 | | |
| 10.2.16 | * | | | | 10-Q | | 10.2 | | May 3, 2022 | | |
| 10.2.17 | * | | | | 10-Q | | 10.3 | | May 3, 2022 | | |
| 10.2.18 | * | | | | 10-Q | | 10.6 | | May 2, 2023 | | |
| 10.2.19 | * | | | | 10-Q | | 10.3 | | April 30, 2024 | | |
| 10.2.20 | * | | | | 10-Q | | 10.6 | | April 30, 2024 | | |
| 10.2.21 | * | | | | 10-Q | | 10.9 | | April 30, 2024 | | |
| 10.3 | * | | | | 10-Q | | 10.7 | | May 11, 2005 | | |
| 10.4 | * | | | | 8-K | | 10.1 | | May 25, 2018 | | |
| 10.5 | * | | | | 8-K | | 10.1 | | July 24, 2019 | | |
| 10.6 | * | | | | 8-K | | 10.1 | | November 25, 2016 | | |
| 10.7 | * | |
| | 8-K | | 10.1 | | July 31, 2019 | | |
| 10.8 | * | | | | 8-K | | 10.1 | | February 28, 2023 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Incorporated by Reference | | Filed/Furnished Herewith |
| Exhibit Number | | | Document Description | | Form | | Exhibit | | Filing Date | | |
| 10.9 | * | | | | 10-Q | | 10.1 | | April 30, 2024 | | |
| 10.10.1 | * | | | | 10-Q | | 10.2 | | May 2, 2023 | | |
| 10.10.2 | * | | | | 8-K | | 10.1 | | October 18, 2024 | | |
| 10.11.1 | ** | | Amended and Restated Credit Agreement, dated June 26, 2023, by and among Molson Coors Beverage Company, Molson Coors Brewing Company (UK) Limited, Molson Canada 2005, Molson Coors Canada Inc., Molson Coors International LP, the lenders party thereto, and Citibank, N.A., as administrative agent. | | 8-K | | 10.1 | | June 28, 2023 | | |
| 10.11.2 | ** | | Amended and Restated Subsidiary Guarantee Agreement, dated June 26, 2023, by and among Molson Coors Beverage Company, Molson Coors Brewing Company (UK) Limited, Molson Canada 2005, Molson Coors Canada Inc., Molson Coors International LP, each subsidiary listed on Schedule I thereto, and Citibank, N.A., as administrative agent. | | 8-K | | 10.2 | | June 28, 2023 | | |
| 10.11.3 | | | | | 8-K | | 10.1 | | June 7, 2024 | | |
| 10.12 | | | | | 8-K | | 10.3 | | July 13, 2017 | | |
| 10.13 | | | | | 10-K | | 10.12 | | February 21, 2023 | | |
| 19 | | | | | | | | | | | X |
| 21 | | | | | | | | | | | X |
| 22 | | | | | | | | | | | X |
| 23 | | | | | | | | | | | X |
| 31.1 | | | | | | | | | | | X |
| 31.2 | | | | | | | | | | | X |
| 32 | | | | | | | | | | | XX |
| 97 | * | | | | 10-K | | 97 | | February 20, 2024 | | X |
| 101.INS | *** | | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | | | | | | | | X |
| 101.SCH | *** | | XBRL Taxonomy Extension Schema Document | | | | | | | | X |
| 101.CAL | *** | | XBRL Taxonomy Extension Calculation Linkbase Document | | | | | | | | X |
| 101.DEF | *** | | XBRL Taxonomy Extension Definition Linkbase Document | | | | | | | | X |
| 101.LAB | *** | | XBRL Taxonomy Extension Label Linkbase Document | | | | | | | | X |
| 101.PRE | *** | | XBRL Taxonomy Extension Presentation Linkbase Document | | | | | | | | X |
104 | | | Cover page formatted as Inline XBRL and contained in Exhibit 101. | | | | | | | | X |
* Represents a management contract or compensatory plan or arrangement.
** Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.
*** Attached as Exhibit 101 to this report are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders' Equity and Noncontrolling Interests, (vi) the Notes to Consolidated Financial Statements, and (vii) document and entity information.
X Filed herewith
XX Furnished herewith
(b)Exhibits
The exhibits included in Item 15(a)(3) above are filed or incorporated by reference pursuant to the requirements of Item 601 of Regulation S-K.
(c)Other Financial Statement Schedules
| | $ | | | | $ | () | | | $ | () | | | $ | | | | December 31, 2023 | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
| December 31, 2022 | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | | |
Additional amounts related to the deferred tax valuation allowance are primarily due to the valuation allowance that was recorded on deferred tax assets in the third quarter of 2024 related to the sale of certain of our U.S. craft businesses. The sale resulted in the realization of a capital loss for U.S. tax purposes. We believe it is more likely than not that the deferred tax asset generated by the capital loss will not be recognized, and as a result, a $ million valuation allowance was recorded for the twelve months ended December 31, 2024. Deduction amounts are primarily due to the re-evaluation of deferred tax assets.
ITEM 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
MOLSON COORS BEVERAGE COMPANY
| | | | | | | | | | | | | | |
| | | | |
| By | | /s/ GAVIN D.K. HATTERSLEY | | President, Chief Executive Officer and Director
(Principal Executive Officer) |
| | Gavin D.K. Hattersley | |
February 18, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
| | | | | | | | | | | | | | |
| By | | /s/ GAVIN D.K. HATTERSLEY | | President, Chief Executive Officer and Director (Principal Executive Officer) |
| | Gavin D.K. Hattersley | |
| By | | /s/ TRACEY I. JOUBERT | | Chief Financial Officer
(Principal Financial Officer) |
| | Tracey I. Joubert | |
| By | | /s/ ROXANNE M. STELTER | | Vice President and Controller
(Principal Accounting Officer) |
| | Roxanne M. Stelter | |
| By | | /s/ GEOFFREY E. MOLSON | | Chairman |
| | Geoffrey E. Molson | | |
| By | | /s/ DAVID S. COORS | | Vice Chairman |
| | David S. Coors | | |
| By | | /s/ JULIA M. BROWN | | Director |
| | Julia M. Brown | | |
| By | | /s/ PETER H. COORS | | Director |
| | Peter H. Coors | | |
| By | | /s/ ROGER G. EATON | | Director |
| | Roger G. Eaton | | |
| By | | /s/ MARY LYNN FERGUSON-MCHUGH | | Director |
| | Mary Lynn Ferguson-McHugh | | |
| By | | /s/ CHARLES M. HERINGTON | | Director |
| | Charles M. Herington | | |
| By | | /s/ ANDREW T. MOLSON | | Director |
| | Andrew T. Molson | | |
| By | | /s/ NESSA O'SULLIVAN | | Director |
| | Nessa O'Sullivan | | |
| By | | /s/ H. SANFORD RILEY | | Director |
| | H. Sanford Riley | | |
| By | | /s/ JILL TIMM | | Director |
| | Jill Timm | | |
| By | | /s/ LEROY J. WILLIAMS, JR. | | Director |
| | Leroy J. Williams, Jr. | | |
| By | | /s/ JAMES A. WINNEFELD, JR. | | Director |
| | James A. Winnefeld, Jr. | | |
February 18, 2025
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