MOLSON COORS BEVERAGE CO - Quarter Report: 2024 September (Form 10-Q)

Payments on debt and borrowings()()Proceeds on debt and borrowings Other()()Net cash provided by (used in) financing activities()()Effect of foreign exchange rate changes on cash and cash equivalents ()Net increase (decrease) in cash and cash equivalents Balance at beginning of year Balance at end of period$ $

See notes to unaudited condensed consolidated financial statements.

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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

AND NONCONTROLLING INTERESTS

(IN MILLIONS)

(UNAUDITED)

Molson Coors Beverage Company Stockholders' Equity

Accumulated

Common stock

Exchangeable

other

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)

As of June 30, 2023

()

Exchange of shares

—

()

—

Shares issued under equity compensation plan

—

Amortization of share-based compensation

—

Deconsolidation of VIE

()

—

()

Net income (loss) including noncontrolling interests

—

Other comprehensive income (loss), net of tax

()

—

()

—

()

Share repurchase program

()

—

()

—

Distributions and dividends to noncontrolling interests

()

—

()

Dividends declared

()

—

()

—

As of September 30, 2023

()

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		Molson Coors Beverage Company Stockholders' Equity
									Accumulated		Common stock
		Common stock			Exchangeable				other		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)
As of June 30, 2024	$	$		$	$	$	$	$	$	()	$	()	$
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		—		—	—	—	—	—	—		—

Reclassification of mandatorily redeemable noncontrolling interest to accounts payable and other current liabilities	()	—	0	—	—	—	—	—	()		—		()
Reclassification of noncontrolling interests to redeemable noncontrolling interests	()	—		—	—	—	—	—	—		—		()
Dividends declared	()	—		—	—	—	—	()	—		—		—
As of September 30, 2024	$	$		$	$	$	$	$	$	()	$	()	$

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Molson Coors Beverage Company Stockholders' Equity

Accumulated

Common stock

Exchangeable

other

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)

As of December 31, 2022

()

Exchange of shares

—

()

—

Shares issued under equity compensation plan

—

Amortization of share-based compensation

—

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

()

—

()

—

As of September 30, 2023

()

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Molson Coors Beverage Company Stockholders' Equity

Accumulated

Common stock

Exchangeable

other

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)

As of December 31, 2023

()

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

()

—

()

Reclassification of mandatorily redeemable noncontrolling interest to accounts payable and other current liabilities

()

—

()

—

()

Reclassification of noncontrolling interests to redeemable noncontrolling interests

()

—

()

Dividends declared

()

—

()

—

As of September 30, 2024

()

(1)

See notes to unaudited condensed consolidated financial statements.

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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unless otherwise indicated, information in this report is presented in USD and comparisons are to comparable prior year periods. Our primary operating currencies, other than the USD, include the CAD, the GBP and our Central European operating currencies such as the EUR, CZK, RON and RSD.

These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report and have been prepared on a consistent basis with the accounting policies described in Note 1 of the Notes to the Audited Consolidated Financial Statements included in our Annual Report, except as noted in Note 2, "New Accounting Pronouncements".

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be achieved for the full year or any other future period.

Anti-Dilutive Securities

Anti-dilutive securities from share-based awards excluded from the computation of diluted EPS were million and million for the three months ended September 30, 2024 and September 30, 2023, respectively, and million and million for the nine months ended September 30, 2024 and September 30, 2023, respectively.

Dividends

On July 18, 2024, our Company's Board of Directors ("Board") declared a dividend of $ per share, paid on September 20, 2024 to shareholders of Class A and Class B common stock of record on August 30, 2024. Shareholders of exchangeable shares received the CAD equivalent of dividends declared on Class A and Class B common stock, equal to CAD per share. During the nine months ended September 30, 2024, dividends declared to eligible shareholders were $ per share, with the CAD equivalent equal to CAD per share.

Share Repurchase Program

During the third quarter of 2023, our Board approved a 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.

Aggregate cost (in millions)$ $ $ $

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million and $ million during the nine months ended September 30, 2024 and September 30, 2023, respectively. In addition, we had non-cash activities related to certain issuances of share-based awards.

Other than the activity mentioned above and the supplemental non-cash activity related to the recognition of leases further discussed in Note 6, "Leases " there was no other significant non-cash activity during the nine months ended September 30, 2024 and September 30, 2023, respectively.

Allowance for Doubtful Accounts

The allowance for doubtful accounts for trade receivables was $ million and $ million as of September 30, 2024 and December 31, 2023, respectively.

Supplier Financing

We are the buyer under a supplier finance program with Citibank N.A. with $ million and $ million confirmed as valid and outstanding as of September 30, 2024 and December 31, 2023, respectively. We recognize these unpaid balances in accounts payable and other current liabilities on our unaudited condensed consolidated balance sheets.

Acquisition

On August 7, 2023, we acquired a % equity interest in Blue Run Spirits, Inc., a U.S. based high end whiskey business, for a purchase price of $ million, which included cash paid of $ million. The acquisition is aligned with our strategy to expand beyond the beer aisle and enhance our presence in the spirits category.

The acquisition was accounted for as a business combination, with $ million allocated to a definite-lived brand intangible asset to be amortized over a -year period and the remainder primarily allocated to other working capital balances and goodwill for the amount in excess of the net identifiable assets acquired. An NCI was recognized at fair value based on a Monte Carlo simulation model and is recorded as redeemable noncontrolling interest in the consolidated balance sheets based on the contractual terms of the agreement. Pro forma results of operations have not been presented as the impact is not material to our results of operation or financial position.

Purchases of Annuity Contracts

On September 26, 2024, we purchased annuity contracts for 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. This transaction 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 unaudited condensed consolidated statements of operations during the third quarter of 2024. See the impacts of the pension plan remeasurement and settlement on AOCI in Note 11, "Accumulated Other Comprehensive Income (Loss)."

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% 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 unaudited condensed 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 unaudited condensed 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 to forecasted results for 2024. In October 2024, we obtained a final redemption value that would be due to acquire the % NCI of the CBPL partnership. As a result, during the three months ended September 30, 2024, we recorded an adjustment of $ million to increase the mandatorily redeemable NCI liability to the final redemption value, with the adjustment recorded to interest expense.

Subsequent Events

The CBPL buyout was finalized on October 21, 2024, resulting in a cash payment of $ million which will be recorded as a cash outflow from financing activities in the consolidated statement of cash flows in the fourth quarter of 2024.

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% ownership interest. In October 2024, we obtained a final valuation of the redemption value that would be due to acquire the remaining %. The transaction was finalized on October 21, 2024, resulting in a cash payment of $ million. See further discussion of this transaction in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies."

Both BRI and BDL have outstanding third party debt which is guaranteed by their respective shareholders. As a result, we had a guarantee liability of $ million and $ million recorded as of September 30, 2024 and December 31, 2023, respectively, which is presented within accounts payable and other current liabilities on the unaudited condensed 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 on the unaudited condensed 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.

ZOA Energy, LLC

During the third quarter of 2023, we increased our investment in ZOA Energy, LLC ("ZOA"), an energy drink company operating in the U.S. and Canada, bringing our ownership interest to %, 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 unaudited condensed consolidated statement of cash flows. Subsequent to the investment, the carrying value of our recorded ownership investment exceeds our ratable portion of underlying equity in the net assets of ZOA, and this basis difference has been fully allocated to equity method goodwill.

In October 2024, we increased our investment in ZOA for cash consideration of $ million, bringing our ownership interest to % subsequent to the closing of the transaction. The transaction will be recorded as a business combination, and ZOA will be 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. Based on the timing of the transaction, we are still in the preliminary stages of accounting for this transaction and expect to complete our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed as well as other consolidation adjustments during the fourth quarter of 2024.

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$ $ $ Other$ $ $ $

As of September 30, 2024, for RMMC/RMBC, $ million and $ million were recorded in inventories, net and property, plant and equipment, net, respectively on the unaudited condensed 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$ $

$ $

Divestiture(2)

() ()Foreign currency translation, net() ()Balance as of September 30, 2024$ $ $

(1)Accumulated impairment losses for the Americas segment was $ million as of September 30, 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.

As of the date of our annual impairment test performed as of October 1, 2023, the fair value of the Americas reporting unit goodwill balance was in excess of its carrying value by slightly less than %, and as such, the reporting unit continues to be at heightened risk of future impairment in the event of significant unfavorable changes in assumptions. We continue to focus on growing our core power brands 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 power 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.

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- $ $()$ 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 changes in the gross carrying amounts of intangible assets from December 31, 2023 to September 30, 2024 were primarily driven by the disposal of brands related to certain of our U.S. craft businesses, along with the impact of foreign exchange rates, as a significant amount of intangible assets, other than goodwill, are denominated in foreign currencies.

2025$ 2026$ 2027$ 2028$

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million and $ million for the three months ended September 30, 2024 and September 30, 2023, respectively, and $ million and $ million for the nine months ended September 30, 2024 and September 30, 2023, respectively. This expense was presented within MG&A expenses in our unaudited condensed consolidated statements of operations.

As of the date of our annual impairment test of indefinite-lived intangible assets, performed as of October 1, 2023, the carrying value of the Staropramen family of brands in EMEA&APAC was determined to be in excess of its fair value such that an impairment loss was recorded during the three months ended December 31, 2023. As this was a partial impairment, the intangible asset is considered to be at a heightened risk of future impairment in the event of significant unfavorable changes in assumptions, including forecasted future cash flows based on execution of strategic initiatives for expansion and distribution of the brand, as well as discount rates and other macroeconomic factors. Our indefinite-lived intangible asset annual impairment analysis as of October 1, 2024 is currently in progress, and we have not yet finalized our results.

The fair value of the Coors brands in the Americas, the Miller brands in the U.S. and the Carling brands in EMEA&APAC all exceeded their respective carrying values by over % as of the October 1, 2023 annual testing date.

No triggering events were identified during the nine months ended September 30, 2024 that would indicate the carrying values of our indefinite-lived or definite-lived intangible assets were greater than their fair values.

Fair Value Assumptions

$ Current operating lease liabilitiesAccounts payable and other current liabilities$ $ Non-current operating lease liabilitiesOther liabilities Total operating lease liabilities$ $ Finance LeasesFinance lease right-of-use assetsProperty, plant and equipment, net$ $ Current finance lease liabilitiesCurrent portion of long-term debt and short-term borrowings$ $ Non-current finance lease liabilitiesLong-term debt Total finance lease liabilities$ $

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$ Operating cash flows from finance leases$ $ Financing cash flows from finance leases$ $ Supplemental non-cash information on right-of-use assets obtained in exchange for new lease liabilitiesOperating leases$ $ Finance leases$ $

Executed leases that have not yet commenced as of September 30, 2024 are not material and are expected to commence by the end of the first quarter of 2025.

million % senior notes due July 2024(1)$ $

CAD million % senior notes due July 2026

$ billion % senior notes due July 2026

EUR million % senior notes due June 2032(2)

$ billion % senior notes due May 2042

$ billion % senior notes due July 2046

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(3)

$ $ 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)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 8, "Derivative Instruments and Hedging Activities" for further details.

(3)Our short-term borrowings include bank overdrafts, borrowings on our overdraft facilities and other items.

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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.

outstanding borrowings as of September 30, 2024 and December 31, 2023. See further detail within Part II.—Item 8. Financial Statements, Note 13, "Commitments and Contingencies" in our Annual Report for further discussion related to letters of credit.

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 using observable market interest and foreign exchange rates. As of September 30, 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. Similarly, 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 September 30, 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.

billion multi-currency 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 facilit

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million % senior notes and as a result, 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.

Foreign Currency Forwards

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 and, as such, changes in the fair value were recorded in other non-operating income (expense), net in the unaudited condensed consolidated statements of operations. These contracts settled on July 12, 2023 for an immaterial amount in advance of the senior notes being repaid.

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 September 30, 2024 and December 31, 2023, we had no significant transfers between Level 1 and Level 2. New derivative contracts transacted during the nine months ended September 30, 2024 were all included in Level 2.

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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 ()Total derivatives not designated as hedging instruments$ $()

As of December 31, 2023

Derivative Assets

Derivative Liabilities

Notional amount

Balance sheet location

Fair value

Balance sheet location

Fair value

Derivatives designated as hedging instruments

Forward starting interest rate swaps

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

()

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)Interest income (expense), net$()Foreign currency forwards()Cost of goods sold Other non-operating income (expense), net()Total$()$ Three Months Ended September 30, 2023Forward starting interest rate swaps$ Interest income (expense), net$()Foreign currency forwards Cost of goods sold Other non-operating income (expense), net()Total$ $

Derivatives in cash flow hedge relationships

Amount of gain
(loss) recognized
in OCI on derivatives

Location of gain (loss)
reclassified from AOCI into
income

Amount of gain
(loss) recognized
from AOCI into income on
derivative

Nine Months Ended September 30, 2024

Forward starting interest rate swaps

()

Interest income (expense), net

()

Foreign currency forwards

Cost of goods sold

Other non-operating income (expense), net

()

Total

Nine Months Ended September 30, 2023

Forward starting interest rate swaps

Interest income (expense), net

()

Foreign currency forwards

Cost of goods sold

Other non-operating income (expense), net

()

Total

()

The Pretax Effect of Net Investment Hedge Accounting on Other Comprehensive Income (Loss), Accumulated Other Comprehensive Income (Loss) and Income (Loss) (in millions):

Net investment hedge relationships

Amount of gain
(loss) recognized
in OCI

Location of gain (loss) recognized in income (amount excluded from effectiveness testing)

Amount of gain (loss) recognized in income (amount excluded from effectiveness testing) (1)

Three Months Ended September 30, 2024

EUR million % senior notes due June 2032

()

Other non-operating income (expense), net

Three Months Ended September 30, 2023

EUR million % senior notes due July 2024

Other non-operating income (expense), net

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million % senior notes due July 2024$ Other non-operating income (expense), net$

EUR million % senior notes due June 2032

()Other non-operating income (expense), net Total$()$ Nine Months Ended September 30, 2023

EUR million % senior notes due July 2024

$ Other non-operating income (expense), net$

(1)Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and period amortization is recorded in OCI.

The cumulative translation adjustments related to our net investment hedges remain in AOCI until the respective underlying net investment is sold or liquidated. During the three and nine months ended September 30, 2024 and September 30, 2023, respectively, we did not reclassify any amounts related to net investment hedges from AOCI into earnings.

As of September 30, 2024, we expect net losses of approximately $ million (pretax) recorded in AOCI that 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 September 30, 2024 is approximately years.

)Three Months Ended September 30, 2023Commodity swapsCost of goods sold$ Foreign currency forwardsOther non-operating income (expense), net Total$

Derivatives not in hedging relationships

Location of gain (loss) recognized in
income on derivatives

Amount of gain (loss) recognized in
income on derivatives

Nine Months Ended September 30, 2024

Commodity swaps

Cost of goods sold

()

Nine Months Ended September 30, 2023

Commodity swaps

Cost of goods sold

()

Foreign currency forwards

Other non-operating income (expense), net

Total

()

% % % %

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million valuation allowance was recorded for the year to date period. The higher effective tax rate was also due to the $ million increase in the mandatorily redeemable NCI liability of CBPL to the final redemption value, which was recorded to interest expense in the third quarter of 2024 and is non-deductible for tax purposes. Finally, the higher effective tax rate for the three months ended September 30, 2024 was partly driven by a decrease in discrete tax benefit.

Our effective tax rate can be volatile and may change with, among other things, the amount and source of pretax income or loss, our ability to utilize foreign tax credits, excess tax benefits or deficiencies from share-based compensation, changes in tax laws and the movement of liabilities established pursuant to accounting guidance for uncertain tax positions as statutes of limitations expire, positions are effectively settled, or when additional information becomes available. There are proposed or pending tax law changes in various jurisdictions and other changes to regulatory environments in countries in which we do business that, if enacted, could have an impact on our effective tax rate.

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 three or nine months ended September 30, 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.

10.

million and $ million as of September 30, 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. For all matters unless otherwise noted below, we believe that any reasonably possible losses in excess of the amounts accrued are immaterial to our unaudited condensed consolidated financial statements. Our litigation, other disputes and environmental issues are discussed in further detail within Part II.—Item 8. Financial Statements, Note 13, "Commitments and Contingencies" in our Annual Report and did not significantly change during the nine months ended September 30, 2024.

Other than those disclosed below, we are also 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. In the first quarter of 2022, a jury returned a verdict in which it concluded that trademark infringement had occurred and awarded Stone Brewing Company $ million in damages. After denial of post-trial motions, in the fourth quarter of 2023, MCBC USA filed a notice of appeal in the 9th Circuit Court of Appeals, which is scheduled to be heard in November 2024. As of September 30, 2024 and December 31, 2023, the Company had a recorded accrued liability of $ million and $ million, respectively, within other liabilities on our unaudited condensed consolidated balance sheets reflecting the best estimate of probable loss in this case based on the judgment plus associated post-judgment interest. However, it is reasonably possible that the estimate of the loss could change in the near term based on the progression of the case, including the appeals process. We will continue to monitor the status of the case and will adjust the accrual in the period in which any significant change occurs which could impact the estimate of the loss for this matter.

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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 during the interim period between the commencement date of the EIA and the original expiration date of the MFA. 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.

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 September 30, 2024 and December 31, 2023, the unaudited condensed consolidated balance sheets include liabilities related to these guarantees of $ million and $ million, respectively.

Separately, related to our Cervejarias Kaiser Brasil S.A. ("Kaiser") indemnities, we accrued $ million and $ million, in aggregate, as of September 30, 2024 and December 31, 2023 respectively. Our Kaiser liabilities are discussed in further detail within Part II.—Item 8. Financial Statements, Note 13, "Commitments and Contingencies" in our Annual Report and did not significantly change during the nine months ended September 30, 2024.

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11. )$ $()$()$()Foreign currency translation adjustments()— — — ()

Cumulative translation adjustment reclassified from noncontrolling interest to accumulated other comprehensive income (loss)(1)

()— — — ()Gain (loss) recognized on net investment hedges()— — — ()Unrealized gain (loss) recognized on derivative instruments— — —

Net change in pension and other postretirement benefit assets and liabilities recognized in other comprehensive income (loss)(2)

— — —

Pension and other postretirement activity reclassified from other comprehensive income (loss)(3)

— — — Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)— — — Tax benefit (expense)— ()()()()As of September 30, 2024$()$ $()$()$()

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. As a result, on September 30, 2024, we remeasured both pension plans and recorded the offset to AOCI.

of our Canadian pension plans as described above, we recorded a total settlement loss of $ million.

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12.

)$()$()$()Asset abandonment and other restructuring costs() () Intangible and tangible asset impairments, excluding goodwill () ()

Gains (losses) on disposals and other(1)(2)

()()()()Other operating income (expense), net$()$()$()$()

(1)During the three months ended September 30, 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. 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 fourth quarter of 2024 and 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 charges.

(2)During the three months ended September 30, 2023, we sold our % controlling interest in Truss LP ("Truss") in Canada to Tilray Brands and recognized a loss of $ million upon deconsolidation of the business.

13.

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$ $ $ EMEA&APAC Inter-segment net sales eliminations()()()()Consolidated net sales$ $ $ $ $ $ $ EMEA&APAC Unallocated()()()()Consolidated income (loss) before income taxes$ $ $ $ $ EMEA&APAC Consolidated total assets$ $

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

For more than two centuries, we have brewed beverages that unite people to celebrate all life’s moments. From our core power brands Coors Light, Miller Lite, Coors Banquet, Molson Canadian, Carling and Ožujsko to our above premium brands including Madri Excepcional, Staropramen, Blue Moon Belgian White and Leinenkugel’s Summer Shandy, to our economy and value brands like Miller High Life and Keystone Light, we produce many beloved and iconic beers. While our Company's history is rooted in beer, we offer a modern portfolio that expands beyond the beer aisle as well, including flavored beverages like Vizzy Hard Seltzer, spirits like Five Trail whiskey and non-alcoholic beverages. As a business, our ambition is to be the first choice for our people, our consumers and our customers, and our success depends on our ability to make our products available to meet a wide range of consumer segments and occasions.

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") in this Quarterly Report on Form 10-Q is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("Annual Report"), as well as our unaudited condensed consolidated financial statements and the accompanying notes included in this report. Due to the seasonality of our operating results, quarterly financial results are not necessarily indicative of the results that may be achieved for the full year or any other future period.

Unless otherwise noted in this report, any description of "we," "us" or "our" includes Molson Coors Beverage Company ("MCBC" or the "Company"), principally a holding company, and its operating and non-operating subsidiaries included within our reporting segments. Our reporting segments include Americas and EMEA&APAC. Our Americas segment operates in the U.S., Canada and various countries in the Caribbean, Latin and South America and our EMEA&APAC segment operates in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K., various other European countries, and certain countries within the Middle East, Africa and Asia Pacific.

Unless otherwise indicated, information in this report is presented in USD and comparisons are to comparable prior year periods. Our primary operating currencies, other than the USD, include the CAD, the GBP, and our Central European operating currencies such as the EUR, CZK, RON and RSD.

Items Affecting the Consolidated Results of Operations

Purchases of Annuity Contracts

During the three months ended September 30, 2024, we purchased annuity contracts for two of our Canadian pension plans. As a result, on September 30, 2024, we remeasured both pension plans and recorded the offset to AOCI in addition to recording a total settlement loss of $34.0 million. See Part I. — Item 1. Financial Statements, Note 1, "B asis of Presentation and Summary of Significant Accounting Policies " and Part I. — Item 1. Financial Statements, Note 1 1 , "Accumulated Other Comprehensive Income (Loss)" for further information.

Cobra Beer Partnership, Ltd. Buyout

During the three months ended September 30, 2024, we adjusted our NCI by $34.5 million to our best estimate of the redemption value that existed at the time of the put option exercise in March 2024 by increasing our net income attributable to noncontrolling interests and decreasing our net income attributable to MCBC. In addition, the final determination of the redemption value was received in October 2024, and we recorded an adjustment of $45.8 million to interest expense in the EMEA&APAC segment with the offset to the mandatorily redeemable NCI that was recorded to accounts payable and other current liabilities in the unaudited condensed consolidated balance sheets. See further discussion of this transaction in Part I. — Item 1. Financial Statements, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies".

Items Affecting the Americas Segment Results of Operations

Wind Down or Sale of Certain U.S. Craft Businesses

During the three months ended September 30, 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. We recognized a loss of $41.1 million related to the disposal of the sold businesses. We expect to continue to incur incremental restructuring charges during the fourth quarter of 2024 and 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 $95 million to $115 million, consisting primarily of accelerated depreciation charges. See Part I. — Item 1. Financial Statements, Note 12, "Other Operating Income (Expense), net" for further information.

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Truss Sale

During the three months ended September 30, 2023, we sold our controlling interest in Truss and recognized a loss of $11.1 million. See Part I. — Item 1. Financial Statements, Note 12, "Other Operating Income (Expense), net" for further information.

Consolidated Results of Operations

The following table highlights summarized components of our unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and September 30, 2023. See Part I.—Item 1. Financial Statements for additional details of our U.S. GAAP results.


	Three Months Ended						Nine Months Ended
	September 30, 2024		September 30, 2023		% change		September 30, 2024		September 30, 2023		% change
	(In millions, except percentages and per share data)
Net sales	$	3,042.7	$	3,298.4	(7.8)	%	$	8,891.4	$	8,911.3	(0.2)	%
Cost of goods sold	(1,840.2)		(1,952.2)		(5.7)	%	(5,395.5)		(5,575.5)		(3.2)	%
Gross profit	1,202.5		1,346.2		(10.7)	%	3,495.9		3,335.8		4.8	%
Marketing, general and administrative expenses	(684.7)		(746.8)		(8.3)	%	(2,067.8)		(2,096.7)		(1.4)	%

%

Net sales increased 6.5% for the nine months ended September 30, 2024, compared to prior year, driven by favorable price and sales mix and favorable foreign currency impacts, partially offset by lower financial volumes.

Financial volumes decreased 1.0% for the nine months ended September 30, 2024, compared to prior year, primarily due to lower volumes in Western Europe due to soft market demand and high promotional activity from the competition, partially offset by Central and Eastern Europe volume growth driven by the favorable performance of our core power brands and our above premium brands and the easing inflationary pressures on the consumer.

Price and sales mix favorably impacted net sales for the nine months ended September 30, 2024, compared to prior year, by 6.7%, primarily due to increased net pricing and favorable sales mix driven by premiumization and favorable channel mix.

A discussion of the foreign currency impacts on net sales is included in the "Foreign currency impacts on results" section above.

Income (loss) before income taxes

Income before income taxes declined 23.6% for the three months ended September 30, 2024, compared to prior year, primarily due to higher interest expense as a result of the adjustment of $45.8 million to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout, lower financial volumes and higher MG&A expense, partially offset by increased net pricing and favorable sales mix.

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Income before income taxes improved 14.6% for the nine months ended September 30, 2024, compared to prior year, primarily due to increased net pricing, favorable sales mix and cost savings initiatives, partially offset by higher interest expense as a result of the adjustment of $45.8 million to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout, higher MG&A expense and lower financial volumes. Higher MG&A was due to increased marketing to support our brands and innovations as well as cost inflation.

A discussion of the foreign currency impacts on income (loss) before income taxes is included in the "Foreign currency impacts on results" section above.

Unallocated Segment

We 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 and realized and unrealized changes in fair value on 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. Only the service cost component of net periodic pension and OPEB cost is reported within each operating segment, and all other components remain unallocated.


	Three Months Ended						Nine Months Ended
	September 30, 2024		September 30, 2023		% change		September 30, 2024		September 30, 2023		% change
	(In millions, except percentages)
Cost of goods sold	$	(1.9)	$	35.3	N/M		$	26.9	$	(77.1)	N/M
Gross profit (loss)	(1.9)		35.3		N/M		26.9		(77.1)		N/M
Operating income (loss)	(1.9)		35.3		N/M		26.9		(77.1)		N/M
Total non-operating income (expense), net	(72.1)		(42.3)		70.4	%	(153.5)		(146.4)		4.8	%
Income (loss) before income taxes	$	(74.0)	$	(7.0)	957.1	%	$	(126.6)	$	(223.5)	(43.4)	%

N/M = Not meaningful

Cost of goods sold

The unrealized changes in fair value on our commodity derivatives, which are economic hedges, make up substantially all of the activity presented within cost of goods sold in the table above for the three and nine months ended September 30, 2024 and September 30, 2023, respectively. As the exposure we are managing is realized, we reclassify the gain or loss on our commodity derivatives to the segment in which the underlying exposure resides, allowing our segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility. See Part I.—Item 1. Financial Statements, Note 8, "Derivative Instruments and Hedging Activities" for further information.

Total non-operating income (expense), net

Total non-operating expense, net increased 70.4% for the three months ended September 30, 2024, compared to prior year, primarily due to a settlement loss of $34.0 million recorded as a result of Canadian pension plan annuity purchases.

Total non-operating expense, net increased 4.8% for the nine months ended September 30, 2024, respectively, compared to prior year, primarily due to a settlement loss of $34.0 million recorded in the third quarter of 2024 as a result of Canadian pension plan annuity purchases, partially offset by lower net interest expense as a result of higher interest income from higher cash balances and higher pension and OPEB non-service benefits.

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Liquidity and Capital Resources

Liquidity

Overview

Our primary sources of liquidity include cash provided by operating activities and access to external capital. We continue to monitor world events which may create credit or economic challenges that could adversely impact our profit or operating cash flows and our ability to obtain additional liquidity. We currently believe that our cash and cash equivalents, cash flows from operations and cash provided by short-term and long-term borrowings, when necessary, will be adequate to meet our ongoing operating requirements, scheduled principal and interest payments on debt, anticipated dividend payments, capital expenditures and other obligations for the twelve months subsequent to the date of the issuance of this quarterly report and our long-term liquidity requirements. We do not have any restrictions that prevent or limit our ability to declare or pay dividends.

While a significant portion of our cash flows from operating activities are generated within the U.S., our cash balances include cash held outside the U.S. and in currencies other than the USD. As of September 30, 2024, approximately 58% of our cash and cash equivalents were located outside the U.S., largely denominated in foreign currencies. Fluctuations in foreign currency exchange rates have had and may continue to have a material impact on these foreign cash balances. Cash balances in foreign countries are often subject to additional restrictions. We may, therefore, have difficulties timely repatriating cash held outside the U.S., and such repatriation may be subject to tax. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. and other countries and may adversely affect our liquidity. To the extent necessary, we accrue for tax consequences on the earnings of our foreign subsidiaries as they are earned. We may utilize tax planning and financing strategies in an effort to ensure that our worldwide cash is available in the locations in which it is needed. We periodically review and evaluate these plans and strategies, including externally committed and non-committed credit agreements accessible by our Company and each of our operating subsidiaries. We believe these financing arrangements, along with cash flows from operating activities within the U.S., are sufficient to fund our current cash needs in the U.S.

Cash Flows and Use of Cash

Our business historically generates positive operating cash flows each year and our debt maturities are generally of a longer-term nature. However, our liquidity could be impacted significantly by the risk factors we described in Part I—Item 1A. "Risk Factors" in our Annual Report, Part II.—Item 1A. "Risk Factors" in this report and the items listed above.

Cash Flows from Operating Activities

Net cash provided by operating activities of $1,415.8 million for the nine months ended September 30, 2024 decreased $188.7 million compared to $1,604.5 million for the nine months ended September 30, 2023. The decrease in net cash provided by operating activities was primarily due to the unfavorable timing of working capital, partially offset by higher net income adjusted for non-cash addbacks and the timing of income taxes paid. The unfavorable timing of working capital was primarily driven by the timing of cash paid for our payables as well as higher payments for 2023 annual incentive compensation, partially offset by the timing of cash receipts.

Cash Flows from Investing Activities

Net cash used in investing activities of $530.3 million for the nine months ended September 30, 2024 decreased $138.2 million compared to $668.5 million for the nine months ended September 30, 2023. The decrease in net cash used in investing activities was primarily due to cash paid in the prior year for an acquisition, partially offset by higher capital expenditures as a result of the timing of capital projects.

Cash Flows from Financing Activities

Net cash used in financing activities of $744.8 million for the nine months ended September 30, 2024 increased $16.2 million compared to $728.6 million for the nine months ended September 30, 2023. The increase in net cash used in financing activities was primarily due to higher Class B common stock share repurchases and higher dividend payments, partially offset by lower net debt repayments.

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Capital Resources, including Material Cash Requirements

Cash and Cash Equivalents

As of September 30, 2024, we had total cash and cash equivalents of $1,021.7 million, compared to $868.9 million as of December 31, 2023 and $801.7 million as of September 30, 2023. The increase in cash and cash equivalents from December 31, 2023 and September 30, 2023 was primarily due to the net cash provided by operating activities, as well as the issuance of new EUR 800 million 3.8% senior notes due 2032, partially offset by net debt repayments, including the repayment of our EUR 800 million 1.25% senior notes which matured in July 2024, capital expenditures, Class B common stock share repurchases and dividend payments.

Borrowings

We repaid our EUR 800 million 1.25% senior notes upon their maturity on July 15, 2024 using the cash proceeds from our EUR 800 million 3.8% senior notes issued on May 29, 2024 and cash on hand. Refer to Part I.—Item 1. Financial Statements, Note 7, "Debt" for details.

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Based on the credit profile of our lenders that are party to our credit facilities, we are confident in our ability to draw on our revolving credit facility if the need arises. On June 3, 2024, we amended our existing $2.0 billion multi-currency revolving credit facility to, among other things, extend the maturity date from June 26, 2028 to June 26, 2029. As of September 30, 2024, we had $2.0 billion available to draw on our amended and restated $2.0 billion multi-currency revolving credit facility. As of September 30, 2024, we had no borrowings drawn on this amended and restated multi-currency revolving credit facility and no commercial paper borrowings.

We intend to further utilize our cross-border, cross currency cash pool as well as our commercial paper programs for liquidity as needed. We also have CAD, GBP and USD overdraft facilities across several banks should we need additional short-term liquidity.

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.

The maximum net debt to EBITDA leverage ratio, as defined by the amended and restated multi-currency revolving credit facility agreement, was 4.00x as of September 30, 2024 and December 31, 2023. As of September 30, 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 September 30, 2024 rank pari-passu.

See Part I.—Item 1. Financial Statements, Note 7, "Debt" for further discussion of our borrowings and available sources of borrowings, including lines of credit.

Guarantees

We guarantee indebtedness and other obligations to banks and other third parties for some of our equity method investments and consolidated subsidiaries. See Part I.—Item 1. Financial Statements, Note 10, "Commitments and Contingencies" for further discussion.

Material Cash Requirements from Contractual and Other Obligations

There were no material changes, except for the cash payment required for the mandatory purchase of the remaining 49.9% ownership interest in Cobra U.K. of $89 million which was made on October 21, 2024, to our material cash requirements from contractual and other obligations outside the ordinary course of business or due to factors similar in nature to inflation, changing prices on operations or changes in the remaining terms of the contracts since December 31, 2023, as reported in Part II.— Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, "Material Cash Requirements from Contractual and Other Obligations" in our Annual Report.

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Credit Rating

Our current long-term credit ratings are BBB/Stable Outlook, Baa1/Stable Outlook and BBB/Stable Outlook with Standard & Poor's, Moody's and DBRS, respectively. Our short-term credit ratings are A-2, Prime-2 and R-2, respectively. A securities rating is not a recommendation to buy, sell or hold securities, and it may be revised or withdrawn at any time by the applicable rating agency.

Guarantor Information

SEC Registered Securities

For purposes of this disclosure, including the tables, "Parent Issuer" shall mean MCBC in its capacity as the issuer of the senior notes under the May 2012 Indenture, the July 2016 Indenture and the May 2024 Indenture. "Subsidiary Guarantors" shall mean certain Canadian and U.S. subsidiaries reflecting the substantial operations of our Americas segment.

Pursuant to the indenture dated May 3, 2012 (as amended, the "May 2012 Indenture"), MCBC issued its outstanding 5.0% senior notes due 2042. Additionally, pursuant to the indenture dated July 7, 2016 ("July 2016 Indenture"), MCBC issued its outstanding 3.0% senior notes due 2026, 4.2% senior notes due 2046 and 1.25% senior notes due 2024 (subsequently repaid upon maturity on July 15, 2024). Further, pursuant to the indenture dated May 29, 2024 ("May 2024 Indenture"), MCBC issued its outstanding 3.8% senior notes due 2032. The issuances of the senior notes under the May 2012 Indenture, the July 2016 Indenture and the May 2024 Indenture were registered under the Securities Act of 1933, as amended. These senior notes are guaranteed on a senior unsecured basis by certain subsidiaries of MCBC, which are listed in Exhibit 22 of this Quarterly Report on Form 10-Q (the Subsidiary Guarantors, and together with the Parent Issuer, the "Obligor Group"). Each of the Subsidiary Guarantors is 100% owned by the Parent Issuer. The guarantees are full and unconditional and joint and several.

None of our other outstanding debt was issued in a transaction that was registered with the SEC, and such other outstanding debt is issued or otherwise generally guaranteed on a senior unsecured basis by the Obligor Group or other consolidated subsidiaries of MCBC. These other guarantees are also full and unconditional and joint and several.

As of September 30, 2024, the senior notes and related guarantees rank pari-passu with all other unsubordinated debt of the Obligor Group and senior to all future subordinated debt of the Obligor Group. The guarantees can be released upon the sale or transfer of a Subsidiary Guarantors' capital stock or substantially all of its assets, or if such Subsidiary Guarantor ceases to be a guarantor under our other outstanding debt.

See Part I.—Item 1. Financial Statements, Note 7, "Debt" for details of all debt issued and outstanding as of September 30, 2024.

The following summarized financial information relates to the Obligor Group as of September 30, 2024 on a combined basis, after elimination of intercompany transactions and balances between the Obligor Group, and excluding the investments in and equity in the earnings of any non-guarantor subsidiaries. The balances and transactions with non-guarantor subsidiaries have been separately presented.

Summarized Financial Information of Obligor Group


	Nine Months Ended
	September 30, 2024
	(in millions)
Net sales, out of which:	$	6,937.7
Intercompany sales to non-guarantor subsidiaries	$	78.6
Gross profit, out of which:	$	2,779.3
Intercompany net costs from non-guarantor subsidiaries	$	(287.3)

Net interest expense, out of which:	$	(119.9)
Intercompany net interest income from non-guarantor subsidiaries	$	27.5

Income before income taxes	$	1,044.0
Net income	$	796.8

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	As of September 30, 2024		As of December 31, 2023
	(in millions)
Total current assets, out of which:	$	2,084.6	$	1,814.3
Intercompany receivables from non-guarantor subsidiaries	$	207.2	$	255.7
Total noncurrent assets, out of which:	$	24,513.5	$	24,641.0
Noncurrent intercompany notes receivable from non-guarantor subsidiaries	$	4,130.2	$	4,178.6

Total current liabilities, out of which:	$	2,742.6	$	3,048.4
Current portion of long-term debt and short-term borrowings	$	5.4	$	885.6
Intercompany payables due to non-guarantor subsidiaries	$	777.9	$	117.7
Total noncurrent liabilities, out of which:	$	9,065.0	$	8,094.7
Long-term debt	$	6,148.7	$	5,257.6

Capital Expenditures

We incurred $424.2 million and paid $563.0 million, for capital improvement projects worldwide in the nine months ended September 30, 2024, excluding capital spending by equity method joint ventures, representing a decrease of $4.2 million from the $428.4 million of capital expenditures incurred in the nine months ended September 30, 2023. We continue to focus on where and how we employ our planned capital expenditures, with an emphasis on obtaining required returns on invested capital as we determine how to best allocate cash within the business.

Contingencies

We are party to various legal proceedings arising in the ordinary course of business, environmental litigation and indemnities associated with our sale of Kaiser to FEMSA. See Part I.—Item 1. Financial Statements, Note 10, "Commitments and Contingencies" for further discussion.

Off-Balance Sheet Arrangements

Refer to Part II.—Item 8. Financial Statements, Note 13, "Commitments and Contingencies" in our Annual Report for discussion of off-balance sheet arrangements. As of September 30, 2024, we did not have any other material off-balance sheet arrangements.

Critical Accounting Estimates

Our accounting policies and accounting estimates critical to our financial condition and results of operations are set forth in our Annual Report and did not change during the nine months ended September 30, 2024. See Part I.—Item 1. Financial Statements, Note 2, "New Accounting Pronouncements" for discussion of any recently adopted accounting pronouncements. See also Part I.—Item 1. Financial Statements, Note 5, "Goodwill and Intangible Assets" for discussion of the results of our 2023 annual impairment testing analysis, the related risks to our indefinite-lived intangible brand assets and the goodwill amounts associated with our reporting units.

New Accounting Pronouncements Not Yet Adopted

See Part I.—Item 1. Financial Statements, Note 2, "New Accounting Pronouncements" for a description of any new accounting pronouncements that have or could have a significant impact on our financial statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Part II.—Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report for further details of our market risks and our market sensitive instruments as of December 31, 2023. During the nine months ended September 30, 2024, our market risk sensitive instruments fluctuated as a result of changes in interest rates, currency exchange rates and commodity prices.

Interest Rate Risk

As of September 30, 2024 and December 31, 2023, the following table presents our fixed rate debt and forward starting interest rate swaps as well as the impact of an absolute 1% adverse change in interest rates on their respective fair values. Notional amounts and fair values are presented in USD based on the applicable exchange rates as of September 30, 2024 and December 31, 2023, respectively. See Part I - Item 1. Financial Statements, Note 7. "Debt" for the maturity dates of our outstanding debt instruments.


	Notional amounts				Fair Value Asset/(Liability)				Effect of Adverse Change
(in millions)	As of September 30, 2024		As of December 31, 2023		As of September 30, 2024		As of December 31, 2023		As of September 30, 2024		As of December 31, 2023
USD denominated fixed rate senior notes	$	4,900.0	$	4,900.0	$	(4,656.2)	$	(4,608.2)	$	(397.0)	$	(414.4)
Foreign currency denominated fixed rate senior notes	$	1,260.5	$	1,260.7	$	(1,288.3)	$	(1,248.6)	$	(70.9)	$	(13.5)
Forward starting interest rate swaps	$	1,000.0	$	1,000.0	$	39.2	$	41.6	$	(82.5)	$	(78.9)

Foreign Exchange Risk

The following table includes details of our foreign currency denominated fixed rate debt and our foreign currency forwards used to hedge our foreign exchange rate risk as well as the impact of a hypothetical 10% adverse change in the related foreign currency exchange rates on their respective fair values. Notional amounts and fair values are presented in USD based on the applicable exchange rates as of September 30, 2024 and December 31, 2023, respectively.


	Notional amounts				Fair Value Asset/(Liability)				Effect of Adverse Change
(in millions)	As of September 30, 2024		As of December 31, 2023		As of September 30, 2024		As of December 31, 2023		As of September 30, 2024		As of December 31, 2023
Foreign currency denominated fixed rate senior notes	$	1,260.5	$	1,260.7	$	(1,288.3)	$	(1,248.6)	$	(129.6)	$	(124.8)
Foreign currency forwards	$	234.0	$	219.4	$	—	$	(1.4)	$	(25.1)	$	(23.6)

SIGNATURE

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



			MOLSON COORS BEVERAGE COMPANY
			By:						/s/ ROXANNE M. STELTER
									Roxanne M. Stelter Vice President and Controller (Principal Accounting Officer) November 8, 2024

MOLSON COORS BEVERAGE CO - Quarter Report: 2024 September (Form 10-Q)

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