Molson Coors Beverage (TAP) 10-K risk factor changes: FY2018 vs FY2017

Specifically, in the U.S., Canada and Europe, we have experienced vast expansion in the craft beer industry along with the expansion of cider and flavored malt [removed: beverages and, accordingly, among other things, we have strategically acquired several craft breweries.][added: beverages.]

If we are unsuccessful in evolving with, and navigating through, the changes to the markets in which we operate, there could be a [removed: material adverse effect on our business and financial results.]

In all of the markets in which we operate, aggressive marketing strategies, such as reduced pricing, brand positioning, and increased capital [added: or other] investments by these competitors could have a material adverse effect on our business and financial results.

In addition, continuing consolidation among major global brewers [added: and between brewers and other beverage companies] may lead to stronger or new competitors, loss of partner brands, negative impacts on our distributor networks and pressures from marketing and pricing tactics by competitors.

Such pressures could have a material adverse impact [removed: our] on our business and our financial results and market share.

For example, sales in the U.S. and Canada accounted for approximately 80% of our total [removed: 2017] [added: 2018] sales.

Our Coors Light and Miller Lite brands in the U.S., Coors Light, Molson Canadian, Coors Banquet and Carling brands in Canada, and Carling, Staropramen, Jelen, Bergenbier and Coors Light brands in Europe represented approximately half of each respective segment's sales volumes in [removed: 2017.][added: 2018.]

Moreover, several of our major markets are mature and we have a significant share in such markets, therefore, small movements in consumer preference, such as [removed: a] consumer [removed: shift] [added: shifts] away from premium light brands, can disproportionately impact our results.

[removed: We cannot be certain that the steps we have taken to protect] our intellectual property rights will be sufficient or that third parties will not infringe upon or misappropriate these rights.

For example, a trend towards value brands in certain of our markets or [removed: further] deterioration of the current economic conditions could result in a material adverse effect on our business and financial results.

Softer consumer demand for our [removed: products] [added: products, particularly] in the [removed: U.S.] [added: U.S.,] could reduce our profitability and could negatively affect our overall financial performance.

[added: Even if we are able to integrate the acquired businesses and operations successfully,] this integration may not result in the realization of the full benefits of the cost and operational synergies of the Acquisition that we currently expect within the anticipated time frame, or at all.

| • | reliance on competitors, [removed: ABI (or Asahi, in the case of Europe),] [added: ABI,] to provide production services as we continue to transition the business; [added: and] |

| • | failure to develop sustainable production sources prior to the expiration of ABI's [removed: (or Asahi's, in the case of Europe)] production services. |

If the Miller International Business or the markets in which it operates deteriorate, the potential cost savings, growth opportunities and other synergies of the acquisition of the Miller International Business may not be realized fully, or at all, or may take longer [added: to realize than expected.]

The supply and price of these raw materials and commodities can be affected by a number of factors beyond our control, including market demand, alternative sources for suppliers, global geopolitical events (especially as to their impact on crude oil prices and the resulting impact on diesel fuel prices), trade agreements among producing and consuming nations, governmental regulations, including tariffs, frosts, droughts and other weather conditions, [added: changes in precipitation patterns, the frequency of extreme weather events,] economic factors affecting growth decisions, inflation, plant [removed: diseases] [added: diseases, theft] and [removed: theft.][added: industry surcharges and other practices.]

For example, as a result of the Acquisition, we [removed: have] allocated approximately $6.3 billion and $7.6 [removed: billion to goodwill and indefinite-lived intangible assets, respectively.]

These brands were therefore reclassified as definite-lived intangible assets and [removed: will be] [added: are being] amortized over useful lives ranging from 30 to 50 years.

Our most recent impairment analysis, conducted as of October 1, [removed: 2017,] [added: 2018,] the first day of our fiscal fourth quarter, indicated that the fair value of the U.S., Europe and Canada reporting units were estimated at approximately [removed: 28%, 18%] [added: 19%, 11%] and [removed: 26%] [added: 6%] in excess of their carrying values, respectively.

Although the fair values of our reporting units are [removed: sufficiently] in excess of their carrying values, the fair values are sensitive to [added: the aforementioned] potential unfavorable changes [removed: in forecasted cash flows, macroeconomic conditions, market multiples or discount rates] that could have an adverse [removed: impact.][added: impact on future analyses.]

See Part II-Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Estimates and Part II-Item 8 Financial Statements and Supplementary Data, [removed: Note 11,] [added: [Note 10,] "Goodwill and Intangible [removed: Assets"] [added: Assets"](#s5EB4C3ED5D9157F4AA4652A0207A6AFF)] of the Notes for additional information related to the results of our annual impairment testing.

We manufacture and/or distribute products of other beverage companies through various joint venture, licensing, distribution, contract brewing or other similar arrangements, such as our agreement to import, market, distribute and sell Heineken in Canada and our arrangements to brew and distribute Beck's, Stella Artois, Lowenbrau and [added: Spaten and to distribute Corona in Central Europe.]

For example, [removed: our 2015 Europe results were adversely impacted by the termination of our brewing and kegging agreement with Heineken under which we produced and packaged the Foster’s and Kronenbourg brands] in [removed: the U.K. Additionally, in] 2017, our International segment was adversely impacted by the loss of the Modelo brands in Japan.

Violations of these laws and regulations could result in fines and penalties, criminal sanctions against us, our officers, or our employees, prohibitions on the conduct of our business and prohibitions on our ability to offer our products and services in one or more countries, each of which could have a materially negative effect on our [added: reputation,] brands and our operating results.

Although we have implemented policies and procedures designed to ensure compliance with these foreign and U.S. laws and regulations, including the U.S. Foreign [added: Corrupt Practices Act and the U.K. Bribery Act, there can be no assurance that our employees, business partners or agents will not violate our policies.]

To the extent that we fail to adequately manage these risks through our risk management policies intended to protect our exposure to currency movements, which may affect our operations, including if our hedging arrangements do not [removed: effectively or completely hedge changes in foreign currency rates, our results of operations may be materially and adversely affected.]

[removed: As] [added: For example, as] a result of the U.K. vote [added: in 2016] to leave the European Union, the GBP experienced a significant decline in comparison to USD and EUR and may continue to be volatile.

Most notably, the statutory federal corporate income tax rate was changed from 35% to 21% for corporations and, as a result, we recorded an estimated net tax benefit of approximately [removed: $434] [added: $567] million in our consolidated statements of operations during the fourth quarter of 2017 driven by the effects of the 2017 Tax Act on our deferred tax positions as of December 31, 2017.

If [removed: our complete and final assessment and understanding of] the [removed: 2017 Tax Act differs significantly from this initial assessment, or the] forthcoming [removed: rules,] regulations and interpretations change [added: relative to] our [removed: preliminary conclusions,] [added: current understanding and initial assessment of] the [added: impacts of the 2017 Tax Act, the] resulting impacts could have a material adverse impact on our tax rate and cash tax expectations.

Additionally, modifications of U.S. laws and policies governing foreign trade and investment (including trade agreements and tariffs, such as the North American Free Trade Agreement or aluminum [removed: tariffs currently being evaluated by the U.S. government)] [added: tariffs)] could adversely affect our supply chain, business and results of operations.

Additionally, uncertainties exist with respect to the interpretation of, and potential future developments in, complex [added: domestic and international tax laws and regulations, the amount and timing of future taxable income and the interaction of such laws and regulations among jurisdictions.]

[removed: Finally,] [added: In particular,] advocates of prohibition and other severe restrictions on the marketing and sales of alcohol are becoming increasingly organized and coordinated on a global basis, seeking to impose laws or regulations or to bring actions against us, to curtail substantially the consumption of alcohol, including beer, in developed and developing markets.

For example, in early 2016, the government of Bihar, India, the largest state in India in which our International segment operates, announced a complete prohibition on the sale and distribution of [removed: alcohol.][added: alcohol, which resulted in the impairment of assets totaling $30.8 million, recorded during the second quarter of 2016.]

Climate [removed: change] [added: change, weather] and water availability may negatively affect our business and financial results.

For example, as part of a strategic review of our supply chain network, certain breweries and bottling lines were closed [removed: during 2015 and 2016] [added: in recent years,] and we [removed: incurred related costs during 2017.][added: have and continue to incur brewery closure costs.]

In order to compete in the consolidating global brewing industry, we anticipate that we may, from time to time, in the future acquire additional businesses or enter into additional joint ventures that we believe would provide a strategic fit with our business such as the [removed: Acquisition.][added: Acquisition and our Canadian business' joint venture with HEXO.]

Potential risks associated with acquisitions and joint ventures could include, among other things: our ability to identify attractive acquisitions and joint ventures; our ability to offer potential acquisition targets and joint venture partners' competitive transaction terms; our ability to raise capital on reasonable terms to finance attractive acquisitions and joint ventures; our ability to realize the benefits or cost savings that we expect to realize as a result of the acquisition or joint venture; diversion of management's attention; our ability to successfully integrate our businesses with the business of the acquired company; motivating, recruiting and retaining key employees; conforming standards, controls, procedures and policies, business cultures and compensation structures among our company and the acquired company; consolidating and streamlining sales, marketing and corporate operations; potential exposure to unknown liabilities of acquired companies; [added: potential exposure to unknown or future liabilities or costs that affect the markets in which acquired companies or joint ventures operate; reputational or other damage due to the conduct of a joint venture partner;] loss of key employees and customers of the acquired business; and managing tax costs or inefficiencies associated with integrating our operations following completion of an acquisition or entry into a joint venture.

Our costs of providing defined benefit pension plans are dependent upon a number of factors, such as the rates of return on the plans' assets, discount rates, the level of interest rates used to measure the required minimum funding levels of the plans, exchange rate fluctuations, [removed: future] government regulation, [added: court rulings or other changes in legal requirements, global equity prices, and our required and/or voluntary contributions to the plans.]

[removed: Such] cash funding obligations (or the timing of such contributions) could have a material adverse effect on our cash flows, credit rating, cost of borrowing, financial position and/or results of operations.

As of December 31, [removed: 2017,] [added: 2018,] approximately [removed: 55%, 40%,] [added: 50%, 35%,] and [removed: 28%] [added: 30%] of our Canadian, European and U.S. workforces, respectively, are represented by trade [removed: unions.][added: unions or councils.]

material adverse effect on our business and financial results.

We cannot be certain that the steps we have taken to protect

In addition, certain of our current and future debt and derivative financial instruments have or, in the future, could have interest rates that are tied to reference interest rates, such as the LIBOR.

The volatility and availability of such reference rates are out of our control.

Accordingly, changes to or the unavailability of such rates, could result in increases to the cost of debt which would negatively affect our profitability.

For example, in 2017, the UK’s Financial Conduct Authority announced that after 2021 it would no longer persuade or compel panel banks to submit the rates required to calculate LIBOR, and it is unclear whether the banks currently reporting information used to set LIBOR will stop doing so after 2021.

Should LIBOR no

longer be available, the rates we pay under certain derivative financial instruments could increase, which would negatively affect our profitability, and the attractiveness of borrowings under our current credit facility or future debt issuances could diminish, thereby limiting our access to capital.

For example, in June 2018, U.S. tariffs on aluminum imports from Canada, Mexico and EU went into effect, which has created volatility in the price of aluminum in the U.S. and increased the price of aluminum used in some of our product packaging.

billion to goodwill and indefinite-lived intangible assets, respectively.

In the current year testing, it was determined that the fair value of each of the reporting units declined from the prior year, resulting in our Europe and Canada reporting units now being considered at risk of future impairment in the event of significant unfavorable changes in the forecasted cash flows (including prolonged weakening of economic conditions, or significant unfavorable changes in tax, environmental or other regulations, including interpretations thereof), terminal growth rates, market multiples and/or weighted-average cost of capital utilized in the discounted cash flow analyses.

effectively or completely hedge changes in foreign currency rates, our results of operations may be materially and adversely affected.

We continue to monitor the 2017 Tax Act, including proposed regulations which may change upon finalization, as well as yet to be issued regulations and interpretations.

Separately, in December 2018, the U.S. Department of Treasury issued a regulation that impacts our ability to claim a refund of certain federal duties, taxes, and fees paid for beer sold between the U.S. and certain other countries effective in February 2019, and, as a result, future claims will no longer be accepted, and further, we may be unable to collect approximately $38 million in historically claimed, but not yet received, refunds, which would negatively impact our revenue.

For example, in June, U.S. 2018 tariffs on aluminum imports from Canada, Mexico and EU went into effect, which has created volatility in the price of aluminum in the U.S. and increased the price of aluminum used in some of our product packaging.

Continued imposition of U.S. aluminum tariffs, the implementation of additional tariffs and retaliatory tariffs from trade partners or related uncertainties could further increase the cost of certain of our imported materials, thereby adversely affecting our profitability.

Furthermore, should weather patterns in our markets shift from warm or high temperatures to unseasonably cool or wet weather, consumption of our products may decline, which could have a material adverse effect on our business and results of operations.

Concern over climate change may result in new or increased regional, federal and global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases, or to limit or impose additional costs on commercial water use due to local water scarcity concerns.

In the event that such regulation is more stringent than current regulatory obligations or the measures that we are currently undertaking to monitor and improve our energy efficiency and water conservation, we may experience disruptions in, or increases in our costs of, operation and delivery and we may be required to make additional investments in facilities and equipment or relocate our facilities.

In particular, increasing regulation of fuel emissions could increase the cost of energy, including fuel, required to operate our facilities or transport and distribute our products, thereby increasing the distribution and supply chain costs associated with our products.

As a result, the effects of climate change or water scarcity could negatively affect our business and operations.

In addition, any failure to achieve our goals with respect to reducing our impact on the environment or perception (whether or not valid) of our failure to act responsibly with respect to water use and the environment or to effectively respond to new, or changes in, legal or regulatory requirements concerning climate change or water scarcity could result in adverse publicity and could adversely affect our business, reputation, financial condition or results of operations.

There is also increased focus, including by governmental and non-governmental organizations, investors, customers and consumers on these and other environmental sustainability matters, including deforestation, land use, climate impact and water use.

Our reputation could be damaged if we or others in our industry do not act, or are perceived not to act, responsibly with respect to our impact on the environment.

Such

and Class A exchangeable shares deposited in the voting trust against the matter.

In addition, in recent years, there has been an increase in public and political attention on health and well-being as it relates to the alcohol beverage and other industries.

Additionally, the concerns around alcohol as well as health and well-being could result in unfavorable regulations or other legal requirements in certain of our markets, such as advertising, selling and other restrictions, increased taxes associated with our sales, or the establishment of minimum unit pricing.

Any such regulations or requirements could change consumer and customer purchasing patterns, which could negatively impact our business, results of operations, cash flows or financial condition.

We have identified a material weakness in our internal control over financial reporting which, if not remediated, could adversely affect our business, reputation and stock price.

As part of preparing our 2018 consolidated financial statements, we identified errors in the accounting for income taxes related to the deferred tax liabilities for our partnership in MillerCoors.

See Part II-Item 8 Financial Statements and Supplementary Data, [Note 1, "Basis of Presentation and Summary of Significant Accounting Policies"](#sB11811A494A55A06924D81AC36186725) for further discussion.

As a result of these errors, management identified a material weakness in internal control over financial reporting as of December 31, 2018, related to designing and maintaining effective controls over the completeness and accuracy of the accounting for, and disclosure of, the income tax effects of acquired partnership interests.

Specifically, we did not design appropriate controls to identify and reconcile deferred income taxes associated with the accounting for acquired partnership interests.

This material weakness resulted in material errors in connection with our step acquisition of MillerCoors that were corrected through the restatement of the consolidated financial statements as of and for the years ended December 31, 2017, and December 31, 2016, as described in Part II-Item 8 Financial Statements and Supplementary Data, [Note 1, "Basis of Presentation and Summary of Significant Accounting Policies"](#sB11811A494A55A06924D81AC36186725) to the consolidated financial statements and the correction of the unaudited quarterly financial information for fiscal years 2018 and 2017.

Additionally, this material weakness could result in misstatements to the aforementioned account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

As a result of the material weakness in internal control over financial reporting, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2018, based on criteria set forth by the Committee of Sponsoring Organization of the Treadway Commission in “Internal Control-An Integrated Framework (2013).” We cannot assure you that we will not identify additional material weaknesses in our internal control over financial reporting in the future related to income tax or other controls.

If the steps we take do not correct the material weakness in a timely manner, we may be unable to conclude in the future that we maintain effective internal control over financial reporting.

The occurrence of or failure to remediate this or future material weaknesses may adversely affect our reputation and business and the market price of our common stock.

Our Canadian business faces numerous risks relating to its joint venture in the Canadian cannabis industry.

In addition, the Supreme Court of Canada is currently considering the validity of certain interprovincial trade rules, which, among other things, may favor local or small brewers, and any changes could adversely impact our operating model across Canada.

Even if we are able to integrate the acquired businesses and operations successfully,

We may also incur additional costs in the course of the integration of the Miller International Business, and we cannot be certain that the elimination of duplicative costs or the realization of other efficiencies related to the integration of the businesses will offset the transaction and integration costs in the near term, or at all.

Integrations of acquired businesses are complex, costly, and time-consuming, and such activities divert management’s time and attention.

The assumption of liabilities in the Acquisition, coupled with any delays, additional costs, or issues experienced during the integration period could have a material adverse effect on our business, financial condition, results of operations and cash flows.

These risks arise because we acquired the Miller International Business from ABI at a time when we had no access to historical financial statements or information which were then in the possession of SABMiller.

Accordingly, our due diligence was limited.

Under a settlement agreement entered into with ABI in January 2018, we received an Adjustment Amount of $328 million related to the Acquisition; however, this adjustment may not be sufficient to mitigate all our risks related to the limited due diligence and incomplete historical financial statements and information of the Miller International Business.

| | |

| --- | --- |

| • | impacts of change in control provisions in contracts and agreements; |

| • | failure to retain key customers, employees and suppliers; |

| • | unanticipated issues, expenses and liabilities; |

| • | unfamiliarity with operating in many of the countries in which the Miller International Business operates; |

to realize than expected.

We currently intend to hold per share dividends constant and have suspended both our dividend target of 18% to 22% of trailing annualized EBITDA and our share repurchase program.

We also intend to use cash from operations to reduce our debt level, which will reduce funds available for other operational or strategic needs and may increase our vulnerability to adverse economic or industry conditions.

Spaten and to distribute Corona in Central Europe.

For example, effective in 2014 we terminated our Modelo Molson Imports, L.P. joint venture that imported, distributed and marketed the Modelo beer brand portfolio across all Canadian provinces and territories which had an adverse effect on our Canadian volumes and financial results.

Corrupt Practices Act and the U.K. Bribery Act, there can be no assurance that our employees, business partners or agents will not violate our policies.

Our initial assessment of the impacts of the 2017 Tax Act is preliminary as we continue to evaluate the 2017 Tax Act and understand its implications, as well as the related, and yet to be issued, regulator rules, regulations and interpretations.

domestic and international tax laws and regulations, the amount and timing of future taxable income and the interaction of such laws and regulations among jurisdictions.

global equity prices, and our required and/or voluntary contributions to the plans.

From time to time, our collective bargaining agreements come due for renegotiation.

Additionally, the concerns around alcohol could result in advertising, selling and other restrictions imposed by regulators.

Moreover, it could result in increased taxes associated with alcohol sales, which also could negatively impact our business, results of operations, cash flows or financial condition if consumers and customers change their purchasing patterns.

If we cease to use the industry standard returnable

The U.K. is expected to leave the EU on March 29, 2019.

Risks Specific to Our Discontinued Operations

Unless otherwise indicated, (a) all $ amounts are in [removed: USD,] [added: USD and] (b) comparisons are to comparable prior [removed: periods, and (c) 2017, 2016 and 2015 refers to the 12 months ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.][added: periods.]

Where indicated, we have reflected unaudited pro forma financial information for 2016 [removed: and 2015] which gives effect to the Acquisition and the related financing as if they were completed on January 1, [removed: 2015,] [added: 2016,] the first day of the Company’s [removed: 2015] [added: 2016] fiscal year.

On January 21, 2018, MCBC and ABI entered into a settlement agreement related to the purchase price adjustment under the purchase [removed: agreement.][added: agreement, and on January 26, 2018, pursuant to the settlement agreement, ABI paid to MCBC $330.0 million, of which $328.0 million constitutes the Adjustment Amount.]

[removed: This] [added: As this] settlement occurred following the finalization of purchase [removed: accounting and, as a result,] [added: accounting,] we [removed: expect] [added: recorded] the settlement proceeds related to the Adjustment Amount [removed: to be recorded] as a gain within special items, net in our consolidated statement of operations [added: in our Corporate segment and within cash provided by operating activities within our consolidated statement of cash flows] for the [removed: three months] [added: year] ended [removed: March] [added: December] 31, 2018.

MCBC and ABI also agreed to certain mutual releases as further described in the settlement [removed: agreement which was filed as an exhibit to a Current Report on Form 8-K filed January 22, 2018.][added: agreement.]

In [removed: 2017,] [added: 2018,] we continued to focus on building our brand strength and transforming our portfolio toward the above premium, flavored malt [removed: beverages,] [added: beverage,] craft and cider segments.

[removed: During the first quarter of 2017, we issued the 2017 Notes (as defined in] [added: See] Part II—Item 8 Financial Statements and Supplementary Data, [removed: Note][added: [Note 4, "Acquisition and Investments"](#sB9A089BE9D5E572488D49B9B5A2F1F77) of the Notes for further discussion.]

The following table highlights summarized components of our consolidated statements of operations for the years ended December 31, [removed: 2017,] [added: 2018,] December 31, [removed: 2016,] [added: 2017,] and December 31, [removed: 2015,] [added: 2016,] and unaudited pro forma financial information for the [removed: years] [added: year] ended December 31, [removed: 2016, and December 31, 2015.][added: 2016.]

[removed: Our consolidated historical financial statements and unaudited pro forma financial information have been revised to reflect the retrospective application] [added: For a complete description] of our [removed: change in] [added: significant] accounting [removed: policy as discussed in] [added: policies, see] Part II—Item 8 Financial Statements and Supplementary Data, [removed: Note] [added: [Note] 1, "Basis of Presentation and Summary of Significant Accounting [removed: Policies"] [added: Policies"](#sB11811A494A55A06924D81AC36186725)] of the Notes.

The unaudited pro forma financial information is based on the historical consolidated financial statements of MCBC and MillerCoors, both prepared in accordance with U.S. GAAP, and gives effect to the Acquisition and the completed financing as if they were completed on January 1, [removed: 2015.][added: 2016.]

The unaudited pro forma financial information does not include adjustments for costs related to integration activities following the completion of the Acquisition, cost savings or synergies that have been or [removed: may be achieved by the combined businesses.]

| | For the years ended | | | | | | | | | | | | | | | | | | | | | [removed: | | | |]

| | December 31, [removed: 2017 | | | | December 31, 2016] [added: 2018] | | | | | | | [added: December 31, 2017] | | | | December 31, [removed: 2015] [added: 2016] | | | | | | | | | |

| | As Reported | | | | [removed: As Reported | | | | Pro Forma] [added: Change] | | | [added: As Restated] | [removed: Pro Forma Change] | | | As [removed: Reported] [added: Restated] | | | | Pro Forma | | | | Pro Forma Change | |

| | (In millions, except percentages and per share data) | | | | | | | | | | | | | | | | | | | | | [removed: | | | |]

| Financial volume in hectoliters(1) | [removed: 99.563 | | | | 46.912] [added: 96.627] | | | | [removed: 101.934] [added: (2.9] | [added: )%] | | [added: 99.563] | [removed: (2.3] | [removed: )%] | | [removed: 33.746] [added: 46.912] | | | | [removed: 104.012] [added: 101.934] | | | | [removed: (2.0] [added: (2.3] | )% |

| Net sales | $ | [removed: 11,002.8 |] [added: 10,769.6] | | [removed: $] | [removed: 4,885.0] [added: (2.1] | [added: )%] | | $ | [removed: 10,983.2 | | | 0.2] [added: 11,002.8] | [removed: %] | | $ | [removed: 3,567.5] [added: 4,885.0] | | | $ | [removed: 11,238.1] [added: 10,983.2] | | | [removed: (2.3] [added: 0.2] | [removed: )%] [added: %] |

| (1) | [removed: Historical financial] [added: Financial] volumes [removed: have been] [added: for the year ended December 31, 2016, were] recast to reflect the impacts of aligning policies on reporting financial volumes as a result of the Acquisition. [removed: See "Worldwide Brand Volume" below for further details.] |

[removed: 2017] [added: 2018] Financial Highlights

[removed: Additionally, as noted above,] [added: During the first quarter of 2017,] we released an indirect tax loss [removed: contingency,] [added: contingency] which was initially recorded in the fourth quarter of 2016, for a benefit of approximately $50 million [removed: during] [added: within] the [removed: first quarter] [added: excise taxes line item on the consolidated statement] of [removed: 2017 in our Europe business which favorably impacted net sales and net income attributable to MCBC from continuing] operations.

| • | We generated cash flow from operating activities of approximately [removed: $1.9] [added: $2.3] billion, representing a [removed: 65.6%] [added: 24.9%] increase from approximately [removed: $1.1] [added: $1.9] billion in [removed: 2016.] [added: 2017.] The increase in operating cash flow in [removed: 2017] [added: 2018] compared to [removed: 2016] [added: 2017] is primarily related to the [removed: addition] [added: proceeds received during the first quarter] of [added: 2018 of $328.0 million related to] the [removed: consolidated U.S. business] [added: Adjustment Amount as previously discussed, as well as lower pension contributions] and lower [removed: cash paid for taxes (refund in 2017 as compared to cash tax paid in 2016),] [added: interest paid,] partially offset by [removed: higher cash paid for interest] [added: unfavorable changes in working capital] and [removed: higher pension contributions.] [added: lower cash tax receipts.] |

| • | Global priority brand volume [removed: increased 2.8%] [added: decreased 3.1%] in [removed: 2017] [added: 2018] versus [removed: 2016, driven by growth in Europe, Canada] [added: 2017, due to declines across Canada, the U.S.] and International, partially offset by [removed: declines in the U.S. The overall increase is driven by] growth [removed: from all global priority brands with the exception of Coors Light as discussed below.] [added: in Europe.] |

| • | Blue Moon Belgian White global brand volume [removed: increased 4.1%] [added: decreased 0.2%] in [removed: 2017] [added: 2018] versus [removed: 2016,] [added: 2017,] due to [removed: strong] [added: decline in the U.S., offset by] growth [removed: globally.] [added: in Canada, Europe and International.] |

| • | Coors global brand volume - Coors Light global brand volume declined [removed: 2.9%] [added: 5.0%] in [removed: 2017] [added: 2018] versus [removed: 2016, as] [added: 2017. The overall volume decrease was due to] lower [removed: volumes] [added: brand volume] in the [removed: U.S. and] [added: U.S.,] Canada [removed: were] [added: and International,] partially offset by [removed: strong performance] [added: growth] in [removed: Europe and International. Although volumes] [added: Europe. Volumes] in the U.S. were lower than prior [removed: year, Coors Light gained share] [added: year reflective] of the [added: U.S. industry] premium [added: and premium] light segment [removed: for the eleventh consecutive quarter.] [added: performance.] The declines in Canada [removed: were] [added: are] the result of ongoing competitive pressures in Quebec and [removed: Ontario.] [added: Ontario and a continued shift in consumer preference to value brands in the West.] Coors Banquet global brand volume [removed: increased 4.2%] [added: decreased 4.9%] in [removed: 2017] [added: 2018] versus [removed: 2016, due to continued strong performance in] [added: 2017, driven by] the U.S. and Canada. |

| • | Miller global brand volume - Miller Lite [removed: and Miller Genuine Draft] global brand volumes [removed: increased] [added: decreased] 1.3% [removed: and 116.1%] in [removed: 2017] [added: 2018] versus [removed: 2016, respectively, due to the addition of] [added: 2017, primarily driven by declines in] the [removed: Miller global brands business. Additionally,] [added: U.S., partially offset by growth in International. However,] Miller Lite gained share of the [added: U.S.] premium light segment [removed: in the U.S.] for the [removed: thirteenth] [added: seventeenth] consecutive quarter. [added: Miller Genuine Draft global brand volume decreased 3.9% in 2018 versus 2017, due to decreases in the U.S., International and Canada, partially offset by growth in Europe.] |

| • | Molson Canadian brand volume in Canada decreased [removed: 4.7%] [added: 8.1%] during [removed: 2017] [added: 2018] versus the prior year, primarily driven by [removed: challenging economic conditions in Ontario and] competitive pressures in the West. |

| • | Staropramen global brand volume increased [removed: 2.7%] [added: 3.7%] during [removed: 2017] [added: 2018] versus [removed: 2016,] [added: 2017,] driven by growth outside of the brand's primary market. |

See Part II—Item 8 Financial Statements and Supplementary Data, [removed: Note] [added: [Note] 4, "Acquisition and [removed: Investments"] [added: Investments"](#sB9A089BE9D5E572488D49B9B5A2F1F77)] of the Notes for further [removed: discussion.][added: details.]

| | December 31, [removed: 2017] [added: 2018] | | | Change | | | December 31, [removed: 2016] [added: 2017] | | | Change | | | December 31, [removed: 2015] [added: 2016] | |

| Financial volume | [removed: 99.563] [added: 96.627] | | | [removed: 112.2] [added: (2.9] | [removed: %] [added: )%] | | [removed: 46.912] [added: 99.563] | | | [removed: 39.0] [added: 112.2] | % | | [removed: 33.746] [added: 46.912] | |

| Less: Contract brewing and wholesaler volume | [removed: (8.602] [added: (8.182] | ) | | [removed: 108.6] [added: (4.9] | [removed: %] [added: )%] | | [removed: (4.124] [added: (8.602] | ) | | [removed: 18.4] [added: 108.6] | % | | [removed: (3.482] [added: (4.124] | ) |

| Add: Royalty volume | [removed: 3.685] [added: 4.054] | | | [removed: 75.3] [added: 10.0] | % | | [removed: 2.102] [added: 3.685] | | | [removed: 28.9] [added: 75.3] | % | | [removed: 1.631] [added: 2.102] | |

| Add: STW to STR adjustment | [removed: (0.687] [added: (0.358] | ) | | [removed: (197.2] [added: (47.9] | )% | | [removed: 0.707] [added: (0.687] | [added: )] | | N/M | | | [removed: (0.041] [added: 0.707] | [removed: )] |

| Owned volume | [removed: 93.959] [added: 92.141] | | | [removed: 106.1] [added: (1.9] | [removed: %] [added: )%] | | [removed: 45.597] [added: 93.959] | | | [removed: 43.1] [added: 106.1] | % | | [removed: 31.854] [added: 45.597] | |

| Add: Proportionate share of equity investment worldwide brand volume | — | | | [removed: (100.0] [added: —] | [removed: )%] [added: %] | | [removed: 19.940] [added: —] | | | [removed: (23.9] [added: (100.0] | )% | | [removed: 26.211] [added: 19.940] | |

| Total worldwide brand volume | [removed: 93.959] [added: 92.141] | | | [removed: 43.4] [added: (1.9] | [removed: %] [added: )%] | | [removed: 65.537] [added: 93.959] | | | [removed: 12.9] [added: 43.4] | % | | [removed: 58.065] [added: 65.537] | |

[removed: Our worldwide] [added: Worldwide] brand volume increased in 2017 compared to 2016, due to the Acquisition as well as strong growth in Europe and International partially as a result of adding the Miller global brands business as well as growth within our existing brand portfolio.

| | Volume | | | Price, Product and Geography [removed: Mix] [added: Mix(1)] | | | Currency | | | [removed: Other(1)] [added: Other(2)] | | | Total | |

| (1) | Europe [removed: "other"] [added: "Other"] column includes the release of an indirect tax provision [removed: as] further [removed: discussed below.] [added: described in the Results of Operations.] |

The following table highlights the drivers of change in net sales [removed: on a reported basis] for the year ended December 31, [removed: 2016,] [added: 2018,] versus December 31, [removed: 2015,] [added: 2017,] by segment (in percentages) and excludes Corporate net sales revenue for our water resources and energy operations in the state of Colorado.

See also "Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995".

We have restated our financial statements for 2017 and 2016 due to the correction of errors in the accounting for income taxes related to the deferred tax liabilities for our partnership in MillerCoors.

Accordingly, the Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth below reflect the effects of the restatements.

On January 1, 2018, we adopted the FASB's new accounting pronouncement related to revenue recognition.

This guidance was adopted using the modified retrospective approach, and therefore, prior period results have not been restated.

The following table highlights the impact of this new guidance on summarized components of our consolidated statement of operations for the year ended December 31, 2018, when comparing our current period results of operations under the new guidance, versus our results of operations if historical guidance had continued to be applied.

| | Year Ended December 31, 2018 | | | | | | | | | | | | | | | | | | |

| | U.S. | | | | Canada | | | | Europe | | | | International | | | | Consolidated | | |

| Impact to Consolidated Statement of Operations - Favorable/(Unfavorable): | | | | | | | | | | | | | | | | | | | |

| Net sales | $ | (6.6 | ) | | $ | (47.3 | ) | | $ | (1.7 | ) | | $ | 0.1 | | | $ | (55.5 | ) |

| Gross profit | $ | (6.6 | ) | | $ | (47.3 | ) | | $ | (1.7 | ) | | $ | 0.1 | | | $ | (55.5 | ) |

| Marketing, general and administrative expenses | $ | 7.7 | | | $ | 47.3 | | | $ | 4.7 | | | $ | — | | | $ | 59.7 | |

| Operating income (loss) | $ | 1.1 | | | $ | — | | | $ | 3.0 | | | $ | 0.1 | | | $ | 4.2 | |

| Income (loss) before income taxes | $ | 1.1 | | | $ | — | | | $ | (0.4 | ) | | $ | 0.1 | | | $ | 0.8 | |

These impacts are primarily driven by the reclassification of certain cash payments to customers from marketing, general and administrative expenses to a reduction of revenue, as well as a change in the timing of recognition of certain promotional discounts and cash payments to customers.

See Part I—Item 1.

Financial Statements, [Note 1, "Basis of Presentation and Summary of Significant Accounting Policies"](#sB11811A494A55A06924D81AC36186725) and [Note 2, "New Accounting Pronouncements"](#s9445C975649B50FBA022CDEC7747D271) for further discussion on the adoption of this guidance.

Adoption of Pension and Other Postretirement Benefit Guidance

On January 1, 2018, we adopted the FASB's new accounting pronouncement related to the classification of pension and other postretirement benefit costs.

Specifically, the new guidance requires us to report only the service cost component in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period; while the other components of net benefit cost are now presented in the consolidated statements of operations separately from the service cost component and outside of operating income.

The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable.

We have also determined that only service cost will be reported within each operating segment and all other components will be reported within the Corporate segment.

The guidance related to the income statement presentation of service costs and other pension and postretirement benefit costs is applied retrospectively, while the capitalization of service costs component is applied prospectively.

This adjustment is classification only and had no impact to our consolidated net income.

See [Note 2, "New Accounting Pronouncements](#s9445C975649B50FBA022CDEC7747D271)" for further details including updated historical financial information.

may be achieved by the combined businesses.

Net income attributable to MCBC and the related diluted per share amounts for 2017 and 2016 have been restated due to the correction of errors related to income tax accounting.

| | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | |

| Net income (loss) attributable to MCBC | $ | 1,116.5 | | | (28.7 | )% | | $ | 1,565.6 | | | $ | 1,593.9 | | | $ | 291.8 | | | N/M | |

| • | In 2018, net income attributable to MCBC decreased 28.7% compared to the prior year primarily driven by the one-time income tax benefit recognized in the prior year due to the reduction to the U.S. federal corporate income tax rate as a result of the 2017 Tax Act. This decline was also driven by unrealized mark-to-market changes on commodity positions and lower volume and cost inflation in the U.S. and Canada, partially offset by the gain of $328.0 million related to the Adjustment Amount as previously discussed, positive global net pricing, global marketing optimization, general and administrative spend reductions and cost savings, as well as lower interest expense. |

| • | During 2018, we repaid our CAD 400 million 2.25% notes with cash on hand as part of our deleveraging commitment. We also repaid $379 million of commercial paper which was outstanding at December, 31, 2017. |

| • | In the U.S. segment, we reported income before income taxes of $1,320.7 million in 2018, versus income of $1,394.2 million in 2017, primarily driven by lower volume, cost of goods sold inflation, higher special charges and negative sales mix, partially offset by lower marketing, general and administrative expenses and higher net pricing. During the year we grew our share of the premium light segment with Miller Lite, which completed its seventeenth consecutive quarter of increased segment share, according to Nielsen. Coors Light remained the number two beer in industry share. In above premium, we established a foundation for growth by successfully introducing Arnold Palmer Spiked, establishing Peroni as the fastest growing European import, and relaunching the Sol brand. Additionally, Peroni grew volume for the seventeenth consecutive quarter. Blue Moon remained the number one national craft brand in the U.S. |

| • | In our Canada segment, we drove positive pricing primarily in Ontario and West. However, volume declined in the West and Ontario, partially offset by growth in Quebec. We reported income before income taxes of $157.0 million in 2018, versus income of $210.2 million in 2017, primarily due to higher other expense related to unrealized mark-to-market losses on warrants issued in connection with the formation of the Truss LP ("Truss") joint venture, negative sales mix and lower volumes, partially offset by higher net pricing. |

| • | In our Europe segment, our continued portfolio premiumization while defending share of national champion brands positively impacted our performance as we grew volumes in our above premium and core brands. In 2018, we reported income before income taxes of $186.4 million, versus income of $234.9 million in 2017, primarily due to cycling the impact of the indirect tax provision release of approximately $50 million during the first quarter of 2017, adopting recently revised excise-tax guidelines in one of our European markets, investments in our First Choice Agenda, as well as unfavorable foreign currency movements. This was partially offset by favorable sales mix shift from our premiumization efforts, more efficient marketing investments, the addition of Aspall Cider business, as well as a positive impact from cycling a bad debt provision recognized in 2017. |

| • | Our International segment reported a loss before income taxes of $2.7 million in 2018, compared to a loss of $19.7 million in the prior year, primarily driven by lower marketing and integration expenses, shifting to a more profitable business model in Mexico, higher net pricing, along with volume growth in our focus markets, partially offset by negative foreign currency movements and increased special charges as a result of formally exiting our China business. |

| • | Carling brand volume in Europe decreased by 2.5% versus 2017, due to lower volumes in the U.K., the brand's primary market. |

Effective in the first quarter of 2018, we have revised our net sales per hectoliter performance discussions to include a brand volume basis as defined above (with the exception of the STW to STR adjustment) with the net sales revenue component reflecting owned and actively managed brands as well as royalty revenue consistent with how management views the business.

Our worldwide brand volume decreased in 2018 compared to 2017, due to declines in the U.S. and Canada, partially offset by growth in Europe and International.

Subsequently, on January 26, 2018, pursuant to the settlement agreement, ABI paid to MCBC $330.0 million, of which $328.0 million constitutes the Adjustment Amount.

Therefore, the amount will not impact the fair value of consideration transferred for the purpose of the previously disclosed purchase accounting.

12, "Debt" of the Notes), and within the first nine months of 2017, we fully repaid our term loans, all of which will generate future interest savings and will contribute to meeting our deleveraging commitments.

As part of our deleveraging commitments we also made a discretionary cash contribution of $200 million to the U.S. pension plan during 2017.

This change impacts our Canada and Europe segments.

| | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net income (loss) attributable to MCBC from continuing operations | $ | 1,412.7 | | | $ | 1,995.8 | | | $ | 294.6 | | | N/M | | | $ | 391.3 | | | $ | 578.3 | | | (49.1 | )% |

| Net income (loss) attributable to MCBC per diluted share from continuing operations | $ | 6.52 | | | $ | 9.35 | | | $ | 1.36 | | | N/M | | | $ | 2.10 | | | $ | 2.67 | | | (49.1 | )% |

N/M = Not meaningful

| | |

| --- | --- |

| • | On an as reported basis - In 2017, net income attributable to MCBC from continuing operations decreased 29.2% compared to the prior year largely due to a benefit recorded to special items, net in 2016 for the revaluation gain on the excess of the estimated fair value remeasurement for our pre-existing 42% interest in MillerCoors over its carrying value, as well as the reclassification of the loss related to MCBC's historical AOCI on our 42% interest in MillerCoors. This was partially offset by the incremental net income recorded in 2017 associated with the Acquisition. Further, we released an indirect tax loss contingency, which was initially recorded in the fourth quarter of 2016, for a benefit of approximately $50 million during the first quarter of 2017 in our Europe business which favorably impacted net sales and net income attributable to MCBC from continuing operations. |

| • | On a pro forma basis - In 2017, net income attributable to MCBC from continuing operations increased from $294.6 million to $1,412.7 million, primarily as a result of lower special charges specifically related to the 2016 impairment |

charge of $495.2 million and an income tax benefit in the current year resulting from U.S. tax reform.

Further, consolidated results were favorably impacted by positive global pricing, net pension benefits, cost savings, and marketing, general and administrative efficiencies, partially offset by the impacts of lower volume, cost inflation and investments behind our global business capabilities.

| • | During 2017, we issued the 2017 Notes and fully repaid our term loans and also refinanced our senior notes maturing during the year with commercial paper, resulting in net debt payments of approximately $1.1 billion, which will generate future interest savings and will contribute to meeting our deleveraging commitments. In addition, we also made contributions of approximately $310 million to our defined benefit pension plans as part of our overall pension de-risking strategy and deleveraging goals. |

| • | In the U.S. segment, our income from continuing operations before income taxes decreased on a reported basis due to a net gain in 2016 of approximately $3.0 billion recorded within special items related to the Acquisition. On a pro forma basis compared to 2016, our income from continuing operations before income taxes increased driven by higher net pricing, cost savings and lower marketing, general and administrative expenses, partially offset by cost of goods sold inflation, and lower shipment volumes. During the year we focused on gaining segment share in premium, accelerating performance in above premium and stabilizing our below premium brand volume. In the premium segment, Coors Banquet completed its eleventh consecutive year of volume growth. We also grew our share of the premium light segment with both Miller Lite and Coors Light. Miller Lite completed its thirteenth consecutive quarter of increased segment share which elevated the brand to the number three beer in America, according to Nielsen. Coors Light remained the number two beer and completed its eleventh consecutive quarter of increased segment share. In above premium, Blue Moon Belgian White grew during each quarter and continued to acquire incremental tap handles while Leinenkugel's was up low-single digits for the year, carried by Summer Shandy's best volume year in the brand's history. Our below premium brand volumes showed a trend improvement relative to recent years led by the Keystone family. |

| • | In our Canada segment, we drove positive pricing and mix resulting from lower year-over-year contract brewing volume. However, volume declined as a result of market pressure in Quebec and weak industry performance in Ontario. We reported income from continuing operations before income taxes of $212.8 million in 2017 compared to a loss of $125.6 million in 2016 primarily driven by lower special charges due to indefinite-lived intangible asset brand impairment charges incurred in 2016 of $495.2 million, positive pricing, cost savings and favorable foreign currency impacts, partially offset by lower volume, cycling lower distribution costs from the prior year, cost inflation, higher brand amortization, and higher compensation expense. |

| • | In our Europe segment, our continued portfolio premiumization and mix management positively impacted our performance as we grew volumes in our above premium brands. In 2017, we reported income from continuing operations before income taxes of $281.0 million, versus income of $149.7 million in 2016, primarily driven by the first quarter 2017 reversal of the indirect tax provision which was recognized in the fourth quarter of 2016 and higher net pension benefits. We also grew our market share as brand volumes increased 10.3% in Europe. |

| • | Our International segment reported a loss from continuing operations before income taxes of $19.7 million in 2017, compared to a loss of $39.7 million in the prior year, primarily driven by special charges as a result of total alcohol prohibition in the state of Bihar, India which resulted in an aggregate impairment charge of $30.8 million recorded in 2016. This improvement was also driven by the addition of the results of the MillerCoors Puerto Rico business, which were previously included as part of the U.S. segment, volume growth in several Latin American markets, and the addition of the Miller global brands. Overall improvements in the International segment were partially offset by the transfer of royalty and export volume to the Europe segment and the loss of the Modelo contract in Japan. |

| • | Carling brand volume in Europe decreased by 0.6% versus 2016, driven by a decrease of 2.3% in the mainstream lager market in U.K. However, Carling maintained its share within its segment compared to the prior year. |

As a result of the Acquisition, we aligned our volume reporting policies resulting in adjustments to our historically reported volumes.

Specifically, financial volume for all consolidated segments has been recast to include contract brewing and wholesaler non-owned brand volumes (including factored brands in Europe and non-owned brands distributed in the U.S.), as the corresponding sales are reported within our gross sales amounts.

We have also modified our worldwide brand volume definition to include an adjustment from STWs to STRs for timing impacts.

Worldwide brand volume increased in 2016 compared to 2015, primarily due to the Acquisition.

Prior to the Acquisition, MillerCoors was accounted for as an equity method investment:

| Consolidated | 39.0 | % | | 3.0 | % | | (5.1 | )% | | — | % | | 36.9 | % |

| Canada | (2.8 | )% | | 0.2 | % | | (3.1 | )% | | — | % | | (5.7 | )% |

| Europe | (1.7 | )% | | 4.2 | % | | (7.2 | )% | | (3.4 | )% | | (8.1 | )% |

| International | (7.3 | )% | | 19.1 | % | | 1.4 | % | | — | % | | 13.2 | % |

On a reported basis, depreciation and amortization expense was $388.4 million in 2016, an increase of $74.0 million compared to 2015, primarily due to the incremental depreciation and amortization recorded for the U.S. segment from October 11, 2016, through December 31, 2016, as a result of the Acquisition.

On a pro forma basis, 2016 depreciation and amortization of approximately $850 million was consistent with prior year, excluding the higher accelerated depreciation expense recorded within special items, net in 2016 compared to 2015 related to the closure of the Eden, North Carolina, brewery.

The decrease was partially offset by the full-year inclusion of 100% of MillerCoors' pretax income in 2017, which is subject to the U.S. federal and state income tax rates, and the impact of certain Acquisition related permanent items during the comparable periods.

The increase in our effective income tax rate in 2016 versus 2015 was primarily driven by higher pretax income in 2016 resulting from the Acquisition related revaluation gain, the inclusion of 100% of MillerCoors' pretax income following the completion of the Acquisition, and the remeasurement of the Molson core brand intangible deferred tax liability.

Additionally, our effective income tax rates also deviate from the U.S. federal statutory rate of 35% primarily due to lower effective income tax rates applicable to our foreign businesses, driven by lower statutory income tax rates and tax planning impacts on statutory taxable income.

Additionally, we continue to evaluate the impacts of the 2017 Tax Act.

As we further understand its implications, as well as the related, and yet to be issued, regulator rules, regulations and interpretations, our effective tax rate could be impacted.

Additional impacts from the 2017 Tax Act will be recorded as they are identified during the measurement period pursuant to Staff Accounting Bulletin No. 118 ("SAB 118").

Our determination of the tax effects of the 2017 Tax Act will be completed no later than one year from the enactment date as permitted under SAB 118.

Notional amounts and fair values are presented in USD based on the applicable exchange rate as of December 31, [removed: 2017.][added: 2018.]

See Part II—Item 8 Financial Statements and Supplementary Data, [removed: Note 12, "Debt"] [added: [Note 11, "Debt"](#s34DD16119D9558EB8D94699B95C5531C)] and [removed: Note 17,] [added: [Note 16,] "Derivative Instruments and Hedging [removed: Activities"] [added: Activities"](#s6774BA419850570392E209D24F0D8562)] of the Notes for further discussion.

| | Notional amounts by expected maturity date | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, [removed: 2017] [added: 2018] | | |

| | [removed: 2018 | | | |] 2019 | | | | 2020 | | | | 2021 | | | | 2022 | | | | [added: 2023 | | | |] Thereafter | | | | Total | | | | Fair value Asset/ (Liability) | | |

| CAD 500 million 2.75% notes due 2020 | $ | — | | | $ | [removed: —] [added: 366.6] | | | $ | [removed: 397.7] [added: —] | | | $ | — | | | $ | — | | | $ | — | | | $ | [removed: 397.7] [added: 366.6] | | | $ | [removed: (402.5] [added: (368.4] | ) |

| CAD 500 million 2.84% notes due 2023 | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | [removed: —] [added: 366.6] | | | $ | [removed: 397.7] [added: —] | | | $ | [removed: 397.7] [added: 366.6] | | | $ | [removed: (396.8] [added: (357.4] | ) |

| CAD 500 million 3.44% notes due 2026 | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | [removed: 397.7] [added: 366.6] | | | $ | [removed: 397.7] [added: 366.6] | | | $ | [removed: (396.6] [added: (352.3] | ) |

| $500 million 1.45% notes due 2019 | $ | [removed: —] [added: 500.0] | | | $ | [removed: 500.0] [added: —] | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 500.0 | | | $ | [removed: (496.9] [added: (498.1] | ) |

| $500 million 1.90% notes due 2019 | $ | [removed: —] [added: 500.0] | | | $ | [removed: 500.0] [added: —] | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 500.0 | | | $ | [removed: (500.7] [added: (501.6] | ) |

| $500 million 2.25% notes due 2020 | $ | — | | | $ | [removed: —] [added: 500.0] | | | $ | [removed: 500.0] [added: —] | | | $ | — | | | $ | — | | | $ | — | | | $ | 500.0 | | | $ | [removed: (502.3] [added: (502.8] | ) |

| $1.0 billion 2.10% notes due 2021 | $ | — | | | $ | — | | | $ | [removed: —] [added: 1,000.0] | | | $ | [removed: 1,000.0] [added: —] | | | $ | — | | | $ | — | | | $ | 1,000.0 | | | $ | [removed: (987.5] [added: (968.7] | ) |

| $500 million 3.5% notes due 2022 | $ | — | | | $ | — | | | $ | — | | | $ | [removed: —] [added: 500.0] | | | $ | [removed: 500.0] [added: —] | | | $ | — | | | $ | 500.0 | | | $ | [removed: (514.3] [added: (496.7] | ) |

| $2.0 billion 3.0% notes due 2026 | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 2,000.0 | | | $ | 2,000.0 | | | $ | [removed: (1,986.4] [added: (1,813.2] | ) |

| $1.1 billion 5.0% notes due 2042 | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,100.0 | | | $ | 1,100.0 | | | $ | [removed: (1,246.2] [added: (1,020.4] | ) |

| $1.8 billion 4.2% notes due 2046 | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,800.0 | | | $ | 1,800.0 | | | $ | [removed: (1,874.4] [added: (1,529.1] | ) |

| EUR 500 million notes due 2019 | $ | [removed: —] [added: 573.4] | | | $ | [removed: 600.3] [added: —] | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | [removed: 600.3] [added: 573.4] | | | $ | [removed: (601.9] [added: (573.7] | ) |

| EUR 800 million 1.25% notes due 2024 | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | [removed: 960.4] [added: 917.4] | | | $ | [removed: 960.4] [added: 917.4] | | | $ | [removed: (975.7] [added: (910.8] | ) |

Our market sensitive derivative and other financial instruments, as defined by the SEC, are debt, foreign currency forward contracts, commodity [added: swaps, commodity options, cross currency swaps, forward starting interest rate] swaps and [removed: commodity options.][added: warrants.]

We monitor foreign exchange risk, interest rate risk, commodity [added: risk, equity price] risk and related derivatives using a sensitivity analysis.

The following table presents the results of the sensitivity analysis, which reflects the impact of a hypothetical 10% adverse change in each of these risks to our derivative and debt [removed: portfolio:][added: portfolio, with the exception of interest rate risk to our forward starting interest rate swaps in which we have applied an absolute 1% adverse change to the respective instrument's interest rate:]

| | December 31, [removed: 2017] [added: 2018] | | | | December 31, [removed: 2016] [added: 2017] | | |

| Forwards | $ | [removed: (36.5] [added: (35.1] | ) | | $ | [removed: (35.1] [added: (36.5] | ) |

| Foreign currency denominated debt | $ | [removed: (310.0] [added: (249.3] | ) | | $ | [removed: (223.6] [added: (310.0] | ) |

| Debt | $ | [removed: (311.9] [added: (302.1] | ) | | $ | [removed: (319.3] [added: (311.9] | ) |

| Commodity swaps | $ | [removed: (43.5] [added: (77.5] | ) | | $ | [removed: (66.8] [added: (43.5] | ) |

Equity Price Risk

We currently hold warrants allowing us the option to purchase common shares of HEXO Corp. ("HEXO"), our Truss LP ("Truss") joint venture partner in Canada.

These warrants are subject to equity price risk, representative of the potential future loss of value that would result from a decline in the market price of HEXO's underlying common shares.

| Forwards | $ | 156.1 | | | $ | 109.2 | | | $ | 59.3 | | | $ | 14.0 | | | $ | — | | | $ | — | | | $ | 338.6 | | | $ | 16.3 | |

| Cross currency swaps | $ | — | | | $ | 500.0 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 500.0 | | | $ | 36.5 | |

| Interest rate management: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Forward starting interest rate swaps | $ | — | | | $ | — | | | $ | 250.0 | | | $ | 250.0 | | | $ | — | | | $ | 1,000.0 | | | $ | 1,500.0 | | | $ | (12.3 | ) |

| Swaps | $ | 520.7 | | | $ | 268.2 | | | $ | 77.1 | | | $ | 2.4 | | | $ | — | | | $ | — | | | $ | 868.4 | | | $ | (42.0 | ) |

| Options | $ | 46.6 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 46.6 | | | $ | — | |

We hold warrants providing us with the ability to purchase 11.5 million common shares of HEXO, our Truss joint venture partner, at a strike price of CAD 6.00 per share which expire on October 4, 2021.

The fair value of our warrant asset at December 31, 2018, was $19.6 million.

| Cross currency swaps | $ | (43.3 | ) | | $ | — | |

| Forward starting interest rate swaps | $ | (126.2 | ) | | $ | — | |

| Equity price risk: | | | | | | | |

| Warrants | $ | (2.8 | ) | | $ | — | |

| CAD 400 million 2.25% notes due 2018 | $ | 318.2 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 318.2 | | | $ | (320.8 | ) |

| Forwards | $ | 160.8 | | | $ | 115.2 | | | $ | 50.4 | | | $ | — | | | $ | — | | | $ | — | | | $ | 326.4 | | | $ | (10.9 | ) |

| Swaps | $ | 411.2 | | | $ | 228.7 | | | $ | 116.8 | | | $ | 8.3 | | | $ | — | | | $ | — | | | $ | 765.0 | | | $ | 122.8 | |

| Options | $ | 30.6 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 30.6 | | | $ | — | |

Our reporting segments include: MillerCoors LLC ("MillerCoors" or U.S. segment), operating in the United States; Molson Coors Canada ("MCC" or Canada segment), operating in Canada; Molson Coors Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, [added: the] Republic of Ireland, Romania, Serbia, the United Kingdom and various other European countries; and Molson Coors International ("MCI" or International segment), operating in various other countries.

On January 21, 2018, MCBC and ABI entered into a settlement agreement related to the purchase price adjustment under the purchase [removed: agreement.][added: agreement, and on January 26, 2018, pursuant to the settlement agreement, ABI paid to MCBC $330.0 million, of which $328.0 million constitutes the Adjustment Amount.]

[removed: This] [added: As this] settlement occurred following the finalization of purchase [removed: accounting and, as a result,] [added: accounting,] we [removed: expect] [added: recorded] the settlement proceeds related to the Adjustment Amount [removed: to be recorded] as a gain within special items, net in our consolidated statement of operations [added: in our Corporate segment and within cash provided by operating activities within our consolidated statement of cash flows] for the [removed: three months] [added: year] ended [removed: March] [added: December] 31, 2018.

MCBC and ABI also agreed to certain mutual releases as further described in the settlement [removed: agreement which was filed as an exhibit to a Current Report on Form 8-K filed January 22, 2018.][added: agreement.]

To provide a perspective of the relative size of the major participants in the global brewing market, the market capitalizations of our primary global competitors, based on foreign exchange rates [removed: at] [added: as of] December 31, [removed: 2017,] [added: 2018,] were as follows:

| Anheuser-Busch InBev SA/NV | $ | [removed: 225.8] [added: 133.6] | |

| Heineken N.V. ("Heineken") | $ | [removed: 60.1] [added: 51.0] | |

| Asahi Group Holdings, Ltd. ("Asahi") | $ | [removed: 24.0] [added: 18.8] | |

| Carlsberg Group ("Carlsberg") | $ | [removed: 18.1] [added: 16.1] | |

We have a diverse portfolio of owned and partner brands which are positioned to meet a wide range of consumer segments and occasions in a variety of markets, including [removed: global priority brands] Blue Moon, Coors Banquet, Coors Light, Miller Genuine Draft, Miller Lite and Staropramen.

| Global priority brands | | [removed: Regional] [added: National] champion [added: and other regional] brands | | Craft and import brands |

| Miller Lite | | [removed: Miller 64] [added: Miller64] | | Pilsner Urquell(1) |

| [removed: Crispin] [added: Smith & Forge] | | Henry's Hard | | |

| [removed: (3)] [added: (4)] Under perpetual royalty-free license from ABI. | | | | |

| Coors Light | | Keystone | | [removed: Le Trou du Diable] [added: Granville Island] |

| Miller Genuine Draft | | Mad Jack | | [removed: Granville Island] [added: Henry's Hard] |

| [removed: Miller Lite] | | [removed: Molson Canadian] | | [added: Molson Canadian] |

| Licensed [removed: and] premium import brands(1) | | | | [removed: Other(2)] |

| Amstel Light | | Desperados | | [removed: Asahi Select] |

| Heineken | | Dos Equis | | [removed: Asahi Super Dry] |

| Murphy's | | Moretti | | [removed: Labatt Blue] |

| Newcastle | | Sol | | [removed: Labatt Blue Light] |

[removed: | (2) Under contract brewing arrangements] [added: We have an agreement] with [removed: Asahi and] North American Breweries, Inc. [added: ("NAB")] to [removed: produce] [added: brew and package certain Labatt brands] for [added: export to] the U.S. market. [removed: | | | | |]

| Miller Genuine Draft | | [removed: Branik] [added: Carling] | | Beck's |

| | | [removed: Kamenitza] [added: Ozujsko] | | Corona Extra |

| | | [removed: Niksicko] | | Grolsch |

| | | [removed: Ozujsko] | | Lowenbrau |

| | | [added: | |] Sharp's Doom Bar | [removed: | Rekorderlig cider |]

| (1) The European business has licensing and distribution agreements with various other brewers through which it also brews and distributes Beck's, Lowenbrau, Stella Artois and Spaten, as well as a distribution agreement for the exclusive distribution of the Corona brand, throughout the Central European countries in which we operate. We have an agreement with Dutch brewer, Bavaria, for the exclusive on-premise and off-premise rights to the sales, distribution and customer marketing of Bavaria and its portfolio of brands in the U.K. [added: Starting in 2018, we have an agreement for licensed brewing and distribution of Bavaria portfolio in Croatia, Bosnia and Herzegovina, Serbia and Montenegro.] We also distribute the Rekorderlig cider brand in the U.K. and [added: the] Republic of Ireland. In the U.K., we also sell the Cobra brands through the Cobra Beer Partnership Ltd. joint venture and the Grolsch brands through a joint venture with Royal Grolsch N.V., and are the exclusive distributor for several brands including Singha. Additionally, in order to be able to provide a full line of beer and other beverages to our U.K. on-premise customers, we sell "factored" brands, which are third-party beverage brands for which we provide distribution to retail, typically on a non-exclusive basis. | | | | |

| [removed: Coors Light] | | Molson Canadian | | [removed: Coors] [added: Leinenkugel's] |

| Miller Genuine [removed: Draft] [added: Draft(1)] | | | | Coors 1873 |

| Miller [removed: Lite] [added: Lite(1)] | | | | [removed: Coors Extra] [added: Keystone] |

In [removed: 2017,] [added: 2018,] we operated the following segments: the U.S., Canada, Europe and International.

A separate operating team manages each segment and each segment manufactures, markets, and sells beer and other [added: malt] beverage products.

See Part II—Item 8 Financial Statements and Supplementary Data, [removed: Note 3, "Segment Reporting"] [added: [Note 18, "Commitments and Contingencies"](#sBC77BCF86FDA5F05AC59B70FF65D6F6F)] of the Notes [removed: to] [added: under] the [removed: Consolidated Financial Statements ("Notes")] [added: caption "Environmental"] for [added: additional] information [removed: relating to our segments and operations, including financial and geographic information.][added: regarding environmental matters.]

| • | Approximately [removed: 7,900] [added: 7,300] employees |

| • | Second largest brewer by volume in the U.S., selling approximately [removed: 25%] [added: 24%] of the total [removed: 2017] [added: 2018] U.S. brewing industry shipments (excluding exports) |

| • | Currently operating seven primary breweries, six craft [removed: breweries,] [added: breweries and] two container operations [removed: and one cidery] |

A national network of approximately 400 independent distributors and one owned distributor, Coors [removed: Distribution] [added: Distributing] Company, purchases our products and distributes them to on- and off-premise retail accounts.

References to on- and off-premise sales volumes are the sales to retailers of these distributors, which [added: we believe] is a useful data point relative to consumer trends.

| MCBC | $ | 12.2 | |

| Crispin | | Arnold Palmer Spiked(3) | | |

| | | Redd's(4) | | |

| (3) In partnership with Hornell Brewing, an affiliate of Arizona Beverages | | | | |

| Miller Lite | | Miller High Life | | Le Trou du Diable |

| Staropramen | | Jelen | | Branik |

| | | Kamenitza | | Birradamare |

| | | Niksicko | | Cobra |

| | | | | Rekorderlig cider |

| Coors Light(1) | | Thunderbolt | | Coors Banquet |

| Staropramen | | | | Milwaukee's Best |

| | | | | Miller Ace |

| | | | | Miller Chill |

| (1) Focus brands in International segment | | | | |

| | Industry channel trend | | | | | | | | | | | | | |

However, we estimate the two largest brewers lost share in 2018 due to volume growth in the import and flavored malt beverage categories as consumer preferences continue to shift within the industry to above premium priced beers.

We believe growing or even maintaining our market share will require stabilizing our core brands and increasing our presence in the fast growing areas of the industry.

We transfer a portion of our share of these savings to distributors consistent with the revenue splitting approach of our U.S. segment’s economic model.

There were no additional acquisitions during 2018.

However, on October 4, 2018, a wholly-owned subsidiary within our Canadian business completed the formation of an independent Canadian joint venture, Truss LP ("Truss"), with HEXO Corp. ("HEXO") to pursue opportunities to develop, produce and market non-alcoholic, cannabis-infused beverages once legal in Canada.

Truss is structured as a standalone start-up company with its own board of directors and an independent management team and we maintain a 57.5% controlling interest in the joint venture.

| | Industry channel trend | | | | | | | | | | | | | |

| | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |

In Newfoundland, our products are sold through independent distributors.

Crowns are currently sourced from one major supplier with a contract through June 2019, which we are currently in the process of extending.

We anticipate that 2018 data, when available, will reflect a continuation of the recent consumer trends.

| | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |

We use high quality ingredients to brew our products.

which cover our requirements through 2019.

Kegs:

from 45% to below 40%.

We anticipate that 2018 data, when available, will reflect a continuation of the recent consumer trends.

| | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |

However, the proposed withdrawal agreement was rejected by the U.K. Parliament on November 14, 2018 and January 15, 2019.

As a result, the terms of the withdrawal remain unknown, which subjects our Europe segment to regulatory and market uncertainty in the U.K. and in the rest of Europe.

See Part I—Item 1A Risk Factors under "Risks Specific to the Europe Segment" for further discussion of the risks specific to the U.K.'s proposed exit from the EU.

The EU Excise Directives are currently under review which may result in all jurisdictions being required to account by reference to alcohol by volume.

| • | International beer markets, including emerging markets in Latin America, Asia Pacific and Africa |

Our strategy is centered on our focus markets and

focus brands.

Subsequently, on January 26, 2018, pursuant to the settlement agreement, ABI paid to MCBC $330.0 million, of which $328.0 million constitutes the Adjustment Amount.

Therefore, the amount will not impact the fair value of consideration transferred for the purpose of the previously disclosed purchase accounting.

| MCBC | $ | 17.7 | |

| | | | | |

| Smith & Forge | | Redd's(3) | | |

| Staropramen | | Carling | | Birradamare |

| | | Jelen | | Cobra |

| | | | | Coors Gold |

| | | | | Thunderbolt |

As result of the Acquisition, effective January 1, 2017, European markets including Sweden, Spain, Germany, Ukraine and Russia, which were previously reported under our International segment, are reported within our Europe segment.

Additionally, effective January 1, 2017, the results of the MillerCoors Puerto Rico business, which were previously included as part of the U.S. segment, are now reported within the International segment.

For certain risks attendant to our operations, refer to Part I—Item 1A Risk Factors.

| | Sales volume by channel | | | | | | | | | | | | | |

As a result of the Acquisition, we produce a small amount of beer for an affiliate of ABI under an Amended and Restated Brewing Agreement ("Brewing Agreement") in which we continue to produce Redd’s and Foster’s products for the ABI affiliate for sale outside of the U.S. This Brewing Agreement has a contractual term through April 2018.

adversely affects our sales volumes and net sales.

Growing or even maintaining market share has required significant investments in marketing.

Following a decline in volume during the recession from 2008 to 2011, overall the U.S. beer industry shipment to wholesaler volumes have been relatively stable since 2011.

However, consumer preferences continue to shift within this space to premium priced, higher alcohol, full calorie beers.

Our focus and investment is on Canada global priority brands, including Belgian Moon, Coors Banquet, and Coors Light, regional champion Molson Canadian, as well as other key owned brands, including Creemore Springs, Granville Island, Molson Dry, Molson Export, Old Style Pilsner and Rickard's and strategic distribution partnerships, including those with Heineken.

In Quebec and Eastern Canada, MCC primarily delivers directly.

We select global suppliers in order to procure high quality materials and services at the lowest prices available.

Crowns are currently sourced from two suppliers with contracts through December 2018.

We have an agreement with North American Breweries, Inc. ("NAB") to brew, package and ship certain Labatt brands to the U.S. market through 2020.

We, along with other owners of BRI, entered into a new beer framework agreement with the Province of Ontario on September 22, 2015, which became effective January 1, 2016.

Refer to Part I—Item 1A, Risk Factors for risks associated with the regulatory environment in Canada.

We also brew and distribute Beck's, Lowenbrau, Spaten and Stella Artois under license agreements with ABI companies, and beginning in January 2015, we distribute certain of the Modelo brands throughout the Central European countries in which we operate.

In 2015, we purchased the Rekorderlig cider brand distribution rights in the U.K. and Republic of Ireland and also sold our U.K. malting facility.

Additionally, in 2015, we closed a brewery in the U.K. and terminated our distribution agreement with Carlsberg whereby it held the exclusive distribution rights for the Staropramen brand in the U.K. As a result, we repatriated distribution of the Staropramen brand back to the U.K. business at the end of 2015.

In the second half of 2016, we entered into a long-term partnership agreement with Dutch brewer, Bavaria, which gives us the exclusive rights in the on- and off-premise channels to the sales, distribution and customer marketing of Bavaria and its portfolio of brands in the U.K. In 2017, we extended our relationship with additional distribution agreements of the Bavaria brand into Croatia and Serbia.

The off-premise channel continues to be challenged by competitive pricing.

Kegs and casks:

In a referendum held on June 23, 2016, a majority of voters in the U.K. voted in favor of the U.K. leaving the EU.

Withdrawal negotiations started in June 2017 and both sides are due to finalize a draft agreement in October 2018.

The draft agreement will be voted on by the U.K. Parliament and the European Parliament.

A potential transition phase after March 29, 2019, is currently being negotiated.

Because the terms of the exit are still unknown, we may face regulatory uncertainty and we may need to quickly adapt to regulatory changes.

In 2017, the excise taxes for our Europe segment, excluding the release of a provision for indirect taxes related to the assessments discussed in Part II—Item 8 Financial Statements and Supplementary Data, Note 19, "Commitments and Contingencies" of the Notes were approximately $43 per hectoliter on a reported basis.

| • | International beer markets, including emerging markets, outside the U.S, Canada and Europe |

The focus of our International segment includes Latin America (including Mexico, Central America, the Caribbean and South America), Asia Pacific and Africa.

Effective January 1, 2017, European markets including Sweden, Spain, Germany, Ukraine and Russia, which were previously reported as part of our International segment, are reported within our Europe segment while the results of the MillerCoors Puerto Rico business, which were previously included as part of the U.S. segment, are presented within the International segment.

For information regarding litigation, other disputes and environmental and regulatory proceedings see Part II—Item 8 Financial Statements and Supplementary Data, [removed: Note 19,] [added: [Note 18,] "Commitments and [removed: Contingencies"] [added: Contingencies"](#sBC77BCF86FDA5F05AC59B70FF65D6F6F)] of the Notes.

While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, none of these disputes and legal actions are [added: currently] expected to have a material impact on our business, consolidated financial position, results of operations or cash flows.

| For the fiscal year ended December 31, [removed: 2017] [added: 2018] | |

[removed: ][added: ]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or [added: an] emerging growth company.

The aggregate market value of the registrant's voting and non-voting common stock held by non-affiliates of the registrant at the close of business on [added: the last trading day of the registrant's most recently completed second fiscal quarter,] June [removed: 30, 2017,] [added: 29, 2018,] was approximately [removed: $15.6] [added: $12.4] billion based upon the last sales price reported for such date on the New York Stock Exchange and the Toronto Stock Exchange.

For purposes of this disclosure, shares of common and exchangeable stock held by persons holding more than 10% of the outstanding shares of stock and shares owned by officers and directors of the registrant as of June [removed: 30, 2017,] [added: 29, 2018,] are excluded in that such persons may be deemed to be affiliates.

The number of shares outstanding of each of the registrant's classes of common stock, as of February [removed: 9, 2018:][added: 7, 2019:]

As of February [removed: 9, 2018,] [added: 7, 2019,] the following number of exchangeable shares was outstanding for Molson Coors Canada, Inc.:

Documents Incorporated by Reference: Portions of the registrant's definitive proxy statement for the registrant's [removed: 2018] [added: 2019] annual meeting of stockholders, which will be filed no later than 120 days after the close of the registrant's fiscal year ended December 31, [removed: 2017,] [added: 2018,] are incorporated by reference under Part III of this Annual Report on Form 10-K.

| Glossary of Terms and Abbreviations | | | [removed: [2](#seba08598d7214f379d163454e85b4b0e)] [added: [2](#s9ED9F5C9CBF355D1B710F43D42FE58DF)] |

| [Item [removed: 1.](#s05B778ACA8A8595DB22050BEC6299F95)] [added: 1.](#s75B0210C36D35A59BDE8CF7E0BD8819F)] | | [removed: [Business](#s05B778ACA8A8595DB22050BEC6299F95)] [added: [Business](#s75B0210C36D35A59BDE8CF7E0BD8819F)] | [removed: [4](#s05B778ACA8A8595DB22050BEC6299F95)] [added: [4](#s75B0210C36D35A59BDE8CF7E0BD8819F)] |

| [Item [removed: 1A.](#s20FAE60A19395C13AC6ED5AB4948AAE8)] [added: 1A.](#s2653C3F5C0A65895AEB556616AC17E65)] | | [Risk [removed: Factors](#s20FAE60A19395C13AC6ED5AB4948AAE8)] [added: Factors](#s2653C3F5C0A65895AEB556616AC17E65)] | [removed: [21](#s20FAE60A19395C13AC6ED5AB4948AAE8)] [added: [20](#s2653C3F5C0A65895AEB556616AC17E65)] |

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| [Item [removed: 3.](#s862230CB809D5340A9C8C7508F533159)] [added: 3.](#s6ED5034E2E635330BBF532C59B223A02)] | | [Legal [removed: Proceedings](#s862230CB809D5340A9C8C7508F533159)] [added: Proceedings](#s6ED5034E2E635330BBF532C59B223A02)] | [removed: [33](#s862230CB809D5340A9C8C7508F533159)] [added: [34](#s6ED5034E2E635330BBF532C59B223A02)] |

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| [PART [removed: II.](#sA7B6B6184DE85AE0B41E23C5441396C1)] [added: II.](#s0C6AC2B8C9295905A5362EE3C3CD4478)] | | | |

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| [Item [removed: 6.](#s28EE5076A9445BCD9CA4CA6C265DF734)] [added: 6.](#s091DC1BEDFF3553CB8375999D7BF8362)] | | [Selected Financial [removed: Data](#s28EE5076A9445BCD9CA4CA6C265DF734)] [added: Data](#s091DC1BEDFF3553CB8375999D7BF8362)] | [removed: [37](#s28EE5076A9445BCD9CA4CA6C265DF734)] [added: [37](#s091DC1BEDFF3553CB8375999D7BF8362)] |

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| [Item [removed: 7A.](#sBB598CC2002B5F6B9A6BCDEC6239A36A)] [added: 7A.](#sAD26CD879A4B59CB92FF31050C36DDCF)] | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sBB598CC2002B5F6B9A6BCDEC6239A36A)] [added: Risk](#sAD26CD879A4B59CB92FF31050C36DDCF)] | [removed: [76](#sBB598CC2002B5F6B9A6BCDEC6239A36A)] [added: [74](#sAD26CD879A4B59CB92FF31050C36DDCF)] |

| [Item [removed: 8.](#s99183B8ADAA95BA392D484ED4EC1401F)] [added: 8.](#s8D9A871477C35E59A89C6C90EE36031F)] | | [Financial Statements and Supplementary [removed: Data](#s99183B8ADAA95BA392D484ED4EC1401F)] [added: Data](#s8D9A871477C35E59A89C6C90EE36031F)] | [removed: [78](#s99183B8ADAA95BA392D484ED4EC1401F)] [added: [77](#s8D9A871477C35E59A89C6C90EE36031F)] |

| [Item [removed: 9.](#sDA05DEA66C3350058C72FC23DA224266)] [added: 9.](#sD99A27FC4DF65D7AA53D229FCDB32801)] | | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#sDA05DEA66C3350058C72FC23DA224266)] [added: Disclosure](#sD99A27FC4DF65D7AA53D229FCDB32801)] | [removed: [174](#sDA05DEA66C3350058C72FC23DA224266)] [added: [173](#sD99A27FC4DF65D7AA53D229FCDB32801)] |

| [Item [removed: 9A.](#s3E564DDC5DCE50FB9C176118A043C99D)] [added: 9A.](#s8AEE092E4B4457BFBB463AE38234A622)] | | [Controls and [removed: Procedures](#s3E564DDC5DCE50FB9C176118A043C99D)] [added: Procedures](#s8AEE092E4B4457BFBB463AE38234A622)] | [removed: [174](#s3E564DDC5DCE50FB9C176118A043C99D)] [added: [173](#s8AEE092E4B4457BFBB463AE38234A622)] |

| [Item [removed: 9B.](#s9706337BF2B15D31A67CC1AA60DEF3A3)] [added: 9B.](#sA0203856E5385BD2AE6C8819BA3CFF39)] | | [Other [removed: Information](#s9706337BF2B15D31A67CC1AA60DEF3A3)] [added: Information](#sA0203856E5385BD2AE6C8819BA3CFF39)] | [removed: [174](#s9706337BF2B15D31A67CC1AA60DEF3A3)] [added: [174](#sA0203856E5385BD2AE6C8819BA3CFF39)] |

| [PART [removed: III.](#s22302B5BD19751A8AA788266D0E0A762)] [added: III.](#s2A9901DA134859928EAB689BC9085668)] | | | |

| [Item [removed: 10.](#sC4C1EF81AE91515DB4E4D76613D84FE9)] [added: 10.](#sFD1DE30643F6542DB2F32B91A6B7D279)] | | [Directors, Executive Officers and Corporate [removed: Governance](#sC4C1EF81AE91515DB4E4D76613D84FE9)] [added: Governance](#sFD1DE30643F6542DB2F32B91A6B7D279)] | [removed: [175](#sC4C1EF81AE91515DB4E4D76613D84FE9)] [added: [175](#sFD1DE30643F6542DB2F32B91A6B7D279)] |

| [Item [removed: 11.](#s0CB870B54752505FAB7FE4BBF263EC36)] [added: 11.](#sC179DBC9AE9D5733BEE6DC0466F97952)] | | [Executive [removed: Compensation](#s0CB870B54752505FAB7FE4BBF263EC36)] [added: Compensation](#sC179DBC9AE9D5733BEE6DC0466F97952)] | [removed: [175](#s0CB870B54752505FAB7FE4BBF263EC36)] [added: [175](#sC179DBC9AE9D5733BEE6DC0466F97952)] |

| [Item [removed: 12.](#sFA8FC2338A4458B9BD25C4AF53F80111)] [added: 12.](#s63B8A0E6D49F57FCA0005D27402F8F5F)] | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sFA8FC2338A4458B9BD25C4AF53F80111)] [added: Matters](#s63B8A0E6D49F57FCA0005D27402F8F5F)] | [removed: [175](#sFA8FC2338A4458B9BD25C4AF53F80111)] [added: [175](#s63B8A0E6D49F57FCA0005D27402F8F5F)] |

| [Item [removed: 13.](#sCD82A32CBA4B5464992204B0B9A77711)] [added: 13.](#s83CBF9EE833257FC8B8C0E53C62A8505)] | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sCD82A32CBA4B5464992204B0B9A77711)] [added: Independence](#s83CBF9EE833257FC8B8C0E53C62A8505)] | [removed: [175](#sCD82A32CBA4B5464992204B0B9A77711)] [added: [175](#s83CBF9EE833257FC8B8C0E53C62A8505)] |

| [Item [removed: 14.](#s1EA6B29DD72B5A6498FB83CF747EF8D2)] [added: 14.](#sDBE723AE7EFA5F99A5FAECF8DA92749B)] | | [Principal Accounting Fees and [removed: Services](#s1EA6B29DD72B5A6498FB83CF747EF8D2)] [added: Services](#sDBE723AE7EFA5F99A5FAECF8DA92749B)] | [removed: [176](#s1EA6B29DD72B5A6498FB83CF747EF8D2)] [added: [175](#sDBE723AE7EFA5F99A5FAECF8DA92749B)] |

| [PART [removed: IV.](#sAB4160C065445608A40B4CEEDB6607E2)] [added: IV.](#s5A6F7E93AB215A359FD0AA8298404C32)] | | | |

| [Item [removed: 15.](#s9702610624AB591E92195BEE2D228E8F)] [added: 15.](#s93A25A72C9865CB49F7C4C60B00B242C)] | | [Exhibits, Financial Statement [removed: Schedules](#s9702610624AB591E92195BEE2D228E8F)] [added: Schedules](#s93A25A72C9865CB49F7C4C60B00B242C)] | [removed: [177](#s9702610624AB591E92195BEE2D228E8F)] [added: [176](#s93A25A72C9865CB49F7C4C60B00B242C)] |

| Item 16. | | Form 10-K [removed: [Summary](#sBCA2F4B7C89A5B5ABA630B207FF70F93)] [added: [Summary](#sA938792DAAE85B798B1D37959BCF21B9)] | [removed: [184](#sBCA2F4B7C89A5B5ABA630B207FF70F93)] [added: [183](#sA938792DAAE85B798B1D37959BCF21B9)] |

Statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements, and include, but are not limited to, statements in Part II—Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations in this report, and under the heading "Outlook for [removed: 2018"] [added: 2019"] therein, overall volume trends, consumer preferences, pricing trends, industry forces, cost reduction strategies, anticipated results, anticipated synergies, expectations for funding future capital expenditures and operations, [added: expectations regarding future dividends,] debt service capabilities, [added: timing and amounts of debt and leverage levels,] shipment levels and profitability, market share and the sufficiency of capital resources.

These risks and uncertainties include, but are not limited [removed: to] [added: to,] those described in Part I—Item 1A "Risk [removed: Factors,"] [added: Factors"] elsewhere throughout this report, and those described from time to time in our past and future reports filed with the SEC.

10-K 1 tap2018123110-k.htm 10-K

| Class A Common Stock—2,560,668 shares | | Class B Common Stock—196,042,622 shares |

| Class A Exchangeable Shares—2,757,201 shares | | Class B Exchangeable Shares—14,807,311 shares |

| [PART I.](#sDCCB334BAA33597AAA4D9CAA53F1D856) | | | |

| [Signatures](#s8B4DB29893135B83930C6E53DDF351CF) | | | [184](#s8B4DB29893135B83930C6E53DDF351CF) |

| DBRS | A global credit rating agency in Toronto |

| 2017 Tax Act | Tax Cuts and Jobs Act |

10-K 1 tap2017123110-k.htm 10-K

| | | (Do not check if a smaller reporting company) | | | | | | |

| Class A Common Stock—2,560,568 shares | | Class B Common Stock—195,427,749 shares |

| Class A Exchangeable Shares—2,878,535 shares | | Class B Exchangeable Shares—14,691,571 shares |

| [PART I.](#s576CA172AC715C87A27BF351C3191AF1) | | | |

| [Signatures](#sE80BBEF09D685C87A8554E299556D48E) | | | [185](#sE80BBEF09D685C87A8554E299556D48E) |

| SOSARs | Stock-only stock appreciation rights |

As of February [removed: 14, 2018,] [added: 12, 2019,] our major facilities were owned (unless otherwise indicated) and are as follows:

| | | Elkton, [removed: Virginia] [added: Virginia(2)] | | Brewing and packaging |

| | | Fort Worth, [removed: Texas(2)] [added: Texas] | | Brewing and packaging |

| | | Burton-on-Trent, [removed: Staffordshire, U.K.(6)(7)] [added: U.K.(6)] | | Brewing and packaging |

| (2) | The Golden, Trenton, Albany, [removed: Fort Worth] [added: Elkton] and Milwaukee breweries collectively account for approximately 75% of our U.S. production. |

| [removed: (4)] [added: (6)] | The [removed: Montréal] [added: Burton-on-Trent, Prague, Ploiesti, Apatin] and [removed: Toronto] [added: Tadcaster] breweries collectively account for approximately [removed: 78%] [added: 71%] of our [removed: Canada] [added: Europe] production. |

We [added: own and] lease various [removed: warehouse] [added: warehouses, distribution centers] and office spaces throughout the United [removed: States and we own] [added: States, Canada] and [removed: lease six warehouses throughout Canada, excluding the Province of Quebec.][added: Europe.]

We also lease offices in Colorado, the location of our Corporate and International segment headquarters, as well as [removed: within] various [added: warehouse and office spaces within the United States and] international countries in which our International segment operates.

In [removed: 2017,] [added: 2018,] our operating facilities were not capacity constrained.

| (4) | The Montréal and Toronto breweries collectively account for approximately 79% of our Canada production. As part of our ongoing strategic review of our Canadian supply chain network, in the third quarter of 2017 we announced the plan to build a more efficient and flexible brewery in the greater Montreal area. As a result of this decision, we have begun to develop plans to transition out of our existing Montreal brewery, and are in the process of actively |

negotiating the sale of the property with targeted completion of the sale in the second quarter of 2019.

The brewery continues to be operational, and as part of the sale, we anticipate leasing back the property for continued use until the new brewery is operational, which is currently expected to occur in 2021.

| (5) | We lease two brewing and packaging facilities in British Columbia. As a result of the continuation of our Canadian strategic review, during 2016 we completed the sale of our Vancouver brewery. In conjunction with the sale of the brewery, we agreed to leaseback the existing property to continue operations on an uninterrupted basis while the new brewery is being constructed. The final closure of the brewery is currently expected to occur in the third quarter of 2019. |

| | |

| --- | --- |

| (5) | We lease two brewing and packaging facilities in British Columbia. As part of our ongoing assessment of our Canadian supply chain network, we completed the sale of our Vancouver brewery on March 31, 2016. In conjunction |

with the sale of the brewery, we agreed to leaseback the existing property to continue operations on an uninterrupted basis while the new brewery is being constructed.

We expect to incur significant capital expenditures associated with the construction of the new brewery, most of which we expect to be funded with the proceeds from the sale of the Vancouver brewery.

The final closure of the brewery is currently expected to occur in the third quarter of 2019.

In further efforts to help optimize the Canada brewery network, in the third quarter of 2017 we announced a plan to build a more efficient and flexible brewery in the greater Montreal area.

As a result of this decision, we have begun to develop plans to transition out of our existing Montreal brewery.

The final closure of the brewery is currently expected to occur in 2021.

| (6) | The Burton-on-Trent, Prague, Ploiesti, Apatin and Tadcaster breweries collectively account for approximately 73% of our Europe production. |

| (7) | During the fourth quarter of 2015, we announced the planned closure of the Burton South brewery in the U.K., which is expected to be completed by the first quarter of 2018. We continue to own the Burton South Brewery as of December 31, 2017. |

In addition, we own fourteen distribution centers, lease sixteen additional distribution centers, own two warehouses and lease nine additional warehouses throughout Europe.

As a result of the implementation of total alcohol prohibition, the Bihar, India brewery is currently not operating and is idled pending any future change in law or regulation.

During the third quarter of 2015, MillerCoors announced plans to close its brewery in Eden, North Carolina, in an effort to optimize the brewery footprint and streamline operations for greater efficiencies.

Products produced in the Eden brewery were transitioned to other breweries in the MillerCoors network.

As of December 31, 2017, we continue to own the Eden, North Carolina brewery, which closed in September 2016.

During the second quarter of 2015 and fourth quarter of 2015, we completed the closure of the Alton brewery in the U.K. and our Plovdiv brewery in Bulgaria, respectively.

During the third quarter of 2017, we completed the sale of land related to the Plovdiv brewery.

We continue to own the Alton brewery as of December 31, 2017.

The approximate number of record security holders by class of stock at February [removed: 9, 2018,] [added: 7, 2019,] is as follows:

| Class A common stock, $0.01 par value | | [removed: 22] [added: 23] |

| Class B common stock, $0.01 par value | | [removed: 2,681] [added: 2,624] |

| Class A exchangeable shares, no par value | | [removed: 226] [added: 218] |

| Class B exchangeable shares, no par value | | [removed: 2,382] [added: 2,338] |

The graph assumes $100 was invested on December 31, [removed: 2012,] [added: 2013,] in our Class B common stock, the S&P 500 and the Peer Group, and assumes reinvestment of all dividends.

[removed: ][added: ]

| | [removed: 2012 | | | |] 2013 | | | | 2014 | | | | 2015 | | | | 2016 | | | | 2017 | | | [added: | 2018 | | |]

As a result of the Acquisition, we suspended the share repurchase program and thus, there were no shares of Class A or Class B common stock repurchased [removed: in 2016 or 2017.][added: since 2015.]

[removed: The Company’s board of directors may] suspend, modify or terminate the share repurchase program at any time without prior notice.

| Molson Coors | $ | 100.00 | | | $ | 135.70 | | | $ | 174.70 | | | $ | 184.06 | | | $ | 158.10 | | | $ | 110.85 | |

| S&P 500 | $ | 100.00 | | | $ | 113.68 | | | $ | 115.24 | | | $ | 126.23 | | | $ | 153.78 | | | $ | 147.03 | |

| Peer Group | $ | 100.00 | | | $ | 123.19 | | | $ | 155.28 | | | $ | 144.39 | | | $ | 152.76 | | | $ | 112.32 | |

We currently plan to maintain our current quarterly dividend of $0.41 per share until we achieve a leverage ratio of approximately 3.75x debt to EBITDA on a rating agency basis, which we expect to achieve around the middle of 2019.

Upon achieving approximately 3.75x leverage, our board's intention is to reinstitute a dividend payout-ratio target in the range of 20-25% of annual trailing EBITDA for the second half of 2019 and ongoing thereafter.

The Company’s board of directors may

We have suspended our share repurchase program as we continue to pay down debt.

The following table sets forth the high and low sales prices per share of our Class A common stock for each quarter of 2017 and 2016 as reported by the New York Stock Exchange, as well as dividends paid in such quarter.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | High | | | | Low | | | | Dividends | | |

| 2017 | | | | | | | | | | | |

| First quarter | $ | 108.00 | | | $ | 94.63 | | | $ | 0.41 | |

| Second quarter | $ | 96.00 | | | $ | 84.23 | | | $ | 0.41 | |

| Third quarter | $ | 91.63 | | | $ | 83.84 | | | $ | 0.41 | |

| Fourth quarter | $ | 87.83 | | | $ | 79.84 | | | $ | 0.41 | |

| 2016 | | | | | | | | | | | |

| First quarter | $ | 93.87 | | | $ | 81.97 | | | $ | 0.41 | |

| Second quarter | $ | 103.78 | | | $ | 91.85 | | | $ | 0.41 | |

| Third quarter | $ | 110.17 | | | $ | 91.86 | | | $ | 0.41 | |

| Fourth quarter | $ | 109.99 | | | $ | 95.07 | | | $ | 0.41 | |

The following table sets forth the high and low sales prices per share of our Class B common stock for each quarter of 2017 and 2016 as reported by the New York Stock Exchange, as well as dividends paid in such quarter.

| First quarter | $ | 102.14 | | | $ | 94.12 | | | $ | 0.41 | |

| Second quarter | $ | 97.50 | | | $ | 85.46 | | | $ | 0.41 | |

| Third quarter | $ | 94.02 | | | $ | 80.92 | | | $ | 0.41 | |

| Fourth quarter | $ | 84.91 | | | $ | 76.25 | | | $ | 0.41 | |

| First quarter | $ | 97.00 | | | $ | 80.78 | | | $ | 0.41 | |

| Second quarter | $ | 104.15 | | | $ | 91.17 | | | $ | 0.41 | |

| Third quarter | $ | 111.24 | | | $ | 89.40 | | | $ | 0.41 | |

| Fourth quarter | $ | 112.19 | | | $ | 94.10 | | | $ | 0.41 | |

The following table sets forth the high and low sales prices per share of our Class A exchangeable shares for each quarter of 2017 and 2016 as reported by the Toronto Stock Exchange, as well as dividends paid in such quarter.

| First quarter | CAD | 131.88 | | | CAD | 120.00 | | | $ | 0.41 | |

| Second quarter | CAD | 125.00 | | | CAD | 111.00 | | | $ | 0.41 | |

| Third quarter | CAD | 120.00 | | | CAD | 101.00 | | | $ | 0.41 | |

| Fourth quarter | CAD | 110.00 | | | CAD | 101.50 | | | $ | 0.41 | |

| First quarter | CAD | 126.34 | | | CAD | 116.00 | | | $ | 0.41 | |

| Second quarter | CAD | 130.84 | | | CAD | 121.82 | | | $ | 0.41 | |

| Third quarter | CAD | 137.84 | | | CAD | 120.00 | | | $ | 0.41 | |

| Fourth quarter | CAD | 140.00 | | | CAD | 128.20 | | | $ | 0.41 | |

The following table sets forth the high and low sales prices per share of our Class B exchangeable shares for each quarter of 2017 and 2016 as reported by the Toronto Stock Exchange, as well as dividends paid in such quarter.

| First quarter | CAD | 134.75 | | | CAD | 120.00 | | | $ | 0.41 | |

| Second quarter | CAD | 132.69 | | | CAD | 111.74 | | | $ | 0.41 | |

| Third quarter | CAD | 117.25 | | | CAD | 100.55 | | | $ | 0.41 | |

| Fourth quarter | CAD | 107.54 | | | CAD | 98.04 | | | $ | 0.41 | |

| First quarter | CAD | 129.87 | | | CAD | 114.90 | | | $ | 0.41 | |

| Second quarter | CAD | 133.94 | | | CAD | 118.13 | | | $ | 0.41 | |

| Third quarter | CAD | 145.51 | | | CAD | 120.02 | | | $ | 0.41 | |

The table below summarizes selected financial information for the five years ended December 31, [removed: 2017.][added: 2018.]

| | [removed: 2017] [added: 2018] | | | | [removed: 2016(1)] [added: 2017] | | | | [removed: 2015] [added: 2016(1)] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Net sales | $ | [removed: 11,002.8] [added: 10,769.6] | | | $ | [removed: 4,885.0] [added: 11,002.8] | | | $ | [removed: 3,567.5] [added: 4,885.0] | | | $ | [removed: 4,146.3] [added: 3,567.5] | | | $ | [removed: 4,206.1] [added: 4,146.3] | |

| Net income [removed: from continuing operations] attributable to MCBC per [removed: share:] [added: share(2):] | | | | | | | | | | | | | | | | | | | |

| Total assets | $ | [removed: 30,246.9] [added: 30,109.8] | | | $ | [removed: 29,341.5] [added: 30,246.9] | | | $ | [removed: 12,276.3] [added: 29,341.5] | | | $ | [removed: 13,980.1] [added: 12,276.3] | | | $ | [removed: 15,560.5] [added: 13,980.1] | |

| Current portion of long-term debt and short-term borrowings | $ | [removed: 714.8] [added: 1,594.5] | | | $ | [removed: 684.8] [added: 714.8] | | | $ | [removed: 28.7] [added: 684.8] | | | $ | [removed: 849.0] [added: 28.7] | | | $ | [removed: 586.9] [added: 849.0] | |

| Long-term debt | $ | [removed: 10,598.7] [added: 8,893.8] | | | $ | [removed: 11,387.7] [added: 10,598.7] | | | $ | [removed: 2,908.7] [added: 11,387.7] | | | $ | [removed: 2,321.3] [added: 2,908.7] | | | $ | [removed: 3,193.4] [added: 2,321.3] | |

| Dividends per share of common stock | $ | 1.64 | | | $ | 1.64 | | | $ | 1.64 | | | $ | [removed: 1.48] [added: 1.64] | | | $ | [removed: 1.28] [added: 1.48] | |

| (1) | Includes MillerCoors' results of operations on a consolidated basis for the post-Acquisition period October 11, 2016, through December 31, 2016, as well as the assets acquired and related debt issued in connection with the Acquisition. Prior to October 11, 2016, MCBC’s 42% share of MillerCoors' results of operations was reported as equity income in MillerCoors in the consolidated statements of operations and our 42% share of MillerCoors' net assets was reported as Investment in MillerCoors in the consolidated balance sheets. Also included in net income [removed: from continuing operations] attributable to MCBC is a net special items gain of approximately $3.0 billion related to the fair value remeasurement of our pre-existing 42% interest in MillerCoors over its carrying value, as well as the reclassification of the loss related to MCBC's historical AOCI on our 42% interest in MillerCoors. See Part II—Item 8 Financial Statements and Supplementary Data, [removed: Note] [added: [Note] 4, "Acquisition and [removed: Investments"] [added: Investments"](#sB9A089BE9D5E572488D49B9B5A2F1F77)] of the Notes for further [removed: discussion.] [added: discussion of the Acquisition.] |

Net income attributable to MCBC and the related net income per basic and diluted share amounts for 2017 and 2016 have been restated due to the correction of errors related to income tax accounting.

See details at Part II—Item 8 Financial Statements and Supplementary Data, [Note 1, "Basis of Presentation and Accounting Policies."](#sB11811A494A55A06924D81AC36186725)

| | | As Restated | | | | As Restated | | | | | | | | | | | | | |

| Net income attributable to MCBC(2) | $ | 1,116.5 | | | $ | 1,565.6 | | | $ | 1,593.9 | | | $ | 395.2 | | | $ | 538.6 | |

| Basic | $ | 5.17 | | | $ | 7.27 | | | $ | 7.52 | | | $ | 2.13 | | | $ | 2.91 | |

| Diluted | $ | 5.15 | | | $ | 7.23 | | | $ | 7.47 | | | $ | 2.12 | | | $ | 2.89 | |

| | |

| --- | --- |

| (2) | Includes the impact of the reduction to the U.S. federal income tax rate as a result of U.S. tax reform in 2017. Additionally, during the first quarter of 2018 we recorded a gain within special items, net of $328.0 million which constitutes the Adjustment Amount related to the settlement agreement between MCBC and ABI as previously discussed. |

Net income from continuing operations attributable to MCBC and the related basic and diluted per share amounts for fiscal years 2013 through 2016, have been revised to reflect the retrospective application of our change in accounting policy as discussed in Part II—Item 8 Financial Statements and Supplementary Data, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" of the Notes.

| Net income from continuing operations attributable to MCBC | $ | 1,412.7 | | | $ | 1,995.8 | | | $ | 391.3 | | | $ | 538.1 | | | $ | 581.3 | |

| Basic | $ | 6.56 | | | $ | 9.41 | | | $ | 2.11 | | | $ | 2.91 | | | $ | 3.18 | |

| Diluted | $ | 6.52 | | | $ | 9.35 | | | $ | 2.10 | | | $ | 2.89 | | | $ | 3.16 | |

| [Management's [removed: Report](#sAFAE8FBBDA3B5EADA97198A378BF0E43)] [added: Report](#s044341D4F31E5057A557DAE4D485A441)] | [removed: [79](#sAFAE8FBBDA3B5EADA97198A378BF0E43)] [added: [78](#s044341D4F31E5057A557DAE4D485A441)] |

| [Report of Independent Registered Public Accounting [removed: Firm](#s845F2E2E84BF59B9976951BBDE4E3991)] [added: Firm](#s3BE2A14087BA5F04B65D36FC54CAC6D7)] | [removed: [80](#s845F2E2E84BF59B9976951BBDE4E3991)] [added: [80](#s3BE2A14087BA5F04B65D36FC54CAC6D7)] |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 2017,] [added: 2018,] December 31, [removed: 2016,] [added: 2017,] and December 31, [removed: 2015](#s7E19EB0E4D2A5EF995C2CE7DCC17CD31)] [added: 2016](#sEC2F5E31A177539FB643C0AC49D4D327)] | [removed: [82](#s7E19EB0E4D2A5EF995C2CE7DCC17CD31)] [added: [82](#sEC2F5E31A177539FB643C0AC49D4D327)] |

| [Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, [removed: 2017,] [added: 2018,] December 31, [removed: 2016,] [added: 2017,] and December 31, [removed: 2015](#s230F2BDCAF585AB493DFC2176A39E58B)] [added: 2016](#s5895F209B46358758CB9F371EEE14E1F)] | [removed: [83](#s230F2BDCAF585AB493DFC2176A39E58B)] [added: [83](#s5895F209B46358758CB9F371EEE14E1F)] |

| [Consolidated Balance Sheets [removed: at] [added: as of] December 31, [removed: 2017,] [added: 2018,] and December 31, [removed: 2016](#sF151D9D38D2558829BE9A880C13431F8)] [added: 2017](#sB274169AAC6652148A2447B1DE025BC9)] | [removed: [84](#sF151D9D38D2558829BE9A880C13431F8)] [added: [84](#sB274169AAC6652148A2447B1DE025BC9)] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2017,] [added: 2018,] December 31, [removed: 2016,] [added: 2017,] and December 31, [removed: 2015](#sF6806A06853D519ABDB602934FB336A9)] [added: 2016](#sAB72A4B692BD5B759BB2C1768DCAE8C9)] | [removed: [85](#sF6806A06853D519ABDB602934FB336A9)] [added: [85](#sAB72A4B692BD5B759BB2C1768DCAE8C9)] |

| [Consolidated Statements of Stockholders' Equity and Noncontrolling Interests for the years ended December 31, [removed: 2017,] [added: 2018,] December 31, [removed: 2016,] [added: 2017,] and December 31, [removed: 2015](#sA3459542B1745374A06B856E631C841C)] [added: 2016](#sE825FD71E25556889B1BD744F47CC931)] | [removed: [87](#sA3459542B1745374A06B856E631C841C)] [added: [87](#sE825FD71E25556889B1BD744F47CC931)] |

| [Notes to Consolidated Financial [removed: Statements](#sF8DDAFF252115CD3AE200D26A0ED85C3)] [added: Statements](#s0EFC2300AB2E5D59A41E8415B3AE90B7)] | [removed: [88](#sF8DDAFF252115CD3AE200D26A0ED85C3)] [added: [89](#s0EFC2300AB2E5D59A41E8415B3AE90B7)] |

| [Note 1, "Basis of Presentation and Summary of Significant Accounting [removed: Policies"](#s56D6E214E9495CECB5978C58B51F598A)] [added: Policies"](#sB11811A494A55A06924D81AC36186725)] | [removed: [88](#s56D6E214E9495CECB5978C58B51F598A)] [added: [89](#sB11811A494A55A06924D81AC36186725)] |

| [Note 2, "New Accounting [removed: Pronouncements"](#s11844684541D56188A121139C916F19B)] [added: Pronouncements"](#s9445C975649B50FBA022CDEC7747D271)] | [removed: [96](#s11844684541D56188A121139C916F19B)] [added: [98](#s9445C975649B50FBA022CDEC7747D271)] |

| [Note 3, "Segment [removed: Reporting"](#sD2E9B3C8D3BD5E9B8B898EF7E2F2210A)] [added: Reporting"](#s86E975D943635FCF9C08159FB56045A6)] | [removed: [97](#sD2E9B3C8D3BD5E9B8B898EF7E2F2210A)] [added: [102](#s86E975D943635FCF9C08159FB56045A6)] |

| [Note 4, "Acquisition and [removed: Investments"](#s4669972ED67955EF875C364FC7EF9E33)] [added: Investments"](#sB9A089BE9D5E572488D49B9B5A2F1F77)] | [removed: [102](#s4669972ED67955EF875C364FC7EF9E33)] [added: [106](#sB9A089BE9D5E572488D49B9B5A2F1F77)] |

| [Note 5, "Other Income and [removed: Expense"](#sA70AA029839A548490528FE2A1B41A0A)] [added: Expense"](#sE425339B16B458FCB8559BD9161C1D08)] | [removed: [111](#sA70AA029839A548490528FE2A1B41A0A)] [added: [114](#sE425339B16B458FCB8559BD9161C1D08)] |

| [Note 6, "Income [removed: Tax"](#s2A4C40D417B05D72A650488259BE79AE)] [added: Tax"](#s4E02A6135BD3598F9A040721598E839A)] | [removed: [111](#s2A4C40D417B05D72A650488259BE79AE)] [added: [114](#s4E02A6135BD3598F9A040721598E839A)] |

| [Note 7, "Special [removed: Items"](#s432CAEB8C3735007937E3D7242EAFD46)] [added: Items"](#sD52372DF080B576AB44474ACD738E414)] | [removed: [117](#s432CAEB8C3735007937E3D7242EAFD46)] [added: [120](#sD52372DF080B576AB44474ACD738E414)] |

| [Note 8, "Stockholders' [removed: Equity"](#s993B1EFB598C511EBF89D513B9E46775)] [added: Equity"](#sC6E71A113AAB5DA08134DEC0D86BB1E3)] | [removed: [120](#s993B1EFB598C511EBF89D513B9E46775)] [added: [122](#sC6E71A113AAB5DA08134DEC0D86BB1E3)] |

| [Note [removed: 10, "Properties"](#sBB8AC9350A875585934CEDABF2E860C0)] [added: 9, "Properties"](#s9FC8BF2224065AE7A78C0D289C6F031B)] | [removed: [123](#sBB8AC9350A875585934CEDABF2E860C0)] [added: [123](#s9FC8BF2224065AE7A78C0D289C6F031B)] |

| [Note [removed: 11,] [added: 10,] "Goodwill and Intangible [removed: Assets"](#sECA93C59E9005E7A8E7CA728590E63D1)] [added: Assets"](#s5EB4C3ED5D9157F4AA4652A0207A6AFF)] | [removed: [124](#sECA93C59E9005E7A8E7CA728590E63D1)] [added: [124](#s5EB4C3ED5D9157F4AA4652A0207A6AFF)] |

| [Note [removed: 12, "Debt"](#s998153F241EE5194B1B69E390336A6DC)] [added: 11, "Debt"](#s34DD16119D9558EB8D94699B95C5531C)] | [removed: [128](#s998153F241EE5194B1B69E390336A6DC)] [added: [128](#s34DD16119D9558EB8D94699B95C5531C)] |

| [Note [removed: 14,] [added: 13,] "Share-Based [removed: Payments"](#s3B80701805BB504C93AD15A5311FDE1E)] [added: Payments"](#sE5C5750BC699543C8C241B21C7CB5756)] | [removed: [132](#s3B80701805BB504C93AD15A5311FDE1E)] [added: [131](#sE5C5750BC699543C8C241B21C7CB5756)] |

| [Note [removed: 15,] [added: 14,] "Accumulated Other Comprehensive Income [removed: (Loss)"](#s20AE11C86E7E53EF8CDF7F5DBC33A5DC)] [added: (Loss)"](#s0DDF30CC660555CCA66751CA06C3ABBD)] | [removed: [136](#s20AE11C86E7E53EF8CDF7F5DBC33A5DC)] [added: [135](#s0DDF30CC660555CCA66751CA06C3ABBD)] |

| [Note [removed: 16,] [added: 15,] "Employee Retirement Plans and Postretirement [removed: Benefits"](#s4A1B57979C0B583A9A1D6BD58834C801)] [added: Benefits"](#s3E782B4178835E2DB0A53766F2226803)] | [removed: [137](#s4A1B57979C0B583A9A1D6BD58834C801)] [added: [136](#s3E782B4178835E2DB0A53766F2226803)] |

| [Note [removed: 17,] [added: 16,] "Derivative Instruments and Hedging [removed: Activities"](#s9B65EFE689505509AF49516E19E6898A)] [added: Activities"](#s6774BA419850570392E209D24F0D8562)] | [removed: [147](#s9B65EFE689505509AF49516E19E6898A)] [added: [146](#s6774BA419850570392E209D24F0D8562)] |

| [Note [removed: 18,] [added: 17,] "Accounts Payable and Other Current [removed: Liabilities"](#sFBAE335B9C0A545097F9EE94D5DC0CD6)] [added: Liabilities"](#sCBFFFE876FFC512EBBEA8FCDF098F4AF)] | [removed: [155](#sFBAE335B9C0A545097F9EE94D5DC0CD6)] [added: [155](#sCBFFFE876FFC512EBBEA8FCDF098F4AF)] |

| [Note [removed: 19,] [added: 18,] "Commitments and [removed: Contingencies"](#s09D3AAA592445838B3A6500C6C1C3684)] [added: Contingencies"](#sBC77BCF86FDA5F05AC59B70FF65D6F6F)] | [removed: [155](#s09D3AAA592445838B3A6500C6C1C3684)] [added: [155](#sBC77BCF86FDA5F05AC59B70FF65D6F6F)] |

| [Note [removed: 20,] [added: 19,] "Supplemental Guarantor [removed: Information"](#s68E836DD4BDE540BA13CE3C663FA1228)] [added: Information"](#s1F33C909CE055BCBA182209E3E9B61C8)] | [removed: [160](#s68E836DD4BDE540BA13CE3C663FA1228)] [added: [159](#s1F33C909CE055BCBA182209E3E9B61C8)] |

| [Note [removed: 21,] [added: 20,] "Quarterly Financial Information [removed: (Unaudited)"](#sC84DB07266D15CE59F3DDA5755A86998)] [added: (Unaudited)"](#s96A17CD24BF65A30B602F6B8FBCFC8E9)] | [removed: [170](#sC84DB07266D15CE59F3DDA5755A86998)] [added: [171](#s96A17CD24BF65A30B602F6B8FBCFC8E9)] |

[removed: In making this assessment,] [added: We also have audited] the Company's [removed: management used the] [added: internal control over financial reporting as of December 31, 2018, based on] criteria [removed: set forth] [added: established in Internal Control - Integrated Framework (2013) issued] by the Committee of Sponsoring Organizations of the Treadway Commission [removed: (COSO) in Internal Control—Integrated Framework (2013 Framework).][added: (COSO).]

[removed: Their accompanying] report is based upon an examination conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), including tests of accounting procedures, records and internal control.

To the Board of Directors and [removed: Shareholders]

[added: Stockholders] of Molson Coors Brewing [removed: Company:][added: Company]

We have audited the accompanying consolidated balance sheets of Molson Coors Brewing Company and its subsidiaries [added: (the "Company")] as of December 31, [removed: 2017] [added: 2018] and [removed: December 31, 2016,] [added: 2017,] and the related consolidated statements of operations, of comprehensive income (loss), of [removed: cash flows, and of] stockholders’ equity and noncontrolling interests [added: and of cash flows] for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] including the related notes and [removed: financial statement] schedule [removed: listed] [added: of valuation and qualifying accounts for each of the three years] in the [removed: index] [added: period ended December 31, 2018] appearing under Item [removed: 15(a)(2)] [added: 15(c)] (collectively referred to as the “consolidated financial statements”).

[removed: We also have audited] [added: Our management, under] the [removed: Company's] [added: supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our] internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on [added: the framework and] criteria established in Internal [removed: Control - Integrated] [added: Control—Integrated] Framework [removed: (2013)] [added: (2013 Framework),] issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission (COSO).][added: Commission.]

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2017] [added: 2018] and [removed: December 31, 2016,] [added: 2017,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2017] [added: 2018] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company [removed: maintained,] [added: did not maintain,] in all material respects, effective internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the [removed: COSO.][added: COSO because a material weakness in internal control over financial reporting existed as of that date related to the completeness and accuracy of the accounting for and disclosure of the income tax effects of acquired partnership interests.]

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial [removed: reporting,] [added: reporting] included in [removed: Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A.][added: management's report referred to above.]

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) [removed: ("PCAOB")] [added: (PCAOB)] and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal [removed: control based on the assessed risk.]

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 [added: permit preparation of financial statements in accordance with generally accepted accounting principles, 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.]

| | For the [removed: Years Ended] [added: years ended] | | | | | | | | | | | [added: | |]

| [Note 12, "Inventories"](#s36311F2EEA4B5BD6A3F77BC22C41F257) | [131](#s36311F2EEA4B5BD6A3F77BC22C41F257) |

A material weakness, as defined in Exchange Act Rule 12b-2, is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As part of preparing our 2018 consolidated financial statements, we identified errors in the accounting for income taxes related to the deferred tax liabilities for our partnership in MillerCoors.

Following the Acquisition in 2016, MillerCoors continued as a partnership for tax purposes until 2018, at which point the partnership was dissolved.

Upon the dissolution of the MillerCoors partnership, we changed our outside basis deferred tax liability for our investment in the partnership to separate deferred tax positions for each of the individual book-tax basis differences in the underlying assets and liabilities of MillerCoors.

In doing so, we identified a difference between the deferred tax liabilities recorded and the deferred tax liabilities required.

As a result, we concluded that the deferred tax liabilities and deferred tax expense associated with our remeasurement of our previously held equity interest in MillerCoors was incorrectly calculated upon close of the Acquisition in the fourth quarter of 2016.

Specifically, upon closing of the Acquisition and completion of the related deferred income tax calculations, we did not reconcile the outside basis deferred income tax liability for the investment in the partnership to the book-tax difference in the underlying assets and liabilities within the partnership.

As part of our annual assessment of internal control over financial reporting, we have determined that a material weakness existed in the Company’s internal control over financial reporting as of December 31, 2018.

A material weakness existed in that we did not design and maintain effective controls over the completeness and accuracy of the accounting for, and disclosure of, the income tax effects of acquired partnership interests.

Specifically, we did not design appropriate controls to identify and reconcile deferred income taxes associated with the accounting for acquired partnership interests.

This material weakness resulted in material errors in connection with our step acquisition of MillerCoors that were corrected through the restatement of the consolidated financial statements as of and for the years ended December 31, 2017, and December 31, 2016, as described in [Note 1, "Basis of Presentation and Summary of Significant Accounting Policies"](#sB11811A494A55A06924D81AC36186725) to the consolidated financial statements and the correction of the unaudited quarterly financial information for fiscal years 2018 and 2017.

Additionally, this material weakness could result in misstatements to the aforementioned account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

As a result of the material weakness in internal control over financial reporting described above, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2018.

Management's Plan for Remediation of the Material Weakness

In response to the material weakness described above, with the oversight of the Audit Committee of our Board of Directors, management is currently evaluating our policies and procedures related to the accounting for income taxes and plans to design and implement adequate internal controls to ensure that (i) the income tax effects of acquired partnership interests are properly accounted for and disclosed in the period of acquisition, and (ii) the resulting investment in partnership deferred income tax assets and liabilities are assessed and reconciled periodically to the book-tax differences in the underlying assets and liabilities within the partnership to determine whether any adjustment is necessary.

The remediation efforts are intended both to address the identified material weakness and to enhance our overall financial control environment.

Management is committed to continuous improvement of the Company’s internal control over financial reporting and will continue to diligently review the Company’s internal control over financial reporting.

Their accompanying

| February 12, 2019 | | February 12, 2019 |

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness referred to above is described in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A.

We considered this material weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2018 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

Restatement of Previously Issued Financial Statements

As discussed in Note 1 to the consolidated financial statements, the Company has restated its 2017 and 2016 financial statements to correct errors.

control based on the assessed risk.

February 12, 2019

| | | As Restated | | | | As Restated | | | | | |

| Gross profit | 4,184.8 | | | | 4,766.1 | | | | 1,886.0 | | |

| Special items, net | 249.7 | | | | (36.4 | | ) | | 2,532.9 | | |

| Operating income (loss) | 1,631.8 | | | | 1,677.7 | | | | 3,322.6 | | |

| Other pension and postretirement benefits (costs), net | 38.2 | | | | 47.4 | | | | 8.4 | | |

| Other income (expense), net | (12.0 | | ) | | 1.4 | | | | (32.5 | | ) |

| Income (loss) before income taxes | 1,359.8 | | | | 1,383.2 | | | | 3,054.1 | | |

| Income tax benefit (expense) | (225.2 | | ) | | 204.6 | | | | (1,454.3 | | ) |

| Net income (loss) | 1,134.6 | | | | 1,587.8 | | | | 1,599.8 | | |

| Basic | $ | 5.17 | | | $ | 7.27 | | | $ | 7.52 | |

| Diluted | $ | 5.15 | | | $ | 7.23 | | | $ | 7.47 | |

| Weighted-average shares outstanding: | | | | | | | | | | | |

| Basic | 216.0 | | | | 215.4 | | | | 212.0 | | |

| | |

| --- | --- |

| [Note 9, "Earnings Per Share"](#sCB9AB4B5C62F55AA9B3B19E00C0CEDB3) | [122](#sCB9AB4B5C62F55AA9B3B19E00C0CEDB3) |

| [Note 13, "Inventories"](#s2586a67edf9d496dbb8c9ee2398fa0dd) | [132](#s2586a67edf9d496dbb8c9ee2398fa0dd) |

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2017.

Based upon its assessment, management concluded that, as of December 31, 2017, the Company's internal control over financial reporting was effective.

| February 14, 2018 | | February 14, 2018 |

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of calculating the market-related value of pension plan assets used to determine net periodic pension cost in 2017.

permit preparation of financial statements in accordance with generally accepted accounting principles, 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.

February 14, 2018

| Gross profit | 4,785.6 | | | | 1,897.5 | | | | 1,435.9 | | |

| Operating income (loss) | 1,725.1 | | | | 3,331.0 | | | | 567.2 | | |

| Income (loss) from continuing operations before income taxes | 1,381.7 | | | | 3,056.9 | | | | 456.1 | | |

| Net income (loss) from continuing operations | 1,434.9 | | | | 2,001.7 | | | | 394.6 | | |

| Income (loss) from discontinued operations, net of tax | 1.5 | | | | (2.8 | | ) | | 3.9 | | |

| From continuing operations | $ | 6.56 | | | $ | 9.41 | | | $ | 2.11 | |

| From discontinued operations | 0.01 | | | | (0.01 | | ) | | 0.02 | | |

| From continuing operations | $ | 6.52 | | | $ | 9.35 | | | $ | 2.10 | |

| Weighted-average shares—basic | 215.4 | | | | 212.0 | | | | 185.3 | | |

| Weighted-average shares—diluted | 216.5 | | | | 213.4 | | | | 186.4 | | |

| Net income (loss) from continuing operations | $ | 1,412.7 | | | $ | 1,995.8 | | | $ | 391.3 | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| Discontinued operations | 4.9 | | | | 5.0 | | |

| Other liabilities | 304.4 | | | | 267.0 | | |

| Discontinued operations | 12.4 | | | | 12.6 | | |

| (Gain) loss from discontinued operations | (1.5 | | ) | | 2.8 | | | | (3.9 | | ) |

| Payments for purchase of treasury stock | — | | | | — | | | | (150.1 | | ) |

| Change in overdraft balances and other | (50.2 | | ) | | (40.9 | | ) | | (56.6 | | ) |

| Balance at December 31, 2014 | $ | 7,886.1 | | | $ | — | | | $ | 1.7 | | | $ | 108.5 | | | $ | 661.5 | | | $ | 3,871.2 | | | $ | 4,413.4 | | | $ | (871.9 | ) | | $ | (321.1 | ) | | $ | 22.8 | |

| Exchange of shares | — | | | | — | | | | — | | | | (0.3 | | ) | | (58.5 | | ) | | 58.8 | | | | — | | | | — | | | | — | | | | — | | |

| Dividends declared and paid | (307.8 | | ) | | — | | | | — | | | | — | | | | — | | | | — | | | | (303.4 | | ) | | — | | | | — | | | | (4.4 | | ) |

Our consolidated historical financial statements have been revised to reflect the retrospective application of our change in accounting policy for recognizing certain components of net periodic pension and postretirement benefit cost as further discussed below.

Revenue is recognized when the significant risks and rewards of ownership, including the risk of loss, are transferred to the customer or distributor depending upon the method of distribution and shipping terms.

In certain of our markets, slotting or listing fees are paid to customers and are also treated as a reduction of sales.

In accordance with guidance pertaining to reporting revenue gross as a principal versus net as an agent, sales under the factored brand business are reported on a gross basis.

Where there is no sufficiently separate identifiable benefit, and the payment is linked to volumes, or fair value cannot be established, the amortization of the prepayment or the cost as incurred is included in sales discounts as a reduction to sales and where there are specific marketing activities/commitments, the cost is included as marketing, general and administrative expenses.

Subsequent to the period covered by these financial statements, our accounting policies for revenue recognition will be updated in the first quarter of 2018, upon adoption of the FASB's new revenue recognition standard.

See Note 2, "New Accounting Pronouncements" for additional information.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that [added: because of the material weakness in] our [added: internal control over financial reporting described below our] disclosure controls and procedures were [added: not] effective as of December 31, [removed: 2017,] [added: 2018] to provide reasonable assurance that information required to be disclosed in our reports [added: 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 [added: disclosure] controls and procedures that, by their nature, can only provide reasonable assurance regarding management's control objectives.

Our management is responsible for establishing and maintaining [removed: effective] [added: 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. [removed: generally accepted accounting principles.][added: 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 [removed: generally accepted accounting principles,] [added: 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 [removed: the] [added: 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 [removed: ineffective due to] [added: inadequate because of] changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our [added: management, under the supervision and with the participation of our] Chief Executive Officer and Chief Financial Officer, [removed: with assistance from other members of management,] assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] 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.

[removed: Based on its evaluation,] [added: As a result of the material weakness in internal control over financial reporting described above,] management has concluded that [removed: our] [added: we did not maintain effective] internal control over financial reporting [removed: was effective] as of December 31, [removed: 2017.][added: 2018.]

[removed: Our] [added: An] independent registered public accounting [removed: firm] [added: firm, PricewaterhouseCoopers LLP,] has audited the effectiveness of our internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] as stated in [removed: the] [added: their] report which appears in Part II—Item 8 Financial Statements and Supplementary Data.

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, [removed: 2017,] [added: 2018,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management performed additional analysis and other post-closing procedures as of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018, to ensure the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), including reviewing the accounting for income taxes related to existing partnerships.

Management has concluded that, notwithstanding the material weakness described below, the company’s consolidated financial statements in this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S. GAAP.

A material weakness, as defined in Exchange Act Rule 12b-2, is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As a result of this assessment, management concluded that we did not design and maintain effective controls over the completeness and accuracy of the accounting for, and disclosure of, the income tax effects of acquired partnership interests.

Specifically, we did not design appropriate controls to identify and reconcile deferred income taxes associated with the accounting for acquired partnership interests.

This material weakness resulted in material errors in connection with our step acquisition of MillerCoors that were corrected through the restatement of the consolidated financial statements as of and for the

years ended December 31, 2017, and December 31, 2016, and the correction of the unaudited quarterly financial information for fiscal years 2018 and 2017.

Additionally, this material weakness could result in misstatements to the aforementioned account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Management's Plan for Remediation of the Material Weakness

In response to the material weakness described above, with the oversight of the Audit Committee of our Board of Directors, management is currently evaluating our policies and procedures related to the accounting for income taxes and plans to design and implement adequate internal controls to ensure that (i) the income tax effects of acquired partnership interests are properly accounted for and disclosed in the period of acquisition, and (ii) the resulting investment in partnership deferred income tax assets and liabilities are assessed and reconciled periodically to the book-tax differences in the underlying assets and liabilities within the partnership to determine whether any adjustment is necessary.

The remediation efforts are intended both to address the identified material weakness and to enhance our overall financial control environment.

Management is committed to continuous improvement of the company’s internal control over financial reporting and will continue to diligently review the company’s internal control over financial reporting.

[removed: Additional information concerning our executive officers, directors and corporate governance is incorporated herein] [added: Incorporated] by reference to our definitive proxy statement for our [removed: 2018] [added: 2019] annual meeting of stockholders, which will be filed no later than 120 days after December 31, [removed: 2017.][added: 2018.]

All of Molson Coors' directors and employees, including its Chief Executive Officer, Chief Financial Officer, and other senior financial officers, are bound by Molson Coors' Code of Business Conduct, which complies with the requirements of the New York Stock Exchange and the SEC to ensure that the business of Molson Coors is conducted in a legal and ethical manner.

The Code of Business Conduct covers all areas of professional conduct, including employment policies, conflicts of interest, fair dealing, and the protection of confidential information, as well as strict adherence to all laws and regulations applicable to the conduct of our business.

A copy of the Code of Business Conduct is available on the Molson Coors website, www.molsoncoors.com.

Molson Coors intends to disclose amendments to, or waivers from, certain provisions of the Code of Business Conduct for executive officers and directors on its website within four business days following the date of such amendment or waiver.

Incorporated by reference to our definitive proxy statement for our [removed: 2018] [added: 2019] annual meeting of stockholders, which will be filed no later than 120 days after December 31, [removed: 2017.][added: 2018.]

Incorporated by reference to our definitive proxy statement for our [removed: 2018] [added: 2019] annual meeting of stockholders, which will be filed no later than 120 days after December 31, [removed: 2017.][added: 2018.]

The following table summarizes information about the Incentive Compensation Plan as of December 31, [removed: 2017.][added: 2018.]

| (1) | Under the Incentive Compensation Plan, we may issue RSUs, DSUs, PSUs and stock options. Amount in column A includes [removed: 1,183,858] [added: 1,172,015] RSUs and DSUs, [removed: 393,368] [added: 503,747] PSUs (assuming the target award is met) and [removed: 1,509,232] [added: 1,271,734] options, respectively, outstanding as of December 31, [removed: 2017.] [added: 2018.] See Part II—Item 8 Financial Statements and Supplementary Data, [removed: Note 14,] [added: [Note 13,] "Share-Based [removed: Payments"] [added: Payments"](#sE5C5750BC699543C8C241B21C7CB5756)] of the Notes to the Consolidated Financial Statements for further discussion. Outstanding RSUs, DSUs and PSUs do not have exercise prices and therefore have been disregarded for purposes of calculating the weighted-average exercise price. |