Molson Coors Beverage (TAP) 10-K risk factor changes: FY2020 vs FY2019

Risks [removed: Specific] [added: Related] to [removed: Our Company][added: our Company and Operations]

Specifically, our [removed: U.S., Canada] [added: North American] and [removed: Europe] [added: European] markets have experienced vast expansion in the craft beer industry along with the expansion of cider, flavored malt beverages (including hard seltzers), [added: CBD beverages] and other [removed: wellness] [added: similar] beverages.

If our competitors are able to respond more quickly to the evolving trends within the craft beer, cider, hard seltzer, flavored malt [added: beverages, CBD] beverages and other [removed: wellness] [added: similar] beverages categories, or if our new products [added: in these categories] are not successful, our business and financial results may be adversely impacted.

Currently, in Ontario and other provinces, provincial governments are reviewing and/or changing this historical foundation as a result of this market evolution and increased demand by some for [removed: government] [added: government's] intervention to [removed: increase competition and choice.][added: remove distribution restrictions.]

We compete with other beer and beverage companies not only for [added: legal age] drinker acceptance and loyalty, but also for shelf, cold box and tap space in retail establishments and for marketing focus by our distributors and their customers, all of which also distribute and sell other beers and alcoholic beverage products.

As discussed above, even within the beer industry we have seen a shift away from the traditionally most popular beer brands and segments and a corresponding expansion in the craft beer industry along with the expansion of cider, hard seltzers, flavored malt [added: beverages, CBD] beverages and other [removed: wellness] [added: similar] beverages.

Failure to generate significant cost savings and margin improvement through our ongoing [removed: initiatives could adversely affect our profitability.]

For example, [added: net] sales in North America accounted for approximately [removed: 80%] [added: 85%] of our total [removed: 2019] [added: 2020 net] sales.

Our success as an enterprise currently depends largely on the success of relatively few products in several mature markets specific to the beer industry; if consumer preferences shift away from our products, consumption of our products decline or we are unable to successfully and timely innovate beyond beer, our business and financial results could be materially adversely affected. Our *Coors Light* and *Miller Lite* brands in the U.S., *Coors Light, Molson Canadian*, *Coors [removed: Banquet*] [added: Original*] and *Carling* brands in Canada, and *Carling, Staropramen, Jelen, Bergenbier* and *Coors Light* brands in Europe represented more than half of each respective segment's sales volumes in [removed: 2019.][added: 2020.]

Recently, there has been more attention focused on health concerns and the harmful [removed: effects] [added: consumption] of alcoholic beverages which could result in a change in the social acceptability of beer and other alcoholic beverages which could materially impact the consumption of beer and our sales.

Additionally, in some of our major markets, specifically [removed: the U.S., Canada] [added: North America] and Europe, there has been a shift in consumer preferences within the total beer market away from premium brands to "craft beer" produced by smaller, regional microbreweries, as well as a shift within the total alcohol beverage market from beer to wine and spirits.

Although the ultimate impact is currently unknown, the emergence of legal cannabis in certain [removed: U.S.] states [added: in the United States] and [added: in] Canada may result in a shift of discretionary income away from our products or a change in consumer preferences away from beer.

[added: The launch of a new product can give rise to a variety of costs and an] unsuccessful launch or short-lived popularity of our product innovations could, among other things, affect consumer perception of our existing brands and our reputation as well as result in inventory write-offs and other costs.

While we have quality control programs in place, in the event we or our third-party manufacturers [removed: experienced] [added: experience] an issue with product quality or if any of our products become unsafe or unfit for consumption, are misbranded or cause injury, we may experience recalls or liability in addition to business disruption which could further negatively impact brand image and reputation, negatively affect our sales and cause us to incur additional costs.

In addition, because our brands carry family [removed: names,] [added: names or we may partner with celebrities or other famous sponsors,] personal activities by certain members of the Molson or Coors families [added: or our promotional partners] that harm their public image or reputation could also have an [removed: adverse effect on our brands.]

Difficult macroeconomic conditions in our markets, such as [added: further] decreases in per capita income and level of disposable income driven by increases to inflation, income taxes, the cost of living, [added: increased and prolonged] unemployment [removed: levels,] [added: or a further decline in consumer confidence as a result of the coronavirus pandemic or otherwise, as well as limited or significantly reduced points of access of our product,] political or economic instability [removed: or] other country-specific factors could [added: continue to] have [removed: an] [added: a material] adverse effect on the demand for our products.

[removed: A significant portion of our consolidated net sales revenues are concentrated in the U.S.] Therefore, unfavorable macroeconomic conditions, such as a recession or slowed economic growth, in [removed: the U.S.] [added: North America or Europe] could negatively affect consumer demand for our product in [removed: this] [added: these] important [removed: market.][added: markets.]

Under difficult economic conditions, consumers may [added: continue to] seek to reduce discretionary spending by forgoing purchases of our [removed: products or] [added: products,] by shifting away from our [added: above-premium] products to lower-priced products offered by [added: us or] other [removed: companies.][added: companies or by shifting to off-premise from on-premise consumption, negatively impacting our net sales and margins.]

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

Our restructuring activities related to our revitalization plan may not be successful and the estimated costs associated with such activities may be more than expected, and our restructuring activities may adversely impact employee hiring and retention. On October 28, 2019, as part of the revitalization plan, we made the determination to establish Chicago, Illinois as our North American operational headquarters, close our [removed: existing] office in Denver, Colorado and consolidate certain administrative functions into our other existing office locations.

In connection with these consolidation activities, we [added: currently] expect to incur certain cash and non-cash restructuring charges related to [removed: employee relocation,] severance, retention and transition costs, non-cash asset related costs, lease exit costs in connection with [added: our] office [removed: leases] [added: lease] in Denver, Colorado, and other transition activities currently estimated in the range [removed: of approximately $120 million to $180 million in the aggregate, the majority of which will be cash charges that we began recognizing in the fourth quarter of 2019, and will be further spread through the balance of fiscal years 2020 and 2021.]

The [removed: turnover] [added: turnover, the onboarding of new talent] and any resulting distraction [removed: could also] [added: has the potential to] negatively impact the overall performance of our [removed: employees,] [added: employees and employee morale,] resulting in [added: loss of institutional knowledge,] inefficiencies, higher short- or long-term costs, or decreased productivity.

If we are not able to maintain compliance with stated financial covenants or if we breach other covenants in any debt agreement, we could be in default under such [removed: agreement.][added: agreement or trigger a cross-default of other debt instruments.]

Such a default would adversely affect our credit ratings, may allow our creditors to accelerate the related [removed: indebtedness, and may result in the acceleration of any other indebtedness to which a cross-acceleration or cross-default provision applies.]

While we have publicly expressed our intention to maintain an investment grade debt rating, ratings are determined by third-party rating [removed: agencies.][added: agencies and in some cases the events that may cause us to suffer a ratings downgrade are unpredictable and outside of our control, such as the economic climate caused by the coronavirus pandemic and its impact on our business.]

A credit ratings downgrade, particularly a downgrade below investment grade, could increase our costs of future [removed: borrowing] [added: borrowing, negatively impact our hedging instruments] and harm our ability to refinance our debt in the future on acceptable terms or access the capital markets.

The risk of counterparty default or failure may be heightened during economic downturns and periods of uncertainty in the financial [removed: markets.][added: markets, including as a result of the coronavirus pandemic.]

Our operations face significant exposure to changes in commodity prices, which could materially and adversely affect our business and financial results. We use a large volume of agricultural and other raw materials, some of which are purchased through supply contracts with third parties, to produce our products, including barley, malted barley, hops, corn, other various starches, water and packaging materials, including aluminum cans and bottles, glass and polyethylene [removed: terephthalate containers, as well as, cardboard and other paper products.]

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), [added: global disease outbreaks or pandemics, such as the coronavirus pandemic,] trade agreements among producing and consuming nations, governmental regulations, including tariffs, frosts, droughts and other weather conditions, changes in precipitation patterns, the frequency of extreme weather events, economic factors affecting growth decisions, inflation, plant diseases, theft and industry surcharges and other practices.

[removed: To] [added: Furthermore, to] the extent any of the foregoing factors affect the availability or prices of ingredients or packaging or our hedging arrangements do not effectively or completely hedge changes in commodity price risks and we are not able to pass these increased costs along to customers, our business and financial results could [added: also] be materially adversely impacted.

Such [removed: proceedings] [added: matters, even those that are ultimately non-meritorious,] can be complex, costly, and highly disruptive to business operations by diverting the attention and energies of management and other key [removed: personnel.][added: personnel, and may generate adverse publicity that damages our reputation or brand image.]

The assessment of the outcome of such [removed: proceedings,] [added: matters,] including our potential liability, if any, is a highly subjective process that requires judgments about future events that are not within our [removed: control.][added: control and are based on the information available to management at that time.]

The outcome of [removed: litigation, arbitration, regulatory or other proceedings,] [added: such matters,] including amounts ultimately received or paid upon judgment or settlement, may differ materially from management’s outlook or estimates, including any amounts accrued in the financial statements.

Actual outcomes, including judgments, awards, settlements or orders, could have a material adverse effect on our business, financial condition, operating results, or cash [removed: flows.][added: flows and damage our corporate reputation and our brands.]

For example, as a result of the [removed: Acquisition,] [added: acquisition of the remaining portion of MillerCoors LLC ("MillerCoors") which occurred on October 11, 2016 (the "Acquisition"),] we allocated approximately $6.3 billion and $7.6 billion to goodwill and indefinite-lived intangible assets, respectively.

[added: Additionally, we identified a triggering event requiring an interim impairment assessment of the goodwill within our historical Canada] reporting unit at the end of the third quarter of 2019, which resulted in a goodwill impairment loss of $668.3 million recorded within special items in our consolidated statements of operations during the third quarter of 2019.

Our most recent impairment analysis, conducted as of October 1, [removed: 2019,] [added: 2020,] the first day of our fiscal fourth quarter, indicated that the fair value of the [removed: U.S., Europe and Canada] [added: North America] reporting [removed: units were] [added: unit was] estimated at approximately [removed: 17%, 12% and 0%] [added: 7%] in excess of [removed: their] [added: its] carrying [removed: values, respectively.][added: value.]

[removed: As a result of our] [added: In the current year] testing, [added: it was determined that] the [removed: Europe and Canada] [added: fair value of the North America] reporting [removed: units continue] [added: unit declined during the year and is considered] to be [removed: considered] at risk of future impairment in the event of significant unfavorable changes in the forecasted cash flows (including [added: Company-specific risks like the performance of our above-premium transformation efforts and overall market performance of new innovations like hard seltzers, along with macro-economic risks like the continued] prolonged weakening of economic conditions, or significant unfavorable changes in [removed: tax,] [added: tax rates,] 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.

The [removed: Canada *Coors Light* distribution agreement] [added: *Staropramen*] indefinite-lived intangible asset is also considered to be at risk of future impairment with a fair value estimated at approximately [removed: 11%] [added: 9%] in excess of its carrying value as of the impairment testing date.

Although the fair values of our [added: North America] reporting [removed: units] [added: unit] and indefinite-lived intangible assets are either equal to or in excess of their carrying values, the fair values are sensitive to the aforementioned potential unfavorable changes that could have an adverse impact on future analyses.

The reader is encouraged to read each risk factor as related and interconnected to the other risk factors set forth in this section.

The novel coronavirus pandemic, efforts to mitigate or disrupt the pandemic and related weak, or weakening of, economic or other negative conditions, have disrupted, and may continue to disrupt our business, which has had and could continue to have a material adverse effect on our operations, liquidity, financial condition and financial results.

Our business has been, and we currently expect will continue to be, materially and adversely affected by the coronavirus pandemic and related weak, or continued weakening of, economic or other negative conditions, particularly in regions where we derive a significant amount of our revenue or profit or where our suppliers and business partners are located, including, in North America and Europe.

Specifically, the coronavirus pandemic has disrupted and we currently expect it to continue to disrupt our business and potential associated financial impacts.

Those impacts include, but are not limited to, lower net sales in markets affected by the pandemic, including potential material shifts in, and impacts to, demand, the inability to sell our products to on-premise consumers and further disruption to the on-premise channel, including staged on premise re-openings and subsequent closure of on-premise accounts, our ability to reinstate or pay a dividend, the delay of, and potential increased costs related to, inventory production and fulfillment, including packaging availability impacted by package mix shifts related to off-premise demand, including significantly increased need for and limited supplies of aluminum cans and paperboard, and lower return rates of our returnable packaging in certain markets, potentially impacting net sales and cost of goods globally and increased incremental costs associated with mitigating the effects of the pandemic, including increased raw materials, freight and logistics costs and other expenses.

Packaging material supply shortages and supply chain constraints have impacted and could continue to negatively impact our ability to meet increased demand in off-premise channels or particular packages, particularly aluminum cans, which in turn could impact our net sales revenues and market share.

Continued disruption and

declines in the global economy have impacted and could continue to impact our customers’ liquidity and capital resources and therefore our ability to collect, or the timeliness of collection of our accounts receivable from them, which may have a material adverse impact on our performance, cash flows and capital resources.

The coronavirus pandemic is ongoing, and its dynamic nature, including uncertainties relating to the ultimate spread of the virus, newer variants, the severity of the disease, the duration of the pandemic, the roll out and efficacy of the vaccines and related prolonged weakening of economic or other negative conditions, such as a recession or slowed economic growth in our markets, and actions that may be taken by governmental authorities to contain the pandemic or to mitigate its impact, makes it difficult to forecast any effects on our results of operations for 2021 and in subsequent years.

However, our results of operations in 2020 were negatively affected and we currently expect our results of operations for 2021 to be significantly and adversely affected.

Specifically, difficult macroeconomic conditions in our markets, such as further decreases in per capita income and level of disposable income, increased and prolonged unemployment or a further decline in consumer confidence as a result of the coronavirus pandemic, as well as limited or significantly reduced points of access of our product, could continue to have a material adverse effect on the demand for our products.

A significant portion of our consolidated net sales revenues are concentrated in markets where the coronavirus pandemic impacts have been significant.

Therefore, unfavorable macroeconomic conditions, including as a result of the coronavirus pandemic and any resulting recession or slowed economic growth, have had, and could continue to have, an outsized negative impact on us.

In addition, difficult economic conditions may have a negative impact on our ability to access capital markets and other funding sources, on acceptable terms or at all, should we seek future financing.

Additionally, we may have unexpected costs and liabilities; revenue and cash provided by operations may continue to decline; macroeconomic conditions may continue to weaken; prolonged and severe levels of unemployment may negatively impact our consumers; and competitive pressures may increase, resulting in difficulty maintaining adequate liquidity and meeting our deleverage commitments and as a result, our credit ratings could be downgraded, which would adversely impact our business, including by increasing our costs of future borrowing and harming our ability to refinance our debt in the future on acceptable terms or access the capital markets, if we are able to obtain additional financing on terms that are acceptable to us at all.

Further, notwithstanding the amendment to our revolving credit facility on June 19, 2020 to revise the leverage ratios under the financial maintenance covenant upwards for the six fiscal quarters beginning with the second quarter of 2020, should the impacts of the pandemic and resulting performance adversely affect our ability to remain compliant with our covenants in our revolving credit facility agreement and absent another amendment or waiver from participating lenders, the outstanding borrowings on our revolving credit facility agreement may become immediately due.

Such events may additionally trigger an event of default on our senior notes resulting in the potential acceleration of amounts due thereunder.

In addition, the coronavirus pandemic and related efforts to mitigate its spread, have impacted, and may continue to impact for the foreseeable future, customer traffic to the on-premise channel, which includes bars, restaurants and sporting, festival and other large venues.

Many governmental authorities across our North America and Europe businesses have required that bars and restaurants limit, close or cease sit-down service, which has negatively impacted and we expect will continue to negatively impact on-premise sales of our beverages and previously led to the incurrence of costs to repurchase products that on-premise accounts or distributors were unable or prohibited from selling as a result of the governmental regulations.

Despite the limited reopening of on-premise accounts in certain of our markets in the second and third quarters, sales to restaurants and bars have not returned to pre-pandemic levels and in many instances, the reopened on-premise accounts have been subsequently forced to close in certain of our markets as a result of an increase in the spread of the coronavirus.

We currently expect that closures and reduced on-premise consumption may continue for an unknown period, negatively impacting our net sales and margins.

We also expect some on-premise accounts will see a decrease in demand as colder weather in the North American and European markets may reduce or eliminate their outdoor seating capacity.

In addition, sporting events, festivals and other large public gatherings where our products are served have been canceled or permitted to take place only with limited or no attendance by the public throughout North America and Europe and we expect them to largely remain cancelled until a vaccine is distributed to the majority of the public.

Additionally, these and other governmental or societal impositions of restrictions on public gatherings, especially if prolonged in nature, will have adverse effects on on-premise traffic and, in turn, our business.

Even if such measures are not implemented and coronavirus does not spread more significantly, or if after the pandemic has subsided, fear of re-occurrence or the perceived risk of infection or health risk may adversely affect traffic to the on-premise channel and, in turn, may have a material adverse effect on our business, liquidity, financial condition and results of operations, particularly if any self-imposed or governmental changes are in place for a significant amount of time.

Moreover, our operations could be disrupted by our employees or employees of our business partners, including our supply chain partners, being diagnosed with coronavirus or were suspected of having coronavirus or other illnesses since this could require us or our business partners to quarantine some or all such employees or close and disinfect our or their facilities.

If a significant percentage of our workforce or the workforce of our business partners are unable to work or if we or our

business partners are required to close our or their production facilities, including because of illness or travel or government restrictions in connection with the coronavirus pandemic, our operations, including manufacturing and distribution capabilities, may be negatively impacted, potentially materially adversely affecting our business, liquidity, financial condition or results of operations.

initiatives could adversely affect our profitability.

As a result, to the extent that we are unable to maintain or grow our market share in our mature markets, our sales and, in turn, business and financial results could be materially and adversely affected.

In addition, the coronavirus pandemic has altered, and in some cases, delayed product innovation efforts.

We were making progress against these ambitions, before the impact of the coronavirus pandemic became widespread throughout North America and Europe.

As a result of this pandemic and resulting uncertainty in the economy, we are making adjustments in the short-term and intend to use the savings, generated from the revitalization plan, to help protect our cash and liquidity position.

adverse effect on our brands or the Company.

A significant portion of our consolidated net sales revenues are concentrated in North America and Europe.

Under difficult economic conditions, consumers may continue to seek to reduce discretionary spending by forgoing purchases of our products, by shifting away from our above-premium products to lower-priced products offered by us or other companies or by shifting to off-premise from on-premise consumption, negatively impacting our net sales and margins.

Softer consumer demand for our products could reduce our profitability and could negatively affect our overall financial performance.

In addition, global markets continue to face threats and uncertainty.

Future changes to U.S. or foreign tax and trade, policies, impositions of new or increased tariffs, other trade restrictions or other government actions, including any government shutdown, foreign currency fluctuations, including devaluations and fear of exposure to or actual impacts of a widespread disease outbreak, such as the coronavirus pandemic, may lead to continuation of such risks and uncertainty.

Uncertain economic and financial market conditions may also adversely affect the financial condition of our customers, suppliers and other business partners.

The launch of a new product can give rise to a variety of costs and an

In 2019, we recognized aggregate special charges of approximately $43 million related to this estimated range, comprised primarily of severance and retention charges of which approximately $40 million remained accrued as of December 31, 2019.

In addition, in connection with the announcement that we plan to consolidate our office locations, we have experienced attrition in our workforce.

As a result, we will be required to hire and train new employees to replace certain employees who were affected by our restructuring activities.

The increased turnover in our employees could distract management and others from the operation of our business and make it more difficult to retain and hire new talent.

conditions;

Unfavorable outcomes of legal or regulatory proceedings may adversely affect our business and financial condition. We are from time to time involved in or subject to legal or regulatory proceedings related to our business.

For example, we identified a triggering event requiring an interim impairment assessment of the goodwill within our Canada

In the current year testing, it was determined that the fair value of the U.S. and Canada reporting units declined during the year, while there was a slight increase in the fair value of the Europe reporting unit versus the prior year.

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

We have continued to monitor these and while temporary and final regulations have not yet resulted in material adverse impacts to us, there are certain proposed regulations, which are not yet considered law, that if finalized as proposed, could result in a material adverse impact on our consolidated financial statements.

Specifically, if certain of the proposed regulations are finalized as proposed with full retroactive application to January 1, 2018, then we would be required to recognize estimated income tax expense of approximately $100 million to $200 million upon enactment related to the proposed retroactive period through December 31, 2019, for fiscal years 2018 and 2019.

This estimated range contains significant uncertainty and could be impacted by various factors, including any differences between the proposed and ultimately finalized regulations.

The U.S. Department of Treasury has until February 18, 2020 to provide a response to the proposed final judgment.

and results of operations.

Climate change and other weather events may negatively affect our business and financial results. Our business depends, in large part, upon agricultural activity and natural resources.

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.

In addition, public expectations for reductions in greenhouse gas emissions could result in increased energy, transportation and raw material costs and may require us to make additional investments in facilities and equipment.

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

For example, following the completion of the triennial review of the U.K. pension plan with the plan's trustees in 2014, we made a GBP 150 million contribution to our U.K. pension plan in January 2015, based on the underfunded status of the plan and the evaluation of the plan's performance and long-term obligations.

In addition, we made pension plan contributions during 2017 of approximately $310 million, including $200 million of discretionary contributions to the U.S. pension plan.

For example, in the first quarter of 2017, our Toronto

certain transformational actions.

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 alcohol, which resulted in the impairment of assets totaling $30.8 million, recorded during the second quarter of 2016.

Our internal control over financial reporting may not be designed or operate effectively which could result in material misstatements in our financial statements, which could, in turn, have a significant adverse effect on our business and the price of our common stock. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f).

We previously identified a material weakness in internal control over financial reporting as of December 31, 2018, and as a result, management 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 believe this material weakness has been fully addressed by the remediation measures put in place during the 2019 fiscal year.

However, we cannot provide assurance that we will not identify additional material weaknesses in our internal control over financial reporting in the future.

Any of the foregoing may adversely affect our reputation and business and the market price of our common stock.

Additional Risks Applicable to the United States Segment

Additional Risks Applicable to the Canada Segment

operations, cash flows and financial position of the Canada segment.

The U.K. exited the European Union on January 31, 2020, which subjects our Europe segment to regulatory and market uncertainty in the U.K. and in the rest of Europe as the full terms of future trade agreements continue to be negotiated.

potential higher costs of conducting business in the U.K. or the rest of Europe.

See also "Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of [removed: 1995".][added: 1995."]

A discussion related to the results of operations and changes in financial condition for [removed: 2018] [added: 2019] compared to [removed: 2017] [added: 2018] has been omitted from this report, [removed: unless significant,] but may be found in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal [removed: 2018] [added: 2019] Form 10-K, filed with the SEC on February 12, [removed: 2019,] [added: 2020,] which is available free of charge on the [removed: SEC’s] [added: SEC's] website at www.sec.gov and our corporate website at www.molsoncoors.com.

Unless otherwise indicated, (a) all $ amounts are in USD, (b) comparisons are to comparable prior periods and (c) [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] refers to the 12 months ended December 31, [removed: 2019,] [added: 2020,] December 31, [removed: 2018] [added: 2019] and December 31, [removed: 2017,] [added: 2018,] respectively.

STR is a metric that we use in our business to refer to sales closer to the end consumer than STWs, which generally means sales from [removed: our] wholesalers or our [removed: Company] [added: company] to retailers, who in turn sell to consumers.

[removed: *Revitalization Plan*][added: Revitalization Plan]

On October 28, 2019, we initiated a revitalization plan designed to allow us to invest across our [removed: portfolio] [added: business] to drive long-term, sustainable success.

[removed: We] [added: During 2020, we] also [removed: made the determination to establish] [added: established] Chicago, Illinois as our North [removed: American] [added: America segment] operational headquarters, [removed: close] [added: closed] our [removed: existing] office in Denver, Colorado and [removed: consolidate] [added: consolidated] certain administrative functions into our other existing office locations.

Effective January [added: 1,] 2020, we [removed: moved] [added: changed our management structure] from a corporate center and four [removed: business units] [added: segments] to two [removed: business units] [added: segments] - North America and Europe.

After taking into account all changes in each of the business units, including Europe, the [added: execution of the] plan [removed: is expected to reduce] [added: has reduced] employment levels, in aggregate, by approximately [removed: 500 to] 600 employees globally.

[removed: The company expects] [added: We currently expect] the costs associated with the restructuring to be substantially recognized by the end of fiscal year 2021.

[removed: Further,] [added: In connection with these consolidation activities,] we currently expect to [added: continue to] incur certain cash and non-cash restructuring charges related to [removed: employee relocation,] severance, retention and transition costs, [added: employee relocation,] non-cash asset related costs, lease [added: impairment and] exit costs in connection with our office lease in Denver, [removed: Colorado,] [added: Colorado] and other transition activities [added: currently] estimated in the range of approximately [removed: $120] [added: $100] million to [removed: $180] [added: $120] million in the aggregate, the majority of which [removed: will be] [added: are] cash charges that we began recognizing [added: as special items] in the fourth quarter of 2019, and [added: have been, and] will [removed: be] [added: continue to,] further [removed: spread] [added: recognize] through [removed: the balance of fiscal years 2020 and] 2021.

[removed: Additionally, in] [added: During 2020 and] 2019 we recognized severance and retention charges of [added: $35.6 million and] $41.2 million, [removed: of which, approximately $40 million remained accrued as of December 31, 2019.][added: respectively.]

[removed: See] [added: (3)See] Part II—Item 8 Financial Statements and Supplementary Data, [removed: [“Note] [added: [Note] 7, [removed: Special Items”](#sCA9CFEF727375C568FFB0D92801E911C)] [added: "Special Items"](#i3d6a958107eb4e3aa2ef5305e4c59ff0_154)] for [removed: additional details.][added: detail of special items.]

The following table highlights summarized components of our consolidated statements of operations for the years ended December 31, [removed: 2019,] [added: 2020,] December 31, [removed: 2018,] [added: 2019,] and December 31, [removed: 2017.][added: 2018.]

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

| | [added: | |] December 31, [removed: 2019] [added: 2020] | | | | [added: | |] Change | | | [added: | | |] December 31, [removed: 2018] [added: 2019] | | | | [added: | |] Change | | | [added: | | |] December 31, [removed: 2017] [added: 2018] | | |

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

| Financial volume in hectoliters | [removed: 92.722] | | [added: 84.479] | | [removed: (4.0] | [removed: )%] | | [removed: 96.627] | [added: (8.9)] | | [added: %] | [removed: (2.9] | [removed: )%] | | [removed: 99.563] [added: 92.722] | | | [added: | | | (4.0) | | % | | | | 96.627 | | |]

| Net sales | [added: | |] $ | [removed: 10,579.4] [added: 9,654.0] | | | [removed: (1.8] | [removed: )%] | [added: (8.7)] | [added: | % | | | |] $ | [removed: 10,769.6] [added: 10,579.4] | | | [removed: (2.1] | [removed: )%] | [added: (1.8)] | [added: | % | | | |] $ | [removed: 11,002.8] [added: 10,769.6] | |

| Net income (loss) attributable to MCBC | [added: | |] $ | [removed: 241.7] [added: (949.0)] | | | [removed: (78.4] | [removed: )%] | [added: N/M] | [added: | | | | |] $ | [removed: 1,116.5] [added: 241.7] | | | [removed: (28.7] | [removed: )%] | [added: (78.4)] | [added: | % | | | |] $ | [removed: 1,565.6] [added: 1,116.5] | |

| Net income (loss) attributable to MCBC per diluted share | [added: | |] $ | [removed: 1.11] [added: (4.38)] | | | [removed: (78.4] | [removed: )%] | [added: N/M] | [added: | | | | |] $ | [removed: 5.15] [added: 1.11] | | | [removed: (28.8] | [removed: )%] | [added: (78.4)] | [added: | % | | | |] $ | [removed: 7.23] [added: 5.15] | |

[removed: 2019 Financial] [added: 2020 Financial] Highlights

[removed: | • |] [added: -] During [removed: 2019,] [added: 2020,] we repaid our [removed: EUR 500 million variable rate notes,] $500 million [removed: 1.90% notes,] [added: 2.25% notes] and [added: CAD] $500 million [removed: 1.45%] [added: 2.75%] notes upon their respective maturities throughout the year as part of our deleveraging commitment. [removed: |]

[removed: | • |] [added: -] Regional financial highlights: [removed: |]

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

| | [added: | |] December 31, [removed: 2019] [added: 2020] | | | [added: | | |] Change | | | [added: | | |] December 31, [removed: 2018] [added: 2019] | | | [added: | | |] Change | | | [added: | | |] December 31, [removed: 2017] [added: 2018] | | [added: |]

| | [added: | |] (In millions, except percentages) | | | | | | | | | | | | | | [added: | | | | | | | | | | | | |]

| Volume in hectoliters: | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Financial volume | [added: | | 84.479 | | | | | | (8.9) | | % | | | |] 92.722 | | | [removed: (4.0] | [removed: )%] | | [removed: 96.627] [added: (4.0)] | | [added: %] | [removed: (2.9] | [removed: )%] | | [removed: 99.563] [added: 96.627] | | [added: |]

| Less: Contract [removed: brewing and] [added: brewing,] wholesaler [added: and non-beer] volume | [removed: (7.715] | [removed: )] | [added: (6.355)] | [removed: (5.7] | [removed: )%] | | [removed: (8.182] | [removed: )] | [added: (17.6)] | [removed: (4.9] | [removed: )%] [added: %] | | [removed: (8.602] | [removed: )] | [added: (7.715) | | | | | | (5.7) | | % | | | | (8.182) | | |]

| Add: Royalty volume | [removed: 4.226] | | [added: 3.783] | [removed: 4.2] | [added: | | | | (10.5) | |] % | | [removed: 4.054] | | [added: 4.226] | [removed: 10.0] | [added: | | | | 4.2 | |] % | | [removed: 3.685] | | [added: 4.054 | | |]

| Add: STW to STR adjustment | [removed: (0.287] | [removed: )] | [added: 0.126] | [removed: (19.8] | [removed: )%] | | [removed: (0.358] | [removed: )] | [added: N/M] | [removed: (47.9] | [removed: )%] | | [removed: (0.687] | [removed: )] | [added: (0.287) | | | | | | (19.8) | | % | | | | (0.358) | | |]

| Total worldwide brand volume | [added: | | 82.033 | | | | | | (7.8) | | % | | | |] 88.946 | | | [removed: (3.5] | [removed: )%] | | [removed: 92.141] [added: (3.5)] | | [added: %] | [removed: (1.9] | [removed: )%] | | [removed: 93.959] [added: 92.141] | | [added: |]

[removed: Our worldwide brand volume decreased] [added: The decrease] in 2019 [removed: compared to 2018, primarily] [added: was] due to lower volume in all segments primarily driven by challenging industry dynamics.

The following table highlights the drivers of change in net sales [added: on a reported basis] for the year ended December 31, 2019 versus December 31, 2018, by segment (in [removed: percentages) and excludes Corporate net sales revenue for our water resources and energy operations in the state of Colorado.][added: percentages).]

| | [added: | |] Volume | | | [added: | | |] Price, Product and Geography Mix | | | [added: | | |] Currency | | | [added: | | |] Other | | | [added: | | |] Total | | [added: |]

| Consolidated | [removed: (4.0] | [removed: )%] | [added: (4.0)] | [added: | % | | | |] 3.6 | [added: |] % | | [removed: (1.2] | [removed: )%] | [added: (1.2)] | [removed: (0.2] | [removed: )%] [added: %] | | [removed: (1.8] | [removed: )%] | [added: (0.2) | | % | | | | (1.8) | | % |]

The following table highlights the drivers of change in net sales [removed: on a reported basis] for the year ended December 31, [removed: 2018] [added: 2020] versus December 31, [removed: 2017,] [added: 2019,] by segment (in [removed: percentages) and excludes Corporate net sales revenue for our water resources and energy operations in the state of Colorado.][added: percentages).]

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

Such discussion does not reflect the recast of the historical presentation of segment information as a result of the reporting segment changes that became effective on January 1, 2020.

For more than two centuries, we have been brewing beverages that unite people for all life’s moments.

From *Coors Light*, *Miller Lite, Molson Canadian, Carling,* and *Staropramen* to *Coors Banquet, Blue Moon Belgian White, Blue Moon LightSky, Vizzy, Coors Seltzer, Leinenkugel’s Summer Shandy, Creemore Springs, Hop Valley* and more, we produce some of the most beloved and iconic beer brands ever made.

While the Company’s history is rooted in beer, we offer a modern portfolio that expands beyond the beer aisle with sparkling cocktails, hard coffee, canned wine, kombucha, cider and more.

Coronavirus Global Pandemic

The coronavirus pandemic had a material adverse effect on our operations, liquidity, financial condition and results of operations during our full year 2020 due mainly to the on-premise closures worldwide.

The effects of the pandemic remain highly uncertain especially around the severity and duration of the outbreak and actions by government authorities to contain the pandemic or address its impact, among other things.

Many governmental entities across North America and Europe required that bars and restaurants close or cease sit-down service during the second quarter of 2020 and again at the end of 2020, which negatively impacted the on-premise sales of our beverages and led to the incurrence of costs to repurchase products that on-premise accounts or distributors were unable or prohibited from selling as a result of the governmental regulations.

This can be seen in our financial results during the full year 2020.

During this same time, other restaurants and bars implemented closures and modified their hours, either voluntarily or as a result of governmental orders or quarantines.

At the end of the second quarter and into the third quarter of 2020, there was a phased reopening of a significant number of on-premise accounts in certain of our markets, but with restrictions and in the fourth quarter some of these re-openings were reversed and businesses were shut down again.

Sales to restaurants and bars have not returned to pre-pandemic levels and in many instances, the reopened on-premise accounts have been impacted by further restrictions or further shut downs imposed as a result of the increased spread of the coronavirus.

In addition, sporting events, festivals and other large public gatherings where our products are served have been canceled throughout North America and Europe.

Sales to on-premise customers tend to be higher margin than sales to off-premise (retail outlets) customers.

Additionally, these and other governmental or societal impositions of restrictions on public gatherings, especially if prolonged in nature, whether government or self-imposed, will have adverse effects on on-premise traffic and, in turn, our business.

We experienced a significant adverse volume impact in 2020 resulting from the initial closure of, and subsequent continued impacts to, the on-premise channel.

As perspective, we estimate that approximately 23% of our 2019 consolidated net sales resulted from on-premise consumption, with approximately 17% of our North America net sales and approximately 50-55% of our Europe net sales each coming from this important part of the industry, and in many of our markets the on-premise business had been reduced to zero for much of the second quarter of 2020.

See further discussion in Part I.

[Item 1.

Business](#i3d6a958107eb4e3aa2ef5305e4c59ff0_19) regarding the historical percentage of volume and net sales represented in the on-premise within our North America and Europe segments and resulting implications to expected profitability as a result of the effective closures of the on-premise in the markets in which we operate.

While we began to see some of the on-premise return mid-year in many of our markets, with the exception of the U.K., which did not reopen until early July, business and consumer behavior in the channel has been slow and remains uncertain.

Subsequently, in the fourth quarter of 2020, the second pandemic wave triggered new lockdowns with different levels of restrictions in Europe and Canada depending on the market.

Therefore, as a result of this uncertainty, we currently continue to expect a significant adverse impact to both net sales and profit performance for fiscal 2021 and, possibly beyond.

In addition, where we have seen shifts in demand to the off-premise, and shifts into certain package types, which has strained our supply chain and package availability, particularly with aluminum can demand and other packaging materials, requiring that we strategically prioritize certain brands and package types.

Our supply chain continues to work diligently to ensure sufficient supply of these high demand brand and packages as we adjust to these changing consumer dynamics.

Further, during 2020, we recorded charges of $15.5 million within cost of goods sold related to temporary "thank you" pay for certain essential North America brewery employees.

Additionally, in order to support the challenges facing our on-premise customers and retailers, and our overall commitment to quality, during the first quarter of 2020, we initiated voluntary temporary keg relief programs in many of our markets providing customers with reimbursements for untapped kegs that met certain established return requirements.

As a result, our results for 2020 further include aggregate charges of $42.4 million, inclusive of a reduction to net sales of $30.3 million for reimbursements through these keg relief programs, as well as charges of $12.1 million within cost of goods sold related to obsolete finished goods keg inventories that were unable to be sold within our freshness specifications as a result of the ongoing on-premise impacts, as well as the costs to facilitate the above mentioned keg returns.

These keg return and inventory obsolescence charges were primarily recognized during the first quarter of 2020.

As a result of the ongoing impacts of the pandemic, we have continued to take various mitigating actions to offset some of the implications to our employees and communities, as well as the challenges to performance, while also ensuring liquidity and deleverage remain key priorities as further discussed within ["Liquidity and Capital Resources"](#i3d6a958107eb4e3aa2ef5305e4c59ff0_76) below.

In addition to actions already taken, additional actions may be necessary.

Such potential actions include, but are not limited to, drawing on our revolving line of credit facility, issuing additional commercial paper under our U.S. commercial paper program, issuing commercial paper under the COVID Corporate Financing Facility in the U.K. (see Part II—Item 8 Financial Statements and Supplementary Data, [Note 11, "Debt"](#i3d6a958107eb4e3aa2ef5305e4c59ff0_172) for further discussion of the facilities and our remaining capacity), further accessing the capital markets, reducing discretionary spending including marketing, general and administrative as well as capital expenditures, asset monetization and taking advantage of certain governmental programs such as furloughs in the U.K. and government relief and payment deferral programs, for example by the U.S. Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and other such government-sponsored legislation and programs.

Further, in response to the global economic uncertainty created by the coronavirus pandemic our board of directors suspended our regular quarterly dividends on our Class A and Class B common and exchangeable shares in May 2020.

See ["Liquidity and Capital Resources"](#i3d6a958107eb4e3aa2ef5305e4c59ff0_76) and Item 1A.

["Risk Factors"](#i3d6a958107eb4e3aa2ef5305e4c59ff0_34) in this report for additional information regarding the impact of the global coronavirus pandemic.

We also continue to monitor the impacts of the pandemic on the recoverability of our assets, including goodwill and indefinite-lived intangible assets.

In particular, given the length and severity of the impacts of the coronavirus pandemic on our Europe business, as well as the protracted recovery currently expected in certain on-premise markets, we recorded a goodwill impairment loss of $1,484.3 million in the fourth quarter of 2020.

If the duration of the pandemic is prolonged and the severity of its impact continues or worsens, it could result in additional significant impairment losses.

Under this plan, we intend to accelerate investments behind our largest brands, invest significantly in the above premium segment and invest more in whitespace and beyond beer opportunities.

Progress has been made against these ambitions despite the complexities and adversity brought by the coronavirus pandemic.

We are one of the world's largest brewers and have a diverse portfolio of owned and partner brands, including global priority brands *Blue Moon, Coors Banquet, Coors Light, Miller Genuine Draft, Miller Lite,* and *Staropramen*, regional champion brands *Carling*, *Molson Canadian* and other leading country-specific brands*,* as well as craft and specialty beers such as *Creemore Springs*, *Cobra*, *Sharp's Doom Bar, Henry's Hard* and *Leinenkugel's*.

With centuries of brewing heritage, we craft high-quality, innovative beverages with the purpose of uniting people to celebrate all life’s moments.

As part of this plan, we expect to accelerate investments behind our largest brands, by focusing on recruitment of consumers and by driving relevance with breakthrough marketing and innovating on core brands to attract new legal age drinkers.

We additionally plan to invest significantly in the above premium segment, the fastest growing area of the beer industry, with added investment in existing brands, new innovations and potentially through new acquisitions.

We expect to invest more in whitespace and beyond beer opportunities.

We have had success in the above premium segment, including portfolio transformation in Europe, *Peroni* growth accelerating and *Blue Moon Belgian White* improving in the U.S. and *Belgian Moon* growing in Canada.

However, our revitalization plan is designed to give us the resources we need to invest in our core brands and build in the above premium segment through innovation and potential acquisition and investments, including more investment behind brands like *Saint Archer Gold*, *Blue Moon Light Sky*, and *Coors Pure* in the U.S. and *Coors Slice* and *Molson Ultra* in Canada.

We also intend to expand a “test and learn” approach that allows us to determine market potential for products and then quickly scale up as we are with *Movo* wine spritzers, and *Saint Archer Gold*, both expected to be available nationally in the U.S. in 2020.

We also expect this plan will allow us to invest behind an even stronger second year of *Cape Line* sparkling cocktails and a stronger third year of *Arnold Palmer Spiked* in the U.S. Finally, our pipeline includes the recent introductions of *La Colombe* hard coffee in the U.S., *Pip & Wild* premium ciders in the U.K., and *Vizzy* hard seltzer in the U.S., which we plan to launch early in 2020, and Truss’s expected new line of cannabis-infused non-alcoholic beverages in Canada, subject to and after all of its licenses and regulatory clearances have been obtained, including the recently announced *Flow Glow*, a CBD-infused spring water.

We also expect to put a greater focus on bringing new beverages to the market faster and with more precision.

This includes expanding the model that has reduced the time it takes to bring innovations to market from 18 months to as little as four months in the U.S., and expanding our previously mentioned “test and learn” approach that evaluates market potential for products and then quickly scales up.

As part of the revitalization plan, we also intend to invest in improving our digital competencies, expanding data resources and building out innovation systems.

To make these new investments possible, we plan to unlock approximately $150 million in annual savings, increasing our 2020-2022 cost savings program from $450 million to $600 million, by simplifying our structure.

The North America business unit consolidates the United States, Canada and corporate center, enabling us to move more quickly with an integrated portfolio strategy.

The Europe business unit allows for standalone operations, developed and supported by a European-based team, including a local leadership, commercial, supply chain and support functions.

The existing International team was reconstituted to more effectively grow our global brands - with the Africa and Asia Pacific businesses reporting into the European business unit and the remaining International business reporting into the North America business unit.

The change in structure to two business units and the resulting financial reporting segment changes will not be reflected until our first quarter 2020 results.

In connection with these consolidation activities, certain impacted employees have been extended an opportunity to continue their employment with the Company in the new organization and locations and, for those not continuing with the Company, certain of such employees have been asked to provide transition assistance and offered severance and retention packages in connection with their termination of service.

In 2019, we recognized aggregate impairment losses of $2.1 million related to the closure of the Denver, Colorado office facility.

We recognized these charges as special items within our consolidated statements of operations.

Actual severance and retention costs related to this restructuring, which are primarily being recognized ratably over the employees’ required future service period, may differ from original estimates based on actual employee turnover levels prior to achieving severance and retention eligibility requirements.

Employee relocation charges are recognized in the period incurred and were immaterial in 2019.

We also changed our name to Molson Coors Beverage Company in January 2020 in order to better reflect our strategic intent to expand beyond beer and into other growth adjacencies.

In addition to the revitalization plan, we intend to continue our ongoing efforts to modernize our brewery footprint and invest several hundred million dollars to modernize our brewery in Golden, Colorado over the next several years.

These previously planned brewery investments are intended to allow for more flexible capacity to better meet demand and fulfill future growth opportunities, while increasing supply chain efficiency.

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

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

| | |

| --- | --- |

| • | In 2019, net income attributable to MCBC decreased 78.4% compared to the prior year primarily driven by the impact of aggregate goodwill and intangible asset impairment losses of $691.9 million, primarily related to our Canada reporting unit. The decrease was also due to lower volume, inflation, restructuring charges and pension and postretirement benefit charges, partially offset by positive global pricing, cost savings, lower incentive compensation, as well as lower interest expense. |

| • | We generated cash flow from operating activities of approximately $1.9 billion, representing an 18.6% decrease from approximately $2.3 billion in 2018. The decrease in operating cash flow in 2019 compared to 2018 is primarily driven by cycling the proceeds received during the first quarter of 2018 of $328.0 million related to the Adjustment Amount (as defined and further discussed in Part II—Item 8 Financial Statements and Supplementary Data, [Note 7, "Special Items"](#sCA9CFEF727375C568FFB0D92801E911C)) related to the settlement agreement between MCBC and ABI, as well as lower net income adjusted for non-cash add backs and higher cash paid for taxes, partially offset by favorable changes in working capital and lower interest paid. |

| • | In the U.S. segment, income before income taxes decreased 1.4% to $1,301.8 million in 2019, versus $1,320.7 million in 2018, primarily driven by lower volume and cost inflation, partially offset by higher net pricing, cycling special charges in the prior year related to restructuring, and cost savings. During the year we grew our share of the premium light segment with *Miller Lite*, which completed its twenty-first consecutive quarter of increased segment share, and *Coors Light*, which completed its third consecutive quarter of increased segment share, according to Nielsen. In above premium, we successfully launched *Cape Line* which was among the industry’s top new franchises in the flavored malt beverage category, according to Nielsen, and we also introduced *Sol Chelada* which drove double-digit volume growth in the *Sol* Franchise. *Blue Moon* remained the number one national craft brand in the U.S. and held industry share. Additionally, *Peroni* grew volume for the twenty-first consecutive quarter with growth accelerating significantly in 2019 with support of the brand's first national marking campaign. |

| • | In our Canada segment, we reported a loss before income taxes of $508.7 million in 2019, versus income of $157.0 million in 2018, primarily driven by the $668.3 million goodwill impairment loss recognized in the third quarter of 2019 as well as the gross profit impacts of volume declines, higher cost of goods sold per hectoliter, Truss joint venture start-up costs, partially offset by positive pricing and lower incentive compensation. See Part II—Item 8 Financial Statements and Supplementary Data, [Note 10, “Goodwill and Intangible Assets”](#s5FAC4A14735651B1BD9DB32AFBB82598) for additional details. |

| • | In our Europe segment, income before income taxes decreased 14.1% to $160.1 million in 2019, versus $186.4 million in 2018, primarily related to increased brand investments, unfavorable foreign currency movements, special charges mainly due to restructuring activities, as well as soft industry demand and inflation, partially offset by positive net pricing and mix and lower incentive compensation. |

| • | Our International segment reported a loss before income taxes of $7.7 million in 2019, compared to a loss of $2.7 million in the prior year, primarily driven by higher special charges due to an aggregate impairment loss of $12.2 million related to our India business along with lower volume and negative geographic mix, partially offset by lower marketing, general and administrative expense and shifting to local production in Mexico. |

| • | Brand highlights: |

| *•* | Global priority brand volume decreased 2.2% in 2019 versus 2018, due to declines across the U.S., Canada, and International partially offset by growth in Europe. |

| *•* | *Blue Moon Belgian White* global brand volume increased 1.1% in 2019 versus 2018, driven by growth in Canada, International and Europe, partially offset by declines in the U.S. |

| *•* | *Carling* brand volume in Europe decreased by 4.8% versus 2018, due to lower volumes in the U.K., the brand's primary market. |

| • | *Coors* global brand volume - *Coors Light* global brand volume decreased 4.6% in 2019 versus 2018. The overall volume decrease was primarily driven by lower brand volume in the U.S., International, and Canada, partially offset by growth in Europe. Volumes in the U.S. were lower than prior year, although *Coors Light* gained share of the U.S. premium light segment for the third consecutive quarter. The declines in International were driven by competitive pressures in Mexico along with economic decline in Puerto Rico. The declines in Canada are primarily the result of industry declines due to ongoing competitive pressures in Quebec and Ontario. *Coors Banquet* global brand volume decreased 2.6% in 2019 versus 2018, driven by the U.S. and Canada, partially offset by the introduction of *Coors Original* in International markets. |

Notional amounts and fair values are presented in USD based on the applicable exchange rate as of December 31, [removed: 2019.][added: 2020.]

See Part II—Item 8 Financial Statements and Supplementary Data, [Note 11, [removed: "Debt"](#s4DE2CE1864555AB7841CBA62BBE4B9FE)] [added: "Debt"](#i3d6a958107eb4e3aa2ef5305e4c59ff0_172)] and [Note 16, "Derivative Instruments and Hedging [removed: Activities"](#s498E8904486B54BC8F42C496720C2CB1)] [added: Activities"](#i3d6a958107eb4e3aa2ef5305e4c59ff0_193)] for further discussion.

| | [added: | |] Notional amounts by expected maturity date | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |] December 31, [removed: 2019] [added: 2020] | | |

| | [added: | |] Year end | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| | [removed: 2020] | | [added: 2021] | | [removed: 2021] | | | | 2022 | | | | [added: | |] 2023 | | | | [added: | |] 2024 | | | | [added: | | 2025 | | | | | |] Thereafter | | | | [added: | |] Total | | | | [added: | |] Fair [removed: value Asset/ (Liability)] [added: value Asset/ (Liability)] | | |

| | [added: | |] (In millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Long-term debt: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| CAD 500 million 2.84% notes due 2023 | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | [removed: —] [added: 392.9] | | | [added: | |] $ | [removed: 384.9] [added: —] | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | [removed: 384.9] [added: 392.9] | | | [added: | |] $ | [removed: (390.2] [added: (414.9)] | [removed: )] |

| CAD 500 million 3.44% notes due 2026 | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | [removed: 384.9] [added: 392.9] | | | [added: | |] $ | [removed: 384.9] [added: 392.9] | | | [added: | |] $ | [removed: (392.0] [added: (432.6)] | [removed: )] |

| $500 million [removed: 2.25%] [added: 3.5%] notes due [removed: 2020] [added: 2022] | [added: | |] $ | [removed: 500.0] [added: —] | | | [added: | |] $ | [removed: —] [added: 500.0] | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | 500.0 | | | [added: | |] $ | [removed: (503.2] [added: (524.0)] | [removed: )] |

| $1.0 billion 2.10% notes due 2021 | [added: | |] $ | [removed: —] [added: 1,000.0] | | | [added: | |] $ | [removed: 1,000.0] [added: —] | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | 1,000.0 | | | [added: | |] $ | [removed: (1,011.6] [added: (1,017.9)] | [removed: )] |

| $2.0 billion 3.0% notes due 2026 | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | 2,000.0 | | | [added: | |] $ | 2,000.0 | | | [added: | |] $ | [removed: (2,056.2] [added: (2,206.4)] | [removed: )] |

| $1.1 billion 5.0% notes due 2042 | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | 1,100.0 | | | [added: | |] $ | 1,100.0 | | | [added: | |] $ | [removed: (1,201.9] [added: (1,376.0)] | [removed: )] |

| $1.8 billion 4.2% notes due 2046 | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | 1,800.0 | | | [added: | |] $ | 1,800.0 | | | [added: | |] $ | [removed: (1,835.5] [added: (2,087.1)] | [removed: )] |

| EUR 800 million 1.25% notes due 2024 | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | [removed: —] [added: 977.3] | | | [added: | |] $ | [removed: 897.0] [added: —] | | | [added: | |] $ | — | | | [added: | |] $ | [removed: 897.0] [added: 977.3] | | | [added: | |] $ | [removed: (927.8] [added: (1,013.8)] | [removed: )] |

| Foreign currency management: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Cross currency swaps | [added: | |] $ | [removed: 500.0] [added: 400.0] | | | [added: | |] $ | [removed: 400.0] [added: —] | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | [removed: 900.0] [added: 400.0] | | | [added: | |] $ | [removed: 10.0] [added: (26.5)] | |

| Interest rate management: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Forward starting interest rate swaps | [added: | |] $ | [removed: —] [added: 250.0] | | | [added: | |] $ | 250.0 | | | [added: | |] $ | [removed: 250.0] [added: —] | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | 1,000.0 | | | [added: | |] $ | 1,500.0 | | | [added: | |] $ | [removed: (111.5] [added: (221.5)] | [removed: )] |

| Commodity pricing management: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

We hold warrants providing us with the ability to purchase [removed: 11.5] [added: 2.9] million common shares of HEXO, our Truss joint venture partner, at a strike price of CAD [removed: 6.00] [added: 24.00] per share, which expire on October 4, 2021.

The fair value of our warrant asset at December 31, [removed: 2019] [added: 2020] was [removed: $2.7] [added: $0.3] million.

| | [added: | |] December 31, [removed: 2019] [added: 2020] | | | | [added: | |] December 31, [removed: 2018] [added: 2019] | | |

| | [added: | |] (In millions) | | | | | | | [added: | |]

| Estimated fair value volatility | | | | | | | | [added: | | | |]

| Foreign currency risk: | | | | | | | | [added: | | | |]

| Forwards | [added: | |] $ | [removed: (25.8] [added: (20.5)] | [removed: )] | | [added: | |] $ | [removed: (35.1] [added: (25.8)] | [removed: )] |

| Foreign currency denominated debt | [added: | |] $ | [removed: (194.2] [added: (190.4)] | [removed: )] | | [added: | |] $ | [removed: (249.3] [added: (194.2)] | [removed: )] |

| Cross currency swaps | [added: | |] $ | [removed: (89.2] [added: (43.0)] | [removed: )] | | [added: | |] $ | [removed: (43.3] [added: (89.2)] | [removed: )] |

| Interest rate risk: | | | | | | | | [added: | | | |]

| Debt | [added: | |] $ | [removed: (255.4] [added: (219.7)] | [removed: )] | | [added: | |] $ | [removed: (302.1] [added: (255.4)] | [removed: )] |

| Forward starting interest rate swaps | [added: | |] $ | [removed: (150.4] [added: (177.1)] | [removed: )] | | [added: | |] $ | [removed: (126.2] [added: (150.4)] | [removed: )] |

| Commodity price risk: | | | | | | | | [added: | | | |]

| Commodity swaps | [added: | |] $ | [removed: (52.9] [added: (96.0)] | [removed: )] | | [added: | |] $ | [removed: (77.5] [added: (52.9)] | [removed: )] |

| Commodity options | [added: | |] $ | — | | | [added: | |] $ | — | |

| Equity price risk: | | | | | | | | [added: | | | |]

| Warrants | [added: | |] $ | [removed: (0.6] [added: (0.1)] | [removed: )] | | [added: | |] $ | [removed: (2.8] [added: (0.6)] | [removed: )] |

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

| Forwards | | | $ | 116.9 | | | | | $ | 56.3 | | | | | $ | 8.0 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 181.2 | | | | | $ | (4.9) | |

| Swaps | | | $ | 460.4 | | | | | $ | 318.8 | | | | | $ | 139.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 918.9 | | | | | $ | 65.2 | |

| Options | | | $ | 16.8 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.8 | | | | | $ | — | |

See [Note 16, "Derivative Instruments and Hedging Activities"](#i3d6a958107eb4e3aa2ef5305e4c59ff0_193) for further details.

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

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

| | | | As of | | | | | | | | |

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

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

| CAD 500 million 2.75% notes due 2020 | $ | 384.9 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 384.9 | | | $ | (388.9 | ) |

| $500 million 3.5% notes due 2022 | $ | — | | | $ | — | | | $ | 500.0 | | | $ | — | | | $ | — | | | $ | — | | | $ | 500.0 | | | $ | (517.4 | ) |

| Forwards | $ | 140.4 | | | $ | 78.6 | | | $ | 18.9 | | | $ | — | | | $ | — | | | $ | — | | | $ | 237.9 | | | $ | 2.1 | |

| Swaps | $ | 391.2 | | | $ | 180.1 | | | $ | 27.1 | | | $ | — | | | $ | — | | | $ | — | | | $ | 598.4 | | | $ | (41.2 | ) |

| Options | $ | 18.4 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 18.4 | | | $ | — | |

| | | | | | | | |

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

| | As of | | | | | | |

Unless otherwise noted in this report, any description of "we," "us" or "our" includes Molson Coors Beverage Company [removed: ("MCBC"] [added: ("MCBC," "Molson Coors"] or the "Company") (formerly known as Molson Coors Brewing Company), principally a holding company, and its operating and non-operating subsidiaries included within our reporting [removed: segments and Corporate.][added: segments.]

[removed: At December 31, 2019,] [added: Accordingly, effective January 1, 2020,] our reporting segments [removed: included: MillerCoors LLC ("MillerCoors" or U.S.] [added: include: North America (North America] segment), operating in the [removed: United States; Molson Coors Canada ("MCC" or] [added: U.S.,] Canada [removed: segment), operating] [added: and various countries] in [removed: Canada; Molson Coors] [added: the Caribbean, Latin and South America; and] Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the [removed: United Kingdom and] [added: U.K.,] various other European [removed: countries;] [added: countries,] and [removed: Molson Coors International ("MCI" or International segment), operating in various other countries.][added: certain countries within the Middle East, Africa and Asia Pacific.]

[removed: As further discussed below, in] [added: On] January [added: 1,] 2020, we changed our management structure [added: from a corporate center and four segments] to two [removed: business units, our] [added: segments -] North America and [removed: Europe businesses.][added: Europe.]

Our primary operating currencies, other than [added: the] USD, include the CAD, the GBP, and our Central European operating currencies such as the EUR, CZK, HRK and RSD.

[removed: With centuries of brewing heritage, we] [added: We] craft high-quality, innovative beverages with the purpose of uniting people to celebrate all life’s moments.

In January 2020, we changed our name from Molson Coors Brewing Company to Molson Coors Beverage [removed: Company, as further discussed below.][added: Company in connection with our revitalization plan.]

[removed: The existing] [added: Our] International [removed: team] [added: segment] was reconstituted [removed: to more effectively grow our global brands -] with the Africa and Asia Pacific businesses reporting into the [removed: European business unit] [added: Europe segment] and the remaining International business reporting into the North America [removed: business unit.][added: segment.]

The brewing industry has significantly evolved over the [removed: years, becoming] [added: years to become] an increasingly global beer market.

[removed: More recently, it] [added: Over time the market] has become increasingly [removed: complex,] [added: complex] as the consolidation of brewers has occurred globally, [removed: resulting in fewer major global market participants.]

In addition to the [added: consolidation and the] acquisitive [removed: element] [added: nature] of [removed: this industry consolidation,] the [removed: market continues to utilize export, license] [added: industry, exports, licensing] and partnership [removed: arrangements; however,] [added: arrangements continued to be used and] these [removed: are often with] [added: transactions typically occurred between] the same global competitors that make up the majority of the market.

[removed: This industry consolidation has resulted] [added: resulting] in a small number of large global brewers representing the majority of the worldwide beer market.

At the same time, smaller local brewers within certain established markets [removed: are experiencing] [added: have experienced] accelerated growth as consumers increasingly place value on locally-produced, regionally-sourced products.

[removed: Changing] [added: In addition to the growth of smaller local craft breweries, changing] consumer trends are [removed: also] pushing the industry toward above premium beer, flavored malt [removed: beverages,] [added: beverages] and beyond beer altogether.

As the beer industry continues its evolution of consolidation and diversification of its products to meet consumer demand with broadening preferences, [added: we believe] large global brewers are uniquely positioned to leverage the scale, depth of product portfolio and industry knowledge to continue to lead the market forward.

We evaluate ourselves in relation to other global brewers using various metrics, including overall market capitalization, volume, net sales revenue, gross margins and net profits, as well as our position within each of our core markets, with the goal to be the first choice for our [added: people,] consumers and customers.

To provide a perspective of the relative size of the major participants in the global brewing market, the market [removed: capitalizations] [added: capitalization] of our primary global competitors, based on foreign exchange rates as of December 31, [removed: 2019,] [added: 2020,] were as follows:

| | [added: | |] Market Capitalization | | |

| | [added: | |] (In billions) | | |

| Anheuser-Busch InBev SA/NV [added: ("ABI")] | [added: | |] $ | [removed: 164.6] [added: 140.6] | |

| Heineken N.V. ("Heineken") | [added: | |] $ | [removed: 61.3] [added: 64.2] | |

| Carlsberg Group ("Carlsberg") | [added: | |] $ | [removed: 22.6] [added: 23.9] | |

| Asahi Group Holdings, Ltd. ("Asahi") | [added: | |] $ | [removed: 22.2] [added: 20.8] | |

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

We [removed: consider these our global priority brands which we] continue to invest in and focus on growing [removed: globally.][added: these brands.]

Additionally, as we continue to evolve our strategy and portfolio to appeal to the ever-changing preferences of our consumer base, we are also broadening our range of products and offerings within our [removed: portfolio to include other beverage categories outside of traditional beer, including our emerging plans in the non-alcoholic beverage segment.][added: portfolio.]

| [removed: *Coors Light*] [added: *Hamm's*] | | [removed: *Keystone*] | | [added: | |] *Peroni Nastro Azurro(1)* | [added: | | | | | | | |]

| [added: *Branik* | | | | | |] *Miller Genuine Draft* | | [removed: *Mickey's*] | | [removed: *Pilsner Urquell(1)*] | [added: | | | |]

| [added: *Coors Banquet*] | | [added: | | | |] *Miller High Life* | | [removed: *Saint Archer*] | [added: | | | | | |]

| [added: *Granville Island*] | | [added: | | | |] *Olde English* | | [removed: *Terrapin*] | [added: | | | | | |]

| [removed: *Crispin* | |] *Arnold Palmer Spiked(3)* | | | [added: | | | *Hop Valley* | | | | | | *Redd's(4)* | | |]

| (1) Under perpetual royalty-free license from Asahi. | | | | | [added: | | | | | | | | | |]

| (3) In partnership with Hornell Brewing, an affiliate of Arizona [removed: Beverages] [added: Beverages.] | | | | | [added: | | | | | | | | | |]

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

Brands sold in [removed: Canada][added: North America]

| [added: *Coors Edge* | | | | | |] *Miller Lite* | | [removed: *Coors Slice*] | | | [added: | | | |]

| [added: *Coors Seltzer*] | | [added: | | | |] *Molson Dry* | | | [added: | | | *Heineken* | | |]

| [added: *Creemore Springs*] | | [added: | | | |] *Molson Ultra* | | | [added: | | | *Moretti* | | |]

| [added: *Exel*] | | [added: | | | |] *Old Style Pilsner* | | | [added: | | | *Strongbow cider* | | |]

| [added: *Coors Light* | | | | | | *Milwaukee's Best* | | | | | |] Licensed premium import [removed: brands(1) | |] [added: brands(2)] | | |

| [added: *Bavaria(1)* | | | | | |] *Coors Light* | | [removed: *Borsodi*] | | [removed: *Bavaria*] | [added: | *Rekorderling Cider(1)* | | |]

We recast the historical presentation of segment information as a result of these reporting segment changes accordingly.

For more than two centuries, we have been brewing beverages that unite people to celebrate all life’s moments.

From *Coors Light*, *Miller Lite, Molson Canadian, Carling,* and *Staropramen* to *Coors Banquet, Blue Moon Belgian White, Blue Moon LightSky, Vizzy, Coors Seltzer, Leinenkugel’s Summer Shandy, Creemore Springs, Hop Valley* and more, we produce many beloved and iconic beer brands.

While the Company’s history is rooted in beer, we offer a modern portfolio that expands beyond the beer aisle as well.

As we continue to evolve our strategy and portfolio to appeal to the ever-changing preferences of our consumer base, we are also broadening our range of products and offerings within our portfolio.

Expanded offerings include, among others, hard seltzers and a variety of non-alcoholic offerings.

Coronavirus Global Pandemic

The coronavirus pandemic had a material adverse effect on our operations, liquidity, financial condition and results of operations in 2020 and we currently expect it will continue to have a material impact to our financial results in 2021 and possibly beyond.

The extent to which our operations will continue to be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity and duration of the outbreak, roll out and efficacy of the vaccines, and actions by government authorities to contain the pandemic or treat its impact, among other things.

We continue to actively monitor the ongoing evolution of the pandemic and resulting impacts to our business and have taken various mitigating actions in response to the impacts of the pandemic and to position our business for the long term.

See further discussion of the status of the pandemic and its impacts on our Company, including the on- and off-premise impacts to our segments in [Part II.

Item 7.

Management's Discussion and Analysis](#i3d6a958107eb4e3aa2ef5305e4c59ff0_58).

In recent years, the hard seltzer market has emerged and has experienced phenomenal growth, particularly in the U.S..

We believe the hard seltzer market will continue to gain traction and be of increasing importance.

We believe we are well positioned to compete in this continually evolving market, particularly in beer, hard seltzer and beyond.

| | | | | | |

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

| MCBC | | | $ | 10.0 | |

In addition to these iconic brands, we offer premium, premium lights, economy, above premium and craft beers.

Further, we offer a modern and growing portfolio that expands beyond the beer aisle as well.

This includes our current and emerging plans in the non-alcoholic beverage segment.

| *Arizona Hard Green Tea(3)* | | | | | | *Henry's Hard* | | | | | | *Pilsner Urquell(1)* | | |

| *Atwater Brewing brands* | | | | | | *Icehouse* | | | | | | *Revolver* | | |

| *Belgian Moon* | | | | | | *Keystone* | | | | | | *Rickard's* | | |

| *Belgian Moon LightSky* | | | | | | *Le Trou du Diable* | | | | | | *Saint Archer* | | |

| *Blue Moon* | | | | | | *Leinenkugel's* | | | | | | *Smith & Forge* | | |

| *Blue Moon LightSky* | | | | | | *Mad Jack* | | | | | | *Staropramen* | | |

| *Brasseurs de Montréal brands* | | | | | | *Mickey's* | | | | | | *Steel Reserve* | | |

| *Carling* | | | | | | *Miller64* | | | | | | *Terrapin brands* | | |

| *Coors Original* | | | | | | *Molson Canadian* | | | | | | *Dos Equis* | | |

| *Coors Slice* | | | | | | *Molson Export* | | | | | | *Heineken 0.0* | | |

| *Crispin* | | | | | | *Movo* | | | | | | *Sol* | | |

| (2) Under license from Heineken. The brand Heineken is under license in Canada only. The brand Sol is under license in the U.S. and Canada. | | | | | | | | | | | | | | |

| *Aspall Cider* | | | | | | *Cobra(1)* | | | | | | *Ozujsko* | | |

| *Borsodi* | | | | | | *Lowenbrau(1)* | | | | | | *Thunderbolt* | | |

| *Carling* | | | | | | *Niksicko* | | | | | | | | |

In 2020, we operated the following segments: North America and Europe.

A separate operating team manages each segment and each segment manufactures, markets, and sells beer as well as offers a modern and growing portfolio that expands beyond the beer aisle.

North America Segment

Accordingly, the segment reporting implications will not be reflected until the first quarter of 2020.

We are one of the world's largest brewers and have a diverse portfolio of owned and partner brands, including global priority brands *Blue Moon, Coors Banquet, Coors Light, Miller Genuine Draft, Miller Lite,* and *Staropramen*, regional champion brands *Carling*, *Molson Canadian* and other leading country-specific brands, as well as craft and specialty beers such as *Creemore Springs*, *Cobra*, *Sharp's Doom Bar, Henry's Hard* and *Leinenkugel's*.

Our largest markets are the U.S., Canada and Europe.

Revitalization Plan

On October 28, 2019, we initiated a revitalization plan designed to allow us to invest across our portfolio to drive long-term, sustainable success.

As part of our revitalization plan, we made the determination to establish Chicago, Illinois as our North American operational headquarters, close our existing office in Denver, Colorado and consolidate certain administrative functions into our other existing office locations.

Effective January 2020, we moved from a corporate center and four business units to two business units - North America and Europe.

The North America business unit consolidates the United States, Canada and corporate center, enabling us to move more quickly with an integrated portfolio strategy.

The Europe business unit allows for standalone operations, developed and supported by a European-based team, including local leadership, commercial, supply chain and support functions.

The change in structure to two business units and the resulting financial reporting segment changes will not be reflected until our first quarter 2020 results.

We also changed our name from Molson Coors Brewing Company to Molson Coors Beverage Company, in January 2020 in order, to better reflect our strategic intent to expand beyond beer and into other growth adjacencies in the beverage industry.

| | | | |

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

| MCBC | $ | 11.8 | |

We believe our portfolio encompasses all segments of the beer industry with the purpose of uniting people to celebrate all life’s moments, including premium and premium lights, economy, above premium and craft, as well as adjacencies such as ciders and other malt beverages.

Brands sold in the U.S.

| | | | | |

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

| Global priority brands | | National champion and other regional brands | | Craft and import brands |

| *Blue Moon* | | *Hamm's* | | *Hop Valley* |

| *Coors Banquet* | | *Icehouse* | | *Leinenkugel's* |

| *Miller Lite* | | *Miller64* | | *Revolver* |

| | | *Milwaukee's Best* | | *Sol(2)* |

| | | *Steel Reserve* | | |

| Hard cider brands | | Flavored malt beverages | | |

| *Smith & Forge* | | *Cape Line* | | |

| | | *Henry's Hard* | | |

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

| | | *Steel Reserve Alloy Series* | | |

| (2) Under license from Heineken. | | | | |

| *Belgian Moon* | | *Aquarelle* | | *Brasseurs de Montréal* |

| *Coors Original* | | *Carling* | | *Creemore Springs* |

| *Coors Light* | | *Carling Black Label* | | *Granville Island* |

| *Miller Genuine Draft* | | *Coors Edge* | | *Le Trou du Diable* |

| | | *Exel* | | |

| | | *Keystone* | | |

| | | *Mad Jack* | | |

| | | *Miller High Life* | | |

| | | *Molson Canadian* | | |

| | | *Molson Export* | | |

For information regarding litigation, other disputes and environmental and regulatory proceedings see Part II—Item 8 Financial Statements and Supplementary Data, [Note 18, "Commitments and [removed: Contingencies."](#sBD90C6F96837545D96967529207FBC19)][added: Contingencies."](#i3d6a958107eb4e3aa2ef5305e4c59ff0_199)]

We are involved in other disputes and legal actions arising in the ordinary course of our business.

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

However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business.

[removed: FORM 10-K][added: FORM 10-K]

| (Mark One) | | [added: | | | |]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

| For the transition period from ______ to ______ . | | [added: | | | |]

Commission File [removed: Number: 1-14829][added: Number: 1-14829]

[removed: ][added: ]

1555 Notre Dame Street [removed: East, Montréal, Québec, Canada][added: East, Montréal, Québec, Canada]

[removed: 514\-521-1786 (Québec)][added: 514-521-1786 (Québec)]

| Title of each class | | [added: | | | |] Trading symbols | | [added: | | | |] Name of each exchange on which registered | [added: | |]

| Class A Common Stock, $0.01 par value | | [added: | | | |] TAP.A | | [added: | | | |] New York Stock Exchange | [added: | |]

| Class B Common Stock, $0.01 par value | | [added: | | | |] TAP | | [added: | | | |] New York Stock Exchange | [added: | |]

| 1.25% Senior Notes due 2024 | | [added: | | | |] TAP | | [added: | | | |] New York Stock Exchange | [added: | |]

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 the last trading day of the registrant's most recently completed second fiscal quarter, June [removed: 28, 2019,] [added: 30, 2020,] was approximately [removed: $10.2] [added: $6.3] 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 officers and directors of the registrant (and their respective affiliates) as of June [removed: 28, 2019,] [added: 30, 2020,] 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: 5, 2020:][added: 4, 2021:]

As of February [removed: 5, 2020,] [added: 4, 2021,] 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: 2020] [added: 2021] 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: 2019,] [added: 2020,] are incorporated by reference under Part III of this Annual Report on Form 10-K.

| | | | [added: | | | | | |] Page | [added: | |]

| [removed: Glossary] [added: [Glossary] of Terms and [removed: Abbreviations] [added: Abbreviations](#i3d6a958107eb4e3aa2ef5305e4c59ff0_10)] | | | [removed: [2](#sF47FD2CEC1065A26A5814B7E475509FF)] | [added: | | | | | [2](#i3d6a958107eb4e3aa2ef5305e4c59ff0_10) | | |]

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| [removed: [PART II.](#s40EA0D7C746658689595F3D19FD8C88F)] [added: [PART II.](#i3d6a958107eb4e3aa2ef5305e4c59ff0_49)] | | | | [added: | | | | | | | |]

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| [Item [removed: 9.](#s01D9EB190AE550DBA4FD21D950AA4661)] [added: 9.](#i3d6a958107eb4e3aa2ef5305e4c59ff0_223)] | | [added: | | | |] [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#s01D9EB190AE550DBA4FD21D950AA4661)] [added: Disclosure](#i3d6a958107eb4e3aa2ef5305e4c59ff0_223)] | [removed: [154](#s01D9EB190AE550DBA4FD21D950AA4661)] | [added: | [143](#i3d6a958107eb4e3aa2ef5305e4c59ff0_223) | | |]

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| [removed: [PART III.](#s31CDE9893BCA5C299C8251AD6B6A3175)] [added: [PART III.](#i3d6a958107eb4e3aa2ef5305e4c59ff0_232)] | | | | [added: | | | | | | | |]

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| [Item [removed: 12.](#s255984532038590DB37DF4B4F39C7FE1)] [added: 12.](#i3d6a958107eb4e3aa2ef5305e4c59ff0_241)] | | [added: | | | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s255984532038590DB37DF4B4F39C7FE1)] [added: Matters](#i3d6a958107eb4e3aa2ef5305e4c59ff0_241)] | [removed: [155](#s255984532038590DB37DF4B4F39C7FE1)] | [added: | [144](#i3d6a958107eb4e3aa2ef5305e4c59ff0_241) | | |]

| | | | | | |

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

| | | | | | |

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

| OR | | | | | |

P.O. Box 4030, NH353, Golden, Colorado, USA

80401

303-279-6565 (Colorado)

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Class A Common Stock—2,561,670 shares Class B Common Stock—200,395,991 shares

Class A Exchangeable Shares—2,718,267 shares Class B Exchangeable Shares—11,104,594 shares

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

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

| [Cautionary Statement](#i3d6a958107eb4e3aa2ef5305e4c59ff0_13) | | | | | | | | | [3](#i3d6a958107eb4e3aa2ef5305e4c59ff0_13) | | |

| [Risk Factors Summary](#i3d6a958107eb4e3aa2ef5305e4c59ff0_2256) | | | | | | | | | [3](#i3d6a958107eb4e3aa2ef5305e4c59ff0_2256) | | |

| [PART I.](#i3d6a958107eb4e3aa2ef5305e4c59ff0_16) | | | | | | | | | | | |

| [Signatures](#i3d6a958107eb4e3aa2ef5305e4c59ff0_262) | | | | | | | | | [153](#i3d6a958107eb4e3aa2ef5305e4c59ff0_262) | | |

| | | | | | |

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

Risks Factors Summary

Our business is subject to a number of risks and uncertainties, including those described in [Part I, Item 1A.

Risk Factors](#i3d6a958107eb4e3aa2ef5305e4c59ff0_34) of this annual report.

These risks include, but are not limited to, the following:

- the novel coronavirus pandemic, efforts to mitigate or disrupt the pandemic and related weak, or weakening of, economic or other negative conditions;

- the constant evolution of the global beer industry and the broader alcohol industry, and our position within the global beer industry and our markets in which we operate;

- competition in our markets, which could require us to reduce prices or increase capital and other expenditures or cause us to lose sales volume;

- our dependence on the success of relatively few products in several mature markets specific to the beer industry;

- our brand image, reputation, product quality and protection of intellectual property;

- changes in the social acceptability, perceptions and the political view of the beverage categories in which we operate, including alcohol;

- weak, or weakening of, economic or other negative conditions in the markets in which we do business, including reductions in discretionary consumer spending;

- our restructuring activities and the success of our revitalization plan;

- climate change and other weather events;

- inadequate supply or availability or quality water;

- loss, operational disruptions or closure of a major brewery or other key facility, including those of our suppliers, due to unforeseen or catastrophic events or otherwise;

- labor strikes, work stoppages or other employee-related issues;

- our reliance on third-party service providers and internal and outsourced systems for our information technology and certain other administrative functions;

- a breach of our information systems;

- our dependence on key personnel;

| | |

| --- | --- |

| OR | |

1801 California Street, Suite 4600, Denver, Colorado, USA

80202

303\-927-2337 (Colorado)

| | | | | |

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

Class A Common Stock—2,560,668 shares Class B Common Stock—196,269,611 shares

Class A Exchangeable Shares—2,725,130 shares Class B Exchangeable Shares—14,826,035 shares

| | | | |

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

| [PART I.](#sE28F68772D1D5C4C9733459B2C1AB7E0) | | | |

| [Signatures](#s2FB1B9E4DF275C8C9766C43279C1AB1E) | | | [164](#s2FB1B9E4DF275C8C9766C43279C1AB1E) |

| Acquisition | Refers to the acquisition of SABMiller plc's ("SABMiller") 58% economic interest and 50% voting interest in MillerCoors LLC and all trademarks, contracts and other assets primarily related to the "Miller International Business," as defined in the purchase agreement dated November 15, 2015, as amended, by and between Anheuser-Busch InBev SA/NV ("ABI") and Molson Coors Brewing Company, outside of the U.S. and Puerto Rico from ABI, on October 11, 2016. |

As of February [removed: 12, 2020,] [added: 11, 2021,] our major facilities were owned (unless otherwise indicated) and are as follows:

| Facility | | [added: | | | |] Location | | [added: | | | |] Character | [added: | |]

| Administrative offices | | [added: | | | |] Chicago, Illinois(1) | | [removed: U.S.] [added: | | | | North America] segment operational headquarters | [added: | |]

| | | [added: | | | |] Golden, Colorado | | [removed: U.S.] [added: | | | | Corporate principal executive office and North America] segment administrative office | [added: | |]

| | | [added: | | | |] Milwaukee, Wisconsin | | [removed: U.S.] [added: | | | | North America] segment administrative office | [added: | |]

| Brewery/packaging plants | | [added: | | | |] Albany, Georgia(2) | | [added: | | | |] Brewing and packaging | [added: | |]

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

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

| | | [added: | | | |] Golden, Colorado(2) | | [added: | | | |] Brewing and packaging | [added: | |]

| | | [removed: Irwindale, California(3)] | | [added: | | Bőcs, Hungary | | | | | |] Brewing and packaging | [added: | |]

| | | [added: | | | |] Milwaukee, Wisconsin | | [added: | | | |] Brewing and packaging | [added: | |]

| | | [added: | | | |] Trenton, Ohio(2) | | [added: | | | |] Brewing and packaging | [added: | |]

| Beer distributorship | | [added: | | | |] Denver, Colorado | | [added: | | | |] Distribution | [added: | |]

| Container operations | | [added: | | | |] Wheat Ridge, Colorado(4) | | [added: | | | |] Bottling manufacturing facility | [added: | |]

| | | [added: | | | |] Golden, Colorado(4) | | [added: | | | |] Can and end manufacturing facilities | [added: | |]

| Malting operations | | [added: | | | |] Golden, Colorado | | [added: | | | |] Malting | [added: | |]

| [removed: Brewery/packaging plants] | | [added: | | | |] Montréal, [removed: Québec(5)] [added: Québec(3)] | | [added: | | | |] Brewing and packaging | [added: | |]

| | | [added: | | | |] Toronto, [removed: Ontario(5)] [added: Ontario] | | [added: | | | |] Brewing and packaging | [added: | |]

| | | [added: | | | |] Chilliwack, British [removed: Columbia(6)] [added: Columbia] | | [added: | | | |] Brewing and packaging | [added: | |]

| Europe Segment | | | | | [added: | | | | | | | | | |]

| Administrative offices | | [added: | | | |] Burton-on-Trent, U.K. | | [added: | | | |] Europe segment operational headquarters | [added: | |]

| | | [added: | | | |] Prague, Czech Republic | | [added: | | | |] Europe segment administrative office | [added: | |]

| Brewery/packaging plants | | [added: | | | |] Apatin, [removed: Serbia(7)] [added: Serbia(5)] | | [added: | | | |] Brewing and packaging | [added: | |]

| | | [removed: Bőcs, Hungary] | | [added: | | Haskovo, Bulgaria | | | | | |] Brewing and packaging | [added: | |]

| | | [added: | | | |] Burton-on-Trent, [removed: U.K.(7)] [added: U.K.(5)] | | [added: | | | |] Brewing and packaging | [added: | |]

| | | [removed: Haskovo, Bulgaria] | | [added: | | Niksic, Montenegro | | | | | |] Brewing and packaging | [added: | |]

| | | [removed: Niksic, Montenegro] | | [added: | | Ploiesti, Romania(5) | | | | | |] Brewing and packaging | [added: | |]

| | | [added: | | | |] Ostrava, Czech Republic | | [added: | | | |] Brewing and packaging | [added: | |]

| | | [removed: Ploiesti, Romania(7)] | | [added: | | Zagreb, Croatia | | | | | |] Brewing and packaging | [added: | |]

| | | [added: | | | |] Prague, Czech [removed: Republic(7)] [added: Republic(5)] | | [added: | | | |] Brewing and packaging | [added: | |]

| | | [added: | | | |] Tadcaster Brewery, Yorkshire, [removed: U.K.(7)] [added: U.K.(5)] | | [added: | | | |] Brewing and packaging | [added: | |]

[removed: | (1) | We] [added: (1)We] lease the office space for our [removed: U.S.] [added: North America] segment [added: operational] headquarters in Chicago, Illinois. [removed: |]

[removed: | (2) | The] [added: (2)The] Golden, Trenton, Elkton, Albany and Fort Worth breweries collectively account for approximately [removed: 78%] [added: 73%] of our [removed: U.S.] [added: North America] production. [removed: |]

[removed: | (4) | The] [added: (4)The] Wheat Ridge and Golden, Colorado facilities are leased from us by RMBC and RMMC, respectively. [removed: |]

[removed: | (5) | The Montréal and Toronto breweries collectively account for approximately 84% of our Canada production. In] [added: (3)In] June 2019, we completed the sale of our Montréal brewery, and in conjunction with the sale, we agreed to lease back the existing property to continue operations on an uninterrupted basis until the new Longueuil, Quebec brewery is operational, which is currently expected to occur in 2021. [removed: |]

[removed: | (7) | The] [added: (5)The] Burton-on-Trent, Prague, Ploiesti, Apatin and Tadcaster breweries collectively account for approximately [removed: 71%] [added: 70%] of our Europe production. [removed: |]

We own and lease various warehouses, distribution centers and office spaces throughout the [removed: United States, Canada, Europe] [added: North American segment] and [removed: international] [added: European segment] countries in which [removed: our International segment operates.][added: we operate.]

In [removed: 2019,] [added: 2020,] our operating facilities were not capacity constrained.

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

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

| North America Segment | | | | | | | | | | | | | | |

| | | | | | | Montréal, Québec | | | | | | Corporate principal executive office and North America segment administrative office | | |

| | | | | | | Toronto, Ontario | | | | | | North America segment administrative office | | |

| | | | | |

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

| U.S. Segment | | | | |

| Canada Segment | | | | |

| Administrative offices | | Montréal, Québec | | Corporate headquarters |

| | | Toronto, Ontario | | Canada segment operational headquarters |

| | | Zagreb, Croatia | | Brewing and packaging |

| | |

| --- | --- |

| (3) | In January 2020, we announced plans to cease production at our Irwindale, California brewery, which is currently expected to occur by September 2020, and entered into an agreement with Pabst Brewing Company, LLC, granting them an option to purchase the Irwindale brewery. Products produced in the Irwindale brewery will be transitioned to |

other breweries in our network.

See Part II—Item 8 Financial Statements and Supplementary Data, [Note 7, "Special Items"](#sCA9CFEF727375C568FFB0D92801E911C) for additional details.

| (6) | The final closure of the leased Vancouver brewery was completed in the third quarter of 2019, and our new Chilliwack brewery is now operational. |

We also lease offices in Colorado, the previous location of our Corporate and International segment headquarters.

As part of our revitalization plan, we announced the closure of our Denver, Colorado office location, which is expected to occur in 2020.

The approximate number of record security holders by class of stock at February [removed: 5, 2020,] [added: 4, 2021,] is as follows:

| Title of class | | [added: | | | |] Number of [removed: record security] [added: record security] holders | [added: | |]

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

| Class B common stock, $0.01 par value | | [removed: 2,777] | [added: | | | 2,902 | | |]

| Class A exchangeable shares, no par value | | [removed: 215] | [added: | | | 214 | | |]

| Class B exchangeable shares, no par value | | [removed: 2,315] | [added: | | | 2,289 | | |]

The graph assumes $100 was invested on December 31, [removed: 2014,] [added: 2015,] in our Class B common stock, the S&P 500 and the Peer Group, and assumes reinvestment of all dividends.

[removed: ][added: ]

| | [removed: 2014] | | [added: 2015] | | [removed: 2015] | | | | 2016 | | | | [added: | |] 2017 | | | | [added: | |] 2018 | | | | [added: | |] 2019 | | | [added: | | | 2020 | | |]

| | | | | | | | | |

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

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

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

| Molson Coors | | | $ | 100.00 | | | | | $ | 105.36 | | | | | $ | 90.50 | | | | | $ | 63.45 | | | | | $ | 63.15 | | | | | $ | 53.58 | |

| S&P 500 | | | $ | 100.00 | | | | | $ | 109.54 | | | | | $ | 133.44 | | | | | $ | 127.58 | | | | | $ | 167.75 | | | | | $ | 198.59 | |

| Peer Group | | | $ | 100.00 | | | | | $ | 92.99 | | | | | $ | 98.38 | | | | | $ | 72.33 | | | | | $ | 92.66 | | | | | $ | 80.24 | |

In response to the global economic uncertainty created by the coronavirus pandemic our board of directors suspended our regular quarterly dividends on our Class A and Class B common and exchangeable shares in May 2020.

| | | |

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

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

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

| Molson Coors | $ | 100.00 | | | $ | 128.74 | | | $ | 135.64 | | | $ | 116.50 | | | $ | 81.68 | | | $ | 81.31 | |

| S&P 500 | $ | 100.00 | | | $ | 101.37 | | | $ | 111.04 | | | $ | 135.27 | | | $ | 129.33 | | | $ | 170.04 | |

| Peer Group | $ | 100.00 | | | $ | 126.05 | | | $ | 117.20 | | | $ | 124.00 | | | $ | 91.17 | | | $ | 116.79 | |

During the second half of 2019, we increased our regular quarterly dividend from $0.41 to $0.57 per share.

Issuer Purchases of Equity Securities

In February 2015, we announced that our board of directors approved and authorized a program to repurchase up to $1.0 billion of our Class A and Class B common stock.

Under the program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.

The number, price and timing of the repurchases will be at the Company’s sole discretion and will be evaluated depending on market conditions, liquidity needs or other factors.

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

No shares of Class A or Class B common stock have been repurchased since 2015.

We have suspended our share repurchase program as we continue to pay down debt which we plan to revisit as we further deleverage.

Not applicable.

Financial information related to fiscal years 2017 and 2016 may be found in Part II, Item 6.

Selected Financial Data in our fiscal 2019 Form 10-K filed with the SEC on February 12, 2020.

Please refer to the consolidated financial statements included herein in Part II—Item 8 [Financial Statements and Supplementary Data](#i3d6a958107eb4e3aa2ef5305e4c59ff0_106) for fiscal year 2020, 2019 and 2018 information.

The table below summarizes selected financial information for the five years ended December 31, 2019.

For further information, refer to our consolidated financial statements and notes thereto presented under Part II—Item 8 Financial Statements and Supplementary Data.