filings.toolsItem 1. FINANCIAL STATEMENTS (UNAUDITED)
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Item 1. FINANCIAL STATEMENTS (UNAUDITED)
MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| Sales | $ | 3,603.3 | $ | 3,905.6 | $ | 10,490.7 | $ | 10,551.5 | |||||||||||||||
| Excise taxes | (560.6) | (607.2) | (1,599.3) | (1,640.2) | |||||||||||||||||||
| Net sales | 3,042.7 | 3,298.4 | 8,891.4 | 8,911.3 | |||||||||||||||||||
| Cost of goods sold | (1,840.2) | (1,952.2) | (5,395.5) | (5,575.5) | |||||||||||||||||||
| Gross profit | 1,202.5 | 1,346.2 | 3,495.9 | 3,335.8 | |||||||||||||||||||
| Marketing, general and administrative expenses | (684.7) | (746.8) | (2,067.8) | (2,096.7) | |||||||||||||||||||
| Other operating income (expense), net | (65.8) | (12.7) | (59.4) | (13.0) | |||||||||||||||||||
| Equity income (loss) | (0.8) | 5.5 | (3.6) | 12.8 | |||||||||||||||||||
| Operating income (loss) | 451.2 | 592.2 | 1,365.1 | 1,238.9 | |||||||||||||||||||
| Interest income (expense), net | (93.1) | (48.8) | (192.7) | (162.5) | |||||||||||||||||||
| Other pension and postretirement benefit (cost), net | (26.6) | 2.5 | (11.9) | 7.7 | |||||||||||||||||||
| Other non-operating income (expense), net | (0.1) | (1.9) | (3.8) | 2.9 | |||||||||||||||||||
| Total non-operating income (expense), net | (119.8) | (48.2) | (208.4) | (151.9) | |||||||||||||||||||
| Income (loss) before income taxes | 331.4 | 544.0 | 1,156.7 | 1,087.0 | |||||||||||||||||||
| Income tax benefit (expense) | (102.6) | (112.4) | (292.7) | (236.1) | |||||||||||||||||||
| Net income (loss) | 228.8 | 431.6 | 864.0 | 850.9 | |||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | (29.0) | (0.9) | (29.4) | (5.3) | |||||||||||||||||||
| Net income (loss) attributable to Molson Coors Beverage Company | $ | 199.8 | $ | 430.7 | $ | 834.6 | $ | 845.6 | |||||||||||||||
| Net income (loss) attributable to Molson Coors Beverage Company per share | |||||||||||||||||||||||
| Basic | $ | 0.96 | $ | 1.99 | $ | 3.98 | $ | 3.91 | |||||||||||||||
| Diluted | $ | 0.96 | $ | 1.98 | $ | 3.96 | $ | 3.89 | |||||||||||||||
| Weighted-average shares outstanding | |||||||||||||||||||||||
| Basic | 207.2 | 216.1 | 209.9 | 216.3 | |||||||||||||||||||
| Dilutive effect of share-based awards | 0.8 | 1.5 | 1.1 | 1.3 | |||||||||||||||||||
| Diluted | 208.0 | 217.6 | 211.0 | 217.6 |
See notes to unaudited condensed consolidated financial statements.
MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(IN MILLIONS)
(UNAUDITED)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| Net income (loss) including noncontrolling interests | $ | 228.8 | $ | 431.6 | $ | 864.0 | $ | 850.9 | |||||||||||||||
| Other comprehensive income (loss), net of tax | |||||||||||||||||||||||
| Foreign currency translation adjustments | 104.8 | (152.6) | (23.0) | (25.1) | |||||||||||||||||||
| Cumulative translation adjustment reclassified from other comprehensive income (loss) | — | (0.7) | — | (0.7) | |||||||||||||||||||
| Unrealized gain (loss) recognized on derivative instruments | (28.6) | 50.0 | 1.3 | 38.5 | |||||||||||||||||||
| Derivative instrument activity reclassified from other comprehensive income (loss) | — | — | — | 1.0 | |||||||||||||||||||
| Net change in pension and other postretirement benefit assets and liabilities recognized in other comprehensive income (loss) | 14.4 | — | 14.4 | — | |||||||||||||||||||
| Pension and other postretirement activity reclassified from other comprehensive income (loss) | 23.3 | (2.8) | 19.7 | (8.5) | |||||||||||||||||||
| Ownership share of unconsolidated subsidiaries' other comprehensive income (loss) | 0.1 | 0.2 | 0.3 | 1.8 | |||||||||||||||||||
| Total other comprehensive income (loss), net of tax | 114.0 | (105.9) | 12.7 | 7.0 | |||||||||||||||||||
| Comprehensive income (loss) | 342.8 | 325.7 | 876.7 | 857.9 | |||||||||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interests | (29.3) | (0.2) | (29.4) | (5.4) | |||||||||||||||||||
| Comprehensive income (loss) attributable to Molson Coors Beverage Company | $ | 313.5 | $ | 325.5 | $ | 847.3 | $ | 852.5 |
See notes to unaudited condensed consolidated financial statements.
MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT PAR VALUE)
(UNAUDITED)
| As of | |||||||||||
| September 30, 2024 | December 31, 2023 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 1,021.7 | $ | 868.9 | |||||||
| Trade receivables, net | 873.5 | 757.8 | |||||||||
| Other receivables, net | 144.6 | 121.6 | |||||||||
| Inventories, net | 833.3 | 802.3 | |||||||||
| Other current assets, net | 356.4 | 297.9 | |||||||||
| Total current assets | 3,229.5 | 2,848.5 | |||||||||
| Property, plant and equipment, net | 4,497.0 | 4,444.5 | |||||||||
| Goodwill | 5,317.6 | 5,325.3 | |||||||||
| Other intangibles, net | 12,408.0 | 12,614.6 | |||||||||
| Other assets | 1,183.2 | 1,142.2 | |||||||||
| Total assets | $ | 26,635.3 | $ | 26,375.1 | |||||||
| Liabilities and equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and other current liabilities | $ | 3,210.5 | $ | 3,180.8 | |||||||
| Current portion of long-term debt and short-term borrowings | 37.7 | 911.8 | |||||||||
| Total current liabilities | 3,248.2 | 4,092.6 | |||||||||
| Long-term debt | 6,203.0 | 5,312.1 | |||||||||
| Pension and postretirement benefits | 452.6 | 465.8 | |||||||||
| Deferred tax liabilities | 2,795.3 | 2,697.2 | |||||||||
| Other liabilities | 368.5 | 372.3 | |||||||||
| Total liabilities | 13,067.6 | 12,940.0 | |||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Redeemable noncontrolling interests | 42.2 | 27.9 | |||||||||
| Molson Coors Beverage Company stockholders' equity | |||||||||||
| Capital stock | |||||||||||
| Preferred stock, $0.01 par value (authorized: 25.0 shares; none issued) | — | — | |||||||||
| Class A common stock, $0.01 par value (authorized: 500.0 shares; issued and outstanding: 2.6 shares and 2.6 shares, respectively) | — | — | |||||||||
| Class B common stock, $0.01 par value (authorized: 500.0 shares; issued: 215.4 shares and 212.5 shares, respectively) | 2.1 | 2.1 | |||||||||
| Class A exchangeable shares, no par value (issued and outstanding: 2.7 shares and 2.7 shares, respectively) | 100.8 | 100.8 | |||||||||
| Class B exchangeable shares, no par value (issued and outstanding: 7.2 shares and 9.4 shares, respectively) | 271.1 | 352.3 | |||||||||
| Paid-in capital | 7,211.0 | 7,108.4 | |||||||||
| Retained earnings | 8,040.2 | 7,484.3 | |||||||||
| Accumulated other comprehensive income (loss) | (1,107.1) | (1,116.3) | |||||||||
| Class B common stock held in treasury at cost (21.4 shares and 13.9 shares, respectively) | (1,172.8) | (735.6) | |||||||||
| Total Molson Coors Beverage Company stockholders' equity | 13,345.3 | 13,196.0 | |||||||||
| Noncontrolling interests | 180.2 | 211.2 | |||||||||
| Total equity | 13,525.5 | 13,407.2 | |||||||||
| Total liabilities and equity | $ | 26,635.3 | $ | 26,375.1 |
See notes to unaudited condensed consolidated financial statements.
MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
| Nine Months Ended | |||||||||||
| September 30, 2024 | September 30, 2023 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net income (loss) including noncontrolling interests | $ | 864.0 | $ | 850.9 | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||||||||||
| Depreciation and amortization | 512.1 | 508.6 | |||||||||
| Amortization of debt issuance costs and discounts | 4.1 | 4.4 | |||||||||
| Interest expense related to mandatorily redeemable noncontrolling interest | 45.8 | — | |||||||||
| Share-based compensation | 34.6 | 34.1 | |||||||||
| (Gain) loss on sale or impairment of property, plant, equipment and other assets, net | 37.3 | 8.2 | |||||||||
| Unrealized (gain) loss on foreign currency fluctuations and derivative instruments, net | (25.1) | 84.6 | |||||||||
| Equity (income) loss | 3.6 | (12.8) | |||||||||
| Income tax (benefit) expense | 292.7 | 236.1 | |||||||||
| Income tax (paid) received | (116.7) | (170.1) | |||||||||
| Interest expense, excluding amortization of debt issuance costs and discounts and mandatorily redeemable noncontrolling interest | 169.7 | 174.0 | |||||||||
| Interest paid | (186.9) | (201.5) | |||||||||
| Change in current assets and liabilities and other | (219.4) | 88.0 | |||||||||
| Net cash provided by (used in) operating activities | 1,415.8 | 1,604.5 | |||||||||
| Cash flows from investing activities | |||||||||||
| Additions to property, plant and equipment | (563.0) | (494.1) | |||||||||
| Proceeds from sales of property, plant, equipment and other assets | 14.9 | 7.3 | |||||||||
| Acquisition of business, net of cash acquired | — | (63.9) | |||||||||
| Other | 17.8 | (117.8) | |||||||||
| Net cash provided by (used in) investing activities | (530.3) | (668.5) | |||||||||
| Cash flows from financing activities | |||||||||||
| Dividends paid | (279.4) | (266.7) | |||||||||
| Payments for purchases of treasury stock | (437.4) | (60.9) | |||||||||
| Payments on debt and borrowings | (879.0) | (402.9) | |||||||||
| Proceeds on debt and borrowings | 863.7 | 7.0 | |||||||||
| Other | (12.7) | (5.1) | |||||||||
| Net cash provided by (used in) financing activities | (744.8) | (728.6) | |||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | 12.1 | (5.7) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 152.8 | 201.7 | |||||||||
| Balance at beginning of year | 868.9 | 600.0 | |||||||||
| Balance at end of period | $ | 1,021.7 | $ | 801.7 |
See notes to unaudited condensed consolidated financial statements.
MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
AND NONCONTROLLING INTERESTS
(IN MILLIONS)
(UNAUDITED)
| Molson Coors Beverage Company Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated | Common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | Exchangeable | other | held in | Non | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| issued | shares issued | Paid-in- | Retained | comprehensive | treasury | controlling | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | Class A | Class B | Class A | Class B | capital | earnings | income (loss) | Class B | interests**(1)** | ||||||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2023 | $ | 13,256.9 | $ | — | $ | 2.1 | $ | 102.2 | $ | 380.7 | $ | 7,059.5 | $ | 7,129.3 | $ | (1,093.4) | $ | (549.6) | $ | 226.1 | |||||||||||||||||||||||||||||||||||||||
| Exchange of shares | — | — | — | (1.4) | (24.7) | 26.1 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued under equity compensation plan | 0.4 | — | — | — | — | 0.4 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of share-based compensation | 13.8 | — | — | — | — | 13.8 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Deconsolidation of VIE | (8.8) | — | — | — | — | — | — | — | — | (8.8) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) including noncontrolling interests | 431.9 | — | — | — | — | — | 430.7 | — | — | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | (105.9) | — | — | — | — | — | — | (105.2) | — | (0.7) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Share repurchase program | (34.5) | — | — | — | — | — | — | — | (34.5) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions and dividends to noncontrolling interests | (4.0) | — | — | — | — | — | — | — | — | (4.0) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | (90.0) | — | — | — | — | — | (90.0) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| As of September 30, 2023 | $ | 13,459.8 | $ | — | $ | 2.1 | $ | 100.8 | $ | 356.0 | $ | 7,099.8 | $ | 7,470.0 | $ | (1,198.6) | $ | (584.1) | $ | 213.8 |
| Molson Coors Beverage Company Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated | Common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | Exchangeable | other | held in | Non | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| issued | shares issued | Paid-in- | Retained | comprehensive | treasury | controlling | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | Class A | Class B | Class A | Class B | capital | earnings | income (loss) | Class B | interests**(1)** | ||||||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2024 | $ | 13,389.0 | $ | — | $ | 2.1 | $ | 100.8 | $ | 352.3 | $ | 7,119.4 | $ | 7,932.4 | $ | (1,217.3) | $ | (1,110.1) | $ | 209.4 | |||||||||||||||||||||||||||||||||||||||
| Exchange of shares | — | — | — | — | (81.2) | 81.2 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued under equity compensation plan | (0.1) | — | — | — | — | (0.1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of share-based compensation | 10.4 | — | — | — | — | 10.4 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of noncontrolling interest | — | — | — | — | — | 0.1 | — | — | — | (0.1) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) including noncontrolling interests | 229.5 | — | — | — | — | — | 199.8 | — | — | 29.7 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 114.0 | — | — | — | — | — | — | 113.7 | — | 0.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Share repurchase program | (62.7) | — | — | — | — | — | — | — | (62.7) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | 2.7 | — | — | — | — | — | — | — | — | 2.7 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of mandatorily redeemable noncontrolling interest to accounts payable and other current liabilities | (49.2) | — | 0 | — | — | — | — | — | (3.5) | — | (45.7) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of noncontrolling interests to redeemable noncontrolling interests | (16.1) | — | — | — | — | — | — | — | — | (16.1) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | (92.0) | — | — | — | — | — | (92.0) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| As of September 30, 2024 | $ | 13,525.5 | $ | — | $ | 2.1 | $ | 100.8 | $ | 271.1 | $ | 7,211.0 | $ | 8,040.2 | $ | (1,107.1) | $ | (1,172.8) | $ | 180.2 |
| Molson Coors Beverage Company Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated | Common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | Exchangeable | other | held in | Non | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| issued | shares issued | Paid-in- | Retained | comprehensive | treasury | controlling | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | Class A | Class B | Class A | Class B | capital | earnings | income (loss) | Class B | interests**(1)** | ||||||||||||||||||||||||||||||||||||||||||||||||||
| As of December 31, 2022 | $ | 12,915.2 | $ | — | $ | 2.1 | $ | 102.2 | $ | 413.3 | $ | 7,006.4 | $ | 6,894.1 | $ | (1,205.5) | $ | (522.9) | $ | 225.5 | |||||||||||||||||||||||||||||||||||||||
| Exchange of shares | — | — | — | (1.4) | (57.3) | 58.7 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued under equity compensation plan | 0.6 | — | — | — | — | 0.6 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of share-based compensation | 34.1 | — | — | — | — | 34.1 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Deconsolidation of VIE | (8.8) | — | — | — | — | — | — | — | — | (8.8) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) including noncontrolling interests | 851.2 | — | — | — | — | — | 845.6 | — | — | 5.6 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 7.0 | — | — | — | — | — | — | 6.9 | — | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Share repurchase program | (61.2) | — | — | — | — | — | — | — | (61.2) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | 2.4 | — | — | — | — | — | — | — | — | 2.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions and dividends to noncontrolling interests | (11.0) | — | — | — | — | — | — | — | — | (11.0) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | (269.7) | — | — | — | — | — | (269.7) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| As of September 30, 2023 | $ | 13,459.8 | $ | — | $ | 2.1 | $ | 100.8 | $ | 356.0 | $ | 7,099.8 | $ | 7,470.0 | $ | (1,198.6) | $ | (584.1) | $ | 213.8 |
| Molson Coors Beverage Company Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated | Common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | Exchangeable | other | held in | Non | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| issued | shares issued | Paid-in- | Retained | comprehensive | treasury | controlling | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | Class A | Class B | Class A | Class B | capital | earnings | income (loss) | Class B | interests**(1)** | ||||||||||||||||||||||||||||||||||||||||||||||||||
| As of December 31, 2023 | $ | 13,407.2 | $ | — | $ | 2.1 | $ | 100.8 | $ | 352.3 | $ | 7,108.4 | $ | 7,484.3 | $ | (1,116.3) | $ | (735.6) | $ | 211.2 | |||||||||||||||||||||||||||||||||||||||
| Exchange of shares | — | — | — | — | (81.2) | 81.2 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued under equity compensation plan | (13.3) | — | — | — | — | (13.3) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of share-based compensation | 34.6 | — | — | — | — | 34.6 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of noncontrolling interest | (0.1) | — | — | — | — | 0.1 | — | — | — | (0.2) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) including noncontrolling interests | 865.7 | — | — | — | — | — | 834.6 | — | — | 31.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 12.7 | — | — | — | — | — | — | 12.7 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Share repurchase program | (437.2) | — | — | — | — | — | — | — | (437.2) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | 2.7 | — | — | — | — | — | — | — | — | 2.7 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions and dividends to noncontrolling interests | (2.8) | — | — | — | — | — | — | — | — | (2.8) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of mandatorily redeemable noncontrolling interest to accounts payable and other current liabilities | (49.2) | — | — | — | — | — | — | (3.5) | — | (45.7) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of noncontrolling interests to redeemable noncontrolling interests | (16.1) | — | — | — | — | — | — | — | — | (16.1) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | (278.7) | — | — | — | — | — | (278.7) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| As of September 30, 2024 | $ | 13,525.5 | $ | — | $ | 2.1 | $ | 100.8 | $ | 271.1 | $ | 7,211.0 | $ | 8,040.2 | $ | (1,107.1) | $ | (1,172.8) | $ | 180.2 |
(1) All activity included in the noncontrolling interests column of the unaudited condensed consolidated statements of stockholder's equity and noncontrolling interests excludes activity from our redeemable noncontrolling interest.
See notes to unaudited condensed consolidated financial statements.
MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Summary of Significant Accounting Policies
Unless otherwise noted in this report, any description of "we," "us" or "our" includes Molson Coors Beverage Company ("MCBC" or the "Company"), principally a holding company, and its operating and non-operating subsidiaries included within its reporting segments. Our reporting segments include the Americas and EMEA&APAC. Our Americas segment operates in the U.S., Canada and various countries in the Caribbean, Latin and South America, and our EMEA&APAC segment operates in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K., various other European countries and certain countries within the Middle East, Africa and Asia Pacific.
Unless otherwise indicated, information in this report is presented in USD and comparisons are to comparable prior year periods. Our primary operating currencies, other than the USD, include the CAD, the GBP and our Central European operating currencies such as the EUR, CZK, RON and RSD.
The accompanying unaudited condensed consolidated financial statements reflect all adjustments which are necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented in accordance with U.S. GAAP. Such unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.
These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report and have been prepared on a consistent basis with the accounting policies described in Note 1 of the Notes to the Audited Consolidated Financial Statements included in our Annual Report, except as noted in Note 2, "New Accounting Pronouncements".
The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be achieved for the full year or any other future period.
Anti-Dilutive Securities
Anti-dilutive securities from share-based awards excluded from the computation of diluted EPS were 1.5 million and 0.3 million for the three months ended September 30, 2024 and September 30, 2023, respectively, and 1.3 million and 0.6 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.
Dividends
On July 18, 2024, our Company's Board of Directors ("Board") declared a dividend of $0.44 per share, paid on September 20, 2024 to shareholders of Class A and Class B common stock of record on August 30, 2024. Shareholders of exchangeable shares received the CAD equivalent of dividends declared on Class A and Class B common stock, equal to CAD 0.60 per share. During the nine months ended September 30, 2024, dividends declared to eligible shareholders were $1.32 per share, with the CAD equivalent equal to CAD 1.78 per share.
Share Repurchase Program
During the third quarter of 2023, our Board approved a share repurchase program authorizing the repurchase of up to an aggregate of $2.0 billion of our Company's Class B common stock, excluding brokerage commissions and excise taxes, with an expected program term of five years. This repurchase program replaces and supersedes any repurchase program previously approved by our Board.
The following table presents the shares repurchased and aggregate cost, including brokerage commissions and excise taxes incurred, under the current and superseded share repurchase programs for the three and nine months ended September 30, 2024 and September 30, 2023.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| Shares repurchased | 1,160,707 | 505,000 | 7,500,489 | 980,000 | |||||||||||||||||||
| Aggregate cost (in millions) | $ | 62.7 | $ | 34.5 | $ | 437.2 | $ | 61.2 |
Non-Cash Activity
Non-cash investing activities include movements in our guarantee of indebtedness of certain equity method investments. See Note 3, "Investments" for further discussion. We also had non-cash activities related to capital expenditures incurred but not yet paid of $119.7 million and $168.6 million during the nine months ended September 30, 2024 and September 30, 2023, respectively. In addition, we had non-cash activities related to certain issuances of share-based awards.
Other than the activity mentioned above and the supplemental non-cash activity related to the recognition of leases further discussed in Note 6, "Leases" there was no other significant non-cash activity during the nine months ended September 30, 2024 and September 30, 2023, respectively.
Allowance for Doubtful Accounts
The allowance for doubtful accounts for trade receivables was $13.4 million and $12.7 million as of September 30, 2024 and December 31, 2023, respectively.
Supplier Financing
We are the buyer under a supplier finance program with Citibank N.A. with $172.8 million and $147.5 million confirmed as valid and outstanding as of September 30, 2024 and December 31, 2023, respectively. We recognize these unpaid balances in accounts payable and other current liabilities on our unaudited condensed consolidated balance sheets.
Acquisition
On August 7, 2023, we acquired a 75% equity interest in Blue Run Spirits, Inc., a U.S. based high end whiskey business, for a purchase price of $77 million, which included cash paid of $64 million. The acquisition is aligned with our strategy to expand beyond the beer aisle and enhance our presence in the spirits category.
The acquisition was accounted for as a business combination, with $88 million allocated to a definite-lived brand intangible asset to be amortized over a 15-year period and the remainder primarily allocated to other working capital balances and goodwill for the amount in excess of the net identifiable assets acquired. An NCI was recognized at fair value based on a Monte Carlo simulation model and is recorded as redeemable noncontrolling interest in the consolidated balance sheets based on the contractual terms of the agreement. Pro forma results of operations have not been presented as the impact is not material to our results of operation or financial position.
Purchases of Annuity Contracts
On September 26, 2024, we purchased annuity contracts for two of our Canadian pension plans which transferred approximately $344 million of pension plan liabilities, along with the associated administration of benefits, to an insurance company using the plan's respective pension plan assets. This transaction had no impact on the amount, timing or form of the retirement benefit payments to the affected retirees and beneficiaries. As a result of the transaction, we reduced the respective pension plan liabilities and assets and remeasured any remaining pension plan liabilities and assets using updated actuarial assumptions. We elected the practical expedient to perform the remeasurement as of the nearest calendar month-end date, which was September 30, 2024. A total settlement loss of $34.0 million was recorded to other pension and postretirement benefit (costs), net in the unaudited condensed consolidated statements of operations during the third quarter of 2024. See the impacts of the pension plan remeasurement and settlement on AOCI in Note 11, "Accumulated Other Comprehensive Income (Loss)."
Cobra Beer Partnership, Ltd. Buyout
Out of Period Adjustment
During the three months ended September 30, 2024, we identified certain errors in the historical accounting for NCI with redemption features outside of our control under the terms of our Cobra Beer Partnership, Ltd. ("Cobra U.K." or "CBPL") partnership agreement and within certain other immaterial investments. Since the inception of these partnerships dating back to as early as 2002, we had historically accounted for the NCI within permanent equity with no adjustments to redemption value. Rather, our partners' shares should have been presented as redeemable NCI through the date of exercise of the redemption feature, with adjustments to the redemption value being recorded each reporting period as necessary. Specific to CBPL, since the option redemption price was not at fair value, the historical adjustments should have been recorded to net (income) loss attributable to noncontrolling interests in the unaudited condensed consolidated statements of operations, based on our accounting policy to reflect the entire change in the redemption amount as a deemed dividend and earnings per share adjustment (resulting from the redemption feature) as part of the attribution of consolidated net income to the noncontrolling interest (as reported on the face of the income statement). Furthermore, in March 2024, our CBPL partner exercised its put option requiring us to acquire their 49.9% ownership interest. Since the exercise was irrevocable, the NCI became mandatorily redeemable at that time and should have been reclassified to accounts payable and other current liabilities. These errors resulted in a reclassification of $65 million from noncontrolling interests, of which $49 million was reclassified to accounts payable and other current liabilities for CBPL and $16 million was reclassified to redeemable noncontrolling interests for the other immaterial investments in our unaudited condensed consolidated balance sheets. In addition, the errors resulted in a cumulative understatement of $34.5 million to net income attributable to NCI and a corresponding cumulative overstatement to net income attributable to MCBC in our unaudited condensed consolidated statements of operations. The errors were corrected through an out of period adjustment as of and for the three months ended September 30, 2024. Management assessed the impact of the errors and deemed them to not be material to any prior periods or to forecasted results for 2024. In October 2024, we obtained a final redemption value that would be due to acquire the 49.9% NCI of the CBPL partnership. As a result, during the three months ended September 30, 2024, we recorded an adjustment of $45.8 million to increase the mandatorily redeemable NCI liability to the final redemption value, with the adjustment recorded to interest expense.
Subsequent Events
The CBPL buyout was finalized on October 21, 2024, resulting in a cash payment of $89 million which will be recorded as a cash outflow from financing activities in the consolidated statement of cash flows in the fourth quarter of 2024.
2. New Accounting Pronouncements
New Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, aimed at enhancing transparency in income statement disclosures by requiring entities to disclose additional disaggregated information about significant expenses included in our results of operations. This guidance is effective for us starting with our annual report for the year ending December 31, 2027 and the subsequent interim periods, with prospective or retrospective application allowed and early adoption permitted. We are still assessing the impact of the ASU, including the timing and method of adoption, however, we expect the guidance to impact disclosures only and not to have a material effect on our financial position or results of operations.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures intended to enhance transparency and decision usefulness of income tax disclosures. This guidance is effective for us starting with our annual report for the year ending December 31, 2025 and the guidance should be applied prospectively. We are permitted to early adopt and can choose to apply the guidance retrospectively. When adopted, we expect the guidance to have an impact on disclosures only and to not have a material effect on our financial position or results of operations. We are still considering if we will apply the standard prospectively or retrospectively.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures intended to improve reportable segment disclosures and to enhance disclosures about significant reportable segment expenses. This guidance is effective for us starting with our annual report for the year ending December 31, 2024 and the subsequent interim periods and is required to be applied retrospectively to all prior periods presented. Because the amendments do not change the methodology for the identification of operating segments, the aggregation of those operating segments or the application of the quantitative thresholds to determine reportable segments, we do not expect the guidance to have a material effect on our financial position or results of operations.
Other than the items noted above, there have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a material effect on our unaudited condensed consolidated financial statements.
3. Investments
Our investments include both equity method and consolidated investments. Those entities identified as VIEs have been evaluated to determine whether we are the primary beneficiary. The VIEs included under "Consolidated VIEs" below are those for which we have concluded that we are the primary beneficiary and accordingly, we have consolidated these entities. We have not provided any financial support to any of our VIEs during the nine months ended September 30, 2024 that we were not previously contractually obligated to provide. Amounts due to and due from our equity method investments are recorded as affiliate accounts payable and affiliate accounts receivable which are presented within accounts payable and other current liabilities and trade receivables, net, respectively, on the unaudited condensed consolidated balance sheets.
Authoritative guidance related to the consolidation of VIEs requires that we continually reassess whether we are the primary beneficiary of VIEs in which we have an interest. As such, the conclusion regarding the primary beneficiary status is subject to change and we continually evaluate circumstances that could require consolidation or deconsolidation. Our consolidated VIEs as of September 30, 2024 are Cobra U.K., Rocky Mountain Metal Container ("RMMC"), and Rocky Mountain Bottle Company ("RMBC"), as well as other immaterial entities. Our unconsolidated VIEs are Brewers Retail Inc. ("BRI"), Brewers Distributor Ltd. ("BDL") and The Yuengling Company LLC, as well as other immaterial investments.
Under our CBPL U.K. partnership agreement, our partner exercised a put option which has resulted in our acquisition of the remaining 49.9% ownership interest. In October 2024, we obtained a final valuation of the redemption value that would be due to acquire the remaining 49.9%. The transaction was finalized on October 21, 2024, resulting in a cash payment of $89 million. See further discussion of this transaction in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies."
Both BRI and BDL have outstanding third party debt which is guaranteed by their respective shareholders. As a result, we had a guarantee liability of $32.0 million and $35.4 million recorded as of September 30, 2024 and December 31, 2023, respectively, which is presented within accounts payable and other current liabilities on the unaudited condensed consolidated balance sheets and represents our proportionate share of the outstanding balance of these debt instruments. The offset to the guarantee liability was recorded as an adjustment to our respective equity method investment on the unaudited condensed consolidated balance sheets. The resulting change in our equity method investments during the year due to movements in the guarantee represents a non-cash investing activity.
ZOA Energy, LLC
During the third quarter of 2023, we increased our investment in ZOA Energy, LLC ("ZOA"), an energy drink company operating in the U.S. and Canada, bringing our ownership interest to 40%, on a fully diluted basis. The increase in ownership resulted in the transition of accounting for our investment from the fair value method under ASC 321 to equity method investment accounting under ASC 323 on a prospective basis and the cash outflow associated with the investment is reflected within other in the investing activities section of the unaudited condensed consolidated statement of cash flows. Subsequent to the investment, the carrying value of our recorded ownership investment exceeds our ratable portion of underlying equity in the net assets of ZOA, and this basis difference has been fully allocated to equity method goodwill.
In October 2024, we increased our investment in ZOA for cash consideration of $53 million, bringing our ownership interest to 51% subsequent to the closing of the transaction. The transaction will be recorded as a business combination, and ZOA will be included in our consolidated financial statements from the date of acquisition within the Americas reporting segment. The acquisition is aligned with our strategy to expand beyond beer. Based on the timing of the transaction, we are still in the preliminary stages of accounting for this transaction and expect to complete our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed as well as other consolidation adjustments during the fourth quarter of 2024.
Consolidated VIEs
The following summarizes the assets and liabilities of our consolidated VIEs (including noncontrolling interests and excluding goodwill):
| As of | |||||||||||||||||||||||
| September 30, 2024 | December 31, 2023 | ||||||||||||||||||||||
| Total Assets | Total Liabilities | Total Assets | Total Liabilities | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| RMMC/RMBC | $ | 209.3 | $ | 24.0 | $ | 261.6 | $ | 24.7 | |||||||||||||||
| Other | $ | 3.7 | $ | 3.5 | $ | 2.8 | $ | 3.3 |
As of September 30, 2024, for RMMC/RMBC, $72.5 million and $105.0 million were recorded in inventories, net and property, plant and equipment, net, respectively on the unaudited condensed consolidated balance sheets. As of December 31, 2023, for RMMC/RMBC, $108.2 million and $120.7 million were recorded in inventories, net and property, plant and equipment, net, respectively on the consolidated balance sheets.
4. Inventories
| As of | |||||||||||
| September 30, 2024 | December 31, 2023 | ||||||||||
| (In millions) | |||||||||||
| Finished goods | $ | 299.7 | $ | 245.7 | |||||||
| Work in process | 99.0 | 97.4 | |||||||||
| Raw materials | 279.8 | 275.1 | |||||||||
| Packaging materials | 154.8 | 184.1 | |||||||||
| Inventories, net | $ | 833.3 | $ | 802.3 |
5. Goodwill and Intangible Assets
Goodwill
The changes in the carrying value of goodwill is presented in the table below by segment.
| Americas | EMEA&APAC | Consolidated**(1)** | |||||||||||||||
| (In millions) | |||||||||||||||||
| Balance as of December 31, 2023 | $ | 5,325.3 | $ | — | $ | 5,325.3 | |||||||||||
| Divestiture(2) | (6.1) | — | (6.1) | ||||||||||||||
| Foreign currency translation, net | (1.6) | — | (1.6) | ||||||||||||||
| Balance as of September 30, 2024 | $ | 5,317.6 | $ | — | $ | 5,317.6 |
(1)Accumulated impairment losses for the Americas segment was $1,513.3 million as of September 30, 2024 and December 31, 2023. The EMEA&APAC goodwill balance was fully impaired during the year ended December 31, 2020 with an accumulated impairment loss of $1,484.3 million.
(2)During the three months ended September 30, 2024, we divested of certain of our U.S. craft businesses and allocated a portion of goodwill to the disposal group based on the relative fair values of the disposal group and the reporting unit.
As of the date of our annual impairment test performed as of October 1, 2023, the fair value of the Americas reporting unit goodwill balance was in excess of its carrying value by slightly less than 15%, and as such, the reporting unit continues to be at heightened risk of future impairment in the event of significant unfavorable changes in assumptions. We continue to focus on growing our core power brands net sales, aggressively premiumizing our portfolio and scaling and expanding beyond beer. While progress has been made on these strategies over recent years, including the strengthening of our core power brands, the growth targets included in management’s forecasted future cash flows are inherently at risk given that the strategies are still in progress. Additionally, the fair value determinations are sensitive to changes in the beer industry environment, broader macroeconomic conditions and market multiples or discount rates that could negatively impact future analyses, including the impacts of cost inflation, increases to interest rates and other external industry factors impacting our business.
We determined that there was no triggering event that occurred during the nine months ended September 30, 2024 that would indicate the carrying value of our Americas reporting unit was greater than its fair value. Our goodwill annual impairment analysis as of October 1, 2024 is currently in progress, and we have not yet finalized our results. For all of the reasons described in the preceding paragraph, our goodwill balance continues to be at risk of future impairment.
Intangible Assets, Other than Goodwill
The following table presents details of our intangible assets, other than goodwill, as of September 30, 2024.
| Useful life | Gross | Accumulated amortization | Net | ||||||||||||||||||||
| (Years) | (In millions) | ||||||||||||||||||||||
| Intangible assets subject to amortization | |||||||||||||||||||||||
| Brands | 10 - 50 | $ | 4,918.0 | $ | (1,716.6) | $ | 3,201.4 | ||||||||||||||||
| License agreements and distribution rights | 10 - 20 | 206.3 | (123.1) | 83.2 | |||||||||||||||||||
| Other | 5 - 40 | 84.8 | (27.5) | 57.3 | |||||||||||||||||||
| Intangible assets not subject to amortization | |||||||||||||||||||||||
| Brands | Indefinite | 8,010.5 | — | 8,010.5 | |||||||||||||||||||
| Distribution networks | Indefinite | 748.0 | — | 748.0 | |||||||||||||||||||
| Other | Indefinite | 307.6 | — | 307.6 | |||||||||||||||||||
| Total | $ | 14,275.2 | $ | (1,867.2) | $ | 12,408.0 |
The following table presents details of our intangible assets, other than goodwill, as of December 31, 2023.
| Useful life | Gross | Accumulated amortization | Net | ||||||||||||||||||||
| (Years) | (In millions) | ||||||||||||||||||||||
| Intangible assets subject to amortization | |||||||||||||||||||||||
| Brands | 10 - 50 | $ | 5,029.2 | $ | (1,634.4) | $ | 3,394.8 | ||||||||||||||||
| License agreements and distribution rights | 10 - 20 | 204.9 | (117.6) | 87.3 | |||||||||||||||||||
| Other | 5 - 40 | 84.8 | (25.8) | 59.0 | |||||||||||||||||||
| Intangible assets not subject to amortization | |||||||||||||||||||||||
| Brands | Indefinite | 8,002.0 | — | 8,002.0 | |||||||||||||||||||
| Distribution networks | Indefinite | 763.9 | — | 763.9 | |||||||||||||||||||
| Other | Indefinite | 307.6 | — | 307.6 | |||||||||||||||||||
| Total | $ | 14,392.4 | $ | (1,777.8) | $ | 12,614.6 |
The changes in the gross carrying amounts of intangible assets from December 31, 2023 to September 30, 2024 were primarily driven by the disposal of brands related to certain of our U.S. craft businesses, along with the impact of foreign exchange rates, as a significant amount of intangible assets, other than goodwill, are denominated in foreign currencies.
Based on foreign exchange rates as of September 30, 2024, the estimated future amortization expense of intangible assets was as follows.
| Fiscal year | Amount | |||||||
| (In millions) | ||||||||
| 2024 - remaining | $ | 50.8 | ||||||
| 2025 | $ | 203.1 | ||||||
| 2026 | $ | 186.2 | ||||||
| 2027 | $ | 127.2 | ||||||
| 2028 | $ | 125.7 |
Amortization expense of intangible assets was $50.7 million and $52.4 million for the three months ended September 30, 2024 and September 30, 2023, respectively, and $155.3 million and $154.9 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. This expense was presented within MG&A expenses in our unaudited condensed consolidated statements of operations.
As of the date of our annual impairment test of indefinite-lived intangible assets, performed as of October 1, 2023, the carrying value of the Staropramen family of brands in EMEA&APAC was determined to be in excess of its fair value such that an impairment loss was recorded during the three months ended December 31, 2023. As this was a partial impairment, the intangible asset is considered to be at a heightened risk of future impairment in the event of significant unfavorable changes in assumptions, including forecasted future cash flows based on execution of strategic initiatives for expansion and distribution of the brand, as well as discount rates and other macroeconomic factors. Our indefinite-lived intangible asset annual impairment analysis as of October 1, 2024 is currently in progress, and we have not yet finalized our results.
The fair value of the Coors brands in the Americas, the Miller brands in the U.S. and the Carling brands in EMEA&APAC all exceeded their respective carrying values by over 15% as of the October 1, 2023 annual testing date.
No triggering events were identified during the nine months ended September 30, 2024 that would indicate the carrying values of our indefinite-lived or definite-lived intangible assets were greater than their fair values.
Fair Value Assumptions
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. The key assumptions used to derive the estimated fair values of our reporting units and indefinite-lived intangible assets are discussed in Part II.—Item 8. Financial Statements, Note 6, "Goodwill and Intangible Assets" in our Annual Report, and represent Level 3 measurements.
6. Leases
Supplemental balance sheet information related to leases as of September 30, 2024 and December 31, 2023 was as follows:
| As of | ||||||||||||||
| September 30, 2024 | December 31, 2023 | |||||||||||||
| Balance Sheet Classification | (In millions) | |||||||||||||
| Operating Leases | ||||||||||||||
| Operating lease right-of-use assets | Other assets | $ | 197.7 | $ | 200.7 | |||||||||
| Current operating lease liabilities | Accounts payable and other current liabilities | $ | 48.2 | $ | 46.9 | |||||||||
| Non-current operating lease liabilities | Other liabilities | 164.5 | 163.9 | |||||||||||
| Total operating lease liabilities | $ | 212.7 | $ | 210.8 | ||||||||||
| Finance Leases | ||||||||||||||
| Finance lease right-of-use assets | Property, plant and equipment, net | $ | 62.7 | $ | 46.4 | |||||||||
| Current finance lease liabilities | Current portion of long-term debt and short-term borrowings | $ | 7.8 | $ | 5.2 | |||||||||
| Non-current finance lease liabilities | Long-term debt | 61.1 | 48.5 | |||||||||||
| Total finance lease liabilities | $ | 68.9 | $ | 53.7 |
Supplemental cash flow information related to leases for the nine months ended September 30, 2024 and September 30, 2023 was as follows:
| Nine Months Ended | |||||||||||
| September 30, 2024 | September 30, 2023 | ||||||||||
| (In millions) | |||||||||||
| Cash paid for amounts included in the measurements of lease liabilities | |||||||||||
| Operating cash flows from operating leases | $ | 40.7 | $ | 43.2 | |||||||
| Operating cash flows from finance leases | $ | 2.8 | $ | 2.8 | |||||||
| Financing cash flows from finance leases | $ | 4.5 | $ | 3.7 | |||||||
| Supplemental non-cash information on right-of-use assets obtained in exchange for new lease liabilities | |||||||||||
| Operating leases | $ | 40.1 | $ | 104.1 | |||||||
| Finance leases | $ | 17.9 | $ | 0.8 |
Executed leases that have not yet commenced as of September 30, 2024 are not material and are expected to commence by the end of the first quarter of 2025.
7. Debt
Debt Obligations
| As of | |||||||||||
| September 30, 2024 | December 31, 2023 | ||||||||||
| (In millions) | |||||||||||
| Long-term debt | |||||||||||
| EUR 800 million 1.25% senior notes due July 2024(1) | $ | — | $ | 883.1 | |||||||
| CAD 500 million 3.44% senior notes due July 2026 | 369.7 | 377.6 | |||||||||
| $2.0 billion 3.0% senior notes due July 2026 | 2,000.0 | 2,000.0 | |||||||||
| EUR 800 million 3.8% senior notes due June 2032(2) | 890.8 | — | |||||||||
| $1.1 billion 5.0% senior notes due May 2042 | 1,100.0 | 1,100.0 | |||||||||
| $1.8 billion 4.2% senior notes due July 2046 | 1,800.0 | 1,800.0 | |||||||||
| Finance leases | 68.9 | 53.7 | |||||||||
| Other | 23.5 | 23.5 | |||||||||
| Less: unamortized debt discounts and debt issuance costs | (39.6) | (35.5) | |||||||||
| Total long-term debt (including current portion) | 6,213.3 | 6,202.4 | |||||||||
| Less: current portion of long-term debt | (10.3) | (890.3) | |||||||||
| Total long-term debt | $ | 6,203.0 | $ | 5,312.1 | |||||||
| Short-term borrowings(3) | $ | 27.4 | $ | 21.5 | |||||||
| Current portion of long-term debt | 10.3 | 890.3 | |||||||||
| Current portion of long-term debt and short-term borrowings | $ | 37.7 | $ | 911.8 |
(1)We repaid our EUR 800 million 1.25% senior notes upon maturity on July 15, 2024 using the cash proceeds from our EUR 800 million 3.8% senior notes issued on May 29, 2024 and cash on hand.
(2)On May 29, 2024, MCBC issued EUR 800 million 3.8% senior notes with a maturity of June 15, 2032 ("EUR 2032 Senior Notes"). The issuance resulted in total proceeds of $863.7 million, net of underwriting fees and discounts. Total debt discounts and debt issuance costs capitalized in connection with these senior notes, including underwriting fees, were approximately $7.1 million, and are being amortized over the term of the EUR 2032 Senior Notes. The EUR 2032 Senior Notes began accruing interest upon issuance, with interest payments due annually. Additionally, upon issuance we designated the EUR 2032 Senior Notes as a hedge of our investment in a EUR functional currency subsidiary. See Note 8, "Derivative Instruments and Hedging Activities" for further details.
(3)Our short-term borrowings include bank overdrafts, borrowings on our overdraft facilities and other items.
As of September 30, 2024, we had $22.4 million in bank overdrafts and $126.2 million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $103.8 million. As of December 31, 2023, we had $16.5 million in bank overdrafts and $75.5 million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $59.0 million.
In addition, we have CAD, GBP and USD overdraft facilities under which we had no outstanding borrowings as of September 30, 2024 and December 31, 2023. See further detail within Part II.—Item 8. Financial Statements, Note 13, "Commitments and Contingencies" in our Annual Report for further discussion related to letters of credit.
Debt Fair Value Measurements
We utilize market approaches to estimate the fair value of certain outstanding borrowings by discounting anticipated future cash flows derived from the contractual terms of the obligations using observable market interest and foreign exchange rates. As of September 30, 2024 and December 31, 2023, the fair value of our outstanding long-term debt (including the current portion of long-term debt) was approximately $6.0 billion and $5.9 billion, respectively. All senior notes are valued based on significant observable inputs and classified as Level 2 in the fair value hierarchy. The carrying values of all other outstanding long-term borrowings and our short-term borrowings approximate their fair values and are also classified as Level 2 in the fair value hierarchy.
Revolving Credit Facility and Commercial Paper
On June 3, 2024, we amended our existing $2.0 billion multi-currency revolving credit facility to, among other things, extend the maturity date from June 26, 2028 to June 26, 2029. The amendment did not change the borrowing capacity of the revolving credit facility, which allows us to issue a maximum aggregate amount of $2.0 billion in commercial paper or other borrowings at any time at variable interest rates. Similarly, the $150.0 million sub-facility available for the issuance of letters of credit remains unchanged. We use this facility from time to time to leverage cash needs to fund the repayment of debt upon maturity and for working capital or general purposes.
We had no borrowings drawn on the amended and restated multi-currency revolving credit facility and no commercial paper borrowings as of September 30, 2024 and December 31, 2023.
Debt Covenants
Under the terms of each of our debt facilities, we must comply with certain restrictions. These include customary events of default and specified representations, warranties and covenants, as well as covenants that restrict our ability to incur certain additional priority indebtedness (certain thresholds of secured consolidated net tangible assets), certain leverage threshold percentages, create or permit liens on assets, and restrictions on mergers, acquisitions and certain types of sale lease-back transactions.
Under the amended and restated $2.0 billion multi-currency revolving credit facility, we are required to maintain a maximum leverage ratio, calculated as net debt to EBITDA (as defined in the amended and restated multi-currency revolving credit facility agreement) of 4.00x, measured as of the last day of each fiscal quarter through maturity of the credit facility. As of September 30, 2024, we were in compliance with all of these restrictions and covenants, have met such financial ratios and have met all debt payment obligations. All of our outstanding senior notes as of September 30, 2024 rank pari-passu.
8. Derivative Instruments and Hedging Activities
Our risk management and derivative accounting policies are presented within Part II.—Item 8. Financial Statements, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" and Note 10, "Derivative Instruments and Hedging Activities" in our Annual Report and did not significantly change during the nine months ended September 30, 2024. As noted in Part II.—Item 8. Financial Statements, Note 10, "Derivative Instruments and Hedging Activities" in our Annual Report, due to the nature of our counterparty agreements, and the fact that we are not subject to master netting arrangements, we are not able to net positions with the same counterparty and, therefore, present our derivative positions on a gross basis in our unaudited condensed consolidated balance sheets. Except as noted below, our significant derivative positions have not changed considerably since December 31, 2023.
Net Investment Hedges
On May 29, 2024, concurrent with the issuance of the EUR 2032 Senior Notes, we designated the principal of the senior notes as a non-derivative net investment hedge of our investment in a EUR functional currency subsidiary in order to hedge a portion of the related foreign currency translational impacts. Accordingly, we will record the changes in the carrying value of the EUR 2032 Senior Notes due to fluctuations in the spot rate to AOCI. See Note 7, "Debt" for further discussion of the EUR 2032 Senior Notes.
Additionally, on May 29, 2024, we de-designated the principal of the EUR 800 million 1.25% senior notes and as a result, the associated net investment hedge was discontinued. The accumulated gains and losses associated with the settled net investment hedge will remain in AOCI until a liquidation or deconsolidation event at which point the accumulated gains and losses will be reclassified into earnings.
Foreign Currency Forwards
In the second quarter of 2023, we entered into approximately CAD 260 million (approximately 195 million USD) of foreign exchange forward contracts to manage our exposure to foreign currency fluctuations related to the repayment of our CAD 500 million 2.84% senior notes that matured on July 15, 2023. These contracts were not designated in hedge accounting relationships and, as such, changes in the fair value were recorded in other non-operating income (expense), net in the unaudited condensed consolidated statements of operations. These contracts settled on July 12, 2023 for an immaterial amount in advance of the senior notes being repaid.
Derivative Fair Value Measurements
We utilize market approaches to estimate the fair value of our derivative instruments by discounting anticipated future cash flows derived from the derivative's contractual terms and observable market interest, foreign exchange and commodity rates. The fair values of our derivatives also include credit risk adjustments to account for our counterparties' credit risk, as well as our own non-performance risk, as appropriate.
The table below summarizes our derivative assets (liabilities) that were measured at fair value as of September 30, 2024 and December 31, 2023. The fair value for all derivative contracts as of September 30, 2024 and December 31, 2023 were valued using significant other observable inputs, which are Level 2 inputs.
| As of | |||||||||||
| September 30, 2024 | December 31, 2023 | ||||||||||
| (In millions) | |||||||||||
| Forward starting interest rate swaps | $ | 39.2 | $ | 41.6 | |||||||
| Foreign currency forwards | — | (1.4) | |||||||||
| Commodity swaps and options | (2.6) | (30.4) | |||||||||
| Total | $ | 36.6 | $ | 9.8 |
As of September 30, 2024 and December 31, 2023, we had no significant transfers between Level 1 and Level 2. New derivative contracts transacted during the nine months ended September 30, 2024 were all included in Level 2.
Results of Period Derivative Activity
The tables below include the results of our derivative activity on our unaudited condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, and our unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and September 30, 2023.
Fair Value of Derivative Instruments on the Unaudited Condensed Consolidated Balance Sheets (in millions):
| As of September 30, 2024 | |||||||||||||||||||||||||||||
| Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||||||||
| Notional amount | Balance sheet location | Fair value | Balance sheet location | Fair value | |||||||||||||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||
| Forward starting interest rate swaps | $ | 1,000.0 | Other non-current assets | $ | 39.2 | Other liabilities | $ | — | |||||||||||||||||||||
| Foreign currency forwards | $ | 234.0 | Other current assets | 0.9 | Accounts payable and other current liabilities | (0.4) | |||||||||||||||||||||||
| Other non-current assets | 0.1 | Other liabilities | (0.6) | ||||||||||||||||||||||||||
| Total derivatives designated as hedging instruments | $ | 40.2 | $ | (1.0) | |||||||||||||||||||||||||
| Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||
| Commodity swaps(1) | $ | 459.7 | Other current assets | $ | 14.9 | Accounts payable and other current liabilities | $ | (18.7) | |||||||||||||||||||||
| Other non-current assets | 4.1 | Other liabilities | (2.9) | ||||||||||||||||||||||||||
| Total derivatives not designated as hedging instruments | $ | 19.0 | $ | (21.6) |
| As of December 31, 2023 | |||||||||||||||||||||||||||||
| Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||||||||
| Notional amount | Balance sheet location | Fair value | Balance sheet location | Fair value | |||||||||||||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||
| Forward starting interest rate swaps | $ | 1,000.0 | Other non-current assets | $ | 41.6 | Other liabilities | $ | — | |||||||||||||||||||||
| Foreign currency forwards | $ | 219.4 | Other current assets | 1.1 | Accounts payable and other current liabilities | (1.2) | |||||||||||||||||||||||
| Other non-current assets | — | Other liabilities | (1.3) | ||||||||||||||||||||||||||
| Total derivatives designated as hedging instruments | $ | 42.7 | $ | (2.5) | |||||||||||||||||||||||||
| Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||
| Commodity swaps(1) | $ | 653.5 | Other current assets | $ | 11.1 | Accounts payable and other current liabilities | $ | (42.0) | |||||||||||||||||||||
| Other non-current assets | 6.6 | Other liabilities | (6.1) | ||||||||||||||||||||||||||
| Commodity options(1) | $ | 21.7 | Other current assets | 0.2 | Accounts payable and other current liabilities | (0.2) | |||||||||||||||||||||||
| Total derivatives not designated as hedging instruments | $ | 17.9 | $ | (48.3) |
(1)Notional includes offsetting buy and sell positions, shown in terms of absolute value. Buy and sell positions are shown gross in the asset and/or liability position, as appropriate.
The Pretax Effect of Cash Flow Hedge Accounting on Other Comprehensive Income (Loss), Accumulated Other Comprehensive Income (Loss) and Income (Loss) (in millions):
| Derivatives in cash flow hedge relationships | Amount of gain (loss) recognized in OCI on derivatives | Location of gain (loss) reclassified from AOCI into income | Amount of gain (loss) recognized from AOCI into income on derivative | |||||||||||||||||
| Three Months Ended September 30, 2024 | ||||||||||||||||||||
| Forward starting interest rate swaps | $ | (35.8) | Interest income (expense), net | $ | (0.8) | |||||||||||||||
| Foreign currency forwards | (2.3) | Cost of goods sold | 0.9 | |||||||||||||||||
| Other non-operating income (expense), net | (0.1) | |||||||||||||||||||
| Total | $ | (38.1) | $ | — | ||||||||||||||||
| Three Months Ended September 30, 2023 | ||||||||||||||||||||
| Forward starting interest rate swaps | $ | 62.6 | Interest income (expense), net | $ | (0.8) | |||||||||||||||
| Foreign currency forwards | 5.1 | Cost of goods sold | 1.1 | |||||||||||||||||
| Other non-operating income (expense), net | (0.3) | |||||||||||||||||||
| Total | $ | 67.7 | $ | — |
| Derivatives in cash flow hedge relationships | Amount of gain (loss) recognized in OCI on derivatives | Location of gain (loss) reclassified from AOCI into income | Amount of gain (loss) recognized from AOCI into income on derivative | |||||||||||||||||
| Nine Months Ended September 30, 2024 | ||||||||||||||||||||
| Forward starting interest rate swaps | $ | (2.4) | Interest income (expense), net | $ | (2.5) | |||||||||||||||
| Foreign currency forwards | 4.0 | Cost of goods sold | 3.0 | |||||||||||||||||
| Other non-operating income (expense), net | (0.5) | |||||||||||||||||||
| Total | $ | 1.6 | $ | — | ||||||||||||||||
| Nine Months Ended September 30, 2023 | ||||||||||||||||||||
| Forward starting interest rate swaps | $ | 51.9 | Interest income (expense), net | $ | (4.3) | |||||||||||||||
| Foreign currency forwards | 0.3 | Cost of goods sold | 3.8 | |||||||||||||||||
| Other non-operating income (expense), net | (0.8) | |||||||||||||||||||
| Total | $ | 52.2 | $ | (1.3) |
The Pretax Effect of Net Investment Hedge Accounting on Other Comprehensive Income (Loss), Accumulated Other Comprehensive Income (Loss) and Income (Loss) (in millions):
| Net investment hedge relationships | Amount of gain (loss) recognized in OCI | Location of gain (loss) recognized in income (amount excluded from effectiveness testing) | Amount of gain (loss) recognized in income (amount excluded from effectiveness testing) (1) | |||||||||||||||||
| Three Months Ended September 30, 2024 | ||||||||||||||||||||
| EUR 800 million 3.8% senior notes due June 2032 | $ | (33.6) | Other non-operating income (expense), net | $ | — | |||||||||||||||
| Three Months Ended September 30, 2023 | ||||||||||||||||||||
| EUR 800 million 1.25% senior notes due July 2024 | $ | 27.0 | Other non-operating income (expense), net | $ | — | |||||||||||||||
| Net investment hedge relationships | Amount of gain (loss) recognized in OCI | Location of gain (loss) recognized in income (amount excluded from effectiveness testing) | Amount of gain (loss) recognized in income (amount excluded from effectiveness testing)****(1) | |||||||||||||||||
| Nine Months Ended September 30, 2024 | ||||||||||||||||||||
| EUR 800 million 1.25% senior notes due July 2024 | $ | 14.5 | Other non-operating income (expense), net | $ | — | |||||||||||||||
| EUR 800 million 3.8% senior notes due June 2032 | (22.1) | Other non-operating income (expense), net | — | |||||||||||||||||
| Total | $ | (7.6) | $ | — | ||||||||||||||||
| Nine Months Ended September 30, 2023 | ||||||||||||||||||||
| EUR 800 million 1.25% senior notes due July 2024 | $ | 10.7 | Other non-operating income (expense), net | $ | — | |||||||||||||||
(1)Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and period amortization is recorded in OCI.
The cumulative translation adjustments related to our net investment hedges remain in AOCI until the respective underlying net investment is sold or liquidated. During the three and nine months ended September 30, 2024 and September 30, 2023, respectively, we did not reclassify any amounts related to net investment hedges from AOCI into earnings.
As of September 30, 2024, we expect net losses of approximately $3 million (pretax) recorded in AOCI that will be reclassified into earnings within the next 12 months. For derivatives designated in cash flow hedge relationships, the maximum length of time over which forecasted transactions are hedged as of September 30, 2024 is approximately 3 years.
The Effect of Derivatives Not Designated as Hedging Instruments on the Unaudited Condensed Consolidated Statements of Operations (in millions):
| Derivatives not in hedging relationships | Location of gain (loss) recognized in income on derivatives | Amount of gain (loss) recognized in income on derivatives | ||||||||||||
| Three Months Ended September 30, 2024 | ||||||||||||||
| Commodity swaps | Cost of goods sold | $ | (13.1) | |||||||||||
| Three Months Ended September 30, 2023 | ||||||||||||||
| Commodity swaps | Cost of goods sold | $ | 35.6 | |||||||||||
| Foreign currency forwards | Other non-operating income (expense), net | 0.8 | ||||||||||||
| Total | $ | 36.4 |
| Derivatives not in hedging relationships | Location of gain (loss) recognized in income on derivatives | Amount of gain (loss) recognized in income on derivatives | ||||||||||||
| Nine Months Ended September 30, 2024 | ||||||||||||||
| Commodity swaps | Cost of goods sold | $ | (10.8) | |||||||||||
| Nine Months Ended September 30, 2023 | ||||||||||||||
| Commodity swaps | Cost of goods sold | $ | (44.0) | |||||||||||
| Foreign currency forwards | Other non-operating income (expense), net | 2.7 | ||||||||||||
| Total | $ | (41.3) |
9. Income Tax
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| Effective tax rate | 31 | % | 21 | % | 25 | % | 22 | % |
The higher effective tax rate for the three and nine months ended September 30, 2024, compared to the prior year, was partly due to the impact of a valuation allowance that was recorded on deferred tax assets in the third quarter of 2024 related to the divestment of certain of our U.S. craft businesses. The divestment resulted in the realization of a capital loss for U.S. tax purposes. We believe it is more likely than not that the deferred tax asset generated by the capital loss will not be recognized, and as a result, a $16.4 million valuation allowance was recorded for the year to date period. The higher effective tax rate was also due to the $45.8 million increase in the mandatorily redeemable NCI liability of CBPL to the final redemption value, which was recorded to interest expense in the third quarter of 2024 and is non-deductible for tax purposes. Finally, the higher effective tax rate for the three months ended September 30, 2024 was partly driven by a decrease in discrete tax benefit.
Our effective tax rate can be volatile and may change with, among other things, the amount and source of pretax income or loss, our ability to utilize foreign tax credits, excess tax benefits or deficiencies from share-based compensation, changes in tax laws and the movement of liabilities established pursuant to accounting guidance for uncertain tax positions as statutes of limitations expire, positions are effectively settled, or when additional information becomes available. There are proposed or pending tax law changes in various jurisdictions and other changes to regulatory environments in countries in which we do business that, if enacted, could have an impact on our effective tax rate.
Recently, intergovernmental entities such as the Organization for Economic Development ("OECD") and European Union ("EU") have proposed changes to the existing tax laws of member countries, including model rules introduced by the OECD for a new 15% global minimum tax. In December 2022, the EU member states agreed to incorporate the 15% global minimum tax into their respective domestic laws effective for fiscal years beginning on or after December 31, 2023. In addition, several non-EU countries, including Canada and the U.K., have proposed and/or adopted legislation consistent with the OECD global minimum tax framework. The global minimum tax, which is now effective in countries with enacted legislation, did not materially impact our financial or cash tax position in the three or nine months ended September 30, 2024. We continue to evaluate the impact on future periods as previously-enacting countries issue related guidance and additional countries consider adoption of the global minimum tax rules.
10. Commitments and Contingencies
Litigation and Other Disputes and Environmental
Related to litigation, other disputes and environmental issues, we have an aggregate accrued contingent liability of $72.3 million and $70.2 million as of September 30, 2024 and December 31, 2023, respectively. While we cannot predict the eventual aggregate cost for litigation, other disputes and environmental matters in which we are currently involved, we believe adequate reserves have been provided for losses that are probable and estimable. For all matters unless otherwise noted below, we believe that any reasonably possible losses in excess of the amounts accrued are immaterial to our unaudited condensed consolidated financial statements. Our litigation, other disputes and environmental issues are discussed in further detail within Part II.—Item 8. Financial Statements, Note 13, "Commitments and Contingencies" in our Annual Report and did not significantly change during the nine months ended September 30, 2024.
Other than those disclosed below, we are also involved in other disputes and legal actions arising in the ordinary course of our business. While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, other than as noted, none of these disputes or legal actions are expected to have a material impact on our business, consolidated financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters, may arise from time to time that may harm our business.
On February 12, 2018, Stone Brewing Company filed a trademark infringement lawsuit in federal court in the Southern District of California against Molson Coors Beverage Company USA LLC ("MCBC USA"), a wholly owned subsidiary of our Company, alleging that the Keystone brand had "rebranded" itself as "Stone" and was marketing itself in a manner confusingly similar to Stone Brewing Company's registered Stone trademark. In the first quarter of 2022, a jury returned a verdict in which it concluded that trademark infringement had occurred and awarded Stone Brewing Company $56.0 million in damages. After denial of post-trial motions, in the fourth quarter of 2023, MCBC USA filed a notice of appeal in the 9th Circuit Court of Appeals, which is scheduled to be heard in November 2024. As of September 30, 2024 and December 31, 2023, the Company had a recorded accrued liability of $60.1 million and $58.5 million, respectively, within other liabilities on our unaudited condensed consolidated balance sheets reflecting the best estimate of probable loss in this case based on the judgment plus associated post-judgment interest. However, it is reasonably possible that the estimate of the loss could change in the near term based on the progression of the case, including the appeals process. We will continue to monitor the status of the case and will adjust the accrual in the period in which any significant change occurs which could impact the estimate of the loss for this matter.
Regulatory Contingencies
The Province of Ontario and Molson Canada 2005, a wholly owned indirect subsidiary of our Company, Labatt Brewing Company Limited, Sleeman Breweries Ltd. (collectively, the "Representative Owners") and BRI, operating under the name The Beer Store ("TBS"), are parties to a Master Framework Agreement ("MFA") that dictates the terms of the beer distribution and retail systems in the Province of Ontario. In December 2023, the Province of Ontario notified the Representative Owners and TBS that it would not be renewing the MFA after the initial term which expires on December 31, 2025. The Province of Ontario simultaneously announced a set of non-binding key principles ("Key Principles") agreed upon between the Province of Ontario, the Representative Owners and TBS, concerning the intended features of the future marketplace for beer distribution and retail systems in the Province of Ontario. Under the Key Principles, TBS will be permitted to continue its retail operations and will continue to be the primary distributor of beer in the Province of Ontario through at least 2031. The Key Principles also state grocery stores, convenience stores, gas stations and big-box retailers in the Province of Ontario will be able to apply for licenses to sell beer, wine, cider and ready-to-drink cocktails starting no later than January 1, 2026. On May 23, 2024, the Representative Owners, TBS and the Province of Ontario (collectively, the "Parties") entered into an Early Implementation Agreement ("EIA") which aligns to the Key Principles that were derived in December of 2023 and replaces the MFA agreement. The EIA was effective August 1, 2024 with provisions continuing until December 31, 2030. In summary, the EIA allows for the expansion of the licensed sale of beer, wine and ready-to-drink cocktails to all convenience stores which began on September 5, 2024 and all grocery stores which began on October 31, 2024. In addition, under the EIA, the Province of Ontario will provide financial support to TBS and the representative owners of up to CAD 225 million through reimbursement of costs incurred in connection with the early implementation and to TBS in connection with the operation of the agreed upon retail footprint during the interim period between the commencement date of the EIA and the original expiration date of the MFA. We continue to evaluate the impacts of the EIA and the expected future marketplace for beer distribution and retail systems in the Province of Ontario on our results of operations.
Guarantees and Indemnities
We guarantee indebtedness and other obligations to banks and other third parties for some of our equity method investments and consolidated subsidiaries. As of September 30, 2024 and December 31, 2023, the unaudited condensed consolidated balance sheets include liabilities related to these guarantees of $34.7 million and $36.9 million, respectively.
Separately, related to our Cervejarias Kaiser Brasil S.A. ("Kaiser") indemnities, we accrued $10.5 million and $11.8 million, in aggregate, as of September 30, 2024 and December 31, 2023 respectively. Our Kaiser liabilities are discussed in further detail within Part II.—Item 8. Financial Statements, Note 13, "Commitments and Contingencies" in our Annual Report and did not significantly change during the nine months ended September 30, 2024.
11. Accumulated Other Comprehensive Income (Loss)
| MCBC stockholders' equity | |||||||||||||||||||||||||||||
| Foreign currency translation adjustments | Gain (loss) on derivative instruments | Pension and postretirement benefit adjustments | Equity method investments | Accumulated other comprehensive income (loss) | |||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| As of December 31, 2023 | $ | (778.0) | $ | 30.6 | $ | (352.7) | $ | (16.2) | $ | (1,116.3) | |||||||||||||||||||
| Foreign currency translation adjustments | (15.4) | — | — | — | (15.4) | ||||||||||||||||||||||||
| Cumulative translation adjustment reclassified from noncontrolling interest to accumulated other comprehensive income (loss)(1) | (3.5) | — | — | — | (3.5) | ||||||||||||||||||||||||
| Gain (loss) recognized on net investment hedges | (7.6) | — | — | — | (7.6) | ||||||||||||||||||||||||
| Unrealized gain (loss) recognized on derivative instruments | — | 1.6 | — | — | 1.6 | ||||||||||||||||||||||||
| Net change in pension and other postretirement benefit assets and liabilities recognized in other comprehensive income (loss)(2) | — | — | 19.5 | — | 19.5 | ||||||||||||||||||||||||
| Pension and other postretirement activity reclassified from other comprehensive income (loss)(3) | — | — | 26.8 | — | 26.8 | ||||||||||||||||||||||||
| Ownership share of unconsolidated subsidiaries' other comprehensive income (loss) | — | — | — | 0.5 | 0.5 | ||||||||||||||||||||||||
| Tax benefit (expense) | — | (0.3) | (12.2) | (0.2) | (12.7) | ||||||||||||||||||||||||
| As of September 30, 2024 | $ | (804.5) | $ | 31.9 | $ | (318.6) | $ | (15.9) | $ | (1,107.1) |
(1)Our partner in the CBPL U.K. partnership agreement exercised a put option in March 2024 which triggered the NCI to become mandatorily redeemable and require reclassification to accounts payable and other current liabilities in the unaudited condensed consolidated balance sheets. The cumulative translation adjustment recorded on the mandatorily redeemable NCI was reclassified to AOCI. See further discussion of this transaction in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies."
(2)On September 26, 2024, we purchased annuity contracts for two of our Canadian pension plans which transferred pension plan liabilities, along with the associated administration of benefits, to an insurance company using the plan's respective pension plan assets. As a result, on September 30, 2024, we remeasured both pension plans and recorded the offset to AOCI.
(3)In connection with the purchase of annuity contracts for two of our Canadian pension plans as described above, we recorded a total settlement loss of $34.0 million.
12. Other Operating Income (Expense), net
We have recorded incurred charges or realized benefits that we believe are significant to our current operating results warranting separate classification in other operating income (expense), net.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Restructuring(1) | |||||||||||||||||||||||
| Employee-related charges | $ | (2.2) | $ | (1.6) | $ | (1.1) | $ | (1.9) | |||||||||||||||
| Asset abandonment and other restructuring costs | (21.9) | 0.1 | (21.9) | 0.1 | |||||||||||||||||||
| Intangible and tangible asset impairments, excluding goodwill | — | (0.1) | — | (0.1) | |||||||||||||||||||
| Gains (losses) on disposals and other(1)(2) | (41.7) | (11.1) | (36.4) | (11.1) | |||||||||||||||||||
| Other operating income (expense), net | $ | (65.8) | $ | (12.7) | $ | (59.4) | $ | (13.0) |
(1)During the three months ended September 30, 2024, we made the decision to wind down or sell certain of our U.S. craft businesses and related facilities and recorded employee-related and asset abandonment charges, including accelerated depreciation in excess of normal depreciation. We recognized a loss of $41.1 million related to the disposal of the sold businesses. We expect to continue to incur incremental restructuring charges during the fourth quarter of 2024 and the first quarter of 2025 through completion of wind down and closure of certain remaining U.S. craft facilities. Remaining charges are estimated to total approximately $95 million to $115 million, consisting primarily of accelerated depreciation charges.
(2)During the three months ended September 30, 2023, we sold our 57.5% controlling interest in Truss LP ("Truss") in Canada to Tilray Brands and recognized a loss of $11.1 million upon deconsolidation of the business.
13. Segment Reporting
Our reporting segments are based on the key geographic regions in which we operate and include the Americas and EMEA&APAC segments. Our Americas segment operates in the U.S., Canada and various countries in the Caribbean, Latin and South America and our EMEA&APAC segment operates in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K., various other European countries and certain countries within the Middle East, Africa and Asia Pacific.
We also have certain activity that is not allocated to our segments, which has been reflected as "Unallocated" below. Specifically, Unallocated primarily includes certain financing-related activities such as interest expense and interest income, foreign exchange gains and losses on intercompany balances, realized and unrealized changes in fair value on derivative instruments not designated in hedging relationships related to financing and other treasury-related activities and the unrealized changes in fair value on our commodity swaps not designated in hedging relationships recorded within cost of goods sold, which are later reclassified when realized to the segment in which the underlying exposure resides. Additionally, only the service cost component of net periodic pension and OPEB cost is reported within each operating segment and all other components remain in Unallocated.
Summarized Financial Information
No single customer accounted for more than 10% of our consolidated net sales for the three and nine months ended September 30, 2024 and September 30, 2023.
Consolidated net sales represent sales to third-party external customers less excise taxes. Inter-segment transactions impacting net sales and income (loss) before income taxes eliminate upon consolidation and are primarily related to the Americas segment royalties received from, and sales to the EMEA&APAC segment.
The following tables present net sales and income (loss) before income taxes by segment:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Americas | $ | 2,345.0 | $ | 2,633.4 | $ | 7,066.3 | $ | 7,194.1 | |||||||||||||||
| EMEA&APAC | 704.4 | 670.4 | 1,842.4 | 1,729.5 | |||||||||||||||||||
| Inter-segment net sales eliminations | (6.7) | (5.4) | (17.3) | (12.3) | |||||||||||||||||||
| Consolidated net sales | $ | 3,042.7 | $ | 3,298.4 | $ | 8,891.4 | $ | 8,911.3 |
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Americas | $ | 353.8 | $ | 483.5 | $ | 1,161.5 | $ | 1,204.2 | |||||||||||||||
| EMEA&APAC | 51.6 | 67.5 | 121.8 | 106.3 | |||||||||||||||||||
| Unallocated | (74.0) | (7.0) | (126.6) | (223.5) | |||||||||||||||||||
| Consolidated income (loss) before income taxes | $ | 331.4 | $ | 544.0 | $ | 1,156.7 | $ | 1,087.0 |
The following table presents total assets by segment:
| As of | |||||||||||
| September 30, 2024 | December 31, 2023 | ||||||||||
| (In millions) | |||||||||||
| Americas | $ | 22,815.1 | $ | 22,753.8 | |||||||
| EMEA&APAC | 3,820.2 | 3,621.3 | |||||||||
| Consolidated total assets | $ | 26,635.3 | $ | 26,375.1 |
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