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

Overview

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

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") in this Quarterly Report on Form 10-Q is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 ("Annual Report"), as well as our unaudited condensed consolidated financial statements and the accompanying notes included in this report. Due to the seasonality of our operating results, quarterly financial results are not necessarily indicative of the results that may be achieved for the full year or any other future period.

Unless otherwise noted in this report, any description of "we," "us" or "our" includes Molson Coors Beverage Company ("MCBC" or the "Company"), principally a holding company, and its operating and non-operating subsidiaries included within its reporting segments. Our reporting segments include Americas and EMEA&APAC. Our Americas segment operates in the U.S., Canada and various countries in Latin 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.

Global Market Conditions and Competitive Trends

Our industry is experiencing and, we expect will continue to experience, increased consumer and economic uncertainty due to volatility in the global macroeconomic environment including global trade policies and other geopolitical events with potential resulting impacts on economic growth, consumer confidence, inflation and currencies. In addition, the associated impacts of the macroeconomic environment on the beer industry in the U.S. have resulted in heightened competitive activity and associated reduction in market share of our products in certain segments. The magnitude of the resulting impacts on our business are dependent on the evolution of the global macroeconomic environment and the competitive landscape, including whether share losses are sustained. The economic and competitive pressures, including the impact of tariffs, on our Company and our consumers' consumption behavior and preferences have and may continue to negatively impact our results of operations during this volatile period. For example, recent tariff announcements in the U.S. have indirectly caused the price of the premium on aluminum in the U.S., known as the Midwest Premium, to spike which has had a negative impact and is expected to continue to have a negative impact on our results of operations. While our hedging program can help mitigate some of the volatility, the opaque pricing and limited liquidity of the Midwest Premium can make hedging this exposure costly. Therefore, the Midwest Premium is one of the commodities for which we currently have the least amount of hedged coverage. In addition to impacting the prices of raw materials, a constant or periodic change in the Midwest Premium may decrease our profit margins or impact our end consumers as we may pass on the increased costs to our consumers. We plan to continue to evaluate and implement strategies which are designed to help mitigate the impact on our business, consolidated results of operations and financial condition while continuing to support our long-term strategic growth and capital allocation priorities.

Items Affecting the Americas Segment Results of Operations

Fevertree Transactions

During the first quarter of 2025, we obtained exclusive rights via a license agreement to produce, market and sell Fever-Tree products in the U.S. In connection with this agreement, we acquired the shares of the Fevertree USA, Inc. entity, with the immaterial acquisition accounted for as a business combination and consideration allocated primarily to working capital balances. The acquisition is aligned with our strategy to expand beyond the beer aisle as Fever-Tree is the world's leading supplier of premium carbonated mixers.

Consolidated Results of Operations

The following table highlights summarized components of our unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and June 30, 2024. See Part I.—Item 1. Financial Statements for additional details of our U.S. GAAP results.

			Three Months Ended																		Six Months Ended
			June 30, 2025						June 30, 2024						% change						June 30, 2025						June 30, 2024						% change
			(In millions, except percentages and per share data)
Net sales			$	3,200.8					$	3,252.3					(1.6)		%				$	5,504.9					$	5,848.7					(5.9)		%
Cost of goods sold			(1,918.9)						(1,922.4)						(0.2)		%				(3,372.1)						(3,555.3)						(5.2)		%
Gross profit			1,281.9						1,329.9						(3.6)		%				2,132.8						2,293.4						(7.0)		%
Marketing, general and administrative expenses			(693.1)						(728.5)						(4.9)		%				(1,346.3)						(1,383.1)						(2.7)		%
Other operating income (expense), net			(9.2)						0.1						N/M						(25.1)						6.4						N/M
Equity income (loss)			4.0						(1.9)						N/M						8.5						(2.8)						N/M
Operating income (loss)			583.6						599.6						(2.7)		%				769.9						913.9						(15.8)		%
Total non-operating income (expense), net			(28.7)						(39.7)						(27.7)		%				(58.7)						(88.6)						(33.7)		%
Income (loss) before income taxes			554.9						559.9						(0.9)		%				711.2						825.3						(13.8)		%
Income tax benefit (expense)			(130.6)						(134.6)						(3.0)		%				(163.8)						(190.1)						(13.8)		%
Net income (loss)			424.3						425.3						(0.2)		%				547.4						635.2						(13.8)		%
Net (income) loss attributable to noncontrolling interests			4.4						1.7						158.8		%				2.3						(0.4)						N/M
Net income (loss) attributable to MCBC			$	428.7					$	427.0					0.4		%				$	549.7					$	634.8					(13.4)		%
Net income (loss) attributable to MCBC per diluted share			$	2.13					$	2.03					4.9		%				$	2.71					$	2.99					(9.4)		%
Financial volume in hectoliters			20.870						22.430						(7.0)		%				36.279						40.404						(10.2)		%

N/M = Not meaningful

Foreign currency impacts on results

For the three months ended June 30, 2025, foreign currency movements had the following impacts on our USD consolidated results:

• Net sales - Favorable impact of $32.8 million (Favorable impact for EMEA&APAC of $36.3 million, partially offset by the unfavorable impact for Americas of $3.5 million).

• Cost of goods sold - Unfavorable impact of $21.3 million (Unfavorable impact for EMEA&APAC of $23.7 million, partially offset by the favorable impact for Americas of $2.4 million).

• MG&A - Unfavorable impact of $7.3 million (Unfavorable impact for EMEA&APAC of $8.3 million, partially offset by the favorable impact for Americas of $1.0 million).

• Income (loss) before income taxes - Favorable impact of $3.9 million (Favorable impact for EMEA&APAC and Americas of $5.4 million and $0.5 million, respectively, partially offset by the unfavorable impact for Unallocated of $2.0 million).

The impacts of foreign currency movements on our consolidated USD results described above for the three months ended June 30, 2025, were primarily due to the weakening of the USD compared to the GBP and EUR, partially offset by the strengthening of the USD compared to the CAD.

For the six months ended June 30, 2025, foreign currency movements had the following impacts on our USD consolidated results:

• Net sales - Favorable impact of $11.7 million (Favorable impact for EMEA&APAC of $31.1 million, partially offset by the unfavorable impact for Americas of $19.4 million).

• Cost of goods sold - Unfavorable impact of $7.2 million (Unfavorable impact for EMEA&APAC and Unallocated of $19.5 million and $0.2 million, respectively, partially offset by the favorable impact for Americas of $12.5 million).

• MG&A - Favorable impact of $1.4 million (Favorable impact for Americas of $7.1 million, partially offset by the unfavorable impact of EMEA&APAC of $5.7 million).

• Income (loss) before income taxes - Favorable impact of $4.1 million (Favorable impact for EMEA&APAC and Americas of $7.4 million and $0.3 million, respectively, partially offset by the unfavorable impact for Unallocated of $3.6 million).

The impacts of foreign currency movements on our consolidated USD results described above for the six months ended June 30, 2025, were primarily due to the weakening of the USD compared to the GBP and EUR, partially offset by the strengthening of the USD compared to the CAD.

Included in these amounts are both translational and transactional impacts of changes in foreign exchange rates. We calculate the impact of foreign exchange by translating our current period local currency results at the average exchange rates used to translate the financial statements in the comparable prior year period during the respective period throughout the year and comparing that amount with the reported amount for the period. The impact of transactional foreign currency gains and losses is recorded within other non-operating income (expense), net in our unaudited condensed consolidated statements of operations.

Volume

Financial volume represents owned or actively managed brands sold to unrelated external customers within our geographic markets (net of returns and allowances), as well as contract brewing, factored non-owned volume and company-owned distribution volume. This metric is presented on a sales-to-wholesalers basis to reflect the sales from our operations to our direct customers, generally distributors. We believe this metric is important and useful for investors and management because it gives an indication of the amount of beer and adjacent products that we have produced and shipped to customers. This metric excludes royalty volume, which consists of our brands produced and sold under various license and contract brewing agreements. Factored volume in our EMEA&APAC segment represents the distribution of beer, wine, spirits and other products owned and produced by other companies to the on-premise channel, which is a common arrangement in the U.K.

Net Sales

We utilize net sales per hectoliter, as well as the year over year changes in this metric, as a key metric for analyzing our results. This metric is calculated as net sales per our unaudited condensed consolidated statements of operations divided by financial volume for the respective period. We believe this metric is important and useful for investors and management because it provides an indication of the trends of sales mix and other impacts on our net sales.

The following table highlights the drivers of the change in net sales for the three months ended June 30, 2025, compared to June 30, 2024 (in percentages):

			Financial Volume						Price and Sales Mix						Currency												Total
Consolidated net sales			(7.0)		%				4.4		%				1.0		%										(1.6)		%

Net sales decreased 1.6% for the three months ended June 30, 2025, compared to prior year, driven by lower financial volumes, partially offset by favorable price and sales mix and favorable foreign currency impacts.

Financial volumes decreased 7.0% for the three months ended June 30, 2025, compared to prior year, primarily due to lower shipments in both the Americas and EMEA&APAC segments as described in further detail in the "Segment Results of Operations" section below.

Price and sales mix favorably impacted net sales by 4.4% for the three months ended June 30, 2025, primarily due to favorable sales mix and increased net pricing in both segments. Americas favorable sales mix was primarily driven by lower contract brewing volume. Net sales per hectoliter increased 5.8% on a reported basis.

The following table highlights the drivers of the change in net sales for the six months ended June 30, 2025, compared to June 30, 2024 (in percentages):

			Financial Volume						Price and Sales Mix						Currency												Total
Consolidated net sales			(10.2)		%				4.1		%				0.2		%										(5.9)		%

Net sales decreased 5.9% for the six months ended June 30, 2025, compared to prior year, driven by lower financial volume, partially offset by favorable price and sales mix and favorable foreign currency impacts.

Financial volumes decreased 10.2% for the six months ended June 30, 2025, compared to prior year, primarily due to lower shipments in both the Americas and EMEA&APAC segments as described in further detail in the "Segment Results of Operations" section below.

Price and sales mix favorably impacted net sales by 4.1% for the six months ended June 30, 2025, primarily due to favorable sales mix and increased net pricing in both segments. Americas favorable sales mix was primarily driven by lower contract brewing volume. Net sales per hectoliter increased 4.8% on a reported basis.

Discussions of currency impacts on net sales for the three and six months ended June 30, 2025 are included in the "Foreign currency impacts on results" section above.

Cost of goods sold

We utilize cost of goods sold per hectoliter, as well as the year over year changes in this metric, as a key metric for analyzing our results. This metric is calculated as cost of goods sold per our unaudited condensed consolidated statements of operations divided by financial volume for the respective period. We believe this metric is important and useful for investors and management because it provides an indication of the trends of sales mix and other cost impacts on our cost of goods sold.

Cost of goods sold decreased 0.2% for the three months ended June 30, 2025, compared to prior year, primarily due to lower financial volumes, partially offset by higher cost of goods sold per hectoliter and unfavorable foreign currency impacts of $21.3 million. Cost of goods sold per hectoliter increased 7.3% for the three months ended June 30, 2025, compared to prior year, primarily due to unfavorable mix driven by lower contract brewing volumes in the Americas segment and premiumization, volume deleverage, cost inflation related to materials and manufacturing expenses as well as unfavorable changes in our unrealized mark-to-market commodity derivative positions, partially offset by cost savings initiatives.

Cost of goods sold decreased 5.2% for the six months ended June 30, 2025, compared to prior year, primarily due to lower financial volumes, partially offset by higher cost of goods sold per hectoliter and unfavorable foreign currency impacts of $7.2 million. Cost of goods sold per hectoliter increased 5.6% for the six months ended June 30, 2025, compared to prior year, primarily due to volume deleverage, unfavorable mix driven by lower contract brewing volumes in the Americas segment and premiumization as well as cost inflation related to materials and manufacturing expense, partially offset by cost savings initiatives.

Discussions of currency impacts on cost of goods sold for the three and six months ended June 30, 2025 are included in the "Foreign currency impacts on results" section above.

Marketing, general and administrative expenses

MG&A expenses decreased 4.9% for the three months ended June 30, 2025, compared to prior year, primarily due to timing of marketing investment and lower general and administrative expenses as a result of lower incentive compensation expense, partially offset by unfavorable foreign currency impacts of $7.3 million.

MG&A expenses decreased 2.7% for the six months ended June 30, 2025, compared to prior year, primarily due to timing of marketing investment and lower general and administrative expenses. Lower general and administrative expenses were primarily driven by lower incentive compensation expense, partially offset by approximately $30 million of integration and transition fees from the Fevertree USA, Inc. acquisition which will be recoverable through net sales over the next 3 years.

Discussions of currency impacts on MG&A expenses for the three and six months ended June 30, 2025 are included in the "Foreign currency impacts on results" section above.

Other operating income (expense), net

See Part I.—Item 1. Financial Statements, Note 12, "Other Operating Income (Expense), net" for detail of our other operating income (expense), net.

Total non-operating income (expense), net

Total non-operating expense, net improved 27.7% for the three months ended June 30, 2025, compared to prior year, primarily due to the favorable unrealized fair value adjustment of the investment in Fevertree Drinks plc, partially offset by lower pension and OPEB non-service benefit, higher interest expense as a result of the issuance of EUR 800 million 3.8% senior notes in the second quarter of 2024 and lower interest income.

Total non-operating expense, net improved 33.7% for the six months ended June 30, 2025, compared to prior year, primarily due to the favorable unrealized fair value adjustment of the investment in Fevertree Drinks plc, partially offset by higher interest expense as a result of the issuance of EUR 800 million 3.8% senior notes in the second quarter of 2024, lower pension and OPEB non-service benefit and lower interest income.

Income tax benefit (expense)

			Three Months Ended												Six Months Ended
			June 30, 2025						June 30, 2024						June 30, 2025						June 30, 2024
Effective tax rate			24		%				24		%				23		%				23		%

The effective tax rate for the three and six months ended June 30, 2025, was relatively flat compared to prior year.

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.

On July 4, 2025, the OBBBA was enacted into law in the U.S. The OBBBA permanently extends certain expiring provisions from the Tax Cuts and Jobs Act of 2017, including accelerated tax recovery for certain capital investments and research and development expenditures and the business interest expense limitation. Additionally, the OBBBA includes changes to the taxation of foreign income for U.S.-domiciled businesses. While we are currently evaluating the impact of the OBBBA to the Company, we do anticipate a decrease in our current year cash tax liability as a result of the OBBBA.

Refer to Part I.—Item 1. Financial Statements, Note 9, "Income Tax" for discussion regarding our effective tax rate.

Segment Results of Operations

Americas Segment

			Three Months Ended																		Six Months Ended
			June 30, 2025						June 30, 2024						% change						June 30, 2025						June 30, 2024						% change
			(In millions, except percentages)
Net sales(1)			$	2,504.8					$	2,575.9					(2.8)		%				$	4,386.6					$	4,721.3					(7.1)		%
Income (loss) before income taxes			$	538.2					$	487.1					10.5		%				$	747.5					$	807.7					(7.5)		%
Financial volume in hectoliters(1)(2)			15.307						16.396						(6.6)		%				27.049						30.306						(10.7)		%

(1)Includes gross inter-segment sales and volumes which are eliminated in the consolidated totals.

(2)Excludes royalty volume of 0.693 million hectoliters and 1.366 million hectoliters for the three and six months ended June 30, 2025, respectively, and excludes royalty volume of 0.578 million hectoliters and 1.169 million hectoliters for the three and six months ended June 30, 2024, respectively.

Net sales

The following table highlights the drivers of the change in net sales for the three months ended June 30, 2025, compared to June 30, 2024 (in percentages):

			Financial Volume						Price and Sales Mix						Currency												Total
Americas net sales			(6.6)		%				4.0		%				(0.2)		%										(2.8)		%

Net sales decreased 2.8% for the three months ended June 30, 2025, compared to prior year, driven by lower financial volumes and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.

Financial volumes decreased 6.6% for the three months ended June 30, 2025, compared to prior year, primarily due to lower U.S. volume impacted by the macroeconomic environment resulting in industry softness as well as lower share performance and an approximate 3% impact from lower contract brewing volume related to the exit of contract brewing arrangements in both the U.S. and Canada at the end of 2024, partially offset by favorable timing of U.S. shipments.

Price and sales mix favorably impacted net sales by 4.0% for the three months ended June 30, 2025, compared to prior year, primarily due to favorable sales mix as a result of lower contract brewing volumes and positive brand mix as well as increased net pricing. Net sales per hectoliter increased 4.2% on a reported basis.

The following table highlights the drivers of the change in net sales for the six months ended June 30, 2025, compared to June 30, 2024 (in percentages):

			Financial Volume						Price and Sales Mix						Currency												Total
Americas net sales			(10.7)		%				4.0		%				(0.4)		%										(7.1)		%

Net sales decreased 7.1% for the six months ended June 30, 2025, compared to prior year, driven by lower financial volumes and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.

Financial volumes decreased 10.7% for the six months ended June 30, 2025, compared to prior year, primarily due to lower U.S. volume impacted by the macroeconomic environment resulting in industry softness as well as lower share performance and an approximate 4% impact from lower contract brewing volume related to the exit of contract brewing arrangements in both the U.S. and Canada at the end of 2024.

Price and sales mix favorably impacted net sales by 4.0% for the six months ended June 30, 2025, compared to prior year, primarily due to favorable sales mix as a result of lower contract brewing volumes and positive brand mix as well as increased net pricing. Net sales per hectoliter increased 4.1% on a reported basis.

Discussions of currency impacts on net sales for the three and six months ended June 30, 2025 are included in the "Foreign currency impacts on results" section above.

Income (loss) before income taxes

Income before income taxes improved 10.5% for the three months ended June 30, 2025, compared to prior year, primarily due to favorable mix, increased net pricing, lower MG&A expense, favorable unrealized fair value adjustment of the investment in Fevertree Drinks plc and cost savings initiatives, partially offset by lower financial volumes and cost inflation related to materials and manufacturing expenses. Lower MG&A spend was primarily due to timing of marketing investment and lower incentive compensation.

Income before income taxes declined 7.5% for the six months ended June 30, 2025, compared to prior year, primarily due to lower financial volumes, cost inflation related to materials and manufacturing expenses and approximately $30 million of integration and transition fees from the Fevertree USA, Inc. acquisition which will be recoverable through net sales over the next 3 years, partially offset by favorable mix, increased net pricing, favorable unrealized fair value adjustment of the investment in Fevertree Drinks plc, cost savings initiatives, timing of marketing investment and lower incentive compensation.

Discussions of currency impacts on income (loss) before income taxes for the three and six months ended June 30, 2025, are included in the "Foreign currency impacts on results" section above.

EMEA&APAC Segment

			Three Months Ended																		Six Months Ended
			June 30, 2025						June 30, 2024						% change						June 30, 2025						June 30, 2024						% change
			(In millions, except percentages)
Net sales(1)			$	703.9					$	683.3					3.0		%				$	1,131.2					$	1,138.0					(0.6)		%
Income (loss) before income taxes			$	64.8					$	81.2					(20.2)		%				$	45.6					$	70.2					(35.0)		%
Financial volume in hectoliters(1)(2)			5.564						6.037						(7.8)		%				9.233						10.101						(8.6)		%

(1)Includes gross inter-segment sales and volumes which are eliminated in the consolidated totals.

(2)Excludes royalty volume of 0.336 million hectoliters and 0.556 million hectoliters for the three and six months ended June 30, 2025, respectively, and excludes royalty volume of 0.325 million hectoliters and 0.543 million hectoliters for the three and six months ended June 30, 2024, respectively.

Net sales

The following table highlights the drivers of the change in net sales for the three months ended June 30, 2025, compared to June 30, 2024 (in percentages):

			Financial Volume						Price and Sales Mix						Currency												Total
EMEA&APAC net sales			(7.8)		%				5.5		%				5.3		%										3.0		%

Net sales increased 3.0% for the three months ended June 30, 2025, compared to prior year, driven by favorable price and sales mix and favorable foreign currency impacts, partially offset by lower financial volumes.

Financial volumes decreased 7.8% for the three months ended June 30, 2025, compared to prior year, primarily due to lower volumes across all regions driven by soft market demand and a heightened competitive landscape.

Price and sales mix favorably impacted net sales by 5.5% for the three months ended June 30, 2025, compared to prior year, primarily due to geographic mix, premiumization and higher factored brand volumes, as well as increased net pricing. Net sales per hectoliter increased 11.8% on a reported basis.

The following table highlights the drivers of the change in net sales for the six months ended June 30, 2025, compared to June 30, 2024 (in percentages):

			Financial Volume						Price and Sales Mix						Currency												Total
EMEA&APAC net sales			(8.6)		%				5.3		%				2.7		%										(0.6)		%

Net sales decreased 0.6% for the six months ended June 30, 2025, compared to prior year, driven by lower financial volumes, partially offset by favorable price and sales mix as well as favorable foreign currency impacts.

Financial volumes decreased 8.6% for the six months ended June 30, 2025, compared to prior year, primarily due to lower volumes across all regions driven by soft market demand and heightened competitive landscape.

Price and sales mix favorably impacted net sales for the six months ended June 30, 2025, compared to prior year, by 5.3%, primarily due to geographic mix, premiumization and higher factored brand volumes, as well as increased net pricing. Net sales per hectoliter increased 8.8% on a reported basis.

Discussions of currency impacts on net sales for the three and six months ended June 30, 2025, are included in the "Foreign currency impacts on results" section above.

Income (loss) before income taxes

Income before income taxes declined 20.2% for the three months ended June 30, 2025, compared to prior year, primarily due to lower financial volumes and higher U.K. waste management fees as a result of the change in extended producer responsibility regulations, partially offset by lower MG&A expense driven by lower incentive compensation and cost savings, increased net pricing and favorable mix, as well as favorable foreign currency impacts of $5.4 million.

Income before income taxes declined 35.0% for the six months ended June 30, 2025, compared to prior year, primarily due to lower financial volumes and higher U.K. waste management fees as a result of the change in the extended producer responsibility regulations, partially offset by lower MG&A expense driven by lower incentive compensation and cost savings, increased net pricing and favorable mix, as well as favorable foreign currency impacts of $7.4 million.

Discussions of currency impacts on income (loss) before income taxes for the three and six months ended June 30, 2025, are included in the "Foreign currency impacts on results" section above.

Unallocated Segment

We have certain activity that is not allocated to our segments, which has been reflected as Unallocated below. Specifically, Unallocated primarily includes certain financing-related activities such as interest expense and interest income as well as foreign exchange gains and losses on intercompany balances. Unallocated activity also includes the unrealized changes in fair value on our commodity swaps not designated in hedging relationships recorded within cost of goods sold, which are later reclassified when realized to the segment in which the underlying exposure resides. Additionally, only the service cost component of net periodic pension and OPEB cost is reported within each operating segment meanwhile all other components remain in Unallocated.

			Three Months Ended																		Six Months Ended
			June 30, 2025						June 30, 2024						% change						June 30, 2025						June 30, 2024						% change
			(In millions, except percentages)
Cost of goods sold			$	7.0					$	28.3					(75.3)		%				$	25.7					$	28.8					(10.8)		%
Gross profit (loss)			7.0						28.3						(75.3)		%				25.7						28.8						(10.8)		%
Operating income (loss)			7.0						28.3						(75.3)		%				25.7						28.8						(10.8)		%
Total non-operating income (expense), net			(55.1)						(36.7)						50.1		%				(107.6)						(81.4)						32.2		%
Income (loss) before income taxes			$	(48.1)					$	(8.4)					472.6		%				$	(81.9)					$	(52.6)					55.7		%

Cost of goods sold

The unrealized changes in fair value on our commodity derivatives, which are economic hedges, make up substantially all of the activity presented within cost of goods sold in the table above for the three and six months ended June 30, 2025 and June 30, 2024. As the exposure we are managing is realized, we reclassify the gain or loss on our commodity derivatives to the segment in which the underlying exposure resides, allowing our segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility. See Part I.—Item 1. Financial Statements, Note 8, "Derivative Instruments and Hedging Activities" for further information.

Total non-operating income (expense), net

Total non-operating expense, net increased 50.1% for the three months ended June 30, 2025, compared to prior year, primarily due to unfavorable foreign currency transactional impacts, higher interest expense as a result of the issuance of EUR 800 million 3.8% senior notes in the second quarter of 2024, lower pension and OPEB non-service benefit and lower interest income.

Total non-operating expense, net increased 32.2% for the six months ended June 30, 2025, compared to prior year, primarily due to higher interest expense as a result of the issuance of EUR 800 million 3.8% senior notes in the second quarter of 2024, lower pension and OPEB non-service benefit and lower interest income.

Liquidity and Capital Resources

Liquidity

Overview

Our primary sources of liquidity include cash provided by operating activities and access to external capital. We continue to monitor world events which may create credit or economic challenges that could adversely impact our profit or operating cash flows and our ability to obtain additional liquidity. We believe that our cash and cash equivalents, cash flows from operations and cash provided by short-term and long-term borrowings, when necessary, will be adequate to meet our ongoing operating requirements, scheduled principal and interest payments on debt, anticipated dividend payments, capital expenditures and other obligations for the twelve months subsequent to the date of the issuance of this quarterly report and our long-term liquidity requirements. We have upcoming debt maturities in 2026, as illustrated in the debt maturity schedule in the cash and cash equivalents section below. We are currently evaluating various alternatives with respect to these maturities, including the potential refinancing of all or a portion of the outstanding debt which may involve utilizing our amended and restated $2.0 billion multi-currency revolving credit facility. No final decisions have been made at this time, and the timing, structure and terms of any such transactions will depend on capital market conditions and other factors. We do not have any restrictions that prevent or limit our ability to declare or pay dividends.

While a significant portion of our cash flows from operating activities are generated within the U.S., our cash balances include cash held outside the U.S. and in currencies other than the USD. As of June 30, 2025, approximately 56% of our cash and cash equivalents were located outside the U.S., largely denominated in foreign currencies. Fluctuations in foreign currency exchange rates have had and may continue to have a material impact on these foreign cash balances. Cash balances in foreign countries are often subject to additional restrictions. We may, therefore, have difficulties repatriating cash held outside the U.S. on a timely basis and such repatriation may be subject to tax. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. and other countries and may adversely affect our liquidity. To the extent necessary, we accrue for tax consequences on the earnings of our foreign subsidiaries as they are earned. We may utilize tax planning and financing strategies in an effort to ensure that our worldwide cash is available in the locations in which it is needed. We periodically review and evaluate these plans and strategies, including externally committed and non-committed credit agreements accessible by our Company and each of our operating subsidiaries. We believe these financing arrangements, along with cash flows from operating activities within the U.S., are sufficient to fund our current cash needs in the U.S.

Cash Flows and Use of Cash

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

Cash Flows from Operating Activities

Net cash provided by operating activities of $627.6 million for the six months ended June 30, 2025, decreased $267.0 million compared to $894.6 million for the six months ended June 30, 2024. The decrease in net cash provided by operating activities was primarily due to lower net income adjusted for non-cash items, the unfavorable movement in working capital and higher interest paid, partially offset by lower income taxes paid. The unfavorable movement in working capital was primarily driven by the $60.6 million payment as final resolution of the Keystone litigation case and the timing of payables and inventories, partially offset by lower payments for prior year annual incentive compensation and the timing of receivables.

Cash Flows from Investing Activities

Net cash used in investing activities of $499.7 million for the six months ended June 30, 2025, increased $118.3 million compared to $381.4 million for the six months ended June 30, 2024. The increase in cash used in investing activities was primarily due to the investment in Fevertree Drinks Plc of $88.1 million as well as the acquisition of Fevertree USA, Inc.

Cash Flows from Financing Activities

Net cash used in financing activities was $506.2 million for the six months ended June 30, 2025, compared to net cash provided by financing activities of $285.6 million for the six months ended June 30, 2024. The change was primarily due to the prior year issuance of our EUR 800 million 3.8% senior notes due 2032, partially offset by lower Class B common stock share repurchases.

Capital Resources, including Material Cash Requirements

Cash and Cash Equivalents

As of June 30, 2025, we had total cash and cash equivalents of $613.8 million, compared to $969.3 million as of December 31, 2024 and $1,647.3 million as of June 30, 2024. The decrease in cash and cash equivalents from December 31, 2024, was primarily due to capital expenditures, Class B common stock share repurchases, dividends paid, as well as our investment in Fevertree Drinks plc and the acquisition of Fevertree USA, Inc., partially offset by net cash provided by operating activities. The decrease in cash and cash equivalents from June 30, 2024, was primarily due to net debt repayments, including the repayment of our EUR 800 million 1.25% senior notes which matured in July 2024, capital expenditures, Class B common stock share repurchases, dividends paid, a payment to acquire the noncontrolling interest in the Cobra Beer Partnership, Ltd., the investment in Fevertree Drinks plc and the acquisition of Fevertree USA, Inc., partially offset by the net cash provided by operating activities.

Based on the credit profile of our lenders that are party to our credit facilities, we are confident in our ability to draw on our revolving credit facility if the need arises. On June 26, 2025, we amended our existing $2.0 billion multi-currency revolving credit facility to extend the maturity date from June 26, 2029 to June 26, 2030. As of June 30, 2025, we had $2.0 billion available to draw on our amended and restated $2.0 billion multi-currency revolving credit facility. As of June 30, 2025, we had no borrowings drawn on this amended and restated multi-currency revolving credit facility and no commercial paper borrowings.

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

Under the terms of each of our debt facilities, we must comply with certain restrictions. These include customary events of default and specified representations, warranties and covenants, as well as covenants that restrict our ability to incur certain additional priority indebtedness (certain thresholds of secured consolidated net tangible assets), certain leverage threshold percentages, create or permit liens on assets and restrictions on mergers, acquisitions and certain types of sale lease-back transactions.

The maximum net debt to EBITDA leverage ratio, as defined by the amended and restated multi-currency revolving credit facility agreement, was 4.00x as of June 30, 2025 and December 31, 2024. As of June 30, 2025 and December 31, 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 June 30, 2025, rank pari-passu.

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

Guarantees

We guarantee indebtedness and other obligations to banks and other third parties for some of our equity method investments and consolidated subsidiaries. See Part I.—Item 1. Financial Statements, Note 3, "Investments" and Part I.—Item 1. Financial Statements, Note 10, "Commitments and Contingencies" for further discussion.

Material Cash Requirements from Contractual and Other Obligations

There were no material changes to our material cash requirements from contractual and other obligations outside the ordinary course of business or due to factors similar in nature to inflation, changing prices on operations or changes in the remaining terms of the contracts since December 31, 2024, as reported in Part II.— Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, "Material Cash Requirements from Contractual and Other Obligations" in our Annual Report.

Credit Rating

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

Guarantor Information

SEC Registered Securities

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

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

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

As of June 30, 2025, the senior notes and related guarantees ranked pari-passu with all other unsubordinated debt of the Obligor Group and senior to all future subordinated debt of the Obligor Group. The guarantees can be released upon the sale or transfer of a Subsidiary Guarantors' capital stock or substantially all of its assets, or if such Subsidiary Guarantor ceases to be a guarantor under our other outstanding debt.

See Part I.—Item 1. Financial Statements, Note 7, "Debt" for details of all debt issued and outstanding as of June 30, 2025.

The following summarized financial information relates to the Obligor Group as of June 30, 2025, on a combined basis, after elimination of intercompany transactions and balances between the Obligor Group, and excluding the investments in and equity in the earnings of any non-guarantor subsidiaries. The balances and transactions with non-guarantor subsidiaries have been separately presented.

Summarized Financial Information of Obligor Group

			Six Months Ended
			June 30, 2025
			(In millions)
Net sales, out of which:			$	4,266.1
Intercompany sales to non-guarantor subsidiaries			$	51.1
Gross profit, out of which:			$	1,699.5
Intercompany net costs from non-guarantor subsidiaries			$	(188.6)
Net interest expense, out of which:			$	(105.9)
Intercompany net interest income from non-guarantor subsidiaries			$	7.4
Income before income taxes			$	692.4
Net income			$	536.9

			As of June 30, 2025						As of December 31, 2024
			(In millions)
Total current assets, out of which:			$	1,888.2					$	1,859.8
Intercompany receivables from non-guarantor subsidiaries			$	214.2					$	191.6
Total noncurrent assets, out of which:			$	23,853.1					$	23,958.2
Noncurrent intercompany notes receivable from non-guarantor subsidiaries			$	3,502.9					$	3,833.8
Total current liabilities, out of which:			$	2,751.7					$	2,673.9
Current portion of long-term debt and short-term borrowings			$	7.4					$	7.6
Intercompany payables due to non-guarantor subsidiaries			$	828.7					$	715.6
Total noncurrent liabilities, out of which:			$	9,160.0					$	8,950.8
Long-term debt			$	6,203.8					$	6,063.6
Noncurrent intercompany notes payable due to non-guarantor subsidiaries			$	35.6					$	13.2

Capital Expenditures

We incurred $257.2 million and paid $400.6 million, for capital improvement projects worldwide for the six months ended June 30, 2025, excluding capital spending by equity method joint ventures, representing a decrease of $42.3 million from the $299.5 million of capital expenditures incurred in the six months ended June 30, 2024. We continue to prioritize our planned capital expenditures with a focus on optimizing returns on invested capital.

Contingencies

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

Off-Balance Sheet Arrangements

Refer to Part II.—Item 8. Financial Statements, Note 13, "Commitments and Contingencies" in our Annual Report for discussion of off-balance sheet arrangements. As of June 30, 2025, we did not have any other material off-balance sheet arrangements.

Critical Accounting Estimates

Our accounting policies and accounting estimates critical to our financial condition and results of operations are set forth in our Annual Report and did not change during the six months ended June 30, 2025. See Part I.—Item 1. Financial Statements, Note 2, "New Accounting Pronouncements" for discussion of any recently adopted accounting pronouncements. See also Part I.—Item 1. Financial Statements, Note 5, "Goodwill and Intangible Assets" for discussion of the results of our 2024 annual impairment testing analysis, the related risks to our indefinite-lived intangible brand assets and the goodwill amounts associated with our reporting units.

New Accounting Pronouncements Not Yet Adopted

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