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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______ .

Commission File Number: 1-14829

Molson Coors Beverage Company

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

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

111 Boulevard Robert-Bourassa, 9th Floor, Montréal, Québec, Canada

(Address of principal executive offices)

84-0178360

(I.R.S. Employer Identification No.)

80401

H3C 2M1

(Zip Code)

303-279-6565 (Colorado)

514-521-1786 (Québec)

(Registrant's telephone number, including area code)

_______________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbols	Name of each exchange on which registered
Class A Common Stock, $0.01 par value	TAP.A	New York Stock Exchange
Class B Common Stock, $0.01 par value	TAP	New York Stock Exchange
1.25% Senior Notes due 2024	TAP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ý

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of July 26, 2022:

Class A Common Stock — 2,562,506 shares

Class B Common Stock — 200,366,067 shares

Exchangeable shares:

As of July 26, 2022, the following number of exchangeable shares were outstanding for Molson Coors Canada, Inc.:

Class A Exchangeable shares — 2,717,367 shares

Class B Exchangeable shares — 11,088,665 shares

The Class A exchangeable shares and Class B exchangeable shares are shares of the share capital in Molson Coors Canada Inc., a wholly-owned subsidiary of the registrant. They are publicly traded on the Toronto Stock Exchange under the symbols TPX.A and TPX.B, respectively. These shares are intended to provide substantially the same economic and voting rights as the corresponding class of Molson Coors common stock in which they may be exchanged. In addition to the registered Class A common stock and the Class B common stock, the registrant has also issued and outstanding one share each of a Special Class A voting stock and Special Class B voting stock. The Special Class A voting stock and the Special Class B voting stock provide the mechanism for holders of Class A exchangeable shares and Class B exchangeable shares to be provided instructions to vote with the holders of the Class A common stock and the Class B common stock, respectively. The holders of the Special Class A voting stock and Special Class B voting stock are entitled to one vote for each outstanding Class A exchangeable share and Class B exchangeable share, respectively, excluding shares held by the registrant or its subsidiaries, and generally vote together with the Class A common stock and Class B common stock, respectively, on all matters on which the Class A common stock and Class B common stock are entitled to vote. The Special Class A voting stock and Special Class B voting stock are subject to a voting trust arrangement. The trustee which holds the Special Class A voting stock and the Special Class B voting stock is required to cast a number of votes equal to the number of then-outstanding Class A exchangeable shares and Class B exchangeable shares, respectively, but will only cast a number of votes equal to the number of Class A exchangeable shares and Class B exchangeable shares as to which it has received voting instructions from the owners of record of those Class A exchangeable shares and Class B exchangeable shares, other than the registrant or its subsidiaries, respectively, on the record date, and will cast the votes in accordance with such instructions so received.

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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

INDEX

		Page
Glossary of Terms and Abbreviations		3
Cautionary Statement		4
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	6
	Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Cash Flows	8
	Condensed Consolidated Statements of Stockholders' Equity and Noncontrolling Interests	9
	Notes to Unaudited Condensed Consolidated Financial Statements	11
	Note 1, "Basis of Presentation and Summary of Significant Accounting Policies"	11
	Note 2, "New Accounting Pronouncements"	12
	Note 3, "Segment Reporting"	13
	Note 4, "Investments"	14
	Note 5, "Special Items"	15
	Note 6, "Income Tax"	16
	Note 7, "Goodwill and Intangible Assets"	16
	Note 8, "Debt"	18
	Note 9, "Inventories"	19
	Note 10, "Accumulated Other Comprehensive Income (Loss)"	20
	Note 11, "Derivative Instruments and Hedging Activities"	20
	Note 12, "Commitments and Contingencies"	24
	Note 13, "Leases"	25
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
Signature		42

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Glossary of Terms and Abbreviations

AOCI	Accumulated other comprehensive income (loss)
CAD	Canadian Dollar
CZK	Czech Koruna
DBRS	A global credit rating agency in Toronto
EBITDA	Earnings before interest, tax, depreciation and amortization
EPS	Earnings per share
EUR	Euro
FASB	Financial Accounting Standards Board
GBP	British Pound
HRK	Croatian Kuna
JPY	Japanese Yen
Moody’s	Moody’s Investors Service Limited, a nationally recognized statistical rating organization designated by the SEC
OCI	Other comprehensive income (loss)
OPEB	Other postretirement benefit plans
PSUs	Performance share units
RSD	Serbian Dinar
RSUs	Restricted stock units
SEC	U.S. Securities and Exchange Commission
Standard & Poor’s	Standard and Poor’s Ratings Services, a nationally recognized statistical rating organization designated by the SEC
STRs	Sales-to-retailers
STWs	Sales-to-wholesalers
U.K.	United Kingdom
U.S.	United States
U.S. GAAP	Accounting principles generally accepted in the U.S.
USD or $	U.S. Dollar
VIEs	Variable interest entities

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Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

This Quarterly Report on Form 10-Q ("this report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). From time to time, we may also provide oral or written forward-looking statements in other materials we release to the public. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995.

Statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements, and include, but are not limited to, statements in Part I.—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in this report under the heading "Items Affecting Reported Results", with respect to expectations regarding the impact of the Montreal/Longueuil, Québec brewery and distribution centers strike on our financial results, impact of the coronavirus pandemic on our operations, liquidity, financial condition and financial results, expectations regarding future dividends, overall volume trends, consumer preferences, pricing trends, industry forces, cost reduction strategies, including our revitalization plan, expectations of cost inflation, anticipated results, expectations for funding future capital expenditures and operations, debt service capabilities, timing and amounts of debt and leverage levels, shipment levels and profitability, market share and the sufficiency of capital resources. In addition, statements that we make in this report that are not statements of historical fact may also be forward-looking statements. Words such as "expects," "intend," "goals," "plans," "believes," "continues," "may," "anticipate," "seek," "estimate," "outlook," "trends," "future benefits," "potential," "projects," "strategies," and variations of such words and similar expressions are intended to identify forward-looking statements.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those indicated (both favorably and unfavorably). These risks and uncertainties include, but are not limited to, those described in Part II.— Item IA. "Risk Factors" in this report and those described from time to time in our past and future reports filed with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2021 ("Annual Report"). Caution should be taken not to place undue reliance on any such forward-looking statements. Forward-looking statements speak only as of the date when made and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Market and Industry Data

The market and industry data used in this report are based on independent industry publications, customers, trade or business organizations, reports by market research firms and other published statistical information from third parties (collectively, the “Third Party Information”), as well as information based on management’s good faith estimates, which we derive from our review of internal information and independent sources. Such Third Party Information generally states that the information contained therein or provided by such sources has been obtained from sources believed to be reliable.

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PART I. FINANCIAL INFORMATION

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				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Sales	$	3,501.4	$	3,564.0	$	6,144.7	$	5,820.1
Excise taxes	(579.7)		(624.6)		(1,008.4)		(982.3)
Net sales	2,921.7		2,939.4		5,136.3		4,837.8
Cost of goods sold	(2,101.7)		(1,667.9)		(3,388.5)		(2,835.3)
Gross profit	820.0		1,271.5		1,747.8		2,002.5
Marketing, general and administrative expenses	(707.6)		(681.7)		(1,383.3)		(1,224.6)
Special items, net	(0.6)		(9.0)		(28.2)		(19.9)
Equity income (loss)	2.7		—		2.6		—
Operating income (loss)	114.5		580.8		338.9		758.0
Interest income (expense), net	(66.6)		(67.9)		(129.9)		(133.2)
Other pension and postretirement benefits (costs), net	10.3		13.0		20.9		26.0
Other income (expense), net	(3.3)		(3.3)		(1.3)		(1.9)
Income (loss) before income taxes	54.9		522.6		228.6		648.9
Income tax benefit (expense)	(7.0)		(132.3)		(43.4)		(176.6)
Net income (loss)	47.9		390.3		185.2		472.3
Net (income) loss attributable to noncontrolling interests	(0.6)		(1.7)		13.6		0.4
Net income (loss) attributable to Molson Coors Beverage Company	$	47.3	$	388.6	$	198.8	$	472.7
Net income (loss) attributable to Molson Coors Beverage Company per share
Basic	$	0.22	$	1.79	$	0.92	$	2.18
Diluted	$	0.22	$	1.79	$	0.91	$	2.17
Weighted-average shares outstanding
Basic	217.0		217.1		217.1		217.1
Dilutive effect of share-based awards	0.8		0.5		0.7		0.4
Diluted	217.8		217.6		217.8		217.5
Anti-dilutive securities excluded from the computation of diluted EPS	1.2		1.3		1.5		1.5

See notes to unaudited condensed consolidated financial statements.

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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(IN MILLIONS)

(UNAUDITED)

	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net income (loss) including noncontrolling interests	$	47.9	$	390.3	$	185.2	$	472.3
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(208.9)		63.9		(219.1)		74.2
Reclassification of cumulative translation adjustment to income (loss)	—		—		12.1		7.5
Unrealized gain (loss) on derivative instruments	70.3		(59.5)		124.4		43.2
Reclassification of derivative (gain) loss to income (loss)	8.4		2.7		9.1		3.9
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income (loss)	(0.9)		0.2		(1.8)		0.6
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)	10.1		0.4		10.3		0.8
Total other comprehensive income (loss), net of tax	(121.0)		7.7		(65.0)		130.2
Comprehensive income (loss)	(73.1)		398.0		120.2		602.5
Comprehensive (income) loss attributable to noncontrolling interests	1.0		(2.1)		15.6		(0.1)
Comprehensive income (loss) attributable to Molson Coors Beverage Company	$	(72.1)	$	395.9	$	135.8	$	602.4

See notes to unaudited condensed consolidated financial statements.

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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT PAR VALUE)

(UNAUDITED)

	As of
	June 30, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	442.1	$	637.4
Accounts receivable, net	885.2		678.9
Other receivables, net	206.5		200.5
Inventories, net	872.4		804.7
Other current assets, net	465.7		457.2
Total current assets	2,871.9		2,778.7
Properties, net	4,169.7		4,192.4
Goodwill	6,148.5		6,152.6
Other intangibles, net	12,993.5		13,286.8
Other assets	1,204.3		1,208.5
Total assets	$	27,387.9	$	27,619.0
Liabilities and equity
Current liabilities
Accounts payable and other current liabilities	$	3,267.3	$	3,107.3
Current portion of long-term debt and short-term borrowings	247.0		514.9
Total current liabilities	3,514.3		3,622.2
Long-term debt	6,557.8		6,647.2
Pension and postretirement benefits	640.0		654.4
Deferred tax liabilities	2,782.7		2,704.6
Other liabilities	290.3		326.5
Total liabilities	13,785.1		13,954.9
Commitments and contingencies (Note 12)
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: 210.3 shares and 210.1 shares, respectively)	2.1		2.1
Class A exchangeable shares, no par value (issued and outstanding: 2.7 shares and 2.7 shares, respectively)	102.2		102.2
Class B exchangeable shares, no par value (issued and outstanding: 11.1 shares and 11.1 shares, respectively)	417.2		417.8
Paid-in capital	6,984.1		6,970.9
Retained earnings	7,433.8		7,401.5
Accumulated other comprehensive income (loss)	(1,069.0)		(1,006.0)
Class B common stock held in treasury at cost (10.0 shares and 9.5 shares, respectively)	(497.6)		(471.4)
Total Molson Coors Beverage Company stockholders' equity	13,372.8		13,417.1
Noncontrolling interests	230.0		247.0
Total equity	13,602.8		13,664.1
Total liabilities and equity	$	27,387.9	$	27,619.0

See notes to unaudited condensed consolidated financial statements.

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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN MILLIONS)

(UNAUDITED)

	Six Months Ended
	June 30, 2022		June 30, 2021
Cash flows from operating activities
Net income (loss) including noncontrolling interests	$	185.2	$	472.3
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization	345.4		403.9
Amortization of debt issuance costs and discounts	4.1		3.1
Share-based compensation	16.9		16.5
(Gain) loss on sale or impairment of properties and other assets, net	21.6		2.5
Unrealized (gain) loss on foreign currency fluctuations and derivative instruments, net	105.7		(222.7)
Equity (income) loss	(2.6)		—
Income tax (benefit) expense	43.4		176.6
Income tax (paid) received	(7.8)		(58.0)
Interest expense, excluding amortization of debt issuance costs and discounts	127.2		131.2
Interest paid	(119.5)		(122.5)
Change in current assets and liabilities and other	(52.8)		(54.4)
Net cash provided by (used in) operating activities	666.8		748.5
Cash flows from investing activities
Additions to properties	(388.7)		(211.9)
Proceeds from sales of properties and other assets	15.0		3.2
Other	4.2		8.6
Net cash provided by (used in) investing activities	(369.5)		(200.1)
Cash flows from financing activities
Exercise of stock options under equity compensation plans	1.5		4.5
Dividends paid	(164.9)		(0.2)
Payments on debt and borrowings	(502.4)		(1.9)
Proceeds on debt and borrowings	5.0		—
Purchases of treasury stock	(26.2)		—
Net proceeds from (payments on) revolving credit facilities and commercial paper	225.9		1.4
Change in overdraft balances and other	(8.7)		(7.7)
Net cash provided by (used in) financing activities	(469.8)		(3.9)
Cash and cash equivalents
Net increase (decrease) in cash and cash equivalents	(172.5)		544.5
Effect of foreign exchange rate changes on cash and cash equivalents	(22.8)		(5.7)
Balance at beginning of year	637.4		770.1
Balance at end of period	$	442.1	$	1,308.9

See notes to unaudited condensed consolidated financial statements.

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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

AND NONCONTROLLING INTERESTS

(IN MILLIONS)

(UNAUDITED)

			Molson Coors Beverage Company Stockholders' Equity
															Accumulated		Common stock
			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
As of March 31, 2021	$	12,834.0	$	—	$	2.1	$	102.3	$	417.8	$	6,947.1	$	6,628.3	$	(1,045.4)	$	(471.4)	$	253.2
Shares issued under equity compensation plan	(0.4)		—		—		—		—		(0.4)		—		—		—		—
Amortization of share-based compensation	8.2		—		—		—		—		8.2		—		—		—		—
Purchase of noncontrolling interest	0.1		—		—		—		—		0.3		—		—		—		(0.2)
Net income (loss) including noncontrolling interests	390.3		—		—		—		—		—		388.6		—		—		1.7
Other comprehensive income (loss), net of tax	7.7		—		—		—		—		—		—		7.3		—		0.4
Contributions from noncontrolling interests	1.7		—		—		—		—		—		—		—		—		1.7
Distributions and dividends to noncontrolling interests	(5.2)		—		—		—		—		—		—		—		—		(5.2)
As of June 30, 2021	$	13,236.4	$	—	$	2.1	$	102.3	$	417.8	$	6,955.2	$	7,016.9	$	(1,038.1)	$	(471.4)	$	251.6

			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
As of March 31, 2022	$	13,770.5	$	—	$	2.1	$	102.2	$	417.2	$	6,975.6	$	7,469.8	$	(949.6)	$	(485.5)	$	238.7
Amortization of share-based compensation	8.4		—		—		—		—		8.4		—		—		—		—
Purchase of noncontrolling interest	(1.5)		—		—		—		—		0.1		—		—		—		(1.6)
Net income (loss) including noncontrolling interests	47.9		—		—		—		—		—		47.3		—		—		0.6
Other comprehensive income (loss), net of tax	(121.0)		—		—		—		—		—		—		(119.4)		—		(1.6)
Share repurchase program	(12.1)		—		—		—		—		—		—		—		(12.1)		—
Distributions and dividends to noncontrolling interests	(6.1)		—		—		—		—		—		—		—		—		(6.1)
Dividends declared	(83.3)		—		—		—		—		—		(83.3)		—		—		—
As of June 30, 2022	$	13,602.8	$	—	$	2.1	$	102.2	$	417.2	$	6,984.1	$	7,433.8	$	(1,069.0)	$	(497.6)	$	230.0

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			Molson Coors Beverage Company Stockholders' Equity
															Accumulated		Common stock
			Common stock				Exchangeable								other		held in		Non
			issued				shares issued				Paid-in-		Retained		comprehensive		treasury		controlling
	Total		Class A		Class B		Class A		Class B		capital		earnings		income (loss)		Class B		interests
As of December 31, 2020	$	12,621.3	$	—	$	2.1	$	102.3	$	417.8	$	6,937.8	$	6,544.2	$	(1,167.8)	$	(471.4)	$	256.3
Shares issued under equity compensation plan	0.6		—		—		—		—		0.6		—		—		—		—
Amortization of share-based compensation	16.5		—		—		—		—		16.5		—		—		—		—
Purchase of noncontrolling interest	(0.1)		—		—		—		—		0.3		—		—		—		(0.4)
Net income (loss) including noncontrolling interests	472.3		—		—		—		—		—		472.7		—		—		(0.4)
Other comprehensive income (loss), net of tax	130.2		—		—		—		—		—		—		129.7		—		0.5
Contributions from noncontrolling interests	1.7		—		—		—		—		—		—		—		—		1.7
Distributions and dividends to noncontrolling interests	(6.1)		—		—		—		—		—		—		—		—		(6.1)
As of June 30, 2021	$	13,236.4	$	—	$	2.1	$	102.3	$	417.8	$	6,955.2	$	7,016.9	$	(1,038.1)	$	(471.4)	$	251.6

			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
As of December 31, 2021	$	13,664.1	$	—	$	2.1	$	102.2	$	417.8	$	6,970.9	$	7,401.5	$	(1,006.0)	$	(471.4)	$	247.0
Exchange of shares	—		—		—		—		(0.6)		0.6		—		—		—		—
Shares issued under equity compensation plan	(4.4)		—		—		—		—		(4.4)		—		—		—		—
Amortization of share-based compensation	16.9		—		—		—		—		16.9		—		—		—		—
Purchase of noncontrolling interest	(1.5)		—		—		—		—		0.1		—		—		—		(1.6)
Net income (loss) including noncontrolling interests	185.2		—		—		—		—		—		198.8		—		—		(13.6)
Other comprehensive income (loss), net of tax	(65.0)		—		—		—		—		—		—		(63.0)		—		(2.0)
Share repurchase program	(26.2)		—		—		—		—		—		—		—		(26.2)		—
Contributions from noncontrolling interests	7.3		—		—		—		—		—		—		—		—		7.3
Distributions and dividends to noncontrolling interests	(7.1)		—		—		—		—		—		—		—		—		(7.1)
Dividends declared	(166.5)		—		—		—		—		—		(166.5)		—		—		—
As of June 30, 2022	$	13,602.8	$	—	$	2.1	$	102.2	$	417.2	$	6,984.1	$	7,433.8	$	(1,069.0)	$	(497.6)	$	230.0

See notes to unaudited condensed consolidated financial statements.

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MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 our reporting segments. Our reporting segments include Americas and EMEA&APAC. Our Americas segment operates in the U.S., Canada and various countries in the Caribbean, Latin and South America, and our EMEA&APAC segment operates in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K., various other European countries and certain countries within the Middle East, Africa and Asia Pacific.

Unless otherwise indicated, information in this report is presented in USD and comparisons are to comparable prior 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, HRK 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 on Form 10-K for the year ended December 31, 2021, 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 six months ended June 30, 2022 are not necessarily indicative of the results that may be achieved for the full year or any other future period.

Coronavirus Global Pandemic

We have been actively monitoring the impact of the coronavirus pandemic since it started at the end of the first quarter of 2020. The extent to which our operations will continue to be impacted by the coronavirus pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including, but not limited to, the level of governmental or societal orders or restrictions on public gatherings and on-premise venues including any vaccine mandates or testing requirements, the severity and duration of the coronavirus pandemic by market including outbreaks of variants, changes in consumer behavior, the rate of vaccination and the efficacy of vaccines against the coronavirus and related variants. We continue to actively monitor the ongoing evolution of the coronavirus pandemic and resulting impacts to our business. See Part I.—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in this report, under the heading "Items Affecting Reported Results" for further discussion.

Dividends

On May 19, 2022, our Company's Board of Directors declared a cash dividend of $0.38 per share, paid on June 15, 2022, to shareholders of Class A and Class B common stock of record on June 3, 2022. Shareholders of exchangeable shares received the CAD equivalent of dividends declared on Class A and Class B common stock, equal to CAD 0.48 per share. During the six months ended June 30, 2022, dividends declared to eligible shareholders totaled $0.76 per share, with the CAD equivalent totaling CAD 0.96 per share.

Share Repurchase Program

On February 17, 2022, our Company's Board of Directors approved a share repurchase program up to an aggregate of $200 million of our Company's Class B common stock through March 31, 2026, with repurchases primarily intended to offset annual employee equity award grants. For the three months ended June 30, 2022, we repurchased 230,000 shares under the share repurchase program at a weighted average price of $52.61 per share, including brokerage commissions, for an aggregate value of $12.1 million. For the six months ended June 30, 2022, we repurchased 510,000 shares under the share repurchase program at a weighted average price of $51.40 per share, including brokerage commissions, for an aggregate value of $26.2 million.

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Non-Cash Activity

Non-cash activity includes non-cash issuances of share-based awards, as well as non-cash investing activities related to movements in our guarantee of indebtedness of certain equity method investments. See Note 4, "Investments" for further discussion. We also had non-cash activities related to capital expenditures incurred but not yet paid of $158.9 million and $164.2 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

In June 2021, we rolled forward our July 2021 $250.0 million forward starting interest rate swap to May 2022 through a cashless settlement. The unrealized loss on the 2021 forward starting interest rate swap at the time of the transaction was factored into the effective interest rate assigned to the new May 2022 forward starting interest rate swap that was settled in late April 2022. See Note 11, "Derivative Instruments and Hedging Activities" for further details.

During the first quarter of 2022, we recorded a non-cash transaction related to the establishment of an accrued liability of $56.0 million as the best estimate of probable loss in the Keystone litigation case based on the jury verdict. See Note 12. "Commitments and Contingencies" for further details.

Other than the activity mentioned above and the supplemental non-cash activity related to the recognition of leases further discussed in Note 13, "Leases," there was no other significant non-cash activity during the six months ended June 30, 2022 and June 30, 2021, respectively.

Share-Based Compensation

During the first half of 2022 and 2021, we granted stock options, RSUs and PSUs to certain officers and other eligible employees, and recognized share-based compensation expense of $8.4 million and $8.2 million during the three months ended June 30, 2022 and June 30, 2021, respectively, and $16.9 million and $16.5 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Longevity Swap Insurance Contract

In June 2022, the trustees of the Molson Coors U.K. Pension Plan ("U.K. Pension Plan") entered into a longevity swap insurance contract with an insurer to alleviate risk in the U.K. Pension Plan from potential fluctuations in estimated life expectancy of covered participants who made up approximately 950 million GBP, or over fifty percent of the U.K. Pension Plan obligation as of December 31, 2021. Under the swap, the U.K. Pension Plan will be responsible for fixed payments to the insurer based on the assumptions outlined at the execution of the swap related to the estimated life expectancy of the covered participants while the insurer will be responsible for floating payments to the U.K. Pension Plan based on actual mortality experience of the covered participants. The longevity swap will be accounted for as an asset of the U.K. Pension Plan and will be valued at fair value in conjunction with the annual plan remeasurement on December 31 of each fiscal year. At execution of the swap, there is no value assigned to the swap due to the longevity swap insurance contract being entered into at market terms. No plan remeasurement was triggered at the execution of the contract as the swap does not relieve the U.K. Pension Plan of primary responsibility for the pension benefit obligation. Benefit payments to the covered participants will continue to be paid from the U.K. Pension Plan, and there is no change to any contractual benefits owed to the covered participants by the U.K. Pension Plan.

Subsequent Events

On July 14, 2022, the Board of Directors declared a quarterly dividend of $0.38 per share.

On July 27, 2022, we purchased an annuity contract to transfer approximately $340 million, or approximately twenty percent, of U.S. qualified pension plan liabilities and the associated administration of benefits to an insurance company using U.S. qualified pension plan assets. This transaction will have 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 will have a reduction to our U.S. qualified pension plan liabilities and assets, and we will remeasure the remaining pension plan assets and obligations using updated actuarial assumptions. Further, a settlement gain (loss) will be measured and reflected in the unaudited condensed consolidated statements of operations during the third quarter of 2022.

2. New Accounting Pronouncements

New Accounting Pronouncements Not Yet Adopted

In November 2021, the FASB issued authoritative guidance intended to provide consistent and transparent disclosures around government assistance by requiring disclosures of the type of government assistance, our accounting for the government assistance and the effect on our financial statements. This guidance is effective for us in our annual report for the year ended December 31, 2022. We can either adopt the amendments in this guidance prospectively or retrospectively. We are currently

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evaluating the impact of this guidance and do not expect it will have a material impact on our consolidated financial statements as the guidance impacts disclosures only.

New Accounting Pronouncements Recently Adopted

In March 2020, the FASB issued authoritative guidance which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform and are effective for all entities upon issuance, March 12, 2020 through December 31, 2022. The guidance permits a company to elect certain optional expedients and exceptions when affected by the changes in reference rate reform. We have elected to adopt optional expedients impacting our derivative instruments with maturity dates extending beyond the expected discontinuance date of LIBOR. In addition, in October 2021, we amended our revolving credit facility to replace LIBOR with designated replacement rates for any future borrowings denominated in EUR or GBP. The partial adoption of, and future elections under Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and ASU 2021-01, Reference Rate Reform (Topic 848): Scope, did not and are not expected to have a material impact on our accounting policies or unaudited condensed consolidated financial statements. We will continue to evaluate the impact of reference rate reform on our other contracts and assess the impacts of adopting incremental portions of this guidance on our financial statements.

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 significant impact, or potential significant impact, to our unaudited condensed consolidated financial statements.

3. 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" activity primarily includes financing-related costs such as interest expense and income, foreign exchange gains and losses on intercompany balances 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 unallocated.

Summarized Financial Information

No single customer accounted for more than 10% of our consolidated net sales for the three or six months ended June 30, 2022 or June 30, 2021.

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: