What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-11 compared with 2020-02-12 · 865 added, 1136 removed, 1580 unchanged (56% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

Index to Financial Statements Page

Consolidated Financial Statements:

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Note 19, "Leases"

Note 20, "Supplemental Guarantor Information"

Note 21, "Quarterly Financial Information (Unaudited)"

MANAGEMENT'S REPORT

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/s/ TRACEY I.

President & Chief Executive Officer

Chief Financial Officer

Molson Coors Beverage Company

February 12, 2020

Hattersley Tracey I.

President & Chief Executive Officer Chief Financial Officer

Molson Coors Beverage Company Molson Coors Beverage Company

February 11, 2021 February 11, 2021

Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholders of Molson Coors Beverage Company

To the Board of Directors and Stockholders of Molson Coors Beverage Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill Impairment Assessments for the Europe and Canada Reporting Units

As described in Notes 1 and 10 to the consolidated financial statements, the Company’s balance related to goodwill in the Europe and Canada reporting units as of December 31, 2019 is $1,484.8 million and $218.1 million, respectively.

Goodwill Impairment Assessments - Europe and North America Reporting Units

As described in Notes 1 and 10 to the consolidated financial statements, the Company’s goodwill balance related to the Europe and North America reporting units as of December 31, 2020 is $0 and $6,151 million, respectively.

The carrying value of goodwill is evaluated for impairment at the reporting unit level at least annually or when an interim triggering event occurs that would indicate that impairment may have taken place.

The Company’s annual impairment tests are performed as of the first day of the fiscal fourth quarter.

however management identified a triggering event requiring an interim impairment assessment of the goodwill within the Canada reporting unit at the end of the third quarter of 2019, which resulted in a goodwill impairment loss of $668.3 million.

As disclosed by management, a combination of discounted cash flow analyses and market approaches are used to determine the fair value of each reporting unit.

As disclosed by management, the evaluation involves comparing each reporting unit’s fair value to its respective carrying value.

If a reporting unit’s carrying value exceeds its fair value, the Company would recognize an impairment loss in an amount equal to the excess up to the total amount of goodwill allocated to that reporting unit.

During the fourth quarter of 2020, it was determined that the carrying value of the Europe reporting unit exceeded its fair value to such an extent that the analysis resulted in the remaining goodwill balance was impaired in its entirety.

A combination of discounted cash flow analyses and market approaches are used to determine the fair value of each reporting unit.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of management’s reporting units may include such items as (i) a decrease in expected future cash flows, specifically, a decrease in sales volume and increase in costs that could significantly impact management’s immediate and long-range results, (ii) prolonged weakening of economic conditions, or (iii) significant unfavorable changes in tax, environmental or other regulations, including interpretations thereof, terminal growth rates, market multiples and / or weighted average cost of capital utilized in the discounted cash flow analyses.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments for the Europe and Canada reporting units is a critical audit matter are as follows.

There was significant judgment by management when developing the fair value measurements.

This in turn led to a high degree of auditor judgment, subjectivity and effort in performing our procedures to evaluate the fair value estimates of the goodwill and the significant assumptions, including the revenue growth rates and terminal growth rate for the Europe reporting unit and the discount rate, revenue growth rates, market multiples and terminal growth rate for the Canada reporting unit.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of management’s reporting units may include such items as (i) a decrease in expected future cash flows, specifically, a decrease in sales volume and increase in costs that could significantly impact management’s immediate and long-range results, (ii) prolonged weakening of economic conditions, or (iii) significant unfavorable changes in tax rates, environmental or other regulations, including interpretations thereof, terminal growth rates, market multiples and / or weighted average cost of capital utilized in the discounted cash flow analyses.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments for the Europe and North America reporting units is a critical audit matter are (i) the significant judgment by management when determining the fair value measurement of the reporting unit;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the discount rate, revenue growth rates and market multiples for the Europe reporting unit and the discount rate, revenue growth rates, market multiples and terminal growth rate for the North America reporting unit;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments for the Europe and Canada reporting units, including controls over the valuation.

These procedures also included, among others (i) testing management’s process for determining the fair value of goodwill for the Europe and Canada reporting units, (ii) evaluating the appropriateness of the discounted cash flow analyses and market approaches, (iii) testing the completeness, accuracy, and relevance of underlying data used in the discounted cash flow analyses and market approaches, and (iv) evaluating the significant assumptions used by management including the revenue growth rates and terminal growth rate for the Europe reporting unit and the discount rate, revenue growth rates, market multiples and terminal growth rate for the Canada reporting unit.

Evaluating the assumptions related to revenue growth rates involved evaluating whether the assumptions used were reasonable considering (i) the Company’s current and past performance, (ii) the consistency with third party industry and economic data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the Company’s discounted cash flow analyses and market approaches and the reasonableness of certain significant assumptions, including the terminal growth rate for the Europe reporting unit and the discount rate, market multiples and terminal growth rate for the Canada reporting unit.

Indefinite-Lived Intangible Asset Impairment Assessment for the Coors Light Brand Distribution Rights (Canada)

As described in Notes 1 and 10 to the consolidated financial statements, the Company’s balance related to indefinite-lived intangible assets of distribution networks as of December 31, 2019 is $778.8 million, inclusive of the Coors Light brand distribution rights in Canada.

The carrying value of the indefinite-lived intangible asset is evaluated for impairment at least annually or when an interim triggering event occurs that would indicate that impairment may have taken place.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Europe and North America reporting units.

These procedures also included, among others (i) testing management’s process for determining the fair value of the reporting units;

(ii) evaluating the appropriateness of the discounted cash flow analyses and market approaches;

(iii) testing the completeness and accuracy of underlying data used in the discounted cash flow analyses and market approaches;

and (iv) evaluating the significant assumptions used by management related to the discount rate, revenue growth rates and market multiples for the Europe reporting unit and the discount rate, revenue growth rates, market multiple and terminal growth rate for the North America reporting unit.

Evaluating the assumptions related to revenue growth rates involved evaluating whether the assumptions used were reasonable considering (i) the current and past performance of the reporting unit;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of (i) the Company’s discounted cash flow analyses and market approaches and (ii) the discount rate and market multiples assumptions for the Europe reporting unit and the discount rate, market multiples and terminal growth rate assumptions for the North America reporting unit.

Indefinite-Lived Intangible Asset Impairment Assessment - Staropramen (Europe)

As described in Notes 1 and 10 to the consolidated financial statements, the Company’s indefinite-lived intangible asset brands balance as of December 31, 2020 is $8,216 million, inclusive of the Staropramen brand name in Europe.

carrying value of the indefinite-lived intangible asset is evaluated for impairment at least annually or when an interim triggering event occurs that would indicate that impairment may have taken place.

The Company’s annual impairment test is performed as of the first day of the fiscal fourth quarter.

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Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of management’s indefinite-lived intangible may include items such as (i) a decrease in expected future cash flows, specifically, a decrease in sales volume and increase in costs that could significantly impact management’s immediate and long-range results, (ii) prolonged weakening of economic conditions, or (iii) significant unfavorable changes in tax, environmental or other regulations, including interpretations thereof, terminal growth rates, and / or weighted average cost of capital utilized in the discounted cash flow analyses.

The principal considerations for our determination that performing procedures relating to the indefinite-lived intangible asset impairment assessment for the Coors Light brand distribution rights in Canada is a critical audit matter are as follows.

There was significant judgment by management when developing the fair value measurement.

This in turn led to a high degree of auditor judgment, subjectivity and effort in performing our procedures to evaluate the fair value estimate of the indefinite-lived intangible asset and the significant assumptions, including the discount rate and terminal growth rate.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of management’s indefinite-lived intangible may include items such as (i) a decrease in expected future cash flows, specifically, a decrease in sales volume and increase in costs that could significantly impact management’s immediate and long-range results, (ii) prolonged weakening of economic conditions, or (iii) significant unfavorable changes in tax rates, environmental or other regulations, including interpretations thereof, terminal growth rates, and / or weighted average cost of capital utilized in the discounted cash flow analyses.

The principal considerations for our determination that performing procedures relating to the indefinite-lived intangible asset impairment assessment for Staropramen in Europe is a critical audit matter are (i) the significant judgment by management when determining the fair value measurement;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible asset impairment assessment for the Coors Light brand distribution rights in Canada, including controls over the valuation.

These procedures also included, among others, (i) testing management’s process for determining the fair value of the Coors Light brand distribution rights in Canada indefinite-lived intangible asset, (ii) evaluating the appropriateness of the excess earnings approach, (iii) testing the completeness, accuracy, and relevance of underlying data used in the excess earnings approach, and (iv) evaluating the significant assumptions used by management, including the discount rate and terminal growth rate.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the Company’s excess earnings approach and the reasonableness of certain significant assumptions, including the discount rate and terminal growth rate.

These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible asset impairment assessment, including controls over the valuation of Staropramen in Europe.

These procedures also included, among others (i) testing management’s process for determining the fair value estimate;

(ii) evaluating the appropriateness of the excess earnings approach;

(iii) testing the completeness and accuracy of underlying data used in the approach;

and (iv) evaluating the significant assumptions used by management related to the discount rate, revenue growth rates and terminal growth rate.

Evaluating the assumptions related to revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the brand;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of (i) the Company’s excess earnings approach and (ii) the discount rate and terminal growth rate assumptions.

/s/ PricewaterhouseCoopers LLP

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For the Years Ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

Sales $ 11,723.8 $ 13,009.1 $ 13,338.0

Excise taxes ( 2,069.8 ) ( 2,429.7 ) ( 2,568.4 )

Net sales 9,654.0 10,579.4 10,769.6

Cost of goods sold ( 5,885.7 ) ( 6,378.2 ) ( 6,584.8 )

Gross profit 3,768.3 4,201.2 4,184.8

Marketing, general and administrative expenses ( 2,437.0 ) ( 2,728.0 ) ( 2,802.7 )

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Net income (loss) attributable to Molson Coors Beverage Company per share:

Basic $ ( 4.38 ) $ 1.12 $ 5.17

Diluted $ ( 4.38 ) $ 1.11 $ 5.15

Weighted-average shares outstanding:

Basic 216.8 216.6 216.0

Dilutive effect of share-based awards — 0.3 0.6

Diluted 216.8 216.9 216.6

Anti-dilutive securities excluded from computation of diluted EPS 2.7 1.3 0.8

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For the Years Ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

Net income (loss) including noncontrolling interests $ ( 945.7 ) $ 246.2 $ 1,134.6

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CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

December 31, 2019

December 31, 2018

(IN MILLIONS, EXCEPT PAR VALUE)

December 31, 2020 December 31, 2019

Current assets:

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Properties, less accumulated depreciation of $ 3,416.4 and $ 3,004.6 , respectively

4,250.3 4,546.5

Goodwill 6,151.0 7,631.4

Other intangibles, less accumulated amortization of $ 1,206.5 and $ 995.1 , respectively

13,556.1 13,656.0

Other assets 954.9 841.5

Total assets $ 27,331.1 $ 28,859.8

Liabilities and equity

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Accounts payable and other current liabilities (includes affiliate payables of $ 0.5 and $ 0.0 , respectively)

$ 2,889.5 $ 2,767.3

Current portion of long-term debt and short-term borrowings 1,020.1 928.2

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Preferred stock, $ 0.01 par value (authorized:

Class A common stock, $0.01 par value per share (authorized:

Class A common stock, $ 0.01 par value (authorized:

500.0 shares;

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2.6 shares and 2.6 shares, respectively)

Class B common stock, $0.01 par value per share (authorized:

Class B common stock, $ 0.01 par value (authorized:

500.0 shares;

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Class B common stock held in treasury at cost ( 9.5 shares and 9.5 shares, respectively)

( 471.4 ) ( 471.4 )

Total Molson Coors Beverage Company stockholders' equity 12,365.0 13,419.4

Noncontrolling interests 256.3 253.7

Total equity 12,621.3 13,673.1

Total liabilities and equity $ 27,331.1 $ 28,859.8

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For the Years Ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

Cash flows from operating activities:

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Interest paid ( 271.9 ) ( 285.0 ) ( 308.7 )

Pension expense (benefit)

Pension contributions paid

Change in current assets and liabilities (net of impact of business combinations) and other:

Receivables 160.8 38.5 ( 38.4 )

Inventories ( 46.2 ) ( 17.7 ) ( 10.6 )

Payables and other current liabilities ( 50.1 ) ( 53.0 ) 27.6

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Proceeds from sales of properties and other assets 158.8 115.9 32.5

Other 2.4 44.6 ( 49.9 )

Net cash used in investing activities ( 413.6 ) ( 433.3 ) ( 669.1 )

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(IN MILLIONS)

For the Years Ended

December 31, 2019

December 31, 2018

December 31, 2017

Cash flows from financing activities:

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Net proceeds from (payments on) revolving credit facilities and commercial paper — ( 4.7 ) ( 374.3 )

Other ( 31.8 ) 3.7 23.4

Net cash provided by (used in) financing activities ( 1,070.4 ) ( 2,007.0 ) ( 1,008.9 )

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MCBC Stockholders' Equity

shares issued

comprehensive

income (loss)

Common stock Exchangeable Accumulated

other Common Stock

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

Balance as of December 31, 2017 $ 13,187.3 $ — $ 2.0 $ 107.7 $ 553.2 $ 6,688.5 $ 6,958.4 $ ( 860.0 ) $ ( 471.4 ) $ 208.9

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Amortization of share-based compensation 42.2 — — — — 42.2 — — — —

Acquisition of business and purchase of noncontrolling interest

Formation of consolidated joint venture 44.3 — — — — 39.4 — — — 4.9

Purchase of noncontrolling interest ( 0.2 ) — — — — 0.1 — — — ( 0.3 )

Net income (loss) including noncontrolling interests 1,134.6 — — — — — 1,116.5 — — 18.1

Other comprehensive income (loss), net of tax ( 292.0 ) — — — — — — ( 290.0 ) — ( 2.0 )

Adoption of revenue recognition accounting standard ( 27.8 ) — — — — — ( 27.8 ) — — —

Contributions from noncontrolling interests 21.6 — — — — — — — — 21.6

Distributions and dividends to noncontrolling interests ( 22.8 ) — — — — — — — — ( 22.8 )

Dividends declared and paid - $ 1.64 per share

( 354.2 ) — — — — — ( 354.2 ) — — —

Balance as of December 31, 2018 $ 13,735.8 $ — $ 2.0 $ 103.2 $ 557.6 $ 6,773.1 $ 7,692.9 $ ( 1,150.0 ) $ ( 471.4 ) $ 228.4

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Amortization of share-based compensation 8.3 — — — — 8.3 — — — —

Formation of consolidated joint venture

Purchase of noncontrolling interest

Acquisition of business and purchase of noncontrolling interest 0.6 — — — — 0.1 — — — 0.5

Deconsolidation of VIE ( 1.7 ) — — — — — — — — ( 1.7 )

Net income (loss) including noncontrolling interests 246.2 — — — — — 241.7 — — 4.5

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

AND NONCONTROLLING INTERESTS (Continued)

(IN MILLIONS)

MCBC Stockholders' Equity

shares issued

comprehensive

income (loss)

Common stock Exchangeable Accumulated

other Common Stock

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

Other comprehensive income (loss), net of tax 63.2 — — — — — — 62.6 — 0.6

Adoption of revenue recognition accounting standard

Adoption of lease accounting standard (Note 2) 32.0 — — — — — 32.0 — — —

Reclassification of stranded tax effects (Note 2) — — — — — — 74.8 ( 74.8 ) — —

Contributions from noncontrolling interests 34.1 — — — — — — — — 34.1

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Dividends declared and paid - $ 1.96 per share

( 424.4 ) — — — — — ( 424.4 ) — — —

Balance as of December 31, 2019 $ 13,673.1 $ — $ 2.1 $ 102.5 $ 557.8 $ 6,773.6 $ 7,617.0 $ ( 1,162.2 ) $ ( 471.4 ) $ 253.7

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Amortization of share-based compensation 24.2 — — — — 24.2 — — — —

Acquisition of business and purchase of noncontrolling interest

Deconsolidation of VIE

Purchase of noncontrolling interest ( 0.2 ) — — — — 0.3 — — — ( 0.5 )

Net income (loss) including noncontrolling interests ( 945.7 ) — — — — — ( 949.0 ) — — 3.3

Other comprehensive income (loss), net of tax ( 3.4 ) — — — — — — ( 5.6 ) — 2.2

Adoption of lease accounting standard ( Note 2 )

Reclassification of stranded tax effects ( Note 2 )

Contributions from noncontrolling interests 16.3 — — — — — — — — 16.3

Distributions and dividends to noncontrolling interests ( 18.7 ) — — — — — — — — ( 18.7 )

Dividends declared and paid - $1.96 per share

Dividends declared - $ 0.57 per share

( 123.8 ) — — — — — ( 123.8 ) — — —

Balance 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

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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")(formerly known as Molson Coors Brewing Company), principally a holding company, and its operating and non-operating subsidiaries included within our reporting segments and Corporate.

At December 31, 2019, our reporting segments included:

MillerCoors LLC ("MillerCoors" or U.S.

segment), operating in the U.S.;

Molson Coors Canada ("MCC" or Canada segment), operating in Canada;

Molson Coors Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K.

and various other European countries;

and Molson Coors International ("MCI" or International segment), operating in various other countries.

As further discussed below, in January 2020, we changed our management structure to two business units, our North America and Europe businesses.

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

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

On January 1, 2020, we changed our management structure from a corporate center and four segments to two segments - North America and Europe.

The previous International segment was reconstituted with the Africa and Asia Pacific businesses reporting into the Europe segment and the remaining International business reporting into the North America segment.

Accordingly, effective January 1, 2020, our reporting segments include:

North America (North America segment), operating in the U.S., Canada and various countries in Latin and South America;

and Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K., various other European countries, and certain countries within Africa and Asia Pacific.

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

Unless otherwise indicated, comparisons are to comparable prior periods, and 2020, 2019 and 2018 refers to the 12 months ended December 31, 2020, December 31, 2019, and December 31, 2018, respectively.

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

Certain amounts within our consolidated statement of comprehensive income (loss) for the year ended December 31, 2017 have been adjusted to reflect presentational reclassifications.

See Note 14, "Accumulated Other Comprehensive Income (Loss)" for further details.

Coronavirus Global Pandemic

We are actively monitoring the impact of the coronavirus pandemic, which had a material adverse effect on our operations, liquidity, financial condition and results of operations during 2020 due to on-premise closures worldwide.

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

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

Additionally, in order to support and demonstrate our commitment to the continued viability of the many bars and restaurants which have been negatively impacted by the coronavirus pandemic, during the first quarter of 2020, we initiated temporary keg relief programs in many of our markets.

As part of these voluntary programs, we committed to provide customers with reimbursements for untapped kegs that met certain established return requirements.

As a result, during 2020, we recognized a reduction to net sales of $ 30.3 million reflecting sales returns and reimbursements through these keg relief programs, substantially all of which was recognized in the first quarter other than immaterial adjustments for changes in estimates recognized during the remainder of 2020.

Further, during 2020, we recognized charges of $ 12.1 million, substantially all of which was recognized in the first quarter other than immaterial adjustments for changes in estimates recognized during the remainder of 2020, within cost of goods sold related to obsolete finished goods keg inventories that were not expected to be sold within our freshness specifications, as well as the costs to facilitate the above mentioned keg returns.

As of December 31, 2020 and December 31, 2019, our aggregate allowance for obsolete inventories was approximately $ 22 million and $ 11 million, respectively.

The actual duration of the coronavirus pandemic, including the length of government-mandated closures or ceased sit-down service limitations at bars and restaurants coupled with the subsequent economic recovery period relative to the assumptions utilized to derive these estimates, could result in further charges due to incremental finished goods keg inventory becoming obsolete in future periods.

Additionally, we continue to monitor the impacts of the coronavirus pandemic on our customers’ liquidity and capital resources and therefore our ability to collect, or the timeliness of collection of our accounts receivable.

While these receivables are not concentrated in any specific customer and our allowance on these receivables factors in expected credit loss, continued disruption and declines in the global economy could result in difficulties in our ability to collect and require increases to our allowance for doubtful accounts.

As of December 31, 2020 and December 31, 2019, our allowance for trade receivables was approximately $ 18 million and $ 12 million, respectively, and allowance activity was immaterial during the year ended December 31, 2020.

Further, in response to the coronavirus pandemic, various governmental authorities globally have announced relief programs which among other items, provide temporary deferrals of income and non-income based tax payments, which have

positively impacted our operating cash flows in the year ended December 31, 2020.

These temporary deferrals of approximately $ 130 million as of December 31, 2020, are included within accounts payable and other current liabilities and other liabilities on the consolidated balance sheets.

Finally, we continue to protect and support our liquidity position in response to the global economic uncertainty created by the coronavirus pandemic.

In May 2020, our board of directors suspended our regular quarterly dividends on our Class A and Class B common and exchangeable shares.

For considerations of the effects of the coronavirus pandemic and impairment charges taken related to our goodwill and indefinite-lived intangible assets, see Note 10, "Goodwill and Intangible Assets."

Revitalization Plan

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

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

In connection with these consolidation activities, effective January 1, 2020, we changed our management structure to two business units, our North America and Europe businesses.

We began to incur charges related to these restructuring activities during the fourth quarter of 2019;

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

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

In connection with these consolidation activities, effective January 1, 2020, we changed our management structure to two segments - North America and Europe.

We began to incur charges related to these restructuring activities during the fourth quarter of 2019 and have been, and will continue to, further recognize charges through fiscal 2021.

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

See Note 3, "Segment Reporting," and Note 7, "Special Items" for further discussion of the impacts of this plan.

See Note 3, "Segment Reporting," Note 7, "Special Items" and Note 10, "Goodwill and Intangible Assets " for further discussion of the impacts of this plan.

Principles of Consolidation

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Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, which we adopted on January 1, 2018 using the modified retrospective transition approach.

The adoption of this guidance in 2018 did not have a significant impact to our core revenue generating activities.

However, it did result in the reclassification of certain cash payments to customers from marketing, general and administrative expenses to a

reduction of revenue.

This classification change resulted in a reduction of revenue and marketing, general and administrative expenses by approximately $ 60 million during 2018 versus 2017, which is presented under historical U.S.

GAAP, primarily within our Canada segment.

The adoption of this guidance also resulted in a change in the timing of recognition of certain promotional discounts and cash payments to customers, which shifted financial statement recognition primarily amongst quarters, however, the full-year impact was not significant to our financial results.

Our net sales represent the sale of beer, malt beverages and other adjacencies, net of excise tax.

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In certain of our markets, we make cash payments to customers such as slotting or listing fees, or payments for other marketing or promotional activities.

These cash payments are recorded as a reduction of revenue unless we receive a distinct good or service as defined under ASC 606.

These cash payments are recorded as a reduction of revenue unless we receive a distinct good or service.

Specifically, a good or service is considered distinct when it is separately identifiable from other promises in the contract, we receive a benefit from the good or service, and the benefit is separable from the sale of our product to the customer.

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Where a distinct good or service is received and fair value can be reasonably estimated, the cost is included as marketing, general and administrative expenses.

The amounts deferred are reassessed regularly for recoverability over the contract period and are impaired where there is objective evidence that the benefits will not be realized or the asset is otherwise not recoverable.

The amounts deferred are reassessed regularly for recoverability over the

contract period and are impaired where there is objective evidence that the benefits will not be realized or the asset is otherwise not recoverable.

Separately, as discussed below, we analyze whether these advance payments contain a significant financing component for potential adjustment to the transaction price.

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We apply the sales-based royalty practical expedient to these licensing arrangements and recognize revenue as product is sold by our partners at the agreed upon rate.

We have evaluated these other revenue generating activities under the disaggregation disclosure criteria outlined within the guidance and concluded that these other revenue generating activities are immaterial for separate disclosure.

Disaggregation of Revenue

We have evaluated our primary revenue generating activities under the disaggregation disclosure criteria outlined within the guidance and concluded that disclosure at the geographical segment level depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors.

We have also evaluated our other revenue generating activities and concluded that these activities are immaterial for separate disclosure.

See Note 3, "Segment Reporting," for disclosure of revenues by geographic segment.

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We estimate the costs required to facilitate product returns and record them in cost of goods sold as required.

During the twelve months ended December 31, 2019 and December 31, 2018, adjustments to revenue from performance obligations satisfied in the prior period due to changes in estimates in variable consideration were immaterial.

During the years ended December 31, 2020 and December 31, 2019, adjustments to revenue from performance obligations satisfied in the prior period due to changes in estimates in variable consideration were immaterial.

Significant Financing Component and Costs to Obtain Contracts

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We further analyze arrangements that span greater than one year on an ongoing basis to determine whether a significant financing component exists.

No such arrangements existed during the twelve months ended December 31, 2019 or December 31, 2018 .

No such arrangements existed during the years ended December 31, 2020 or December 31, 2019.

Advance payments to customers, where legally permitted, are deferred and amortized as a reduction to revenue over the expected period of benefit and tested for recoverability as appropriate.

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Production costs of advertising and promotional materials are expensed when the advertising is first run.

Marketing, general and administrative expenses also include integration costs of $ 25.0 million , $ 38.8 million and $ 70.6 million for 2019 , 2018 and 2017 , respectively.

Marketing, general and administrative expenses also include integration costs of $ 25.0 million and $ 38.8 million for 2019 and 2018, respectively.

There were no integration costs recorded in 2020 as the activity related to the acquisition of the remaining portion of MillerCoors LLC ("MillerCoors"), which occurred on October 11, 2016 (the "Acquisition"), was completed by the end of 2019.

This classification also includes general and administrative costs for functions such as finance, legal, human resources and information technology, along with integration costs as noted above.

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Our share-based compensation plan and the awards within it contain provisions that accelerate vesting of awards upon change in control, retirement, disability or death of eligible employees and directors.

Our share-based awards are considered vested when the employee's retention of the award is no longer contingent on providing service, which for certain awards can result in immediate recognition for awards granted to retirement-eligible individuals or accelerated recognition for awards granted to individuals that will become retirement eligible within the stated vesting period.

Our share-based awards are considered vested when the employee's retention of

the award is no longer contingent on providing service, which for certain awards can result in immediate recognition for awards granted to retirement-eligible individuals or accelerated recognition for awards granted to individuals that will become retirement eligible within the stated vesting period.

Also, if less than the stated vesting period, we recognize these costs over the period from the grant date to the date retirement eligibility is achieved.

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Interest earned on our cash and cash equivalents across our business is recorded as interest income.

Changes in estimates (if any) to mandatorily redeemable noncontrolling interest liabilities, which are presented within accounts payable and other current liabilities on the consolidated balance sheet, are also recognized within interest expense.

We capitalize interest cost as a part of the original cost of acquiring certain fixed assets if the cost of the capital expenditure and the expected time to complete the project are considered significant.

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Our other income (expense) classification primarily includes gains and losses associated with activities not directly related to our operations.

For instance, aggregate unrealized and realized foreign exchange gains and losses resulting from remeasurement and settlement of foreign-denominated monetary assets and liabilities, as well as certain gains or losses on sales of non-operating assets and the mark-to-market activity associated with warrants are classified in this line item.

For instance, aggregate unrealized and realized foreign exchange gains and losses resulting from the remeasurement and settlement of foreign-denominated monetary assets and liabilities, as well as certain gains or losses on sales of non-operating assets and the mark-to-market activity associated with warrants are classified in this line item.

These gains and losses are reported in the operating segment in which they occur;

however, foreign exchange gains and losses on intercompany balances related to financing and other treasury-related activities are reported within the Corporate segment.

however, foreign exchange gains and losses on intercompany balances related to financing and other treasury-related activities remain unallocated.

The initial recording of foreign-denominated transactions are classified based on the nature of the transaction, with the unrealized or realized foreign exchange gains or losses resulting from the subsequent remeasurement of the monetary asset or liability, and its ultimate settlement, classified in other income (expense).

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We apply the intraperiod tax allocation rules to allocate our provision for income taxes between continuing operations and other categories of earnings, such as other comprehensive income (loss), when we meet the criteria prescribed by U.S.

We annually distribute cash from our foreign subsidiaries’ current year earnings and record the tax impacts associated with these transactions.

Any current earnings not otherwise distributed or planned to be distributed in the current year are considered permanently reinvested in our foreign operations.

The aggregate of these earnings is currently a deficit for U.S.

tax purposes and would not result in any material taxes, if distributed.

We have no plans to dispose of foreign subsidiaries and would not expect outside basis differences in foreign subsidiaries to reverse with material tax consequences.

The tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained based on its technical merits.

When working capital funds are available after satisfying all other business obligations, we may distribute cash from a foreign subsidiary to its U.S.

parent and record the tax impacts associated with these transactions.

However, to the extent current earnings are not otherwise distributed or planned to be distributed, in the current year, they are considered permanently reinvested in our foreign operations.

We currently would not expect the aggregate of these permanently reinvested earnings, which are largely in deficit positions for U.S.

tax purposes, to result in any material U.S.

taxes, if distributed.

The tax benefit from an uncertain tax position is recognized only if it is determined that the tax position will more likely be sustained based on its technical merits.

We measure and record the tax benefits from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

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We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.

We account for the tax effects of global intangible low-taxed income (“GILTI”) as a component of income tax expense in the period the tax arises, to the extent applicable.

Other Comprehensive Income (Loss)

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Amounts remaining within AOCI are expected to be reclassified out of AOCI in the future, at which point they will be recognized within the consolidated statement of operations as a component of net income (loss).

We recognize OCI related to the translation of assets and liabilities of our foreign subsidiaries which are denominated in currencies other than USD, unrealized gains and losses on the effective portion of our derivatives designated in cash flow and net investment hedging relationships, actuarial gains and losses and prior service costs related to our pension and other post-retirement benefit plans, as well as our proportionate share of our equity method investments' OCI.

We recognize OCI related to the translation of assets and liabilities of our foreign subsidiaries which are denominated in currencies other than USD, unrealized gains and losses on the effective portion of our derivatives designated in cash flow hedging relationships and derivative and non-derivative instruments designated in net investment hedging relationships, actuarial gains and losses and prior service costs related to our pension and other post-retirement benefit plans, as well as our proportionate share of our equity method investments' OCI.

Additionally, when we do not have the expectation or intent to cash settle certain of our intercompany note receivable and note payable positions in the foreseeable future, the remeasurement of these instruments is recorded as a component of foreign currency translation adjustments within OCI.

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We also had other non-cash activities primarily related to capital expenditures incurred but not yet paid of $ 171.9 million, $ 214.9 million and $ 221.0 million during 2020, 2019 and 2018, respectively.

Additionally, the initial recognition of the warrants discussed in Note 16, “Derivative Instruments and Hedging Activities” represents a non-cash financing activity in 2018, and during 2017, we also had non-cash activities related to the acquisition of a business.

Additionally, the initial recognition of the warrants discussed in Note 16, “Derivative Instruments and Hedging Activities” represents a non-cash financing activity in 2018.

Other than the activity mentioned above and the supplemental non-cash activity related to the recognition of leases discussed in Note 19, "Leases," there was no other significant non-cash activity in 2020, 2019 and 2018.

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We calculate this allowance based on our country-specific history of write-offs, level of past-due accounts based on the contractual terms of the receivables and our relationships with and the economic status of our customers, which may be impacted by current macroeconomic and regulatory factors specific to the country of origin.

This methodology takes into consideration historical loss experience and current and forecasted changes in cash flows based on internal and external information.

In the U.K., loans are extended to a portion of the retail outlets that sell our brands.

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Software maintenance and training costs are expensed in the period incurred.

Implementation costs incurred in hosting arrangements that are service contracts are currently capitalized within

Implementation costs incurred in hosting arrangements that are service contracts are capitalized within other assets and are immaterial.

See Note 2, "New Accounting Pronouncements" for further discussion of the changes to the accounting for implementation costs incurred in a hosting arrangement that became effective January 1, 2020.

Properties held under finance lease (previously known as capital) are depreciated using the straight-line method over the estimated useful life or the lease term, whichever is shorter, and the related depreciation is included in depreciation expense.

Properties held under finance lease are depreciated using the straight-line method over the estimated useful life or the lease term, whichever is shorter, and the related depreciation is included in depreciation expense.

Finance lease assets for which ownership is transferred at the end of the lease, or there is a purchase option that we are reasonably certain to exercise, are amortized over the useful life that would be assigned if the asset were owned.

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A reporting unit is an operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by segment management.

As of the date of completion of our 2019 impairment testing, the operations in each of the specific regions within our U.S., Canada, Europe and International segments are considered components based on the availability of discrete financial information and the regular review by segment management.

We have concluded that the components within the U.S., Canada and Europe segments each meet the criteria as having similar economic characteristics and therefore have aggregated these components into the U.S., Canada and Europe reporting units, respectively.

Additionally, we determined that the components within our International segment do not meet the criteria for aggregation with the exception of the operations of our India businesses, which constitute a separate reporting unit.

As the changes in management structure resulting from the revitalization plan discussed above were not effective until January 1, 2020, potential changes to our reporting unit conclusions, if any, have not yet been evaluated and concluded.

Effective January 1, 2020, we have two reporting units, North America and Europe.

See further discussion in Note 10, "Goodwill and Intangibles."

As required, we evaluate the carrying value of our goodwill and indefinite-lived intangible assets for impairment at the reporting unit level at least annually or when an interim triggering event occurs that would indicate that impairment may have taken place.

Our annual test is performed as of the first day of our fiscal fourth quarter.

We continuously monitor the performance of our other definite-lived intangible assets and evaluate for impairment when evidence exists that certain events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.

We continuously monitor the performance of our other definite-lived intangible assets and evaluate for impairment when evidence exists that certain events

or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.

Significant judgments and assumptions are required in such impairment evaluations.

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We account for these contracts on an accrual basis, recording realized settlements related to these contracts in the same financial statement line items as the corresponding transaction.

We account for leases in accordance with Accounting Standards Codification (“ASC”) Topic 842, Leases, which we adopted on January 1, 2019, electing not to adjust comparative periods presented and applying a modified retrospective transition approach as of the effective date of adoption (see Note 2, "New Accounting Pronouncements" for impacts of adoption).

We enter into contractual arrangements for the utilization of certain non-owned assets, primarily real estate and equipment, which are evaluated as finance or operating leases upon commencement, and are accounted for accordingly.

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We assess whether an arrangement is or contains a lease at inception of the contract.

For all contractual arrangements deemed to be leases (other than short-term leases), as of the lease commencement date, we recognize on the consolidated balance sheet a liability for our obligation related to the lease and a corresponding asset representing our right to use the underlying asset over the period of use.

For all contractual arrangements deemed to be leases (other than short-term leases), as of the lease commencement date, we recognize on the consolidated balance sheet a liability for

our obligation related to the lease and a corresponding asset representing our right to use the underlying asset over the period of use.

For leases that qualify as short-term leases, we have elected, for all classes of underlying assets, to not apply the balance sheet recognition requirements of ASC 842, and instead, we recognize the lease payments in the consolidated statements of operations on a straight-line basis over the lease term.

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We employ the corridor approach for determining each plan's potential amortization from AOCI of deferred gains and losses, which occur when actual experience differs from estimates, into our net periodic pension and postretirement benefit cost.

This approach defines the "corridor" as the greater of 10% of the projected benefit obligation or 10% of the market-related value of plan assets and requires amortization of the excess net gain or loss that exceeds the corridor over the average remaining service periods of active plan participants.

service periods of active plan participants.

For plans closed to new entrants and the future accrual of benefits, the average remaining life expectancy of all plan participants (including retirees) is used.

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New Accounting Pronouncements

Adoption of New Accounting Pronouncements

In February 2016, the FASB issued authoritative guidance intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and liabilities on the balance sheet and disclosure of key information about leasing arrangements.

We adopted this guidance and all related amendments applying the modified retrospective transition approach to all lease arrangements as of the effective date of adoption, January 1, 2019.

As permitted under the guidance, financial statements for reporting periods beginning after January 1, 2019 are presented under the new guidance, while prior period amounts have not been adjusted and continue to be reported and disclosed in accordance with historical accounting guidance.

Additionally, for existing leases as of the effective date, we have elected the package of practical expedients available at transition to not reassess the historical lease determination, lease classification and initial direct costs.

For operating leases, the adoption of the new guidance resulted in the recognition of right-of-use assets of approximately $ 154 million and aggregate current and non-current lease liabilities of approximately $ 164 million as of January 1, 2019, including immaterial reclassifications of prepaid and deferred rent balances into right-of-use assets.

Separately, as a result of the cumulative impact of adopting the new guidance, we recorded a net increase to opening retained earnings of approximately $ 32 million as of January 1, 2019 with the offsetting impact within other assets, related to our share of the accelerated recognition of deferred gains on non-qualifying and other sale-leaseback transactions by an equity method investment within our Canada segment.

Additionally, while our accounting for finance leases remains unchanged at adoption, we have prospectively changed the presentation of finance lease liabilities within the consolidated balance sheets to be presented within current portion of long-term debt and short-term borrowings, and long-term debt, as appropriate.

As of January 1, 2019, we reclassified approximately $ 3 million and $ 82 million of short-term and long-term finance lease liabilities from accounts payable and other current liabilities and other non-current liabilities to current portion of long-term debt and short-term borrowings and long-term debt, respectively.

The adoption of this guidance had no impact to our cash flows from operating, investing, or financing activities.

See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” and Note 19, "Leases" for additional discussion on our leasing arrangements.

Accumulated Other Comprehensive Income (Loss)

In February 2018, the FASB issued authoritative guidance intended to improve the usefulness of financial information related to the enactment of the 2017 Tax Act.

This guidance provides an option to reclassify from AOCI to retained earnings the stranded tax effects resulting from the change in the U.S.

federal corporate income tax rate as a result of the 2017 Tax Act.

We adopted this guidance as of January 1, 2019 and elected to reclassify stranded tax effects related to the 2017 Tax Act, resulting in an approximate $ 75 million increase to retained earnings in the period of adoption.

New Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued authoritative guidance that changes the impairment model used to measure credit losses for most financial instruments.

Adoption of New Accounting Pronouncements and Securities and Exchange Commission Rules

In June 2016, the FASB issued guidance that changes the impairment model used to measure credit losses for most financial instruments.

The new guidance replaces the existing incurred credit loss model, and requires the application of a forward-looking expected credit loss model, which will generally result in earlier recognition of allowances for credit losses for financial instruments that are in scope of the new guidance, including trade receivables.

This guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods.

We are currently evaluating the potential impact of this guidance and do not expect it will have a material impact on our financial statements.

We adopted this guidance in the first quarter of 2020, which did not have a material impact on our financial statements.

In August 2018, the FASB issued authoritative guidance intended to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract.

This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The guidance also requires presentation of the capitalized implementation costs in the statement of financial position and in the statement of cash flows in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented, and the expense related to the capitalized implementation costs to be presented in the same line item in the statement of operations as the fees associated with

the hosting element (service) of the arrangement.

This guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods.

We will adopt this guidance prospectively in the first quarter of 2020 and are currently evaluating the impact on our financial position, results of operations and statement of cash flows.

The adoption of this guidance will result in the change in presentation of capitalized implementation costs related to hosting arrangements from properties to other assets on the consolidated balance sheet, as well as the expense related to such costs no longer being classified as depreciation expense and cash flows related to those costs no longer being presented as investing activities.

We adopted this guidance prospectively in the first quarter of 2020, which did not have a material impact on our financial statements.

However, the adoption of this guidance resulted in the change in presentation of capitalized implementation costs related to hosting arrangements from properties to other assets on the consolidated balance sheet, as well as the expense related to such costs no longer being classified as depreciation expense and cash flows related to those costs no longer being presented as investing activities beginning in the first quarter of 2020.

In March 2020, the SEC finalized its proposed updates to Rule 3-10 of Regulation S-X, Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant's Securities (the

The Rule simplifies the disclosure requirements for issuers and guarantors of securities that are registered or being registered under the Securities Act of 1933.

The Rule also eliminates the requirement to disclose condensed consolidating financial information within the financial statements for qualifying entities and permits abbreviated disclosures of the guarantor/issuer relationship within Part II, Item 7, Management's Discussion and Analysis .

The Rule is effective on January 4, 2021 and voluntary compliance prior to the effective date is permitted.

We adopted the Rule effective January 1, 2020 and, as such, no longer include condensed consolidating information within Part II, Item 8, Financial Statements.

New Accounting Pronouncements Not Yet 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 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, which is a full year after the current expected discontinuation date of LIBOR.

We are currently evaluating the potential impact of this guidance on our financial statements.

In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes.

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This guidance is effective for annual periods beginning after December 15, 2020, including interim periods within those annual periods.

We are currently evaluating the potential impact of this guidance and do not expect it will have a material impact on our financial statements.

We plan to adopt this guidance in the first quarter of 2021 and do not expect it will have a material impact 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 consolidated financial statements.

Segment Reporting

Our reporting segments are based on the key geographic regions in which we operate, which are the basis on which our chief operating decision maker evaluates the performance of the business.

On October 28, 2019, as part of our revitalization plan, we made the determination to establish Chicago, Illinois as our North American operational headquarters, close our existing office in Denver, Colorado and consolidate certain administrative functions into our other existing office locations.

In connection with these consolidation activities, effective January 1, 2020, we changed our management structure to two business units, our North America and Europe businesses.

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

Reporting Segments as of December 31, 2019

United States

segment consists of our production, marketing and sales of our brands and other owned and licensed brands in the U.S.

We also have an agreement to brew, package and ship products for Pabst Brewing Company, LLC.

Additionally, the U.S.

segment produces beer for export to our Canada and International segments.

The Canada segment consists of our production, marketing and sales of our brands and other owned and licensed brands in Canada.

The Canada segment also includes BRI, our joint venture arrangement related to the distribution and retail sale of beer in Ontario, and BDL, our joint venture arrangement related to the distribution of beer in the western provinces.

Both BRI and BDL are accounted for as equity method investments.

We have an agreement with Heineken N.V.

Our reporting segments are based on the key geographic regions in which we operate, and previously included the U.S., Canada, Europe and International segments.

As part of our revitalization plan announced in the fourth quarter of 2019, we made the determination to establish Chicago, Illinois as our North American operational headquarters, closed our office in Denver, Colorado and consolidated certain administrative functions into our other existing office locations.

In connection with these consolidation activities, effective January 1, 2020, we changed our management structure from a corporate center and four segments to two segments - North America and Europe.

The North America segment consolidated the United States, Canada and corporate center, with a centralized North American leadership team, integrated North American supply chain network and centralized marketing and support functions, enabling us to move more quickly with an integrated portfolio strategy.

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

The previous International segment was reconstituted to more effectively grow our global brands with the Africa and Asia Pacific businesses reporting into the Europe segment and the remaining International business reporting into the North America segment.

As a result of these structural changes, the review of discrete financial information by our chief operating decision maker, our President and Chief Executive Officer, is now performed only at the consolidated North America and Europe geographic segment level, which is the basis on which our chief operating decision maker evaluates the performance of the business and allocates resources accordingly.

Historical results have been recast to retrospectively reflect these changes in segment reporting.

Reporting Segments

North America

The North America segment consists of our production, marketing and sales of our brands and other owned and licensed brands in the U.S., Canada and various countries in Latin and South America.

In the U.S., we have an agreement to brew, package and ship products for Pabst Brewing Company, LLC, and in Canada, we contract brew and package certain Labatt brands for the U.S.

We also have an agreement with Heineken N.V.

("Heineken") that grants us the right to import, market, distribute and sell certain Heineken products in Canada.

We also contract brew and package certain Labatt brands for the U.S.

The Europe segment consists of our production, marketing and sales of our brands as well as a number of smaller regional brands in the U.K., the Republic of Ireland and Central Europe.

Additionally, European markets including Sweden, Spain, Germany, Ukraine and Russia are reported within our Europe segment.

The North America segment also includes BRI, our joint venture arrangement related to the distribution and retail sale of beer in Ontario, and BDL, our joint venture arrangement related to the distribution of beer in the western provinces.

In the third quarter of 2020, we formed The Yuengling Company LLC ("TYC"), a joint venture owned equally by MCBC and DGY West Holdings, LP ("DGY West") that, pursuant to an operating agreement, formed to expand commercialization of Yuengling's brands with operation currently expected to commence in the second half of 2021.

BRI, BDL and TYC are all accounted for as equity method investments.

The Europe segment consists of our production, marketing and sales of our brands as well as a number of smaller regional brands in the U.K., Central Europe and various other European countries, along with certain countries within Africa and Asia Pacific.

Our European business also has licensing agreements and distribution agreements with various other brewers.

A portion of the operating results of the international Miller brand portfolio are reported in the Europe segment.

International

The objective of the International segment is to grow and expand our business and brand portfolio in new and existing markets, including emerging markets, outside the U.S., Canada, and Europe segments.

The International segment includes operations in Latin America, Asia Pacific and Africa.

International operates through a combination of export and license arrangements, in addition to our India business that produces, markets and sells our products and our Japan business that imports, markets and sells our and certain other third-party products.

Corporate is not a reportable segment and primarily includes interest and certain other general and administrative costs that are not allocated to any of the operating segments as well as the results of our water resources and energy operations in Colorado 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.

The majority of these corporate costs relate to worldwide administrative functions, such as corporate affairs, legal, human resources, information technology, finance, internal audit, insurance, ethics and compliance, risk management, global growth, supply chain and commercial initiatives.

Additionally, only the service cost component of net periodic pension and OPEB cost is reported within each operating segment, and all other components are reported within the Corporate segment.

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

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Consolidated net sales represent sales to third-party external customers less excise taxes.

Inter-segment transactions impacting net sales revenues and income (loss) before income taxes eliminate in consolidation and, for fiscal year 2019 are U.S.

segment sales of $ 94.2 million to our International segment and $ 17.5 million to our Canada segment, as well as approximately $ 12 million of Canada inter-segment sales to the U.S.

Inter-segment transactions impacting net sales revenues and income (loss) before income taxes eliminate upon consolidation and are primarily related to North America segment sales to, and royalties received from, the Europe segment.

The following tables represent consolidated net sales, interest expense, interest income and reconciliations of amounts shown as income (loss) before income taxes to income (loss) attributable to MCBC.

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refer to Note 7, "Special Items" for further discussion.

Additionally, integration costs of $ 25.0 million , $ 38.8 million and $ 70.6 million for 2019 , 2018 and 2017 , respectively, were recorded within marketing, general and administrative expenses, primarily within the Corporate segment.

Additionally, integration costs of $ 25.0 million and $ 38.8 million for 2019 and 2018, respectively, were recorded within marketing, general and administrative expenses, primarily within our North America segment.

No integration costs were recorded in the year ended December 31, 2020.

Year ended December 31, 2020

International (2)

Corporate (3)

Inter-segment net sales eliminations

North America Europe (1)

Unallocated (2)

Inter-segment net sales eliminations Consolidated (3)

(In millions)

Net sales $ 8,237.0 $ 1,431.9 $ — $ ( 14.9 ) $ 9,654.0

Interest expense ( 2.6 ) ( 5.7 ) ( 266.3 ) — ( 274.6 )

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Net income (loss) attributable to MCBC $ ( 949.0 )

During the third quarter of 2019, we recorded a goodwill impairment loss to our Canada reporting unit of $ 668.3 million , which was recorded as a special item.

See Note 10, "Goodwill and Intangible Assets" for further discussion.

During the second quarter of 2019, we completed the sale of our existing Montreal brewery for $ 96.2 million (CAD 126 million ), resulting in a $ 61.3 million gain, which was recorded as a special item.

Also, during 2019 and 2018, we recorded unrealized mark-to-market losses of approximately $ 18 million and $ 24 million , respectively, on the HEXO Corp.

("HEXO") warrants received in connection with the formation of the Truss LP ("Truss") joint venture.

During the third quarter of 2019, we recorded an aggregate goodwill and definite-lived intangible asset impairment loss related to our India reporting unit of $ 12.2 million , which was recorded as a special item.

(1) During the fourth quarter of 2020, we recorded a goodwill impairment loss related to the Europe reporting unit of $ 1,484.3 million, which was recorded as a special item.

See Note 10, "Goodwill and Intangible Assets" for further discussion.

Related to the unrealized mark-to-market valuation on our commodity hedge positions, we recorded unrealized losses of $ 0.8 million for the year ended December 31, 2019 compared to unrealized losses of $ 166.2 million for the year ended December 31, 2018.

(2) Includes unrealized mark-to-market changes on our commodity hedge positions.

We recorded unrealized gains of $ 107.6 million for the year ended December 31, 2020.

(3) During 2020, the coronavirus pandemic had a material adverse effect on our operations, liquidity, financial condition and results of operations during 2020 due to on-premise closures worldwide.

In 2020, we experienced a reduction in volume as a result of the on-premise closures worldwide and due to the keg relief program, experienced a reduction in net sales and an increase in our inventory allowance for obsolete inventory.

Year ended December 31, 2019

International

Corporate (1)

Inter-segment net sales eliminations

North America (1)

Europe Unallocated (2)

Inter-segment net sales eliminations Consolidated

(In millions)

Net sales $ 8,618.2 $ 1,986.4 $ — $ ( 25.2 ) $ 10,579.4

Interest expense 2.8 ( 6.2 ) ( 277.5 ) — ( 280.9 )

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Net income (loss) attributable to MCBC $ 241.7

During the first quarter of 2018, we recorded a gain of $ 328.0 million related to the Adjustment Amount as defined and further discussed in Note 7, "Special Items." Additionally, related to the unrealized mark-to-market valuation on our commodity hedge positions, we recorded unrealized losses of $ 166.2 million for the year ended December 31, 2018 compared to unrealized gains of $ 123.3 million for the year ended December 31, 2017.

(1) During the third quarter of 2019, we recorded a goodwill impairment loss to our North America reporting unit of $ 668.3 million, which was recorded as a special item.

See Note 10, "Goodwill and Intangible Assets" for further discussion.

During the second quarter of 2019, we completed the sale of our existing Montreal brewery for $ 96.2 million, resulting in a $ 61.3 million gain.

(2) Includes unrealized mark-to-market valuation on our commodity hedge positions.

We recorded unrealized losses of $ 0.8 million for the year ended December 31, 2019.

Year ended December 31, 2018

International

Corporate (2)

Inter-segment net sales eliminations

North America (1)

Europe Unallocated (2)

Inter-segment net sales eliminations Consolidated

(In millions)

Net sales $ 8,724.4 $ 2,070.4 $ — $ ( 25.2 ) $ 10,769.6

Interest expense 8.8 ( 5.6 ) ( 309.4 ) — ( 306.2 )

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Net income (loss) attributable to MCBC $ 1,116.5

During the first quarter of 2017, we released an indirect tax loss contingency, which was initially recorded in the fourth quarter of 2016, for a benefit of approximately $ 50 million .

See Note 18, "Commitments and Contingencies" for details.

Related to the unrealized mark-to-market valuation on our commodity hedge positions, we recorded unrealized gains of $ 123.3 million for the twelve months ended December 31, 2017.

(1) During the first quarter of 2018, we recorded a gain of $ 328.0 million related to the Adjustment Amount as defined and further discussed in Note 7, "Special Items."

(2) Includes unrealized mark-to-market valuation on our commodity hedge positions.

We recorded unrealized losses of $ 166.2 million for the year ended December 31, 2018.

The following table presents total assets and select cash flow information by segment:

Depreciation and amortization

Capital expenditures

As of December 31,

For the years ended December 31,

Assets Depreciation and amortization Capital expenditures

As of December 31, For the years ended December 31, For the years ended December 31,

2020 2019 2020 2019 2018 2020 2019 2018

(In millions)

International

North America $ 23,375.6 $ 23,360.2 $ 743.0 $ 676.9 $ 667.6 $ 461.4 $ 450.7 $ 499.7

Europe 3,955.5 5,499.6 179.0 182.1 189.9 113.4 143.1 152.0

Consolidated $ 27,331.1 $ 28,859.8 $ 922.0 $ 859.0 $ 857.5 $ 574.8 $ 593.8 $ 651.7

The following table presents net sales by geography, based on the location of the customer:

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

1 unchanged sentence

United States and its territories $ 7,016.1 $ 7,244.9 $ 7,272.1

Canada 1,111.6 1,231.3 1,298.2

United Kingdom 663.7 1,119.1 1,184.6

Other foreign countries (1)

862.6 984.1 1,014.7

Consolidated net sales $ 9,654.0 $ 10,579.4 $ 10,769.6

Reflects net sales from the individual countries within our Central European operations (included in our Europe segment), as well as our International segment, for which no individual country has total net sales exceeding 10 % of the total consolidated net sales.

(1) Reflects net sales from the individual countries within certain countries in Europe, Latin America, South America, Africa and Asia.

No individual country has total net sales exceeding 10 % of the total consolidated net sales.

The following table presents net properties by geographic location:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(In millions)

1 unchanged sentence

United States and its territories $ 2,393.7 $ 2,760.2

Canada 941.9 831.9

United Kingdom 384.2 406.5

1 unchanged sentence

Consolidated net properties $ 4,250.3 $ 4,546.5

Reflects net properties within the individual countries included in our Central European operations (included in our Europe segment), as well as our International segment, for which no individual country has total net properties exceeding 10 % of the total consolidated net properties.

(1) Reflects net sales from the individual countries within certain countries in Europe, Latin America, South America, Africa and Asia.

No individual country has total net properties exceeding 10 % of the total consolidated net properties.

Our investments include both equity method and consolidated investments.

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We have not provided any financial support to any of our VIEs during 2020 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.

Amounts due to and due from our equity method investments are recorded as affiliate accounts payable and affiliate accounts receivable.

See below under "Affiliate Transactions" for further details.

In the third quarter of 2020, we formed The Yuengling Company LLC ("TYC") , a joint venture equally owned by MCBC and DGY West that, pursuant to an operating agreement, formed to expand commercialization of Yuengling's brands with operation currently expected to commence in the second half of 2021.

TYC will oversee any new market expansion outside Yuengling's current 22-state footprint and New England.

We have concluded that TYC is a VIE for which we are not the primary beneficiary and will therefore apply the equity method of accounting.

We have an obligation to proportionately fund TYC's operations.

Initial funding of TYC is expected to begin in the first quarter of 2021 and is expected to be immaterial.

Transactions between MCBC and TYC are expected to include billings for product under a supply agreement and fees under a services agreement and will be considered affiliate transactions.

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.

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Our consolidated VIEs are Cobra Beer Partnership, Ltd.

("Cobra U.K."), Rocky Mountain Metal Container (“RMMC”), Rocky Mountain Bottle Company (“RMBC”) and Truss.

("Cobra U.K."), Rocky Mountain Metal Container (“RMMC”), Rocky Mountain Bottle Company (“RMBC”) and Truss, as well as other immaterial entities.

Our unconsolidated VIEs are BRI and BDL, as well as other immaterial investments.

6 unchanged sentences

Brewers' Retail Inc.

BRI is a beer distribution and retail network for the Ontario region of Canada, with majority of the ownership residing with MCC, Labatt Breweries of Canada LP (a subsidiary of ABI) and Sleeman Breweries Ltd.

BRI is a beer distribution and retail network for the Ontario region of Canada, with majority of the ownership residing with Molson Coors Canada ("MCC"), Labatt Breweries of Canada LP (a subsidiary of ABI) and Sleeman Breweries Ltd.

(a subsidiary of Sapporo International).

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As of December 31, 2020 and December 31, 2019, we had a positive equity method investment balance of $ 31.9 million and $ 27.2 million, respectively.

The increase to our net investment balance from prior year was primarily related to our share of the accelerated recognition of deferred gains on BRI's non-qualifying and other sale-leaseback transactions upon the adoption of the new lease accounting standard as of January 1, 2019, as discussed in Note 2, "New Accounting Pronouncements." This increase was partially offset by our share of BRI's net loss during the year as well as an increase to BRI's employee retirement plan obligations (resulting from the annual actuarial valuation) unfavorably impacting the net assets of BRI.

See "Affiliate Transactions" below for BRI affiliate transactions including administrative fees charged to MCBC under the agreement with BRI which are recorded in cost of goods sold, as well as for BRI affiliate due to and due from balances as of December 31, 2020 and December 31, 2019, respectively, related to trade receivables and payables for sales to external customers and costs incurred by BRI offset by administrative fees charged and paid by MCBC (which may be in a payable or receivable position depending on the amount under or over charged).

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BDL is a distribution operation owned by MCC and Labatt Breweries of Canada LP (a subsidiary of ABI) that, pursuant to an operating agreement, acts as an agent for the distribution of their products in the western provinces of Canada.

The two owners share 50 % - 50 % voting control of this business.

The two owners share equal voting control of this business.

We consider BDL an affiliate.

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This administrative fee is based on costs incurred, net of other revenues earned, and is allocated in accordance with the operating agreement to the owners based on volume of products.

No other parties are allowed to sell beer through BDL, which does not take legal title to the beer distributed for the owners.

Our investment in BDL was $ 30.0 million as of both December 31, 2019 and December 31, 2018 .

for sales to external customers and costs incurred by BDL offset by administrative fees charged and paid by MCBC (which may be in a payable or receivable position depending on the amount under or over charged).

Our investment in BDL was $ 27.0 million and $ 30.0 million as of December 31, 2020 and December 31, 2019, respectively.

See "Affiliate Transactions" section below for BDL affiliate transactions including administrative fees charged to MCBC under the agreement with BDL which are recorded in cost of goods sold, as well as for BDL affiliate due to and due from balances as of December 31, 2020 and December 31, 2019, respectively, related to trade receivables and payables for sales to external customers and costs incurred by BDL offset by administrative fees charged and paid by MCBC (which may be in a payable or receivable position depending on the amount under or over charged).

We have certain other immaterial equity investments we enter into from time to time that align with our organizational strategies and growth initiatives.

4 unchanged sentences

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

2 unchanged sentences

Amounts due to and due from affiliates as of December 31, 2020 and December 31, 2019, respectively, are as follows:

Amounts due from affiliates

Amounts due to affiliates

December 31, 2019

December 31, 2018

December 31, 2019

December 31, 2018

Amounts due from affiliates Amounts due to affiliates

December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019

(In millions)

BRI $ 6.0 $ 4.6 $ — $ —

BDL 2.1 4.0 — —

Other 0.3 0.3 0.5 —

Total $ 8.4 $ 8.9 $ 0.5 $ —

Consolidated VIEs

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We consolidate the results and financial position of Cobra U.K., and it is reported within our Europe operating segment.

On October 4, 2018 , a wholly-owned subsidiary within our Canadian business completed the formation of Truss LP, an independent Canadian joint venture with HEXO to pursue opportunities to develop, produce and market non-alcoholic,

cannabis-infused beverages in Canada.

Truss is structured as a standalone start-up company with its own board of directors and an independent management team.

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

Truss is structured as a standalone company with its own board of directors and an independent management team.

We maintain a 57.5 % controlling interest in Truss, which is a VIE that is consolidated.

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The following summarizes the assets and liabilities of our consolidated VIEs (including noncontrolling interests):

December 31, 2019

December 31, 2018

Total Liabilities

December 31, 2020 December 31, 2019

Total Assets Total Liabilities Total Assets Total Liabilities

(In millions)

RMMC/RMBC $ 239.3 $ 17.9 $ 207.4 $ 17.9

Other $ 93.4 $ 18.0 $ 65.3 $ 20.8

Grolsch Deconsolidation

In September 2019, we received termination notices of our Grolsch U.K.

In 2019, we received termination notices of our Grolsch U.K.

("Grolsch") joint venture arrangement, as well as the related brewing and distribution agreements for the Grolsch brands in the U.K.

In November 2019, we mutually agreed with Asahi that the agreements would terminate with immediate effect and that we would receive a payment in November 2019.

As a result, the Grolsch joint venture ceased all operations, including the production, marketing and sale of the Grolsch brands in these markets, in the third quarter of 2019.

Upon notice of termination in the third quarter of 2019, we reassessed our status as the primary beneficiary of the joint venture and concluded that we were no longer able to exert control over the operations or direction of the joint venture or otherwise influence the activities that most significantly impact the economics of the entity.

Therefore, we deconsolidated the joint venture and recorded an immaterial loss on deconsolidation as a special item during the third quarter of 2019.

The aggregate loss related to the termination of the Grolsch business, resulting from the loss upon deconsolidation and the impairment losses on the related definite-lived intangible assets in the third quarter of 2019, along with the payment we received and recorded in the fourth quarter of 2019, is $ 0.5 million for fiscal year 2019.

We therefore reassessed our status as the primary beneficiary of the joint venture and concluded that we were no longer able to exert control over the operations or direction of the joint venture or otherwise influence the activities that most significantly impact the economics of the entity.

As a result, we deconsolidated the joint venture and recorded an aggregate immaterial loss on the deconsolidation and termination of the Grolsch business as a special item in 2019.

Other Income and Expense

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

5 unchanged sentences

During 2018, we recorded a non-cash gain of CAD 5.8 million, or $ 4.3 million, resulting from the release of our guarantee of the Montreal Canadiens' obligations under a ground lease for the Bell Centre Arena as a result of an independent transaction by the Montreal Canadiens with the lessor.

During 2017, we received payment and recorded a gain of CAD 10.9 million , or $ 8.3 million , resulting from a purchase price adjustment related to the historical sale of Molson Inc.’s ownership interest in the Montreal Canadiens, an affiliate of MCBC.

Our income (loss) before income taxes on which the provision for income taxes was computed is as follows:

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

Income tax expense (benefit) includes the following current and deferred provisions:

Domestic $ 1,151.7 $ 1,136.1 $ 1,320.4

Foreign ( 1,795.6 ) ( 656.2 ) 39.4

Total $ ( 643.9 ) $ 479.9 $ 1,359.8

The components of the provision for income taxes are as follows:

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

Total current tax expense (benefit)

Total deferred tax expense (benefit)

Total income tax expense (benefit)

The increase in income tax expense for 2018 versus 2017 was primarily driven by net deferred tax benefit of approximately $ 567 million recognized in 2017 resulting from the impacts of the 2017 Tax Act, partially offset by the impact of the reduction of the U.S.

federal corporate income tax rate from 35 % to 21 % in 2018.

Our effective tax rate varies from the U.S.

federal statutory income tax rate as follows:

Federal $ 79.0 $ 69.1 $ ( 22.9 )

State 5.2 9.4 ( 4.7 )

Foreign 111.4 46.7 38.7

Total current tax (benefit) expense $ 195.6 $ 125.2 $ 11.1

Federal $ 101.9 $ 128.3 $ 232.2

State 19.5 22.2 31.2

Foreign ( 15.2 ) ( 42.0 ) ( 49.3 )

Total deferred tax (benefit) expense $ 106.2 $ 108.5 $ 214.1

Total income tax (benefit) expense $ 301.8 $ 233.7 $ 225.2

A reconciliation from the U.S.

statutory federal income tax rate to the effective income tax rate is as follows:

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

($ in millions)

Statutory federal income tax rate 21.0 % $ ( 135.2 ) 21.0 % $ 100.8 21.0 % $ 285.5

1 unchanged sentence

Effect of foreign tax rates and tax planning 3.5 % ( 22.3 ) ( 21.2 ) % ( 101.8 ) ( 8.1 ) % ( 109.5 )

Effect of U.S.

Effect of foreign tax law and rate changes ( 0.9 ) % 6.0 — % — — % —

Effect of unrecognized tax benefits ( 26.1 ) % 167.9 3.7 % 18.0 0.8 % 10.9

1 unchanged sentence

Goodwill impairment ( 41.4 ) % 266.8 36.5 % 175.3 — % —

Effective tax rate

The increase in the effective income tax rate for 2019 versus 2018 is primarily driven by the $ 668.3 million impairment loss attributable to nondeductible goodwill of our Canada reporting unit, increased valuation allowances, the recognition of other one-time tax expenses in 2019, as well as cycling one-time tax benefits in 2018.

The increase in the effective income tax rate for 2018 versus 2017 was primarily driven by the one-time impacts of the 2017 Tax Act recognized when enacted in 2017, most notably the remeasurement of our deferred taxes from the reduction in the U.S.

statutory federal corporate income tax rate.

Other, net ( 2.6 ) % 16.0 ( 0.7 ) % ( 3.8 ) 0.8 % 10.0

Effective tax rate / Tax (benefit) expense ( 46.9 ) % $ 301.8 48.7 % $ 233.7 16.6 % $ 225.2

The decrease to the effective tax rate, when compared to the statutory rate, for fiscal year 2020 is primarily driven by two items.

The impact of the $ 1,484.3 million goodwill impairment, recorded within our Europe segment in the fourth quarter of 2020, of which a majority related to nondeductible goodwill and the recognition of approximately $ 135 million of tax expense following the enactment of the U.S.

final hybrid regulations, recorded in the second quarter of 2020.

The increase in the effective tax rate, when compared to the statutory rate, for fiscal year 2019 was primarily driven by the $ 668.3 million goodwill impairment recorded within our North America segment in 2019, increased valuation allowances, and the recognition of other one-time tax expenses.

The decrease in the effective tax rate, when compared to the statutory rate, for fiscal year 2018 was primarily driven by one-time tax benefits.

Additionally, our foreign businesses operate in jurisdictions with statutory income tax rates that differ from the U.S.

1 unchanged sentence

Specifically, the statutory income tax rates in the countries in Europe in which we operate range from 9 % to 25 %, and Canada has a statutory income tax rate of approximately 26 %.

Separately, since 2018, the U.S.

Department of Treasury has continued to issue proposed, temporary and final regulations to implement provisions of the 2017 Tax Act.

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

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

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

December 31, 2019

December 31, 2018

During the third quarter of 2020, the U.K.

government enacted legislation to repeal the previously enacted reduction to the U.K.

corporate income tax rate.

Remeasurement of our deferred tax liabilities resulted in the recognition of additional tax expense of approximately $ 6 million in 2020.

December 31, 2020 December 31, 2019

(In millions)

2 unchanged sentences

Pension and postretirement benefits 102.4 115.9

Foreign exchange gain/loss

Derivative instruments 76.5 41.8

5 unchanged sentences

Non-current deferred tax liabilities:

Fixed assets 358.3 353.7

Partnerships and investments 19.6 18.8

4 unchanged sentences

Net non-current deferred tax liabilities $ 2,133.9 $ 2,155.4

The overall increase in net deferred tax liabilities of $ 101.1 million in 2019 is primarily attributable to the amortization of goodwill and indefinite-lived intangible assets resulting from the Acquisition for U.S.

tax purposes.

The overall decrease in net deferred tax liabilities of $ 21.5 million in 2020 is primarily due to an increase in deferred tax assets of $ 143.9 million attributable to additional tax loss carryforwards, tax credits, and future deductible temporary differences generated in 2020, offset by an increase in deferred tax liabilities of $ 122.4 million related to the amortization of goodwill and indefinite-lived intangible assets for U.S.

tax purposes due to the Acquisition.

Additionally, our deferred tax balances are also impacted by foreign exchange rates, as a significant amount of our deferred tax assets and liabilities are in foreign jurisdictions.

4 unchanged sentences

We have deferred tax assets for U.S.

tax carryforwards that expire between 2020 and 2039 of $ 63.2 million and $ 76.7 million as of December 31, 2019 and December 31, 2018 , respectively.

We have foreign tax loss carryforwards that expire between 2020 and 2039 of $ 233.8 million and $ 195.0 million as of December 31, 2019 and December 31, 2018 , respectively.

We have foreign tax loss carryforwards that do not expire of $ 11.2 million and $ 984.6 million as of December 31, 2019 and December 31, 2018 , respectively.

The significant year over year decrease in our deferred tax valuation allowances as well as our tax loss carryforwards that do not expire is attributable to the liquidation of certain European entities, resulting in the write-off of their loss carryforwards and associated full valuation allowances.

As a result, these write-offs did not have an impact to the consolidated statement of operations, balance sheet and statement of cash flows.

December 31, 2019

December 31, 2018

tax carryforwards that expire between 2021 and 2040 of $ 62.4 million as of December 31, 2020, and that expire between 2020 and 2039 of $ 63.2 million as of December 31, 2019.

tax losses that may be carried forward indefinitely of $ 19.9 million and $ 0 million as of December 31, 2020 and December 31, 2019, respectively.

We have foreign tax loss carryforwards that expire between 2021 and 2040 of $ 283.5 million as of December 31, 2020, and that expire between 2020 and 2039 of $ 233.8 million as of December 31, 2019.

We have foreign tax losses that may be carried forward indefinitely of $ 22.0 million and $ 11.2 million as of December 31, 2020 and December 31, 2019, respectively.

December 31, 2020 December 31, 2019

(In millions)

3 unchanged sentences

Net non-current deferred tax liabilities $ 2,133.9 $ 2,155.4

The 2019 and 2018 amounts above exclude $ 68.4 million and $ 47.8 million , respectively, of unrecognized tax benefits that have been recorded as a reduction of non-current deferred tax assets, which is presented within non-current deferred tax liabilities due to jurisdictional netting on the consolidated balance sheets.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows:

The fiscal year 2020 and 2019 amounts above exclude $ 142.1 million and $ 68.4 million, respectively, of unrecognized tax benefits that have been recorded as a reduction of non-current deferred tax assets, which is presented within non-current deferred tax liabilities due to jurisdictional netting on the consolidated balance sheets.

A reconciliation of the beginning and ending amounts of un recognized tax benefits, excluding interest and penalties, is as follows:

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

3 unchanged sentences

Reductions for tax positions of prior years ( 1.6 ) — ( 8.4 )

Settlements ( 0.4 ) — —

Release due to statute expirations — ( 0.8 ) ( 1.6 )

4 unchanged sentences

however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued.

During 2020 , we anticipate that an immaterial amount of unrecognized tax benefits will be released due to closings of statutes of limitations.

Due to anticipated settlements and expected expiration of statutes of limitation, it is reasonably possible that the amount of unrecognized tax benefits may decrease by an amount up to $ 150 million within the next 12 months.

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

8 unchanged sentences

Amount of unrecognized tax benefits that would impact the effective tax rate, if recognized (1)

$ 87.7 $ 72.4 $ 51.6

(1) Amounts exclude the potential effects of valuation allowances, which may fully or partially offset the impact to the effective tax rate.

1 unchanged sentence

Tax years through 2013 are closed in the U.S.

In Canada, tax years through the year ended 2014 are closed or have been effectively settled through examination except for issues relating to intercompany cross-border transactions.

In Canada, tax years through tax year 2014 are closed or have been effectively settled through examination except for issues relating to intercompany cross-border transactions.

The statute of limitations for intercompany cross-border transactions is closed through tax year 2012.

Tax years through 2013 are closed for most countries in European jurisdictions with statutes of limitations varying from 3 to 7 years.

We annually distribute cash from our foreign subsidiaries’ current year earnings and record the tax impacts associated with these transactions.

Any current earnings not otherwise distributed or planned to be distributed in the current year are considered permanently reinvested in our foreign operations.

The aggregate of these earnings is currently a deficit for U.S.

tax purposes and would not result in any material taxes, if distributed.

We have no plans to dispose of foreign subsidiaries and would not expect outside basis differences in foreign subsidiaries to reverse with material tax consequences.

Tax years through 2013 are closed for most European jurisdictions in which we operate, with statutes of limitations varying from 3 to 7 years.

When working capital funds are available after satisfying all other business obligations, we may distribute cash from a foreign subsidiary to its U.S.

parent and record the tax impacts associated with these transactions.

However, to the extent current earnings are not otherwise distributed or planned to be distributed, in the current year, they are considered permanently reinvested in our foreign operations.

We currently would not expect the aggregate of these permanently reinvested earnings, which are largely in deficit positions for U.S.

tax purposes, to result in any material U.S.

taxes, if distributed.

Special Items

2 unchanged sentences

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

2 unchanged sentences

Impairments or asset abandonment charges

- Asset abandonment (1)

Canada - Goodwill impairment (2)

Canada - Asset abandonment (3)

North America - Asset abandonment (1)

115.8 38.8 32.7

North America - Impairment losses (2)

Europe - Asset abandonment (3)

International - Goodwill and intangible asset impairment (2)

Europe - Impairment losses (4)

1,516.2 12.2 —

Termination fees and other (gains) losses

- Gain on sale of asset

Canada - Gain on sale of brewery (3)

Europe - Deconsolidation of VIE

Europe - Gain on sale of asset (4)

International (5)

Purchase price adjustment settlement gain (6)

North America (5)

( 2.0 ) ( 68.3 ) ( 326.9 )

( 0.7 ) 0.8 6.0

Total Special items, net $ 1,740.2 $ 708.8 $ ( 249.7 )

Following management approval in December 2019, in January 2020, we announced plans to cease production at our Irwindale, California brewery and entered into an option agreement with Pabst Brewing Company, LLC ("Pabst"), granting Pabst an option to purchase our Irwindale, California brewery, including plant equipment and machinery and the underlying land.

Pursuant to the agreement, Pabst will have 120 days from receipt of the notice of the Irwindale brewery closure from MillerCoors to exercise the option to purchase the Irwindale brewery.

If Pabst exercises its option to purchase the Irwindale brewery, the agreement provides (i) the purchase price will be $ 150 million , subject to adjustment as further specified in the agreement, (ii) the closing will be within six months from Pabst’s exercise of the option, but no earlier than September 1, 2020 and no later than December 31, 2020, subject to the satisfaction of certain customary closing conditions, (iii) for the treatment and allocation of certain liabilities related to the operation of the Irwindale brewery prior to closing, and (iv) for customary representations and warranties and certain post-closing restrictions on Pabst regarding the operations and disposal of the Irwindale brewery.

In conjunction with the agreement, MillerCoors and Pabst also executed mutual releases of claims related to their ongoing litigation and agreed to dismiss the litigation with prejudice.

Charges for 2019 consist primarily of accelerated depreciation in excess of normal depreciation and other closure costs, and we will continue to incur special charges during each reporting period through the planned closure of the brewery in September 2020.

Total special charges associated with the planned closure are expected to be approximately $ 150 million to $ 175 million , consisting primarily of accelerated depreciation charges.

However, this estimated range contains significant uncertainty, and actual results could differ materially from these estimates due to uncertainty regarding the ultimate net cost associated with the disposition of assets, restructuring charges, as well as the overall outcome of the Pabst purchase option, which if exercised, could significantly impact these estimates.

Charges for 2018 consist primarily of accelerated depreciation in excess of normal depreciation related to the closure of the Colfax, California cidery, which was completed during the first quarter of 2019, as well as other costs associated with the previously closed Eden, North Carolina brewery, including net charges associated with the sale of the Eden real property.

Charges for 2017 also relate to the Eden brewery closure.

During the third quarter of 2019, we recorded goodwill impairment losses within our Canada and India reporting units of $ 668.3 million and $ 6.1 million , respectively.

(1) Following management approval in December 2019, in January 2020, we announced plans to cease production at our Irwindale, California brewery and entered into an option agreement with Pabst Brewing Company, LLC ("Pabst"), granting Pabst an option to purchase our Irwindale, California brewery, including plant equipment and machinery and the underlying land for $ 150 million, subject to adjustment as further specified in the option agreement.

Pursuant to the option agreement on May 4, 2020, Pabst exercised its option to purchase the Irwindale brewery and the purchase was completed in the fourth quarter of 2020.

Production at the Irwindale brewery ceased during the third quarter of 2020.

Charges associated with the brewery closure for the year ended December 31, 2020 and 2019 totaled $ 117.7 million and $ 15.8 million, respectively, excluding the fourth quarter gain on sale of the brewery of $ 2.1 million.

The charges for the year ended December 31, 2020 primarily consisted of accelerated depreciation in excess of normal depreciation of $ 96.0 million and employee related costs of retention and severance of $ 16.5 million.

The employee related costs of retention and severance are included in the restructuring line above.

The charges for fiscal year 2019 primarily consisted of accelerated depreciation in excess of normal depreciation of $ 8.0 million and employee related costs of retention and severance of $ 1.1 million.

In addition to incurring accelerated depreciation for Irwindale, in 2020, 2019 and 2018, we incurred asset abandonment charges, related to the accelerated depreciation in excess of normal depreciation as a result of the Vancouver brewery closure, which occurred in the third quarter of 2019, and the planned Montreal brewery closure, which is currently expected to occur in 2021.

We currently expect to incur additional charges, including estimated accelerated depreciation charges in excess of normal depreciation of approximately CAD 10 million, through the completion of the Montreal brewery closure.

However, due to the uncertainty inherent in our estimates, these estimated future accelerated depreciation charges as well as the timing of the brewery closure are subject to change.

Charges in 2018 also included accelerated depreciation in excess of normal depreciation related to the closure of the Colfax, California cidery, which was completed during the first quarter of 2019, as well as other costs associated with

the previously closed Eden, North Carolina brewery, including net charges associated with the sale of the Eden real property.

(2) Of the $ 39.6 million of impairment losses recognized in the North America segment for the year ended December 31, 2020, we recorded aggregate impairment losses of $ 17.0 million related to certain regional craft brand definite-lived intangible assets during the fourth quarter of 2020.

The estimates and assumptions used to determine the fair value represent Level 3 measurements and additional impairment losses may be recognized in the future.

The remaining $ 22.6 million of impairments recognized in 2020 were related to definite-lived tangible assets associated with these regional craft brands.

Of the $ 671.7 million of impairment losses recognized in the North America segment in fiscal year 2019, we recorded $ 668.3 million of goodwill impairment losses related to the North America reporting unit.

See Note 10, "Goodwill and Intangible Assets" for further discussion.

(3) We incurred asset abandonment charges in our Europe segment in fiscal year 2020 primarily related to the closure of a small brewery in Europe as a result of the ongoing impacts of the coronavirus pandemic.

Further, as a result of our continued strategic review of our European supply chain network, during 2020, 2019 and 2018, we incurred charges consisting primarily of accelerated depreciation in excess of normal depreciation related to the closure of our Burton South brewery and Alton brewery and other associated closure costs.

(4) During the fourth quarter of 2020, we recognized goodwill impairment losses on the Europe reporting unit of $ 1,484.3 million.

See Note 10, "Goodwill and Intangible Assets" for further discussion.

In addition, during the fourth quarter of 2020, we incurred impairment losses as a result of small brewery closures in Europe as a result of the ongoing impact of the coronavirus pandemic.

During the third quarter of 2020, we recognized an impairment loss of $ 30.0 million related to the held for sale classification of a disposal group within our India business, representing an insignificant part of our Europe segment.

The held for sale disposal group was measured at fair value on a nonrecurring basis using Level 3 inputs.

The estimated fair value less cost to sell was determined using a market approach, based upon the expected net sales proceeds of the disposal group.

The remaining carrying value of the disposal group held for sale is presented within other current assets, net on our consolidated balance sheet as of December 31, 2020.

During the third quarter of 2019, we recorded goodwill impairment losses within the former India reporting unit of $ 6.1 million.

We also recorded impairment losses related to definite-lived intangible assets in India of $ 6.1 million.

See Note 10, "Goodwill and Intangible Assets" for further discussion.

During 2019 , 2018 and 2017 , we incurred asset abandonment charges, consisting primarily of accelerated depreciation in excess of normal depreciation related to the closure of the Vancouver brewery, which occurred in the third quarter of 2019, and the planned closure of the Montreal brewery, which is currently expected to occur in 2021.

We currently expect to incur additional charges, including estimated accelerated depreciation charges in excess of normal depreciation of approximately CAD 27 million , through final closure of the Montreal brewery.

However, due to the uncertainty inherent in our estimates, these estimated future accelerated depreciation charges as well as the timing of the brewery closure are subject to change.

Additionally, during the second quarter of 2019, we completed the sale of the existing Montreal brewery property for $ 96.2 million (CAD 126 million ), and recognized a gain of $ 61.3 million .

(5) During 2020, we recognized termination fees and other gains of $ 2.0 million, which was primarily due to the gain recorded on the sale of the Irwindale brewery.

During the second quarter of 2019, we completed the sale of the existing Montreal brewery property for $ 96.2 million, and recognized a gain of $ 61.3 million.

See Note 19, "Leases" for further discussion.

As a result of our continued strategic review of our European supply chain network, during 2019, 2018 and 2017, we incurred charges consisting primarily of accelerated depreciation in excess of normal depreciation related to the closure of our Burton South brewery and other associated closure costs.

The Burton South Brewery closed during the first quarter of 2018.

Additionally, as part of this review, related to the closures of our Plovdiv brewery in Bulgaria and Alton brewery in the U.K., during 2018 and 2017, we recorded asset abandonment related special charges.

Separately, during 2017 we completed the sale of land related to our previously closed Plovdiv brewery and received net cash proceeds of $ 8.2 million and recognized a gain of $ 4.6 million .

During the first quarter of 2018, we received $ 330.0 million from ABI, of which $ 328.0 million constituted a purchase price adjustment (the "Adjustment Amount"), related to the Miller International Business which was acquired in our acquisition of the remaining portion of MillerCoors which occurred on October 11, 2016.

As this settlement occurred following the finalization of purchase accounting, we recorded the settlement proceeds related to the Adjustment Amount as a gain within special items, net in our consolidated statement of operations in the North America segment and within cash provided by operating activities in our consolidated statement of cash flows for the year ended December 31, 2018.

(6) During 2019, we recognized a special charge of $ 0.5 million related to the deconsolidation of the Grolsch joint venture.

Represents charges related to the exit of our China business in 2018, consisting primarily of the reclassification of the associated cumulative foreign currency translation adjustment from AOCI upon substantial liquidation in the fourth quarter of 2018.

See Note 14, "Accumulated Other Comprehensive Income (Loss)" for further details.

As this settlement occurred following the finalization of purchase accounting, we recorded the settlement proceeds related to the Adjustment Amount as a gain within special items, net in our consolidated statement of operations in our Corporate segment and within cash provided by operating activities in our consolidated statement of cash flows for the year ended December 31, 2018.

Restructuring Activities

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

The company expects the costs associated with the restructuring to be substantially recognized by the end of fiscal year 2021.

After taking into account all changes in each of the business units, including Europe, the plan is expected to reduce employment levels, in aggregate, by approximately 500 to 600 employees globally.

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

In 2019, we recognized aggregate impairment losses of $ 2.1 million related to the closure of the Denver, Colorado office facility, including a $ 1.1 million impairment of the associated lease right-of-use asset.

Additionally, in 2019 we recognized severance and retention charges of $ 41.2 million , of which, approximately $ 40 million remained accrued as of December 31, 2019.

On October 28, 2019, as part of our revitalization plan, we made the determination to establish Chicago, Illinois as our North American operational headquarters, close our office in Denver, Colorado and consolidate certain administrative functions into our other existing office locations.

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

We expect the costs associated with the restructuring to be substantially recognized by the end of fiscal year 2021.

After taking into account all changes in each of the business units,

including Europe, the revitalization plan has reduced employment levels, in aggregate, by approximately 600 employees globally.

In connection with these consolidation activities and related organizational and personnel changes, we currently expect to incur certain cash and non-cash restructuring charges related to severance, retention and transition costs, employee relocation, non-cash asset related costs, lease impairment and exit costs in connection with our office lease in Denver, Colorado, and other transition activities currently estimated in the range of approximately $ 100 million to $ 120 million in the aggregate, the majority of which will be cash charges that we began recognizing in the fourth quarter of 2019, and will be further recognized through the balance of 2021.

During 2020 and 2019 we recognized severance and retention charges of $ 35.6 million and $ 41.2 million, respectively, and our remaining accrued restructuring balance related to the revitalization plan as of December 31, 2020 was approximately $ 19 million.

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

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

Employee relocation charges are recognized in the period incurred and totaled $ 11.0 million in 2020.

Additionally, during 2020 and 2019, we recognized aggregate impairment losses of $ 7.6 million and $ 2.1 million, respectively, related to the closure of the office facility in Denver, Colorado, including our lease right-of-use asset, in light of the sublease market outlook as a result of the coronavirus pandemic.

Should our ability to obtain future subtenant occupancy for the office location significantly differ from the estimates and assumptions used to determine its fair value, which represent Level 3 measurements, additional impairment losses may be recognized in the future.

Separately, during the third quarter of 2018, we initiated global restructuring activities primarily in the U.S.

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As a result, we reduced U.S.

employment levels by approximately 300 employees

in the fourth quarter of 2018.

employment levels by approximately 300 employees in the fourth quarter of 2018.

Severance costs related to these restructuring activities were recorded as special items in our consolidated statements of operations.

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The accrued restructuring balances as of December 31, 2020 represent expected future cash payments required to satisfy our remaining obligations, the majority of which we expect to be paid in the next 12 months.

International

North America Europe Total

(In millions)

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Balance as of December 31, 2019 $ 42.6 $ 4.5 $ 47.1

Charges incurred and changes in estimates

Charges incurred 63.7 9.5 73.2

Payments made ( 77.3 ) ( 11.1 ) ( 88.4 )

Changes in estimates ( 4.6 ) ( 1.0 ) ( 5.6 )

Foreign currency and other adjustments 0.1 0.1 0.2

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Changes to the number of shares of capital stock issued were as follows:

issued Exchangeable

shares issued

Class A Class B Class A Class B

(Share amounts in millions)

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Shares issued under equity compensation plans — 0.7 — —

Shares exchanged for common stock

Shares exchanged for Class B exchangeable shares — — ( 0.1 ) 0.1

Balance as of December 31, 2018 2.6 205.4 2.8 14.8

Shares issued under equity compensation plans — 0.2 — —

Shares exchanged for common stock — 0.1 — ( 0.1 )

Shares exchanged for Class B exchangeable shares — — ( 0.1 ) 0.1

2 unchanged sentences

Shares exchanged for common stock — 3.7 — ( 3.7 )

Shares exchanged for Class B exchangeable shares

Balance as of December 31, 2020 2.6 209.8 2.7 11.1

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The exchangeable shares are substantially the economic equivalent of the corresponding shares of Class A and Class B common stock that a Molson shareholder would have received in the merger of Adolph Coors Company with Molson Inc.

in February 2005, if the holder had elected to receive shares of Molson Coors

common stock.

in February 2005, if the holder had elected to receive shares of Molson Coors common stock.

Exchangeable shareholders receive the CAD equivalent of dividends declared on Class A and B common stock on the date of declaration.

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Our Class B common stock has fewer voting rights than our Class A common stock and holders of our Class A common stock have the ability to effectively control or have a significant influence over company actions requiring stockholder approval.

Specifically, holders of Class B common stock voting together as a single class have the right to elect three directors of the Molson Coors Board of Directors, as well as the right to vote on certain additional matters as outlined in the Restated Certificate of Incorporation (as amended, the “Certificate”), such as merger agreements that require approval under applicable law, sales of all or substantially all of the our assets to unaffiliated third parties, proposals to dissolve MCBC, and certain amendments to the Certificate that require approval under applicable law, each as further described and limited by the Certificate.

Specifically, holders of Class B common stock voting together as a single class have the right to elect three directors of the Molson Coors Board of Directors, as well as the right to vote on certain additional matters as outlined in the Restated Certificate of Incorporation (as amended, the “Certificate”), such as merger agreements that require approval under applicable law, sales of all or substantially all of our assets to unaffiliated third parties, proposals to dissolve MCBC, and certain amendments to the Certificate that require approval under applicable law, each as further described and limited by the Certificate.

The Certificate also provides that holders of Class A common stock and Class B common stock shall vote together as a single class, on an advisory basis, on any proposal to approve the compensation of MCBC's named executive officers.

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Therefore, a portion of our authorized and unissued Class A and Class B common shares are reserved to meet exchange requirements.

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(In millions)

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Furniture and fixtures 295.9 264.6

Software 466.3 468.1

Natural resource properties 3.8 3.8

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Depreciation expense was $ 702.0 million, $ 637.8 million and $ 633.4 million in 2020, 2019 and 2018, respectively.

The increase in depreciation expense for the year ended December 31, 2020 compared to 2019 was due to the increase in accelerated depreciation recorded as a result of certain facility closures.

Accelerated depreciation recorded during the years ended December 31, 2020, 2019 and 2018 was $ 112.3 million, $ 31.7 million and $ 30.7 million respectively.

See Note 7, "Special Items" for further discussion.

Loss and breakage expense related to our returnable containers, included in the depreciation expense amounts noted above, was $ 42.6 million, $ 48.8 million and $ 48.4 million in 2020, 2019 and 2018, respectively, and is classified within cost of goods sold in the consolidated statements of operations.

Additionally, the previously mentioned depreciation expense for 2019 , 2018 and 2017 includes accelerated depreciation of $ 31.7 million , $ 30.7 million and $ 20.5 million respectively, primarily associated with brewery closures, and is classified within special items in the consolidated statements of operations.

See Note 7, "Special Items" for further discussion as well as details around facility closures.

Goodwill and Intangible Assets

International

North America (1)

Changes in Goodwill:

(In millions)

Balance as of December 31, 2018 $ 6,785.1 $ 1,475.7 $ 8,260.8

Adjustments to preliminary purchase price allocation

Business acquisition

Impairments ( 668.3 ) ( 6.1 ) ( 674.4 )

Foreign currency translation 29.8 15.2 45.0

Balance as of December 31, 2019 $ 6,146.6 $ 1,484.8 $ 7,631.4

Impairments — ( 1,484.3 ) ( 1,484.3 )

Foreign currency translation 4.4 ( 0.5 ) 3.9

Balance as of December 31, 2020 $ 6,151.0 $ — $ 6,151.0

Accumulated impairment losses related to our reporting units with remaining goodwill balances as of December 31, 2019 totals $ 668.3 million .

(1) On January 1, 2020, we changed our management structure from four segments and a corporate center to two reportable segments.

Under this new structure we have two reporting units, North America and Europe.

The gross amount of goodwill totaled approximately $ 8.4 billion as of December 31, 2020.

Accumulated impairment losses as of December 31, 2020 totaled $ 2,264.5 million, and are comprised of impairments taken on both the Europe and North America reporting units as well as our historic India reporting unit, which was fully impaired in 2019.

The following table presents details of our intangible assets, other than goodwill, as of December 31, 2020:

(In millions)

Useful life Gross Accumulated

amortization Net

(Years) (In millions)

Intangible assets subject to amortization:

Brands 10 - 50

$ 5,128.4 $ ( 1,070.6 ) $ 4,057.8

License agreements and distribution rights 15 - 20

206.8 ( 99.5 ) 107.3

109.1 ( 36.4 ) 72.7

Intangible assets not subject to amortization:

Distribution networks

Brands Indefinite 8,215.7 — 8,215.7

Distribution networks Indefinite 795.0 — 795.0

Other Indefinite 307.6 — 307.6

Total $ 14,762.6 $ ( 1,206.5 ) $ 13,556.1

The following table presents details of our intangible assets, other than goodwill, as of December 31, 2019:

(In millions)

Useful life Gross Accumulated

amortization Net

(Years) (In millions)

Intangible assets subject to amortization:

Brands 10 - 50

$ 5,036.3 $ ( 865.1 ) $ 4,171.2

License agreements and distribution rights 15 - 20

202.0 ( 90.6 ) 111.4

124.0 ( 39.4 ) 84.6

Intangible assets not subject to amortization:

Distribution networks

The changes in the gross carrying amounts of intangible assets from December 31, 2018 to December 31, 2019 are driven, in part, by the impairment losses recognized during the third quarter of 2019 related to the Grolsch brand and distribution agreement definite-lived intangible assets discussed in Note 4, "Investments" and the brand intangible asset related to our India business discussed below, along with the impact of foreign exchange rates, as a significant amount of intangible assets are denominated in foreign currencies.

Brands Indefinite 8,172.4 — 8,172.4

Distribution networks Indefinite 778.8 — 778.8

Other Indefinite 337.6 — 337.6

Total $ 14,651.1 $ ( 995.1 ) $ 13,656.0

The changes in the gross carrying amounts of intangible assets from December 31, 2019 to December 31, 2020 are primarily driven by the impact of foreign exchange rates, as a significant amount of intangible assets are denominated in foreign currencies, impairment of definite-lived brand intangible assets and $ 30.0 million of other intangibles disposed of as part of the Irwindale brewery sale as discussed in Note 7, "Special Items."

Based on foreign exchange rates as of December 31, 2020, the estimated future amortization expense of intangible assets is as follows:

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This expense is primarily presented within marketing, general and administrative expenses in our consolidated statements of operations.

Interim Impairment Assessment

We identified a triggering event requiring an interim impairment assessment of the goodwill within our Canada reporting unit at the end of the third quarter of 2019, which resulted in a goodwill impairment loss of $ 668.3 million .

The goodwill impairment trigger was the result of continued challenges and steepening declines within the Canadian beer industry reflected in the prolonged weakened performance of the Canada reporting unit through the third quarter of 2019.

These performance headwinds have been countered, in part, by the benefit of the recent interest rate environment, which resulted in a decrease in the risk-free rate included in our current year discount rate calculations.

Specifically, the discount rate used in developing our interim fair value estimate for the Canada reporting unit was 8.50 % , as compared to 9.25 % used as of the October 1, 2018 annual testing date.

However, the performance declines and increased challenges within the beer industry in Canada, coupled with significant increases in cost inflation, volume deleverage, and resulting margin erosion, has had a material adverse impact on the expected future cash flows utilized in the valuation approaches for the Canada reporting unit, such that it was determined that the fair value of the reporting unit was more likely than not reduced below its carrying amount during the third quarter of 2019.

As a result of this triggering event, we performed an interim quantitative analysis, using a combination of discounted cash flow analyses and market-based approaches, consistent with our annual impairment testing, in which it was determined that the carrying value of the Canada reporting unit exceeded its fair value by $ 668.3 million .

We also evaluated the indefinite-lived and definite-lived intangible assets within our Canada reporting unit, prior to recording the goodwill impairment, and concluded that no impairments were required;

however, the Coors Light distribution agreement indefinite-lived intangible asset is considered to be at risk of future impairment as further discussed below.

Separately, during the third quarter of 2019 we also identified an interim triggering event related to goodwill within our India reporting unit resulting from significant declines in performance in the current year, coupled with the continuation of challenging business conditions, which required us to perform an interim quantitative impairment analysis at the end of the third quarter of 2019.

As a result of this interim analysis, we determined that the carrying value of the India reporting unit exceeded its fair value, resulting in an aggregate impairment loss of $ 12.2 million related to the goodwill of our India reporting unit and a definite-lived brand intangible asset.

Annual Impairment Assessment

We completed our required annual goodwill and indefinite-lived intangible asset impairment testing as of October 1, 2019, the first day of our fourth quarter, and concluded there were no additional impairments of goodwill within any of our reporting units.

Further, there were no impairments of our other indefinite-lived intangible assets as a result of the annual review process.

We completed our required annual goodwill and indefinite-lived intangible asset impairment testing as of October 1, 2020, the first day of our fourth quarter, and concluded the carrying value of the Europe reporting unit was determined to be in excess of its fair value such that an impairment loss of $ 1,484.3 million was recorded.

The goodwill impairment was the result of continued challenges and declines within the European beer industry brought on by the extended impacts and continued duration of the coronavirus pandemic and related outlook of recovery.

The ongoing uncertainty related to the pandemic and related unknown expectations of when the European beer industry will return to normal operating levels have created significant performance headwinds.

Specifically, the discount rate used in developing our fair value estimate for the Europe reporting unit was 10.00 %, as compared to 8.50 % used as of the October 1, 2019 annual testing date.

The recent performance declines and continued challenges within the beer industry and broader economies throughout Europe, including the additional lockdowns and increased restrictions to the on-premise, have had a material adverse impact on the expected future cash flows utilized in the valuation approaches for the Europe reporting unit.

As a result, it was determined that the fair value of the reporting unit was more likely than not reduced below its carrying amount during the fourth quarter of 2020.

Using a combination of discounted cash flow analyses and market-based approaches, it was determined that the carrying value of the Europe reporting unit exceeded its fair value to such an extent that the analysis resulted in the aforementioned goodwill impairment.

We also evaluated the indefinite-lived and definite-lived intangible assets within our European reporting unit, prior to recording the goodwill impairment, and concluded that an insignificant impairment was required for a definite-lived intangible asset but no impairments were required for the indefinite-lived intangible assets;

however, the Staropramen indefinite-lived intangible asset is considered to be at risk of future impairment as further discussed below.

The North America reporting unit did not have an impairment of goodwill but is considered to be at risk of future impairment as further discussed below.

Apart from the Staropramen indefinite-lived intangible asset, none of our other indefinite-lived intangible assets were impaired as a result of the annual review process.

Reporting Units and Goodwill

As of the date of our impairment test, the operations in each of the specific regions within our U.S., Canada, Europe and International segments are considered components based on the availability of discrete financial information and the regular review by segment management.

We have concluded that the components within the U.S., Canada and Europe segments each meet the criteria of having similar economic characteristics and therefore have aggregated these components into the U.S., Canada and Europe reporting units, respectively.

Additionally, we determined that the components within our International segment do not meet the criteria for aggregation, and therefore, the operations of our India business constitute a separate reporting unit at the component level.

As the changes in management structure resulting from the revitalization plan were not

effective until January 1, 2020, potential changes to our reporting units, if any, have not yet been evaluated and concluded.

See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" for further discussion of our determination of reporting units for purposes of goodwill impairment testing.

The fair value of the U.S., Europe and Canada reporting units were estimated at approximately 17 % , 12 % and 0 % in excess of carrying value, respectively, as of the October 1, 2019 testing date.

In the current year testing, it was determined that the fair value of the U.S.

and Canada reporting units declined during the year, while there was a slight increase in the fair value of the Europe reporting unit versus the prior year.

As a result of our testing, the Europe and Canada reporting units continue to be considered at risk of impairment.

The decline in fair value of the U.S.

and Canada reporting units in the current year is largely due to weakening of the overall North American beer market in 2019, which adversely impacted the results of our impairment testing.

These challenges were partially offset by the benefits to our discount rate as a result of the recent interest rate environment.

Specifically, the discount rate used in developing our annual fair value estimates for the U.S., Europe and Canada reporting units in the current year was 8.50 % for all reporting units, based on market-specific factors, as compared to 9.00 % , 9.50 % and 9.25 % , respectively used as of the October 1, 2018 annual testing date.

reporting unit, industry driven declines negatively impacted brand volumes as compared to 2018;

however these headwinds were partially offset by continued investment behind above premium brands and innovation benefiting management's forward-looking plans.

In the Europe reporting unit, while weather and tourism-related headwinds had an adverse impact on current year brand volumes, forward-looking plans continue to focus on management's premiumization agenda, which is positively impacting the forecasted future cash flows of the reporting unit.

Following the interim goodwill impairment charge recorded during the third quarter of 2019 within the Canada reporting unit, the fair value of the Canada reporting unit was reduced to its carrying value.

No further deterioration in value was identified in the fourth quarter testing, and therefore, the fair value of the Canada reporting unit goodwill equals its carrying value as of the October 1, 2019 testing date.

As a result of the interim goodwill impairment charge within the India reporting unit, the goodwill balance was reduced to zero and is no longer subject to evaluation for impairment on a go-forward basis.

Although the fair value of each of our reporting units was determined to be either equal to or in excess of its respective carrying value as of the October 1, 2019, testing date, the fair value determinations are sensitive to further unfavorable changes in forecasted cash flows, macroeconomic conditions, market multiples or discount rates that could negatively impact future analyses.

As of the date of our annual impairment test, October 1, the operations in each of the specific regions within our North America and Europe segments are considered components based on the availability of discrete financial information and the regular review by segment.

We have concluded that the components within the North America segments each meet the criteria of having similar economic characteristics and therefore have aggregated these components into the North America reporting unit.

Additionally, we determined that all of the components within the Europe segment, with the exception of India and the Asia Pacific export and license businesses, meet the criteria for aggregation, and will thus have been aggregated into the Europe reporting unit.

The operations of our India and Asia Pacific export and licensing businesses constitute separate reporting units at the component level.

However, no goodwill exists within these reporting units that require testing.

The carrying value of the Europe reporting unit was determined to be in excess of its fair value such that an impairment loss of $ 1,484.3 million was recorded.

The fair value of the North America reporting unit was estimated at approximately 7 % in excess of carrying value, as of the October 1, 2020 testing date, which is a decline during the year, and therefore the reporting unit is considered to be at risk of future impairment.

The decline in fair value of the North America reporting unit in the current year is largely due to the perceived risk in the execution of our revitalization efforts amidst a global pandemic, which adversely impacted the results of our impairment testing.

These challenges were partially offset by the reduction to the discount rate as a result of the recent interest rate environment.

Specifically, the discount rate used in developing our annual fair value estimates for the North America and Europe reporting units in the current year was 8.00 % and 10.00 %, respectively, based on market-specific factors, as compared to 8.50 % for all reporting units used as of the October 1, 2019 annual testing date.

In North America, we continue to invest behind above premium brands and innovation.

While the preliminary results are promising, including successful launches of brands like Blue Moon LightSky , Vizzy and Coors Seltzer in the current year, the growth targets included in management’s forecasted future cash flows are inherently at risk given the recent introduction of these brands.

In the Europe reporting unit, impacts from the coronavirus pandemic drove significant headwinds that had an adverse impact on current year brand volumes and overall company performance as the Europe business relies heavily on the on-premise business.

The uncertainty around the ongoing impacts of the pandemic including governmental or societal impositions on bars and restaurants and restrictions on public gatherings that limit many on-premise locations to operate at full capacity if at all have negatively impacted the forecasted future cash flows of the reporting unit.

As of the October 1, 2020 testing date, the fair value of our North America reporting unit was determined to be in excess of its carrying value, although considered to be at risk of future impairment, while the Europe reporting unit's fair value resulted in an impairment.

The fair value determinations are sensitive to further unfavorable changes in forecasted cash flows, macroeconomic conditions, market multiples or discount rates that could negatively impact future analyses, including the

further extent, duration and impact of the ongoing pandemic on our reporting units.

The key assumptions used to derive the estimated fair values of our reporting units represent Level 3 measurements.

Indefinite-Lived Intangible Assets

The Coors and Miller indefinite-lived brands in the U.S.

continue to be sufficiently in excess of their respective carrying values as of the annual testing date.

The fair value of the indefinite-lived Coors Light brand distribution rights in Canada is considered to be at risk of future impairment with a fair value estimated at approximately 11 % in excess of its carrying value as of the annual testing date.

The fair value decline of the Coors Light brand distribution rights versus the prior year was a result of continued volume declines through 2019.

The performance deterioration in the current year follows the goodwill impairment charge that was taken in the third quarter of 2019 that resulted from prolonged Canada beer industry declines.

The fair values of our indefinite-lived intangible assets in Europe, including the Staropramen and Carling brands, continue to be sufficiently in excess of their respective carrying values as of the annual testing date.

We utilized Level 3 fair value measurements in our impairment analysis of certain indefinite-lived intangible brand assets, including the Coors and Miller brands in the U.S., the Staropramen brand in Europe and the Coors Light brand distribution rights in Canada, which utilizes an excess earnings approach to determine the fair values of these assets as of the testing date.

The fair value of the indefinite-lived Miller brands in the U.S.

is sufficiently in excess of its carrying values as of the annual testing date.

The fair value of the indefinite-lived Coors brands in North America is sufficiently in excess of its carrying value as of the annual testing date.

The fair value of our Carling indefinite-lived intangible assets in Europe continues to be sufficiently in excess of its carrying value as of the annual testing date.

However, the fair value of our Staropramen indefinite-lived intangible assets in Europe is considered to be at risk of future impairment with a fair value estimated to be approximately 9 % in excess of its carrying value as of the annual testing date.

The carrying value of the Staropramen indefinite-lived intangible assets as of December 31, 2020 was $ 621.7 million.

The fair value decline of the Staropramen brand versus the prior year was a result of the coronavirus’ impact on the on-premise business throughout Europe during 2020 and potentially beyond.

We utilized Level 3 fair value measurements in our impairment analysis of certain indefinite-lived intangible brand assets, including the Coors brands in North America, Miller brands in the U.S.

and the Staropramen and Carling brands in Europe.

An excess earnings approach is used to determine the fair values of these assets as of the testing date.

The future cash flows used in the analysis are based on internal cash flow projections based on our long range plans and include significant assumptions by management as noted below.

Separately, we performed qualitative assessments of certain indefinite-lived intangible assets, including the Carling brand in Europe and water rights in the U.S., to determine whether it was more likely than not that the fair values of these assets were greater than their respective carrying amounts.

Based on the qualitative assessments, we determined that a full quantitative analysis was not necessary.

Separately, we performed a qualitative assessment of our water rights indefinite-lived intangible assets in the U.S.

to determine whether it was more likely than not that the fair values of these assets were greater than their respective carrying amounts.

Based on this qualitative assessment, we determined that a full quantitative analysis was not necessary.

Key Assumptions

As of the date of our annual impairment test, performed as of October 1, the Europe and Canada reporting unit goodwill balances are at risk of future impairment in the event of significant unfavorable changes in the forecasted cash flows (including prolonged weakening of economic conditions, or significant unfavorable changes in tax, environmental or other regulations, including interpretations thereof), terminal growth rates, market multiples and/or weighted-average cost of capital utilized in the discounted cash flow analyses.

As of the date of our annual impairment test, performed as of October 1, the North America reporting unit goodwill balance is at risk of future impairment in the event of significant unfavorable changes in the forecasted cash flows (including company-specific risks like the performance of our above-premium transformation efforts and overall market performance of new innovations like seltzers, along with macro-economic risks like the continued prolonged weakening of economic conditions, or significant unfavorable changes in tax rates, environmental or other regulations, including interpretations thereof), terminal growth rates, market multiples and/or weighted-average cost of capital utilized in the discounted cash flow analyses.

For testing purposes of our reporting units, management's best estimates of the expected future results are the primary driver in determining the fair value.

Current projections used for our Canada reporting unit testing reflect

continued challenges within the beer industry in Canada adversely impacting the projected cash flows of the business.

Current projections used for our Europe reporting unit incorporate volume and revenue growth driven by management's premiumization agenda, slightly off-set by adverse impacts to cash flows in 2019 generated by underperformance of brand volumes driven by external factors such as weather and tourism-related activity.

Challenges in both Canada and Europe were partially offset by the benefits to our discount rate as a result of the recent interest rate environment.

Current projections used for our North America reporting unit testing reflect growth assumptions associated with our revitalization plan to build on the strength of our iconic core brands, aggressively grow our above premium portfolio, expand beyond the beer aisle, invest in our capabilities and support our people and our communities all of which are intended to benefit the projected cash flows of the business.

These cash flow assumptions are tempered somewhat by the impacts the coronavirus has had on our overall business and specifically our more profitable on-premise business.

Coronavirus impacts had a disproportional impact on our Europe business as a greater portion of its business takes place on-premise.

Additionally, European countries have had and continue to impose stricter measures, i.e.

lockdowns and social distancing requirements, to control the spread of the pandemic relative to various North American markets, which limit many on-premise locations to operate at full capacity.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill and indefinite-lived intangible impairment tests will prove to be an accurate prediction of the future.

As a result, there can be no assurance that the estimates and assumptions made for purposes of the goodwill and indefinite-lived intangible impairment tests will prove to be an accurate prediction of the future.

Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of our reporting units and indefinite-lived intangible assets may include such items as:

(i) a decrease in expected future cash flows, specifically, a decrease in sales volume and increase in costs that could significantly impact our immediate and long-range results, a decrease in sales volume driven by a prolonged weakness in consumer demand or other competitive pressures adversely affecting our long-term volume trends, a continuation of the trend away from core brands in certain of our markets, especially in markets where our core brands represent a significant portion of the market, unfavorable working capital changes and an inability to successfully achieve our cost savings targets, (ii) adverse changes in macroeconomic conditions or an economic recovery that significantly differs from our assumptions in timing and/or degree (such as a recession), (iii) volatility in the equity and debt markets or other country specific factors which could result in a higher weighted-average cost of capital, (iv) sensitivity to market multiples;

and (v) regulation limiting or banning the manufacturing, distribution or sale of alcoholic beverages.

(i) a decrease in expected future cash flows, specifically, a decrease in sales volume and increase in costs that could significantly impact our immediate and long-range results, a decrease in sales volume driven by a prolonged weakness in consumer demand or other competitive pressures adversely affecting our long-term volume trends, a continuation of the trend away from core brands in certain of our markets, especially in markets where our core brands represent a significant portion of the market, unfavorable working capital changes and an inability to successfully achieve our cost savings targets, (ii) adverse changes in macroeconomic conditions or an economic recovery that significantly differs from our assumptions in timing and/or degree (such as a global pandemic or recession), (iii) significant unfavorable changes in tax rates such as increased corporate income tax rates (iv) volatility in the equity and debt markets or other country specific factors which could result in a higher weighted-average cost of capital, (v) sensitivity to market multiples;

and (vi) regulation limiting or banning the manufacturing, distribution or sale of alcoholic beverages.

Based on known facts and circumstances, we evaluate and consider recent events and uncertain items, as well as related potential implications, as part of our annual assessment and incorporate into the analyses as appropriate.

These facts and circumstances are subject to change and may impact future analyses.

For example, we continue to monitor the challenges within the beer industry for further weakening or additional systemic structural declines.

Separately, the Ontario provincial government adopted a bill that, if enacted, could adversely impact the existing terms of the beer distribution and retail systems in the province, as further described in Note 18, "Commitments and Contingencies" .

For example, we continue to monitor the challenges within the beer industry for further weakening or additional systemic structural declines, as well as for adverse changes in macroeconomic conditions such as the coronavirus pandemic that could significantly impact our immediate and long-range results.

Specifically, subsequent to the January 1, 2020 interim impairment assessments, the World Health Organization characterized the outbreak of the coronavirus disease as a global pandemic as further discussed in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies.” Our business has been, and could continue to be, materially and adversely impacted by the coronavirus pandemic.

The related weakening of economic conditions during a prolonged pandemic could lead to a material impairment as the duration and severity of the pandemic and resulting impacts to our financial projections are further understood.

Additionally, we are monitoring the impacts the coronavirus pandemic has on the market inputs used in calculating our discount rates, including risk-free rates, equity premiums and our cost of debt, which could result in a meaningful change to our weighted-average cost of capital calculation, as well as the market multiples used in our impairment assessment.

Furthermore, increased volatility in the equity and debt markets or other country specific factors, including, but not limited to, extended or future government intervention in response to the pandemic, could also result in a meaningful change to our weighted-average cost of capital calculation and other inputs used in our impairment assessment.

Separately, the Ontario government in Canada adopted a bill that, if enacted, could adversely impact the existing terms of the beer distribution and retail systems in the province, as further described in Note 18, "Commitments and Contingencies" .

While historical performance and current expectations have resulted in fair values of our reporting units and indefinite-lived intangible assets equal to or in excess of carrying values, if our assumptions are not realized, it is possible that an impairment charge may need to be recorded in the future.

Reporting Unit Changes and Interim Impairment Testing

As discussed in Note 3, "Segment Reporting," effective January 1, 2020, we changed our management structure from a corporate center and four segments to two segments - North America and Europe.

These structural changes included leadership re-alignment with a centralized North America leadership team, an integrated North American supply chain network, and centralized marketing and innovations functions including movement to a single brand manager and North America marketing strategy for our major brands.

Additionally, as part of our leadership re-alignment, we moved from two separate U.S.

and Canada segment managers to a single North America segment manager, our President and Chief Executive Officer, who reviews discrete financial information only at the consolidated North America segment level.

As a result of these changes, we re-evaluated our historical reporting unit conclusions and have consolidated our previously separate U.S.

and Canada reporting units into a single North America reporting unit effective January 1, 2020.

There were no changes to our existing Europe reporting unit, which was previously considered to be at risk of future impairment following the completion of our October 1, 2019 annual impairment testing.

We completed an interim impairment assessment for our U.S.

and Canada reporting units as of January 1, 2020 immediately prior to the reporting unit change, as well as an impairment assessment of the combined North America reporting unit immediately after the change, and determined that no impairments existed.

Additionally, as the changes resulted in the combination of our U.S.

and Canada reporting units into a single North America reporting unit, no further reallocation of goodwill was required.

Additionally, as a result of the structural changes discussed above, including the centralization of the brand management and strategy for our Coors brands across North America, we have aggregated our Coors brand indefinite-lived intangible asset in the U.S.

and Coors Light distribution agreement indefinite-lived intangible asset in Canada into a single unit of accounting for the purpose of testing for impairment, effective January 1, 2020.

We completed an interim impairment assessment for each individual indefinite-lived intangible asset immediately prior to aggregation, and determined that no impairments existed.

Definite-Lived Intangible Assets

Regarding definite-lived intangible assets, we continuously monitor the performance of the underlying assets for potential triggering events suggesting an impairment review should be performed.

With the exception of the impairment losses related to the Grolsch brand and distribution agreement definite-lived intangible assets discussed in Note 4, "Investments" and the brand intangible asset related to our India business discussed above, no such triggering events were identified in 2019 , 2018 or 2017 .

In the current year, we recognized impairment losses on some of our definite-lived intangible assets related to certain regional craft breweries in North America and Europe.

Impairment losses on the Grolsch brand and distribution agreement definite-lived intangible assets and the brand intangible asset related to our historical India business were recognized in 2019.

See Note 7, "Special Items" for further details on these impairment losses.

No such triggering events resulting in an impairment loss were identified in 2018.

2019 Impairment Assessment

We identified a triggering event requiring an interim impairment assessment of the goodwill within our former Canada reporting unit, now part of our North America reporting unit, at the end of the third quarter of 2019, which resulted in a goodwill impairment loss of $ 668.3 million.

Separately, during the third quarter of 2019 we also identified an interim triggering event related to goodwill within our former India reporting unit resulting from significant declines in performance in 2019, coupled with the continuation of challenging business conditions, which required us to perform an interim quantitative impairment analysis at the end of the third quarter of 2019.

As a result of this interim analysis, we determined that the carrying value of the former India reporting unit exceeded its fair value, resulting in an aggregate impairment loss of $ 12.2 million related to the goodwill of our India reporting unit and a definite-lived brand intangible asset.

Further we completed our required annual goodwill and indefinite-lived intangible asset impairment testing as of October 1, 2019 and concluded there were no additional impairments of goodwill within any of our reporting units.

Also, there were no impairments of our other indefinite-lived intangible assets as a result of the annual review process.

Debt Obligations

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(In millions)

Senior notes:

Long-term debt:

CAD 500 million 2.75 % notes due September 2020 (1)

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CAD 500 million 3.44 % notes due July 2026 (1)(2)

$500 million 1.45% notes due July 2019 (2)

$ 500 million 2.25 % notes due March 2020 (3)

$500 million 2.25% notes due March 2020 (3)

$ 1.0 billion 2.1 % notes due July 2021 (2)

1,000.0 1,000.0

$ 500 million 3.5 % notes due May 2022 (4)

$ 2.0 billion 3.0 % notes due July 2026 (2)

2,000.0 2,000.0

$ 1.1 billion 5.0 % notes due May 2042 (4)

1,100.0 1,100.0

$ 1.8 billion 4.2 % notes due July 2046 (2)

EUR 500 million notes due March 2019 (3)

1,800.0 1,800.0

EUR 800 million 1.25 % notes due July 2024 (2)

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Short-term borrowings (5)

Other short-term borrowings (6)

Current portion of long-term debt 1,006.1 921.3

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We settled these swaps at the time of issuance of the 2015 Notes and are amortizing a portion of the resulting loss from AOCI to interest expense over the remaining term of the 2015 Notes as well as over a portion of the 2016 Notes defined below up to the full 10-year term of the interest rate swap agreements.

The amortizing loss will increase our effective cost of borrowing compared to the stated coupon rates by 0.65 % and 0.60 % on each of the CAD 500 million notes due in 2020 and 2026, respectively.

During the third quarter of 2020, we repaid the 2015 Notes upon maturity.

The amortizing loss resulted in an increase in our effective cost of borrowing compared to the stated coupon rates by 0.65 % and 0.60 % on each of the CAD 500 million

notes repaid in 2020 and due in 2026, respectively.

See Note 16, "Derivative Instruments and Hedging Activities" for further details on the forward starting interest rate swaps.

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Total debt issuance costs capitalized in connection with these notes including underwriting fees, discounts and other financing related costs, were approximately $ 65 million and are being amortized over the respective terms of the 2016 Notes.

The 2016 Notes began accruing interest upon issuance, with semi-annual payments due on the 2016 USD Notes and 2016 CAD Notes in January and July beginning in 2017, and annual interest payments due on the

2016 EUR Notes in July beginning in 2017.

During the third quarter of 2019, we repaid the $ 500 million 1.45 % notes which matured in July 2019.

As of December 31, 2019 , we have cross currency swaps in order to hedge a portion of the foreign currency translational impacts of our European investment.

As a result of the swaps, we have economically converted a portion of our $ 1.0 billion 2.1 % senior notes due 2021 and associated interest to EUR denominated, which will result in a EUR interest rate to be received of 0.71 % .

As of December 31, 2020, we have cross currency swaps associated with our $ 1.0 billion 2.1 % senior notes due 2021 in order to hedge a portion of the foreign currency translational impacts of our European investment.

As a result of the swaps, we have economically converted a portion of these notes and associated interest to EUR denominated, which results in a EUR interest rate to be received of 0.71 %.

See Note 16, "Derivative Instruments and Hedging Activities" for further details.

On March 15, 2017, MCBC issued approximately $ 1.5 billion of senior notes, consisting of $ 500 million 1.9 % senior notes due March 15, 2019 , and $ 500 million 2.25 % senior notes due March 15, 2020 (collectively, the "2017 USD Notes") and EUR 500 million floating rate senior notes due March 15, 2019 ("2017 EUR Notes") (2017 USD Notes and 2017 EUR Notes, collectively, the "2017 Notes").

We bear quarterly interest on the 2017 EUR Notes at the rate of 0.35% plus three-month EURIBOR.

(3) On March 15, 2017, MCBC issued approximately $ 1.5 billion of senior notes.

These issuances resulted in total proceeds of approximately $ 1.5 billion, net of underwriting fees and discounts of $ 3.1 million and $ 0.7 million, respectively.

Total debt issuance costs capitalized in connection with these notes, including underwriting fees, discounts and other financing related costs, were $ 6.1 million and are being amortized over the respective terms of the 2017 Notes.

The 2017 Notes began accruing interest upon issuance, with quarterly payments due on the 2017 EUR Notes beginning June 15, 2017, and semi-annual payments due on the 2017 USD Notes beginning September 15, 2017.

During the first quarter of 2019, we repaid the $ 500 million 1.9 % senior notes and EUR 500 million floating rate senior notes.

In the first quarter of 2017, we entered into interest rate swaps to economically convert our fixed rate 2017 USD Notes to floating rate debt.

As a result of these hedge programs, the carrying value of the $ 500 million 1.9 % notes and $ 500 million 2.25 % notes were adjusted for fair value movements attributable to the benchmark interest rate.

During the fourth quarter of 2017, we settled these interest rate swaps, at which time we ceased adjusting the carrying value of the 2017 USD Notes for the fair value of these swaps.

At the time of termination, cumulative adjustments to the carrying value of the notes were losses of $ 1.6 million on the $ 500 million 1.9 % notes and $ 1.9 million on the $ 500 million 2.25 % notes.

Beginning in the fourth quarter of 2017, we began amortizing these cumulative adjustments to interest expense over the remaining term of each respective note and will accordingly increase the annual effective interest rate for the $ 500 million 1.9 % notes and $ 500 million 2.25 % notes for the remaining term of the notes by 0.24 % and 0.17 % , respectively.

The fair value adjustments and subsequent amortization have been excluded from the aggregate principal debt maturities table presented below.

As of December 31, 2019 , we have cross currency swaps in order to hedge a portion of the foreign currency translational impacts of our European investment.

As a result of the swaps, we have economically converted our $ 500 million 2.25 % notes due 2020 and associated interest to EUR denominated, which result in a EUR interest rate to be received of 0.68 % .

See Note 16, "Derivative Instruments and Hedging Activities" for further details.

Prior to issuing the 2017 EUR Notes, we entered into foreign currency forward agreements to economically hedge the foreign currency exposure of a portion of the respective notes, which were subsequently settled on March 15, 2017, concurrent with the issuance of the 2017 EUR Notes.

Additionally, upon issuance we designated the 2017 EUR Notes as a net investment hedge of our Europe business.

See Note 16, "Derivative Instruments and Hedging Activities" for further details.

Total debt issuance costs capitalized in connection with these notes, including underwriting fees, discounts and other financing related costs, were $ 6.1 million and were amortized over the respective terms of the notes.

As of December 31, 2020, these notes have been repaid.

(4) On May 3, 2012, we issued approximately $ 1.9 billion of senior notes with portions maturing in 2017, 2022 and 2042.

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The fair value adjustments and subsequent amortization have been excluded from the aggregate principal debt maturities table presented below.

As of January 1, 2019 , we reclassified approximately $ 3 million and $ 82 million of short-term and long-term finance lease liabilities from accounts payable and other current liabilities and other non-current liabilities to current portion of long-term debt and short-term borrowings and long-term debt, respectively, in connection with our adoption of the new lease accounting standard.

See Note 2, "New Accounting Pronouncements" for further details.

As of December 31, 2019 , we had $ 1.1 million in bank overdrafts and $ 55.0 million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $ 53.9 million .

(5) As of December 31, 2020, we had $ 11.0 million in bank overdrafts a n d $ 103.7 million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $ 92.7 million.

As of December 31, 2019, we had $ 1.1 million in bank overdrafts and $ 55.0 million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $ 53.9 million.

We had total outstanding borrowings of $ 3.0 million and $ 2.8 million under our JPY facilities as of December 31, 2020 and December 31, 2019, respectively.

In addition, we have USD, GBP and CAD overdraft facilities under which we had no outstanding borrowings as of December 31, 2019 or December 31, 2018 .

In addition, we have USD, GBP and CAD overdraft facilities under which we ha d no outstanding borrowings as of December 31, 2020 or December 31, 2019.

A summary of our short-term facility availability is presented below.

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• JPY 100 million overdraft facility at Japan short-term Prime rate

• CAD unlimited overdraft facility at CAD Prime + 3.95 %

• CAD unlimited overdraft facility at CAD Prime plus 0.50 %

• GBP 20 million overdraft facility at GBP base rate plus 1.5 %

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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 and observable market interest and foreign exchange rates.

As of December 31, 2020 and December 31, 2019, the fair value of our outstanding long-term debt (including current portion of long-term debt) was approximately $ 9.1 billion and $ 9.2 billion, respectively.

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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

We maintain a $ 1.5 billion revolving credit facility, that also allows us to issue a maximum aggregate amount of commercial paper of $ 1.5 billion at any time.

Revolving Credit Facility and Commercial Paper

We maintain a $ 1.5 billion revolving credit facility with a maturity date of July 7, 2024, that also allows us to issue a maximum aggregate amount of $ 1.5 billion in commercial paper or other borrowings at any time at variable interest rates.

We use this financing from time to time to leverage cash needs including debt repayments.

As of December 31, 2019 and December 31, 2018 , we had $ 1.5 billion available to draw under our $ 1.5 billion revolving credit facility, which we extended the maturity date in the current year to July 7, 2024, as there were no outstanding revolving credit facility or commercial paper borrowings.

The maximum leverage ratio of this facility as of December 31, 2019 is 4.25x net debt to EBITDA, with a decline to 4.00x net debt to EBITDA as of the last day of the fiscal quarter ending December 31, 2020 .

During 2020, we utilized borrowings from this facility in order to fund the repayment of debt upon maturity, for working capital and general purposes, as well as a precautionary measure in order to provide enhanced financial flexibility due to uncertain market conditions arising from the impact of the coronavirus pandemic, as further discussed in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies." We had no borrowings drawn on this revolving credit facility and no commercial paper borrowings as of December 31, 2020 and December 31, 2019.

On May 26, 2020, Molson Coors Brewing Company (UK) Limited (“MCBC U.K.”), a subsidiary of MCBC that operates and manages the Company’s business in the U.K., established a commercial paper facility for the purpose of issuing short-term, unsecured Sterling-denominated notes that are eligible for purchase under the Joint HM Treasury and Bank of England’s COVID Corporate Financing Facility commercial paper program (the “CCFF Program”) in an aggregate principal amount up to GBP 300 million, subject to certain conditions, which may be increased from time to time as provided in the Dealer Agreement (as defined below).

Commercial paper issuances under the CCFF Program do not impact the borrowing capacity under our revolving credit facility.

In connection with the CCFF Program, MCBC U.K.

and MCBC entered into a Dealer Agreement (the “Dealer Agreement”) with Lloyds Bank Corporate Markets PLC (“Lloyds”), as both the arranger and dealer, pursuant to which notes may be issued to Lloyds at such prices and upon such terms as MCBC U.K.

and Lloyds may agree.

The maturities of the notes vary but will not be less than seven days nor greater than 364 days.

The Dealer Agreement contains customary representations, warranties, covenants and indemnification provisions typical for the issuance of commercial paper of this type.

In addition, MCBC entered into a Deed of Guarantee to guarantee the payment of all sums payable from time to time by MCBC U.K.

in respect of the notes to the holders of any notes.

We had no borrowings outstanding under the CCFF Program as of December 31, 2020.

To the extent MCBC U.K.

has borrowings outstanding under the CCFF Program with maturities extending beyond May 19, 2021, there are certain additional conditions placed on the operations of MCBC U.K., including capital distributions and senior executive compensation, and as a consequence we currently do not anticipate having any borrowings under the CCFF Program with maturities extending beyond May 19, 2021, unless such previously described conditions under the CCFF Program are modified.

Debt Covenants

On June 19, 2020, we entered into to an amendment to our existing revolving credit facility agreement, which among other things, revised the leverage ratios under the financial maintenance covenant for each fiscal quarter ending on or after June 30, 2020 through the maturity of the credit facility.

The maximum net debt to EBITDA leverage ratio, as such terms are defined by the amended revolving credit facility agreement, as of December 31, 2020 is 5.25 x net debt to EBITDA, with a 0.50 x reduction to 4.75 x net debt to EBITDA for the fiscal quarter ending June 30, 2021.

The leverage ratio requirement as of the last day of the fiscal quarter ending September 30, 2021 is reduced by 0.25 x to 4.50 x net debt to EBITDA, with a further 0.50 x reduction to 4.00 x net debt to EBITDA as of the last day of the fiscal quarter ending December 31, 2021 through maturity of the credit facility.

Under the terms of each of our debt facilities, we must comply with certain restrictions.

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(In millions)

2021 $ 1,019.3

Thereafter 5,286.3

Total $ 8,210.9

The aggregate principal debt maturities in the table above excludes finance leases which are disclosed in Note 19, "Leases."

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

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Interest expensed $ 274.6 $ 280.9 $ 306.2

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(In millions)

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We have one share-based compensation plan, the MCBC Incentive Compensation Plan (the "Incentive Compensation Plan"), as of December 31, 2020 and all outstanding awards fall under this plan.

MCBC Incentive Compensation Plan

Incentive Compensation Plan

We issue the following types of awards related to shares of Class B common stock to certain directors, officers, and other eligible employees, pursuant to the Incentive Compensation Plan:

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DSU awards, under the Directors' Stock Plan pursuant to the Incentive Compensation Plan, are elections made by non-employee directors of MCBC that enable them to receive all or one-half of their annual cash retainer payments in our stock.

The deferred stock unit awards are issued at the market value equal to the closing price on the date of the grant.

The DSU awards are issued at the market value equal to the price of our stock at the date of the grant.

The DSUs are paid in shares of stock upon termination of service.

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In 2020, 2019 and 2018, we granted a small number of DSUs with a weighted-average market value of $ 37.53 , $ 56.68 and $ 64.48 per share, respectively.

As part of our annual grant in the first quarter of 2019 , 2018 and 2017 , we granted PSUs.

PSUs are granted with a target value established at the date of grant and vest upon completion of a service requirement.

PSU awards are granted with a target value established at the date of grant and vest upon completion of a service requirement.

The settlement amount of the PSUs is determined based on market and performance metrics, which include our total shareholder return performance relative to the stock market index defined by each award and specified internal performance metrics designed to drive greater shareholder return.

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During 2020, 2019 and 2018, we granted 0.4 million, 0.4 million and 0.2 million options, respectively, each with a weighted-average fair value of $ 6.70 , $ 9.20 and $ 15.44 , respectively.

Certain RSU and PSU awards granted in 2020 entitle participants to receive dividends upon vesting, subject to the performance, vesting and other conditions, including forfeiture, applicable to the respective awards.

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

(In millions)

Pretax share-based compensation expense (1)

$ 24.2 $ 8.5 $ 42.6

Tax benefit ( 4.3 ) ( 1.6 ) ( 6.9 )

After-tax share-based compensation expense $ 19.9 $ 6.9 $ 35.7

(1) The decrease in share-based compensation expense in 2019 was primarily driven by the reversal of cumulative compensation expense previously recognized for our 2018 and 2017 PSU awards as the achievement of the performance conditions are no longer deemed probable for the respective performance periods, as well as the impacts of the reversal of expense associated with forfeitures related to the revitalization plan initiated in 2019.

Additionally, our share-based compensation expense in 2018 and 2017 also includes expense associated with replacement awards issued in connection with the Acquisition.

Additionally, our share-based compensation expense in 2018 also includes expense associated with replacement awards issued in connection with the Acquisition.

As of December 31, 2020, there was $ 34.2 million of total unrecognized compensation cost from all share-based compensation arrangements granted under the Incentive Compensation Plan, related to unvested awards.

This total compensation expense is expected to be recognized over a weighted-average period of 1.9 years.

RSUs and DSUs

Weighted-average

grant date fair value per unit

Weighted-average grant date fair value per unit

RSUs and DSUs PSUs

Units Weighted-average

grant date fair value per unit Units Weighted-average grant date fair value per unit

(In millions, except per unit amounts)

Non-vested as of December 31, 2019 1.0 $ 68.18 0.6 $ 70.37

Granted 0.5 $ 48.81 0.3 $ 52.60

Vested ( 0.3 ) $ 84.81 — $ —

Forfeited ( 0.2 ) $ 64.12 ( 0.2 ) $ 66.22

Non-vested as of December 31, 2020 1.0 $ 56.21 0.7 $ 58.12

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Stock options

exercise price

Awards Weighted-

exercise price per unit Weighted-

life (years) Aggregate

(In millions, except per share amounts and years)

Outstanding as of December 31, 2019 1.6 $ 68.77 3.8 $ 3.1

Granted 0.4 $ 51.48

Exercised ( 0.1 ) $ 43.13

Forfeited ( 0.1 ) $ 60.01

Outstanding as of December 31, 2020 1.8 $ 66.32 4.5 $ 0.2

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The total intrinsic values of exercises during 2020, 2019 and 2018 were $ 0.8 million, $ 0.6 million and $ 9.6 million, respectively.

Total tax benefits realized, including excess tax benefits, from share-based awards vested or exercised was $ 4.5 million , $ 8.4 million and $ 20.2 million , respectively.

The shares of Class B common stock to be issued under the stock option plans are made available from authorized and unissued MCBC Class B common stock.

Total tax benefits realized, including excess tax benefits, from share-based awards vested or exercised during 2020, 2019 and 2018 was $ 3.1 million, $ 4.5 million and $ 8.4 million, respectively.

The shares of Class B common stock to be issued under our equity plans are made available from authorized and unissued MCBC Class B common stock.

As of December 31, 2020, there were 2.3 million shares of MCBC Class B common stock available for the issuance under the Incentive Compensation Plan.

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For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

Risk-free interest rate 0.91 % 2.46 % 2.65 %

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22.36 % - 24.14 %

22.40% - 22.88%

Weighted-average volatility 25.40 % 24.48 % 22.81 %

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For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

Risk-free interest rate 0.84 % 2.49 % 2.34 %

Dividend yield

Dividend yield N/A 4.17 % 2.08 %

Volatility range 15.21 % - 45.75 %

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13.03 % - 81.87 %

13.71% - 80.59%

Weighted-average volatility 26.02 % 24.97 % 22.76 %

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MCBC stockholders' equity

Gain (loss) on

adjustments Gain (loss) on

instruments Pension and

postretirement

Equity Method

adjustments Equity method

investments Accumulated

comprehensive

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Foreign currency translation adjustments ( 411.6 ) — ( 0.6 ) — ( 412.2 )

Reclassification of cumulative translation adjustment to

6.0 — — — 6.0

Gain (loss) on net investment hedges 106.4 — — — 106.4

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Foreign currency translation adjustments 129.3 — ( 2.5 ) — 126.8

Reclassification of cumulative translation adjustment to

Gain (loss) on net investment hedges 50.3 — — — 50.3

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Tax benefit (expense) ( 0.1 ) 27.0 ( 2.9 ) 3.8 27.8

Net period other comprehensive income (loss) 179.5 ( 83.7 ) ( 22.6 ) ( 10.6 ) 62.6

Reclassification of stranded tax effects (2)

( 73.3 ) ( 3.8 ) 2.3 — ( 74.8 )

As of December 31, 2019 $ ( 652.5 ) $ ( 87.8 ) $ ( 351.0 ) $ ( 70.9 ) $ ( 1,162.2 )

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Pension and other postretirement benefit adjustments — — ( 52.9 ) — ( 52.9 )

Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income and settlement

Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income — — ( 7.6 ) — ( 7.6 )

Ownership share of unconsolidated subsidiaries' other comprehensive income (loss) — — — 19.4 19.4

Tax benefit (expense) 30.5 27.9 15.4 ( 5.2 ) 68.6

Net current-period other comprehensive income (loss)

Reclassification of stranded tax effects (see Note 2 )

As of December 31, 2020 $ ( 539.5 ) $ ( 173.9 ) $ ( 397.7 ) $ ( 56.7 ) $ ( 1,167.8 )

Amounts have been adjusted to reflect the retrospective application of a change in presentation.

Specifically, the unrealized gain (loss) on outstanding net investment hedge positions was historically presented within the "gain (loss) on derivative instruments" column of this table.

Once settled, the realized gain (loss) was reclassified to be presented within the "foreign currency translation adjustments" column.

We have retrospectively adjusted this table to present all activity associated with net investment hedge positions within the "foreign currency translation adjustments" column, along with other insignificant presentational reclassifications.

These presentational changes had no net impact on our aggregate AOCI balances or our total comprehensive income (loss) amounts on our consolidated statements of comprehensive income (loss) for any period presented.

However, we have retrospectively reflected a presentational reclassification of $ 116.0 million between the foreign currency translation adjustments and unrealized gain (loss) on derivative instruments lines on the consolidated statement of comprehensive income (loss) for the year ended December 31, 2017.

(1) As a result of exiting our China business, the associated cumulative foreign currency translation adjustment was reclassified from AOCI and recognized within special items, net upon substantial liquidation.

See Note 7, "Special Items" for further details.

(2) Represents the one-time reclassification of stranded tax effects from AOCI to retained earnings resulting from the change in the U.S.

federal corporate income tax rate as part of the 2017 Tax Act.

This reclassification occurred on January 1, 2019 upon adoption of the associated FASB authoritative guidance.

We have significant levels of net assets denominated in currencies other than the USD due to our operations in foreign countries, and therefore we recognize OCI gains and/or losses when those items are translated to USD.

The foreign currency translation gains recognized during 2019 were due to the strengthening of the CAD and GBP versus the USD.

The foreign currency translation gains recognized during 2020 and 2019 were primarily due to the strengthening of the CAD and GBP versus the USD.

Additionally, the 2020 foreign currency translation adjustment gains were further impacted by the strengthening of other currencies of our Europe operations versus the USD.

The foreign currency translation losses recognized during 2018 were due to the weakening of the CAD, GBP and other currencies of our Europe operations versus the USD.

The foreign currency translation gains recognized during 2017 were due to the strengthening of the CAD, GBP, and other currencies of our Europe operations versus the USD.

Reclassifications from AOCI to income:

For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

Reclassifications from AOCI

Location of gain (loss)

December 31, 2020 December 31, 2019 December 31, 2018

Reclassifications from AOCI Location of gain (loss)

recognized in income

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Gain/(loss) on cash flow hedges:

Forward starting interest rate swaps

Interest expense, net

Foreign currency forwards

Cost of goods sold

Foreign currency forwards

Other income (expense), net

Forward starting interest rate swaps $ ( 2.9 ) $ ( 3.0 ) $ ( 3.0 ) Interest expense, net

Foreign currency forwards 4.6 3.1 ( 0.2 ) Cost of goods sold

Foreign currency forwards ( 1.2 ) ( 0.7 ) ( 0.2 ) Other income (expense), net

Total income (loss) reclassified, before tax 0.5 ( 0.6 ) ( 3.4 )

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Amortization of defined benefit pension and other postretirement benefit plan items:

Prior service benefit (cost)

Other pension and postretirement benefits (costs), net

Net actuarial gain (loss) and settlement

Other pension and postretirement benefits (costs), net

Prior service benefit (cost) $ 0.4 $ ( 0.4 ) $ ( 0.5 ) Other pension and postretirement benefits (costs), net

Net actuarial gain (loss) and settlement 7.2 ( 26.1 ) ( 6.0 ) Other pension and postretirement benefits (costs), net

Total income (loss) reclassified, before tax 7.6 ( 26.5 ) ( 6.5 )

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Other reclassifications from AOCI to Income:

China cumulative translation adjustment resulting from substantial liquidation

Special items, net

China cumulative translation adjustment resulting from substantial liquidation $ — $ — $ ( 6.0 ) Special items, net

Income tax benefit (expense) — — —

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We have defined benefit pension plans in the U.S., U.K., Canada and Japan.

All active retirement plans for Corporate employees are defined contribution plans.

Additionally, we offer OPEB plans to a portion of our Canadian, U.S., Corporate and Central European employees;

these plans are not funded.

Additionally, we offer OPEB plans to a portion of our Canadian, U.S., and Central European employees which are unfunded plans.

BRI and BDL maintain defined benefit, defined contribution and postretirement benefit plans as well;

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participates in and makes contributions to multi-employer pension plans.

Contributions to multi-employer pension plans were $ 7.9 million for both 2019 and 2018 , and $ 7.7 million in 2017 .

Contributions to multi-employer pension plans were $ 8.2 million in 2020 and $ 7.9 million for both 2019 and 2018.

Additionally, the U.S.

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The benefits paid, including prescription drugs, were $ 33.0 million, $ 37.6 million and $ 37.1 million in 2020, 2019 and 2018, respectively.

Subsidies of $ 0.1 million for 2019 , and $ 0.3 million for both 2018 and 2017 , were received.

There were immaterial subsidies received in each of 2020, 2019 and 2018.

Defined Benefit and OPEB Plans

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For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

Pension OPEB Consolidated Pension OPEB Consolidated Pension OPEB Consolidated

(In millions)

Service cost:

Other pension and postretirement costs (benefits), net:

Service cost $ 2.7 $ 6.0 $ 8.7 $ 4.0 $ 7.0 $ 11.0 $ 5.5 $ 9.3 $ 14.8

Other pension and postretirement (benefit) cost, net:

Interest cost 120.5 18.8 139.3 161.9 25.5 187.4 161.8 25.8 187.6

Expected return on plan assets, net of expenses ( 161.8 ) 0.2 ( 161.6 ) ( 217.3 ) 0.5 ( 216.8 ) ( 232.8 ) 0.5 ( 232.3 )

Amortization of prior service cost (benefit)

Amortization of net actuarial loss (gain)

Curtailment, settlement or special termination benefit loss (gain) (1)

Amortization of prior service (benefit) cost 0.3 ( 0.7 ) ( 0.4 ) 1.1 ( 0.7 ) 0.4 0.7 ( 0.2 ) 0.5

Amortization of net actuarial (gain) loss 7.3 ( 14.5 ) ( 7.2 ) 10.4 ( 14.1 ) ( 3.7 ) 7.6 ( 1.7 ) 5.9

Curtailment, settlement or special termination benefit (gain) loss (1)

— — — 30.5 — 30.5 0.8 0.1 0.9

Expected participant contributions ( 0.4 ) — ( 0.4 ) ( 0.7 ) — ( 0.7 ) ( 0.8 ) — ( 0.8 )

Total other pension and postretirement cost (benefits), net

Net periodic pension and OPEB cost (benefit)

Total other pension and postretirement (benefit) cost, net ( 34.1 ) 3.8 ( 30.3 ) ( 14.1 ) 11.2 ( 2.9 ) ( 62.7 ) 24.5 ( 38.2 )

Net periodic pension and OPEB (benefit) cost $ ( 31.4 ) $ 9.8 $ ( 21.6 ) $ ( 10.1 ) $ 18.2 $ 8.1 $ ( 57.2 ) $ 33.8 $ ( 23.4 )

(1) During the fourth quarter of 2019, we utilized plan assets to purchase buy-out annuity contracts for a portion of our Canadian pension plans and recognized a pension settlement charge of $ 29.8 million.

Obligations and Changes in Funded Status

For the year ended December 31, 2019

For the year ended December 31, 2018

For the year ended December 31, 2020 For the year ended December 31, 2019

Pension OPEB Total Pension OPEB Total

(In millions)

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Actuarial loss (gain) 460.3 43.7 504.0 533.4 7.4 540.8

Amendments and special termination benefits

Plan amendments 0.8 — 0.8 ( 1.4 ) — ( 1.4 )

Benefits paid ( 316.6 ) ( 39.2 ) ( 355.8 ) ( 350.6 ) ( 44.1 ) ( 394.7 )

Curtailment and settlement

Curtailment, settlement and special termination ( 0.1 ) — ( 0.1 ) ( 192.9 ) ( 0.2 ) ( 193.1 )

Foreign currency exchange rate change 105.3 2.9 108.2 139.7 4.8 144.5

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Actual employee contributions 0.4 — 0.4 0.5 — 0.5

Curtailment, settlement and special termination ( 0.2 ) — ( 0.2 ) ( 192.9 ) — ( 192.9 )

Benefits and plan expenses paid ( 316.6 ) ( 39.7 ) ( 356.3 ) ( 350.6 ) ( 44.1 ) ( 394.7 )

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Funded status:

$ 386.9 $ ( 704.7 ) $ ( 317.8 ) $ 343.5 $ ( 672.5 ) $ ( 329.0 )

Amounts recognized in the Consolidated Balance Sheets:

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The accumulated benefit obligation for our defined benefit pension plans was approximately $ 5.6 billion and $ 5.2 billion as of December 31, 2020 and December 31, 2019, respectively.

The $ 30.5 million decrease in the net underfunded status of our aggregate pension and OPEB plans from December 31, 2018 to December 31, 2019 , was primarily driven by strong asset returns.

Separately, as discussed above, in the fourth quarter of 2019 we purchased buy-out annuity contracts for a portion of our Canadian pension plans resulting in a decrease to our projected benefit obligation and a corresponding reduction to our plan assets.

As of December 31, 2019 and December 31, 2018 , our defined benefit plan in the U.K.

and certain defined benefit plans in the U.S.

The $ 11.2 million decrease in the net underfunded status of our aggregate pension and OPEB plans from December 31, 2019 to December 31, 2020, was primarily driven by strong asset returns, partially offset by the impacts of decreased discount rates.

During the fourth quarter of 2019, we purchased buy-out annuity contracts for a portion of our Canadian pension plans resulting in a decrease to our projected benefit obligation and a corresponding reduction to our plan assets in fiscal year 2019.

As of December 31, 2020 and December 31, 2019, our defined benefit pension plan in the U.K.

and certain defined benefit pension plans in the U.S.

and Canada were overfunded as a result of our ongoing de-risking strategy.

Information for our defined benefit plans that had aggregate accumulated benefit obligations and projected benefit obligations in excess of plan assets is as follows:

December 31, 2019

December 31, 2018

Information for our defined benefit pension plans that had aggregate accumulated benefit obligations and projected benefit obligations in excess of plan assets is as follows:

December 31, 2020 December 31, 2019

(In millions)

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Amounts recognized in AOCI not yet recognized as components of net periodic pension and OPEB cost, pretax, were as follows:

As of December 31, 2019

As of December 31, 2018

As of December 31, 2020 As of December 31, 2019

Pension OPEB Total Pension OPEB Total

(In millions)

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Changes in plan assets and benefit obligations recognized in OCI, pretax, were as follows:

Pension OPEB Total

(In millions)

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Net prior service cost ( 2.0 ) — ( 2.0 )

Settlement and curtailment ( 29.8 ) ( 0.2 ) ( 30.0 )

Current year actuarial loss (gain) 38.5 7.4 45.9

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Net prior service cost 0.8 — 0.8

Settlement and curtailment

Current year actuarial loss (gain) 8.1 44.0 52.1

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For the years ended

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2020 December 31, 2019 December 31, 2018

Pension OPEB Pension OPEB Pension OPEB

Weighted-average assumptions:

Settlement discount rate 2.55 % 2.91 % 3.44 % 3.92 % 3.01 % 3.34 %

Rate of compensation increase

Rate of compensation increase 2.00 % N/A 2.00 % N/A 2.00 % N/A

Expected return on plan assets (1)

Health care cost trend rate

Ranging ratably from 6.5% in 2019 to 4.5% in 2037

Ranging ratably from 6.75% in 2018 to 4.5% in 2037

Ranging ratably from 7.0% in 2017 to 4.5% in 2037

3.24 % N/A 4.38 % N/A 4.10 % N/A

Health care cost trend rate N/A Ranging ratably from 6.25 % in 2020 to 3.57 % in 2040

N/A Ranging ratably from 6.5 % in 2019 to 4.5 % in 2037

N/A Ranging ratably from 6.75 % in 2018 to 4.5 % in 2037

(1) We develop our EROA assumptions annually with input from independent investment specialists including our actuaries, investment consultants, plan trustee and other specialists.

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The weighted-average rates used in determining the projected benefit obligation for defined pension plans and the accumulated postretirement benefit obligation for OPEB plans, as of December 31, 2020 and December 31, 2019, were as follows:

As of December 31, 2019

As of December 31, 2018

As of December 31, 2020 As of December 31, 2019

Pension OPEB Pension OPEB

Weighted-average assumptions:

Settlement discount rate 1.84 % 2.10 % 2.55 % 2.91 %

Rate of compensation increase

Health care cost trend rate

Ranging ratably from 6.25% in 2020 to 3.57% in 2040

Ranging ratably from 6.5% in 2019 to 4.5% in 2037

Rate of compensation increase 2.00 % N/A 2.00 % N/A

Health care cost trend rate N/A Ranging ratably from 6.00 % in 2021 to 3.57 % in 2040

N/A Ranging ratably from 6.25 % in 2020 to 3.57 % in 2040

The change to the weighted-average discount rates used for our defined benefit pension plans and postretirement plans as of December 31, 2020 from December 31, 2019, is primarily the result of declining interest rates during 2020.

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The following compares target asset allocation percentages with actual asset allocations on a weighted-average asset basis as of December 31, 2020:

allocations Actual

Equities 10.3 % 10.4 %

Fixed income 64.6 % 66.9 %

Real estate 7.0 % 6.0 %

Annuities 14.7 % 14.7 %

Other 3.4 % 2.0 %

Significant Concentration Risks

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Fair value measurements as of December 31, 2020

December 31, 2019

Quoted prices

December 31, 2020 Quoted prices

(Level 1) Significant

(Level 2) Significant

Cash and cash equivalents

Cash $ 144.6 $ 144.6 $ — $ —

Trades awaiting settlement 16.7 16.7 — —

Bank deposits, short-term bills and notes 25.0 — 25.0 —

Government securities

Government debt securities 869.6 — 869.6 —

Corporate debt securities 112.7 — 112.7 —

1 unchanged sentence

Buy-in annuities 783.9 — — 783.9

Equity options

Repurchase agreements ( 483.5 ) ( 483.5 ) — —

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Fair value of investments using NAV per share practical expedient

Debt funds 1,591.4

Equity funds 1,418.6

Real estate funds 274.4

Private equity funds 77.1

Hedge funds 6.7

Total fair value of plan assets $ 5,958.4

1 unchanged sentence

Fair value measurements as of December 31, 2019

December 31, 2018

Quoted prices

December 31, 2019 Quoted prices

(Level 1) Significant

(Level 2) Significant

Cash and cash equivalents

Cash $ 107.2 $ 107.2 $ — $ —

Trades awaiting settlement 17.2 17.2 — —

3 unchanged sentences

Interest and inflation linked assets 948.1 — 938.8 9.3

Collateralized debt securities

Investment funds

Private equity

Buy-in annuities 748.1 — — 748.1

Equity options 6.3 6.3 — —

Repurchase agreements ( 923.2 ) ( 923.2 ) — —

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Fair value of investments using NAV per share practical expedient

Debt funds 1,636.7

Equity funds 1,820.5

Real estate funds 20.4

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Expected future benefit payments for defined benefit pension and OPEB plans, based on foreign exchange rates as of December 31, 2020, are as follows:

Expected benefit payments

Expected benefit payments Pension OPEB

(In millions)

2021 $ 327.1 $ 43.4

2022 $ 327.1 $ 42.8

2023 $ 327.9 $ 42.2

2024 $ 328.1 $ 42.0

2025 $ 329.5 $ 41.2

2026-2030 $ 1,643.8 $ 200.2

Defined Contribution Plans

We offer defined contribution pension plans for the majority of our U.S., Corporate, Canadian and U.K.

We offer defined contribution pension plans for the majority of our U.S., Canadian and U.K.

The investment strategy for defined contribution plans are determined by each individual participant from the options we have made available as the plan sponsor.

non-union and Corporate employees are eligible to participate in qualified defined contribution plans which provide for employer contributions ranging from 5 % to 11 % of eligible compensation (certain employees were also eligible for additional employer contributions).

Effective, December 29, 2017, the plans covering the U.S.

non-union and Corporate employees were merged while retaining the contribution percentages previously indicated.

non-union employees are eligible to participate in qualified defined contribution plans which provide for employer contributions ranging from 5 % to 11 % of eligible compensation (certain employees were also eligible for additional employer contributions).

In addition, U.S.

union employees are eligible to participate in a qualified defined contribution plan which provides for employer contributions based on factors associated with various collective bargaining agreements.

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These assets are invested in publicly traded mutual funds whose performance is expected to closely match changes in the plan liabilities.

As of December 31, 2019 , and December 31, 2018 , the plan liabilities were equal to the plan assets and were included in other liabilities and other assets on our consolidated balance sheets, respectively.

As of December 31, 2020, and December 31, 2019, the plan liabilities

were equal to the plan assets and were included in other liabilities and other assets on our consolidated balance sheets, respectively.

Derivative Instruments and Hedging Activities

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Our foreign currency forwards and our forward starting interest rate swaps are designated in hedging relationships as cash flow hedges, and our cross currency swaps are designated as net investment hedges.

Prior to settlements discussed below, our

interest rate swaps were designated as fair value hedges.

Prior to settlements discussed below, our interest rate swaps were designated as fair value hedges.

In certain situations, we may execute derivatives that do not qualify for, or we do not otherwise seek, hedge accounting but are determined to be important for managing risk.

For example, our commodity swaps and commodity options are not designated in hedge accounting relationships.

These outstanding economic hedges are measured at fair value on our consolidated balance sheets with changes in fair value recorded in earnings.

These outstanding economic

hedges are measured at fair value on our consolidated balance sheets with changes in fair value recorded in earnings.

We have historically elected to apply the NPNS exemption to certain contracts, as applicable.

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Interest Rate Swaps

During the fourth quarter of 2017, we voluntarily settled our interest rate swaps with an aggregate notional amount of $ 1.0 billion , which were previously entered into earlier in 2017 to economically convert our fixed rate $ 1.0 billion 2017 USD Notes to floating rate debt based on a credit spread plus the one-month LIBOR rate.

This settlement resulted in net cash payments of $ 3.5 million .

These swaps were previously designated as fair value hedges with the changes in fair value of the hedged item recognized in earnings.

At the time of settlement we ceased adjusting the carrying value of the two $ 500 million notes for the fair value movements and these cumulative adjustments are now being amortized as a charge to interest expense over the expected remaining term of the respective note.

See Note 11, "Debt" for additional details.

Separately, in prior years, we also entered into similar interest rate swap agreements to economically convert our fixed rate $ 500 million 3.5 % notes due 2022 to floating rate debt.

These interest rate swap agreements were also previously voluntarily cash settled, at which time we ceased adjusting the carrying value of the notes for the fair value movements.

The cumulative adjustments which increased the carrying value of the notes are being amortized as a benefit to interest expense over the expected remaining term of the notes.

See Note 11, "Debt" for additional details.

In prior years, we entered into interest rate swap agreements to economically convert our fixed rate $ 1.0 billion 2017 USD Notes and $ 500 million 3.5 % notes due in 2022 to floating rate debt.

These interest rate swap agreements, which were designated as fair value hedges, were previously voluntarily cash settled, at which time we ceased adjusting the carrying value of the notes for the fair value movements.

The cumulative adjustments on the $ 1.0 billion 2017 USD Notes were amortized as a charge to interest expense over the remaining term of each respective note.

The cumulative adjustments on the $ 500 million 3.5 % notes increased the carrying value of the notes and are being amortized as a benefit to interest expense over the expected remaining term of the notes.

Net Investment Hedges

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Under these agreements we were required to early terminate these swaps at the approximate time we issued the previously forecasted debt.

We had designated these contracts as cash flow hedges and accordingly, a portion of the CAD 39.2 million ( $ 29.5 million at settlement) loss on the forward starting interest rate swaps is being reclassified from AOCI and amortized to interest expense over the remaining term of the 2015 Notes, due in September 2020, and over a portion of the CAD 500 million notes due in 2026 up to the full 10-year term of the interest rate swap agreements.

We had designated these contracts as cash flow hedges and accordingly, a portion of the CAD 39.2 million ($ 29.5 million at settlement) loss on the forward starting interest rate swaps is being reclassified from AOCI and amortized to interest expense over the remaining term of the 2015 Notes, repaid in September 2020, and over a portion of the CAD 500 million notes due in 2026 up to the full 10-year term of the interest rate swap agreements.

Cross Currency Swaps

Effective March 20, 2019, we entered into cross currency swap agreements having a total notional value of approximately EUR 353 million ($ 400 million upon execution) in order to hedge a portion of the foreign currency translational impacts of our European investment.

As a result of the swaps, we economically converted a portion of our $ 1.0 billion 2.1 % senior notes due 2021 and associated interest to EUR denominated, which will result in a EUR interest rate to be received at 0.71 % .

As a result of the swaps, we economically converted a portion of our $ 1.0 billion 2.1 % senior notes due 2021 and associated interest to EUR denominated, which results in a EUR interest rate to be received at 0.71 %.

Separately, effective April 3, 2019, we voluntarily early terminated our $ 500 million cross currency swaps due in 2020 under which we were receiving EUR interest payments at a rate received of 0.85 %, and concurrently entered into new cross currency swap agreements having a total notional of approximately EUR 445 million ($ 500 million upon execution) in order to hedge a portion of the foreign currency translation impacts of our European investment.

As a result of the swaps, we economically converted our 500 million 2.25 % senior notes due 2020 and associated interest to EUR denominated, which will result in a EUR interest rate to be received of 0.68 % .

The termination of the original $ 500 million cross currency swaps resulted in cash receipts of approximately $ 47 million which were classified as investing activities in our consolidated statement of cash flows during the second quarter of 2019.

As a result of the swaps, we economically converted our $ 500 million 2.25 % senior notes due 2020 and associated interest to EUR denominated, which resulted in a EUR interest rate to be received of 0.68 %.

The termination of the original $ 500 million cross currency swaps resulted in cash receipts of approximately $ 47 million during the second quarter of 2019.

Upon repayment of the $ 500 million 2.25 % senior notes at maturity in March 2020, we settled the associated cross currency swaps resulting in cash receipts of $ 3.2 million.

The cash receipts upon settlement of these cross currency swaps were classified as investing activities in our consolidated statement of cash flows.

We have designated each of these cross currency swaps as net investment hedges and accordingly, record changes in fair value due to fluctuations in the spot rate to AOCI.

1 unchanged sentence

Foreign Currency Forwards

Prior to issuing the 2017 EUR Notes on March 15, 2017, we entered into foreign currency forward agreements in the first quarter of 2017 with a total notional amount of EUR 499 million , representing a majority of the anticipated net proceeds from the issuance of the respective 2017 EUR Notes, to economically hedge the foreign currency exposure of the associated notes against the USD prior to issuance and to convert the proceeds to USD upon issuance through gross settlement.

We settled these foreign currency forwards on March 15, 2017, resulting in a loss of $ 8.3 million .

These foreign currency forwards were not designated in hedge accounting relationships, and, accordingly, the mark-to-market fair value adjustments and resulting losses were recorded to other income (expense).

We have financial foreign exchange forward contracts in place to manage our exposure to foreign currency fluctuations.

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Further, we hedge forecasted purchases of barley based on crop year and physical inventory management.

For purposes of measuring segment operating performance, the unrealized changes in fair value of the swaps not designated in hedge accounting relationships are reported in Corporate outside of the segment specific operating results until such time that the exposure we are managing is realized.

At that time we reclassify the gain or loss from Corporate to the operating segment, allowing our operating segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility.

For purposes of measuring segment operating performance, the unrealized changes in fair value of the swaps not designated in hedge accounting relationships are reported in Unallocated outside of the segment specific operating results until such time that the exposure we are managing is realized.

At that time we reclassify the gain or loss from Unallocated to the operating segment, allowing our operating segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility.

On October 4, 2018, in connection with the formation of the Truss joint venture, as discussed further in Note 4, "Investments," our joint venture partner, HEXO, issued to our Canadian subsidiary a total of 11.5 million warrants to purchase common shares of HEXO at a strike price of CAD 6.00 per share at any time during the three year period following the formation of the joint venture.

The fair value of the warrants at issuance of approximately $ 45 million was recorded as a non-current asset and as an adjustment to paid-in capital, net of tax.

On December 23, 2020, HEXO consolidated its issued and

outstanding common shares on the basis of four old shares for one new share that resulted in the adjustment of the strike price to CAD 24.00 per share and a reduction in warrants to 2.9 million.

All changes in the fair value of the warrants subsequent to issuance are recorded in other income (expense), net on the consolidated statements of operations.

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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 fair value of our warrants to acquire common shares of HEXO at a strike price of CAD 6.00 per share are estimated using the Black-Scholes option-pricing model.

As of December 31, 2019 and December 31, 2018 , the assumptions used to estimate the fair value of the HEXO warrants are as follows:

As of December 31, 2019

As of December 31, 2018

Expected term (years)

Estimated volatility

Risk-free interest rate

Expected dividend yield

The expected term is based on the contractual maturity date of the warrants.

Estimated volatility is based on a blend of implied volatility and historical volatility of HEXO's stock.

The risk-free rate utilized is based on a zero-coupon Canadian Treasury security yield with a remaining term equal to the expected term of the warrants.

The expected dividend yield is determined by historical dividend levels.

The table below summarizes our derivative assets and liabilities that were measured at fair value as of December 31, 2019 and December 31, 2018 .

The fair value of our warrants to acquire common shares of HEXO is estimated using the Black-Scholes option-pricing model.

The tables below summarize our derivative assets and (liabilities) that were measured at fair value as of December 31, 2020 and December 31, 2019.

See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" for further discussion related to measuring the fair value of derivative instruments.

1 unchanged sentence

December 31, 2020

December 31, 2019

Quoted prices

December 31, 2020 Quoted prices

in active markets

(Level 1) Significant

(Level 2) Significant

(In millions)

3 unchanged sentences

Commodity swaps and options 65.2 — 65.2 —

Warrants 0.3 — 0.3 —

Total $ ( 187.4 ) $ — $ ( 187.4 ) $ —

Fair Value Measurements as of

December 31, 2019

December 31, 2018

Quoted prices

December 31, 2019 Quoted prices

in active markets

(Level 1) Significant

(Level 2) Significant

(In millions)

3 unchanged sentences

Commodity swaps and options ( 41.2 ) — ( 41.2 ) —

Warrants 2.7 — 2.7 —

Total $ ( 137.9 ) $ — $ ( 137.9 ) $ —

As of December 31, 2020 and December 31, 2019, we had no significant transfers between Level 1 and Level 2.

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December 31, 2020

Asset derivatives

Liability derivatives

Notional amount

Balance sheet location

Asset derivatives Liability derivatives

Notional amount Balance sheet location Fair value Balance sheet location Fair value

Derivatives designated as hedging instruments:

Cross currency swaps

Other current assets

Accounts payable and other current liabilities

Other non-current assets

Other liabilities

Interest rate swaps

Other non-current assets

Other liabilities

Foreign currency forwards

Other current assets

Accounts payable and other current liabilities

Other non-current assets

Cross currency swaps $ 400.0 Other current assets $ — Accounts payable and other current liabilities $ ( 26.5 )

Other non-current assets — Other liabilities —

Interest rate swaps $ 1,500.0 Other non-current assets — Accounts payable and other current liabilities ( 47.7 )

Other liabilities ( 173.8 )

Foreign currency forwards $ 181.2 Other current assets 0.3 Accounts payable and other current liabilities ( 3.0 )

Other non-current assets — Other liabilities ( 2.2 )

Total derivatives designated as hedging instruments $ 0.3 $ ( 253.2 )

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Commodity swaps (1)

Other current assets

Accounts payable and other current liabilities

Other non-current assets

Other liabilities

$ 918.9 Other current assets $ 44.5 Accounts payable and other current liabilities $ ( 20.6 )

Other non-current assets 45.4 Other liabilities ( 4.1 )

Commodity options (1)

Other current assets

Accounts payable and other current liabilities

Other non-current assets

Other liabilities

$ 16.8 Other current assets — Accounts payable and other current liabilities —

Warrants $ 54.2 Other non-current assets 0.3 Other liabilities —

Total derivatives not designated as hedging instruments $ 90.2 $ ( 24.7 )

December 31, 2019

Asset derivatives

Liability derivatives

Notional amount

Balance sheet location

Asset derivatives Liability derivatives

Notional amount Balance sheet location Fair value Balance sheet location Fair value

Derivatives designated as hedging instruments:

Cross currency swaps

Other non-current assets

Other liabilities

Interest rate swaps

Other non-current assets

Other liabilities

Foreign currency forwards

Other current assets

Accounts payable and other current liabilities

Other non-current assets

Other liabilities

Cross currency swaps $ 900.0 Other current assets $ 1.8 Accounts payable and other current liabilities $ —

Other non-current assets 8.2 Other liabilities —

Interest rate swaps $ 1,500.0 Other non-current assets — Other liabilities ( 111.5 )

Foreign currency forwards $ 237.9 Other current assets 1.9 Accounts payable and other current liabilities ( 0.8 )

Other non-current assets 1.4 Other liabilities ( 0.4 )

Total derivatives designated as hedging instruments $ 13.3 $ ( 112.7 )

1 unchanged sentence

Commodity swaps (1)

Other current assets

Accounts payable and other current liabilities

Other non-current assets

Other liabilities

$ 598.4 Other current assets $ 5.7 Accounts payable and other current liabilities $ ( 36.4 )

Other non-current assets 1.0 Other liabilities ( 11.5 )

Commodity options (1)

Other current assets

Accounts payable and other current liabilities

Other non-current assets

Other liabilities

$ 18.4 Other current assets — Accounts payable and other current liabilities —

Warrants $ 53.1 Other non-current assets 2.7 Other liabilities —

Total derivatives not designated as hedging instruments $ 9.4 $ ( 47.9 )

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Line item in the balance sheet in which the hedged item is included

Carrying amount of the hedged assets/liabilities

Cumulative amount of fair value hedging adjustment(s) in the hedged assets/liabilities (1) Increase/(Decrease)

As of December 31, 2019

As of December 31, 2018

As of December 31, 2019

As of December 31, 2018

Carrying amount of the hedged assets/liabilities Cumulative amount of fair value hedging adjustment(s) in the hedged assets/liabilities (1) Increase/(Decrease)

As of December 31, 2020 As of December 31, 2019 As of December 31, 2020 As of December 31, 2019

(In millions)

4 unchanged sentences

For the year ended December 31, 2020

Derivatives in cash flow hedge relationships

Amount of gain (loss) recognized in OCI on derivative

Location of gain (loss) reclassified from AOCI into income

Amount of gain (loss) recognized from AOCI on derivative

Forward starting interest rate swaps

Interest expense

Foreign currency forwards

Cost of goods sold

Derivatives in cash flow hedge relationships Amount of gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized from AOCI on derivative

Forward starting interest rate swaps $ ( 110.0 ) Interest expense $ ( 2.9 )

Foreign currency forwards ( 3.5 ) Cost of goods sold 4.6

Other income (expense), net ( 1.2 )

Total $ ( 113.5 ) $ 0.5

For the year ended December 31, 2020

Derivatives in net investment hedge relationships

Amount of gain (loss) recognized in OCI on derivative

Location of gain (loss) reclassified from AOCI into income

Amount of gain (loss) recognized from AOCI on derivative

Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)

Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) (1)

Cross currency swaps

Interest expense

Derivatives in net investment hedge relationships Amount of gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized from AOCI on derivative Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) (1)

Cross currency swaps $ ( 33.2 ) Interest expense $ — Interest expense $ 14.2

Total $ ( 33.2 ) $ — $ 14.2

For the year ended December 31, 2020

Non-derivative financial instruments in net investment hedge relationships

Amount of gain (loss) recognized in OCI on derivative

Location of gain (loss) reclassified from AOCI into income

Amount of gain (loss) recognized from AOCI on derivative

Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)

Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)

EUR 800 million notes due 2024

Other income (expense), net

Non-derivative financial instruments in net investment hedge relationships Amount of gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized from AOCI on derivative Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)

EUR 800 million notes due 2024

Other income (expense), net

$ ( 80.3 ) Other income (expense), net $ — Other income (expense), net $ —

Total $ ( 80.3 ) $ — $ —

For the year ended December 31, 2019

Derivatives in cash flow hedge relationships

Amount of gain (loss) recognized in OCI on derivative

Location of gain (loss) reclassified from AOCI into income

Amount of gain (loss) recognized from AOCI on derivative

Forward starting interest rate swaps

Interest expense

Foreign currency forwards

Cost of goods sold

Forward starting interest rate swaps $ ( 99.2 ) Interest expense $ ( 3.0 )

Foreign currency forwards ( 12.1 ) Cost of goods sold 3.1

Other income (expense), net ( 0.7 )

Total $ ( 111.3 ) $ ( 0.6 )

For the year ended December 31, 2019

Derivatives in net investment hedge relationships

Amount of gain (loss) recognized in OCI on derivative

Location of gain (loss) reclassified from AOCI into income

Amount of gain (loss) recognized from AOCI on derivative

Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)

Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) (1)

Cross currency swaps

Interest expense

Cross currency swaps $ 19.8 Interest expense $ — Interest expense $ 23.5

Total $ 19.8 $ — $ 23.5

(1) Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and period amortization is recorded in other comprehensive income.

For the year ended December 31, 2019

Non-derivative financial instruments in net investment hedge relationships

Amount of gain (loss) recognized in OCI on derivative

Location of gain (loss) reclassified from AOCI into income

Amount of gain (loss) recognized from AOCI on derivative

Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)

Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)

EUR 800 million notes due 2024

Other income (expense), net

$ 20.4 Other income (expense), net $ — Other income (expense), net $ —

EUR 500 million notes due 2019

Other income (expense), net

10.1 Other income (expense), net — Other income (expense), net —

Total $ 30.5 $ — $ —

For the year ended December 31, 2018

Derivatives in cash flow hedge relationships

Amount of gain

(loss) recognized

(effective portion)

Location of gain

(loss) reclassified

(effective portion)

Amount of gain

(loss) recognized

on derivative

(effective portion)

Location of gain

(loss) recognized

on derivative

(ineffective portion

excluded from

effectiveness testing)

Amount of gain

Derivatives in cash flow hedge relationships Amount of gain

(loss) recognized

on derivative

(ineffective portion

excluded from

effectiveness testing)

Forward starting interest rate swaps

Interest expense

Foreign currency forwards

Cost of goods sold

Other income (expense), net

(effective portion) Location of gain (loss) reclassified from AOCI into income

Amount of gain (loss) recognized from AOCI on derivative

Forward starting interest rate swaps $ ( 12.3 ) Interest expense $ ( 3.0 )

Foreign currency forwards 26.8 Cost of goods sold ( 0.2 )

Other income (expense), net ( 0.2 )

Total $ 14.5 $ ( 3.4 )

For the year ended December 31, 2018

Non-derivative financial instruments in net investment hedge relationships

Amount of gain

(loss) recognized

(effective portion)

Location of gain

(loss) reclassified

(effective portion)

Amount of gain

(loss) recognized

on derivative

(effective portion)

Location of gain

Cross currency swaps $ 36.5 Interest expense $ — Interest expense $ 10.7

Total $ 36.5 $ — $ 10.7

For the year ended December 31, 2018

(loss) recognized

on derivative

(ineffective portion

excluded from

effectiveness testing)

Amount of gain

effectiveness testing) Amount of gain

(loss) recognized

on derivative

(ineffective portion

excluded from

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EUR 800 million notes due 2024

Other income (expense), net

$ 43.0 Other income (expense), net $ — Other income (expense), net $ —

EUR 500 million notes due 2019

Other income (expense), net

For the year ended December 31, 2017

Derivatives in fair value hedge relationship

Amount of gain (loss) recognized in income on derivative

Location of gain (loss) recognized in income

Interest rate swaps

Interest expense

26.9 Other income (expense), net — Other income (expense), net —

Total $ 69.9 $ — $ —

We expect net losses of approximately $ 6 million (pretax) recorded in AOCI as of December 31, 2020 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 December 31, 2019 is approximately 4 years, as well as those related to our forecasted debt issuances in 2021, 2022, and 2026.

For derivatives designated in cash flow hedge relationships, the maximum length of time over which forecasted transactions are hedged as of December 31, 2020 is approxim ately 4 yea rs, as well as those related to our forecasted debt issuances in 2021, 2022, and 2026.

The Effect of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Operations (in millions) :

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Location and amount of gain (loss) recognized in income on fair value and cash flow hedging relationships (1)

Cost of goods sold

Other income (expense), net

Interest expense

Cost of goods sold Other income (expense), net Interest expense

Total amount of income and expense line items presented in the consolidated statement of operations in which the effects of fair value or cash flow hedges are recorded $ ( 5,885.7 ) $ 6.0 $ ( 274.6 )

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Location and amount of gain (loss) recognized in income on fair value and cash flow hedging relationships (1)

Cost of goods sold

Other income (expense), net

Interest expense

Cost of goods sold Other income (expense), net Interest expense

Total amount of income and expense line items presented in the consolidated statement of operations in which the effects of fair value or cash flow hedges are recorded $ ( 6,378.2 ) $ ( 14.7 ) $ ( 280.9 )

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Amount of gain (loss) reclassified from AOCI into income $ 3.1 $ ( 0.7 ) $ —

For the year ended December 31, 2018

Location and amount of gain (loss) recognized in income on fair value and cash flow hedging relationships (1)

Cost of goods sold Other income (expense), net Interest expense

Total amount of income and expense line items presented in the consolidated statement of operations in which the effects of fair value or cash flow hedges are recorded $ ( 6,584.8 ) $ ( 12.0 ) $ ( 306.2 )

Gain (loss) on cash flow hedging relationships:

Forward starting interest rate swaps

Amount of gain (loss) reclassified from AOCI into income $ — $ — $ ( 3.0 )

Foreign currency forwards

Amount of gain (loss) reclassified from AOCI into income $ ( 0.2 ) $ ( 0.2 ) $ —

(1) We had no outstanding fair value hedges during 2020, 2019 or 2018.

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For the year ended December 31, 2020

Derivatives not in hedging relationship

Location of gain (loss) recognized

in income on derivative

Amount of gain (loss) recognized

Derivatives not in hedging relationship Location of gain (loss) recognized

in income on derivative Amount of gain (loss) recognized

in income on derivative

Commodity swaps

Cost of goods sold

Other income (expense), net

Commodity swaps Cost of goods sold $ 28.5

Warrants Other income (expense), net ( 2.4 )

For the year ended December 31, 2019

Derivatives not in hedging relationship

Location of gain (loss) recognized

in income on derivative

Amount of gain (loss) recognized

Derivatives not in hedging relationship Location of gain (loss) recognized

in income on derivative Amount of gain (loss) recognized

in income on derivative

Commodity swaps

Cost of goods sold

Other income (expense), net

Commodity swaps Cost of goods sold $ ( 26.8 )

Warrants Other income (expense), net ( 17.8 )

Total $ ( 44.6 )

For the year ended December 31, 2018

Derivatives not in hedging relationship

Location of gain (loss) recognized

in income on derivative

Amount of gain (loss) recognized

Derivatives not in hedging relationship Location of gain (loss) recognized

in income on derivative Amount of gain (loss) recognized

in income on derivative

Commodity swaps

Cost of goods sold

Foreign currency swaps

Other income (expense), net

Lower commodity prices relative to our hedged positions, primarily in aluminum and diesel during 2019 and primarily in aluminum during 2018, drove the total losses recognized in income related to commodity swaps for the years ended December 31, 2019 and December 31, 2018 .

Contrarily, higher commodity prices, primarily in aluminum, during 2017 resulted in the total gain recognized in income related to commodity swaps for the year ended December 31, 2017 .

Commodity swaps Cost of goods sold $ ( 110.5 )

Warrants Other income (expense), net ( 23.8 )

Total $ ( 134.3 )

Higher commodity prices relative to our hedged positions in the current year drove the total gain recognized in income related to commodity swaps for the year ended December 31, 2020.

Conversely, lower commodity prices relative to our hedged positions, primarily in aluminum and diesel during 2019 and primarily in aluminum during 2018, drove the total losses recognized in income related to commodity swaps for the years ended December 31, 2019 and December 31, 2018.

Accounts Payable and Other Current Liabilities

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(In millions)

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Accrued interest 101.4 107.0

Accrued selling and marketing costs

Container liability 100.9 123.5

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Accounts payable and other current liabilities $ 2,889.5 $ 2,767.3

Includes current liabilities related to derivatives, income taxes, pensions and other postretirement benefits, mandatorily redeemable noncontrolling interest liabilities, and various other accrued expenses.

(1) Includes current liabilities related to derivatives, income taxes, pensions and other postretirement benefits, guarantee liabilities for some of our equity method investments, and various other accrued expenses.

Commitments and Contingencies

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These letters primarily expire throughout 2021 and $ 18.8 million of the letters contain a feature that automatically renews the letter for an additional year if no cancellation notice is submitted.

These letters of credit are being maintained as security for deferred compensation payments, reimbursements to insurance companies, reimbursements to the trustee for pension payments,

deductibles or retention payments made on our behalf, various payments due to governmental agencies, operations of underground storage tanks and other general business purposes, and are not included on our consolidated balance sheets.

These letters of credit are being maintained as security for deferred compensation payments, reimbursements to insurance companies, reimbursements to the trustee for pension payments, deductibles or retention payments made on our behalf, various payments due to governmental agencies, operations of underground storage tanks and other general business purposes, and are not included on our consolidated balance sheets.

Guarantees and Indemnities

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The maximum potential claims amount for the remainder of the purchased tax credits was $ 67.4 million as of December 31, 2020.

Our total estimate of the indemnity liability as of December 31, 2019 was $ 10.0 million , of which $ 4.0 million was classified as a current liability and $ 6.0 million classified as non-current.

Our total estimate of the indemnity liability as of December 31, 2020 was $ 7.7 million, which is classified as non-current.

Our estimates consider a number of scenarios for the ultimate resolution of these issues, the probabilities of which are influenced not only by legal developments in Brazil but also by management's intentions with regard to various alternatives that could present themselves leading to the ultimate resolution of these issues.

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Rather, they represent unconditional, non-cancelable purchase commitments under contracts with remaining terms greater than one year.

Supply and Distribution

Advertising and Promotions

Year Supply and Distribution Advertising and Promotions

(Amounts in millions)

Total purchases under our supply and distribution contracts in 2019 , 2018 and 2017 were approximately $ 1.0 billion , $ 1.1 billion and $ 1.2 billion , respectively.

Total marketing and advertising expense was approximately $ 1.2 billion , $ 1.2 billion and $ 1.3 billion in 2019 , 2018 and 2017 , respectively.

2021 $ 301.6 $ 152.8

2022 397.8 136.6

2023 282.7 115.0

2024 148.4 108.2

2025 151.6 82.5

Thereafter 367.7 183.9

Total $ 1,649.8 $ 779.0

Total purchases under our supply and distribution contracts in 2020, 2019 and 2018 were $ 542.6 million and approximately $ 1.0 billion and $ 1.1 billion, respectively.

Total marketing and advertising expense was $ 923.2 million and approximately $ 1.2 billion and $ 1.2 billion in 2020, 2019 and 2018, respectively.

Litigation and Other Disputes and Environmental

Related to litigation, other disputes and environmental issues, we have an aggregate accrued contingent liability of $ 16.2 million and $ 13.7 million as of December 31, 2019 and December 31, 2018 , respectively.

Related to litigation, other disputes and environmental issues, we had an aggregate accrued contingent liability of $ 17.9 million and $ 16.2 million as of December 31, 2020 and December 31, 2019, 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.

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

While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, 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.

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.

In 2017, a local jurisdictional court ruled in our favor related to our challenge of the validity of historical assessments from a local country regulatory authority related to indirect tax calculations in our Europe operations.

Based on this favorable ruling, we released a previously recorded provision in the first quarter of 2017 as we no longer deemed this loss probable.

This resulted in a benefit of approximately $ 50 million , recorded within the excise taxes line item on the consolidated statement of operations during the year ended December 31, 2017.

On February 12, 2018, Stone Brewing Company filed a trademark infringement lawsuit in federal court in the Southern District of California against MillerCoors LLC alleging that the Keystone brand has “rebranded” itself as “Stone” and is marketing itself in a manner confusingly similar to Stone Brewing Company's registered Stone trademark.

Stone Brewing Company seeks treble damages in the amount of MillerCoors’ profit from Keystone sales.

MillerCoors subsequently filed an answer and counterclaims against Stone Brewing Company.

On May 31, 2018, Stone Brewing Company filed a motion to dismiss MillerCoors' counterclaims and for a preliminary injunction seeking to bar MillerCoors from continuing to use “STONE” on Keystone Light cans and related marketing materials.

In March 2019, the court denied Stone Brewing Company’s motion for preliminary injunction and its motion to dismiss MillerCoors’ counterclaims.

No trial date has been scheduled.

On February 12, 2018, Stone Brewing Company filed a trademark infringement lawsuit in federal court in the Southern District of California against MCBC USA alleging that the Keystone brand has “rebranded” itself as “Stone” and is marketing itself in a manner confusingly similar to Stone Brewing Company's registered Stone trademark.

Stone Brewing Company seeks treble damages in the amount of MCBC USA's profit from Keystone sales.

MCBC USA subsequently filed an answer and counterclaims against Stone Brewing Company.

On May 31, 2018, Stone Brewing Company filed a motion to dismiss MCBC USA's counterclaims and for a preliminary injunction seeking to bar MCBC USA from continuing to use “STONE” on Keystone Light cans and related marketing materials.

In March 2019, the court denied Stone Brewing Company’s motion for preliminary injunction and its motion to dismiss MCBC USA's counterclaims.

Discovery is closed.

The jury trial scheduled to begin October 13, 2020 was continued by the court and has not yet been reset.

We intend to vigorously assert and defend our rights in this lawsuit.

A range of potential loss is not estimable at this time.

In December 2018, the U.S.

Department of Treasury issued a regulation that impacts our ability to claim a refund of certain federal duties, taxes, and fees paid for beer sold between the U.S.

and certain other countries effective in February 2019.

As a result, based on the terms of the regulation, it is the U.S.

Department of Treasury’s view that future claims will no longer be accepted, and we may be further unable to collect historically claimed, but not yet received, refunds of approximately $ 40 million , which are recorded within other non-current assets on our consolidated balance sheet as of December 31, 2019 .

In January 2020, the United States Court of International Trade issued an opinion and order ruling the challenged portions of this regulation dealing with refunds of certain federal duties, taxes and fees paid with respect to certain imported beer, to the extent of certain exported beer, to be unlawful.

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

We will continue to monitor this matter including our ability to collect our historically claimed refunds as well our ability to claim ongoing refunds should the court's decision remain upheld.

On February 15, 2019, two purported stockholders filed substantially similar putative class action complaints against the Company, Mark R.

3 unchanged sentences

The plaintiffs purport to represent a class of the Company’s stockholders and assert that the Defendants violated Sections 10(b) and 20(a) of the Exchange Act by allegedly making false and misleading statements or omissions regarding the Company’s restatement of consolidated financial statements for the years ended December 31, 2016 and December 31, 2017, and that the Company purportedly lacked adequate internal controls over financial reporting.

The plaintiffs seek, among other things, an unspecified amount of damages and reasonable attorneys’ fees, expert fees and other costs.

The plaintiffs seek, among other things, an unspecified amount of damages and attorneys’ fees, expert fees and other costs.

On April 16, 2019, motions to consolidate and appoint a lead plaintiff were filed in each case.

On May 24, 2019, the securities class action suit filed with the Illinois District Court was transferred to the Colorado District Court, but was voluntarily dismissed on July 25, 2019.

On May 24, 2019, the securities class action suit filed with the Illinois District Court was transferred to the Colorado District Court, and subsequently was voluntarily dismissed on July 25, 2019.

On October 2, 2019, the class action lawsuits originally filed in Colorado District Court were consolidated, and, on October 3, 2019, the court appointed a lead plaintiff and lead counsel for the consolidated case.

2 unchanged sentences

We filed a motion to dismiss the amended complaint on January 23, 2020;

We intend to defend the claims vigorously.

A range of potential loss is not estimable at this time.

On March 26, 2019, a purported stockholder filed a purported shareholder derivative action in Colorado District Court against the Company’s board of directors and certain current officers (the “Individual Defendants”), and the Company as a nominal defendant.

the plaintiff subsequently filed an opposition to our motion to dismiss on March 9, 2020;

and we filed our reply brief in support of our motion to dismiss on April 8, 2020.

Oral argument on the motion occurred on October 28, 2020.

On December 2, 2020, the Court granted our motion to dismiss with prejudice and the deadline to appeal has passed.

This case is now fully resolved and closed.

On March 26, 2019, a purported stockholder filed a purported shareholder derivative action in Colorado District Court against the Company’s board of directors and certain officers (the “Individual Defendants”), and the Company as a nominal defendant.

On May 14, 2019, another purported stockholder filed a substantially similar complaint in the Colorado District Court.

On August 12, 2019, a third derivative complaint was filed in Colorado District Court by purported stockholders.

On August 12, 2019, a third derivative complaint was filed in Colorado District Court by a purported stockholder.

All three derivative complaints assert claims against the Individual Defendants for breaches of fiduciary duty and unjust enrichment arising out of the Company’s dissemination to shareholders of purportedly materially misleading and inaccurate information in connection with the Company’s restatement of consolidated financial statements for the years ended December 31, 2016 and December 31, 2017.

The complaints further allege that the Company lacked adequate internal controls over

financial reporting.

The complaints further allege that the Company lacked adequate internal controls over financial reporting.

The third derivative complaint filed in August also alleges the Individual Defendants violated Sections 14(a) and 20(a) of the Exchange Act by issuing misleading statements in the Company’s proxy statement.

The relief sought in the complaints include changes to the Company’s corporate governance procedures, unspecified damages, restitution, and attorneys’ fees, expert fees, other costs and such other relief as the court deems proper.

The parties have agreed to administratively stay the proceedings in the various shareholder derivative actions until the federal district court rules on the company's motion to dismiss filed on January 23, 2020 in the above mentioned consolidated securities action.

All three derivative actions have been administratively closed, subject to being reopened for good cause shown.

All three derivative actions have been administratively closed.

A range of potential loss is not estimable at this time.

In June 2019, the Ontario provincial government adopted a bill that, if enacted, would terminate a 10-year Master Framework Agreement that was originally signed between the previous government administration and MCBC, Labatt Brewing Company Limited, Sleeman Breweries Ltd., and Brewers Retail Inc.

in 2015 and governs the terms of the beer distribution and retail systems in Ontario through 2025.

Regulatory Contingencies

In December 2018, the U.S.

Department of Treasury issued a regulation that impacts our ability to claim a refund of certain federal duties, taxes, and fees paid for beer sold between the U.S.

and certain other countries effective in February 2019.

As a result, based on the terms of the regulation, it is the U.S.

Department of Treasury's position that future claims will no longer be accepted, and we may be further unable to collect previously claimed, but not yet received, refunds.

exported beer, to be unlawful.

On April 17, 2020, the U.S.

Department of Treasury appealed this ruling as well as filed a motion for stay of the enforcement of judgment and suspension of claims pending appeal.

Department of Treasury's motion to stay was denied pending appeal and they were ordered to pay on all claims under the accelerated payment program.

As a result, we have collected approximately $ 49 million of previously filed claims during 2020, and have previously claimed, but not yet received, refunds of approximately $ 4 million re corded within other receivables, net on our unaudited condensed consolidated balance sheet as of December 31, 2020.

On July 23, 2020, the U.S.

Department of Treasury filed its opening appellate brief in the United States Court of Appeals for the Federal Circuit.

An opposition/response brief was filed on October 1, 2020 and a final reply brief was submitted on December 11, 2020.

We will continue to monitor this matter including our ability to collect the remainder of our previously claimed refunds, our potential liability to repay refunds received, as well as our ability to claim ongoing refunds as the appeal process progresses.

In June 2019, the Ontario government adopted a bill that, if enacted, would terminate a 10-year Master Framework Agreement that was originally signed between the previous government administration and Molson Canada 2005, a wholly owned indirect subsidiary of the Company, Labatt Brewing Company Limited, Sleeman Breweries Ltd., and Brewers Retail Inc.

in 2015 and dictates the terms of the beer distribution and retail systems in Ontario through 2025.

The government has not yet proclaimed the bill as law.

The impacts of these potential legislative changes are unknown at this time, but could have a negative impact on the results of operations, cash flows and financial position of the Canada segment.

While discussions remain ongoing with the government to reach a mutually agreeable alternative to the enactment of the law, the Company and the other Master Framework Agreement signatories are prepared to vigorously defend our rights and pursue legal recourse, should the Master Framework Agreement be unilaterally terminated by the enactment of the legislation.

The impacts of these potential legislative changes are unknown at this time, but could have a negative impact on the results of operations, cash flows and financial position of the North America segment.

While discussions remain ongoing with the government to reach a mutually agreeable alternative to the enactment of the law, it is unclear how the coronavirus pandemic will impact these discussions.

Molson Canada 2005 and the other Master Framework Agreement signatories are prepared to vigorously defend our rights and pursue legal recourse, should the Master Framework Agreement be unilaterally terminated by the enactment of the legislation.

Environmental

3 unchanged sentences

Total environmental expenditures recognized for 2020, 2019 and 2018 were immaterial to our consolidated financial statements.

North America

Our Canada brewing operations are subject to provincial environmental regulations and local permit requirements.

1 unchanged sentence

We have environmental programs in Canada including organization, monitoring and verification, regulatory compliance, reporting, education and training, and corrective action.

We sold a chemical specialties business in 1996.

In Canada, we sold a chemical specialties business in 1996.

We are still responsible for certain aspects of environmental remediation, undertaken or planned, at those chemical specialties business locations.

We have established provisions for the costs of these remediation programs.

United States

We were previously notified that we are or may be a potentially responsible party ("PRP") under the Comprehensive Environmental Response, Compensation and Liability Act or similar state laws for the cleanup of sites where hazardous substances have allegedly been released into the environment.

In the United States, we were previously notified that we are or may be a potentially responsible party ("PRP") under the Comprehensive Environmental Response, Compensation and Liability Act or similar state laws for the cleanup of sites where hazardous substances have allegedly been released into the environment.

We cannot predict with certainty the total costs of cleanup, our share of the total cost, the extent to which contributions will be available from other parties, the amount of time necessary to complete the cleanups or insurance coverage.

18 unchanged sentences

There may also be other contamination of which we are currently unaware.

Europe and International

We are subject to the requirements of governmental and local environmental and occupational health and safety laws and regulations within each of the countries in which we operate.

1 unchanged sentence

Montreal Brewery Sale and Leaseback Transaction

In June 2019, we completed the sale of our Montreal brewery for $ 96.2 million (CAD 126 million ), resulting in a $ 61.3 million gain, which was recorded as a special item.

In June 2019, we completed the sale of our Montreal brewery for $ 96.2 million, resulting in a $ 61.3 million gain, which was recorded as a special item in the year ended December 31, 2019.

In conjunction with the sale, we agreed to lease back the existing property to continue operations on an uninterrupted basis for a period up to 5 years with early termination options at our discretion, while our new brewery in Longueuil, Quebec is being constructed.

Accordingly, we have recorded operating lease right-of-use assets and liabilities of approximately CAD 6 million assuming a lease term that is coterminous with the construction of our new brewery, which is currently expected to be operational in 2021.

Accordingly, in the year ended December 31, 2019, we recorded operating lease right-of-use assets and liabilities of approximately CAD 6 million assuming a lease term that is coterminous with the construction of our new brewery, which is currently expected to be operational in 2021.

However, due to the uncertainty inherent in our estimates, the term of the brewery lease is subject to reassessment.

Once the existing property has been entirely redeveloped by the purchaser, we plan to lease a minor portion of the future space for administrative and other purposes.

We have evaluated this transaction pursuant to the accounting guidance for sale and leaseback transactions and concluded that the relevant criteria have been met for full gain recognition upon completion of the transaction in the second quarter of 2019.

We evaluated this transaction pursuant to the accounting guidance for sale and leaseback transactions and concluded that the relevant criteria have been met for full gain recognition upon completion of the transaction in the second quarter of 2019.

Lease Financial Information

For the year ended December 31, 2019 , lease expense (including immaterial short-term and variable lease costs) was as follows:

Year ended December 31, 2019

For the years ended December 31, 2020 and December 31, 2019, lease expense (including immaterial short-term and variable lease costs) was as follows:

Year ended December 31, 2020 Year ended December 31, 2019

(In millions)

2 unchanged sentences

Total lease expense $ 82.9 $ 83.1

Separately, as a result of our decision to close our Denver, Colorado office, we recorded an impairment loss of $ 1.1 million to the Denver, Colorado office lease right-of use asset in the fourth quarter of 2019.

Supplemental cash flow information related to leases for the year ended December 31, 2019 was as follows:

Year ended December 31, 2019

Separately, we recorded impairment losses on certain right-of-use assets, primarily related to our Denver, Colorado office lease, during 2020 and 2019 as discussed in Note 7, "Special Items."

Supplemental cash flow information related to leases for the years ended December 31, 2020 and December 31, 2019 was as follows:

Year ended December 31, 2020 Year ended December 31, 2019

(In millions)

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Finance leases $ 5.4 $ 9.2

Supplemental balance sheet information related to leases as of December 31, 2019 was as follows:

December 31, 2019

Balance Sheet Classification

(In millions)

Supplemental balance sheet information related to leases as of December 31, 2020 and December 31, 2019 was as follows:

December 31, 2020 December 31, 2019

Balance Sheet Classification (In millions)

Operating Leases

Operating lease right-of-use assets

Current operating lease liabilities

Accounts payable and other current liabilities

Non-current operating lease liabilities

Other liabilities

Operating lease right-of-use assets Other assets $ 136.2 $ 154.5

Current operating lease liabilities Accounts payable and other current liabilities $ 47.1 $ 46.6

Non-current operating lease liabilities Other liabilities 106.4 119.5

Total operating lease liabilities $ 153.5 $ 166.1

Finance Leases

Finance lease right-of-use assets

Properties, net

Current finance lease liabilities

Current portion of long-term debt and short-term borrowings

Non-current finance lease liabilities

Long-term debt

Finance lease right-of-use assets Properties, net $ 60.5 $ 73.0

Current finance lease liabilities Current portion of long-term debt and short-term borrowings $ 4.1 $ 34.5

Non-current finance lease liabilities Long-term debt 59.9 60.0

Total finance lease liabilities $ 64.0 $ 94.5

The weighted-average remaining lease term and discount rate as of December 31, 2020 are as follows:

Weighted-Average Remaining Lease Term (Years)

Weighted-Average Discount Rate

Weighted-Average Remaining Lease Term (Years) Weighted-Average Discount Rate

Operating leases 4.5 4.1 %

1 unchanged sentence

Based on foreign exchange rates as of December 31, 2020, maturities of lease liabilities were as follows:

Operating Leases

Finance Leases

Operating Leases Finance Leases

(In millions)

2021 $ 52.0 $ 7.5

2022 41.0 7.0

2023 30.3 6.9

2024 16.0 6.9

Thereafter 17.2 64.1

Total lease payments $ 166.4 $ 99.0

interest ( 12.9 ) ( 35.0 )

Present value of lease liabilities $ 153.5 $ 64.0

Executed leases that have not yet commenced as of December 31, 2020 are immaterial.

Information as of December 31, 2018 , as well as comparative period information under historical lease accounting guidance

Gross assets recorded under finance leases as of December 31, 2018 were $ 82.5 million .

The associated accumulated amortization on these assets as of December 31, 2018 was $ 13.2 million .

These amounts are recorded within properties, net on the consolidated balance sheet.

Current and non-current finance lease liabilities as of December 31, 2018 were $ 3.2 million and $ 82.1 million , respectively, and were recorded in accounts payable and other current liabilities and other non-current liabilities, respectively, on the consolidated balance sheet.

Separately, during the year ended December 31, 2018 and December 31, 2017 , non-cash activities related to the recognition of finance leases was $ 15.5 million and $ 33.8 million , respectively.

Based on foreign exchange rates as of December 31, 2018 , future minimum lease payments under operating leases that have initial or remaining non-cancelable terms in excess of one year, as well as finance leases, are as follows:

Operating Leases

Finance Leases

(In millions)

Total future minimum lease payments

interest on finance leases

Present value of future minimum finance lease payments

Total rent expense was $ 66.1 million and $ 64.1 million in 2018 and 2017 , respectively.

Supplemental Guarantor Information

For purposes of this Note 20, including the tables, "Parent Issuer" shall mean MCBC.

"Subsidiary Guarantors" shall mean certain Canadian and U.S.

subsidiaries reflecting the substantial operations of each of our Canada and U.S.

SEC Registered Securities

On May 3, 2012, MCBC issued $ 1.9 billion of senior notes, in a registered public offering, consisting of $ 300 million 2.0 % senior notes due 2017 (subsequently repaid in the second quarter of 2017), $ 500 million 3.5 % senior notes due 2022, and $ 1.1 billion 5.0 % senior notes due 2042.

Additionally, on July 7, 2016 , MCBC issued the $ 500 million 1.45 % senior notes due 2019 (subsequently repaid in the third quarter of 2019), $ 1.0 billion 2.10 % senior notes due 2021, $ 2.0 billion 3.0 % senior notes due 2026, $ 1.8 billion 4.2 % senior notes due 2046 and EUR $ 800.0 million 1.25 % senior notes due 2024, in a registered public offering.

In December 2017, MCBC completed an exchange offer in which it issued publicly registered senior notes in exchange for its $ 500 million 1.90 % senior notes due 2019 (subsequently repaid in the first quarter of 2019), $ 500 million 2.25 % senior notes due 2020 and our EUR 500 million floating rate senior notes due 2019 (subsequently repaid in the first quarter of 2019), which were issued in private placement transactions in March 2017.

"Parent Issuer" in the below tables is specifically referring to MCBC in its capacity as the issuer of these 2012, 2016 and 2017 issuances.

These senior notes are guaranteed on a senior unsecured basis by the Subsidiary Guarantors.

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 is registered with the SEC, and such other outstanding debt is guaranteed on a senior unsecured basis by the Parent and/or Subsidiary Guarantors.

These guarantees are full and unconditional and joint and several.

See Note 11, "Debt" for details of all debt issued and outstanding as of December 31, 2019 .

In the fourth quarter of 2019, MillerCoors LLC, a subsidiary guarantor, as well as certain other subsidiary guarantors declared distributions totaling approximately $ 5 billion to MCBC, which were simultaneously non-cash settled via offset to an equal amount of payables that were owed by MCBC to MillerCoors LLC and the other subsidiary guarantors.

Also in the fourth quarter of 2019, two subsidiary guarantors, each separately agreed to transfer certain intercompany note receivables to two separate subsidiary non-guarantors, in consideration for equity in non-cash transactions of approximately CAD 5 billion and approximately EUR 1 billion , respectively.

In the first quarter of 2018, MillerCoors LLC, a subsidiary guarantor, declared a distribution of approximately $ 1.7 billion to MCBC, which was simultaneously non-cash settled via offset to an equal amount of payables that were owed by MCBC to MillerCoors LLC.

The following information sets forth the condensed consolidating statements of operations for the years ended December 31, 2019 , December 31, 2018 and December 31, 2017 , condensed consolidating balance sheets as of December 31, 2019 and December 31, 2018 , and condensed consolidating statements of cash flows for the years ended December 31, 2019 , December 31, 2018 and December 31, 2017 .

Investments in subsidiaries are accounted for under the equity method;

accordingly, entries necessary to consolidate the Parent Issuer and all of our guarantor and non-guarantor subsidiaries are reflected in the eliminations column.

In the opinion of management, separate complete financial statements of MCBC and the Subsidiary Guarantors would not provide additional material information that would be useful in assessing their financial composition.

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(IN MILLIONS)

December 31, 2019

Cost of goods sold

Marketing, general and administrative expenses

Special items, net

Equity income (loss) in subsidiaries

Operating income (loss)

Interest income (expense), net

Other pension and postretirement benefits (costs), net

Other income (expense), net

Total other income (expense), net

Income (loss) before income taxes

Income tax benefit (expense)

Net income (loss)

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to MCBC

Comprehensive income (loss) attributable to MCBC

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(IN MILLIONS)

December 31, 2018

Cost of goods sold

Marketing, general and administrative expenses

Special items, net

Equity income (loss) in subsidiaries

Operating income (loss)

Other income (expense), net

Interest income (expense), net

Other pension and postretirement benefits (costs), net

Other income (expense), net

Total other income (expense), net

Income (loss) before income taxes

Income tax benefit (expense)

Net income (loss)

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to MCBC

Comprehensive income (loss) attributable to MCBC

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(IN MILLIONS)

December 31, 2017

Cost of goods sold

Marketing, general and administrative expenses

Special items, net

Equity income (loss) in subsidiaries

Operating income (loss)

Other income (expense), net

Interest income (expense), net

Other pension and postretirement benefits (costs), net

Other income (expense), net

Total other income (expense), net

Income (loss) before income taxes

Income tax benefit (expense)

Net income (loss)

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to MCBC

Comprehensive income (loss) attributable to MCBC

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

(IN MILLIONS)

December 31, 2019

Current assets:

Cash and cash equivalents

Accounts receivable, net

Other receivables, net

Inventories, net

Other current assets, net

Intercompany accounts receivable

Total current assets

Properties, net

Other intangibles, net

Net investment in and advances to subsidiaries

Liabilities and equity

Current liabilities:

Accounts payable and other current liabilities

Current portion of long-term debt and short-term borrowings

Intercompany accounts payable

Total current liabilities

Long-term debt

Pension and postretirement benefits

Deferred tax liabilities

Other liabilities

Intercompany notes payable

Total liabilities

MCBC stockholders' equity

Intercompany notes receivable

Total stockholders' equity

Noncontrolling interests

Total liabilities and equity

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

(IN MILLIONS)

December 31, 2018

Non Guarantors

Current assets:

Cash and cash equivalents

Accounts receivable, net

Other receivables, net

Inventories, net

Other current assets, net

Intercompany accounts receivable

Total current assets

Properties, net

Other intangibles, net

Net investment in and advances to subsidiaries

Liabilities and equity

Current liabilities:

Accounts payable and other current liabilities

Current portion of long-term debt and short-term borrowings

Intercompany accounts payable

Total current liabilities

Long-term debt

Pension and postretirement benefits

Deferred tax liabilities

Other liabilities

Intercompany notes payable

Total liabilities

MCBC stockholders' equity

Intercompany notes receivable

Total stockholders' equity

Noncontrolling interests

Total liabilities and equity

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(IN MILLIONS)

December 31, 2019

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to properties

Proceeds from sales of properties and other assets

Net intercompany investing activity

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Exercise of stock options under equity compensation plans

Dividends paid

Payments on debt and borrowings

Proceeds on debt and borrowings

Net proceeds from (payments on) revolving credit facilities and commercial paper

Net intercompany financing activity

Net cash provided by (used in) financing activities

CASH AND CASH EQUIVALENTS:

Net increase (decrease) in cash and cash equivalents

Effect of foreign exchange rate changes on cash and cash equivalents

Balance at beginning of year

Balance at end of period

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(IN MILLIONS)

December 31, 2018

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to properties

Proceeds from sales of properties and other assets

Net intercompany investing activity

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Exercise of stock options under equity compensation plans

Dividends paid

Payments on debt and borrowings

Debt issuance costs

Net proceeds from (payments on) revolving credit facilities and commercial paper

Net intercompany financing activity

Net cash provided by (used in) financing activities

CASH AND CASH EQUIVALENTS:

Net increase (decrease) in cash and cash equivalents

Effect of foreign exchange rate changes on cash and cash equivalents

Balance at beginning of year

Balance at end of period

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(IN MILLIONS)

December 31, 2017

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to properties

Proceeds from sales of properties and other assets

Net intercompany investing activity

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Exercise of stock options under equity compensation plans

Dividends paid

Payments on debt and borrowings

Proceeds on debt and borrowings

Debt issuance costs

Net proceeds from (payments on) revolving credit facilities and commercial paper

Net intercompany financing activity

Net cash provided by (used in) financing activities

CASH AND CASH EQUIVALENTS:

Net increase (decrease) in cash and cash equivalents

Effect of foreign exchange rate changes on cash and cash equivalents

Balance at beginning of year

Balance at end of period

Quarterly Financial Information (Unaudited)

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

(In millions, except per share data)

Cost of goods sold

Amounts attributable to Molson Coors Beverage Company:

Net income (loss) attributable to Molson Coors Beverage Company

Basic net income (loss) attributable to Molson Coors Beverage Company per share

Diluted net income (loss) attributable to Molson Coors Beverage Company per share

The sum of the quarterly net income per share amounts may not agree to the full-year net income per share amounts.

We calculate net income per share based on the weighted-average number of outstanding shares during the reporting period.

The average number of shares fluctuates throughout the year and can therefore produce a full-year result that does not agree to the sum of the individual quarters.

Additionally, due to the anti-dilutive effect resulting from the reported net loss attributable to MCBC for the three months ended September 30, 2019, the impact of potentially dilutive securities has been excluded from the quarterly calculation of weighted-average shares for diluted EPS for the third quarter of 2019.

Comparative Period Information Under Historical Lease Accounting Guidance

During the year ended December 31, 2018, non-cash activities related to the recognition of finance leases was $ 15.5 million and total rent expense for the year ended December 31, 2018 was $ 66.1 million.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data