What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-18 compared with 2025-02-18 · 230 added, 185 removed, 349 unchanged (54% of the section changed)

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

From our core power brands Coors Light, Miller Lite, Coors Banquet, Molson Canadian, Carling and Ožujsko to our above premium brands including Madrí Excepcional, Staropramen, Blue Moon Belgian White and Leinenkugel’s Summer Shandy , to our economy and value brands like Miller High Life and Keystone Light , we produce many beloved and iconic beers.

While our Company's history is rooted in beer, we offer a modern portfolio that expands beyond the beer aisle as well, including flavored beverages like Vizzy Hard Seltzer , spirits like Five Trail whiskey and non-alcoholic beverages.

We also have partner brands, such as Simply Spiked, ZOA Energy , among others, through license, distribution, partnership and joint venture agreements.

From our core power brands Coors Light , Miller Lite , Coors Banquet , Molson Canadian , Carling and Ožujsko, to our above premium brands including Madrí Excepcional , Staropramen , Blue Moon Belgian White and Leinenkugel’s Summer Shandy , to our value brands like Miller High Life and Keystone Light , we produce many beloved and iconic beers.

We also have partner brands, such as Simply Spiked , ZOA Energy , Fever-Tree , among others, through license, distribution, partnership and joint venture agreements.

As a business, our ambition is to be the first choice for our people, our consumers and our customers, and our success depends on our ability to make our products available to meet a wide range of consumer segments and occasions.

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Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal 2024 Form 10-K, filed with the SEC on February 18, 2025, which is available free of charge on the SEC's website at www.sec.gov and our corporate website at www.molsoncoors.com.

The information provided on our website (or any other website referred to in this report) is not part of this report and is not incorporated by reference as part of this report.

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Our Fiscal Year

Unless otherwise indicated, (a) all $ amounts are in USD, (b) comparisons are to comparable prior periods and (c) 2025, 2024 and 2023 refers to the 12 months ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively.

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Global Market Conditions and Competitive Trends

Our industry is experiencing, and we expect will continue to experience, increased consumer and economic uncertainty due to volatility in the global macroeconomic environment including global trade policies and other geopolitical events with potential resulting impacts on economic growth, consumer confidence, inflation and currencies and their exchange rates.

In addition, the associated impacts of the macroeconomic environment on the beer industry in the U.S.

has resulted in heightened competitive activity and associated reduction in market share of our products in certain segments.

The magnitude of the resulting impacts on our business are dependent on the evolution of the global macroeconomic environment and the competitive landscape, including whether market share losses are sustained.

The economic and competitive pressures, including the impact of tariffs, on our Company and our consumers' consumption behavior and preferences have negatively impacted, and may continue to negatively impact, our results of operations during this volatile period.

For example, tariff announcements in the U.S.

in the second quarter of 2025 have indirectly caused the price of the premium on aluminum in the U.S., known as the Midwest Premium, to spike and remain elevated which resulted in an approximate $35 million unfavorable impact on our results for the year ended December 31, 2025 and is expected to continue to adversely impact our results of operations.

While our hedging program can help mitigate some of the volatility, the opaque pricing and limited liquidity of the Midwest Premium can make hedging this exposure costly.

In addition to impacting the prices of raw materials, a constant or periodic change in the Midwest Premium may decrease our profit margins or we may pass on the increased costs to our consumers which could in turn result in the loss of sales if the end consumer is not willing to pay the increased price.

We plan to continue to evaluate and implement strategies which are designed to help mitigate the impact on our business, consolidated results of operations and financial condition while continuing to support our long-term strategic growth and capital allocation priorities.

Chief Executive Officer Succession

On April 12, 2025, Gavin D.K.

Hattersley, the then President and CEO of our Company and a then member of the Board, informed our Company and the Board that he intended to retire from our Company and as a member of the Board, in each case, by December 31, 2025.

On September 19, 2025, the Board appointed Rahul Goyal as our Company’s President and CEO and member of the Board effective, in each case, as of October 1, 2025, following the retirement of Gavin D.K.

Hattersley from those same positions immediately prior to such appointments.

Hattersley remained employed by our Company in an advisory role to assist in the transition until December 31, 2025.

Items Affecting Reported Results

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On September 26, 2024, we purchased annuity contracts for two of our Canadian pension plans.

As a result, on September 30, 2024, we remeasured both pension plans and recorded a total settlement loss of $34.0 million to other pension and postretirement benefit (cost), net in the consolidated statements of operations.

As a result, on September 30, 2024, we remeasured both pension plans and recorded a total settlement loss of $34.0 million to other pension and postretirement benefit (costs), net in our consolidated statements of operations during the third quarter of 2024.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 11, "Employee Retirement Plans and Postretirement Benefits" and Part II—Item 8 Financial Statements and Supplementary Data, Note 15, "Accumulated Other Comprehensive Income (Loss)" for further information.

Cobra Beer Partnership, Ltd.

In March 2024, our partner of CBPL exercised a put option under our partnership agreement which required us to acquire the remaining 49.9% ownership interest.

We adjusted our NCI by $34.5 million to our best estimate of the redemption value that existed at the time of the put option exercise by increasing our net income attributable to noncontrolling interests and decreasing our net income attributable to MCBC.

In addition, we received the final determination of the redemption value in the third quarter of 2024 and as the transaction was considered mandatorily redeemable, we recorded an adjustment of $45.8 million to interest expense in the EMEA&APAC segment.

During March 2024, our partner in Cobra Beer Partnership, Ltd.

("CBPL") exercised a put option under our partnership agreement which required us to acquire the remaining 49.9% ownership interest.

We adjusted the NCI by $34.5 million to our best estimate of the redemption value that existed at the time of the put option exercise by increasing net income attributable to noncontrolling interests and decreasing our net income attributable to MCBC.

In addition, we received the final determination of the redemption value in October 2024 and as the transaction was considered mandatorily redeemable, we recorded an adjustment of $45.8 million to interest expense in the EMEA&APAC segment during the third quarter of 2024.

The transaction was finalized on October 21, 2024, resulting in a cash payment of $89 million which was recorded as a cash outflow from financing activities.

See further discussion of this transaction in Part II—Item 8 Financial Statements and Supplementary Data, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" .

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Items Affecting the Americas Segment Results of Operations

Americas Restructuring Plan

On October 20, 2025, we announced an Americas Restructuring Plan designed to create a leaner, more agile Americas segment while advancing our ability to reinvest in the business and position our Company for future growth.

The plan resulted in charges of $28.7 million, primarily related to severance payments and post-employment benefits, recorded to other operating income (expense), net in our consolidated statements of operations during the year ended December 31, 2025.

The remaining charges, predominantly employee-related charges, for the Americas Restructuring Plan are expected to be recorded during the year ended December 31, 2026 and total restructuring charges are expected to be at the low end of the previously communicated range of $35 million to $50 million at approximately $35 million.

Goodwill Impairment

During the third quarter of 2025, we recorded a partial goodwill impairment charge of $3,645.7 million to goodwill impairment in our consolidated statement of operations related to our Americas reporting unit.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 6, "Goodwill and Intangible Assets" for further information.

Intangible Asset Impairment

During the third quarter of 2025, we recorded a full impairment charge of $75.3 million related to our Blue Run Spirits definite-lived intangible asset within other operating income (expense), net in our consolidated statements of operations.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 6, "Goodwill and Intangible Assets" for further information.

Fevertree Transactions

During the first quarter of 2025, we obtained exclusive rights via a license agreement to import, produce, market, advertise, promote, sell and distribute Fever-Tree products in the U.S.

In connection with this agreement, we acquired the shares of the Fevertree USA, Inc.

entity, with the immaterial acquisition accounted for as a business combination and consideration allocated primarily to working capital balances.

The acquisition is aligned with our strategy to expand beyond the beer aisle.

On October 31, 2024, we further increased our investment in ZOA bringing our ownership interest to 51%.

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During the third quarter of 2024, we decided to wind down or sell certain of our U.S.

craft businesses and related facilities and recorded employee-related and asset abandonment charges, including accelerated depreciation in excess of normal depreciation of $93.6 million.

In addition, we recognized a loss of $41.2 million on the sold businesses.

We expect to continue to incur incremental restructuring charges during the first quarter of 2025 through completion of wind down and closure of certain remaining U.S.

craft facilities.

craft businesses and related facilities.

We recorded accelerated depreciation in excess of normal depreciation of $17.9 million and $93.6 million during the year ended December 31, 2025 and December 31, 2024, respectively.

In addition, during the year ended December 31, 2024, we recognized a loss of $41.2 million related to the disposal of the sold businesses.

Restructuring charges related to these actions are complete.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 17, "Other Operating Income (Expense), net" for further information.

Truss Impairment and Sale

During the first quarter of 2022, we recognized an impairment loss of $28.6 million related to the Truss LP ("Truss") joint venture asset group of which $12.1 million was attributable to the noncontrolling interest.

Additionally, during the third quarter of 2023, we sold our controlling interest in Truss and recognized a loss of $11.1 million.

These losses were recorded within other operating income (expense), net.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 17, "Other Operating Income (Expense), net" and Part II—Item 8 Financial Statements and Supplementary Data, Note 3, "Investme nts" for further information.

Keystone Litigation

During the first quarter of 2022, we accrued a liability of $56.0 million within MG&A related to probable losses as a result of the ongoing Keystone litigation case.

During the years ended December 31, 2024 and December 31, 2023 we accrued $2.1 million and $1.9 million, respectively, in associated interest related to this accrued liability.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 13, "Commitments and Contingencies" for further information.

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Items Affecting the EMEA&APAC Segment Results of Operations

Staropramen Brands Impairment

During the fourth quarter of 2023, we recorded a partial impairment charge of $160.7 million to our indefinite-lived intangible asset related to the Staropramen family of brands within the EMEA&APAC segment as a result of our annual impairment analysis.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 6, "Goodwill and Intangible Assets" for further information.

Russia-Ukraine Conflict

In February 2022, Russia invaded Ukraine and the conflict remains ongoing.

As a result, we suspended exports of all our brands to Russia and subsequently terminated the license to produce any of our brands in Russia.

While not material to our consolidated net sales, the Russia-Ukraine conflict negatively impacted our EMEA&APAC segment net sales for the years ended December 31, 2023 and December 31, 2022.

In addition, the Russia-Ukraine conflict has caused a negative impact to the global economy which has impacted our Company, driving further increases to materials and manufacturing expenses.

See risk factors related to this conflict at Part I.—Item 1A.

"Risk Factors" .

Intangible Asset Impairment

During the third quarter of 2025, we recorded a partial impairment charge of $198.6 million related to the Staropramen family of brands indefinite-lived intangible asset within other operating income (expense), net in our consolidated statements of operations.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 17, "Other Operating Income (Expense), net" for further information.

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Consolidated Results of Operations

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For the years ended

December 31, 2024 % Change

December 31, 2023 % Change

December 31, 2022

December 31, 2025 % Change December 31, 2024 % Change December 31, 2023

(In millions, except percentages and per share data)

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Marketing, general and administrative expenses (2,643.9) (2.7) % (2,717.5) (2.2) % (2,779.9)

Goodwill impairment — — % — N/M (845.0)

Goodwill impairment (3,645.7) N/M — N/M —

Other operating income (expense), net (335.3) 412.7 % (65.4) (59.8) % (162.7)

Equity income (loss) 13.4 396.3 % 2.7 (77.5) % 12.0

Operating income (loss) 1,753.2 21.9 % 1,438.2 813.1 % 157.5

Operating income (loss) (2,336.9) N/M 1,753.2 21.9 % 1,438.2

Total non-operating income (expense), net (181.1) (27.6) % (250.2) 34.7 % (185.7)

Income (loss) before income taxes (2,518.0) N/M 1,503.0 20.0 % 1,252.5

Income tax benefit (expense) (345.3) 16.6 % (296.1) 138.8 % (124.0)

Income tax benefit (expense) 337.8 N/M (345.3) 16.6 % (296.1)

Net income (loss) (2,180.2) N/M 1,157.7 21.0 % 956.4

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Foreign currency impacts on results

For the year ended December 31, 2024, foreign currency movements had the following impacts on our USD consolidated results:

• Net sales - Unfavorable impact of $1.6 million (unfavorable impact for Americas of $21.9 million, partially offset by the favorable impact for EMEA&APAC of $20.3 million).

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• Cost of goods sold - Favorable impact of $0.6 million (favorable impact for Americas and Unallocated of $14.3 million and $0.4 million, respectively, partially offset by the unfavorable impact for EMEA&APAC of $14.1 million).

• MG&A - Favorable impact of $2.8 million (favorable impact for Americas of $6.5 million, partially offset by the unfavorable impact for EMEA&APAC of $3.7 million).

• Income (loss) before income taxes - Unfavorable impact of $7.0 million (unfavorable impact for Americas and EMEA&APAC of $7.0 million and $2.3 million, respectively, partially offset by the favorable impact for Unallocated of $2.3 million).

The impacts of foreign currency movements on our consolidated USD results described above for the year ended December 31, 2024, were primarily due to the strengthening of the USD compared to the CAD and CZK, partially offset by the weakening of the USD compared to the GBP.

For the year ended December 31, 2025, foreign currency movements had the following impacts on our USD consolidated results of operations:

• Net sales - Favorable impact of $77.6 million (favorable impact for EMEA&APAC of $99.0 million, partially offset by the unfavorable impact for Americas of $21.4 million).

• Cost of goods sold - Unfavorable impact of $50.1 million (unfavorable impact for EMEA&APAC of $63.6 million, partially offset by the favorable impact for Americas of $13.5 million).

• MG&A - Unfavorable impact of $15.3 million (unfavorable impact for EMEA&APAC of $22.5 million, partially offset by the favorable impact for Americas of $7.2 million).

• Other operating income (expense), net - Unfavorable impact of $15.6 million (unfavorable impact for EMEA&APAC and Americas of $15.5 million and $0.1 million, respectively).

• Income (loss) before income taxes - Unfavorable impact of $2.5 million (unfavorable impact for Unallocated of $3.8 million, partially offset by the favorable impact for EMEA&APAC of $1.3 million).

The impacts of foreign currency movements on our consolidated USD results described above for the year ended December 31, 2025, were primarily due to the weakening of the USD compared to the GBP, EUR and CZK, partially offset by the strengthening of the USD compared to the CAD.

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Included in these amounts are both translational and transactional impacts of changes in foreign exchange rates.

We calculate the impact of foreign exchange by translating our current period local currency results at the average exchange rates used to translate the financial statements in the comparable prior year period during the respective period throughout the year and comparing that amount with the reported amount for the period.

The impact of transactional foreign currency gains and losses, including the impact of undesignated foreign currency forwards, is recorded within other non-operating income (expense), net in our consolidated statements of operations.

The impact of transactional foreign currency gains and losses is recorded within other non-operating income (expense), net in our consolidated statements of operations.

Financial volume represents owned or actively managed brands sold to unrelated external customers within our geographic markets (net of returns and allowances), as well as contract brewing, factored non-owned volume and company-owned distribution volume.

This metric is presented on a sales-to-wholesalers ("STW") basis to reflect the sales from our operations to our direct customers, generally distributors.

This metric is presented on a sales-to-wholesalers basis to reflect the sales from our operations to our direct customers, generally distributors.

We believe this metric is important and useful for investors and management because it gives an indication of the amount of beer and adjacent products that we have produced and shipped to customers.

This metric excludes royalty volume, which consists of our brands produced and sold under various license and contract brewing agreements.

Factored volume in our EMEA&APAC segment is the distribution of beer, wine, spirits and other products owned and produced by other companies to the on-premise channel such as bars and restaurants, which is a common arrangement in the U.K.

Factored volume in our EMEA&APAC segment represents the distribution of beer, wine, spirits and other products owned and produced by other companies to the on-premise channel, which is a common arrangement in the U.K.

We utilize net sales per hectoliter, as well as the year over year changes in this metric, as a key metric for analyzing our results.

This metric is calculated as net sales per our consolidated statements of operations divided by financial volume for the respective period.

We believe this metric is important and useful for investors and management because it provides an indication of the trends of price and sales mix and other impacts on our net sales.

The following table highlights the drivers of the change in net sales for the year ended December 31, 2025, compared to December 31, 2024, (in percentages):

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Consolidated net sales (8.6) % 3.8 % 0.6 % (4.2) %

Net sales decreased 0.6% for the year ended December 31, 2024, compared to prior year driven by lower financial volumes, partially offset by favorable price and sales mix.

Financial volumes decreased 5.0% for the year ended December 31, 2024, compared to prior year, due to lower shipments in the Americas, including lower contract brewing volumes representing almost half of the decline as well as the impact of the macroeconomic environment resulting in industry softness.

EMEA&APAC financial volumes also decreased 2.6%.

Price and sales mix favorably impacted net sales for the year ended December 31, 2024, by 4.4%, primarily due to increased net pricing as well as favorable sales mix for both segments, including as a result of lower contract brewing volumes in the Americas as well as premiumization and favorable channel mix in EMEA&APAC.

Net sales decreased 4.2% for the year ended December 31, 2025, compared to prior year, driven by lower financial volume, partially offset by favorable price and sales mix and favorable foreign currency impacts.

Financial volume decreased 8.6% for the year ended December 31, 2025, compared to prior year, primarily due to lower shipments in both the Americas and EMEA&APAC segments as described in further detail in the “Segment Results of Operations” section below.

Price and sales mix favorably impacted net sales by 3.8% for the year ended December 31, 2025, primarily due to favorable sales mix and increased net pricing in both segments.

Americas favorable sales mix was primarily driven by lower contract brewing volume and positive brand mix.

Net sales per hectoliter increased 4.8%.

A discussion of currency impacts on net sales is included in the "Foreign currency impacts on results" section above.

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This metric is calculated as cost of goods sold per our consolidated statements of operations divided by financial volume for the respective period.

We believe this metric is important and useful for investors and management because it provides an indication of the trends of sales mix and other cost impacts on our cost of goods sold.

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Cost of goods sold decreased 3.3% for the year ended December 31, 2024, compared to prior year, primarily due to lower financial volumes, partially offset by higher cost of goods sold per hectoliter.

Cost of goods sold per hectoliter increased 1.8% for the year ended December 31, 2024, compared to prior year, primarily due to cost inflation related to materials and manufacturing expenses, unfavorable mix driven by lower contract brewing volumes and volume deleverage in the Americas segment, partially offset by favorable changes in our unrealized mark-to-market commodity derivative positions of $133.0 million and cost savings initiatives.

We believe this metric is important and useful for investors and management because it provides an indication of the trends of mix and other cost impacts on our cost of goods sold.

Cost of goods sold decreased 3.2% for the year ended December 31, 2025, compared to prior year, primarily due to lower financial volume, partially offset by higher cost of goods sold per hectoliter and the unfavorable foreign currency impact of $50.1 million.

Cost of goods sold per hectoliter incr eased 5.8% for the year ended December 31, 2025, compared to prior year, primarily due to unfavorable mix driven by lower contract brewing volume in the Americas segment and premiumization, volume deleverage, cost inflation related to materials and manufacturing expenses including an approximate $35 million unfavorable impact to cost of goods sold attributable to Midwest Premium pricing as well as unfavorable foreign currency impact, partially offset by cost savings initiatives.

A discussion of currency impacts on cost of goods sold is included in the "Foreign currency impacts on results" section above.

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Marketing, general and administrative expenses

MG&A expenses decreased 2.2% for the year ended December 31, 2024, compared to prior year, primarily due to lower incentive compensation expense and lower marketing resulting from cycling higher investment levels in the prior year.

MG&A expenses decreased 2.7% for the year ended December 31, 2025, compared to prior year, primarily due to lower short-term incentive compensation expense of approximately $70 million and lower marketing investment, partially offset by approximately $30 million of integration and transition fees from the Fevertree USA, Inc.

acquisition which will be recoverable through net sales over the next 3 years which started in the second quarter of 2025 and costs incurred related to our global modernization ERP system implementation project.

A discussion of currency impacts on marketing, general and administrative expenses is included in the "Foreign currency impacts on results" section above.

Goodwill impairment

During the third quarter of 2025, we identified a triggering event that indicated it was more likely than not that the carrying value of the Americas reporting unit exceeded its fair value resulting in a $3,645.7 million partial goodwill impairment charge.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 6, "Goodwill and Intangible Assets" for further information regarding the recorded impairment.

Other operating income (expense), net

Other operating expense, net improved 59.8% for the year ended December 31, 2024, compared to prior year, primarily due to the cycling of a $160.7 million partial impairment charge to our indefinite-lived intangible asset related to the Staropramen family of brands recorded in the prior year as well as a $77.9 million gain recognized upon the consolidation of ZOA in the fourth quarter of 2024, partially offset by the costs incurred related to the wind down and sale of certain U.S.

craft businesses and related restructuring costs including accelerated depreciation charges in excess of normal depreciation of $93.6 million as well as a $41.2 million loss on the disposal of the sold businesses.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 17, "Other Operating Income (Expense), net" for further detail of our other operating income (expense), net.

Other operating expense, net declined $269.9 million for the year ended December 31, 2025, compared to prior year, primarily due to intangible asset impairments of $273.9 million, the cycling of a $77.9 million gain recognized upon the consolidation of ZOA in the fourth quarter of 2024 and restructuring charges of $28.7 million related to our Americas Restructuring Plan, partially offset by the cycling of a prior year loss on the decision to wind down or sell certain of our U.S.

craft businesses.

A discussion of currency impacts on other operating income (expense), net is included in the "Foreign currency impacts on results" section above.

Total non-operating income (expense), net

Total non-operating expense, net increased 34.7% for the year ended December 31, 2024, compared to prior year primarily due to higher interest expense driven by a $45.8 million adjustment to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout recorded in the third quarter of 2024, a settlement loss of $34.0 million recorded as a result of Canadian pension plan annuity purchases and unfavorable transactional foreign currency impacts, partially offset by higher pension and OPEB non-service benefit.

Total non-operating expense, net improved 27.6% for the year ended December 31, 2025, compared to prior year, primarily due to the cycling of a prior year $45.8 million adjustment recorded to interest expense to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout, the cycling of a prior year settlement loss of $34.0 million recorded as a result of Canadian pension plan annuity purchases and a favorable $31.7 million unrealized fair value adjustment of the investment in Fevertree Drinks plc in the current year, partially offset by lower interest income, lower pension and OPEB non-service benefit and higher interest expense as a result of the issuance of EUR 800 million 3.8% senior notes in the second quarter of 2024.

Income tax benefit (expense)

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Effective tax rate 13 % 23 % 24 %

Our effective tax rate decreased for the year ended December 31, 2024 , compared to the prior year, in part due to the impact of the $77.9 million gain recognized upon the consolidation of ZOA in the fourth quarter of 2024, which is non-taxable.

The decrease was partially offset by (i) the $20.0 million increase in valuation allowance that was recorded on deferred tax assets related to the sale of certain U.S.

craft businesses in the third quarter of 2024, and (ii) the impact of the $45.8 million increase in the mandatorily redeemable NCI liability of CBPL in the third quarter of 2024, which is non-deductible for tax purposes.

The effective tax rate for the year ended December 31, 2024, was further decreased by the recognition of additional net tax benefit items totaling $12.8 million, as compared to the recognition of additional net tax expense items totaling $10.0 million in the year ended December 31, 2023.

Our effective tax rate decreased for the year ended December 31, 2025, compared to the prior year, primarily due to the impact of the $3,645.7 million partial goodwill impairment, a portion of which was not deductible for tax purposes.

The decrease was also driven by the cycling of a $45.8 million increase in the mandatorily redeemable noncontrolling interest liability of CBPL to its final redemption value, which was recorded to interest expense in the third quarter of 2024 and was nondeductible for tax purposes.

These decreases were offset in part by the cycling a $77.9 million nontaxable gain recognized upon the consolidation of ZOA in the fourth quarter of 2024.

Our effective tax rate can be volatile and may change with, among other things, the amount and source of pretax income or loss, our ability to utilize foreign tax credits, excess tax benefits or deficiencies from share-based compensation, changes in tax laws and the movement of liabilities established pursuant to accounting guidance for uncertain tax positions as statutes of limitations expire, positions are effectively settled or when additional information becomes available.

There are proposed or pending tax law changes in various jurisdictions and other changes to regulatory environments in countries in which we do business that, if enacted, could have an impact on our effective tax rate.

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On July 4, 2025, the OBBBA was enacted into law in the U.S.

The OBBBA includes various provisions which permanently extend certain expiring provisions from the Tax Cuts and Jobs Act of 2017, many of which have different effective dates.

Changes in the OBBBA include the accelerated tax recovery for certain capital investments and research and development expenditures, and changes to the business interest expense limitation.

Additionally, the OBBBA includes changes to the taxation of foreign income for U.S.-domiciled businesses.

While the OBBBA did not materially affect our effective tax rate for the year ended December 31, 2025, it reduced our cash tax payments by approximately $80 million.

We are continuing to assess the potential impact of OBBBA changes that become effective after 2025 on our consolidated financial statements.

For a comprehensive view of the income taxes we pay globally, our total tax contribution (inclusive of both income and non‑income taxes), and our approach to being a responsible corporate tax citizen in all jurisdictions in which we operate, refer to Our Imprint Report available at www.molsoncoors.com/goals-and-reporting.

Our total tax contribution may be affected by, among other factors, changes to existing tax laws or the enactment of new tax policies, regulations, guidance, or laws, as well as the final resolution of tax audits and any related litigation.

The information provided on our website (or any other website referred to in this report) is not part of this report and is not incorporated by reference as part of this report.

Refer to Part II—Item 8 Financial Statements and Supplementary Data, Note 12, "Income Tax" for further discussion regarding our effective tax rate.

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Net income (loss) attributable to noncontrolling interests

Net income attributable to noncontrolling interests increased $27.8 million for the year ended December 31, 2024, compared to the prior year, primarily due to the recording of an out of period adjustment in the third quarter 2024 to increase the noncontrolling interest to the best estimate of the redemption value that existed at the time of the put option exercise in March 2024.

See further discussion in Part II—Item 8 Financial Statements and Supplementary Data, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" .

Net loss attributable to noncontrolling interests of $40.6 million declined $75.9 million for the year ended December 31, 2025, from income of $35.3 million in the prior year.

The current year loss was primarily related to the allocation of the Americas reporting unit goodwill impairment and the Blue Run Spirits intangible asset impairment, partially offset by redemption value adjustments.

The prior year income was driven by an increase in one of the noncontrolling interests to its redemption value.

Segment Results of Operations

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For the years ended

December 31, 2024 % Change

December 31, 2023 % Change

December 31, 2022

December 31, 2025 % Change December 31, 2024 % Change December 31, 2023

(In millions, except percentages)

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$ 8,712.8 (5.7) % $ 9,240.2 (2.0) % $ 9,425.2

Income (loss) before income taxes $ 1,523.3 (2.8) % $ 1,566.7 400.7 % $ 312.9

Income (loss) before income taxes $ (2,343.6) N/M $ 1,523.3 (2.8) % $ 1,566.7

Financial volume in hectoliters (1)(2)

53.507 (9.2) % 58.905 (5.7) % 62.491

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

N/M = Not meaningful

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

(2) Excludes royalty volume of 2.852 million hectoliters, 2.550 million hectoliters and 2.683 million hectoliters for the years ended December 31, 2025, 2024 and 2023, respectively.

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Americas net sales (9.2) % 3.7 % (0.2) % (5.7) %

Net sales decreased 2.0% for the year ended December 31, 2024, compared to prior year, driven by lower financial volumes and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.

Financial volumes decreased 5.7% for the year ended December 31, 2024, compared to prior year, primarily due to lower contract brewing volumes related to the wind down of a U.S.

contract brewing arrangement (1.9 million hectoliters) and lower U.S.

volumes due to the macroeconomic environment resulting in industry softness partly offset by an increase in volumes in Canada.

Price and sales mix favorably impacted net sales for the year ended December 31, 2024, by 4.0% primarily due to increased net pricing and favorable sales mix as a result of lower contract brewing volumes.

Net sales decreased 5.7% for the year ended December 31, 2025, compared to prior year, driven by lower financial volume and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.

Financial volumes decreased 9.2% for the year ended December 31, 2025, compared to prior year, primarily due to lower U.S.

volume impacted by the macroeconomic environment resulting in industry softness as well as lower share performance and an approximate 3% impact from lower contract brewing volume resulting from the exit of contract brewing arrangements in the U.S.

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Price and sales mix favorably impacted net sales by 3.7%, for the year ended December 31, 2025, primarily due to favorable sales mix as a result of lower contract brewing volume and positive brand mix as well as increased net pricing.

Net sales per hectoliter increased 3.8%.

A discussion of currency impacts on net sales is included in the "Foreign currency impacts on results" section above.

Income (loss) before income taxes

Income before income taxes declined 2.8% for the year ended December 31, 2024, compared to prior year, primarily due to lower financial volumes, cost inflation related to materials and manufacturing expenses and higher other operating expense, net, partially offset by increased net pricing, favorable sales mix, lower MG&A expense and favorable cost saving initiatives.

Higher other operating expense, net was primarily due to the wind down and sale of certain of our U.S.

craft businesses and related restructuring costs, including accelerated depreciation charges in excess of normal depreciation of $93.6 million as well as a $41.2 million loss on the disposal of the sold businesses, partially offset by a $77.9 million gain recognized upon the consolidation of ZOA in the fourth quarter of 2024.

Lower MG&A spend was primarily due to lower incentive compensation expense and lower marketing resulting from cycling higher investment levels in the prior year.

Loss before income taxes of $2,343.6 million decreased $3,866.9 million for the year ended December 31, 2025, compared to income before income taxes in the prior year, primarily due to a $3,645.7 million partial goodwill impairment charge, lower financial volume, cost inflation related to materials and manufacturing expenses including an approximate $35 million unfavorable impact attributable to Midwest Premium pricing, higher other operating expense, net and costs incurred related to our global modernization ERP system implementation project, partially offset by favorable mix, increased net pricing, cost savings initiatives, lower MG&A expenses driven by lower short-term incentive compensation expense of approximately $50 million and lower marketing investment as well as favorable unrealized fair value adjustment of the investment in Fevertree Drinks plc.

Higher other operating expense, net, was primarily due to the cycling of a $77.9 million gain recognized upon the consolidation of ZOA in the fourth quarter of 2024, a $75.3 million full impairment charge to our definite-lived intangible asset related to the Blue Run Spirits asset group and restructuring charges of $28.7 million related to our Americas Restructuring Plan, partially offset by cycling the wind down and sale of certain of our U.S.

craft businesses and related restructuring costs.

A discussion of currency impacts on income (loss) before income taxes is included in the "Foreign currency impacts on results" section above.

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EMEA&APAC Segment

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EMEA&APAC net sales (6.8) % 4.5 % 4.1 % 1.8 %

Net sales increased 5.0% for the year ended December 31, 2024, compared to prior year, driven by favorable price and sales mix as well as favorable foreign currency impacts, partially offset by lower financial volumes.

Financial volumes decreased 2.6% for the year ended December 31, 2024, compared to prior year, primarily due to lower volumes in Western Europe due to soft market demand and high promotional activity from the competition, partially offset by Central and Eastern Europe volume growth driven by the favorable performance of our above premium and premium brands.

Price and sales mix favorably impacted net sales for the year ended December 31, 2024, by 6.7% primarily due to increased net pricing and favorable sales mix driven by premiumization and favorable channel mix.

Net sales increased 1.8% for the year ended December 31, 2025, compared to prior year, driven by price and sales mix and favorable foreign currency impacts, partially offset by lower financial volume.

Financial volume decreased 6.8% for the year ended December 31, 2025, compared to prior year, primarily due to lower volume across all regions driven by soft market demand and a heightened competitive landscape.

Price and sales mix favorably impacted net sales by 4.5% for the year ended December 31, 2025, primarily due to premiumization, geographic mix and higher factored brand volume, as well as increased net pricing.

Net sales per hectoliter increased 9.3%.

A discussion of currency impacts on net sales is included in the "Foreign currency impacts on results" section above.

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Income (loss) before income taxes

Income before income taxes was $145.3 million for the year ended December 31, 2024, compared to a loss before income taxes of $41.1 million in the prior year.

The improvement was primarily due to the cycling of a $160.7 million partial impairment charge to our indefinite-lived intangible asset related to the Staropramen family of brands recorded in the prior year, increased net pricing, favorable sales mix and cost savings initiatives, partially offset by higher net interest expense, lower financial volumes and higher MG&A spend.

Higher net interest expense was driven by an adjustment of $45.8 million to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout in the third quarter of 2024.

Higher MG&A spend was due to increased strategic and transformation project costs as well as increased marketing to support our brands and innovations.

Loss before income taxes of $13.1 million declined $158.4 million for the year ended December 31, 2025, compared to income before income taxes in the prior year, primarily due to the partial impairment charge of $198.6 million to the indefinite-lived intangible asset related to the Staropramen family of brands, lower financial volume and higher U.K.

waste management fees as a result of the implementation of the Extended Producer Responsibility regulations, partially offset by lower MG&A expenses driven by lower incentive compensation expense of approximately $20 million and targeted cost reductions, the cycling of a prior year $45.8 million adjustment recorded to interest expense to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout and increased net pricing.

A discussion of currency impacts on income (loss) before income taxes is included in the "Foreign currency impacts on results" section above.

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We have certain activity that is not allocated to our segments, which has been reflected as Unallocated below.

Specifically, Unallocated primarily includes certain financing-related activities such as interest expense and interest income, foreign exchange gains and losses on intercompany balances as well as realized and unrealized changes in fair value on derivative instruments not designated in hedging relationships related to financing and other treasury-related activities.

Unallocated activity also includes the unrealized changes in fair value on our commodity swaps not designated in hedging relationships recorded within cost of goods sold, which are later reclassified when realized to the segment in which the underlying exposure resides.

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

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Specifically, Unallocated primarily includes certain financing-related activities such as interest expense and interest income, as well as foreign exchange gains and losses on intercompany balances.

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

Meanwhile, all other components remain in Unallocated.

For the years ended

December 31, 2024 % Change

December 31, 2023 % Change

December 31, 2022

December 31, 2025 % Change December 31, 2024 % Change December 31, 2023

(In millions, except percentages)

Cost of goods sold $ 48.4 47.6 % $ 32.8 N/M $ (93.5)

Gross profit (loss)

32.8 N/M (93.5) (59.3)% (229.9)

Gross profit (loss) 48.4 47.6 % 32.8 N/M (93.5)

Operating income (loss) 48.4 47.6 % 32.8 N/M (93.5)

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Total non-operating income (expense), net

Total non-operating expense, net increased 10.5% for the year ended December 31, 2024, compared to prior year primarily due to a settlement loss of $34.0 million recorded as a result of Canadian pension plan annuity purchases and lower favorable transactional foreign currency impacts, partially offset by higher pension and OPEB non-service benefits and higher interest income from higher cash balances.

See Part II - Item 8 Financial Statements and Supplementary Data, Note 11, "Employee Retirement Plans and Postretirement Benefits" for further discussion of pension and OPEB.

Fever-Tree Partnership

Effective February 1, 2025, we obtained exclusive rights via a license agreement to produce, market and sell Fever-Tree products in the U.S.

In connection with this agreement, we acquired the shares of the Fever-Tree USA, Inc.

entity, with the immaterial acquisition to be accounted for as a business combination and consideration to be allocated primarily to working capital balances.

Further, we made an investment of approximately $90 million in Fever-Tree Drinks Plc, a listed entity on the London Stock Exchange (LSE:FEVR).

The investment will be accounted for at fair value under ASC 321.

We expect to incur certain one-time transition and integration fees related to the transactions over the next several months.

The amounts of such fees will be dependent upon the progression of our integration plans.

Total non-operating expense, net increased 5.7% for the year ended December 31, 2025, compared to prior year, primarily due to lower pension and OPEB non-service benefit, lower interest income, higher interest expense as a result of the issuance of EUR 800 million 3.8% senior notes in the second quarter of 2024 as well as unfavorable foreign currency transactional impacts, partially offset by the cycling of a prior year settlement loss of $34.0 million recorded as a result of Canadian pension plan annuity purchases.

See Part II - Item 8 Financial Statements and Supplementary Data, Note 11, "Employee Retirement Plans and Postretirement Benefits" for further discussion of our pension and OPEB plans.

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Liquidity and Capital Resources

Our primary sources of liquidity include cash provided by operating activities and access to external capital.

We continue to monitor world events which may create credit or economic challenges that could adversely impact our profit or operating cash flows and our ability to obtain additional liquidity.

We currently believe that our cash and cash equivalents, cash flows from operations and cash provided by short-term and long-term borrowings, when necessary, will be adequate to meet our ongoing operating requirements, scheduled principal and interest payments on debt, anticipated dividend payments, capital expenditures and other obligations for the twelve months subsequent to the date of the issuance of this report and our long-term liquidity requirements.

We continue to monitor world events which may create credit or economic challenges that could adversely impact our net income (loss) or operating cash flows and our ability to obtain additional liquidity.

We believe that our cash and cash equivalents, cash flows from operations and cash provided by short-term and long-term borrowings, when necessary, will be adequate to meet our ongoing operating requirements, scheduled principal and interest payments on debt, anticipated dividend payments, capital expenditures and other obligations for the twelve months subsequent to the date of the issuance of this report and our long-term liquidity requirements.

We have upcoming debt maturities in 2026, as illustrated in the debt maturity schedule in the cash and cash equivalents section below.

We are currently evaluating various alternatives with respect to these maturities, including the potential refinancing of all or a portion of the outstanding debt which may involve utilizing our amended and restated $2.0 billion multi-currency revolving credit facility.

We have not made a decision at this time, and the timing, structure and terms of any such transactions will depend on capital market conditions and other factors.

There can be no assurance that such transactions, including a potential refinancing, will be pursued or completed on terms acceptable to the Company.

We do not have any restrictions that prevent or limit our ability to declare or pay dividends.

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While a significant portion of our cash flows from operating activities are generated within the U.S., our cash balances include cash held outside the U.S.

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As of December 31, 2025, approximately 57% of our cash and cash equivalents were located outside the U.S., largely denominated in foreign currencies.

F luctuations in foreign currency exchange rates have had and may continue to have a material impact on these foreign cash balances.

F luctuations in foreign currency exchange rates could have a material impact on these foreign cash balances.

Cash balances in foreign countries are often subject to additional restrictions.

We may, therefore, have difficulties timely repatriating cash held outside the U.S., and such repatriation may be subject to tax.

We may, therefore, have difficulties repatriating cash held outside the U.S.

on a timely basis and such repatriation may be subject to tax.

These limitations may affect our ability to fully utilize our cash resources for needs in the U.S.

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Pursuant to the indenture dated May 3, 2012 (as amended, the "May 2012 Indenture"), MCBC issued its outstanding 5.0% senior notes due 2042.

Additionally, pursuant to the indenture dated July 7, 2016 ("July 2016 Indenture"), MCBC issued its outstanding 3.0% senior notes due 2026, 4.2% senior notes due 2046 and 1.25% senior notes due 2024 (subsequently repaid upon maturity on July 15, 2024).

Additionally, pursuant to the indenture dated July 7, 2016 ("July 2016 Indenture"), MCBC issued its outstanding 3.0% senior notes due 2026 and 4.2% senior notes due 2046.

Further, pursuant to the indenture dated May 29, 2024 ("May 2024 Indenture"), MCBC issued its outstanding 3.8% senior notes due 2032.

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The guarantees are full and unconditional and joint and several.

None of our other outstanding debt was issued in a transaction that was registered with the SEC, and such other outstanding debt is issued or otherwise generally guaranteed on a senior unsecured basis by the Obligor Group or other consolidated subsidiaries of MCBC.

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

These other guarantees are also full and unconditional and joint and several.

As of December 31, 2024, the senior notes and related guarantees rank pari-passu with all other unsubordinated debt of the Obligor Group and senior to all future subordinated debt of the Obligor Group.

As of December 31, 2025, the senior notes and related guarantees ranked pari-passu with all other unsubordinated debt of the Obligor Group and senior to all future subordinated debt of the Obligor Group.

The guarantees can be released upon the sale or transfer of a Subsidiary Guarantors' capital stock or substantially all of its assets, or if such Subsidiary Guarantor ceases to be a guarantor under our other outstanding debt.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 9, "Debt" for details of all debt issued and outstanding as of December 31, 2025.

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The following summarized financial information relates to the Obligor Group as of December 31, 2025, on a combined basis, after elimination of intercompany transactions and balances between the Obligor Group, and excluding the investments in and equity in the earnings of any non-guarantor subsidiaries.

The balances and transactions with non-guarantor subsidiaries have been separately presented.

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Summarized Financial Information of Obligor Group

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Net interest expense, out of which:

Intercompany net interest income from non-guarantor subsidiaries

Income before income taxes $ 1,338.9

Net income $ 1,036.2

Intercompany net interest expense from non-guarantor subsidiaries $ (1.4)

Loss before income taxes $ (2,267.2)

Net loss $ (1,926.2)

As of December 31, 2025

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Cash Flows and Use of Cash

Our business historically generates positive operating cash flows each year and our debt maturities are generally of a longer-term nature.

Our business historically generates positive operating cash flows each year and our debt is generally of a longer-term nature.

See the debt maturity profile graph below or refer to Part II—Item 8 Financial Statements and Supplementary Data, Note 9, "Debt" for further details of our debt maturity profile.

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Cash Flows from Operating Activities

Net cash provided by operating activities of $1,910.3 million for the year ended December 31, 2024, decreased $168.7 million from $2,079.0 million for the year ended December 31, 2023, primarily due to the unfavorable timing of working capital, partially offset by higher net income adjusted for non-cash items.

The unfavorable timing of working capital was primarily driven by the timing of cash paid for our payables as well as higher payments in the current year for 2023 annual incentive compensation, partially offset by the timing of cash receipts.

Net cash provided by operating activities of $1,784.4 million for the year ended December 31, 2025, decreased $125.9 million from $1,910.3 million for the year ended December 31, 2024, primarily due to lower net income adjusted for non-cash items, a $60.6 million payment as final resolution of the Keystone litigation case and higher interest paid, partially offset by lower payments for prior year annual incentive compensation and lower income taxes paid including the approximate $80 million impact from the passage of the OBBBA in the U.S.

and the favorable timing of working capital.

Cash Flows from Investing Activities

Net cash used in investing activities of $648.0 million for the year ended December 31, 2024, decreased $193.7 million from $841.7 million for the year ended December 31, 2023, primarily due to cash paid in the prior year for an acquisition and other investing activities, as well as higher proceeds in the current year from the sale of the U.S.

craft businesses.

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Net cash used in investing activities of $822.1 million for the year ended December 31, 2025, increased $174.1 million from $648.0 million for the year ended December 31, 2024.

The increase in cash used in investing activities was primarily due to our investment in Fevertree Drinks plc of $88.1 million, higher capital expenditures as a result of the timing of capital projects and the acquisition of Fevertree USA, Inc., partially offset by cycling the net proceeds from the sale of the U.S.

craft businesses in the prior year.

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Cash Flows from Financing Activities

Net cash used in financing activities of $1,138.4 million for the year ended December 31, 2024, increased $157.0 million from $981.4 million for the year ended December 31, 2023, primarily due to higher Class B common stock share repurchases and a payment to acquire the noncontrolling interest in CBPL, partially offset by lower net debt repayments.

Net cash used in financing activities of $1,056.8 million for the year ended December 31, 2025, decreased $81.6 million from $1,138.4 million for the year ended December 31, 2024.

The decrease in cash used in financing activities was primarily due to the prior year payment to acquire the noncontrolling interest in CBPL.

Capital Resources, including Material Cash Requirements

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As of December 31, 2025, we had total cash and cash equivalents of $896.5 million, compared to $969.3 million as of December 31, 2024.

The increase in cash and cash equivalents from December 31, 2023, was primarily due to net cash provided by operating activities, as well as the issuance of new EUR 800 million 3.80% senior notes due 2032.

This was partially offset by debt repayments, including the repayment of our EUR 800 million 1.25% senior notes which matured in July 2024, capital expenditures, Class B common stock share repurchases, dividend payments and payment to acquire the noncontrolling interest in CBPL.

The decrease in cash and cash equivalents from December 31, 2024, was primarily due to capital expenditures, Class B common stock share repurchases, dividends paid, as well as our investment in Fevertree Drinks plc and the acquisition of Fevertree USA, Inc., partially offset by net cash provided by operating activities.

See Part II—Item 8 Financial Statements and Supplementary Data, Consolidated Statements of Cash Flows for additional detail.

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These efforts include optimizing our inventory levels and managing our payment terms on accounts payable and accounts receivable.

We repaid our EUR 800 million 1.25% senior notes upon their maturity on July 15, 2024, using the cash proceeds from our EUR 800 million 3.80% senior notes issued on May 29, 2024, and cash on hand.

Refer to Part II—Item 8 Financial Statements and Supplementary Data, Note 9, "Debt" for details.

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Based on the credit profile of our lenders that are party to our credit facilities, we are confident in our ability to draw on our revolving credit facility if the need arises.

On June 3, 2024, we amended our existing $2.0 billion multi-currency revolving credit facility to, among other things, extend the maturity date from June 26, 2028 to June 26, 2029.

On June 26, 2025, we amended our existing $2.0 billion multi-currency revolving credit facility to extend the maturity date from June 26, 2029 to June 26, 2030.

As of December 31, 2025, we had $2.0 billion available to draw on our amended and restated $2.0 billion multi-currency revolving credit facility.

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We also have CAD, GBP and USD overdraft facilities across several banks should we need additional short-term liquidity.

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Under the terms of each of our debt facilities, we must comply with certain restrictions.

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We guarantee indebtedness and other obligations to banks and other third parties for some of our equity method investments and consolidated subsidiaries.

Guarantees of the outstanding third-party debt of our equity method investments, which are classified as current on the consolidated balance sheets, have been excluded from the material cash requirements table below.

See Part II - Item 8 Financial Statements and Supplementary Data, Note 3, "Investments" and Part II - Item 8 Financial Statements and Supplementary Data, Note 13, "Commitments and Contingencies" for further discussion.

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Material Cash Requirements from Contractual and Other Obligations

A summary of our material cash requirements from our contractual and other obligations as of December 31, 2024, based on foreign exchange rates as of December 31, 2024, is as follows.

A summary of our material cash requirements from our contractual and other obligations as of December 31, 2025, based on foreign exchange rates as of December 31, 2025, was as follows.

Payments due by period

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(1) Primarily represents expected benefit payments under our OPEB plans through 2035.

The net underfunded liability as of December 31, 2024, of our defined benefit pension plans (excluding our overfunded plans) and OPEB plans is $34.9 million and $423.0 million, respectively.

The net underfunded liability as of December 31, 2025, of our defined benefit pension plans (excluding our overfunded plans) and OPEB plans was $34.1 million and $435.1 million, respectively.

Defined benefit pension plan contributions in future years will vary based on a number of factors, including actual plan asset returns and interest rates, and thus, have been excluded from the above table.

(2) See Part II—Item 8 Financial Statements and Supplementary Data, Note 13, "Commitments and Contingencies" for further discussion of the majority of the other long-term obligations which includes supply and distribution and advertising and promotions commitments.

The remaining balance relates to derivative payments, information technology services, pre-commencement leases, open purchase orders and other commitments.

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The remaining balance relates to royalty payments, information technology services, derivative payments, pre-commencement leases and other commitments.

Other Commercial Commitments

Based on foreign exchange rates as of December 31, 2024, future commercial commitments are as follows:

Based on foreign exchange rates as of December 31, 2025, future commercial commitments were as follows:

Amount of commitment expiration per period

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Capital Expenditures

We incurred $720.8 million, and paid $674.1 million, for capital improvement projects worldwide for the year ended December 31, 2024, excluding capital spending by equity method joint ventures, representing an increase of $32.2 million from the $688.6 million of capital expenditures incurred for the year ended December 31, 2023.

We continue to focus on where and how we employ our planned capital expenditures, with an emphasis on obtaining required returns on invested capital as we determine how to best allocate cash within the business.

We incurred $667.4 million and paid $716.6 million for capital improvement projects worldwide for the year ended December 31, 2025, excluding capital spending by equity method joint ventures, representing a decrease of $53.4 million from the $720.8 million of capital expenditures incurred in the year ended December 31, 2024.

We continue to prioritize our planned capital expenditures with a focus on optimizing returns on invested capital.

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Contingencies

We are party to various legal proceedings arising in the ordinary course of business, environmental litigation and indemnities associated with our sale of Kaiser to FEMSA.

We are party to various legal proceedings arising in the ordinary course of business, environmental matters, and indemnities associated with our sale of Kaiser to FEMSA.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 13, "Commitments and Contingencies" for further discussion.

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Benefit accruals for the majority of employees in our U.S.

plans have been frozen and the plans are closed to new entrants.

plans are frozen and the plans are closed to new entrants.

In the U.S., we also participate in, and make contributions to, multi-employer pension plans.

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We also offer defined contribution plans in each of our segments.

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Accounting for pension and OPEB plans requires that we make assumptions that involve considerable judgment which are significant inputs in the actuarial models that measure our net pension and OPEB obligations and ultimately impact our earnings.

Accounting for our pension and OPEB plans requires that we make assumptions that involve considerable judgment which are significant inputs in the actuarial models that measure our net pension and OPEB obligations and ultimately impact our earnings.

These include the discount rate, long-term expected rate of return on assets, and plan asset fair value determination, which are important assumptions used in determining the plans' funded status and annual net periodic pension and OPEB costs.

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Discount Rates

The assumed discount rates are used to present value future benefit obligations based on each plan's respective estimated duration.

Discount rates are used to present value future benefit obligations based on each plan's respective estimated duration.

Our pension and OPEB discount rates are based on our annual evaluation of high quality corporate bonds in various markets based on appropriate indices and actuarial guidance.

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As of December 31, 2025, on a weighted-average basis, the discount rates used were 5.31% for our defined benefit pension plans and 4.95% for our OPEB plans.

The change from the weighted-average discount rates of 4.74% for our defined benefit pension plans and 4.64% for our OPEB plans as of December 31, 2023, was primarily due to an increase in interest rates in 2024, particularly for our U.S.

A 50 basis point change in our discount rate assumptions would have had the following effects on the projected benefit obligation balances as of December 31, 2024, for our pension and OPEB plans:

The change from the weighted-average discount rates of 5.41% for our defined benefit pension plans and 5.15% for our OPEB plans as of December 31, 2024, was primarily due to a decrease in corporate bond yields using December 31, 2025 market data for our U.S.

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A 50 basis point change in our discount rate assumptions would have had the following effects on the benefit obligation balances as of December 31, 2025, for our pension and OPEB plans:

Decrease in discount rate Increase in discount rate

(In millions)

Unfavorable (favorable) impact to projected benefit obligation as of December 31, 2024

Increase (decrease) impact to benefit obligation as of December 31, 2025

Pension obligation $ 116.3 $ (106.7)

OPEB obligation 17.2 (16.0)

Total impact to the projected benefit obligation $ 135.8 $ (125.4)

Total impact to the benefit obligation $ 133.5 $ (122.7)

pension plan includes benefits linked to inflation.

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Long-Term Expected Rate of Return on Assets

The assumed long-term expected return on assets is used to estimate the actual return that will occur on each individual funded plan's respective plan assets in the upcoming year.

The long-term expected return on assets is used to estimate the actual return that will occur on each individual funded plan's respective plan assets in the upcoming year.

We determine each plan's EROA with substantial input from independent investment specialists, including our actuaries and our outsourced investment consultants.

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Based on the above factors and expected asset allocations, we have assumed, on a weighted-average basis, an EROA of 6.05% for our defined benefit pension plan assets for cost recognition in 2026.

This is an increase from the weighted-average rate of 5.47% we assumed for 2024, primarily due to the increase in interest rates in 2024 causing higher expected future fixed income returns.

This was an increase from the weighted-average rate of 5.70% we assumed for 2025, primarily due to updated investment guidelines and target asset allocations.

We believe that our EROA assumptions are appropriate;

however, significant changes in our assumptions or actual returns that differ significantly from estimated returns may materially affect our net periodic pension costs.

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A 50 basis point change in our EROA assumptions made at the beginning of 2025 would have had the following effects on 2025 net periodic pension and postretirement benefit costs.

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(In millions)

(Unfavorable) favorable impact to the 2024 net periodic pension and postretirement benefit cost $ (13.9) $ 13.9

Favorable (unfavorable) impact to the 2025 net periodic pension and postretirement benefit cost $ (11.7) $ 11.7

Fair Value of Plan Assets

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Health Care Cost Trend Rates

The assumed health care cost trend rates represent the rates at which health care costs are assumed to increase and are based on actuarial input and consideration of historical and expected experience.

The health care cost trend rates represent the rates at which health care costs are assumed to increase and are based on actuarial input and consideration of historical and expected experience.

We use these trends as a significant assumption in determining our postretirement benefit obligation and related costs.

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however, significant changes in our assumptions may materially affect our postretirement benefit obligations and related costs.

As of December 31, 2024, the health care trend rates used were ranging ratably from 7.00% in 2025 to 3.57% in 2040, which is a slight increase from our assumed health care trend rates ranging ratably from 6.75% in 2024 to 3.57% in 2040 as of December 31, 2023.

As of December 31, 2025, the health care trend rates used were ranging ratably from 7.50% in 2026 to 3.57% in 2040, which was an increase from our assumed health care trend rates ranging ratably from 7.00% in 2025 to 3.57% in 2040 as of December 31, 2024.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 11, "Employee Retirement Plans and Postretirement Benefits" for further information.

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Contingencies, Environmental and Litigation Reserves

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Significant judgments and assumptions are required in such impairment evaluations.

As of December 31, 2024, the carrying values of goodwill and intangible assets were approximately $5.6 billion and $12.2 billion, respectively, with the goodwill balance entirely attributed to the Americas reporting unit.

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We use a combination of discounted cash flow analyses and market approaches to determine the fair value of each of our reporting units and an excess earnings approach to determine the fair values of our indefinite-lived brand intangible assets.

Our discounted cash flow projections include assumptions for growth rates for sales, costs and profits, which are based on various long-range financial and operational plans of each reporting unit or each indefinite-lived intangible asset.

As of December 31, 2025, the carrying values of goodwill and intangible assets were approximately $1.9 billion and $12.0 billion, respectively, with the goodwill balance entirely attributable to the Americas reporting unit.

We have the option of using a quantitative or qualitative approach for our annual impairment testing of goodwill and indefinite-lived intangible assets.

When utilizing a quantitative impairment testing approach, we use a combination of discounted cash flow analyses and market approaches to determine the fair value of each of our reporting units and an excess earnings approach to determine the fair values of our indefinite-lived brand intangible assets.

Our discounted cash flow projections include significant assumptions for growth rates for sales and associated costs of goods sold, which are based on various long-range financial and operational plans of each reporting unit or each indefinite-lived intangible asset, along with terminal growth rates.

Additionally, discount rates used in our goodwill analysis are based on weighted-average cost of capital, driven by the prevailing interest rates in geographies where these businesses operate, as well as the credit ratings, financing abilities and opportunities of each reporting unit, among other factors.

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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, an inability to execute on our strategic initiatives including our premiumization efforts or an increase in costs driven by inflation or other factors that could significantly impact our immediate and long range results, prolonged weakness in consumer demand or other competitive pressures adversely affecting our long-term volume trends, changes in trends and consumer preferences within the industry towards other brands or product categories, unfavorable working capital changes or an inability to successfully implement our cost savings initiatives, (ii) adverse changes in macroeconomic conditions that significantly differ from our assumptions in timing and/or degree (such as a global pandemic, recession or evolving beer industry), (iii) significant unfavorable changes in 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;

(i) a decrease in expected future cash flows, specifically, an inability to execute on our strategic initiatives, including prioritizing our investments to strengthen our core and value beer portfolios and to transform our above premium beer and beyond beer portfolios or an increase in costs driven by inflation or other factors that could significantly impact our immediate and long range results, prolonged weakness in consumer demand or other competitive pressures adversely affecting our long-term volume trends, changes in trends and consumer preferences within the industry towards other brands or product categories, unfavorable working capital changes or an inability to successfully implement our cost savings initiatives, (ii) adverse changes in macroeconomic conditions that significantly differ from our assumptions in timing and/or degree (such as a recession or evolving beer industry), (iii) significant unfavorable changes in 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.

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If actual performance results differ significantly from our projections or we experience significant fluctuations in our other assumptions, a material impairment loss may occur in the future.

See Part II—Item 8 Financial Statements and Supplementary Data, Note 6, "Goodwill and Intangible Assets" for further discussion and presentation of these amounts.

Annual Goodwill Impairment Test

As of the October 1, 2024, testing date, the fair value of the Americas reporting unit was determined to be in excess of its carrying amount and therefore no goodwill impairment charge was recorded.

The Americas reporting unit continues to be at a heightened risk of future impairment as the fair value exceeded its respective carrying value by less than 15%.

The fair value of the Americas reporting unit decreased during the current year, primarily due to lower market multiples and lower forecasted cash flow projections, with the decreases largely driven by more challenging U.S.

industry expectations.

This is partially offset by a decrease to the discount rate as a result of reductions in the interest rate environment.

Specifically, the discount rate used in developing our annual fair value estimates for the Americas reporting unit in the current year was 8.25% based on market-specific factors, as compared to 9.00% used as of the October 1, 2023, annual testing date.

A 50 basis point increase in our discount rate assumption, holding all other assumptions and inputs constant, would not have resulted in an impairment of the Americas reporting unit.

Current projections used for the Americas reporting unit testing reflected growth assumptions associated with our continued plan to consistently grow our core power brand revenue, aggressively premiumize our portfolio, scale and expand beyond beer, invest in our capabilities and invest in our people, communities and planet, all of which are intended to benefit the projected cash flows of the business.

While progress has been made on this strategy, including the strengthening of our core brands, there is not enough historical data yet to adequately predict future impacts and forecasted future cash flows are inherently at risk given that the strategies are still in progress.

In addition, while we have included in our forecasted future cash flows estimates for expected cost inflation and adjusted our volumes to be reflective of the current beer industry trends, there is still inherent risk in achieving our goals.

If our assumptions are not realized, it is possible that further impairment charges may be recorded in the future.

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During the third quarter of 2025, as we began updating our long-range planning based on current year results to date and industry conditions, we identified a triggering event that indicated it was more likely than not that the carrying value of the Americas reporting unit exceeded its fair value.

An impairment test was completed as of August 31, 2025, using a combination of a discounted cash flow analysis and market approach and it was concluded that the carrying value of the Americas reporting unit was in excess of its fair value such that a partial goodwill impairment loss of $3,645.7 million was recorded in the consolidated statements of operations.

Due to the partial impairment charge, the Americas reporting unit is still considered to be at a heightened risk of future impairment.

The triggering event was due to lower current year and future forecasted results which were driven by declines in the beer industry, market share losses and higher than expected costs in the U.S.

combined with a higher discount rate and lower market multiples.

We utilized independent valuation specialists and industry accepted valuation models in calculating the fair value of the Americas reporting unit as of August 31, 2025.

The key assumptions used to derive the estimated fair value of the Americas reporting unit, which included the internal cash flow projections based on our updated long-range plans and the discount rate, represented Level 3 measurements.

Our discounted cash flow projections included assumptions for growth rates for sales and associated costs of goods sold, which were based on various long-range financial and operational plans, along with terminal growth rates.

Additionally, the discount rate used in our analysis was based on the weighted-average cost of capital, driven by the prevailing interest rates and financing abilities as well as the identified risks and opportunities of the reporting unit.

The increase in the discount rate compared to the prior year annual test was partially due to the additional risk premium assessed on the reporting unit based on the current industry environment.

Current projections used for the Americas reporting unit testing reflected our focus on building a portfolio of strong and scalable brands in both beer and beyond beer, which entails prioritizing our investments to strengthen our core and value beer portfolios and to transform our above premium beer and beyond beer portfolios.

While progress has been made, continued focus is required to deliver on our objectives.

Therefore, the growth targets included in management's forecasted future cash flows were inherently at risk given that the strategies are still in progress.

Additionally, the fair value determinations are sensitive to changes in the beer industry environment, broader macroeconomic conditions, market multiples and discount rates that could negatively impact future analyses, including the impacts of cost inflation and tariffs, increases to interest rates and other external industry factors impacting our business.

Due to the proximity of the goodwill impairment test completed during the third quarter of 2025 to our annual testing date of October 1, 2025, we completed our required annual goodwill impairment testing using a qualitative approach and concluded that the fair value of the Americas reporting unit was more likely than not in excess of its carrying value and, therefore, no additional goodwill impairment charge was recorded.

However, due to the partial impairment charge recognized in the third quarter of 2025, and the fact that the Americas reporting unit's fair value exceeds its carrying value by less than 15%, the Americas reporting unit continues to be at a heightened risk of future impairment.

Indefinite-Lived Intangible Assets

During the third quarter of 2025, as we began updating our long-range planning based on current year results to date and the current challenging industry environment in the relevant markets, we identified a triggering event for the Staropramen family of brands in the EMEA&APAC segment.

The triggering event was driven by softer than expected current year and future forecasted results in certain of the key markets where the Staropramen family of brands is sold.

We completed an impairment test using a discounted cash flow approach as of August 31, 2025 and concluded that the carrying value of the Staropramen family of brands was in excess of its fair value such that a partial impairment loss of $198.6 million was recorded within other operating income (expense), net in the consolidated statements of operations.

After the impairment charge, the carrying value of the Staropramen family of brands was $257.1 million.

The decline in the fair value of the Staropramen family of brands during the current year was impacted by reductions in management forecasts due to lower than expected brand results in 2025 driven by soft market demand and a heightened competitive landscape across key markets, resulting in a more modest growth trajectory than in previous assumptions.

In conjunction with the impairment review of the Staropramen family of brands, we also reassessed the brand's indefinite-life classification and determined that the impaired brand has characteristics that have evolved and which now indicate a definite-life is more appropriate, including prolonged weakness in consumer demand driven by increased economic and competitive pressures.

These factors have resulted in continued declines in performance and these pressures are expected to continue into the future.

Therefore, we reclassified the Staropramen family of brands to a definite-lived intangible asset with a useful life of 50 years effective August 31, 2025.

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We utilized Level 3 fair value measurements in our impairment analysis of the Staropramen family of brands indefinite-lived intangible asset.

We utilized independent valuation specialists in calculating the fair value of the Staropramen family of brands using the excess earnings approach.

The future cash flows used in the analyses were based on internal cash flow projections related to our long-range plans and included significant assumptions for growth rates for sales and associated costs of goods sold.

The discount rate utilized for the Staropramen family of brands was a key assumption and was based on the weighted-average cost of capital, driven by the prevailing interest rates and financing abilities of the geographies in which the family of brands are sold as well as the identified risks and opportunities of the brands for each geography.

The fair values of the Coors brands in the Americas (inclusive of our Coors brand in the U.S.

and Coors distribution agreement in Canada), the Miller brands in the U.S., the Carling brands in the U.K.

and the Staropramen brands in EMEA&APAC are sufficiently in excess of their respective carrying values as of the October 1, 2024 annual testing date, with each having over 15% cushion of fair value over book value.

We utilize Level 3 fair value measurements in our impairment analysis of our indefinite-lived intangible assets.

and Coors distribution agreement in Canada), the Miller brands in the U.S.

and the Carling brands in the U.K.

are sufficiently in excess of their respective carrying values as of the October 1, 2025 annual testing date, with each having over 15% cushion of fair value over book value.

We utilized Level 3 fair value measurements in our impairment analyses of our indefinite-lived intangible assets.

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 analyses are based on internal cash flow projections utilizing our long range plans and include significant assumptions by management.

A 50 basis point increase in our discount rate assumptions would not have resulted in an impairment of any of our indefinite-lived intangible assets.

As of the October 1, 2023, testing date, the carrying value of the Staropramen family of brands in EMEA&APAC was determined to be in excess of its fair value such that a partial impairment loss of $160.7 million was recorded in our consolidated statements of operations during the fourth quarter of 2023.

As of the October 1, 2025 annual testing date, a 50 basis point increase in our discount rate assumptions would not have resulted in an impairment of any of our indefinite-lived intangible assets.

Definite-Lived Intangible Assets and Other Long-Lived Assets

We continuously monitor the performance of our definite-lived intangible assets and other long-lived assets for potential triggering events suggesting an impairment review should be performed or useful lives should be re-assessed.

Due to a reduction in forecasted cash flows associated with one of our asset groups, we identified this as a triggering event during the fourth quarter of 2024 and performed a recoverability test for the long-lived assets at the asset group level but concluded that the recoverability test passed and no impairment was recorded.

No other material triggering events were identified in either 2024 or 2023 related to our definite-lived intangible assets or other definite-lived assets.

During the third quarter of 2025, as we began updating our long-range planning based on current year results to date, we identified a triggering event for the Blue Run Spirits asset group in the Americas segment, due to softer current year and future forecasted results primarily driven by a challenging macroeconomic environment for full strength spirits, resulting in lower sales.

The asset group did not pass the recoverability test and the carrying value was determined to exceed its fair value resulting in the full impairment of the definite-lived intangible brand of $75.3 million as of August 31, 2025, which was recorded within other operating income (expense), net in the consolidated statement of operations.

The asset group was measured at fair value primarily using a discounted cash flow approach and utilized Level 3 fair value measurements.

Additionally, during 2024, due to a reduction in forecasted cash flows associated with one of our asset groups, we identified a triggering event and performed a recoverability test for the long-lived assets at the asset group level but concluded that the recoverability test passed and no impairment was recorded.

No other material triggering events were identified in either 2025 or 2024 related to our definite-lived intangible assets or other long-lived assets.

Income taxes are accounted for in accordance with U.S.

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The taxes associated with any future repatriation of undistributed earnings are anticipated to be insignificant.

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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.

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As a result, such changes may, upon ultimate enactment, result in material impacts to our financial statements.

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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.

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Item 7. Management’s Discussion and Analysis