MOLSON COORS BEVERAGE CO
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
TAP-A$43.00-2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000024545-24-000018
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000024545-24-000024
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 131 previous paragraphs and 152 current paragraphs.
71 unchanged; 41 reworded; 40 added; 19 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Items Affecting the Consolidated Results of Operations
Current report
Purchases of Annuity Contracts
Current report
During the three months ended September 30, 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 the offset to AOCI in addition to recording a total settlement loss of $34.0 million. See Part I.— Item 1. Financial Statements, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" and Part I. — Item 1. Financial Statements, Note 11, "Accumulated Other Comprehensive Income (Loss)" for further information.
Current report
Cobra Beer Partnership, Ltd. Buyout
Current report
During the three months ended September 30, 2024, 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 in March 2024 by increasing our net income attributable to noncontrolling interests and decreasing our net income attributable to MCBC. In addition, the final determination of the redemption value was received in October 2024, and we recorded an adjustment of $45.8 million to interest expense in the EMEA&APAC segment with the offset to the mandatorily redeemable NCI that was recorded to accounts payable and other current liabilities in the unaudited condensed consolidated balance sheets. See further discussion of this transaction in Part I. — Item 1. Financial Statements, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies".
Current report
Items Affecting the Americas Segment Results of Operations
Current report
Wind Down or Sale of Certain U.S. Craft Businesses
Current report
During the three months ended September 30, 2024, we made the decision to wind down or sell certain of our U.S. craft businesses and related facilities and recorded employee-related and asset abandonment charges, including accelerated depreciation in excess of normal depreciation. We recognized a loss of $41.1 million related to the disposal of the sold businesses. We expect to continue to incur incremental restructuring charges during the fourth quarter of 2024 and the first quarter of 2025 through completion of wind down and closure of certain remaining U.S. craft facilities. Remaining charges are estimated to total approximately $95 million to $115 million, consisting primarily of accelerated depreciation charges. See Part I. — Item 1. Financial Statements, Note 12, "Other Operating Income (Expense), net" for further information.
Current report
Truss Sale
Current report
During the three months ended September 30, 2023, we sold our controlling interest in Truss and recognized a loss of $11.1 million. See Part I.— Item 1. Financial Statements, Note 12, "Other Operating Income (Expense), net" for further information.
Current report
•Cost of goods sold- Unfavorable impact of $1.7 million (unfavorable impact for EMEA&APAC of $10.4 million, partially offset by the favorable impact for Americas and Unallocated of $8.3 million and $0.4 million, respectively).
Current report
•MG&A- Unfavorable impact of $0.7 million (unfavorable impact for EMEA&APAC of $3.8 million, partially offset by the favorable impact for Americas of $3.1 million).
Current report
•Income (loss) before income taxes- Unfavorable impact of $5.1 million (unfavorable impact for Americas and EMEA&APAC of $3.9 million and $2.8 million, respectively, partially offset by the favorable impact for Unallocated of $1.6 million).
Current report
The following table highlights the drivers of the change in net sales for the three months ended September 30, 2024 compared to September 30, 2023 (in percentages):
Current report
Net sales decreased 7.8% for the three months ended September 30, 2024, compared to prior year, driven by lower financial volumes, partially offset by favorable price and sales mix.
Current report
Financial volumes decreased 12.3% for the three months ended September 30, 2024, compared to prior year, primarily due to lower shipments, including lower contract brewing volumes in the Americas.
Current report
Net sales decreased 0.2% for the nine months ended September 30, 2024, compared to prior year, driven by lower financial volumes, partially offset by favorable price and sales mix.
Current report
Financial volumes decreased 4.5% for the nine months ended September 30, 2024, compared to prior year, primarily due to lower shipments, including lower contract brewing volumes in the Americas.
Current report
A discussion of currency impacts on cost of goods sold is included in the "Foreign currency impacts on results" section above.
Current report
MG&A expenses decreased 8.3% for the three months ended September 30, 2024 compared to prior year, primarily due to lower marketing investment resulting from cycling higher spend levels in the prior year and lower incentive compensation expense.
Current report
A discussion of currency impacts on MG&A expenses is included in the "Foreign currency impacts on results" section above.
Current report
Total non-operating expense, net increased 148.5% for the three months ended September 30, 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 and a settlement loss of $34.0 million recorded as a result of Canadian pension plan annuity purchases.
Current report
Total non-operating expense, net increased 37.2% for the nine months ended September 30, 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 and a settlement loss of $34.0 million recorded as a result of Canadian pension plan annuity purchases in the third quarter of 2024, partially offset by higher interest income from higher cash balances and higher pension and OPEB non-service benefit.
Current report
Income tax benefit (expense)
Current report
The higher effective tax rate for the three and nine months ended September 30, 2024, compared to the prior year, was partly due to the impact of a valuation allowance that was recorded on deferred tax assets in the third quarter of 2024 related to the divestment of certain of our U.S. craft businesses. The divestment resulted in the realization of a capital loss for U.S. tax purposes. We believe it is more likely than not that the deferred tax asset generated by the capital loss will not be recognized, and as a result, a $16.4 million valuation allowance was recorded for the year to date period. The higher effective tax rate was also due to the $45.8 million increase in the mandatorily redeemable NCI liability of CBPL to the final redemption value, which was recorded to interest expense in the third quarter of 2024 and is non-deductible for tax purposes. Finally, the higher effective tax rate for the three months ended September 30, 2024 was partly driven by a decrease in discrete tax benefit.
Current report
Net income (loss) attributable to noncontrolling interests
Current report
Net income attributable to noncontrolling interests increased $28.1 million and $24.1 million for the three and nine months ended September 30, 2024, respectively, compared to the prior year, primarily due to the recording of an out of period adjustment 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 I. — Item 1. Financial Statements, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies".
Current report
The following table highlights the drivers of the change in net sales for the three months ended September 30, 2024 compared to September 30, 2023 (in percentages):
Current report
Net sales decreased 11.0% for the three months ended September 30, 2024, compared to prior year, driven by lower financial volumes and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.
Current report
Price and sales mix favorably impacted net sales for the three months ended September 30, 2024, compared to prior year, by 4.9% primarily due to increased net pricing and favorable sales mix as a result of lower contract brewing volumes.
Current report
Net sales decreased 1.8% for the nine months ended September 30, 2024, compared to prior year, driven by lower financial volumes and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.
Current report
Income before income taxes declined 26.8% for the three months ended September 30, 2024 compared to prior year, primarily due to lower financial volumes, higher other operating expense as a result of the exit of our U.S. craft businesses and related restructuring costs and cost inflation related to materials and manufacturing expenses, partially offset by lower MG&A expense, increased net pricing, favorable sales mix and cost savings initiatives. Lower MG&A expense was primarily driven by lower marketing spend resulting from the cycling of higher spend levels in the prior year and lower incentive compensation expense.
Current report
Income before income taxes declined 3.5% for the nine months ended September 30, 2024 compared to prior year, primarily due to lower financial volumes, cost inflation related to materials and manufacturing expenses, higher other operating expense as a result of the exit of our U.S. craft businesses and related restructuring costs, partially offset by increased net pricing, lower MG&A expense, favorable sales mix and cost savings initiatives. Lower MG&A expense was primarily driven by lower incentive compensation expense.
Current report
A discussion of the foreign currency impacts on income (loss) before income taxes is included in the "Foreign currency impacts on results" section above.
Current report
The following table highlights the drivers of the change in net sales for the three months ended September 30, 2024 compared to September 30, 2023 (in percentages).
Current report
Net sales increased 5.1% for the three months ended September 30, 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.
Current report
Net sales increased 6.5% for the nine months ended September 30, 2024, compared to prior year, driven by favorable price and sales mix and favorable foreign currency impacts, partially offset by lower financial volumes.
Current report
Income before income taxes declined 23.6% for the three months ended September 30, 2024, compared to prior year, primarily due to higher interest expense as a result of the adjustment of $45.8 million to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout, lower financial volumes and higher MG&A expense, partially offset by increased net pricing and favorable sales mix.
Current report
A discussion of the foreign currency impacts on income (loss) before income taxes is included in the "Foreign currency impacts on results" section above.
Current report
Total non-operating expense, net increased 70.4% for the three months ended September 30, 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.
Removed paragraphs (19)
Previous report
•Net sales- Unfavorable impact of $12.2 million (unfavorable impact for Americas and EMEA&APAC of $6.9 million and $5.3 million, respectively).
Previous report
•Cost of goods sold - Favorable impact of $7.9 million (favorable impact for Americas and EMEA&APAC of $4.6 million and $3.3 million, respectively).
Previous report
•MG&A - Favorable impact of $3.5 million (favorable impact for Americas and EMEA&APAC of $1.8 million and $1.7 million, respectively).
Previous report
Net sales decreased 0.4% for the three months ended June 30, 2024, compared to prior year, driven by lower financial volumes and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.
Previous report
Financial volumes decreased 4.1% for the three months ended June 30, 2024, compared to prior year, primarily due to lower contract brewing volumes in the Americas segment.
Previous report
Net sales increased 4.2% for the six months ended June 30, 2024, compared to prior year, driven by favorable price and sales mix.
Previous report
Financial volumes were flat for the six months ended June 30, 2024 compared to prior year, with both of the Americas and EMEA&APAC segments relatively flat compared to prior year.
Previous report
MG&A expenses increased 2.5% for the six months ended June 30, 2024 compared to prior year, primarily due to increased marketing investment to support our brands and innovations, partially offset by lower incentive compensation expense.
Previous report
Total non-operating expense, net improved 16.2% for the three months ended June 30, 2024, compared to prior year, primarily due to higher pension and OPEB non-service net benefit and lower net interest expense.
Previous report
Income taxes benefit (expense)
Previous report
The higher effective tax rate for the three months ended June 30, 2024 compared to the prior year was primarily due to tax expense items recognized in the three months ended June 30, 2024, which in the aggregate were immaterial, as compared to tax benefit items recognized in the three months ended June 30, 2023, which in the aggregate were also immaterial.
Previous report
Net sales decreased 1.7% for the three months ended June 30, 2024, compared to prior year, driven by lower financial volumes and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.
Previous report
Net sales increased 3.5% for the six months ended June 30, 2024, compared to prior year, driven by favorable price and sales mix, partially offset by unfavorable foreign currency impacts.
Previous report
Price and sales mix favorably impacted net sales for the six months ended June 30, 2024, compared to prior year, by 3.7% primarily due to increased net pricing and favorable sales mix as a result of lower contract brewing volumes.
Previous report
Income before income taxes were flat for the three months ended June 30, 2024 compared to prior year, primarily due to increased net pricing, favorable sales mix, lower MG&A and cost savings initiatives, offset by lower financial volumes and cost inflation related to materials and manufacturing expenses. Lower MG&A spend was driven by lower incentive compensation expense, partially offset by increased marketing investment to support our brands and innovations.
Previous report
Income before income taxes improved 12.1% for the six months ended June 30, 2024 compared to prior year, primarily due to increased net pricing, favorable sales mix and cost savings initiatives, partially offset by cost inflation related to materials and manufacturing expenses.
Previous report
Net sales increased 5.3% for the three months ended June 30, 2024, compared to prior year, driven by favorable price and sales mix as well as higher financial volumes, partially offset by unfavorable foreign currency impacts.
Previous report
Net sales increased 7.4% for the six months ended June 30, 2024, compared to prior year, driven by favorable price and sales mix as well as higher financial volumes and favorable foreign currency impacts.
Previous report
Total non-operating expense, net improved 24.6% and 21.8% for the three and six months ended June 30, 2024, respectively, compared to prior year, primarily due to higher pension and OPEB non-service net benefit, lower net interest expense and favorable transactional foreign currency impacts.
Reworded paragraphs (41)
Previous wording
For over two centuries, we have been brewing 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 Madri, Staropramen, Blue Moon Belgian Whiteand Leinenkugel’s Summer Shandy, to our economy and value brands like Miller High Lifeand Keystone, we produce many beloved and iconic beer brands. 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 as well as non-alcoholic beverages. 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.
Current wording
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 Ožujskoto our above premium brands including Madri 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. 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.
Previous wording
Unless otherwise indicated, information in this report is presented in USD and comparisons are to comparable prior periods. Our primary operating currencies, other than the USD, include the CAD, the GBP, and our Central European operating currencies such as the EUR, CZK, RON and RSD.
Current wording
Unless otherwise indicated, information in this report is presented in USD and comparisons are to comparable prior year periods. Our primary operating currencies, other than the USD, include the CAD, the GBP, and our Central European operating currencies such as the EUR, CZK, RON and RSD.
Previous wording
The following table highlights summarized components of our unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023. See Part I.—Item 1. Financial Statements for additional details of our U.S. GAAP results.
Current wording
The following table highlights summarized components of our unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and September 30, 2023. See Part I.—Item 1. Financial Statements for additional details of our U.S. GAAP results.
Previous wording
•Net sales - Favorable impact of $0.4 million (favorable impact for EMEA&APAC of $6.5 million, partially offset by the unfavorable impact of Americas of $6.1 million).
Current wording
•Net sales- Favorable impact of $1.2 million (favorable impact for EMEA&APAC of $8.6 million, partially offset by the unfavorable impact for Americas of $7.4 million).
Previous wording
•Cost of goods sold- Unfavorable impact of $0.6 million (unfavorable impact for EMEA&APAC of $4.7 million, partially offset by the favorable impact of Americas and Unallocated of $4.0 million and $0.1 million, respectively).
Current wording
•Cost of goods sold - Unfavorable impact of $1.1 million (unfavorable impact for EMEA&APAC of $5.7 million, partially offset by the favorable impact for Americas and Unallocated of $4.3 million and $0.3 million, respectively).
Previous wording
•MG&A- Unfavorable impact of $0.3 million (unfavorable impact for EMEA&APAC of $1.9 million, partially offset by the favorable impact of Americas of $1.6 million).
Current wording
•MG&A - Unfavorable impact of $0.4 million (unfavorable impact for EMEA&APAC of $1.9 million, partially offset by the favorable impact for Americas of $1.5 million).
Previous wording
•Income (loss) before income taxes- Unfavorable impact of $5.0 million (unfavorable impact for EMEA&APAC and Americas of $3.8 million and $2.4 million, respectively, partially offset by the favorable impact of Unallocated of $1.2 million).
Current wording
•Income (loss) before income taxes - Unfavorable impact of $0.1 million (unfavorable impact for Americas of $1.5 million, partially offset by the favorable impact of EMEA&APAC and Unallocated of $1.0 million and $0.4 million, respectively).
Previous wording
The impacts of foreign currency movements on our consolidated USD results described above for the six months ended June 30, 2024 were primarily due to the weakening of the USD compared to the GBP, partially offset by the strengthening of the USD compared to the CAD and CZK.
Current wording
The impacts of foreign currency movements on our consolidated USD results described above for the three months ended September 30, 2024 were primarily due to the weakening of the USD compared to the GBP, partially offset by the strengthening of the USD compared to the CAD.
Previous wording
During the six months ended June 30, 2024, foreign currency movements had the following impacts on our USD consolidated results:
Current wording
During the nine months ended September 30, 2024, foreign currency movements had the following impacts on our USD consolidated results:
Previous wording
•Income (loss) before income taxes - Favorable impact of $2.6 million (favorable impact for Unallocated of $5.6 million, partially offset by the unfavorable impact of EMEA&APAC and Americas of $1.9 million and $1.1 million, respectively).
Current wording
•Net sales - Favorable impact of $1.6 million (favorable impact for EMEA&APAC of $15.1 million, partially offset by the unfavorable impact for Americas $13.5 million).
Previous wording
The impacts of foreign currency movements on our consolidated USD results described above for the three months ended June 30, 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.
Current wording
The impacts of foreign currency movements on our consolidated USD results described above for the nine months ended September 30, 2024 were primarily due to the weakening of the USD compared to the GBP, partially offset by the strengthening of the USD compared to the CAD and CZK.
Previous wording
Price and sales mix favorably impacted net sales for the three months ended June 30, 2024 by 4.0%, 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 U.S.
Current wording
Price and sales mix favorably impacted net sales for the three months ended September 30, 2024 by 4.5%, 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 U.S.
Previous wording
Price and sales mix favorably impacted net sales for the six months ended June 30, 2024 by 4.2%, primarily due to increased net pricing as well as favorable sales mix.
Current wording
Price and sales mix favorably impacted net sales for the nine months ended September 30, 2024 by 4.3%, 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 U.S.
Previous wording
Cost of goods sold decreased 6.1% for the three months ended June 30, 2024, compared to prior year, primarily due to lower financial volumes, lower cost of goods sold per hectoliter and favorable foreign currency impacts. Cost of goods sold per hectoliter improved 2.1% for the three months ended June 30, 2024, compared to prior year, including favorable foreign currency impacts of 0.4%, primarily due to the favorable changes in our unrealized mark-to-market derivative positions of $91.5 million and cost savings initiatives, partially offset by cost inflation related to materials and manufacturing expenses, volume deleverage and unfavorable mix driven by lower contract brewing volumes in the Americas segment.
Current wording
Cost of goods sold decreased 5.7% for the three months ended September 30, 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 7.5% for the three months ended September 30, 2024, compared to prior year, primarily due to volume deleverage in the Americas segment, unfavorable mix driven by lower contract brewing volumes in the Americas segment, unfavorable changes in our unrealized mark-to-market commodity derivative positions of $34.4 million and cost inflation related to materials and manufacturing expenses, partially offset by cost savings initiatives.
Previous wording
Cost of goods sold decreased 1.9% for the six months ended June 30, 2024, compared to prior year, primarily due to lower cost of goods sold per hectoliter. Cost of goods sold per hectoliter improved 1.9% for the six months ended June 30, 2024, compared to prior year, primarily due to the favorable changes in our unrealized mark-to-market derivative positions of $144.1 million and cost savings initiatives, partially offset by cost inflation related to materials and manufacturing expenses and unfavorable mix driven by lower contract brewing volumes in the Americas segment.
Current wording
Cost of goods sold decreased 3.2% for the nine months ended September 30, 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 1.4% for the nine months ended September 30, 2024, compared to prior year, primarily due to cost inflation related to materials and manufacturing expenses, unfavorable mix driven by lower contract brewing volumes in the Americas segment and volume deleverage, partially offset by favorable changes in our unrealized commodity mark-to-market derivative positions of $109.7 million and cost savings initiatives.
Previous wording
MG&A expenses decreased 0.9% for the three months ended June 30, 2024 compared to prior year, primarily due to lower incentive compensation expense and favorable foreign currency impacts, partially offset by increased marketing investment to support our brands and innovations.
Current wording
MG&A expenses decreased 1.4% for the nine months ended September 30, 2024 compared to prior year, primarily due to lower incentive compensation expense, partially offset by increased marketing investment to support our brands and innovations.
Previous wording
See Part I.—Item 1. Financial Statements, Note 12, "Other Operating Income (Expense), net" for detail of our other operating income (expense), net.
Current wording
During the three months ended September 30, 2024, we made the decision to wind down or sell certain of our U.S. craft businesses and related facilities and recorded employee-related and asset abandonment charges, including accelerated depreciation in excess of normal depreciation. We recognized a loss of $41.1 million related to the disposal of the sold businesses. See Part I.—Item 1. Financial Statements, Note 12, "Other Operating Income (Expense), net" for detail of our other operating income (expense), net.
Previous wording
Our 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.
Current wording
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.
Previous wording
(2)Excludes royalty volume of 0.578 million hectoliters and 1.169 million hectoliters for the three and six months ended June 30, 2024, respectively, and excludes royalty volume of 0.645 million hectoliters and 1.263 million hectoliters for the three and six months ended June 30, 2023, respectively.
Current wording
(2)Excludes royalty volume of 0.626 million hectoliters and 1.795 million hectoliters for the three and nine months ended September 30, 2024, respectively, and excludes royalty volume of 0.692 million hectoliters and 1.955 million hectoliters for the three and nine months ended September 30, 2023, respectively.
Previous wording
Financial volumes were flat for the six months ended June 30, 2024, compared to prior year, primarily due to an increase in U.S. volumes driven by favorable shipment timing to increase distributor inventory levels ahead of and during a brewery strike which ended in late May, offset by lower contract brewing volumes related to the wind down of a contract brewing arrangement leading up to the termination by the end of 2024.
Current wording
Financial volumes decreased 15.6% for the three months ended September 30, 2024, compared to prior year, primarily due to the timing of U.S. shipments as well as lower U.S. volumes due to the macroeconomic environment resulting in industry softness. In addition, of the 15.6% decrease, 260bps relates to lower contract brewing volumes in the U.S. related to the wind down of a contract brewing arrangement leading up to the termination by the end of 2024.
Previous wording
Financial volumes decreased 5.6% for the three months ended June 30, 2024, compared to prior year, primarily due to lower contract brewing volumes in the U.S. related to the wind down of a contract brewing arrangement leading up to the termination by the end of 2024, partially offset by favorable U.S. shipment timing.
Current wording
Financial volumes decreased 5.7% for the nine months ended September 30, 2024, compared to prior year, primarily due to a 300bps impact relating to lower contract brewing volumes related to the wind down of a contract brewing arrangement leading up to the termination by the end of 2024 and lower U.S. volumes due to the macroeconomic environment resulting in industry softness.
Previous wording
Price and sales mix favorably impacted net sales for the three months ended June 30, 2024, compared to prior year, by 4.1% primarily due to increased net pricing and favorable sales mix as a result of lower contract brewing volumes.
Current wording
Price and sales mix favorably impacted net sales for the nine months ended September 30, 2024, compared to prior year, by 4.1% primarily due to increased net pricing and favorable sales mix as a result of lower contract brewing volumes.
Previous wording
(2)Excludes royalty volume of 0.325 million hectoliters and 0.543 million hectoliters for the three and six months ended June 30, 2024, respectively, and excludes royalty volume of 0.250 million hectoliters and 0.406 million hectoliters for the three and six months ended June 30, 2023, respectively.
Current wording
(2)Excludes royalty volume of 0.356 million hectoliters and 0.899 million hectoliters for the three and nine months ended September 30, 2024, respectively, and excludes royalty volume of 0.291 million hectoliters and 0.697 million hectoliters for the three and nine months ended September 30, 2023, respectively.
Previous wording
Financial volumes increased 0.3% for the three months ended June 30, 2024, compared to prior year, primarily due to Central and Eastern Europe volume growth driven by the favorable performance of our core power brands and above premium brands and the easing inflationary pressures on the consumer, partially offset by lower volumes in Western Europe due to soft market demand and high promotional activity from the competition.
Current wording
Financial volumes decreased 3.0% for the three months ended September 30, 2024, compared to prior year, primarily driven by lower volumes in Western Europe due to soft market demand and high promotional activity from the competition.
Previous wording
Price and sales mix favorably impacted net sales for the three months ended June 30, 2024, compared to prior year, by 5.8%, primarily due to increased net pricing and favorable sales mix driven by premiumization.
Current wording
Price and sales mix favorably impacted net sales for the three months ended September 30, 2024, compared to prior year, by 6.8%, primarily due to increased net pricing and favorable sales mix driven by premiumization and favorable channel mix.
Previous wording
Financial volumes increased 0.1% for the six months ended June 30, 2024, compared to prior year, primarily due to Central and Eastern Europe volume growth driven by the favorable performance of our core power brands and our above premium brands and the easing inflationary pressures on the consumer, partially offset by lower volumes in Western Europe due to soft market demand and high promotional activity from the competition.
Current wording
Financial volumes decreased 1.0% for the nine months ended September 30, 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 core power brands and our above premium brands and the easing inflationary pressures on the consumer.
Previous wording
Price and sales mix favorably impacted net sales for the six months ended June 30, 2024, compared to prior year, by 6.7%, primarily due to increased net pricing to customers and favorable sales mix driven by premiumization.
Current wording
Price and sales mix favorably impacted net sales for the nine months ended September 30, 2024, compared to prior year, by 6.7%, primarily due to increased net pricing and favorable sales mix driven by premiumization and favorable channel mix.
Previous wording
Income before income taxes improved 26.5% and 80.9% for the three and six months ended June 30, 2024, respectively, compared to the prior year, primarily due to increased net pricing, favorable sales mix and cost savings initiatives, partially offset by higher MG&A expense and unfavorable foreign currency impacts. Higher MG&A expense was primarily due to increased marketing to support our brands and innovations as well as cost inflation.
Current wording
Income before income taxes improved 14.6% for the nine months ended September 30, 2024, compared to prior year, primarily due to increased net pricing, favorable sales mix and cost savings initiatives, partially offset by higher interest expense as a result of the adjustment of $45.8 million to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout, higher MG&A expense and lower financial volumes. Higher MG&A was due to increased marketing to support our brands and innovations as well as cost inflation.
Previous wording
We 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 and realized and unrealized changes in fair value on 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. Only the service cost component of net periodic pension and OPEB cost is reported within each operating segment, and all other components remain unallocated.
Current wording
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 and realized and unrealized changes in fair value on 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. Only the service cost component of net periodic pension and OPEB cost is reported within each operating segment, and all other components remain unallocated.
Previous wording
The unrealized changes in fair value on our commodity derivatives, which are economic hedges, make up substantially all of the activity presented within cost of goods sold in the table above for the three and six months ended June 30, 2024 and June 30, 2023, respectively. As the exposure we are managing is realized, we reclassify the gain or loss on our commodity derivatives to the segment in which the underlying exposure resides, allowing our segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility. See Part I.—Item 1. Financial Statements, Note 8, "Derivative Instruments and Hedging Activities" for further information.
Current wording
The unrealized changes in fair value on our commodity derivatives, which are economic hedges, make up substantially all of the activity presented within cost of goods sold in the table above for the three and nine months ended September 30, 2024 and September 30, 2023, respectively. As the exposure we are managing is realized, we reclassify the gain or loss on our commodity derivatives to the segment in which the underlying exposure resides, allowing our segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility. See Part I.—Item 1. Financial Statements, Note 8, "Derivative Instruments and Hedging Activities" for further information.
Previous wording
Total non-operating expense, net improved 14.6% for the six months ended June 30, 2024, compared to prior year, primarily due to lower net interest expense as a result of higher interest income from higher cash balances as well as higher pension and OPEB non-service net benefit, partially offset by unfavorable transactional foreign currency impacts.
Current wording
Total non-operating expense, net increased 4.8% for the nine months ended September 30, 2024, respectively, compared to prior year, primarily due to a settlement loss of $34.0 million recorded in the third quarter of 2024 as a result of Canadian pension plan annuity purchases, partially offset by lower net interest expense as a result of higher interest income from higher cash balances and higher pension and OPEB non-service benefits.
Previous wording
While a significant portion of our cash flows from operating activities are generated within the U.S., our cash balances include cash held outside the U.S. and in currencies other than the USD. Excluding euro-denominated cash and cash equivalents held for the repayment of our EUR 800 million 1.25% notes in July 2024, as of June 30, 2024, approximately 58% of our cash and cash equivalents were located outside the U.S., largely denominated in foreign currencies. Fluctuations in foreign currency exchange rates have had and may continue to have a material impact on these foreign cash balances. Cash balances in foreign countries are often subject to additional restrictions. We may, therefore, have difficulties timely repatriating cash held outside the U.S., and such repatriation may be subject to tax. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. and other countries and may adversely affect our liquidity. To the extent necessary, we accrue for tax consequences on the earnings of our foreign subsidiaries as they are earned. We may utilize tax planning and financing strategies in an effort to ensure that our worldwide cash is available in the locations in which it is needed. We periodically review and evaluate these plans and strategies, including externally committed and non-committed credit agreements accessible by our Company and each of our operating subsidiaries. We believe these financing arrangements, along with cash flows from operating activities within the U.S., are sufficient to fund our current cash needs in the U.S.
Current wording
While a significant portion of our cash flows from operating activities are generated within the U.S., our cash balances include cash held outside the U.S. and in currencies other than the USD. As of September 30, 2024, approximately 58% of our cash and cash equivalents were located outside the U.S., largely denominated in foreign currencies. Fluctuations in foreign currency exchange rates have had and may continue to have a material impact on these foreign cash balances. Cash balances in foreign countries are often subject to additional restrictions. We may, therefore, have difficulties timely repatriating cash held outside the U.S., and such repatriation may be subject to tax. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. and other countries and may adversely affect our liquidity. To the extent necessary, we accrue for tax consequences on the earnings of our foreign subsidiaries as they are earned. We may utilize tax planning and financing strategies in an effort to ensure that our worldwide cash is available in the locations in which it is needed. We periodically review and evaluate these plans and strategies, including externally committed and non-committed credit agreements accessible by our Company and each of our operating subsidiaries. We believe these financing arrangements, along with cash flows from operating activities within the U.S., are sufficient to fund our current cash needs in the U.S.
Previous wording
Net cash provided by operating activities of $894.6 million for the six months ended June 30, 2024 increased $0.2 million compared to $894.4 million for the six months ended June 30, 2023. The increase in net cash provided by operating activities was primarily due to higher net income offset by lower non-cash expense and the unfavorable change in working capital. The unfavorable change in working capital was primarily driven by the timing of cash receipts as well as higher payments for annual incentive compensation.
Current wording
Net cash provided by operating activities of $1,415.8 million for the nine months ended September 30, 2024 decreased $188.7 million compared to $1,604.5 million for the nine months ended September 30, 2023. The decrease in net cash provided by operating activities was primarily due to the unfavorable timing of working capital, partially offset by higher net income adjusted for non-cash addbacks and the timing of income taxes paid. The unfavorable timing of working capital was primarily driven by the timing of cash paid for our payables as well as higher payments for 2023 annual incentive compensation, partially offset by the timing of cash receipts.
Previous wording
Net cash used in investing activities of $381.4 million for the six months ended June 30, 2024 increased $40.8 million compared to $340.6 million for the six months ended June 30, 2023. The increase in net cash used in investing activities was primarily due to higher capital expenditures resulting from the timing of capital projects.
Current wording
Net cash used in investing activities of $530.3 million for the nine months ended September 30, 2024 decreased $138.2 million compared to $668.5 million for the nine months ended September 30, 2023. The decrease in net cash used in investing activities was primarily due to cash paid in the prior year for an acquisition, partially offset by higher capital expenditures as a result of the timing of capital projects.
Previous wording
Net cash provided by financing activities of $285.6 million for the six months ended June 30, 2024 improved $487.5 million compared to net cash used in financing activities of $201.9 million for the six months ended June 30, 2023. The improvement in net cash provided by financing activities was primarily due to the issuance of new EUR 800 million 3.8% notes due 2032, partially offset by higher Class B common stock repurchases.
Current wording
Net cash used in financing activities of $744.8 million for the nine months ended September 30, 2024 increased $16.2 million compared to $728.6 million for the nine months ended September 30, 2023. The increase in net cash used in financing activities was primarily due to higher Class B common stock share repurchases and higher dividend payments, partially offset by lower net debt repayments.
Previous wording
As of June 30, 2024, we had total cash and cash equivalents of $1,647.3 million, compared to $868.9 million as of December 31, 2023 and $960.9 million as of June 30, 2023. The increase in cash and cash equivalents from December 31, 2023 was primarily due to the net cash provided by operating activities, as well as the proceeds from the issuance of new EUR 800 million 3.8% notes due in 2032 partially offset by capital expenditures, Class B common stock share repurchases and dividends paid. The increase in cash and cash equivalents from June 30, 2023 was primarily due to the net cash provided by operating activities, as well as the issuance of new EUR 800 million 3.8% notes due in 2032, partially offset by capital expenditures, Class B common stock repurchases, net debt repayments, including the repayment of our CAD 500 million 2.84% notes which matured in July 2023, dividend payments and cash paid for acquisitions.
Current wording
As of September 30, 2024, we had total cash and cash equivalents of $1,021.7 million, compared to $868.9 million as of December 31, 2023 and $801.7 million as of September 30, 2023. The increase in cash and cash equivalents from December 31, 2023 and September 30, 2023 was primarily due to the net cash provided by operating activities, as well as the issuance of new EUR 800 million 3.8% senior notes due 2032, partially offset by net debt repayments, including the repayment of our EUR 800 million 1.25% senior notes which matured in July 2024, capital expenditures, Class B common stock share repurchases and dividend payments.
Previous wording
We repaid our EUR 800 million 1.25% notes upon their maturity on July 15, 2024 using the cash proceeds from our EUR 800 million 3.8% notes issued on May 29, 2024 and cash on hand. Refer to Part I.—Item 1. Financial Statements, Note 7, "Debt" for details.
Current wording
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 3.8% senior notes issued on May 29, 2024 and cash on hand. Refer to Part I.—Item 1. Financial Statements, Note 7, "Debt" for details.
Previous wording
There were no material changes to our material cash requirements from contractual and other obligations outside the ordinary course of business or due to factors similar in nature to inflation, changing prices on operations or changes in the remaining terms of the contracts since December 31, 2023, as reported in Part II.— Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, "Material Cash Requirements from Contractual and Other Obligations" in our Annual Report.
Current wording
There were no material changes, except for the cash payment required for the mandatory purchase of the remaining 49.9% ownership interest in Cobra U.K. of $89 million which was made on October 21, 2024, to our material cash requirements from contractual and other obligations outside the ordinary course of business or due to factors similar in nature to inflation, changing prices on operations or changes in the remaining terms of the contracts since December 31, 2023, as reported in Part II.— Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, "Material Cash Requirements from Contractual and Other Obligations" in our Annual Report.
Previous wording
Our current long-term credit ratings are BBB/Stable Outlook, Baa2/Positive Outlook and BBB/Stable Outlook with Standard & Poor's, Moody's and DBRS, respectively. Our short-term credit ratings are A-2, Prime-2 and R-2, respectively. A securities rating is not a recommendation to buy, sell or hold securities, and it may be revised or withdrawn at any time by the applicable rating agency.
Current wording
Our current long-term credit ratings are BBB/Stable Outlook, Baa1/Stable Outlook and BBB/Stable Outlook with Standard & Poor's, Moody's and DBRS, respectively. Our short-term credit ratings are A-2, Prime-2 and R-2, respectively. A securities rating is not a recommendation to buy, sell or hold securities, and it may be revised or withdrawn at any time by the applicable rating agency.
Previous wording
We incurred $299.5 million, and paid $392.2 million, for capital improvement projects worldwide in the six months ended June 30, 2024, excluding capital spending by equity method joint ventures, representing a decrease of $3.2 million from the $302.7 million of capital expenditures incurred in the six months ended June 30, 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.
Current wording
We incurred $424.2 million and paid $563.0 million, for capital improvement projects worldwide in the nine months ended September 30, 2024, excluding capital spending by equity method joint ventures, representing a decrease of $4.2 million from the $428.4 million of capital expenditures incurred in the nine months ended September 30, 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.
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