MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(IN MILLIONS)

(UNAUDITED)


	Three Months Ended
	June 30, 2019
	Parent Issuer		Subsidiary Guarantors		Subsidiary Non Guarantors		Eliminations		Consolidated
Sales	$	38.3	$	2,765.8	$	988.9	$	(173.0)	$	3,620.0
Excise taxes	—		(380.2)		(291.5)		—		(671.7)
Net sales	38.3		2,385.6		697.4		(173.0)		2,948.3
Cost of goods sold	(2.4)		(1,398.4)		(479.9)		120.9		(1,759.8)
Gross profit	35.9		987.2		217.5		(52.1)		1,188.5
Marketing, general and administrative expenses	(71.5)		(565.6)		(184.7)		52.1		(769.7)
Special items, net	—		52.0		(2.1)		—		49.9
Equity income (loss) in subsidiaries	374.5		(66.7)		85.0		(392.8)		—
Operating income (loss)	338.9		406.9		115.7		(392.8)		468.7
Interest income (expense), net	(76.2)		88.3		(77.7)		—		(65.6)
Other pension and postretirement benefits (costs), net	—		1.1		7.3		—		8.4
Other income (expense), net	(0.1)		22.5		(33.3)		—		(10.9)
Income (loss) before income taxes	262.6		518.8		12.0		(392.8)		400.6
Income tax benefit (expense)	66.8		(143.8)		6.6		—		(70.4)
Net income (loss)	329.4		375.0		18.6		(392.8)		330.2
Net (income) loss attributable to noncontrolling interests	—		—		(0.8)		—		(0.8)
Net income (loss) attributable to MCBC	$	329.4	$	375.0	$	17.8	$	(392.8)	$	329.4

Comprehensive income (loss) attributable to MCBC	$	333.5	$	424.0	$	1.1	$	(425.1)	$	333.5

Three Months Ended
March 31, 2019
Parent
Issuer
Subsidiary
Guarantors

Subsidiary
Non
Guarantors
Eliminations Consolidated
Sales $ 26.3
$ 2,209.3
$ 694.9
$ (130.4 ) $ 2,800.1
Excise taxes —
(284.7 ) (212.1 ) —
(496.8 )
Net sales 26.3
1,924.6
482.8
(130.4 ) 2,303.3
Cost of goods sold (1.5 ) (1,135.3 ) (365.6 ) 89.4
(1,413.0 )
Gross profit 24.8
789.3
117.2
(41.0 ) 890.3
Marketing, general and administrative expenses (71.6 ) (457.9 ) (166.7 ) 41.0
(655.2 )
Special items, net (0.4 ) (8.4 ) (4.2 ) —
(13.0 )
Equity income (loss) in subsidiaries 245.3
(63.0 ) (5.9 ) (176.4 ) —
Operating income (loss) 198.1
260.0
(59.6 ) (176.4 ) 222.1
Interest income (expense), net (77.4 ) 80.2
(76.1 ) —
(73.3 )
Other pension and postretirement benefits (costs), net —
1.2
7.4
—
8.6
Other income (expense), net —
(29.9 ) 53.8
—
23.9
Income (loss) before income taxes 120.7
311.5
(74.5 ) (176.4 ) 181.3
Income tax benefit (expense) 30.7
(66.0 ) 3.1
—
(32.2 )
Net income (loss) 151.4
245.5
(71.4 ) (176.4 ) 149.1
Net (income) loss attributable to noncontrolling interests —
—
2.3
—
2.3
Net income (loss) attributable to MCBC $ 151.4
$ 245.5
$ (69.1 ) $ (176.4 ) $ 151.4
Comprehensive income (loss) attributable to MCBC $ 193.5
$ 270.8
$ (64.4 ) $ (206.4 ) $ 193.5

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING ~~BALANCE SHEET~~STATEMENT OF OPERATIONS

(IN MILLIONS)

(UNAUDITED)

As of
March 31, 2020
Parent
Issuer
Subsidiary
Guarantors

Subsidiary
Non
Guarantors
Eliminations Consolidated
Assets
Current assets:
Cash and cash equivalents $ 297.3
$ 98.3
$ 270.5
$ —
$ 666.1
Accounts receivable, net —
353.2
284.6
—
637.8
Other receivables, net 16.1
59.1
31.9
—
107.1
Inventories, net —
513.2
168.3
—
681.5
Other current assets, net —
168.9
111.1
—
280.0
Intercompany accounts receivable 150.6
303.5
100.3
(554.4 ) —
Total current assets 464.0
1,496.2
966.7
(554.4 ) 2,372.5
Properties, net 10.3
3,207.7
1,175.6
—
4,393.6
Goodwill —
6,129.9
1,409.1
—
7,539.0
Other intangibles, net 3.5
11,515.1
1,786.5
—
13,305.1
Net investment in and advances to subsidiaries 20,890.1
8,104.6
4,228.2
(33,222.9 ) —
Other assets 151.2
363.2
395.0
(58.5 ) 850.9
Total assets $ 21,519.1
$ 30,816.7
$ 9,961.1
$ (33,835.8 ) $ 28,461.1
Liabilities and equity
Current liabilities:
Accounts payable and other current liabilities $ 114.7
$ 1,662.8
$ 780.9
$ —
$ 2,558.4
Current portion of long-term debt and short-term borrowings 1,025.5
386.1
33.4
—
1,445.0
Intercompany accounts payable 123.8
201.4
229.2
(554.4 ) —
Total current liabilities 1,264.0
2,250.3
1,043.5
(554.4 ) 4,003.4
Long-term debt 7,236.5
720.8
74.8
—
8,032.1
Pension and postretirement benefits 7.4
673.1
13.4
—
693.9
Deferred tax liabilities —
1,529.3
713.4
(58.5 ) 2,184.2
Other liabilities 325.7
185.8
90.0
—
601.5
Intercompany notes payable —
3,555.7
3,590.1
(7,145.8 ) —
Total liabilities 8,833.6
8,915.0
5,525.2
(7,758.7 ) 15,515.1
MCBC stockholders' equity 12,686.6
25,490.7
7,732.2
(33,222.9 ) 12,686.6
Intercompany notes receivable (1.1 ) (3,589.0 ) (3,555.7 ) 7,145.8
—
Total stockholders' equity 12,685.5
21,901.7
4,176.5
(26,077.1 ) 12,686.6
Noncontrolling interests —
—
259.4
—
259.4
Total equity 12,685.5
21,901.7
4,435.9
(26,077.1 ) 12,946.0
Total liabilities and equity $ 21,519.1
$ 30,816.7
$ 9,961.1
$ (33,835.8 ) $ 28,461.1


	Six Months Ended
	June 30, 2020
	Parent Issuer		Subsidiary Guarantors		Subsidiary Non Guarantors		Eliminations		Consolidated
Sales	$	5.7	$	4,568.4	$	1,245.0	$	(251.5)	$	5,567.6
Excise taxes	—		(610.0)		(351.4)		—		(961.4)
Net sales	5.7		3,958.4		893.6		(251.5)		4,606.2
Cost of goods sold	(0.9)		(2,455.5)		(719.3)		240.1		(2,935.6)
Gross profit	4.8		1,502.9		174.3		(11.4)		1,670.6
Marketing, general and administrative expenses	(63.1)		(825.3)		(277.2)		11.4		(1,154.2)
Special items, net	(15.4)		(127.1)		(8.4)		—		(150.9)
Equity income (loss) in subsidiaries	241.1		(233.3)		(3.7)		(4.1)		—
Operating income (loss)	167.4		317.2		(115.0)		(4.1)		365.5
Interest income (expense), net	(120.4)		14.9		(33.1)		—		(138.6)
Other pension and postretirement benefits (costs), net	(0.3)		10.2		5.2		—		15.1
Other income (expense), net	(0.3)		(0.1)		1.4		—		1.0
Income (loss) before income taxes	46.4		342.2		(141.5)		(4.1)		243.0
Income tax benefit (expense)	31.6		(99.7)		(93.1)		—		(161.2)
Net income (loss)	78.0		242.5		(234.6)		(4.1)		81.8
Net (income) loss attributable to noncontrolling interests	—		—		(3.8)		—		(3.8)
Net income (loss) attributable to MCBC	$	78.0	$	242.5	$	(238.4)	$	(4.1)	$	78.0
Comprehensive income (loss) attributable to MCBC	$	(305.4)	$	1.8	$	(523.2)	$	521.4	$	(305.4)

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(IN MILLIONS)

(UNAUDITED)


	Six Months Ended
	June 30, 2019
	Parent Issuer		Subsidiary Guarantors		Subsidiary Non Guarantors		Eliminations		Consolidated
Sales	$	64.6	$	4,975.1	$	1,683.8	$	(303.4)	$	6,420.1
Excise taxes	—		(664.9)		(503.6)		—		(1,168.5)
Net sales	64.6		4,310.2		1,180.2		(303.4)		5,251.6
Cost of goods sold	(3.9)		(2,533.7)		(845.5)		210.3		(3,172.8)
Gross profit	60.7		1,776.5		334.7		(93.1)		2,078.8
Marketing, general and administrative expenses	(143.1)		(1,023.5)		(351.4)		93.1		(1,424.9)
Special items, net	(0.4)		43.6		(6.3)		—		36.9
Equity income (loss) in subsidiaries	619.8		(129.7)		79.1		(569.2)		—
Operating income (loss)	537.0		666.9		56.1		(569.2)		690.8
Interest income (expense), net	(153.6)		168.5		(153.8)		—		(138.9)
Other pension and postretirement benefits (costs), net	—		2.3		14.7		—		17.0
Other income (expense), net	(0.1)		(7.4)		20.5		—		13.0
Income (loss) before income taxes	383.3		830.3		(62.5)		(569.2)		581.9
Income tax benefit (expense)	97.5		(209.8)		9.7		—		(102.6)
Net income (loss)	480.8		620.5		(52.8)		(569.2)		479.3
Net (income) loss attributable to noncontrolling interests	—		—		1.5		—		1.5
Net income (loss) attributable to MCBC	$	480.8	$	620.5	$	(51.3)	$	(569.2)	$	480.8
Comprehensive income attributable to MCBC	$	527.0	$	694.8	$	(63.3)	$	(631.5)	$	527.0

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

(IN MILLIONS)

(UNAUDITED)


	As of
	June 30, 2020
	Parent Issuer		Subsidiary Guarantors		Subsidiary Non Guarantors		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	217.5	$	119.1	$	444.2	$	—	$	780.8
Accounts receivable, net	—		406.7		307.0		—		713.7
Other receivables, net	4.5		96.8		27.8		—		129.1
Inventories, net	—		470.6		168.5		—		639.1
Other current assets, net	1.4		172.5		106.1		—		280.0
Intercompany accounts receivable	123.4		1,149.1		105.5		(1,378.0)		—
Total current assets	346.8		2,414.8		1,159.1		(1,378.0)		2,542.7
Properties, net	6.4		3,161.7		1,175.9		—		4,344.0
Goodwill	—		6,137.1		1,424.7		—		7,561.8
Other intangibles, net	3.0		11,556.6		1,824.4		—		13,384.0

Net investment in and advances to subsidiaries	21,339.2		8,006.1		4,352.5		(33,697.8)		—

Other assets	142.0		346.7		400.9		(83.3)		806.3
Total assets	$	21,837.4	$	31,623.0	$	10,337.5	$	(35,159.1)	$	28,638.8
Liabilities and equity
Current liabilities:
Accounts payable and other current liabilities	$	133.8	$	2,001.5	$	1,057.4	$	—	$	3,192.7
Current portion of long-term debt and short-term borrowings	199.9		399.2		13.9		—		613.0
Intercompany accounts payable	920.8		167.9		289.3		(1,378.0)		—
Total current liabilities	1,254.5		2,568.6		1,360.6		(1,378.0)		3,805.7
Long-term debt	7,253.3		746.2		74.2		—		8,073.7
Pension and postretirement benefits	7.5		673.8		13.4		—		694.7

Deferred tax liabilities	—		1,569.6		732.2		(83.3)		2,218.5
Other liabilities	320.3		166.5		91.4		—		578.2
Intercompany notes payable	—		3,683.0		3,726.2		(7,409.2)		—
Total liabilities	8,835.6		9,407.7		5,998.0		(8,870.5)		15,370.8
MCBC stockholders' equity	13,002.9		25,940.4		7,757.4		(33,697.8)		13,002.9
Intercompany notes receivable	(1.1)		(3,725.1)		(3,683.0)		7,409.2		—
Total stockholders' equity	13,001.8		22,215.3		4,074.4		(26,288.6)		13,002.9
Noncontrolling interests	—		—		265.1		—		265.1
Total equity	13,001.8		22,215.3		4,339.5		(26,288.6)		13,268.0
Total liabilities and equity	$	21,837.4	$	31,623.0	$	10,337.5	$	(35,159.1)	$	28,638.8

As of
December 31, 2019
Parent
Issuer
Subsidiary
Guarantors

Subsidiary
Non
Guarantors
Eliminations Consolidated
Assets
Current assets:
Cash and cash equivalents $ 15.7
$ 119.6
$ 388.1
$ —
$ 523.4
Accounts receivable, net —
396.3
318.5
—
714.8
Other receivables, net 14.4
58.4
32.7
—
105.5
Inventories, net —
449.1
166.8
—
615.9
Other current assets, net 3.0
126.0
95.8
—
224.8
Intercompany accounts receivable 94.1
190.0
14.9
(299.0 ) —
Total current assets 127.2
1,339.4
1,016.8
(299.0 ) 2,184.4
Properties, net 19.8
3,294.7
1,232.0
—
4,546.5
Goodwill —
6,146.5
1,484.9
—
7,631.4
Other intangibles, net 4.0
11,750.6
1,901.4
—
13,656.0
Net investment in and advances to subsidiaries 21,200.6
8,364.9
4,497.9
(34,063.4 ) —
Other assets 137.2
364.4
417.9
(78.0 ) 841.5
Total assets $ 21,488.8
$ 31,260.5
$ 10,550.9
$ (34,440.4 ) $ 28,859.8
Liabilities and equity
Current liabilities:
Accounts payable and other current liabilities $ 170.7
$ 1,722.0
$ 874.6
$ —
$ 2,767.3
Current portion of long-term debt and short-term borrowings 499.7
415.1
13.4
—
928.2
Intercompany accounts payable —
150.7
148.3
(299.0 ) —
Total current liabilities 670.4
2,287.8
1,036.3
(299.0 ) 3,695.5
Long-term debt 7,250.3
779.1
80.1
—
8,109.5
Pension and postretirement benefits 7.2
695.5
13.9
—
716.6
Deferred tax liabilities —
1,593.3
743.3
(78.0 ) 2,258.6
Other liabilities 142.6
172.2
91.7
—
406.5
Intercompany notes payable —
—
65.0
(65.0 ) —
Total liabilities 8,070.5
5,527.9
2,030.3
(442.0 ) 15,186.7
MCBC stockholders' equity 13,419.4
25,796.5
8,266.9
(34,063.4 ) 13,419.4
Intercompany notes receivable (1.1 ) (63.9 ) —
65.0
—
Total stockholders' equity 13,418.3
25,732.6
8,266.9
(33,998.4 ) 13,419.4
Noncontrolling interests —
—
253.7
—
253.7
Total equity 13,418.3
25,732.6
8,520.6
(33,998.4 ) 13,673.1
Total liabilities and equity $ 21,488.8
$ 31,260.5
$ 10,550.9
$ (34,440.4 ) $ 28,859.8

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

(IN MILLIONS)

(UNAUDITED)


	As of
	December 31, 2019
	Parent Issuer		Subsidiary Guarantors		Subsidiary Non Guarantors		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	15.7	$	119.6	$	388.1	$	—	$	523.4
Accounts receivable, net	—		396.3		318.5		—		714.8
Other receivables, net	14.4		58.4		32.7		—		105.5
Inventories, net	—		449.1		166.8		—		615.9
Other current assets, net	3.0		126.0		95.8		—		224.8
Intercompany accounts receivable	94.1		190.0		14.9		(299.0)		—
Total current assets	127.2		1,339.4		1,016.8		(299.0)		2,184.4
Properties, net	19.8		3,294.7		1,232.0		—		4,546.5
Goodwill	—		6,146.5		1,484.9		—		7,631.4
Other intangibles, net	4.0		11,750.6		1,901.4		—		13,656.0

Net investment in and advances to subsidiaries	21,200.6		8,364.9		4,497.9		(34,063.4)		—

Other assets	137.2		364.4		417.9		(78.0)		841.5
Total assets	$	21,488.8	$	31,260.5	$	10,550.9	$	(34,440.4)	$	28,859.8
Liabilities and equity
Current liabilities:
Accounts payable and other current liabilities	$	170.7	$	1,722.0	$	874.6	$	—	$	2,767.3
Current portion of long-term debt and short-term borrowings	499.7		415.1		13.4		—		928.2
Intercompany accounts payable	—		150.7		148.3		(299.0)		—
Total current liabilities	670.4		2,287.8		1,036.3		(299.0)		3,695.5
Long-term debt	7,250.3		779.1		80.1		—		8,109.5
Pension and postretirement benefits	7.2		695.5		13.9		—		716.6

Deferred tax liabilities	—		1,593.3		743.3		(78.0)		2,258.6
Other liabilities	142.6		172.2		91.7		—		406.5
Intercompany notes payable	—		—		65.0		(65.0)		—
Total liabilities	8,070.5		5,527.9		2,030.3		(442.0)		15,186.7
MCBC stockholders' equity	13,419.4		25,796.5		8,266.9		(34,063.4)		13,419.4
Intercompany notes receivable	(1.1)		(63.9)		—		65.0		—
Total stockholders' equity	13,418.3		25,732.6		8,266.9		(33,998.4)		13,419.4
Noncontrolling interests	—		—		253.7		—		253.7
Total equity	13,418.3		25,732.6		8,520.6		(33,998.4)		13,673.1
Total liabilities and equity	$	21,488.8	$	31,260.5	$	10,550.9	$	(34,440.4)	$	28,859.8

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(IN MILLIONS)

(UNAUDITED)


	Six Months Ended
	June 30, 2020
	Parent Issuer		Subsidiary Guarantors		Subsidiary Non Guarantors		Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	690.7	$	262.9	$	106.3	$	—	$	1,059.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties	(4.8)		(255.3)		(85.0)		—		(345.1)
Proceeds from sales of properties and other assets	—		1.4		1.6		—		3.0


Other	3.2		(4.2)		1.6		—		0.6
Net intercompany investing activity	(73.2)		(3,626.6)		(3,587.7)		7,287.5		—
Net cash provided by (used in) investing activities	(74.8)		(3,884.7)		(3,669.5)		7,287.5		(341.5)
CASH FLOWS FROM FINANCING ACTIVITIES:

Exercise of stock options under equity compensation plans	4.0		—		—		—		4.0

Dividends paid	(115.3)		—		(10.0)		—		(125.3)
Payments on debt and borrowings	(500.0)		(0.2)		(7.4)		—		(507.6)
Proceeds on debt and borrowings	—		—		1.0		—		1.0
Net proceeds from (payments on) revolving credit facilities and commercial paper	199.8		—		—		—		199.8
Change in overdraft balances and other	(2.6)		(34.5)		15.4		—		(21.7)
Net intercompany financing activity	—		3,659.7		3,627.8		(7,287.5)		—
Net cash provided by (used in) financing activities	(414.1)		3,625.0		3,626.8		(7,287.5)		(449.8)
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and cash equivalents	201.8		3.2		63.6		—		268.6
Effect of foreign exchange rate changes on cash and cash equivalents	—		(3.7)		(7.5)		—		(11.2)
Balance at beginning of year	15.7		119.6		388.1		—		523.4
Balance at end of period	$	217.5	$	119.1	$	444.2	$	—	$	780.8

Three Months Ended
March 31, 2020
Parent
Issuer
Subsidiary
Guarantors

Subsidiary
Non
Guarantors
Eliminations Consolidated
Net cash provided by (used in) operating activities $ (60.8 ) $ 145.8
$ (103.1 ) $ —
$ (18.1 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties (4.0 ) (170.1 ) (51.0 ) —
(225.1 )
Proceeds from sales of properties and other assets —
0.5
1.1
—
1.6
Other 3.2
0.1
0.2
—
3.5
Net intercompany investing activity (72.0 ) (3,617.1 ) (3,587.7 ) 7,276.8
—
Net cash provided by (used in) investing activities (72.8 ) (3,786.6 ) (3,637.4 ) 7,276.8
(220.0 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of stock options under equity compensation plans 4.0
—
—
—
4.0
Dividends paid (113.4 ) —
(10.0 ) —
(123.4 )
Payments on debt and borrowings (500.0 ) (0.1 ) (2.8 ) —
(502.9 )
Proceeds on debt and borrowings —
—
1.0
—
1.0
Net proceeds from (payments on) revolving credit facilities and commercial paper 1,025.5
—
—
—
1,025.5
Change in overdraft balances and other (0.9 ) (34.3 ) 29.7
—
(5.5 )
Net intercompany financing activity —
3,659.7
3,617.1
(7,276.8 ) —
Net cash provided by (used in) financing activities 415.2
3,625.3
3,635.0
(7,276.8 ) 398.7
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and cash equivalents 281.6
(15.5 ) (105.5 ) —
160.6
Effect of foreign exchange rate changes on cash and cash equivalents —
(5.8 ) (12.1 ) —
(17.9 )
Balance at beginning of year 15.7
119.6
388.1
—
523.4
Balance at end of period $ 297.3
$ 98.3
$ 270.5
$ —
$ 666.1

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(IN MILLIONS)

(UNAUDITED)


	Six Months Ended
	June 30, 2019
	Parent Issuer		Subsidiary Guarantors		Subsidiary Non Guarantors		Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	663.1	$	217.6	$	(23.2)	$	(29.5)	$	828.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties	(5.1)		(186.0)		(119.4)		—		(310.5)
Proceeds from sales of properties and other assets	—		96.5		3.4		—		99.9



Other	46.2		0.2		(3.6)		—		42.8
Net intercompany investing activity	20.0		(9.5)		48.4		(58.9)		—
Net cash provided by (used in) investing activities	61.1		(98.8)		(71.2)		(58.9)		(167.8)
CASH FLOWS FROM FINANCING ACTIVITIES:

Exercise of stock options under equity compensation plans	1.4		—		—		—		1.4
Dividends paid	(163.0)		(29.5)		(14.4)		29.5		(177.4)

Payments on debt and borrowings	(1,066.3)		(0.2)		(4.3)		—		(1,070.8)

Net proceeds from (payments on) revolving credit facilities and commercial paper	—		—		(1.9)		—		(1.9)
Change in overdraft balances and other	(2.9)		(9.6)		25.3		—		12.8
Net intercompany financing activity	—		(69.3)		10.4		58.9		—
Net cash provided by (used in) financing activities	(1,230.8)		(108.6)		15.1		88.4		(1,235.9)
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and cash equivalents	(506.6)		10.2		(79.3)		—		(575.7)
Effect of foreign exchange rate changes on cash and cash equivalents	3.0		4.2		0.8		—		8.0
Balance at beginning of year	515.8		156.1		386.0		—		1,057.9
Balance at end of period	$	12.2	$	170.5	$	307.5	$	—	$	490.2

Three Months Ended
March 31, 2019
Parent
Issuer
Subsidiary
Guarantors

Subsidiary
Non
Guarantors
Eliminations Consolidated
Net cash provided by (used in) operating activities $ 32.6
$ 70.2
$ (171.8 ) $ (29.5 ) $ (98.5 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties (2.6 ) (127.7 ) (67.7 ) —
(198.0 )
Proceeds from sales of properties and other assets —
1.4
1.0
—
2.4
Other —
(0.3 ) 1.3
—
1.0
Net intercompany investing activity 9.4
4.1
35.8
(49.3 ) —
Net cash provided by (used in) investing activities 6.8
(122.5 ) (29.6 ) (49.3 ) (194.6 )
CASH FLOWS FROM FINANCING ACTIVITIES:

Exercise of stock options under equity compensation plans 0.6
—
—
—
0.6
Dividends paid (81.4 ) (29.5 ) (7.3 ) 29.5
(88.7 )
Payments on debt and borrowings (1,066.3 ) (0.1 ) (0.8 ) —
(1,067.2 )
Net proceeds from (payments on) revolving credit facilities and commercial paper 603.4
—
0.9
—
604.3
Change in overdraft balances and other (2.8 ) (4.7 ) 23.7
—
16.2
Net intercompany financing activity —
(46.2 ) (3.1 ) 49.3
—
Net cash provided by (used in) financing activities (546.5 ) (80.5 ) 13.4
78.8
(534.8 )
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and cash equivalents (507.1 ) (132.8 ) (188.0 ) —
(827.9 )
Effect of foreign exchange rate changes on cash and cash equivalents 3.0
3.2
(1.8 ) —
4.4
Balance at beginning of year 515.8
156.1
386.0
—
1,057.9
Balance at end of period $ 11.7
$ 26.5
$ 196.2
$ —
$ 234.4

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

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") in this Quarterly Report on Form 10-Q is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 ("Annual Report"), as well as our unaudited condensed consolidated interim financial statements and the accompanying notes included in this Quarterly Report on Form 10-Q. Due to the seasonality of our operating results, quarterly financial results are not an appropriate basis from which to project annual results.

Unless otherwise noted in this report, any description of "we," "us" or "our" includes Molson Coors Beverage Company ("MCBC" or the "Company") (formerly known as Molson Coors Brewing Company), principally a holding company, and its operating and non-operating subsidiaries included within our reporting segments. As further discussed below, on January 1, 2020, we changed our management structure from a corporate center and four segments to two segments - North America and Europe. Our International segment was reconstituted with the Africa and Asia Pacific businesses reporting into the Europe segment and the remaining International business reporting into the North America segment. Accordingly, effective January 1, 2020, our reporting segments include: North America (North America segment), operating in the U.S., Canada and various countries in Latin and South America; and Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K., various other European countries, and certain countries within Africa and Asia Pacific. We have recast the historical presentation of segment information as a result of these reporting segment changes accordingly.

Unless otherwise indicated, information in this report is presented in USD and comparisons are to comparable prior periods. Our primary operating currencies, other than USD, include the CAD, the GBP, and our Central European operating currencies such as the EUR, CZK, HRK and RSD.

Operational Measures

We have certain operational measures, such as STWs and STRs, which we believe are important metrics. STW is a metric that we use in our business to reflect the sales from our operations to our direct customers, generally wholesalers. We believe the STW metric is important because it gives an indication of the amount of beer and adjacent products that we have produced and shipped to customers. STR is a metric that we use in our business to refer to sales closer to the end consumer than STWs, which generally means sales from our wholesalers or our company to retailers, who in turn sell to consumers. We believe the STR metric is important because, unlike STWs, it provides the closest indication of the performance of our brands in relation to market and competitor sales trends.

Executive Summary

We are one of the world's largest brewers and have a diverse portfolio of owned and partner brands, including global brands Blue Moon, Coors Banquet, Coors Light, Miller Genuine Draft, Miller Lite, and Staropramen, regional champion brands Carling, Molson Canadian and other leading country-specific brands, as well as craft and specialty beers such as Creemore Springs, Cobra, Sharp's Doom Bar ~~Henry's Hard~~ and Leinenkugel's. With centuries of brewing heritage, we craft high-quality, innovative beverages with the purpose of uniting people to celebrate all life's moments. 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.

Coronavirus Global Pandemic

On March 11, 2020, the World Health Organization characterized the outbreak of the novel coronavirus disease, known as COVID-19, as a global pandemic and recommended containment and mitigation measures. We are actively monitoring the impact of the coronavirus pandemic, which has had, and we currently expect will continue to have, a material adverse effect on our operations, liquidity, financial condition and financial results for our full year 2020 and, possibly, beyond. The extent to which our operations will be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity and duration of the outbreak and actions by government authorities to contain the pandemic or treat its impact, among other things.

~~Recently, many~~Many governmental entities across North America and Europe ~~have~~ required that bars and restaurants close or cease sit-down service for the majority of the second quarter of 2020, which has negatively impacted, and we currently expect will continue to negatively impact, on-premise sales of our beverages and ~~incur~~previously led to the incurrence of costs to repurchase products that on-premise accounts or distributors were unable or prohibited from selling as a result of the governmental regulations. Other restaurants and bars have also implemented closures and/or modified their hours, either voluntarily or as a result of governmental orders or quarantines. While we did see some restaurants and bars begin to reopen late in the second quarter of

2020, business has not returned to pre-pandemic levels and remains uncertain. In addition, sporting events, festivals and other large public gatherings where our products are served have been canceled throughout North America and Europe. See "Outlook" for additional details. Sales to on-premise customers tend to be higher margin than sales to off-premise (retail outlets) customers. Additionally, these and other governmental or societal impositions of restrictions on public gatherings, especially if prolonged in nature, whether government or self-imposed, will have adverse effects on on-premise traffic and, in turn, our business.

~~We currently expect~~As expected, we experienced a significant adverse volume impact ~~particularly~~ in the second quarter of 2020 ~~to both net sales and profit performance for fiscal year 2020, and potentially beyond, due to~~resulting from the ~~resulting~~ closure of the on-premise channel in nearly all of our markets ~~as well as the anticipated negative impact~~for most of the ~~pandemic on~~quarter. Specifically, for the ~~global economy. Specifically,~~second quarter of 2020, we estimate that nearly all of our consolidated net sales resulted from off-premise consumption. This compares to our previously provided estimate that approximately 23% of our 2019 consolidated net sales resulted from on-premise consumption, with approximately 17% of our North America net sales and approximately 50-55% of our Europe net sales each coming from this important part of the industry, and in many of our markets the on-premise business ~~has~~had been reduced to ~~zero.~~zero for much of the second quarter. See further discussion below under "Results of Operations" regarding the historical percentage of volume and net sales represented in the on-premise within our North America and Europe segment businesses and resulting implications to expected profitability as a result of the effective closures of the on-premise in the markets in which we operate. WeWhile we began to see some of the on-premise return in June in many of these markets, with the notable exception of the U.K. which did not reopen until early July, business and consumer behavior in the channel has been slow and remains uncertain. Therefore, as a result of this uncertainty, along with the growing risk of a return of shutdowns in certain markets, we currently continue to expect a significant adverse impact to both net sales and profit performance for the third quarter and fiscal year 2020, and, possibly, beyond.

In addition, where we have ~~considered various actions~~seen shifts in demand to the off-premise, and certain package types, this has strained our supply chain and package availability, particularly with aluminum can demand and other packaging materials, requiring that ~~may~~we strategically prioritize certain brands and package types. Our supply chain continues to work diligently to ensure sufficient supply of these high demand brand and packages as we adjust to these changing consumer dynamics.

Further, during the three and six months ended June 30, 2020, we recorded charges of $15.5 million within cost of goods sold related to temporary "thank you" pay for certain essential North America brewery employees. Additionally, in order to support the challenges facing our on-premise customers and retailers, and our overall commitment to quality, during the first quarter of 2020, we initiated voluntary temporary keg relief programs in many of our markets which will provide customers with reimbursements for untapped kegs that meet certain established return requirements. As a result, our results for the six months ended June 30, 2020, further include aggregate charges of $48.6 million, inclusive of a reduction to net sales of $31.8 million for estimated reimbursements through these keg relief programs, as well as charges of $16.8 million within cost of goods sold related to obsolete finished goods keg inventories that are not expected to be ~~needed~~sold within our freshness specifications as a result of the ongoing on-premise impacts, as well as the estimated costs to ~~mitigate~~facilitate the above mentioned keg returns. These keg return and inventory obsolescence charges were recognized primarily during the first quarter of 2020. See Part I—Item 1. Financial Statements, Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” for additional details.

With the continued spread of the coronavirus and the reversal of certain on-premise re-openings, the extent, severity and duration to which our operations will be impacted by the pandemic remains uncertain. Therefore, we previously withdrew our financial outlook for 2020 and beyond and have determined that the market remains too unpredictable to provide an updated detailed financial outlook at this time.

As a result of the ongoing impacts of the ~~coronavirus~~ pandemic, during the second quarter of 2020 we continued to take various mitigating actions to offset some of the implications to our employees and ~~have resources in place should we need~~communities, as well as the immediate challenges to ~~act on any of these quickly.~~performance, while also ensuring liquidity and deleverage remain key priorities as further discussed within "Outlook" below. In addition to actions already taken, additional actions may be necessary. Such potential actions include, but are not limited to, ~~further~~ drawing on our revolving line of credit facility, issuing additional commercial paper under our U.S. commercial paper program, issuing commercial paper under the recently established COVID Corporate Financing Facility in the U.K. (see Part I—Item 1. Financial Statements, Note 8, "Debt" ~~regarding details~~for further discussion of the facilities and our ~~current revolving credit facility borrowings and~~ remaining capacity), further accessing the capital markets, reducing discretionary spending including marketing, general and administrative as well as capital expenditures, asset monetization and taking advantage of certain governmental programs such as furloughs in the U.K. and government relief and payment deferral programs, for example by the U.S. Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and other such government-sponsored legislation and programs. Our board of directors also suspended our regular quarterly dividends on our Class A and Class B common and exchangeable shares otherwise payable in fiscal year 2020. See "Liquidity and Capital Resources" and Part II—Item 1A. "Risk Factors" in this report for additional information regarding the impact of the global coronavirus pandemic. We also continue to monitor the impacts of the pandemic on the recoverability of our assets, including goodwill and indefinite-lived intangible assets. While we have not recognized any resulting impairment losses at this time, if the duration of the pandemic is prolonged and the severity of its impact continues or worsens, it could result in significant impairment losses. See Part I—Item 1. Financial Statements, Note 7, "Goodwill and Intangible Assets" for further details.

Further, in order to support the challenges facing our on-premise customers and retailers, and our overall commitment to quality, we initiated voluntary temporary keg relief programs in many of our markets which will provide customers with reimbursements for untapped kegs that meet certain established return requirements. As a result, our first quarter results include aggregate charges of $50 million, inclusive of a reduction to net sales of $31.5 million for estimated reimbursements through these keg relief programs, as well as charges of $18.5 million within cost of goods sold related to obsolete finished goods keg inventories that are not expected to be sold within our freshness specifications as a result of the ongoing on-premise impacts, as well as the estimated costs to facilitate the above mentioned keg returns. See Part I—Item 1. Financial Statements, ~~Note 1, “Basis of Presentation and Summary of Significant Accounting Policies”~~ ~~for further additional details.~~

In April 2020, the impacts of the coronavirus pandemic have continued to significantly adversely affect the on-premise channel, which continues to be effectively closed across all of our markets, and the benefit of pantry loading to our North America STR performance at the end of March has not continued. While off-premise sales continue to perform well, we do not expect them to fully offset the loss of the on-premise volume. Specifically, for the first four weeks of April 2020, in North America, we estimate that U.S. STRs were down approximately 14%, driven by lower premium and above premium brand trends, with economy brand performance down approximately 4% in the four weeks. In the U.S. we continue to see strong STR trends in the off-premise channel, but these trends are not fully offsetting the effective elimination of on-premise sales. We expect the negative on-premise trends in the U.S. to continue while social isolation continues to be practiced and expect that any increase in total off-premise volumes due to channel shifting will not be sufficient to offset the losses experienced in the on-premise. We estimate that this will result in negative trends in volume, net sales, and mix versus our prior estimates and expect these trends to continue at least through the end of the year and in particular in the second quarter. Separately, in Europe, we estimate that brand volumes are down approximately 40% for the first four weeks of April 2020. The extent, severity and duration to which our operations will be impacted by the pandemic remains uncertain. Therefore, we withdrew our financial outlook for 2020 and beyond and the market remains too unpredictable to provide updated detailed financial outlook.

Additionally, as a result of the ongoing impacts of the pandemic, early in the second quarter we have begun to take various mitigating actions to prepare to offset some of the implications to our employees and communities, as well as the immediate challenges to performance, while also ensuring liquidity and deleverage remain key priorities as further discussed within ~~"Outlook"~~ ~~below.~~

Revitalization Plan

On October 28, 2019, we initiated a revitalization plan designed to allow us to invest across our portfolio to drive long-term, sustainable success. As part of this plan, we planned to accelerate investments behind our largest brands, invest significantly in the above premium segment, and invest more in whitespace and beyond beer opportunities. We were making progress against these ambitions before the impact of the coronavirus pandemic became widespread throughout North America and Europe. As a result of this pandemic and resulting uncertainty in the economy, we are making adjustments in the short-term and intend to use the savings we continue to generate from the revitalization plan to help protect our cash and liquidity position. See additional discussion of the implications of the pandemic above.

We also made the determination to establish Chicago, Illinois as our North American operational headquarters, close our existing office in Denver, Colorado and consolidate certain administrative functions into our other existing office locations. Effective January 1, 2020, we changed our management structure from a corporate center and four segments to two segments - North America and Europe. The North America segment consolidates the United States, Canada and corporate center, enabling us to move more quickly with an integrated portfolio strategy. The Europe segment allows for standalone operations, developed and supported by a European-based team, including local leadership, commercial, supply chain and support functions. The existing International team was reconstituted to more effectively grow our global brands - with the Africa and Asia Pacific businesses reporting into the European segment and the remaining International business reporting into the North America segment.

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

In connection with these consolidation activities, we currently expect to incur certain cash and non-cash restructuring charges related to ~~employee relocation,~~ severance, retention and transition costs, employee relocation, non-cash asset related costs, lease exit costs in connection with our office lease in Denver, Colorado, and other transition activities currently estimated in the range of approximately $90 million to $120 million in the aggregate, the majority of which will be cash charges that we began recognizing in the fourth quarter of 2019, and will be further ~~spread~~recognized through the balance of fiscal years 2020 and 2021. In the second quarter and first ~~quarter~~half of 2020, we recognized severance and retention charges of ~~$22.7~~$8.4 million and $31.1 million, respectively, bringing the aggregate of such charges to approximately ~~$64~~$72 million since the plan was initiated. Actual severance and retention costs related to this restructuring, which are primarily being recognized ratably over the employees' required future service period, may differ from original estimates based on actual employee turnover levels prior to achieving severance and retention eligibility requirements. Employee relocation charges are recognized in the period incurred and ~~were immaterial in first~~totaled $4.4 million and $6.4 million for the three and six months ended June 30, 2020, respectively. Additionally, during the second quarter of ~~2020.~~2020, we recognized aggregate impairment losses of $7.6 million related to the closure of the office facility in Denver, Colorado, including our lease right-of use asset, in light of the sublease market outlook as a result of the coronavirus pandemic. Should our ability to obtain future subtenant occupancy for the office location significantly differ from the estimates and assumptions used to determine its fair value, additional impairment losses may be recognized in the future. We ~~recognized~~recorded these

charges as special items within our unaudited condensed consolidated statements of operations. See Part I—Item 1. Financial Statements, Note 5, "Special Items” for additional details.

After taking into account all changes in each of the business units, including Europe, the plan is expected to reduce employment levels, in aggregate, by approximately ~~500 to~~ 600 employees globally. ~~The company expects~~We currently expect the costs associated with the restructuring to be substantially recognized by the end of fiscal year 2021.

Summary of Consolidated Results of Operations

The following table highlights summarized components of our unaudited condensed consolidated statements of operations for the three and six months ended ~~March 31,~~June 30, 2020 and ~~March 31,~~June 30, 2019. See Part I-Item 1. Financial Statements for additional details of our U.S. GAAP results.


	Three Months Ended										Six Months Ended
	June 30, 2020		June 30, 2019		% change		June 30, 2020		June 30, 2019		% change
	(In millions, except percentages and per share data)
Financial volume in hectoliters	22.586		25.811		(12.5)	%	41.014		45.912		(10.7)	%
Net sales	$	2,503.4	$	2,948.3	(15.1)	%	$	4,606.2	$	5,251.6	(12.3)	%
Net income (loss) attributable to MCBC	$	195.0	$	329.4	(40.8)	%	$	78.0	$	480.8	(83.8)	%
Net income (loss) attributable to MCBC per diluted share	$	0.90	$	1.52	(40.8)	%	$	0.36	$	2.22	(83.8)	%

Three Months Ended
March 31, 2020 March 31, 2019 % change
(In millions, except percentages and per share data)
Financial volume in hectoliters 18.428
20.101
(8.3 )%
Net sales $ 2,102.8
$ 2,303.3
(8.7 )%
Net income (loss) attributable to MCBC $ (117.0 ) $ 151.4
N/M
Net income (loss) attributable to MCBC per diluted share $ (0.54 ) $ 0.70
N/M

~~N/M = Not meaningful~~

~~First~~Second Quarter 2020 Financial Highlights

During the ~~first~~second quarter of 2020, we recognized a net ~~loss~~income attributable to MCBC of ~~$117.0~~$195.0 million compared to net income of ~~$151.4~~$329.4 million in the prior year. This decrease was ~~primarily~~ driven by ~~an approximate $158 million unfavorable unrealized mark-to-market change on our commodity positions and HEXO warrants,~~ an increase in special charges of approximately ~~$74 million, estimated keg sales returns and finished goods obsolescence reserves and related costs of $50~~$114 million resulting from charges associated with the ~~on-premise impacts~~revitalization plan, the Irwindale brewery closure and cycling the gain on sale of the ~~coronavirus pandemic, the impact of~~Montreal brewery, lower financial volume ~~inflation~~ and ~~negative mix. These items were~~unfavorable mix, partially offset by lower marketing, general and administrative expense, favorable ~~net pricing~~impacts to cost of goods sold related to unrealized mark-to-market changes on our commodity positions and cost savings, as well as favorable unrealized mark-to-market changes on our HEXO Corp. ("HEXO") warrants within other income (expense), net. The significant decline in marketing, general and administrative expense was driven by prioritizing and shifting spend including media to platforms with higher audiences in the current environment, while suspending on-premise activation spending and reducing or eliminating spend in areas that have been significantly impacted, such as sports and in-market activations. We also adjusted timing of spend behind brands and packs that were constrained by supply. Further, we also realized cost savings related to the revitalization ~~plan, as well as other targeted spend reductions.~~ plan. Finally, net income was adversely impacted by the increase in the effective tax rate to 51% driven by approximately $135 million of discrete tax expense recognized in the second quarter of 2020 related to hybrid regulations enacted by the U.S. Department of Treasury in the second quarter of 2020.

Net sales of approximately ~~$2.1~~$2.5 billion in the ~~first~~second quarter of 2020 decreased ~~8.7%~~15.1% from the prior year, driven by financial volume declines ~~estimated keg sales returns and reimbursements of $31.5 million~~ related to ~~the~~ on-premise ~~impacts~~closures resulting from the coronavirus pandemic across all of our major markets, as well as unfavorable global mix, partially offset by higher ~~global~~ net ~~pricing.~~pricing in the U.S. and Canada.

Regional financial highlights:

•

~~In our~~ ~~North America~~ segment, income before income taxes decreased 69.0% to $76.2 million in the first quarter of 2020, compared to the prior year primarily driven by lower financial volume, higher special charges, the recognition of estimated keg sales returns and finished good obsolescence reserves and related costs resulting from the on-premise impacts

•In our North America segment, income before income taxes decreased 8.2% to $411.5 million in the second quarter of 2020, compared to the prior year primarily driven by higher special charges, lower financial volume and the cost of "thank you" pay for certain essential North America brewery employees as a result of the coronavirus pandemic, cost of goods sold inflation, as well as the unrealized mark-to-market changes on our HEXO warrants. These unfavorable drivers were partially offset by lower marketing, general and administrative expense, cost savings in cost of goods sold and net pricing growth. The lower marketing, general and administrative expense was driven by cost savings related to the revitalization plan, lower incentive compensation, as well as cycling higher project costs in the prior year related to brewery system implementations, partially offset by a slight overall increase in marketing spend around new innovations that occurred early in the quarter such as ~~Saint Archer Gold~~ ~~and~~ ~~Blue Moon LightSky, in line with our initial plans for 2020, prior to actions taken to mitigate the impacts associated with the coronavirus pandemic.~~

•

~~In our~~ ~~Europe~~ segment, the pre-tax loss before income taxes increased to a loss of $76.8 million in the first quarter of 2020, compared to a loss of $38.4 million in the prior year, primarily due to lower net sales revenue, increased cost of goods sold resulting from estimated finished goods obsolescence reserves and related costs resulting from the on-premise impacts of the coronavirus pandemic as well as cost inflation, volume deleverage and higher specials charges primarily related to the revitalization plan, partially offset by lower marketing, general and administrative expense, cost savings in cost of goods sold, the favorable resolution of our property tax appeal for our Golden, Colorado brewery and higher net pricing. The lower marketing, general and administrative expense was driven by cost mitigation actions taken and anticipated shifts in the timing of marketing spend into the second half of 2020 as a result of the coronavirus pandemic as well as cost savings related to the revitalization plan.

•In our Europe segment, we reported a loss before income taxes of $11.0 million in the second quarter of 2020, compared to income of $43.4 million in the prior year, primarily due to lower gross profit as a result of the closure of the on-premise channel across all markets for the majority of the second quarter, with the exception of the U.K. which remained closed until early July compared to other European markets which started to reopen gradually toward the end of May and early June, partially offset by lower marketing, general and administrative expense driven by cost mitigation actions and lower incentive compensation, lower special charges and favorable foreign currency movements.

See "Results of Operations" below for further analysis of our segment results.

Brand highlights:


•	~~Blue Moon Belgian White~~ ~~global brand volume decreased 7.1% in the first quarter of 2020 versus 2019, driven by declines in North America, specifically in the U.S., partially offset by growth in Europe.~~

•

~~Carling~~ ~~brand volume in Europe decreased 9.0% during the first~~

•Blue Moon global brand volume decreased 19.9% in the second quarter of 2020 versus 2019, driven by declines in North America, specifically in the U.S. primarily as a result of the on-premise impacts of the coronavirus pandemic.

•Carling brand volume in Europe decreased 34.5% during the second quarter of 2020 versus 2019, due to lower volumes in the U.K., the brand's primary market as a result of the on-premise impacts of the coronavirus pandemic.

•Coors global brand volume - Coors Light global brand volume decreased 10.9% during the second quarter of 2020 versus 2019. The overall volume decrease in the second quarter of 2020 was primarily driven by declines across North America and Europe primarily as a result of the on-premise impacts of the coronavirus pandemic. Despite volume declines in the U.S., Coors Light gained share of the U.S. premium light segment for the fifth consecutive quarter. Coors Banquet and Coors Original in Canada and Latin America brand volume, on an aggregate basis, increased 0.7% during the second quarter of 2020 versus 2019.

•Miller global brand volume - Miller Lite global brand volumes decreased 6.5% during the second quarter of 2020 versus 2019, primarily driven by declines in the U.S. and Latin America primarily as a result of the on-premise impacts of the coronavirus pandemic, partially offset by growth in Canada. However, Miller Lite gained share of the U.S. premium light segment for the twenty-third consecutive quarter. Miller Genuine Draft global brand volume decreased 21.2% during the second quarter of 2020 versus 2019, primarily due to a decrease in Latin America as a result of the coronavirus pandemic.

•Staropramen global brand volume, including royalty volume, decreased 25.1% during the second quarter of 2020 versus 2019, primarily due to lower volumes in all European markets as a result of the on-premise impacts of the coronavirus pandemic.

•

~~Coors~~ ~~global brand volume -~~ ~~Coors Light~~ global brand volume increased 0.8% during the first quarter of 2020 versus 2019. The overall volume increase in the first quarter of 2020 was primarily driven by growth in North America specifically in Latin America, partially offset by declines in Europe and other North American markets including the U.S. and Canada. Despite volume declines in the U.S., ~~Coors Light~~ ~~gained share of the U.S. premium light segment for the fourth consecutive quarter.~~ ~~Coors Banquet~~ ~~global brand volume increased 2.2% during the first quarter of 2020 versus 2019 driven by growth in Canada.~~

•

~~Miller~~ ~~global brand volume~~ ~~- Miller Lite~~ ~~global brand volumes increased 1.0% during the first quarter of 2020 versus 2019, primarily driven by growth in Canada and Latin America, partially offset by declines in the U.S. However,~~ ~~Miller Lite~~ ~~gained share of the U.S. premium light segment for the twenty-second consecutive quarter.~~ ~~Miller Genuine Draft~~ ~~global brand volumedecreased 6.0% during the first quarter of 2020 versus 2019, due to a decrease in North America.~~


•	~~Staropramen~~ global brand volume, including royalty volume, decreased 6.7% during the first quarter of 2020 versus 2019, primarily driven by lower volumes in European markets outside of Czech Republic, the brand's primary market.

Worldwide Brand Volume

Worldwide brand volume (or "brand volume" when discussed by segment) reflects owned brands sold to unrelated external customers within our geographic markets, net of returns and allowances, royalty volume and an adjustment from STWs to STRs calculated consistently with MCBC owned volume. Contract brewing and wholesaler volume is removed from worldwide brand volume as this is non-owned volume for which we do not directly control performance. We believe this definition of worldwide brand volume more closely aligns with how we measure the performance of our owned brands within the markets in which they are sold. Financial volume represents owned brands sold to unrelated external customers within our geographical markets, net of returns and allowances as well as contract brewing, wholesale non-owned brand volume and company-owned distribution volume. Royalty volume consists of our brands produced and sold by third parties under various license and contract-brewing agreements and because this is owned volume, it is included in worldwide brand volume. The adjustment from STWs to STRs provides the closest indication of the performance of our owned brands in relation to market and competitor sales trends, as it reflects sales volume one step closer to the end consumer and generally means sales from our wholesalers or our company to retailers.


	Three Months Ended						Six Months Ended
	June 30, 2020	June 30, 2019	% change		June 30, 2020	June 30, 2019	% change
	(In millions, except percentages)
Volume in hectoliters:
Financial volume	22.586	25.811	(12.5)	%	41.014	45.912	(10.7)	%
Less: Contract brewing, wholesaler and non-beer volume	(1.566)	(2.129)	(26.4)	%	(3.163)	(3.935)	(19.6)	%
Add: Royalty volume	0.673	1.040	(35.3)	%	1.552	1.777	(12.7)	%
Add: STW to STR adjustment	(0.218)	(0.427)	(48.9)	%	(0.063)	(1.264)	(95.0)	%
Total worldwide brand volume	21.475	24.295	(11.6)	%	39.340	42.490	(7.4)	%

Worldwide Brand Volume by Segment
North America	16.151	17.523	(7.8)	%	29.897	31.216	(4.2)	%
Europe	5.324	6.772	(21.4)	%	9.443	11.274	(16.2)	%
Total	21.475	24.295	(11.6)	%	39.340	42.490	(7.4)	%

Three Months Ended
March 31, 2020 March 31, 2019 % change
(In millions, except percentages)
Volume in hectoliters:
Financial volume 18.428
20.101
(8.3 )%
Less: Contract brewing, wholesaler and non-beer volume (1.597 ) (1.806 ) (11.6 )%
Add: Royalty volume 0.879
0.737
19.3 %
Add: STW to STR adjustment 0.155
(0.837 ) N/M
Total worldwide brand volume 17.865
18.195
(1.8 )%

~~N/M = Not meaningful~~

Our worldwide brand volume decreased ~~1.8%,~~11.6% and 7.4% during the three and six months ended June 30, 2020, respectively, compared to prior year, while financial volume decreased ~~8.3%, for~~12.5% and 10.7% during the three and six months ended ~~March 31,~~June 30, 2020, respectively, compared to prior ~~year, reflecting unfavorable shipment timing~~year. This reflects the impacts of the coronavirus pandemic and the related closure of on-premise outlets in ~~the U.S. including brewery downtime associated with the Milwaukee tragedy~~both North America and Europe, as well as market share declines in ~~February, share declines~~part due to prioritization of certain key brands and package types to meet off-premise demand, and lower contract brewing volumes in North America. Despite this and the gradual re-opening of on-premise locations in certain geographies, the increase in off-premise brand volumes was not sufficient to offset the volume losses experienced related to the closure of the on-premise, resulting in overall brand volume declines. This has continued into July 2020 as we see further uncertainty around the re-opening of the on-premise across North America ~~as well as lower volume in Europe as~~and Europe. As a result, of the coronavirus pandemic. In North America brand volumes benefited in March 2020 from pantry loading, particularly in the U.S, as well as from the timing of trading days versus the prior year. This pantry

~~loading has not continued into April and while off-premise sales have continued to perform well early in the second quarter of 2020,~~ we do not expect ~~them~~off-premise volumes to fully offset the loss of the on-premise volume due to closures related to the pandemic.

Net Sales Drivers

For the three months ended ~~March 31,~~June 30, 2020 versus ~~March 31,~~June 30, 2019, by segment (in percentages):


	Volume		Price, Product and Geography Mix		Currency		Total
Consolidated	(12.5)	%	(1.8)	%	(0.8)	%	(15.1)	%
North America	(8.3)	%	0.4	%	(0.4)	%	(8.3)	%
Europe	(24.8)	%	(17.6)	%	(2.2)	%	(44.6)	%

Volume Price, Product and Geography Mix Currency Total
Consolidated (8.3 )% 0.1 % (0.5 )% (8.7 )%
North America (7.8 )% 0.6 % (0.2 )% (7.4 )%
Europe (10.0 )% (3.4 )% (2.1 )% (15.5 )%

For the six months ended June 30, 2020 versus June 30, 2019, by segment (in percentages):


	Volume		Price, Product and Geography Mix		Currency		Total
Consolidated	(10.7)	%	(1.0)	%	(0.6)	%	(12.3)	%
North America	(8.1)	%	0.5	%	(0.3)	%	(7.9)	%
Europe	(18.8)	%	(11.9)	%	(2.1)	%	(32.8)	%

Income taxes


	Three Months Ended						Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Effective tax rate	51	%	18	%	66	%	18	%

Three Months Ended
March 31, 2020 March 31, 2019
Effective tax rate 27 % 18 %

The increase in the effective tax rate for the three and six months ended June 30, 2020 was primarily driven by approximately $135 million of discrete tax expense recognized in the second quarter of 2020 related to the hybrid regulations enacted in the second quarter of 2020, as further discussed below. The increase in the effective tax rate during the six months ended June 30, 2020 was further driven by lower pretax income during the first half of 2020.

Since 2018, the U.S. Department of Treasury has continued to issue proposed, temporary and final regulations to implement provisions of the 2017 Tax Act. We have continued to monitor these regulations, and on April 7, 2020, the U.S. Department of Treasury enacted final hybrid regulations with full retroactive application to January 1, 2018, with a few exceptions. We have reviewed the final regulations and their impact on our tax positions and financial statements. The final regulations, associated with the taxability of certain interest, impact tax positions we took in 2018 and 2019 and have resulted in additional income tax expense of approximately $135 million, which was recognized upon enactment in the second quarter of 2020. The impact of the finalized regulations could result in cash tax outflows up to this amount in 2021. We continue to analyze the potential cash impacts of the final regulations to minimize any cash outflows.

In July 2020, the U.K. government enacted legislation to repeal the previously enacted reduction to the corporate income tax rate that was due to take effect April 1, 2020, which will change the previously anticipated corporate income tax rate from 17% to 19%. We anticipate the impact to estimated income tax expense in the third quarter of 2020 was primarily driven by an increase in net discrete tax benefits recognized in the first quarter of 2020, along with a pretax loss in the first quarter of 2020, versus pretax income in the first quarter of 2019. Specifically, we recognized a net discrete tax benefit of $13.9 million in the first quarter of 2020, versus a $1.2 million net discrete tax benefit in the first quarter of 2019.will be immaterial.

Our tax rate is volatile and may increase or decrease with changes in, among other things, the amount and source of 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, may have an impact on our effective tax rate.

Since 2018, the U.S. Department of Treasury has continued to issue proposed, temporary and final regulations to implement provisions of the 2017 Tax Act. We have continued to monitor these and, most recently, on April 7, 2020, the U.S. Department of Treasury enacted final hybrid regulations with full retroactive application to January 1, 2018, with a few exceptions. We are currently in the process of reviewing and interpreting the finalized regulations related to their impact on our tax positions, as well as evaluating the impact on our financial statements. Based on our preliminary review of these finalized regulations, we currently expect to recognize estimated income tax expense of approximately $100 million to $200 million upon enactment in the second quarter of 2020, related to the retroactive period of January 1, 2018 through March 31, 2020, for fiscal years 2018, 2019, and the first quarter of 2020. This estimated range considers the potential impacts associated with the possible technical interpretations of the regulations that could result following a full legal analysis.

Refer to Part I - Item 1. Financial Statements, Note 6, "Income Tax" for discussion regarding our effective tax rate.

Results of Operations

North America Segment


	Three Months Ended									Three Months Ended										Six Months Ended
	March 31, 2020			March 31, 2019			% change			June 30, 2020		June 30, 2019		% change		June 30, 2020		June 30, 2019		% change
	(In millions, except percentages)									(In millions, except percentages)
Financial volume in hectoliters⁽¹⁾⁽²⁾	14.456			15.682			(7.8	)%	Financial volume in hectoliters⁽¹⁾⁽²⁾	17.648		19.240		(8.3)	%	32.104		34.922		(8.1)	%
Sales⁽²⁾	$	2,055.0		$	2,219.9		(7.4	)%	Sales⁽²⁾	$	2,548.8	$	2,783.2	(8.4)	%	$	4,603.8	$	5,003.1	(8.0)	%
Excise taxes	(265.3		)	(287.3		)	(7.7	)%	Excise taxes	(348.6)		(382.6)		(8.9)	%	(613.9)		(669.9)		(8.4)	%
Net sales⁽²⁾	1,789.7			1,932.6			(7.4	)%	Net sales⁽²⁾	2,200.2		2,400.6		(8.3)	%	3,989.9		4,333.2		(7.9)	%
Cost of goods sold⁽²⁾	(1,132.4		)	(1,187.2		)	(4.6	)%	Cost of goods sold⁽²⁾	(1,302.0)		(1,386.7)		(6.1)	%	(2,434.4)		(2,573.9)		(5.4)	%
Gross profit	657.3			745.4			(11.8	)%	Gross profit	898.2		1,013.9		(11.4)	%	1,555.5		1,759.3		(11.6)	%
Marketing, general and administrative expenses	(496.6		)	(512.1		)	(3.0	)%	Marketing, general and administrative expenses	(425.2)		(609.9)		(30.3)	%	(921.8)		(1,122.0)		(17.8)	%
Special items, net⁽³⁾	(79.1		)	(9.6		)	N/M		Special items, net⁽³⁾	(64.1)		51.6		N/M		(143.2)		42.0		N/M
Operating income (loss)	81.6			223.7			(63.5	)%	Operating income (loss)	408.9		455.6		(10.3)	%	490.5		679.3		(27.8)	%
Interest income (expense), net	(1.0		)	(2.3		)	(56.5	)%	Interest income (expense), net	(0.7)		4.3		N/M		(1.7)		2.0		N/M
Other income (expense), net	(4.4		)	24.5			N/M		Other income (expense), net	3.3		(11.4)		N/M		(1.1)		13.1		N/M
Income (loss) before income taxes	$	76.2		$	245.9		(69.0	)%	Income (loss) before income taxes	$	411.5	$	448.5	(8.2)	%	$	487.7	$	694.4	(29.8)	%

N/M = Not meaningful


~~(1)~~	Excludes royalty volume of 0.515 million hectoliters and 0.395 million hectoliters for the three months ended March 31, 2020 and March 31, 2019, respectively. The results for the three months ended March 31, 2019 have been recast to reflect the segment changes as part of the revitalization plan.


~~(2)~~	~~Includes gross inter-segment sales, purchases, and volumes, which are eliminated in the consolidated totals.~~

~~(3)~~

(1)Excludes royalty volume of 0.288 million and 0.803 million hectoliters for the three and six months ended June 30, 2020, and excludes royalty volume of 0.523 million and 0.918 million hectoliters for the three and six months ended June 30, 2019, respectively. The results for the three and six months ended June 30, 2019 have been recast to reflect the segment changes as part of the revitalization plan.

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

(3)See Part I—Item 1. Financial Statements, Note 5, "Special Items"~~Note 5, "Special Items"~~ for detail of special items.

Significant events

We continue to monitor the coronavirus pandemic, which has had, and we currently expect will continue to have, a material adverse effect on our North America results of operations for fiscal year 2020 and, possibly, beyond. InAs expected, we experienced a significant adverse impact in the first half of 2020 resulting from the closure of the on-premise channel for the majority of the second quarter. While we began to see some of the on-premise return in June, business and consumer behavior in the channel has been uncertain and has not returned to pre-pandemic levels. For the second quarter of 2020, we estimate that nearly all of our North America volume and net sales was from the off-premise channel. This compares to our 2019 we estimate that approximately 16% and 17% of our North America volume and net sales, respectively, was from the on-premise channel, which tends to be more profitable than the off-premise channel as a result of its higher above premium brand mix. We have seen some of the on-premise demand shift to the off-premise; however, this shift has not been proportionate to the severe declines in volume lost from the on-premise closures and weakened demand. As a result of the coronavirus pandemic and resulting ~~government~~government-imposed restrictions and related on-premise closures, ~~we have seen~~ this portion of our business effectively ~~cease~~ceased entirely from the middle of March and ~~continuing~~ into April across all of North America. While brand volume benefited from pantry loading towards the end of March, as discussed below, this pantry loading has not continued into April and while off-premise sales have continued to perform well early in the second quarter of 2020, we do not expect them to fully offset the loss of the on-premise volume due to closures related to the pandemic.June. Additionally, continuing governmental or societal impositions ~~of the closure of~~on bars and restaurants and restrictions on public gatherings including the growing risk of a return of shutdowns, especially if prolonged in nature, we expect will continue to have adverse effects on on-premise traffic and, in turn, our business performance, cash flows and liquidity. Further, the CAD has recently become volatile as a result of the ongoing uncertainties and impacts of the coronavirus pandemic. Any significant weakening of the CAD to the USD could have an adverse impact on our results due to the relative magnitude of our Canadian business.

Our ~~first quarter~~ results for the six months ended June 30, 2020 include a reduction to net sales of ~~$19.0~~$19.6 million and charges to cost of goods sold of ~~$11.8~~$12.2 million related to the recognition of estimated sales returns and finished good obsolescence reserves and related costs resulting from the on-premise impacts of the coronavirus pandemic. These charges were primarily recognized during the first quarter of 2020, with immaterial adjustments for changes in estimates recognized in the second quarter. We also recognized charges to cost of goods sold of $15.5 million related to temporary "thank you" pay for certain essential North America brewery employees.

In late February 2020, we experienced a tragic shooting in our Milwaukee brewery. This impacted our employees in various capacities, and also significantly impacted STWs in late February and early March 2020 as the brewery was shut down for a full week, and when reopened, it took several days to return to full capacity. This downtime affected shipment levels resulting in lower than planned distributor inventory at the end of the quarter.

As part of our revitalization plan announced during the fourth quarter of 2019, we initiated restructuring activities and continue to incur severance and other employee-related costs as special items.

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

Pursuant to the agreement, Pabst has 120 days from receipt of the previously provided notice of the Irwindale brewery closure from Molson Coors Beverage Company USA LLC ("MCBC USA" formerly known as MillerCoors LLC) to exercise the option to purchase the Irwindale brewery. If Pabst exercises its option to purchase the Irwindale brewery, the agreement provides (i) the purchase price will beland for $150 million, subject to adjustment as further specified in the ~~agreement, (ii) the closing will be within six months from Pabst’s exercise of~~option agreement. Pursuant to the option ~~but no earlier than September 1,~~agreement, on May 4, 2020, ~~and no later than December 31,~~Pabst exercised its option to purchase the Irwindale Brewery which is expected to be completed in the fourth quarter of 2020, subject to the satisfaction of certain customary closing conditions, (iii) for the treatment and allocation of certain liabilities related to the operation of the Irwindale brewery prior to closing, and (iv) for customary representations and warranties and certain post-closing restrictions on Pabst regarding the operations and disposal of the Irwindale brewery. In conjunction with the agreement, MCBC USA and Pabst also executed mutual releases of claims related to their ongoing litigation and agreed to dismiss the litigation with prejudice.

conditions. We recorded special charges related to the planned Irwindale brewery closure of approximately $58 million during the first quarter of 2020, consisting primarily of accelerated depreciation, bringing the total special charges recognized related to the planned brewery closure to approximately $74 million as ~~of March 31, 2020. We will continue to incur special charges during each reporting period through the planned closure of the brewery~~further discussed in September 2020. While analysis of the implications of the announced brewery closure remain ongoing, remaining special charges associated with the planned closure are currently expected to be approximately $75 million to $100 million, consisting primarily of accelerated depreciation charges. However, this estimated range contains significant uncertainty, and actual results could differ materially from these estimates due to uncertainty regarding the ultimate net cost associated with the disposition of assets, restructuring charges, as well as the overall outcome of the Pabst purchase option, which if exercised, could significantly impact these estimates.Part I—Item 1. Financial Statements, Note 5, "Special Items".

The volatility of aluminum prices, inclusive of Midwest Premium and tariffs, continued to significantly impact our results during the first ~~quarter~~half of 2020. To the extent these prices continue to fluctuate, our business and financial results could be materially adversely impacted. We continue to monitor these risks and rely on our risk management hedging program to help mitigate price risk exposure for commodities including aluminum and fuel.

In further efforts to help optimize the North America brewery network, in the third quarter of 2017, we announced a plan to build a more efficient and flexible brewery in Longueuil, Quebec. ~~Additionally, during~~During the second quarter of 2019, we completed the sale of our Montreal ~~brewery.~~brewery for $96.2 million (CAD 126.0 million), resulting in a $61.3 million gain, which was recorded as a special item. In conjunction with the sale, we agreed to lease back the existing property to continue operations on an uninterrupted basis until the new brewery is operational, which we currently expect to occur in 2021. However, due to the uncertainty inherent in our estimates, the timing of the brewery closure is subject to change. We will continue to incur significant capital expenditures associated with the construction of the new brewery in Longueuil, ~~Quebec.~~Quebec, through its estimated completion in late 2021.

In June 2019, the Ontario government adopted a bill that, if enacted, would terminate a 10-year Master Framework Agreement that was originally signed between the previous government administration and Molson Canada 2005, a wholly owned indirect subsidiary of the Company, Labatt Brewing Company Limited, Sleeman Breweries Ltd., and Brewers Retail Inc. in 2015 and governs the terms of the beer distribution and retail systems in Ontario through 2025. The government has not yet proclaimed the bill as law. The impacts of these potential legislative changes are unknown at this time, but could have a negative impact on the results of operations, cash flows and financial position of the North America segment. While discussions remain ongoing with the government to reach a mutually agreeable alternative to the enactment of the law, it is unclear how the coronavirus pandemic will impact these ~~discussions,~~discussions. Molson Canada 2005 and the other Master Framework Agreement signatories are prepared to vigorously defend their rights and pursue legal recourse, should the Master Framework Agreement be unilaterally terminated by the enactment of the legislation. For additional information, see Part I—Item 1. Financial Statements, Note 12, "Commitments and Contingencies."

In June 2019, Health Canada released final regulations resulting in the legalization of new classes of cannabis products including edibles and cannabis infused beverages on October 17, 2019, with product sales being permitted sixty days after submission of the beverage formulations to Health Canada and satisfaction of all other licensing and regulatory preconditions. ~~Our~~ Truss, our joint venture with HEXO ~~Corp. ("HEXO")~~ in Canada, ~~has been making progress preparing for the launch of cannabis-infused products in~~launched its first cannabis infused product, Veryvell Drops, across the Canadian market ~~including the on-going construction of a production facility in Belleville, Ontario. We currently~~and we expect ~~that Truss~~it will launch ~~products in 2020, subject~~its ready to ~~and after all~~drink beverage portfolio throughout the remainder of ~~its licenses and regulatory clearances have been obtained.~~2020. Separately, in April 2020, we completed the formation of a new ~~U.S.~~ joint venture with HEXO to explore opportunities for non-alcohol hemp-derived CBD beverages in Colorado.

Foreign currency impact on results

During the three months ended ~~March 31,~~June 30, 2020, foreign currency movements favorably impacted our North America USD income before income taxes by $1.1 million and during the six months ended June 30, 2020, foreign currency movements unfavorably impacted our North America USD income before income taxes by ~~$2.4~~$1.3 million. Included in this amount are both translational and transactional impacts of changes in foreign exchange rates. The impact of transactional foreign currency gains and losses is recorded within other income (expense) in our unaudited condensed consolidated statements of operations.

Volume and net sales

Brand volume ~~increased 0.4%~~decreased 7.8% and 4.2%, ~~on a trading day adjusted basis,~~ for the three and six months ended ~~March 31,~~June 30, 2020 compared to prior year, due to the ~~favorable timing~~closure of ~~trading days versus~~on-premise outlets as a result of the ~~prior year,~~coronavirus pandemic as well as ~~March pantry loading, particularly in the U.S., partially offset by~~ estimated market share declines in North America. Financial volume declined ~~7.8%~~8.3% and 8.1% for the three and six months ended ~~March 31,~~June 30, 2020 respectively, compared to prior year, reflecting lower brand volume, unfavorable shipment timing in the U.S.~~, including brewery downtime associated with the Milwaukee tragedy,~~ largely due to aluminum can supply and other packaging material constraints as well as lower contract brewing volume.

Net sales per hectoliter on a brand volume basis increased 0.9% and decreased ~~1.3%~~0.1% for the three and six months ended ~~March 31,~~June 30, 2020, respectively, compared to prior ~~year,~~year. The increase in the second quarter was driven by favorable geographic mix and net pricing increases in the U.S. and Canada, partially offset by brand and channel mix attributed to the shift of volume from on-premise to off-premise as a result of the coronavirus pandemic. The slight decline for the six months ended June 30, 2020 was driven by the estimated ~~on-premise~~keg sales returns and reimbursements recognized in the first quarter of 2020 related to the on-premise impacts of the coronavirus pandemic as well as ~~unfavorable geographic~~negative brand mix, ~~driven by growing licensed volume in Mexico,~~ partially offset by net ~~pricing growth.~~price increases in the U.S. and Canada. Net sales per hectoliter on a reported basis in local currency increased ~~0.6%~~0.4% and 0.5% for the three and six months ended ~~March 31,~~June 30, 2020 compared to prior year.

Cost of goods sold

Cost of goods sold per hectoliter in local currency for the three and six months ended ~~March 31,~~June 30, 2020 increased ~~3.7%~~2.9% and 3.3%, respectively, compared to prior year, driven by volume deleverage as well as temporary "thank you" pay for certain essential North America brewery employees, partially offset by cost savings and the favorable resolution of our property tax appeal for our Golden, Colorado brewery. Additionally, cost of goods sold per hectoliter in local currency for the six months ended June 30, 2020 was also impacted by finished good obsolescence reserves and related costs recognized in the first quarter of 2020 resulting from the on-premise impacts of the coronavirus ~~pandemic as well as volume deleverage and inflation, partially offset by cost savings.~~pandemic.

Marketing, general and administrative expenses

Marketing, general and administrative expenses in local currency for the three and six months ended ~~March 31,~~June 30, 2020 decreased ~~2.9%~~29.9% and 17.6%, respectively, compared to prior year, primarily driven by cost mitigation actions and anticipated shifts in the timing of marketing spend into the second half of 2020 as a result of the coronavirus pandemic leading to significant reductions in marketing expense in the second quarter, reduced discretionary spending, cost savings related to the revitalization plan ~~lower incentive compensation,~~ as well as cycling higher project costs in the prior year related to brewery system ~~implementations, partially offset by a slight overall increase in marketing spend around new innovations that occurred early in the quarter such as~~ ~~Saint Archer Gold~~ ~~and~~ ~~Blue Moon LightSky,~~ ~~in line with initial plans for 2020, prior to actions taken to mitigate the impacts associated with the coronavirus pandemic.~~implementations.

Other income (expense), net

~~For the three months ended March 31, 2020 the~~The change in other income (expense) during the three and six months ended June 30, 2020 was primarily driven by unrealized mark-to-market ~~losses of approximately $2 million compared to gains of approximately $23 million~~changes on ~~the~~our HEXO ~~warrants received in connection with the formation of the Truss joint venture, as further discussed in~~ ~~Note 11, "Derivative Instruments and Hedging Activities."~~warrants.

Europe Segment


	Three Months Ended										Six Months Ended
	June 30, 2020		June 30, 2019		% change		June 30, 2020		June 30, 2019		% change
	(In millions, except percentages)
Financial volume in hectoliters⁽¹⁾⁽²⁾	4.963		6.601		(24.8)	%	8.965		11.046		(18.8)	%
Sales⁽²⁾	$	484.9	$	843.2	(42.5)	%	$	972.2	$	1,428.4	(31.9)	%
Excise taxes	(177.8)		(289.1)		(38.5)	%	(347.5)		(498.6)		(30.3)	%
Net sales⁽²⁾	307.1		554.1		(44.6)	%	624.7		929.8		(32.8)	%
Cost of goods sold⁽²⁾	(217.9)		(348.3)		(37.4)	%	(469.9)		(613.2)		(23.4)	%
Gross profit	89.2		205.8		(56.7)	%	154.8		316.6		(51.1)	%
Marketing, general and administrative expenses	(99.3)		(159.8)		(37.9)	%	(232.4)		(302.9)		(23.3)	%
Special items, net⁽³⁾	(0.2)		(1.7)		(88.2)	%	(7.7)		(5.1)		51.0	%
Operating income (loss)	(10.3)		44.3		N/M		(85.3)		8.6		N/M
Interest income (expense), net	(1.3)		(1.5)		(13.3)	%	(2.7)		(2.8)		(3.6)	%
Other income (expense), net	0.6		0.6		—	%	0.2		(0.8)		N/M
Income (loss) before income taxes	$	(11.0)	$	43.4	N/M		$	(87.8)	$	5.0	N/M

N/M = Not meaningful

(1)Excludes royalty volume of 0.385 million and 0.749 million hectoliters for the three and six months ended June 30, 2020, and excludes royalty volume of 0.517 million and 0.859 million hectoliters for the three and six months ended June 30, 2019, respectively. The results for the three and six months ended June 30, 2019 have been recast to reflect the segment changes as part of the revitalization plan.

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

Three Months Ended
March 31, 2020 March 31, 2019 % change
(In millions, except percentages)
Financial volume in hectoliters⁽¹⁾⁽²⁾
4.002
4.445
(10.0 )%
Sales⁽²⁾
$ 487.3
$ 585.2
(16.7 )%
Excise taxes (169.7 ) (209.5 ) (19.0 )%
Net sales⁽²⁾
317.6
375.7
(15.5 )%
Cost of goods sold (252.0 ) (264.9 ) (4.9 )%
Gross profit 65.6
110.8
(40.8 )%
Marketing, general and administrative expenses (133.1 ) (143.1 ) (7.0 )%
Special items, net⁽³⁾
(7.5 ) (3.4 ) 120.6 %
Operating income (loss) (75.0 ) (35.7 ) 110.1 %
Interest income (expense), net (1.4 ) (1.3 ) 7.7 %
Other income (expense), net (0.4 ) (1.4 ) (71.4 )%
Income (loss) before income taxes $ (76.8 ) $ (38.4 ) 100.0 %


~~(1)~~	Excludes royalty volume of 0.364 million hectoliters and 0.342 million hectoliters for the three months ended March 31, 2020 and March 31, 2019, respectively. The results for the three months ended March 31, 2019 have been recast to reflect the segment changes as part of the revitalization plan.


~~(2)~~	~~Includes gross inter-segment sales, purchases, and volumes, which are eliminated in the consolidated totals.~~


~~(3)~~	(3)See Part I-Item 1. Financial Statements, Note 5, "Special Items"~~Note 5, "Special Items"~~ for detail of special items.

Significant events

We continue to monitor the coronavirus pandemic, which has had, and we currently expect will continue to have, a material adverse effect on our Europe results of operations for fiscal year 2020 and, possibly, beyond. InAs expected, we experienced a significant adverse impact in the first half of 2020 resulting from the closure of the on-premise channel for the majority of the second quarter. While we began to see some of the on-premise return in June, with the notable exception of the U.K., business and consumer behavior in the channel has been uncertain and has not returned to pre-pandemic levels. For the second quarter of 2020, we estimate that nearly all of our Europe volume and net sales, respectively, was from the off-premise channel. This compares to our 2019 we estimate that approximately 40% and 50-55% of our Europe volume and net sales, respectively, was from the on-premise channel, which tends to be more profitable than the off-premise channel. In addition, the U.K. is further negatively being impacted by the on-premise restrictions as the ~~U.K~~U.K. comprises approximately 55% of our Europe net sales, which were $1,986.4 million for the year ended December 31, 2019 (the Europe net sales includes the U.K. factored brand business, which represents approximately 17% of this amount), and, we estimate, nearly 60% and approximately 70-75% of the U.K. volume and net sales revenue, respectively, originate from the U.K. on-premise channel. As a result of the coronavirus pandemic and resulting government-imposed restrictions and related on-premise closures, this portion of our business has effectively ceased entirely from the middle of March through early June across all of Europe and continuing into ~~April across all of Europe.~~early July in the U.K. Additionally, the governmental or societal impositions ~~of the closure of~~on bars and restaurants and restrictions on public gatherings including the growing risk of a return of shutdowns, especially if prolonged in nature, we expect will continue to have adverse effects on on-premise traffic and, in turn, our business performance, cash flows and liquidity.

Our ~~first quarter~~ results for the six months ended June 30, 2020 include a reduction to net sales of ~~$12.5~~$12.2 million and charges to cost of goods sold of ~~$6.7~~$4.6 million related to the recognition of estimated sales returns and finished good obsolescence reserves and related costs resulting from the on-premise impacts of the coronavirus pandemic. These charges were primarily recognized during the first quarter of 2020, with immaterial adjustments for changes in estimates recognized in the second quarter.

The U.K. exited the European Union (EU) on January 31, 2020, which subjects our Europe segment to regulatory and market uncertainty as the U.K. remains in the EU customs union and single market until December 31, 2020, while the full terms of future trade agreements continue to be negotiated. The GBP has recently become volatile as a result of the government discussions related to the uncertainty and terms of the exit as well as from the ongoing uncertainties and impacts of the coronavirus pandemic. Any significant weakening of the GBP to the USD could have an adverse impact on our results due to the importance and relative magnitude of U.K. sales.

Foreign currency impact on results

Our Europe segment operates in numerous countries within Europe and each country's operations utilize distinct currencies. Foreign currency movements favorably impacted our Europe USD loss before income taxes by ~~$2.8~~$1.2 million and $4.0 million for the

three and six months ended ~~March 31, 2020.~~June 30, 2020, respectively. Included in this amount are both translational and transactional impacts of changes in foreign exchange rates. The impact of transactional foreign currency gains and losses is recorded within other income (expense) in our unaudited condensed consolidated statements of operations.

Volume and net sales

Our Europe brand volume decreased ~~8.5%~~21.4% and 16.2% for the three and six months ended ~~March 31,~~June 30, 2020, respectively, as a result of the coronavirus pandemic. Financial volume declined 24.8% and 18.8% for the three and six months ended June 30, 2020 respectively, also as a result of the coronavirus pandemic.

Net sales per hectoliter on a brand volume basis decreased ~~5.2%~~12.7% and 9.6% in local currency for the three and six months ended ~~March 31,~~June 30, 2020, respectively, compared to prior year, driven by unfavorable channel and geographic mix, particularly in the higher margin U.K. business, which has a more significant exposure to the on-premise channel and remained closed until early July compared to other European markets which started to reopen gradually toward the end of May and early June as ~~well as~~a result of the coronavirus pandemic. Net sales per hectoliter on a brand volume basis was also impacted by the estimated keg sales returns primarily recognized in the first quarter of 2020 related to the on-premise impacts resulting from the coronavirus pandemic ~~partially offset by positive pricing.~~and slightly unfavorable pricing during the second quarter of 2020. Net sales per hectoliter on a reported basis decreased ~~3.8%~~23.4% and 14.6% in local currency for the three and six months ended ~~March 31,~~June 30, 2020, respectively, compared to prior year.

Cost of goods sold

Cost of goods sold per hectoliter ~~increased 8.4%~~decreased 13.4% and 2.5% in local currency for the three and six months ended ~~March 31,~~June 30, 2020, respectively, versus prior year, driven by changes in geographic mix, partially offset by volume deleverage and cost inflation as well as the estimated finished ~~goods~~good obsolescence reserves and costs resulting from the on-premise impacts of the coronavirus pandemic ~~as well as cost inflation and volume deleverage.~~recognized primarily in the first quarter of 2020.

Marketing, general and administrative expenses

Marketing, general and administrative expenses decreased ~~4.3%~~35.5% and 20.8% in local currency for the three and six months ended ~~March 31,~~June 30, 2020, respectively, compared to prior year, primarily as a result of actions taken to mitigate the impacts associated with the coronavirus pandemic and ~~favorable foreign currency movements.~~lower incentive compensation.

Unallocated


	Three Months Ended									Three Months Ended										Six Months Ended
	March 31, 2020			March 31, 2019			% change			June 30, 2020		June 30, 2019		% change		June 30, 2020		June 30, 2019		% change
	(In millions, except percentages)									(In millions, except percentages)
Financial volume in hectoliters	—			—			—	%	Financial volume in hectoliters	—		—		—	%	—		—		—	%
Sales	$	—		$	—		—	%	Sales	$	—	$	—	—	%	$	—	$	—	—	%
Excise taxes	—			—			—	%	Excise taxes	—		—		—	%	—		—		—	%
Net sales	—			—			—	%	Net sales	—		—		—	%	—		—		—	%
Cost of goods sold	(99.1		)	34.1			N/M		Cost of goods sold	59.4		(31.2)		N/M		(39.7)		2.9		N/M
Gross profit	(99.1		)	34.1			N/M		Gross profit	59.4		(31.2)		N/M		(39.7)		2.9		N/M
Marketing, general and administrative expenses	—			—			—	%	Marketing, general and administrative expenses	—		—		—	%	—		—		—	%
Special items, net	—			—			—	%	Special items, net	—		—		—	%	—		—		—	%
Operating income (loss)	(99.1		)	34.1			N/M		Operating income (loss)	59.4		(31.2)		N/M		(39.7)		2.9		N/M
Interest expense, net	(66.5		)	(69.7		)	(4.6	)%
Interest income (expense), net									Interest income (expense), net	(67.7)		(68.4)		(1.0)	%	(134.2)		(138.1)		(2.8)	%
Other pension and postretirement benefits (costs), net	7.5			8.6			(12.8	)%	Other pension and postretirement benefits (costs), net	7.6		8.4		(9.5)	%	15.1		17.0		(11.2)	%
Other income (expense), net	—			0.8			(100.0	)%	Other income (expense), net	1.9		(0.1)		N/M		1.9		0.7		171.4	%
Income (loss) before income taxes	$	(158.1	)	$	(26.2	)	N/M		Income (loss) before income taxes	$	1.2	$	(91.3)	N/M		$	(156.9)	$	(117.5)	33.5	%

N/M = Not meaningful

Cost of goods sold

The unrealized changes in fair value on our commodity swaps, which are economic hedges, are recorded as cost of goods sold within ~~unallocated.~~unallocated and make up the entirety of the activity presented within cost of goods sold in the table above for both the three and six months ended June 30, 2020 and June 30, 2019. As the exposure we are managing is realized, we reclassify the gain or loss 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. Lower commodity market prices relative to our hedged positions on our commodity swaps drove total unrealized mark-to-market losses of $99.1 million recognized in cost of goods sold for the three months ended March 31, 2020, compared to the unrealized mark-to-market gain of $34.1 million recognized in cost of goods sold for the three months ended March 31, 2019.

Interest ~~expense,~~income (expense), net

Net interest expense decreased ~~for~~during the three and six months ended ~~March 31,~~June 30, 2020 compared to the prior year, primarily driven by the repayment of debt as part of our deleveraging ~~commitments as well as risk management strategies to reduce interest expense.~~commitments. See Part I—Item 1. Financial Statements, Note 8, "Debt" ~~and~~ ~~Note 11, "Derivative Instruments and Hedging Activities"~~ for further details.

Liquidity and Capital Resources

On March 11, 2020, the World Health Organization characterized the outbreak of the novel coronavirus disease, known as COVID-19, as a global pandemic and recommended containment and mitigation measures. We are actively monitoring the impact of the coronavirus pandemic, which has had, and we currently expect will continue to have, a material adverse effect on our operations, liquidity, financial condition and financial results for our full year 2020 and, possibly, beyond. The extent to which our future liquidity will be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity and duration of the pandemic and actions by government authorities to contain the outbreak or treat its impact, among other things.

Our primary sources of liquidity have included cash provided by operating activities and access to external capital. However, a continued worldwide disruption could materially affect our future access to our sources of liquidity. In the event of a sustained market deterioration and continued declines in net sales, profit and operating cash flow, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. 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, capital expenditures and other obligations for the twelve months subsequent to the date of the issuance of this quarterly report,

and our long-term liquidity requirements. Additionally, in the second quarter of 2020, as part of our planned actions to mitigate liquidity considerations related to the coronavirus pandemic, we amended our $1.5 billion revolving credit facility to revise the leverage ratios~~However,~~ under the financial maintenance covenant upwards for the six fiscal quarters beginning second quarter 2020 to consider the effects of the pandemic on our business. Separately we have entered into the COVID Corporate Financing Facility commercial paper program in the U.K. allowing for an incremental borrowing capacity of up to GBP 300 million as further discussed below.

We are currently focused on navigating the recent challenges presented by the coronavirus pandemic by preserving our liquidity and managing our cash flow through taking preemptive action to enhance our ability to meet our short-term liquidity needs. Specifically, we have taken several actions and considered various potential actions that may be needed to meet short-term and mid-term liquidity needs and have resources in place should we need to act on any of these quickly. Such potential actions include, but are not limited to, ~~further~~ drawing on our $1.5 billion revolving ~~line of~~ credit ~~(see~~facility, including issuing commercial paper under our U.S. commercial paper program, issuing, as necessary, up to GBP 300 million in commercial paper under the COVID Corporate Financing Facility in the U.K.(see Part I—Item 1. Financial Statements, Note 8, "Debt" regarding details of our current ~~revolving credit facility~~ borrowings and remaining ~~capacity)~~capacities under these programs), further accessing the capital markets, reducing discretionary spending including marketing, general and administrative as well as capital expenditures, asset monetization, and taking advantage of certain governmental programs such as furloughs in the U.K. and government relief and payment deferral programs, for example by the U.S. Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), discussed below, and other such government-sponsored legislation and programs. In addition, we and our ~~Board are~~board of directors continue to actively ~~evaluating~~evaluate various capital allocation ~~options, including a suspension, reduction or temporary elimination of~~considerations, which most recently led to taking the action in late May 2020 to suspend our ~~dividend.~~regular quarterly dividends otherwise payable in fiscal year 2020.

While we currently expect to have the necessary cash on hand to repay obligations when due, continued declines in net sales and profit could have a material adverse effect on our financial operations, cash flow and our ability to raise capital. The coronavirus pandemic is ongoing, and because of its dynamic nature, including uncertainties relating to the ultimate spread of the virus, the severity of the disease, the duration of the pandemic, the duration of on-premise closures and related prolonged weakening of economic or other negative conditions, and governmental reactions, we cannot fully anticipate future conditions given the substantial uncertainties in the economy in general. We may have unexpected costs and liabilities; revenue and cash provided by operations may decline; macroeconomic conditions may continue to weaken; prolonged and severe levels of unemployment may negatively impact our consumers; and competitive pressures may increase. These factors may result in difficulty maintaining liquidity, meeting our deleverage commitments and complying with our revolving credit facility covenants. As a result, our credit ratings could be downgraded, which would increase our costs of future borrowing and harm our ability to refinance our debt in the future on acceptable terms or at all. However, in anticipation of these uncertainties, we entered into Amendment No. 2 to our $1.5 billion revolving credit facility on June 19, 2020. While the amendment did not increase our borrowing capacity or extend the term of the facility, it, among other things, (i) temporarily increases certain levels of the applicable rate by 25 basis points for the period beginning June 19, 2020 and ending on the last day of the fiscal quarter ending September 30, 2021, and (ii) revises the leverage ratios under the financial maintenance covenant for each fiscal quarter ending on or after June 30, 2020 through the maturity of the Credit Agreement.

There can be no assurance that we will be able to secure additional liquidity if our revolving credit facility is fully drawn, the capital markets become inaccessible or if our credit rating is adversely impacted, which may result in difficulties in accessing debt markets or increase our debt costs. Even if we have access to the capital markets, we may not be able to raise capital on acceptable terms or at all. If we are unable to maintain or access adequate liquidity, our ability to timely pay our obligations when due could be adversely affected.

Continued disruption and declines in the global economy could also impact our customers' liquidity and capital resources and therefore our ability to collect, or the timeliness of collection of our accounts receivable from them, which may have a material adverse impact on our performance, cash flows and capital resources. We continue to monitor our accounts receivable aging and have recorded reserves as appropriate. In addition, measures taken by governmental agencies to provide relief to businesses could further impact our ability to collect from customers. See Part I—Item 1. Financial Statements, Note 1, “Basis

of Presentation and Summary of Significant Accounting Policies” for additional discussion related to our accounts receivable and associated reserves.

Additionally, in response to the coronavirus pandemic, various governmental authorities globally have announced relief programs which we continue to monitor and evaluate, such as the CARES Act in the U.S. ~~which was signed into law on March 27, 2020.~~ Certain of these relief programs provide temporary deferrals of income and non-income based tax payments, which have positively impacted our operating cash flows in the first ~~quarter~~half of 2020. We anticipate ~~these temporary deferrals will result in continued timing~~that a significant portion of the over $500 million of cash flow benefits ~~to operating cash flows in the first half of 2020, largely expected to benefit cash flows in~~recognized through the second quarter of 2020 ~~with reversals~~resulting from these temporary deferrals will reverse in the second half of 2020, ~~and into 2021~~with the remaining amounts reversing beyond this fiscal year as these deferred payments programs end and payments are ~~made.~~due.

While a significant portion of our cash flows from operating activities is generated within the U.S., our cash balances may be comprised of cash held outside the U.S. and in currencies other than USD. As of ~~March 31,~~June 30, 2020, approximately ~~52%~~69% of our cash and cash equivalents was located outside the U.S., largely denominated in foreign currencies. The recent fluctuations in foreign currency exchange rates may have a material impact on these foreign cash balances. We accrue for tax consequences on the earnings of our foreign subsidiaries upon repatriation. When the earnings are considered indefinitely reinvested outside of the U.S., we do not accrue taxes. However, we continue to assess the impact of the 2017 Tax Act and related U.S. Department of Treasury proposed, temporary and final regulations, on the tax consequences of future cash repatriations. We utilize a variety of 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 strategies, including external committed and non-committed credit agreements accessible by MCBC and each of our operating subsidiaries. We believe these financing arrangements, along with the cash generated from the operations of our U.S. business and other liquidity measures resulting from considerations of the on-going coronavirus global pandemic, as discussed above, are sufficient to fund our current cash needs in the U.S.

Additionally, our cash balances in foreign countries are often subject to additional restrictions and covenants. We may, therefore, have difficulties repatriating cash held outside of the U.S. which would also be subject to various repatriation taxes. In some countries repatriation of certain foreign balances is restricted by local laws and could have adverse tax consequences if we were to move the cash to another country. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. or other countries and may adversely affect our liquidity.

Separately, as discussed in Part I - Item 1. Financial Statements, Note 6, "Income Tax", the U.S. Department of Treasury recently enacted final hybrid regulations which impact tax positions we took in 2018 and 2019 and have resulted in additional income tax expense of approximately $135 million recognized during the second quarter of 2020. The impact of the finalized regulations could result in cash tax outflows up to this amount in 2021. We continue to analyze the potential cash impacts of the final regulations to minimize any cash outflows.

Cash Flows and Use of Cash

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

Cash Flows from Operating Activities

Net cash ~~used in~~provided by operating activities of ~~$18.1 million~~approximately $1.1 billion for the ~~three~~six months ended ~~March 31,~~June 30, 2020 ~~decreased~~increased by ~~$80.4~~$231.9 million compared to net cash ~~used~~provided by operating activities of ~~$98.5~~$828.0 million during the ~~three~~six months ended ~~March 31,~~June 30, 2019. This benefit was primarily driven by favorable timing of working capital, ~~and~~ lower cash paid for taxes and lower interest paid, partially offset by lower net income adjusted for non-cash add-backs during the ~~three~~six months ended ~~March 31,~~June 30, 2020. Notably, working capital and cash paid for taxes benefited from over $500 million in deferred tax payments from various government-sponsored payment deferral programs initiated in response to the coronavirus pandemic, of which we currently anticipate a significant portion to be paid in the second half of 2020 with the remaining amounts to be paid beyond this fiscal year.

Cash Flows from Investing Activities

Net cash used in investing activities of ~~$220.0~~$341.5 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020 increased by ~~$25.4~~$173.7 million compared to the ~~three~~six months ended ~~March 31,~~June 30, 2019, driven primarily by the receipt of $94.2 million of net proceeds from the sale of our Montreal brewery during the second quarter of 2019, higher capital ~~expenditures.~~expenditures and lower net cash inflows from other investing activities including the proceeds of approximately $47 million received from the voluntary settlement of our cross currency swaps during the second quarter of 2019.

Cash Flows from Financing Activities

Net cash ~~provided by~~used in financing activities was ~~$398.7~~$449.8 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020 compared to net cash used in financing activities of ~~$534.8 million~~approximately $1.2 billion for the ~~three~~six months ended ~~March 31,~~June 30, 2019. This ~~increase~~decrease was primarily driven by lower net debt repayments for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 and lower dividends paid resulting from the suspension of dividend payments in the second quarter of 2020, partially offset by an increase in borrowings under our ~~revolving credit facility and~~ commercial paper program and lower net debt repayments for the three months ended March 31, 2020 compared to the three months ended March 31, 2019, partially offset by previously declared increased dividend payments during the first quarter of 2020.program.

Capital Resources

Cash and Cash Equivalents

As of ~~March 31,~~June 30, 2020, we had total cash and cash equivalents of ~~$666.1~~$780.8 million, compared to $523.4 million as of December 31, 2019 and ~~$234.4~~$490.2 million as of ~~March 31,~~June 30, 2019. The increase in cash and cash equivalents from ~~December 31, 2019~~both prior periods was primarily driven by cash generated from operating activities, including the above-mentioned deferred tax payments from

various government-sponsored payment deferral programs and borrowings under our ~~revolving credit facility and~~ commercial paper program, partially offset by the repayment of debt, capital expenditures ~~and dividend payments. The increase in cash and cash equivalents from March 31,~~

2019 was primarily driven by cash generated from operating activities and borrowings under our revolving credit facility, partially offset by lower borrowings under our commercial paper program, as well as debt repayments and dividend payments.

Borrowings

During the first quarter of 2020, we repaid our $500 million 2.25% notes, which matured in March 2020. Notional amounts below are presented in USD based on the applicable exchange rate as of ~~March 31,~~June 30, 2020. We have economically converted a portion of our $1.0 billion 2.1% senior notes due 2021 to EUR denominated using cross currency swaps of $400 million. Refer to Part I—Item 1. Financial Statements, Note 8, "Debt" for ~~details~~details.

Based on the credit profile of our lenders that are party to our credit facilities, we are confident in our ability to continue to draw on our revolving credit facility if the need arises. As of ~~March 31,~~June 30, 2020, we had ~~$474.5 million~~$1.3 billion available to draw on our $1.5 billion revolving credit facility, as ~~we had approximately $1.0 billion of borrowings drawn and~~ the borrowing capacity is also reduced by borrowings under our commercial paper program. As of ~~March 31,~~June 30, 2020, we had total outstanding borrowings under our commercial paper program of ~~$25.5~~approximately $200 million. Subsequent to ~~March 31,~~June 30, 2020, we ~~made total~~had net ~~repayments of $425.5 million on our outstanding~~ commercial paper ~~and revolving credit facility borrowings resulting in no~~payments of approximately $25 million, for a total amount outstanding ~~commercial paper and $600.0~~of approximately $175 million ~~outstanding under our revolving credit facility.~~as of July 30, 2020. As such, as of ~~April~~July 30, 2020, we have ~~$900.0 million~~approximately $1.3 billion available to draw on our total $1.5 billion revolving credit facility. We had no borrowings drawn on this revolving credit facility and no commercial paper borrowings as of December 31, 2019. Additionally, we expect to use commercial paper issuances and cash on hand to fund the upcoming repayment of our CAD 500 million 2.75% notes due September 2020, which we began purchasing CAD in anticipation of this upcoming maturity during July 2020.

Separately, on May 26, 2020, Molson Coors Brewing Company (UK) Limited (“MCBC U.K.”), a subsidiary of MCBC that operates and manages the Company’s business in the U.K., established a commercial paper facility for the purpose of issuing short-term, unsecured Sterling-denominated notes that are eligible for purchase under the Joint HM Treasury and Bank of England’s COVID Corporate Financing Facility commercial paper program (the “CCFF Program”) in an aggregate principal amount up to GBP 300 million, which may be increased from time to time as provided in the Dealer Agreement (as defined in Part I—Item 1. Financial Statements, Note 8, "Debt"). Commercial paper issuances under the CCFF Program do not impact the borrowing capacity under our revolving credit facility. We had no borrowings outstanding under the CCFF Program as of June 30, 2020 or July 30, 2020.

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

Under the terms of each of our debt facilities, we must comply with certain restrictions. These include customary events of default and specified representations, warranties and covenants, as well as covenants that restrict our ability to incur certain additional priority indebtedness (certain thresholds of secured consolidated net tangible assets), certain leverage threshold percentages, create or permit liens on assets and restrictions on mergers, acquisitions and certain types of sale lease-back transactions. ~~Additionally, under the $1.5 billion~~

On June 19, 2020, we entered into to an amendment to our existing revolving credit facility agreement, which among other things, revised the leverage ratios under the financial maintenance covenant for each fiscal quarter ending on or after June 30, 2020 through the maturity of the credit facility. The maximum leverage ratio, as defined by the amended revolving credit facility agreement as of June 30, 2020 is 4.75x net debt to EBITDA, with an increase to 5.25x net debt to EBITDA as of the last day of the fiscal quarter ending September 30, 2020 through March 31, ~~2020~~2021, followed by a 0.50x reduction to 4.75x net debt to EBITDA for the fiscal quarter ending June 30, 2021. The leverage ratio requirement as of the last day of the fiscal quarter ending September 30, 2021 is ~~4.25x~~reduced by 0.25x to 4.50x net debt to EBITDA, with a ~~decline~~further 0.50x reduction to 4.00x net debt to EBITDA as of the last day of the fiscal quarter ending December 31, ~~2020.~~2021 through maturity of the credit facility. As of ~~March 31,~~June 30, 2020 and December 31, 2019, we were in compliance with all of these restrictions, have met such financial ratios and have met all debt payment obligations. All of our outstanding senior notes as of ~~March 31,~~June 30, 2020 rank pari-passu.

See Part I—Item 1. Financial Statements, Note 8, "Debt" for a complete discussion and presentation of all borrowings and available sources of borrowing, including lines of credit.

Credit Rating

Our current long-term credit ratings are BBB-/Negative Outlook, Baa3/Stable Outlook and BBB(Low)/~~Stable~~Negative Outlook with Standard & Poor's, Moody's and DBRS, respectively. Our short-term credit ratings are A-3, Prime-3 and R-2(low), 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.

Foreign Exchange

Foreign exchange risk is inherent in our operations primarily due to the significant operating results that are denominated in currencies other than USD. Our approach is to reduce the volatility of cash flows and reported earnings which result from currency fluctuations rather than business related factors. Therefore, we closely monitor our operations in each country and seek to adopt appropriate strategies that are responsive to foreign currency fluctuations. Our financial risk management policy is intended to offset a portion of the potentially unfavorable impact of exchange rate changes on net income and earnings per share. See Part II—Item 8. Financial Statements and Supplementary Data, Note 16, "Derivative Instruments and Hedging Activities" of our Annual Report for additional information on our financial risk management strategies.

Our consolidated financial statements are presented in USD, which is our reporting currency. Assets and liabilities recorded in foreign currencies that are the functional currencies for the respective operations are translated at the prevailing exchange rate at the balance sheet date. Translation adjustments resulting from this process are reported as a separate component of other comprehensive income. Revenue and expenses are translated at the average exchange rates during the respective period throughout the year. Gains and losses from foreign currency transactions are included in earnings for the period. The significant exchange rates to the USD used in the preparation of our consolidated financial results for the primary foreign currencies used in our foreign operations (functional currency) are as follows:


	Three Months Ended			Six Months Ended
	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019
Weighted-Average Exchange Rate (1 USD equals)
Canadian Dollar (CAD)	1.36	1.33	1.36	1.33
Euro (EUR)	0.91	0.89	0.91	0.89
British Pound (GBP)	0.81	0.78	0.80	0.78
Czech Koruna (CZK)	23.91	22.69	23.80	22.67
Croatian Kuna (HRK)	6.74	6.56	6.75	6.56
Serbian Dinar (RSD)	107.44	104.46	106.92	104.11
Romanian Leu (RON)	4.35	4.22	4.35	4.18
Bulgarian Lev (BGN)	1.77	1.74	1.77	1.73
Hungarian Forint (HUF)	313.79	286.00	311.51	284.89

Three Months Ended
March 31, 2020 March 31, 2019
Weighted-Average Exchange Rate (1 USD equals)
Canadian Dollar (CAD) 1.35

1.34
Euro (EUR) 0.90

0.88
British Pound (GBP) 0.80

0.77
Czech Koruna (CZK) 22.92

22.60
Croatian Kuna (HRK) 6.77

6.53
Serbian Dinar (RSD) 106.61

104.06
Romanian Leu (RON) 4.35

4.15
Bulgarian Lev (BGN) 1.77

1.72
Hungarian Forint (HUF) 306.74

279.72


	As of			As of
	March 31, 2020	December 31, 2019		June 30, 2020	December 31, 2019
Closing Exchange Rate (1 USD equals)			Closing Exchange Rate (1 USD equals)
Canadian Dollar (CAD)	1.41	1.30	Canadian Dollar (CAD)	1.36	1.30
Euro (EUR)	0.91	0.89	Euro (EUR)	0.89	0.89
British Pound (GBP)	0.81	0.75	British Pound (GBP)	0.81	0.75
Czech Koruna (CZK)	24.80	22.70	Czech Koruna (CZK)	23.74	22.70
Croatian Kuna (HRK)	6.91	6.63	Croatian Kuna (HRK)	6.74	6.63
Serbian Dinar (RSD)	106.50	104.93	Serbian Dinar (RSD)	104.71	104.93
Romanian Leu (RON)	4.38	4.27	Romanian Leu (RON)	4.31	4.27
Bulgarian Lev (BGN)	1.77	1.74	Bulgarian Lev (BGN)	1.74	1.74
Hungarian Forint (HUF)	326.95	295.21	Hungarian Forint (HUF)	315.51	295.21

The weighted-average exchange rates in the above table have been calculated based on the average of the foreign exchange rates during the relevant period and have been weighted according to the foreign denominated earnings from

operations of the USD equivalent. During the first ~~quarter~~half of 2020, the coronavirus pandemic has resulted in increased

volatility in exchange rates including the weakening of the CAD and GBP versus the USD. If foreign currencies in the countries in which we operate devalue significantly in future periods, most significantly the CAD, GBP and other European operating currencies included in the above table, then the impact on USD reported earnings may be material.

Capital Expenditures

We incurred ~~$171.8~~$271.4 million, and have paid ~~$225.1~~$345.1 million, for capital improvement projects worldwide in the ~~three~~six months ended ~~March 31,~~June 30, 2020, excluding capital spending by equity method joint ventures, representing an increase of ~~$76.1~~$27.9 million from the ~~$95.7~~$243.5 million of capital expenditures incurred in the ~~three~~six months ended ~~March 31,~~June 30, 2019. This increase was primarily due to the timing of projects, including the on-going construction of the new brewery in Longueuil, Quebec and increased investments to modernize our Golden, Colorado brewery.

As a partial mitigating action to prepare to offset some of the financial implications of the coronavirus pandemic, we have reduced our capital expenditure plans by approximately $200 million for full year 2020, based on foreign exchange rates as of ~~March 31,~~June 30, 2020. This expectation includes capital expenditures associated with the construction of our new Longueuil, Quebec brewery, which is under construction and not currently expected to be completed until 2021, and increased investment to modernize our Golden, Colorado brewery, which began in the fourth quarter of 2019. However, certain aspects of both projects are currently delayed and may continue to be delayed as a result of the pandemic.

We are currently focused on navigating ~~these recent~~the challenges presented by the coronavirus pandemic. Specifically, we have considered various actions that may be needed in relation to mitigation efforts, such as, but not limited to, reducing and/or delaying discretionary capital expenditure spend.

In light of this, we have heightened our focus on where and how we employ our remaining planned capital expenditures, with an emphasis on strengthening our focus on required returns on invested capital as we determine how to best allocate cash within the business.

Contractual Obligations and Commercial Commitments

There were no material changes to our contractual obligations and commercial commitments 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, 2019, as reported in Part II - Item 7. Management's Discussion and Analysis, Contractual Obligations and Commercial Commitments in our Annual Report, with the exception of the repayment of our $500 million 2.25% notes during the first quarter of 2020. However, we ~~are currently reviewing~~continue to review and ~~monitoring~~monitor our contractual obligations and commitments relative to the potential considerations resulting from the on-going coronavirus pandemic.

Guarantees

We guarantee indebtedness and other obligations to banks and other third parties for some of our equity method investments and consolidated subsidiaries. See Part I - Item 1. Financial Statements, Note 12, "Commitments and Contingencies" for further discussion.

Contingencies

We are party to various legal proceedings arising in the ordinary course of business, environmental litigation and indemnities associated with our sale of Kaiser to FEMSA. See Part I—Item 1. Financial Statements, Note 12, "Commitments and Contingencies" for further discussion.

Off-Balance Sheet Arrangements

Refer to Part II—Item 8 Financial Statements, Note 18, "Commitments and Contingencies" in our Annual Report for discussion of off-balance sheet arrangements. As of ~~March 31,~~June 30, 2020, we did not have any other material off-balance sheet arrangements (as defined in Item 303(a)(4)(ii) of Regulation S-K).

Outlook

We have seen the benefits of our work in response to the short-term impacts of the coronavirus pandemic and are confident in how we are positioning the business for the long term. However, we are still actively monitoring the ~~impact~~continued evolution of the ~~novel~~ coronavirus pandemic ~~which has changed~~and resulting impacts to our business. While we began to see some of the ~~landscape~~on-premise return in June in many of our ~~business. We~~markets, with the notable exception of the U.K. which remained closed until early July, business in the channel has been slow, remains uncertain and has not returned to pre-pandemic levels. Therefore, as a result of this uncertainty, along with the growing risk of a return of shutdowns in certain markets, we currently continue to expect a

significant adverse impact ~~particularly in the second quarter of 2020,~~ to both net sales and profit performance for the third quarter and fiscal year 2020, and, possibly, ~~beyond,~~beyond.

The coronavirus pandemic continues to impact our business due to ~~the resulting closure of the~~ on-premise ~~channel~~losses across all our geographies, and disproportionately in ~~effectively all of our markets, as well as the anticipated~~Europe, and we expect negative ~~impact of the pandemic on the global economy. Specifically, we estimate that approximately 23% of our 2019 consolidated~~trends in volume, net sales ~~resulted from on-premise consumption, with approximately 17%~~revenue, mix, and unfavorable fixed cost absorption in cost of ~~our North America net sales and approximately 50-55% of our Europe net sales each coming from this important part of~~goods sold will continue for the ~~industry, and in nearly all of our markets the on-premise business~~foreseeable future. Off-premise demand has been ~~effectively reduced to zero.~~

In April 2020, the impacts of the coronavirus pandemic have continued to significantly adversely affect the on-premise channel, which continues to be effectively closed across all of our markets, and the benefit of pantry loading to our North America STR performance at the end of Marchstrong, but it has not ~~continued. While off-premise sales continue to perform well, we do not expect them to~~ fully offset the ~~loss of~~on-premise losses and, while the on-premise volume. Specifically, for the first four weeks of April 2020, in North America, we estimate that U.S. STRs were down approximately 14%, driven by lower premium and above premium brand trends, with economy brand performance down approximately 4% in the four weeks. In the U.S. we continue to see strong STR trends in the off-premise channel, but these trends are not fully offsetting the effective elimination of on-premise sales. We expect the negativecurrent on-premise trends ~~in the U.S. to~~ continue, ~~while social isolation continues to be practiced and~~we do not expect that any increase in total off-premise volumes due to channel shifting will ~~not~~ be sufficient to offset the ~~losses experienced~~on-premise losses. In addition, where we have seen shifts in demand to the off-premise, and certain package types, this has strained our supply chain and package availability, particularly with aluminum can demand and other packaging materials, requiring that we strategically prioritize certain brands and package types. Our supply chain continues to work diligently to ensure sufficient supply of these high demand brands and packages as we adjust to these changing consumer dynamics. We currently expect these supply constraints to remain a challenge for the third quarter of 2020. However, in the ~~on-premise. We estimate that this will result in negative trends in volume, net sales, and mix versus our prior estimates and~~U.S., we expect ~~these~~domestic shipment trends to ~~continue at least through~~be higher than brand volume trends as we build distributor inventories for the ~~end~~balance of the ~~year and in particular~~year.

We expect our marketing investment to increase in the second ~~quarter. Separately,~~half of 2020 in ~~Europe,~~North America as further discussed below, but some of this spend will be dependent on a number of factors including the anticipated return of live sports. Additionally, we ~~estimate that brand volumes are down approximately 40% for~~will be cycling lower incentive compensation, particularly long-term incentive compensation, from the prior year in both the third and fourth quarters, as well as a non-recurring vendor benefit in the U.S. in the fourth quarter of 2020.

Further, in response to the coronavirus pandemic, various governmental authorities globally have announced relief programs which among other items, provide temporary deferrals of income and non-income based tax payments, which have positively impacted our operating cash flows in the first ~~four weeks~~half of ~~April~~ 2020. We anticipate that a significant portion of the over $500 million of cash flow benefits recognized through the first half of 2020 resulting from these temporary deferrals will reverse in the second half of 2020, with the remaining amounts reversing beyond this fiscal year as these deferred payments programs end and payments are due.

~~The~~With the continued spread of the coronavirus and the reversal of certain on-premise re-openings, the extent, severity and duration to which our operations will be impacted by the pandemic remains uncertain. Therefore, we previously withdrew our financial outlook for 2020 and beyond and have determined that the market remains too unpredictable to provide an updated detailed financial ~~outlook. However,~~outlook at this time.

Despite these obstacles, we ~~have provided~~continue to effectively navigate the ~~above information on early indications of the impact on our April performance in response.~~

~~We are~~coronavirus pandemic taking ~~various mitigating~~numerous actions to ~~prepare to offset some of the implications to~~protect our employees and ~~communities,~~mitigate short-term challenges while simultaneously working to position our business to succeed in the longer term including:

•We instituted and provided approximately $16 million of "thank you" pay for certain essential North America brewery employees which concluded in the second quarter as well as ~~the immediate challenges to performance,~~a paid leave policy and voluntary paid leave program, while also ~~ensuring liquidity and deleverage remain key priorities, including:~~

~~Taking the~~taking necessary steps to protect our employees by implementing additional health and safety measures in breweries and distribution centers, ~~instituting~~

•We prioritized and shifted our marketing spend significantly including shifting media to platforms with higher audiences in the current environment while suspending on-premise activation spending and reducing or eliminating spend in areas that have been significantly impacted, for example sports and in-market activations. We also adjusted the timing of spend behind brands and packs that were constrained by supply. These actions resulted in significant reductions in spend in the second quarter of 2020 versus the second quarter of 2019. With the expected improvement in availability of our brands, as well as the very successful launch of Vizzy and Blue Moon LightSky as well as the upcoming launch of Coors Seltzer, we currently anticipate marketing spend in the third and fourth quarter of 2020 to be above the prior year in North America,

•While second quarter of 2020 shipments were below desired levels driven in part by the on-premise closures, we strategically prioritized brands and package types to meet off-premise demand leading to positive mix in the U.S. and continue to work diligently to deliver product to meet these evolving shifts in demand,

•We reduced discretionary spending, limited new hiring and restricted travel,

•We reduced our planned 2020 capital expenditures by approximately $200 million and those reductions remain on target without sacrificing our ability to invest in necessary safety and maintenance projects and return-focused capital investments to our breweries, such as our Fort Worth, Texas seltzer expansion,

•We entered into an amendment to our existing $1.5 billion revolving credit facility agreement, which among other things, favorably revises the leverage ratios under the financial maintenance covenant for each fiscal quarter ending on or after June 30, 2020 through the maturity of the credit facility giving us greater financial flexibility,

•We established a ~~paid leave policy, voluntary paid leave~~commercial paper facility in the U.K. for the purpose of issuing short-term, unsecured GBP-denominated notes that are eligible for purchase under the Joint HM Treasury and Bank of England’s COVID Corporate Financing Facility commercial paper program in an aggregate principal amount up to GBP 300 million adding incremental borrowing capacity,

•Our board of directors suspended our regular quarterly dividends on our Class A and ~~"thank you" pay incentive for certain essential brewery employees,~~Class B common and exchangeable shares otherwise payable in the 2020 fiscal year, and

~~Supporting~~•We remain committed to maintaining our ~~local communities~~investment grade debt rating.

Amidst the backdrop of this global pandemic, we are very pleased with ~~charitable efforts including providing fresh water and hand sanitizer,~~

~~Taking a number~~our second quarter of ~~financial actions to protect our balance sheet,~~2020 financial performance, our progress in improving liquidity, and ~~position~~efforts to advance our ~~business to succeed in~~long-term goals for the ~~long-term, including:~~


◦	~~Reducing 2020 capital expenditures by approximately $200 million,~~


◦	~~Substantially reducing discretionary spending, limiting new hiring, and significantly decreasing marketing spend corresponding to the current environment,~~


◦	~~Furloughing certain employees in our Europe business and North America hospitality businesses,~~


◦	~~Shifting marketing investments to focus on our key media platforms that our consumers are at and eliminating spend that will not deliver value in the current environment,~~


◦	~~Using savings from our revitalization program to protect our cash and liquidity position, given the uncertainty in the economy,~~


◦	~~Utilizing our revolving credit facility when necessary and leveraging government payment deferral programs to provide enhanced financial flexibility and short-term liquidity, and,~~


◦	~~In addition, we and our Board are actively evaluating various capital allocation options, including a suspension, reduction or temporary elimination of our dividend.~~

~~Beyond the products we have in the market,~~business. While we are ~~also adapting the way~~confident in our ability to achieve long-term success, we ~~get them to consumers by accelerating our e-commerce efforts, subject to relevant government regulations. We~~ are partnering with a number of alcohol delivery platforms and other click and mortar retail sites to merchandise and make it easier to find our beers online. We are launching new e-commerce tools like a product locator for online purchases.

~~This is a very fluid situation, as governments and companies evaluate the impacts~~mindful of the ~~pandemic~~challenges and ~~prepare for the re-opening~~continued uncertainty that lie ahead. During this time of ~~the economy. We~~great uncertainty, our management and board will continue to take prudent and proactive actions which are in the best interests of the Company, our employees, consumers, customers and our ~~stockholders as things become clearer in this rapidly evolving situation.~~stockholders. Our decisions will be guided by, and consistent with, the Company’s overall financial discipline, ensuring adequate liquidity and our continued desire to maintain our investment grade rating. ~~As we contemplate taking additional~~Our actions ~~to navigate this unprecedented environment, we~~ remain ~~mindful of~~focused on doing what is best not ~~taking any steps that would have unintended negative ramifications to our~~only in the near-term, but positioning the business ~~or that would jeopardize our~~for medium orand long-term success.

Critical Accounting Estimates

Our accounting policies and accounting estimates critical to our financial condition and results of operations are set forth in our Annual Report and did not change during the first ~~quarter~~half of 2020, except as noted below. See Part I—Item 1. Financial Statements, Note 2, "New Accounting Pronouncements" for discussion of recently adopted accounting pronouncements. See

also Part I—Item 1. Financial Statements, Note 7, "Goodwill and Intangible Assets" for discussion of the interim impairment analysis performed as of January 1, 2020 as a result of our change in reporting units and aggregation of the Coors indefinite-lived intangible brand assets, and the related risks to our indefinite-lived intangible brand assets and goodwill amounts associated with our reporting units.

New Accounting Pronouncements Not Yet Adopted

See Part I—Item 1. Financial Statements, Note 2, "New Accounting Pronouncements" for a description of all new accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we actively manage our exposure to various market risks by entering into various supplier-based and market-based hedging transactions, authorized under established risk management policies that place clear controls on these activities. Our objective in managing these exposures is to decrease the volatility of our earnings and cash flows due to changes in underlying rates and costs.

The counterparties to our market-based transactions are generally highly rated institutions. We perform assessments of their credit risk regularly. Our market-based transactions include a variety of derivative financial instruments, none of which are used for trading or speculative purposes.

For details of our derivative instruments that are presented on the balance sheet, including their fair values as of period end, see Part I—Item 1. Financial Statements, Note 11, "Derivative Instruments and Hedging Activities." On a rolling twelve-month basis, maturities of derivative financial instruments held on ~~March 31,~~June 30, 2020,, based on foreign exchange rates as of ~~March 31,~~June 30, 2020,, are as follows:


Total	Total		Less than 1 year			1 - 3 years			3 - 5 years		More than 5 years			Total	Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
(In millions)	(In millions)													(In millions)
$	(400.0	)	$	(91.1	)	$	(116.6	)	$	—	$	(192.3	)	(351.4)	$	(64.4)	$	(103.4)	$	0.1	$	(183.7)

Sensitivity Analysis

Our market risk sensitive derivative and other financial instruments, as defined by the SEC, are debt, foreign currency forward contracts, commodity swaps, commodity options, cross currency swaps, forward starting interest rate swaps and warrants. We monitor foreign exchange risk, interest rate risk, commodity risk, equity price risk and related derivatives using a sensitivity analysis.

The following table presents the results of the sensitivity analysis, which reflects the impact of a hypothetical 10% adverse change in each of these risks to our derivative and debt portfolio, with the exception of interest rate risk to our forward starting interest rate swaps in which we have applied an absolute 1% adverse change to the respective instrument's interest rate:


	As of							As of
	March 31, 2020			December 31, 2019				June 30, 2020		December 31, 2019
	(In millions)							(In millions)
Estimated fair value volatility							Estimated fair value volatility
Foreign currency risk:							Foreign currency risk:
Forwards	$	(20.7	)	$	(25.8	)	Forwards	$	(20.5)	$	(25.8)
Foreign currency denominated debt	$	(171.2	)	$	(194.2	)	Foreign currency denominated debt	$	(182.8)	$	(194.2)
Cross currency swaps	$	(38.2	)	$	(89.2	)	Cross currency swaps	$	(39.5)	$	(89.2)
Interest rate risk:							Interest rate risk:
Debt	$	(256.4	)	$	(255.4	)	Debt	$	(239.4)	$	(255.4)
Forward starting interest rate swaps	$	(189.2	)	$	(150.4	)	Forward starting interest rate swaps	$	(189.6)	$	(150.4)

Commodity price risk:							Commodity price risk:
Commodity swaps	$	(49.9	)	$	(52.9	)	Commodity swaps	$	(83.0)	$	(52.9)
Commodity options	$	—		$	—		Commodity options	$	—	$	—
Equity price risk:							Equity price risk:
Warrants	$	(0.2	)	$	(0.6	)	Warrants	$	(0.2)	$	(0.6)

The volatility of the applicable rates and prices are dependent on many factors that cannot be forecast with reliable accuracy. Therefore, actual changes in fair values could differ significantly from the results presented in the table above.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2020 to provide reasonable assurance that information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applies its judgment in assessing the costs and benefits of such controls and procedures that, by their nature, can only provide reasonable assurance regarding management's control objectives. Also, we have investments in certain unconsolidated entities that we do not control or manage.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the three months ended ~~March 31,~~June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information regarding litigation, other disputes and environmental and regulatory proceedings see Part I—Item 1. Financial Statements, Note 12, "Commitments and Contingencies."

We are also involved in other disputes and legal actions arising in the ordinary course of our business. While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, none of these disputes and legal actions are expected to have a material impact on our business, consolidated financial position, results

of operations or cash flows. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report and the risk factor noted below, you should carefully consider the factors discussed in Part I—Item 1A. "Risk Factors" in our Annual Report, which could materially affect our business, financial condition and/or future results and may be further impacted by the coronavirus pandemic. The risks described in our Annual Report and herein are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, cash flows and/or future results.

The novel coronavirus pandemic, efforts to mitigate or disrupt the pandemic and related weak, or weakening of, economic or other negative conditions, have disrupted, and may continue to disrupt our business, which has had and could continue to have a material adverse effect on our operations, liquidity, financial condition and financial results.

Our business has been, and we currently expect will continue to be, materially and adversely affected by the coronavirus pandemic and related weak, or continued weakening of, economic or other negative conditions, particularly in regions where we derive a significant amount of our revenue or profit or where our suppliers and business partners are located, including, in North America and Europe. Specifically, the coronavirus pandemic has been disruptive and may continue to cause a disruption to our business and potential associated financial impacts include, but are not limited to, lower net sales in markets affected by the pandemic, including potential material shifts in, and impacts to, demand, the inability to sell our products to on-premise consumers and further disruption to the on-premise channel, including staged on premise re-openings and subsequent closure of on-premise accounts, the delay of, and potential increased costs related to, inventory production and fulfillment, including packaging availability impacted by package mix shifts related to off-premise demand, including significantly increased need for aluminum cans and paperboard, and lower return rates of our returnable packaging in certain markets, potentially impacting net sales and cost of goods globally and potential incremental costs associated with mitigating the effects of the pandemic, including increased raw materials, freight and logistics costs and other expenses. Packaging material supply shortages and supply chain constraints have impacted and could continue to negatively impact our ability to meet increased demand in off-premise channels or particular packages, which in turn could impact our net sales revenues and market share. Continued disruption and declines in the global economy have impacted and could ~~also~~continue to impact our customers’ liquidity and capital resources and therefore our ability to collect, or the timeliness of collection of our accounts receivable from them, which may have a material adverse impact on our performance, cash flows and capital resources. The coronavirus pandemic is ongoing, and its dynamic nature, including uncertainties relating to the ultimate spread of the virus, the severity of the disease, the duration of the pandemic and related prolonged weakening of economic or other negative conditions, such as a recession or slowed economic growth in our markets, and actions that may be taken by governmental authorities to contain the pandemic or to mitigate its impact, makes it difficult to forecast any effects on our results of operations for 2020 and in subsequent years. However, our results of operations have been negatively affected and we currently expect our results of operations for the remainder of 2020 to be significantly and adversely affected.

Specifically, difficult macroeconomic conditions in our markets, such as further decreases in per capita income and level of disposable income, increased and prolonged unemployment or a further decline in consumer confidence as a result of the coronavirus pandemic, as well as limited or significantly reduced points of access of our product, could continue to have a material adverse effect on the demand for our products. Under difficult economic conditions, consumers may continue to seek to reduce discretionary spending by forgoing purchases of our products, or by shifting away from our above-premium products to lower-priced products offered by us or other companies or by shifting to off-premise from on-premise consumption, negatively impacting our net sales and margins. Softer consumer demand for our products, particularly in North America, could reduce our profitability and could negatively affect our overall financial performance. A significant portion of our consolidated net sales revenues are concentrated in the United States and Europe, where the coronavirus pandemic impacts have been significant. Therefore, unfavorable macroeconomic conditions, in the U.S. and Europe, including as a result of the coronavirus pandemic and any resulting recession or slowed economic growth, have had, and could continue to have, an outsized negative impact on us. In addition, difficult economic conditions may have a negative impact on our ability to access capital markets and other funding sources, on acceptable terms or at all, should we seek future financing. Additionally, we may have unexpected costs and liabilities; revenue and cash provided by operations may decline; macroeconomic conditions may continue to weaken; prolonged and severe levels of unemployment may negatively impact our consumers; and competitive pressures may increase, resulting in difficulty maintaining adequate liquidity and meeting our deleverage commitments and as a result, our credit ratings could be downgraded, which would adversely impact our business, including by increasing our costs of future borrowing and harming our ability to refinance our debt in the future on acceptable terms or access the capital markets, if we are able to obtain additional financing on terms that are acceptable to us at all. Further, notwithstanding the amendment to our revolving credit facility on June 19, 2020 to revise the leverage ratios under the financial maintenance covenant upwards for the six fiscal quarters beginning second quarter 2020, should the impacts of the pandemic and resulting performance adversely affect our ability to remain compliant with our covenants in our revolving credit facility agreement and absent aanother amendment or waiver ~~or amendment~~ from participating lenders, the outstanding borrowings on our revolving credit facility agreement may become immediately due. Such events may additionally trigger an event of default on our senior notes resulting in the potential acceleration of amounts due thereunder.

In addition, the coronavirus pandemic and related efforts to mitigate its spread, have impacted, and may continue to impact for the foreseeable future, customer traffic to the on-premise channel, which includes bars, restaurants and sporting, festival and other large venues. Many governmental authorities in our North America and Europe businesses have required that bars and restaurants close or cease sit-down service, which has negatively impacted and we expect will continue to negatively impact on-premise sales of our beverages and ~~incur~~previously led to the incurrence of costs to repurchase products that on-premise accounts or distributors were unable or prohibited from selling as a result of the governmental regulations. ~~Other~~Despite the limited reopening of on-premise accounts in certain of our markets in in the second quarter, sales to restaurants and bars have ~~also implemented closures and/or modified their hours, either voluntarily or~~not returned to pre-pandemic levels and in many instances, the reopened on-premise accounts have been subsequently forced to close in certain of our markets as a result of ~~governmental orders or quarantines. Such closures have continued through~~an increase in the ~~date~~spread of ~~this report and we~~the coronavirus. We currently expect that ~~they~~closures and reduced on-premise consumption may continue for an unknown ~~period.~~period, negatively impacting our net sales and margins. In addition, sporting events, festivals and other large public gatherings where our products are served have been canceled throughout North America and Europe. Additionally, these and other governmental or societal impositions of restrictions on public gatherings, especially if prolonged in nature, will have adverse effects on on-premise traffic and, in turn, our business. Even if such measures are not implemented and coronavirus does not spread more significantly, or if after the pandemic has initially subsided, fear of re-occurrence or the perceived risk of infection or health risk may adversely affect traffic to the on-premise channel and, in turn, may have a material adverse effect on our business, liquidity, financial condition and results of operations, particularly if any self-imposed or governmental changes are in place for a significant amount of time.

Moreover, our operations could be disrupted by our employees or employees of our business partners, including our supply chain partners, being diagnosed with coronavirus or were suspected of having coronavirus or other illnesses since this could require us or our business partners to quarantine some or all such employees or close and disinfect our or their facilities. If a significant percentage of our workforce or the workforce of our business partners are unable to work or if we or our business partners are required to close our or their production facilities, including because of illness or travel or government restrictions in connection with the coronavirus pandemic, our operations, including manufacturing and distribution capabilities, may be negatively impacted, potentially materially adversely affecting our business, liquidity, financial condition or results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following are filed or incorporated by reference as a part of this Quarterly Report on Form 10-Q:

(a) Exhibits

Exhibit

Number

Document Description

10.1*10.1

~~Option Agreement,~~Amendment No. 2, dated as of ~~January 6,~~June 19, 2020, by and among ~~MillerCoors LLC, MillerCoors USA LLC and Pabst~~Molson Coors Beverage Company, Molson Coors Brewing Company ~~LLC.~~(UK) Limited, Molson Canada 2005, Molson Coors Canada Inc. and Molson Coors International LP, the lenders party thereto, and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on June 22, 2020).

10.2**10.2

~~Executive Employment Offer Letter,~~Dealer Agreement dated ~~November 17, 2019,~~May 21, 2020 by and between Molson Coors Brewing Company (UK) Limited, Molson Coors Beverage Company, Lloyds Bank Corporate Markets PLC, as arranger, and ~~E. Lee Reichert.~~Lloyds Bank Corporate Markets PLC, as dealer (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K, filed on May 26, 2020).

10.3**10.3

~~Executive Employment Offer Letters,~~Deed of Guarantee dated ~~November 17, 2019 and January 12, 2019,~~May 21, 2020 by ~~and between~~ Molson Coors ~~Brewing~~Beverage Company ~~and Michelle St. Jacques.~~in favor of the holders thereunder (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed on May 26, 2020).

31.1

Section 302 Certification of Chief Executive Officer.

31.2

Section 302 Certification of Chief Financial Officer.

Written Statement of Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 USC. Section 1350).

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.***

101.SCH

XBRL Taxonomy Extension Schema Document.***

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.***

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.***

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.***

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.***

~~This filing excludes certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K, which the registrant agrees to furnish supplementally to the SEC upon request by the SEC.~~

~~Represents a management contract or a compensatory plan or arrangement.~~

~~***~~

Attached as Exhibit 101 to this report are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statements of Operations, (ii) the Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Unaudited Condensed Consolidated Balance Sheets, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows, (v) the Unaudited Condensed Consolidated Statements of Stockholders' Equity and Noncontrolling Interests, (vi) the Notes to Unaudited Condensed Consolidated Financial Statements, and (vii) document and entity information.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MOLSON COORS BEVERAGE COMPANY

By:

/s/ BRIAN C. TABOLT

Brian C. Tabolt

Vice President and Controller

(Principal Accounting Officer)

~~April~~July 30, 2020

5964



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


					Page
Glossary of Terms and Abbreviations						3
Cautionary Statement						4

						~~Page~~
~~Glossary of Terms and Abbreviations~~		3
~~Cautionary Statement~~		4

PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)		5
~~Item 1.~~			~~Financial Statements (Unaudited)~~	5
	Condensed Consolidated Statements of Operations		5
			Condensed Consolidated Statements of Comprehensive Income (Loss)		6
			Condensed Consolidated Balance Sheets		7
			Condensed Consolidated Statements of Cash Flows		8
			Condensed Consolidated Statements of Stockholders' Equity and Noncontrolling Interests		9
			Notes to Unaudited Condensed Consolidated Financial Statements		1011
			Note 1, "Basis of Presentation and Summary of Significant Accounting Policies"		1011
			Note 2, "New Accounting Pronouncements"		1113
			Note 3, "Segment Reporting"		1213
			Note 4, "Investments"		1315
			Note 5, "Special Items"		1416
			Note 6, "Income Tax"		1617
			Note 7, "Goodwill and Intangible Assets"		1618
			Note 8, "Debt"		1921
			Note 9, "Inventories"		2123
			Note 10, "Accumulated Other Comprehensive Income (Loss)"		2123
			Note 11, "Derivative Instruments and Hedging Activities"		2123
			Note 12, "Commitments and Contingencies"		2629
			Note 13, "Leases"
			Note 14, "Supplemental Guarantor Information"		2832
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations		3641
Item 3.			Quantitative and Qualitative Disclosures About Market Risk		5459
Item 4.			Controls and Procedures		5560
PART II. OTHER INFORMATION
Item 1.			Legal Proceedings		60
Item 1.1A.			~~Legal Proceedings~~Risk Factors		5561
Item ~~1A.~~2.			~~Risk Factors~~	56
~~Item 2.~~	Unregistered Sales of Equity Securities and Use of Proceeds		5762
Item 3.			Defaults Upon Senior Securities		5762
Item 4.			Mine Safety Disclosures		5762
Item 5.			Other Information		5762
Item 6.			Exhibits		5863
Signature						5964



AOCI			Accumulated other comprehensive income (loss)
CAD			Canadian dollar
CZK			Czech Koruna
DBRS			A global credit rating agency in Toronto
EBITDA			Earnings before interest, tax, depreciation and amortization
EPS			Earnings per share
EUR			Euro
FASB			Financial Accounting Standards Board
GBP			British Pound
HRK			Croatian Kuna
JPY			Japanese Yen
Moody’s			Moody’s Investors Service Limited, a nationally recognized statistical rating organization designated by the SEC
OCI			Other comprehensive income (loss)
OPEB			Other postretirement benefit plans
PSUs			Performance share units
RSD			Serbian Dinar
RSUs			Restricted stock units
SEC			U.S. Securities and Exchange Commission
Standard & Poor’s			Standard and Poor’s Ratings Services, a nationally recognized statistical rating organization designated by the SEC
STRs			Sales-to-retailers
STWs			Sales-to-wholesalers
2017 Tax Act			U.S. Tax Cuts and Jobs Act
U.K.			United Kingdom
U.S.			United States
U.S. GAAP			Accounting principles generally accepted in the U.S.
USD or $			U.S. dollar
VIEs			Variable interest entities


	Three Months Ended							Three Months Ended						Six Months Ended
	March 31, 2020			March 31, 2019				June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Net income (loss) including noncontrolling interests	$	(115.4	)	$	149.1		Net income (loss) including noncontrolling interests	$	197.2	$	330.2	$	81.8	$	479.3
Other comprehensive income (loss), net of tax:							Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(373.5		)	71.5			Foreign currency translation adjustments	119.7		42.1		(253.8)		113.6
Unrealized gain (loss) on derivative instruments	(127.9		)	(29.7		)	Unrealized gain (loss) on derivative instruments	(0.7)		(38.3)		(128.6)		(68.0)
Reclassification of derivative (gain) loss to income	—			0.1			Reclassification of derivative (gain) loss to income	(1.1)		(0.3)		(1.1)		(0.2)
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income	(1.3		)	(0.6		)	Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income	(1.9)		(0.5)		(3.2)		(1.1)
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)	0.7			1.0			Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)	0.8		0.8		1.5		1.8
Total other comprehensive income (loss), net of tax	(502.0		)	42.3			Total other comprehensive income (loss), net of tax	116.8		3.8		(385.2)		46.1
Comprehensive income (loss)	(617.4		)	191.4			Comprehensive income (loss)	314.0		334.0		(303.4)		525.4
Comprehensive (income) loss attributable to noncontrolling interests	1.3			2.1			Comprehensive (income) loss attributable to noncontrolling interests	(3.3)		(0.5)		(2.0)		1.6
Comprehensive income (loss) attributable to Molson Coors Beverage Company	$	(616.1	)	$	193.5		Comprehensive income (loss) attributable to Molson Coors Beverage Company	$	310.7	$	333.5	$	(305.4)	$	527.0



	North America⁽¹⁾			Europe			Consolidated
Changes in Goodwill:	(In millions)
Balance as of December 31, 2019	$	6,146.6		$	1,484.8		$	7,631.4
Foreign currency translation	(16.7		)	(75.7		)	(92.4		)
Balance as of March 31, 2020	$	6,129.9		$	1,409.1		$	7,539.0



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


			Molson Coors Beverage Company Stockholders' Equity
															Accumulated		Common stock
			Common stock						Exchangeable										other		held in	Non
			issued						shares issued						Paid-in-		Retained		comprehensive		treasury	controlling
	Total		Class A		Class B		Class A		Class B		capital		earnings		income (loss)		Class B		interests
As of March 31, 2019	$	13,888.1	$	—	$	2.0	$	103.2	$	557.6	$	6,776.2	$	7,862.4	$	(1,182.7)	$	(471.4)	$	240.8
Exchange of shares	—		—		—		(0.2)		0.3		(0.1)		—		—		—		—
Shares issued under equity compensation plan	0.3		—		0.1		—		—		0.2		—		—		—		—
Amortization of share-based compensation	7.0		—		—		—		—		7.0		—		—		—		—
Acquisition of business	0.7		—		—		—		—		—		—		—		—		0.7
Net income (loss) including noncontrolling interests	330.2		—		—		—		—		—		329.4		—		—		0.8
Other comprehensive income (loss), net of tax	3.8		—		—		—		—		—		—		4.1		—		(0.3)
Contributions from noncontrolling interests	7.0		—		—		—		—		—		—		—		—		7.0
Distributions and dividends to noncontrolling interests	(3.4)		—		—		—		—		—		—		—		—		(3.4)
Dividends declared and paid - $0.41 per share	(88.7)		—		—		—		—		—		(88.7)		—		—		—
As of June 30, 2019	$	14,145.0	$	—	$	2.1	$	103.0	$	557.9	$	6,783.3	$	8,103.1	$	(1,178.6)	$	(471.4)	$	245.6


~~(2)~~	During the first quarter of 2019, we received payment and recorded a gain of $1.5 million resulting from a purchase price adjustment related to the historical sale of Molson Inc.’s ownership interest in the Montreal Canadiens, which is considered an affiliate of MCBC.


~~(3)~~	Related to the unrealized mark-to-market valuation on our commodity hedge positions, we recorded an unrealized loss of $99.1 million during the three months ended March 31, 2020, compared to an unrealized gain of $34.1 million during the three months ended March 31, 2019.


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


~~(1)~~	As a result of the structural changes resulting from the revitalization plan, we re-evaluated our reporting units and have combined our historical U.S. and Canada reporting units into a single North America reporting unit. There were no related changes to our Europe reporting unit. See further discussion below.


	Useful life	Gross		Accumulated amortization		Net
	(Years)	(In millions)
Intangible assets subject to amortization:
Brands	10 - 50	$	4,928.7	$	(945.8)	$	3,982.9
License agreements and distribution rights	15 - 20	199.2		(90.7)		108.5
Other	3 - 40	124.0		(46.2)		77.8
Intangible assets not subject to amortization:
Brands	Indefinite	8,132.0		—		8,132.0
Distribution networks	Indefinite	745.2		—		745.2
Other	Indefinite	337.6		—		337.6
Total		$	14,466.7	$	(1,082.7)	$	13,384.0



Fiscal year	Amount
	(In millions)
2020 - remaining	$	161.0
2021	$	210.2
2022	$	204.8
2023	$	203.8
2024	$	203.8


~~(1)~~	~~The fair value hedges related to these notes have been settled and are being amortized over the life of the respective note.~~



	MCBC stockholders' equity
	Foreign currency translation adjustments			Gain (loss) on derivative instruments			Pension and postretirement benefit adjustments			Equity method investments			Accumulated other comprehensive income (loss)
	(In millions)
As of December 31, 2019	$	(652.5	)	$	(87.8	)	$	(351.0	)	$	(70.9	)	$	(1,162.2	)
Foreign currency translation adjustments	(370.6		)	—			—			—			(370.6		)
Gain (loss) on net investment hedges	27.5			—			—			—			27.5
Unrealized gain (loss) on derivative instruments	—			(170.1		)	—			—			(170.1		)
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income	—			—			(1.9		)	—			(1.9		)
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)	—			—			—			1.0			1.0
Tax benefit (expense)	(27.5		)	42.2			0.6			(0.3		)	15.0
As of March 31, 2020	$	(1,023.1	)	$	(215.7	)	$	(352.3	)	$	(70.2	)	$	(1,661.3	)



	As of March 31, 2020		As of December 31, 2019
Expected term (years)	1.50		1.75
Estimated volatility	96.05	%	81.45	%
Risk-free interest rate	0.54	%	1.69	%
Expected dividend yield	—	%	—	%


				Fair value measurements as of March 31, 2020										Fair value measurements as of June 30, 2020
	As of March 31, 2020			Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			As of June 30, 2020		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(In millions)											(In millions)
Cross currency swaps	$	19.8		$	—	$	19.8		$	—	Cross currency swaps	$	12.0	$	—	$	12.0	$	—
Interest rate swaps	(297.4		)	—		(297.4		)	—		Interest rate swaps	(291.3)		—		(291.3)		—
Foreign currency forwards	16.9			—		16.9			—		Foreign currency forwards	8.1		—		8.1		—
Commodity swaps and options	(140.1		)	—		(140.1		)	—		Commodity swaps and options	(81.3)		—		(81.3)		—
Warrants	0.8			—		0.8			—		Warrants	1.1		—		1.1		—
Total	$	(400.0	)	$	—	$	(400.0	)	$	—	Total	$	(351.4)	$	—	$	(351.4)	$	—


				Fair value measurements as of December 31, 2019										Fair value measurements as of December 31, 2019
	As of December 31, 2019			Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			As of December 31, 2019		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(In millions)											(In millions)
Cross currency swaps	$	10.0		$	—	$	10.0		$	—	Cross currency swaps	$	10.0	$	—	$	10.0	$	—
Interest rate swaps	(111.5		)	—		(111.5		)	—		Interest rate swaps	(111.5)		—		(111.5)		—
Foreign currency forwards	2.1			—		2.1			—		Foreign currency forwards	2.1		—		2.1		—
Commodity swaps and options	(41.2		)	—		(41.2		)	—		Commodity swaps and options	(41.2)		—		(41.2)		—
Warrants	2.7			—		2.7			—		Warrants	2.7		—		2.7		—
Total	$	(137.9	)	$	—	$	(137.9	)	$	—	Total	$	(137.9)	$	—	$	(137.9)	$	—


	As of June 30, 2020
			Derivative Assets						Derivative Liabilities
	Notional amount		Balance sheet location	Fair value		Balance sheet location			Fair value
Derivatives designated as hedging instruments:
Cross currency swaps	$	400.0	Other current assets	$	—	Accounts payable and other current liabilities			$	—
			Other non-current assets	12.0		Other liabilities			—

Interest rate swaps	$	1,500.0	Other non-current assets	—		Other liabilities			(291.3)
Foreign currency forwards	$	191.2	Other current assets	5.8		Accounts payable and other current liabilities			(0.2)
			Other non-current assets	2.7		Other liabilities			(0.2)
Total derivatives designated as hedging instruments							$	20.5			$	(291.7)
Derivatives not designated as hedging instruments:
Commodity swaps⁽¹⁾	$	950.3	Other current assets	$	6.4	Accounts payable and other current liabilities			$	(76.4)
			Other non-current assets	9.4		Other liabilities			(20.7)
Commodity options⁽¹⁾	$	18.4	Other current assets	—		Accounts payable and other current liabilities			—

Warrants	$	50.8	Other non-current assets	1.1		Other liabilities			—
Total derivatives not designated as hedging instruments							$	16.9			$	(97.1)


~~(1)~~	~~Notional includes offsetting buy and sell positions, shown in terms of absolute value. Buy and sell positions are shown gross in the asset and/or liability position, as appropriate.~~


Line item in the balance sheet in which the hedged item is included	Carrying amount of the hedged assets/liabilities				Cumulative amount of fair value hedging adjustment(s) in the hedged assets/liabilities⁽¹⁾ Increase/(Decrease)					Line item in the balance sheet in which the hedged item is included	Carrying amount of the hedged assets/liabilities									Cumulative amount of fair value hedging adjustment(s) in the hedged assets/liabilities⁽¹⁾ Increase/(Decrease)
	As of March 31, 2020		As of December 31, 2019		As of March 31, 2020		As of December 31, 2019						As of June 30, 2020			As of December 31, 2019			As of June 30, 2020			As of December 31, 2019
	(In millions)										(In millions)
Current portion of long-term debt and short-term borrowings	$	—	$	—	$	—	$	(0.2	)	Current portion of long-term debt and short-term borrowings	$	—		$	—		$	—		$	(0.2)
Long-term debt	$	—	$	—	$	5.8	$	6.5		Long-term debt	$	—		$	—		$	5.1		$	6.5


Three Months Ended March 31, 2020
Three Months Ended June 30, 2020								Three Months Ended June 30, 2020
Derivatives in cash flow hedge relationships	Amount of gain (loss) recognized in OCI on derivative			Location of gain (loss) reclassified from AOCI into income	Amount of gain (loss) recognized from AOCI on derivative			Derivatives in cash flow hedge relationships	Amount of gain (loss) recognized in OCI on derivative		Location of gain (loss) reclassified from AOCI into income	Amount of gain (loss) recognized from AOCI on derivative
Forward starting interest rate swaps	$	(185.9	)	Interest income (expense), net	$	(0.7	)	Forward starting interest rate swaps	$	6.1	Interest income (expense), net	$	(0.7)
Foreign currency forwards	15.8			Cost of goods sold	1.0			Foreign currency forwards	(7.0)		Cost of goods sold	2.6
				Other income (expense), net	(0.3		)				Other income (expense), net	(0.5)
Total	$	(170.1	)		$	—		Total	$	(0.9)		$	1.4



Three Months Ended March 31, 2020
Derivatives in net investment hedge relationships	Amount of gain (loss) recognized in OCI on derivative		Location of gain (loss) reclassified from AOCI into income	Amount of gain (loss) recognized from AOCI on derivative		Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)	Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)⁽¹⁾
Cross currency swaps	$	13.0	Interest income (expense), net	$	—	Interest income (expense), net	$	5.7
Total	$	13.0		$	—		$	5.7



Three Months Ended March 31, 2020
Non-derivative financial instruments in net investment hedge relationships	Amount of gain (loss) recognized in OCI on derivative		Location of gain (loss) reclassified from AOCI into income	Amount of gain (loss) recognized from AOCI on derivative		Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)	Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)
EUR 800 million notes due 2024	$	14.5	Other income (expense), net	$	—	Other income (expense), net	$	—
Total	$	14.5		$	—		$	—



Three Months Ended March 31, 2019
Derivatives in cash flow hedge relationships	Amount of gain (loss) recognized in OCI on derivative			Location of gain (loss) reclassified from AOCI into income		Amount of gain (loss) recognized from AOCI on derivative
Forward starting interest rate swaps	$	(32.4	)	Interest income (expense), net		$	(0.7	)
Foreign currency forwards	(7.0		)	Cost of goods sold		0.8
				Other income (expense), net		(0.2		)
Total	$	(39.4	)		��	$	(0.1	)


~~(1)~~	~~Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and period amortization is recorded in other comprehensive income.~~


Three Months Ended June 30, 2019
Derivatives in cash flow hedge relationships	Amount of gain (loss) recognized in OCI on derivative		Location of gain (loss) reclassified from AOCI into income	Amount of gain (loss) recognized from AOCI on derivative
Forward starting interest rate swaps	$	(46.3)	Interest income (expense), net	$	(0.8)
Foreign currency forwards	(4.5)		Cost of goods sold	1.5
			Other income (expense), net	(0.3)
Total	$	(50.8)		$	0.4


Six Months Ended June 30, 2020
Derivatives in cash flow hedge relationships	Amount of gain (loss) recognized in OCI on derivative		Location of gain (loss) reclassified from AOCI into income	Amount of gain (loss) recognized from AOCI on derivative
Forward starting interest rate swaps	$	(179.8)	Interest income (expense), net	$	(1.4)
Foreign currency forwards	8.8		Cost of goods sold	3.6
			Other income (expense), net	(0.8)
Total	$	(171.0)		$	1.4


Six Months Ended June 30, 2019
Derivatives in cash flow hedge relationships	Amount of gain (loss) recognized in OCI on derivative			Location of gain (loss) reclassified from AOCI into income	Amount of gain (loss) recognized from AOCI on derivative
Forward starting interest rate swaps	$	(78.7)		Interest income (expense), net	$	(1.5)
Foreign currency forwards	(11.5)			Cost of goods sold	2.3
				Other income (expense), net	(0.5)
Total	$	(90.2)	-90200000		$	0.3


Three Months Ended June 30, 2020
	Location and amount of gain (loss) recognized in income on fair value and cash flow hedging relationships⁽¹⁾
	Cost of goods sold		Other income (expense), net		Interest income (expense), net
Total amount of income and expense line items presented in the unaudited condensed consolidated statement of operations in which the effects of fair value or cash flow hedges are recorded	$	(1,456.6)	$	5.8	$	(69.7)
Gain (loss) on cash flow hedging relationships:
Forward starting interest rate swaps
Amount of gain (loss) reclassified from AOCI into income	—		—		(0.7)

Foreign currency forwards
Amount of gain (loss) reclassified from AOCI into income	2.6		(0.5)		—



Three Months Ended March 31, 2020
Derivatives not in hedging relationships	Location of gain (loss) recognized in income on derivative	Amount of gain (loss) recognized in income on derivative
Commodity swaps	Cost of goods sold	$	(112.5	)
Warrants	Other income (expense), net	(1.7		)
Total		$	(114.2	)