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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Molson Coors Beverage Company | NYSE:TAP.A | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -1.65 | -2.67% | 60.11 | 60.11 | 60.11 | 60.11 | 32 | 21:00:01 |
From Oct 2024 to Dec 2024
Third Quarter Net Sales Declined 7.8% and Income Before Income Taxes Decreased 39.1% or 8.7% on an Underlying Basis in Constant Currency
Continues to Return Cash to Shareholders Through Dividend and Share Repurchases of $153 Million
Reaffirms 2024 Full Year Guidance for Bottom-Line Growth including Narrowing to the High End for Underlying Diluted Earnings per Share While Reducing Top-Line Guidance Reflecting Macroeconomic Challenges in the U.S.
Molson Coors Beverage Company ("MCBC," "Molson Coors" or "the Company") (NYSE: TAP, TAP.A; TSX: TPX.A, TPX.B) today reported results for the 2024 third quarter.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241107763285/en/
2024 THIRD QUARTER FINANCIAL HIGHLIGHTS1
1
See Appendix for definitions and reconciliations of non-GAAP financial measures including constant currency.
CEO AND CFO PERSPECTIVES
In the third quarter of 2024, net sales declined 7.8% and underlying income before income taxes declined 8.7% on a constant currency basis. Our EMEA&APAC business unit performed strongly as did Canada within our Americas business unit. However, the U.S. was challenged with the macroeconomic environment along with anticipated unfavorable shipment timing and the wind down of a contract brewing agreement contributing to a U.S. financial volume decline of 17.9%.
Given the impacts the macroeconomic environment has had on the U.S. beer industry and our U.S. financial volumes during this year's peak selling season, we are adjusting our 2024 top-line guidance to down approximately 1% from previous guidance of up low single-digits, both on a constant currency basis. However, we are reaffirming our underlying income (loss) before income taxes on a constant currency basis for the year because of an improved cost outlook related to packaging materials, transportation and general and administrative expenses. And we are reaffirming our underlying diluted earnings per share guidance of mid single-digit growth, but narrowing to the higher end of the range, driven by the accelerated pace of our share repurchase program.
Despite the U.S. macroeconomic environment, our core power brands remain healthy. According to Circana, in the third quarter in the U.S., Coors Light, Miller Lite and Coors Banquet retained a substantial portion of their combined volume share gains of industry versus a year ago when we saw strong share increases. These brands were up 1.9 share points compared to the third quarter of 2022.
In Canada, broad strength across our portfolio fueled strong revenue and share performance amid a challenging backdrop in the third quarter.
In EMEA&APAC, continued growth of our highly successful above premium innovation Madri in the U.K., and market leader Ožujsko in Croatia, along with the successful launch of legacy brand Caraiman in Romania, helped to offset some impact of the increasingly competitive environment in the U.K.
With strong cash flow, we continued to invest in our business, supporting our brands globally and building capabilities that help drive long-term, sustainable and profitable growth. We did this while returning $717 million in cash to shareholders in the first nine months through both dividends and our share repurchase program.
Gavin Hattersley, President and Chief Executive Officer Statement:
"We have continued to advance our Acceleration Plan and remain confident in our long-term growth potential. While the U.S. industry was softer than expected during the summer, our core power brands remain strong. Our businesses in EMEA&APAC and in Canada are performing strongly. Not only are they supporting our premiumization goals, but they serve as proven examples to the U.S. where we have targeted plans in both above premium beer and beyond beer. And underpinning all of this are our robust capabilities that fuel insights-led innovation, commercial effectiveness, and supply chain efficiencies - all of which help drive sustained, long-term profitable growth."
Tracey Joubert, Chief Financial Officer Statement:
"We are reaffirming our bottom-line growth and Underlying Free Cash Flow guidance for this year, while continuing to invest in our business to achieve our long-term financial and strategic goals and return cash to shareholders. While the U.S. shipment timing and exit of contract brewing volume will continue to impact us in the fourth quarter, these near-term headwinds do not diminish our confidence in our long-term growth algorithm."
CONSOLIDATED PERFORMANCE - THIRD QUARTER 2024
For the Three Months Ended
($ in millions, except per share data) (Unaudited)
September 30, 2024
September 30, 2023
Reported Increase (Decrease)
Foreign Exchange Impact
Constant Currency Increase (Decrease)(1)
Net sales
$
3,042.7
$
3,298.4
(7.8
)%
$
1.2
(7.8
)%
U.S. GAAP income (loss) before income taxes
$
331.4
$
544.0
(39.1
)%
$
(0.1
)
(39.1
)%
Underlying income (loss) before income taxes(1)
$
479.5
$
525.4
(8.7
)%
$
(0.4
)
(8.7
)%
U.S. GAAP net income (loss)(2)(3)
$
199.8
$
430.7
(53.6
)%
Per diluted share
$
0.96
$
1.98
(51.5
)%
Underlying net income (loss)(1)
$
374.4
$
418.5
(10.5
)%
Per diluted share
$
1.80
$
1.92
(6.2
)%
Financial volume(4)
20.629
23.532
(12.3
)%
Brand volume(4)
21.332
22.322
(4.4
)%
For the Nine Months Ended
($ in millions, except per share data) (Unaudited)
September 30, 2024
September 30, 2023
Reported Increase (Decrease)
Foreign Exchange Impact
Constant Currency Increase (Decrease)(1)
Net sales
$
8,891.4
$
8,911.3
(0.2
)%
$
1.6
(0.2
)%
U.S. GAAP income (loss) before income taxes
$
1,156.7
$
1,087.0
6.4
%
$
(5.1
)
6.9
%
Underlying income (loss) before income taxes(1)
$
1,269.5
$
1,185.4
7.1
%
$
(5.2
)
7.5
%
U.S. GAAP net income (loss)(2)(3)
$
834.6
$
845.6
(1.3
)%
Per diluted share
$
3.96
$
3.89
1.8
%
Underlying net income (loss)(1)
$
981.4
$
922.0
6.4
%
Per diluted share
$
4.65
$
4.24
9.7
%
Financial volume(4)
61.033
63.923
(4.5
)%
Brand volume(4)
59.946
61.325
(2.2
)%
(1)
Represents income (loss) before income taxes and net income (loss) attributable to MCBC adjusted for non-GAAP items. See Appendix for definitions and reconciliations of non-GAAP financial measures including constant currency.
(2)
Net income (loss) attributable to MCBC.
(3)
During the three months ended September 30, 2024, we identified certain errors in the historical accounting for noncontrolling interest (“NCI”) with redemption features outside of our control under the terms of our Cobra Beer Partnership, Ltd. ("Cobra U.K." or "CBPL") partnership agreement and within certain other immaterial investments. Since the inception of these partnerships dating back to as early as 2002, we had historically accounted for the NCI within permanent equity with no adjustments to redemption value. Rather, our partners' shares should have been presented as redeemable NCI through the date of exercise of the redemption feature, with adjustments to the redemption value being recorded each reporting period as necessary. Specific to CBPL, since the option redemption price was not at fair value, the historical adjustments should have been recorded to net (income) loss attributable to noncontrolling interests in the unaudited condensed consolidated statements of operations, based on our accounting policy to reflect the entire change in the redemption amount as a deemed dividend and earnings per share adjustment (resulting from the redemption feature) as part of the attribution of consolidated net income to the noncontrolling interest (as reported on the face of the income statement). Furthermore, in March 2024, our CBPL partner exercised its put option requiring us to acquire their 49.9% ownership interest. Since the exercise was irrevocable, the NCI became mandatorily redeemable at that time and should have been reclassified to accounts payable and other current liabilities. These errors resulted in a reclassification of $65 million from noncontrolling interests, of which $49 million was reclassified to accounts payable and other current liabilities for CBPL and $16 million was reclassified to redeemable noncontrolling interests for the other immaterial investments in our unaudited condensed consolidated balance sheets. In addition, the errors resulted in a cumulative understatement of $34.5 million to net income attributable to NCI and a corresponding cumulative overstatement to net income attributable to MCBC in our unaudited condensed consolidated statements of operations. The errors were corrected through an out of period adjustment as of and for the three months ended September 30, 2024. Management assessed the impact of the errors and deemed them to not be material to any prior periods or to forecasted results for 2024. In October 2024, we obtained a final redemption value that would be due to acquire the 49.9% NCI of the CBPL partnership. As a result, during the three months ended September 30, 2024, we recorded an adjustment of $45.8 million to increase the mandatorily redeemable NCI liability to the final redemption value, with the adjustment recorded to interest expense.
The CBPL buyout was finalized on October 21, 2024, resulting in a cash payment of $89 million which will be recorded as a cash outflow from financing activities in the consolidated statement of cash flows in the fourth quarter of 2024.
(4)
See Worldwide and Segmented Brand and Financial Volume in the Appendix for definitions of financial volume and brand volume as well as the reconciliation from financial volume to brand volume.
QUARTERLY CONSOLIDATED HIGHLIGHTS (VERSUS THIRD QUARTER 2023 RESULTS)
Net Sales Drivers (unaudited)
Financial volume
(12.3
%)
Price and sales mix
4.5
%
Currency
—
%
Total consolidated net sales
(7.8
%)
Net sales decreased 7.8%, driven by lower financial volumes, partially offset by favorable price and sales mix.
Financial volumes decreased 12.3%, primarily due to lower shipments including lower contract brewing volumes in the Americas. Brand volumes decreased 4.4%, including a 5.4% decrease in the Americas as well as a 1.8% decrease in EMEA&APAC.
Price and sales mix favorably impacted net sales by 4.5%, primarily due to increased net pricing as well as favorable sales mix for both segments, including as a result of lower contract brewing volumes in the U.S.
(Unaudited)
For the Three Months Ended
September 30, 2024
September 30, 2023
U.S. GAAP effective tax rate
31
%
21
%
Underlying effective tax rate(1)
24
%
20
%
(1) See Appendix for definitions and reconciliations of non-GAAP financial measures.
The increase in our third quarter U.S. GAAP effective tax rate was in part due to a $16.4 million valuation allowance recorded year to date on deferred tax assets. The divestment of certain of our U.S. craft businesses in the third quarter of 2024 resulted in the realization of a capital loss for U.S. tax purposes. We believe it is more likely than not that the deferred tax asset generated by the capital loss will not be recognized, resulting in the valuation allowance recorded. The higher effective tax rate was also due to the $45.8 million increase in the mandatorily redeemable NCI liability of CBPL to the final redemption value in the third quarter of 2024, which was recorded to interest expense and is non-deductible for tax purposes. Finally, the higher effective tax rate was due to a decrease in discrete tax benefit.
The increase in our third quarter Underlying effective tax rate was primarily due to a decrease in discrete tax benefit.
QUARTERLY SEGMENT HIGHLIGHTS (VERSUS THIRD QUARTER 2023 RESULTS)
Americas Segment Overview
The following table highlights the Americas segment results for the three and nine months ended September 30, 2024 compared to September 30, 2023.
For the Three Months Ended
($ in millions, except per share data) (Unaudited)
September 30, 2024
September 30, 2023
Reported % Change
FX Impact
Constant Currency % Change(2)
Net sales(1)
$
2,345.0
$
2,633.4
(11.0
)
$
(7.4
)
(10.7
)
Income (loss) before income taxes(1)
$
353.8
$
483.5
(26.8
)
$
(1.5
)
(26.5
)
Underlying income (loss) before income taxes(1)(2)
$
419.8
$
494.1
(15.0
)
$
(1.5
)
(14.7
)
For the Nine Months Ended
($ in millions, except per share data) (Unaudited)
September 30, 2024
September 30, 2023
Reported % Change
FX Impact
Constant Currency % Change(2)
Net sales(1)
$
7,066.3
$
7,194.1
(1.8
)
$
(13.5
)
(1.6
)
Income (loss) before income taxes(1)
$
1,161.5
$
1,204.2
(3.5
)
$
(3.9
)
(3.2
)
Underlying income (loss) before income taxes(1)(2)
$
1,228.3
$
1,215.6
1.0
$
(3.9
)
1.4
The reported percent change and the constant currency percent change in the above table are presented as (unfavorable) favorable. (1)
Includes gross inter-segment volumes, sales and purchases, which are eliminated in the consolidated totals.
(2)Represents income (loss) before income taxes adjusted for non-GAAP items. See Appendix for definitions and reconciliations of non-GAAP financial measures including constant currency.
Americas Segment Highlights (Versus Third Quarter 2023 Results)
Net Sales Drivers (unaudited)
Financial volume
(15.6
%)
Price and sales mix
4.9
%
Currency
(0.3
%)
Total Americas net sales
(11.0
%)
Net sales decreased 11.0% driven by lower financial volumes and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.
Financial volumes decreased 15.6% primarily due to the timing of U.S. shipments as well as lower U.S. volumes due to the macroeconomic environment resulting in industry softness. In addition, of the 15.6% decrease, 260bps relates to lower contract brewing volumes in the U.S. related to the wind down of a contract brewing arrangement leading up to the termination by the end of 2024. Americas brand volumes decreased 5.4%, including a 6.2% decrease in the U.S., primarily due to cycling double digit growth in our core power brands and lower above premium volumes, partially offset by one additional trading day in the current quarter and favorable holiday timing. Canada brand volumes increased 3.9% driven by our above premium portfolio.
Price and sales mix favorably impacted net sales by 4.9% primarily due to increased net pricing and favorable sales mix as a result of lower contract brewing volumes.
EMEA&APAC Segment Overview
The following table highlights the EMEA&APAC segment results for the three and nine months ended September 30, 2024 compared to September 30, 2023.
For the Three Months Ended
($ in millions, except per share data) (Unaudited)
September 30, 2024
September 30, 2023
Reported % Change
FX Impact
Constant Currency % Change(2)
Net sales(1)
$
704.4
$
670.4
5.1
$
8.6
3.8
Income (loss) before income taxes(1)
$
51.6
$
67.5
(23.6
)
$
1.0
(25.0
)
Underlying income (loss) before income taxes(1)(2)
$
98.0
$
69.1
41.8
$
0.9
40.5
For the Nine Months Ended
($ in millions, except per share data) (Unaudited)
September 30, 2024
September 30, 2023
Reported % Change
FX Impact
Constant Currency % Change(2)
Net sales(1)
$
1,842.4
$
1,729.5
6.5
$
15.1
5.7
Income (loss) before income taxes(1)
$
121.8
$
106.3
14.6
$
(2.8
)
17.2
Underlying income (loss) before income taxes(1)(2)
$
161.7
$
111.5
45.0
$
(2.6
)
47.4
The reported percent change and the constant currency percent change in the above table are presented as (unfavorable) favorable.
(1)
Includes gross inter-segment volumes, sales and purchases, which are eliminated in the consolidated totals.
(2)
Represents income (loss) before income taxes adjusted for non-GAAP items. See Appendix for definitions and reconciliations of non-GAAP financial measures including constant currency.
EMEA&APAC Segment Highlights (Versus Third Quarter 2023 Results)
Net Sales Drivers (unaudited)
Financial volume
(3.0
%)
Price and sales mix
6.8
%
Currency
1.3
%
Total EMEA&APAC net sales
5.1
%
Net sales increased 5.1%, driven by favorable price and sales mix as well as favorable foreign currency impacts, partially offset by lower financial volumes. Net sales increased 3.8% in constant currency.
Financial volumes decreased 3.0% and brand volumes decreased 1.8%, primarily driven by lower volumes in Western Europe due to soft market demand and high promotional activity from the competition.
Price and sales mix favorably impacted net sales by 6.8%, primarily due to increased net pricing and favorable sales mix driven by premiumization and favorable channel mix.
CASH FLOW AND LIQUIDITY HIGHLIGHTS
2024 OUTLOOK
As a result of the impact of the macroeconomic environment on the U.S. beer industry and on our volumes during this year's peak selling season, we are adjusting our full year 2024 top-line guidance. We continue to expect to achieve the remaining targets for the full year 2024. However, the inherent uncertainties and challenges that exist in the U.S. macroeconomic environment could continue to impact our financial performance.
These targets are based on the following key considerations:
SUBSEQUENT EVENTS
The CBPL buyout was finalized on October 21, 2024, resulting in a cash payment of $89 million which will be recorded as a cash outflow from financing activities in the consolidated statements of cash flows in the fourth quarter of 2024.
In October 2024, we increased our investment in ZOA Energy, LLC ("ZOA") for cash consideration of $53 million, bringing our ownership interest to 51% subsequent to the closing of the transaction. The transaction will be recorded as a business combination, and ZOA will be included in our consolidated financial statements from the date of acquisition within the Americas reporting segment.
NOTES
Unless otherwise indicated in this release, all $ amounts are in U.S. Dollars, and all quarterly comparative results are for the Company’s third quarter ended September 30, 2024 compared to the third quarter ended September 30, 2023. Some numbers may not sum due to rounding.
2024 THIRD QUARTER INVESTOR CONFERENCE CALL
Molson Coors Beverage Company will conduct an earnings conference call with financial analysts and investors at 8:30 a.m. Eastern Time today to discuss the Company’s 2024 third quarter results. The live webcast will be accessible via our website, ir.molsoncoors.com. An online replay of the webcast is expected to be posted within two hours following the live webcast. The Company will post this release and related financial statements on its website today.
OVERVIEW OF MOLSON COORS BEVERAGE COMPANY
For more than two centuries, Molson Coors Beverage Company has brewed beverages that unite people to celebrate all life’s moments. From our core power brands Coors Light, Miller Lite, Coors Banquet, Molson Canadian, Carling and Ožujsko to our above premium brands including Madri Excepcional, Staropramen, Blue Moon Belgian White and Leinenkugel’s Summer Shandy, to our economy and value brands like Miller High Life and Keystone Light, we produce many beloved and iconic beers. While our Company's history is rooted in beer, we offer a modern portfolio that expands beyond the beer aisle as well, including flavored beverages like Vizzy Hard Seltzer, spirits like Five Trail whiskey and non-alcoholic beverages. As a business, our ambition is to be the first choice for our people, our consumers and our customers, and our success depends on our ability to make our products available to meet a wide range of consumer segments and occasions.
To learn more about Molson Coors Beverage Company, visit molsoncoors.com.
ABOUT MOLSON COORS CANADA INC.
Molson Coors Canada Inc. ("MCCI") is a subsidiary of Molson Coors Beverage Company. MCCI Class A and Class B exchangeable shares offer substantially the same economic and voting rights as the respective classes of common shares of MCBC, as described in MCBC’s annual proxy statement and Form 10-K filings with the U.S. Securities and Exchange Commission. The trustee holder of the special Class A voting stock and the special Class B voting stock has the right to cast a number of votes equal to the number of then outstanding Class A exchangeable shares and Class B exchangeable shares, respectively.
FORWARD-LOOKING STATEMENTS
This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws. Generally, the words "expects," "intend," "goals," "plans," "believes," "continues," "may," "anticipate," "seek," "estimate," "outlook," "trends," "future benefits," "potential," "projects," "strategies," "implies," and variations of such words and similar expressions are intended to identify forward-looking statements. Statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements, and include, but are not limited to, statements under the headings "CEO and CFO Perspectives" and "2024 Outlook," with respect to, among others, expectations of cost inflation, limited consumer disposable income, consumer preferences, overall volume and market share trends, pricing trends, industry forces, cost reduction strategies, shipment levels and profitability, the sufficiency of capital resources, anticipated results, expectations for funding future capital expenditures and operations, effective tax rate, debt service capabilities, timing and amounts of debt and leverage levels, Preserving the Planet and related initiatives and expectations regarding future dividends and share repurchases. In addition, statements that we make in this press release that are not statements of historical fact may also be forward-looking statements.
Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company’s historical experience, and present projections and expectations are disclosed in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the risks discussed in our filings with the SEC, including our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
MARKET AND INDUSTRY DATA
The market and industry data used, if any, in this press release are based on independent industry publications, customer specific data, trade or business organizations, reports by market research firms and other published statistical information from third parties, including Circana (formerly Information Resources, Inc.) for U.S. market data and Beer Canada for Canadian market data (collectively, the “Third Party Information”), as well as information based on management’s good faith estimates, which we derive from our review of internal information and independent sources. Such Third Party Information generally states that the information contained therein or provided by such sources has been obtained from sources believed to be reliable.
APPENDIX
STATEMENTS OF OPERATIONS - MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In millions, except per share data) (Unaudited)
For the Three Months Ended
For the Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Sales
$
3,603.3
$
3,905.6
$
10,490.7
$
10,551.5
Excise taxes
(560.6
)
(607.2
)
(1,599.3
)
(1,640.2
)
Net sales
3,042.7
3,298.4
8,891.4
8,911.3
Cost of goods sold
(1,840.2
)
(1,952.2
)
(5,395.5
)
(5,575.5
)
Gross profit
1,202.5
1,346.2
3,495.9
3,335.8
Marketing, general and administrative expenses
(684.7
)
(746.8
)
(2,067.8
)
(2,096.7
)
Other operating income (expense), net
(65.8
)
(12.7
)
(59.4
)
(13.0
)
Equity income (loss)
(0.8
)
5.5
(3.6
)
12.8
Operating income (loss)
451.2
592.2
1,365.1
1,238.9
Interest income (expense), net
(93.1
)
(48.8
)
(192.7
)
(162.5
)
Other pension and postretirement benefits (costs), net
(26.6
)
2.5
(11.9
)
7.7
Other non-operating income (expense), net
(0.1
)
(1.9
)
(3.8
)
2.9
Income (loss) before income taxes
331.4
544.0
1,156.7
1,087.0
Income tax benefit (expense)
(102.6
)
(112.4
)
(292.7
)
(236.1
)
Net income (loss)
228.8
431.6
864.0
850.9
Net (income) loss attributable to noncontrolling interests
(29.0
)
(0.9
)
(29.4
)
(5.3
)
Net income (loss) attributable to MCBC
$
199.8
$
430.7
$
834.6
$
845.6
Basic net income (loss) attributable to MCBC per share
$
0.96
$
1.99
$
3.98
$
3.91
Diluted net income (loss) attributable to MCBC per share
$
0.96
$
1.98
$
3.96
$
3.89
Weighted average shares outstanding - basic
207.2
216.1
209.9
216.3
Weighted average shares outstanding - diluted
208.0
217.6
211.0
217.6
Dividends per share
$
0.44
$
0.41
$
1.32
$
1.23
BALANCE SHEETS - MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions, except par value) (Unaudited)
As of
September 30, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
1,021.7
$
868.9
Trade receivables, net
873.5
757.8
Other receivables, net
144.6
121.6
Inventories, net
833.3
802.3
Other current assets, net
356.4
297.9
Total current assets
3,229.5
2,848.5
Property, plant and equipment, net
4,497.0
4,444.5
Goodwill
5,317.6
5,325.3
Other intangibles, net
12,408.0
12,614.6
Other assets
1,183.2
1,142.2
Total assets
$
26,635.3
$
26,375.1
Liabilities and equity
Current liabilities
Accounts payable and other current liabilities
$
3,210.5
$
3,180.8
Current portion of long-term debt and short-term borrowings
37.7
911.8
Total current liabilities
3,248.2
4,092.6
Long-term debt
6,203.0
5,312.1
Pension and postretirement benefits
452.6
465.8
Deferred tax liabilities
2,795.3
2,697.2
Other liabilities
368.5
372.3
Total liabilities
13,067.6
12,940.0
Redeemable noncontrolling interest
42.2
27.9
Molson Coors Beverage Company stockholders' equity
Capital stock
Preferred stock, $0.01 par value (authorized: 25.0 shares; none issued)
—
—
Class A common stock, $0.01 par value (authorized: 500.0 shares; issued and outstanding: 2.6 shares and 2.6 shares, respectively)
—
—
Class B common stock, $0.01 par value (authorized: 500.0 shares; issued: 215.4 shares and 212.5 shares, respectively)
2.1
2.1
Class A exchangeable shares, no par value (issued and outstanding: 2.7 shares and 2.7 shares, respectively)
100.8
100.8
Class B exchangeable shares, no par value (issued and outstanding: 7.2 shares and 9.4 shares, respectively)
271.1
352.3
Paid-in capital
7,211.0
7,108.4
Retained earnings
8,040.2
7,484.3
Accumulated other comprehensive income (loss)
(1,107.1
)
(1,116.3
)
Class B common stock held in treasury at cost (21.4 shares and 13.9 shares, respectively)
(1,172.8
)
(735.6
)
Total Molson Coors Beverage Company stockholders' equity
13,345.3
13,196.0
Noncontrolling interests
180.2
211.2
Total equity
13,525.5
13,407.2
Total liabilities and equity
$
26,635.3
$
26,375.1
CASH FLOW STATEMENTS - MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In millions) (Unaudited)
For the Nine Months Ended
September 30, 2024
September 30, 2023
Cash flows from operating activities
Net income (loss) including noncontrolling interests
$
864.0
$
850.9
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization
512.1
508.6
Amortization of debt issuance costs and discounts
4.1
4.4
Interest expense related to mandatorily redeemable noncontrolling interest
45.8
—
Share-based compensation
34.6
34.1
(Gain) loss on sale or impairment of property, plant, equipment and other assets, net
37.3
8.2
Unrealized (gain) loss on foreign currency fluctuations and derivative instruments, net
(25.1
)
84.6
Equity (income) loss
3.6
(12.8
)
Income tax (benefit) expense
292.7
236.1
Income tax (paid) received
(116.7
)
(170.1
)
Interest expense, excluding amortization of debt issuance costs and discounts and mandatorily redeemable noncontrolling interest
169.7
174.0
Interest paid
(186.9
)
(201.5
)
Change in current assets and liabilities and other
(219.4
)
88.0
Net cash provided by (used in) operating activities
1,415.8
1,604.5
Cash flows from investing activities
Additions to property, plant and equipment
(563.0
)
(494.1
)
Proceeds from sales of property, plant, equipment and other assets
14.9
7.3
Acquisition of business, net of cash acquired
—
(63.9
)
Other
17.8
(117.8
)
Net cash provided by (used in) investing activities
(530.3
)
(668.5
)
Cash flows from financing activities
Dividends paid
(279.4
)
(266.7
)
Payments for purchases of treasury stock
(437.4
)
(60.9
)
Payments on debt and borrowings
(879.0
)
(402.9
)
Proceeds on debt and borrowings
863.7
7.0
Other
(12.7
)
(5.1
)
Net cash provided by (used in) financing activities
(744.8
)
(728.6
)
Effect of foreign exchange rate changes on cash and cash equivalents
12.1
(5.7
)
Net increase (decrease) in cash and cash equivalents
152.8
201.7
Balance at beginning of year
868.9
600.0
Balance at end of period
$
1,021.7
$
801.7
SUMMARIZED SEGMENT RESULTS (hectoliter volume and $ in millions) (Unaudited)
Americas
Q3 2024
Q3 2023
Reported % Change
FX Impact
Constant Currency % Change(3)
YTD 2024
YTD 2023
Reported % Change
FX Impact
Constant Currency % Change(3)
Net sales(1)
$
2,345.0
$
2,633.4
(11.0
)
$
(7.4
)
(10.7
)
$
7,066.3
$
7,194.1
(1.8
)
$
(13.5
)
(1.6
)
COGS(1)(2)
$
(1,403.1
)
$
(1,552.0
)
9.6
$
4.3
9.3
$
(4,244.3
)
$
(4,332.5
)
2.0
$
8.3
1.8
MG&A
$
(521.7
)
$
(589.3
)
11.5
$
1.5
11.2
$
(1,589.1
)
$
(1,658.1
)
4.2
$
3.1
4.0
Income (loss) before income taxes
$
353.8
$
483.5
(26.8
)
$
(1.5
)
(26.5
)
$
1,161.5
$
1,204.2
(3.5
)
$
(3.9
)
(3.2
)
Underlying income (loss) before income taxes(3)
$
419.8
$
494.1
(15.0
)
$
(1.5
)
(14.7
)
$
1,228.3
$
1,215.6
1.0
$
(3.9
)
1.4
Financial volume(1)(4)
14.695
17.414
(15.6
)
45.001
47.718
(5.7
)
Brand volume
15.367
16.245
(5.4
)
43.928
45.386
(3.2
)
EMEA&APAC
Q3 2024
Q3 2023
Reported % Change
FX Impact
Constant Currency % Change(3)
YTD 2024
YTD 2023
Reported % Change
FX Impact
Constant Currency % Change(3)
Net sales(1)
$
704.4
$
670.4
5.1
$
8.6
3.8
$
1,842.4
$
1,729.5
6.5
$
15.1
5.7
COGS(1)(2)
$
(441.9
)
$
(440.9
)
(0.2
)
$
(5.7
)
1.1
$
(1,195.4
)
$
(1,178.2
)
(1.5
)
$
(10.4
)
(0.6
)
MG&A
$
(163.0
)
$
(157.5
)
(3.5
)
$
(1.9
)
(2.3
)
$
(478.7
)
$
(438.6
)
(9.1
)
$
(3.8
)
(8.3
)
Income (loss) before income taxes
$
51.6
$
67.5
(23.6
)
$
1.0
(25.0
)
$
121.8
$
106.3
14.6
$
(2.8
)
17.2
Underlying income (loss) before income taxes(3)
$
98.0
$
69.1
41.8
$
0.9
40.5
$
161.7
$
111.5
45.0
$
(2.6
)
47.4
Financial volume(1)(4)
5.938
6.120
(3.0
)
16.039
16.209
(1.0
)
Brand volume
5.965
6.077
(1.8
)
16.018
15.939
0.5
Unallocated & Eliminations
Q3 2024
Q3 2023
Reported % Change
FX Impact
Constant Currency % Change(3)
YTD 2024
YTD 2023
Reported % Change
FX Impact
Constant Currency % Change(3)
Net sales
$
(6.7
)
$
(5.4
)
(24.1
)
$
(17.3
)
$
(12.3
)
(40.7
)
COGS(2)
$
4.8
$
40.7
88.2
$
44.2
$
(64.8
)
N/M
Income (loss) before income taxes
$
(74.0
)
$
(7.0
)
(957.1
)
$
0.4
(962.9
)
$
(126.6
)
$
(223.5
)
43.4
$
1.6
42.6
Underlying income (loss) before income taxes(3)
$
(38.3
)
$
(37.8
)
(1.3
)
$
0.2
(1.9
)
$
(120.5
)
$
(141.7
)
15.0
$
1.3
14.0
Financial volume
(0.004
)
(0.002
)
N/M
(0.007
)
(0.004
)
N/M
Consolidated
Q3 2024
Q3 2023
Reported % Change
FX Impact
Constant Currency % Change(3)
YTD 2024
YTD 2023
Reported % Change
FX Impact
Constant Currency % Change(3)
Net sales
$
3,042.7
$
3,298.4
(7.8
)
$
1.2
(7.8
)
$
8,891.4
$
8,911.3
(0.2
)
$
1.6
(0.2
)
COGS
$
(1,840.2
)
$
(1,952.2
)
5.7
$
(1.1
)
5.8
$
(5,395.5
)
$
(5,575.5
)
3.2
$
(1.7
)
3.3
MG&A
$
(684.7
)
$
(746.8
)
8.3
$
(0.4
)
8.4
$
(2,067.8
)
$
(2,096.7
)
1.4
$
(0.7
)
1.4
Income (loss) before income taxes
$
331.4
$
544.0
(39.1
)
$
(0.1
)
(39.1
)
$
1,156.7
$
1,087.0
6.4
$
(5.1
)
6.9
Underlying income (loss) before income taxes(3)
$
479.5
$
525.4
(8.7
)
$
(0.4
)
(8.7
)
$
1,269.5
$
1,185.4
7.1
$
(5.2
)
7.5
Financial volume(4)
20.629
23.532
(12.3
)
61.033
63.923
(4.5
)
Brand volume
21.332
22.322
(4.4
)
59.946
61.325
(2.2
)
N/M = Not meaningful The reported percent change and the constant currency percent change in the above table are presented as (unfavorable) favorable.
(1)
Includes gross inter-segment volumes, sales and purchases, which are eliminated in the consolidated totals.
(2)
The unrealized changes in fair value on our commodity swaps, which are economic hedges, are recorded as COGS within Unallocated. 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.
(3)
Represents income (loss) before taxes adjusted for non-GAAP items. See the Non-GAAP Measures and Reconciliations section for definitions and reconciliations of non-GAAP financial measures including constant currency.
(4)
Financial volume in hectoliters for the Americas and EMEA&APAC segments excludes royalty volume of 0.626 million hectoliters and 0.356 million hectoliters, respectively, for the three months ended September 30, 2024, and excludes royalty volume of 0.692 million hectoliters and 0.291 million hectoliters, respectively, for the three months ended September 30, 2023. Financial volume in hectoliters for the Americas and EMEA&APAC segments excludes royalty volume of 1.795 million hectoliters and 0.899 million hectoliters, respectively, for the nine months ended September 30, 2024, and excludes royalty volume of 1.955 million hectoliters and 0.697 million hectoliters respectively, for the nine months ended September 30, 2023.
WORLDWIDE AND SEGMENT BRAND AND FINANCIAL VOLUME (in millions of hectoliters)
(Unaudited)
For the Three Months Ended
Americas
September 30, 2024
September 30, 2023
Change
Financial Volume
14.695
17.414
(15.6
)%
Contract brewing and wholesale/factored volume
(0.804
)
(1.503
)
(46.5
)%
Royalty volume
0.626
0.692
(9.5
)%
Sales-To-Wholesaler to Sales-To-Retail adjustment and other(1)
0.850
(0.358
)
N/M
Total Americas Brand Volume
15.367
16.245
(5.4
)%
EMEA&APAC
September 30, 2024
September 30, 2023
Change
Financial Volume
5.938
6.120
(3.0
)%
Contract brewing and wholesale/factored volume
(0.329
)
(0.334
)
(1.5
)%
Royalty volume
0.356
0.291
22.3
%
Total EMEA&APAC Brand Volume
5.965
6.077
(1.8
)%
Consolidated
September 30, 2024
September 30, 2023
Change
Financial Volume
20.629
23.532
(12.3
)%
Contract brewing and wholesale/factored volume
(1.133
)
(1.837
)
(38.3
)%
Royalty volume
0.982
0.983
(0.1
)%
Sales-To-Wholesaler to Sales-To-Retail adjustment and other
0.854
(0.356
)
N/M
Total Worldwide Brand Volume
21.332
22.322
(4.4
)%
For the Nine Months Ended
Americas
September 30, 2024
September 30, 2023
Change
Financial Volume
45.001
47.718
(5.7
)%
Contract brewing and wholesale/factored volume
(2.604
)
(4.316
)
(39.7
)%
Royalty volume
1.795
1.955
(8.2
)%
Sales-To-Wholesaler to Sales-To-Retail adjustment and other(1)
(0.264
)
0.029
N/M
Total Americas Brand Volume
43.928
45.386
(3.2
)%
EMEA&APAC
September 30, 2024
September 30, 2023
Change
Financial Volume
16.039
16.209
(1.0
)%
Contract brewing and wholesale/factored volume
(0.920
)
(0.966
)
(4.8
)%
Royalty volume
0.899
0.697
29.0
%
Sales-To-Wholesaler to Sales-To-Retail adjustment and other(1)
—
(0.001
)
N/M
Total EMEA&APAC Brand Volume
16.018
15.939
0.5
%
Consolidated
September 30, 2024
September 30, 2023
Change
Financial Volume
61.033
63.923
(4.5
)%
Contract brewing and wholesale/factored volume
(3.524
)
(5.282
)
(33.3
)%
Royalty volume
2.694
2.652
1.6
%
Sales-To-Wholesaler to Sales-To-Retail adjustment and other
(0.257
)
0.032
N/M
Total Worldwide Brand Volume
59.946
61.325
(2.2
)%
N/M = Not meaningful
(1)
Includes gross inter-segment volumes which are eliminated in the consolidated totals.
Worldwide brand volume (or "brand volume" when discussed by segment) reflects owned or actively managed brands sold to unrelated external customers within our geographic markets (net of returns and allowances), royalty volume and our proportionate share of equity investment worldwide brand volume calculated consistently with MCBC owned volume. Financial volume represents owned or actively managed 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. Contract brewing and wholesale/factored volume is included within financial volume, but is removed from worldwide brand volume, as this is non-owned volume for which we do not directly control performance. Factored volume in our EMEA&APAC segment is the distribution of beer, wine, spirits and other products owned and produced by other companies to the on-premise channel, which is a common arrangement in the U.K. 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. Our worldwide brand volume definition also includes an adjustment from Sales-to-Wholesaler ("STW") volume to Sales-to-Retailer ("STR") volume. We believe the brand volume metric is important because, unlike financial volume and STWs, it provides the closest indication of the performance of our brands in relation to market and competitor sales trends.
We also utilize COGS per hectoliter, as well as the year over year changes in this metric, as a key metric for analyzing our results. This metric is calculated as COGS per our unaudited condensed consolidated statements of operations divided by financial volume for the respective period. We believe this metric is important and useful for investors and management because it provides an indication of the trends of sales mix and other cost impacts on our COGS.
NON-GAAP MEASURES AND RECONCILIATIONS
Use of Non-GAAP Measures
In addition to financial measures presented on the basis of accounting principles generally accepted in the U.S. (“U.S. GAAP”), we also use non-GAAP financial measures, as listed and defined below, for operational and financial decision making and to assess Company and segment business performance. These non-GAAP measures should be viewed as supplements to (not substitutes for) our results of operations presented under U.S. GAAP. We have provided reconciliations of all historical non-GAAP measures to their nearest U.S. GAAP measure and have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure.
Our management uses these metrics to assist in comparing performance from period to period on a consistent basis; as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; in communications with the Board of Directors, stockholders, analysts and investors concerning our financial performance; as useful comparisons to the performance of our competitors; and as metrics of certain management incentive compensation calculations. We believe these measures are used by, and are useful to, investors and other users of our financial statements in evaluating our operating performance.
Our guidance or long-term targets for any of the measures noted above are also non-GAAP financial measures that exclude or otherwise have been adjusted for non-GAAP adjustment items from our U.S. GAAP financial statements. When we provide guidance for any of the various non-GAAP metrics described above, we do not provide reconciliations of the U.S. GAAP measures as we are unable to predict with a reasonable degree of certainty the actual impact of the non-GAAP adjustment items. By their very nature, non-GAAP adjustment items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our Company and its financial results. Therefore, we are unable to provide a reconciliation of these measures without unreasonable efforts.
RECONCILIATION TO NEAREST U.S. GAAP MEASURES
Reconciliation by Line Item
(In millions, except per share data) (Unaudited)
For the Three Months Ended September 30, 2024
Cost of goods sold
Marketing, general and administrative expenses
Income (loss) before income taxes
Net income (loss) attributable to MCBC
Diluted earnings per share
Reported (U.S. GAAP)
$
(1,840.2
)
$
(684.7
)
$
331.4
$
199.8
$
0.96
Non-GAAP adjustments (pre-tax)
Restructuring(1)
—
—
24.1
24.1
0.12
(Gains) losses on other disposals(1)
—
—
41.7
41.7
0.20
Unrealized mark-to-market (gains) losses
1.7
—
1.7
1.7
0.01
Other items(2)(3)
—
0.8
80.6
80.6
0.39
Tax effects of income before income tax non-GAAP adjustments and discrete tax items
—
—
—
(10.1
)
(0.05
)
Adjustment for redeemable noncontrolling interest recorded to the redemption value(3)
—
—
—
36.6
0.18
Underlying (Non-GAAP)
$
(1,838.5
)
$
(683.9
)
$
479.5
$
374.4
$
1.80
(In millions, except per share data) (Unaudited)
For the Three Months Ended September 30, 2023
Cost of goods sold
Marketing, general and administrative expenses
Income (loss) before income taxes
Net income (loss) attributable to MCBC
Diluted earnings per share
Reported (U.S. GAAP)
$
(1,952.2
)
$
(746.8
)
$
544.0
$
430.7
$
1.98
Non-GAAP adjustments (pre-tax)
Restructuring
—
—
1.5
1.5
0.01
Intangible and tangible asset impairments, excluding goodwill
—
—
0.1
0.1
—
(Gains) and losses on other disposals(4)
—
—
11.1
11.1
0.05
Unrealized mark-to-market (gains) losses
(32.7
)
—
(30.8
)
(30.8
)
(0.14
)
Other items
—
0.7
(0.5
)
(0.5
)
—
Tax effects of income before income tax non-GAAP adjustments and discrete tax items
—
—
—
6.4
0.03
Underlying (Non-GAAP)
$
(1,984.9
)
$
(746.1
)
$
525.4
$
418.5
$
1.92
(In millions, except per share data) (Unaudited)
For the Nine Months Ended September 30, 2024
Cost of goods sold
Marketing, general and administrative expenses
Income (loss) before income taxes
Net income (loss) attributable to MCBC
Diluted earnings per share
Reported (U.S. GAAP)
$
(5,395.5
)
$
(2,067.8
)
$
1,156.7
$
834.6
$
3.96
Non-GAAP adjustments (pre-tax)
Restructuring(1)
—
—
23.0
23.0
0.11
(Gains) losses on other disposals(1)
—
—
36.4
36.4
0.17
Unrealized mark-to-market (gains) losses
(27.9
)
—
(27.9
)
(27.9
)
(0.13
)
Other items(2)(3)
—
1.7
81.3
81.3
0.39
Tax effects of income before income tax non-GAAP adjustments and discrete tax items
—
—
—
(2.6
)
(0.01
)
Adjustment for redeemable noncontrolling interest recorded to the redemption value(3)
—
—
—
36.6
0.17
Underlying (Non-GAAP)
$
(5,423.4
)
$
(2,066.1
)
$
1,269.5
$
981.4
$
4.65
(In millions, except per share data) (Unaudited)
For the Nine Months Ended September 30, 2023
Cost of goods sold
Marketing, general and administrative expenses
Income (loss) before income taxes
Net income (loss) attributable to MCBC
Diluted earnings per share
Reported (U.S. GAAP)
$
(5,575.5
)
$
(2,096.7
)
$
1,087.0
$
845.6
$
3.89
Non-GAAP adjustments (pre-tax)
Restructuring
—
—
1.8
1.8
0.01
Intangible and tangible asset impairments, excluding goodwill
—
—
0.1
0.1
—
(Gains) and losses on other disposals(4)
—
—
11.1
11.1
0.05
Unrealized mark-to-market (gains) losses
81.8
—
81.8
81.8
0.38
Other items
—
5.0
3.6
3.6
0.02
Tax effects of income before income tax non-GAAP adjustments and discrete tax items
—
—
—
(22.0
)
(0.10
)
Underlying (Non-GAAP)
$
(5,493.7
)
$
(2,091.7
)
$
1,185.4
$
922.0
$
4.24
(1)
During the three months ended September 30, 2024, we made the decision to wind down or sell certain of our U.S. craft businesses and related facilities within our Americas segment and recorded employee-related and asset abandonment charges, including accelerated depreciation in excess of normal depreciation. In addition, we recognized a loss of $41.1 million on the disposal of the sold businesses.
(2)
During the three months ended September 30, 2024, we recorded a non-cash pension settlement loss of $34.0 million within other pension and postretirement benefits (costs), net in Unallocated as a result of annuity purchases for two of our Canadian pension plans.
(3)
During the three months ended September 30, 2024, we recorded an increase in interest expense within our EMEA&APAC segment driven by a $45.8 million adjustment to increase our mandatorily redeemable NCI liability to the final redemption value related to the buyout of the remaining ownership interest in CBPL. In addition, we recorded a $36.6 million adjustment to net (income) loss attributable to noncontrolling interests related to the change in redemption value of CBPL. See the Consolidated Performance table earlier in this document for further information on this adjustment.
(4)
During the three months ended September 30, 2023, we sold our controlling interest in the Truss joint venture within our Americas segment and recognized a loss of $11.1 million.
Reconciliation to Underlying Income (Loss) Before Income Taxes by Segment
(In millions) (Unaudited)
For the Three Months Ended September 30, 2024
Americas
EMEA&APAC
Unallocated
Consolidated
Income (loss) before income taxes
$
353.8
$
51.6
$
(74.0
)
$
331.4
Cost of goods sold(1)
—
—
1.7
1.7
Marketing, general & administrative
0.7
0.1
—
0.8
Other non-GAAP adjustment items(2)
65.3
46.3
34.0
145.6
Total non-GAAP adjustment items
$
66.0
$
46.4
$
35.7
$
148.1
Underlying income (loss) before income taxes
$
419.8
$
98.0
$
(38.3
)
$
479.5
(In millions) (Unaudited)
For the Three Months Ended September 30, 2023
Americas
EMEA&APAC
Unallocated
Consolidated
Income (loss) before income taxes
$
483.5
$
67.5
$
(7.0
)
$
544.0
Cost of goods sold(1)
—
—
(32.7
)
(32.7
)
Marketing, general & administrative
0.7
—
—
0.7
Other non-GAAP adjustment items(2)
9.9
1.6
1.9
13.4
Total non-GAAP adjustment items
$
10.6
$
1.6
$
(30.8
)
$
(18.6
)
Underlying income (loss) before income taxes
$
494.1
$
69.1
$
(37.8
)
$
525.4
(In millions) (Unaudited)
For the Nine Months Ended September 30, 2024
Americas
EMEA&APAC
Unallocated
Consolidated
Income (loss) before income taxes
$
1,161.5
$
121.8
$
(126.6
)
$
1,156.7
Cost of goods sold(1)
—
—
(27.9
)
(27.9
)
Marketing, general & administrative
1.7
—
—
1.7
Other non-GAAP adjustment items(2)
65.1
39.9
34.0
139.0
Total non-GAAP adjustment items
$
66.8
$
39.9
$
6.1
$
112.8
Underlying income (loss) before income taxes
$
1,228.3
$
161.7
$
(120.5
)
$
1,269.5
(In millions) (Unaudited)
For the Nine Months Ended September 30, 2023
Americas
EMEA&APAC
Unallocated
Consolidated
Income (loss) before income taxes
$
1,204.2
$
106.3
$
(223.5
)
$
1,087.0
Cost of goods sold(1)
—
—
81.8
81.8
Marketing, general & administrative
1.7
3.3
—
5.0
Other non-GAAP adjustment items(2)
9.7
1.9
—
11.6
Total non-GAAP adjustment items
$
11.4
$
5.2
$
81.8
$
98.4
Underlying income (loss) before income taxes
$
1,215.6
$
111.5
$
(141.7
)
$
1,185.4
(1)
Reflects changes in our mark-to-market positions on our derivative hedges recorded as COGS within Unallocated. 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.
(2)
See the Reconciliations by Line Item table for further information on our non-GAAP adjustments.
Underlying Depreciation and Amortization Reconciliation
(In millions) (Unaudited)
For the Three Months Ended
For the Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
U.S. GAAP depreciation and amortization
$
(175.4
)
$
(168.7
)
$
(512.1
)
$
(508.6
)
Accelerated depreciation(1)
9.9
—
9.9
—
Non-GAAP Underlying depreciation and amortization
$
(165.5
)
$
(168.7
)
$
(502.2
)
$
(508.6
)
(1)
During the three months ended September 30, 2024, we made the decision to wind down or sell certain of our U.S. craft businesses and related facilities within our Americas segment and recorded accelerated depreciation in excess of normal depreciation of $9.9 million.
Underlying Net Interest Income (Expense), net Reconciliation
(In millions) (Unaudited)
For the Three Months Ended
For the Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
U.S. GAAP Interest income (expense), net
$
(93.1
)
$
(48.8
)
$
(192.7
)
$
(162.5
)
Adjustment to the redemption value of mandatorily redeemable noncontrolling interest(1)
45.8
—
45.8
—
Non-GAAP Underlying net interest income (expense), net
$
(47.3
)
$
(48.8
)
$
(146.9
)
$
(162.5
)
(1)
During the three months ended September 30, 2024, we recorded an increase in interest expense driven by a $45.8 million adjustment to increase our mandatorily redeemable NCI liability related to CBPL to its final redemption value. See the Consolidated Performance table earlier in this document for further information on this adjustment.
Effective Tax Rate Reconciliation
(Unaudited)
For the Three Months Ended
September 30, 2024
September 30, 2023
U.S. GAAP Effective Tax Rate
31
%
21
%
Tax effect of non-GAAP adjustment items(1)
(7
%)
(1
%)
Non-GAAP Underlying Effective Tax Rate
24
%
20
%
(1)
Adjustments related to the tax effect of non-GAAP adjustment items, including a non-deductible $45.8 million adjustment recorded to interest expense to increase the mandatorily redeemable NCI liability related to CBPL to the final redemption value in the third quarter of 2024 as well as a valuation allowance on deferred tax assets recorded in the third quarter of 2024 from the sale of certain U.S. craft businesses.
Underlying Free Cash Flow
(In millions) (Unaudited)
For the Nine Months Ended
September 30, 2024
September 30, 2023
U.S. GAAP Net Cash Provided by (Used In) Operating Activities
$
1,415.8
$
1,604.5
Additions to property, plant and equipment, net(1)
(563.0
)
(494.1
)
Cash impact of non-GAAP adjustment items(2)
3.2
11.2
Non-GAAP Underlying Free Cash Flow
$
856.0
$
1,121.6
(1)
Included in net cash provided by (used in) investing activities.
(2)
Included in net cash provided by (used in) operating activities and primarily reflects costs paid for restructuring activities for the nine months ended September 30, 2024 and September 30, 2023.
Net Debt and Net Debt to Underlying EBITDA Ratio
(In millions except net debt to underlying EBITDA ratio) (Unaudited)
As of
September 30, 2024
September 30, 2023
U.S. GAAP Current portion of long-term debt and short-term borrowings
$
37.7
$
878.8
Add/Less:
Long-term debt
6,203.0
5,301.1
Cash and cash equivalents
1,021.7
801.7
Net debt
5,219.0
$
5,378.2
Q3 Underlying EBITDA
692.3
742.9
Q2 Underlying EBITDA
750.1
725.2
Q1 Underlying EBITDA
476.2
388.4
Q4 Underlying EBITDA
566.1
555.5
Non-GAAP Underlying EBITDA(1)
$
2,484.7
$
2,412.0
Net debt to underlying EBITDA ratio
2.10
2.23
(1)
Represents underlying EBITDA on a trailing twelve month basis.
Underlying EBITDA Reconciliation
(In millions) (Unaudited)
For the Three Months Ended
September 30, 2024
September 30, 2023
U.S. GAAP Net income (loss)
228.8
431.6
Add/Less:
Interest expense (income), net
93.1
48.8
Income tax expense (benefit)
102.6
112.4
Depreciation and amortization
175.4
168.7
Non-GAAP adjustments to arrive at underlying EBITDA(1)
92.4
(18.6
)
Non-GAAP Underlying EBITDA
$
692.3
$
742.9
(1)
Includes pre-tax adjustments to Net income (loss) related to non-GAAP adjustment items as described in other non-GAAP reconciliation tables above excluding non-GAAP adjustments to interest expense (income), net, and depreciation and amortization. See the above tables (i) Reconciliations to Nearest U.S. GAAP Measures by Line Item, (ii) Underlying Depreciation and Amortization Reconciliation and (iii) Underlying Net Interest Income (Expense), net Reconciliation tables for further information on our non-GAAP adjustments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107763285/en/
Investor Relations Traci Mangini, (415) 308-0151 News Media Rachel Dickens, (314) 452-9673
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