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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______ .
Commission File Number: 1-14829
Molson Coors Beverage Company
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)
P.O. BOX 4030, NH353, Golden, Colorado, USA
1555 Notre Dame Street East, Montréal, Québec, Canada
(Address of principal executive offices)
84-0178360
(I.R.S. Employer Identification No.)
80401
H2L 2R5
(Zip Code)

303-279-6565 (Colorado)
514-521-1786 (Québec)
(Registrant's telephone number, including area code)
_______________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbolsName of each exchange on which registered
Class A Common Stock, $0.01 par value TAP.ANew York Stock Exchange
Class B Common Stock, $0.01 par value TAPNew York Stock Exchange
1.25% Senior Notes due 2024TAPNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý    No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý Accelerated filer o Non-accelerated filer o Smaller reporting company  Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No ý
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of April 22, 2021:
Class A Common Stock — 2,561,670 shares
Class B Common Stock — 200,532,624 shares
Exchangeable shares:
As of April 22, 2021, the following number of exchangeable shares were outstanding for Molson Coors Canada, Inc.:
Class A Exchangeable shares — 2,718,267 shares
Class B Exchangeable shares — 11,104,565 shares
The Class A exchangeable shares and Class B exchangeable shares are shares of the share capital in Molson Coors Canada Inc., a wholly-owned subsidiary of the registrant. They are publicly traded on the Toronto Stock Exchange under the symbols TPX.A and TPX.B,
respectively. These shares are intended to provide substantially the same economic and voting rights as the corresponding class of Molson Coors common stock in which they may be exchanged. In addition to the registered Class A common stock and the Class B common stock, the registrant has also issued and outstanding one share each of a Special Class A voting stock and Special Class B voting stock. The Special Class A voting stock and the Special Class B voting stock provide the mechanism for holders of Class A exchangeable shares and Class B exchangeable shares to be provided instructions to vote with the holders of the Class A common stock and the Class B common stock, respectively. The holders of the Special Class A voting stock and Special Class B voting stock are entitled to one vote for each outstanding Class A exchangeable share and Class B exchangeable share, respectively, excluding shares held by the registrant or its subsidiaries, and generally vote together with the Class A common stock and Class B common stock, respectively, on all matters on which the Class A common stock and Class B common stock are entitled to vote. The Special Class A voting stock and Special Class B voting stock are subject to a voting trust arrangement. The trustee which holds the Special Class A voting stock and the Special Class B voting stock is required to cast a number of votes equal to the number of then-outstanding Class A exchangeable shares and Class B exchangeable shares, respectively, but will only cast a number of votes equal to the number of Class A exchangeable shares and Class B exchangeable shares as to which it has received voting instructions from the owners of record of those Class A exchangeable shares and Class B exchangeable shares, other than the registrant or its subsidiaries, respectively, on the record date, and will cast the votes in accordance with such instructions so received.




MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
INDEX
Page
2



Glossary of Terms and Abbreviations
AOCI    
Accumulated other comprehensive income (loss)
CAD    
Canadian Dollar
CZKCzech Koruna
DBRSA global credit rating agency in Toronto
EBITDAEarnings before interest, tax, depreciation and amortization
EPS    
Earnings per share
EUREuro
FASB    
Financial Accounting Standards Board
GBP    
British Pound
HRKCroatian Kuna
JPY    
Japanese Yen
Moody’s
Moody’s Investors Service Limited, a nationally recognized statistical rating organization designated by the SEC
OCIOther comprehensive income (loss)
OPEBOther postretirement benefit plans
PSUs    
Performance share units
RSD    
Serbian Dinar
RSUsRestricted stock units
SECU.S. Securities and Exchange Commission
Standard & Poor’sStandard 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. GAAPAccounting principles generally accepted in the U.S.
USD or $U.S. Dollar
VIEsVariable interest entities
3



Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). From time to time, we may also provide oral or written forward-looking statements in other materials we release to the public. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995.
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 in Part I - Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations in this report, and under the headings "Executive Summary" and "Outlook" therein, with respect to expectations regarding the impact of the coronavirus pandemic on our operations, liquidity, financial condition and financial results, impact of the cybersecurity incident, including on revenues and related expenses, expectations regarding future dividends, overall volume trends, consumer preferences, pricing trends, industry forces, cost reduction strategies, including our revitalization plan announced in 2019 and the estimated range of related charges and timing of cash charges, anticipated results, expectations for funding future capital expenditures and operations, debt service capabilities, timing and amounts of debt and leverage levels, shipment levels and profitability, market share, and the sufficiency of capital resources. In addition, statements that we make in this report that are not statements of historical fact may also be forward-looking statements. Words such as "expects," "intend," "goals," "plans," "believes," "continues," "may," "anticipate," "seek," "estimate," "outlook," "trends," "future benefits," "potential," "projects," "strategies," and variations of such words and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those indicated (both favorably and unfavorably). These risks and uncertainties include, but are not limited to, those described in Part II - Item IA. Risk Factors in this report, and those described from time to time in our past and future reports filed with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2020. Caution should be taken not to place undue reliance on any such forward-looking statements. Forward-looking statements speak only as of the date when made and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Market and Industry Data
The market and industry data used in this Quarterly Report on Form 10-Q are based on independent industry publications, customers, trade or business organizations, reports by market research firms and other published statistical information from third parties (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.
4



PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS (UNAUDITED)

MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 Three Months Ended
 March 31, 2021March 31, 2020
Sales$2,256.1 $2,537.8 
Excise taxes(357.7)(435.0)
Net sales1,898.4 2,102.8 
Cost of goods sold(1,167.4)(1,479.0)
Gross profit731.0 623.8 
Marketing, general and administrative expenses(542.9)(629.7)
Special items, net(10.9)(86.6)
Operating income (loss)177.2 (92.5)
Interest income (expense), net(65.3)(68.9)
Other pension and postretirement benefits (costs), net13.0 7.5 
Other income (expense), net1.4 (4.8)
Income (loss) before income taxes126.3 (158.7)
Income tax benefit (expense)(44.3)43.3 
Net income (loss)82.0 (115.4)
Net (income) loss attributable to noncontrolling interests2.1 (1.6)
Net income (loss) attributable to Molson Coors Beverage Company$84.1 $(117.0)
  
Net income (loss) attributable to Molson Coors Beverage Company per share
Basic$0.39 $(0.54)
Diluted $0.39 $(0.54)
Weighted-average shares outstanding
Basic217.0 216.7 
Dilutive effect of share-based awards0.4  
Diluted217.4 216.7 
Anti-dilutive securities excluded from the computation of diluted EPS1.8 2.9 
See notes to unaudited condensed consolidated financial statements.

5



MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(IN MILLIONS)
(UNAUDITED)
Three Months Ended
March 31, 2021March 31, 2020
Net income (loss) including noncontrolling interests$82.0 $(115.4)
Other comprehensive income (loss), net of tax:  
Foreign currency translation adjustments10.3 (373.5)
Reclassification of cumulative translation adjustment to income (loss)7.5  
Unrealized gain (loss) on derivative instruments102.7 (127.9)
Reclassification of derivative (gain) loss to income (loss)1.2  
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income (loss)0.4 (1.3)
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)0.4 0.7 
Total other comprehensive income (loss), net of tax122.5 (502.0)
Comprehensive income (loss)204.5 (617.4)
Comprehensive (income) loss attributable to noncontrolling interests2.0 1.3 
Comprehensive income (loss) attributable to Molson Coors Beverage Company$206.5 $(616.1)
See notes to unaudited condensed consolidated financial statements.

6




MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT PAR VALUE)
(UNAUDITED)
 As of
 March 31, 2021December 31, 2020
Assets  
Current assets  
Cash and cash equivalents$532.7 $770.1 
Accounts receivable, net557.9 558.0 
Other receivables, net159.3 129.1 
Inventories, net746.4 664.3 
Other current assets, net369.6 297.3 
Total current assets2,365.9 2,418.8 
Properties, net4,143.5 4,250.3 
Goodwill6,153.9 6,151.0 
Other intangibles, net13,482.2 13,556.1 
Other assets1,018.1 954.9 
Total assets$27,163.6 $27,331.1 
Liabilities and equity  
Current liabilities  
Accounts payable and other current liabilities$2,532.8 $2,889.5 
Current portion of long-term debt and short-term borrowings1,063.5 1,020.1 
Total current liabilities3,596.3 3,909.6 
Long-term debt7,181.2 7,208.2 
Pension and postretirement benefits757.7 763.2 
Deferred tax liabilities2,476.8 2,381.6 
Other liabilities317.6 447.2 
Total liabilities14,329.6 14,709.8 
Commitments and contingencies (Note 12)
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: 210.0 shares and 209.8 shares, respectively)
2.1 2.1 
Class A exchangeable shares, no par value (issued and outstanding: 2.7 shares and 2.7 shares, respectively)
102.3 102.3 
Class B exchangeable shares, no par value (issued and outstanding: 11.1 shares and 11.1 shares, respectively)
417.8 417.8 
Paid-in capital6,947.1 6,937.8 
Retained earnings6,628.3 6,544.2 
Accumulated other comprehensive income (loss)(1,045.4)(1,167.8)
Class B common stock held in treasury at cost (9.5 shares and 9.5 shares, respectively)
(471.4)(471.4)
Total Molson Coors Beverage Company stockholders' equity12,580.8 12,365.0 
Noncontrolling interests253.2 256.3 
Total equity12,834.0 12,621.3 
Total liabilities and equity$27,163.6 $27,331.1 
See notes to unaudited condensed consolidated financial statements.
7



MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
 Three Months Ended
 March 31, 2021March 31, 2020
Cash flows from operating activities:  
Net income (loss) including noncontrolling interests$82.0 $(115.4)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: 
Depreciation and amortization202.3 256.5 
Amortization of debt issuance costs and discounts1.8 2.1 
Share-based compensation8.3 5.9 
(Gain) loss on sale or impairment of properties and other assets, net2.8 (0.2)
Unrealized (gain) loss on foreign currency fluctuations and derivative instruments, net(122.6)103.3 
Income tax (benefit) expense44.3 (43.3)
Income tax (paid) received(9.1)(9.2)
Interest expense, excluding interest amortization64.1 67.6 
Interest paid(86.6)(90.3)
Change in current assets and liabilities and other(378.2)(195.1)
Net cash provided by (used in) operating activities(190.9)(18.1)
Cash flows from investing activities:  
Additions to properties(102.5)(225.1)
Proceeds from sales of properties and other assets1.1 1.6 
Other16.8 3.5 
Net cash provided by (used in) investing activities(84.6)(220.0)
Cash flows from financing activities:  
Exercise of stock options under equity compensation plans4.5 4.0 
Dividends paid (123.4)
Payments on debt and borrowings(0.9)(502.9)
Proceeds on debt and borrowings 1.0 
Net proceeds from (payments on) revolving credit facilities and commercial paper0.5 1,025.5 
Change in overdraft balances and other40.9 (5.5)
Net cash provided by (used in) financing activities45.0 398.7 
Cash and cash equivalents:  
Net increase (decrease) in cash and cash equivalents(230.5)160.6 
Effect of foreign exchange rate changes on cash and cash equivalents(6.9)(17.9)
Balance at beginning of year770.1 523.4 
Balance at end of period$532.7 $666.1 
See notes to unaudited condensed consolidated financial statements.
8



MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
AND NONCONTROLLING INTERESTS
(IN MILLIONS)
(UNAUDITED)
 Molson Coors Beverage Company Stockholders' Equity 
  AccumulatedCommon stock 
 Common stockExchangeableotherheld inNon
 issuedshares issuedPaid-in-Retainedcomprehensivetreasurycontrolling
TotalClass AClass BClass AClass Bcapitalearningsincome (loss)Class Binterests
As of December 31, 2019$13,673.1 $ $2.1 $102.5 $557.8 $6,773.6 $7,617.0 $(1,162.2)$(471.4)$253.7 
Shares issued under equity compensation plan1.2 —  — — 1.2 — — — — 
Amortization of share-based compensation5.9 — — — — 5.9 — — — — 
Purchase of noncontrolling interest(0.1)— — — — — — — — (0.1)
Net income (loss) including noncontrolling interests(115.4)— — — — — (117.0)— — 1.6 
Other comprehensive income (loss), net of tax(502.0)— — — — — — (499.1)— (2.9)
Contributions from noncontrolling interests8.6 — — — — — — — — 8.6 
Distributions and dividends to noncontrolling interests(1.5)— — — — — — — — (1.5)
Dividends declared - $0.57 per share
(123.8)— — — — — (123.8)— — — 
As of March 31, 2020$12,946.0 $ $2.1 $102.5 $557.8 $6,780.7 $7,376.2 $(1,661.3)$(471.4)$259.4 

  Molson Coors Beverage Company Stockholders' Equity 
   AccumulatedCommon stock 
  Common stockExchangeableotherheld inNon
  issuedshares issuedPaid-in-Retainedcomprehensivetreasurycontrolling
 TotalClass AClass BClass AClass Bcapitalearningsincome (loss)Class Binterests
As of December 31, 2020$12,621.3 $ $2.1 $102.3 $417.8 $6,937.8 $6,544.2 $(1,167.8)$(471.4)$256.3 
Shares issued under equity compensation plan1.0 —  — — 1.0 — — — — 
Amortization of share-based compensation8.3 — — — — 8.3 — — — — 
Purchase of noncontrolling interest(0.2)— — — — — — — — (0.2)
Net income (loss) including noncontrolling interests82.0 — — — — — 84.1 — — (2.1)
Other comprehensive income (loss), net of tax122.5 — — — — — — 122.4 — 0.1 
Distributions and dividends to noncontrolling interests(0.9)— — — — — — — — (0.9)
As of March 31, 2021$12,834.0 $ $2.1 $102.3 $417.8 $6,947.1 $6,628.3 $(1,045.4)$(471.4)$253.2 
See notes to unaudited condensed consolidated financial statements.
9



MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Summary of Significant Accounting Policies
Unless otherwise noted in this report, any description of "we," "us" or "our" includes Molson Coors Beverage Company ("MCBC" or the "Company"), principally a holding company, and its operating and non-operating subsidiaries included within our reporting segments. Our reporting segments include North America and Europe. Our North America segment operates in the U.S., Canada and various countries in Latin and South America, and our Europe segment operates 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.
Unless otherwise indicated, information in this report is presented in USD and comparisons are to comparable prior periods. Our primary operating currencies, other than the USD, include the CAD, the GBP, and our Central European operating currencies such as the EUR, CZK, HRK and RSD.
The accompanying unaudited condensed consolidated interim financial statements reflect all adjustments which are necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented in accordance with U.S. GAAP. Such unaudited interim condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.
These unaudited condensed consolidated interim financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 ("Annual Report"), and have been prepared on a consistent basis with the accounting policies described in Note 1 of the Notes to the Audited Consolidated Financial Statements included in our Annual Report, except as noted in Note 2, "New Accounting Pronouncements".
The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results that may be achieved for the full year.
Due to the anti-dilutive effect resulting from the reported net loss attributable to MCBC for the three months ended March 31, 2020, the impact of potentially dilutive securities has been excluded from the quarterly calculation of weighted-average shares for diluted EPS for the first quarter of 2020.
Cybersecurity Incident
During March 2021, we experienced a systems outage that was caused by a cybersecurity incident. We engaged leading forensic information technology firms and legal counsel to assist our investigation into the incident and we restored our systems after working to get the systems back up as quickly as possible. Despite these actions, we experienced some delays and disruptions to our business, including brewery operations, production and shipments. This incident caused us to not produce or ship as much as we would have in the first quarter of 2021. In addition, we incurred certain incremental one-time costs of $2.0 million in the first quarter of 2021 related to consultants, experts and data recovery efforts, net of insurance recoveries. We expect to incur additional incremental one-time costs related to the incident in the second quarter of 2021.
Coronavirus Global Pandemic
The coronavirus pandemic had a material adverse effect on our operations, liquidity, financial condition and results of operations in 2020, starting at the end of the first quarter of 2020, and we expect it will continue to have a material impact on our financial results in 2021 and possibly beyond. The extent to which our operations will continue to 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, roll out and efficacy of the vaccines, and actions by government authorities to contain the pandemic or treat its impact, among other things. We continue to actively monitor the ongoing evolution of the pandemic and resulting impacts to our business and have taken various mitigating actions in response to the impacts of the pandemic and to position our business for the long term.
During the first quarter of 2020, we commenced a keg relief program in order to support and demonstrate our commitment to the continued viability of the many bars and restaurants which were negatively impacted by the shutdowns at the onset of the coronavirus pandemic. We provided customers with reimbursements for untapped kegs that met certain established return requirements and as a result, during the three month period ended March 31, 2020, we recognized a reduction to net sales of $31.5 million reflecting estimated sales returns and reimbursements through these programs. Further, during the three months ended March 31, 2020, we recognized charges of $18.5 million within cost of goods sold related to obsolete finished goods keg inventories that were not expected to be sold within our freshness specifications, as well as the costs to
10



facilitate the above mentioned keg returns. The actual duration of the coronavirus pandemic, including the length of government-mandated closures or ceased sit-down service limitations at bars and restaurants coupled with the subsequent recovery period relative to the assumptions utilized to derive the allowance for obsolete inventories, could result in future charges due to incremental finished goods keg inventory becoming obsolete in future periods.
As the coronavirus pandemic continues to evolve, we continue to monitor the impacts on our customers’ liquidity and capital resources and therefore our ability to collect, or the timeliness of collection of our accounts receivable. While these receivables are not concentrated in any specific customer and our allowance on these receivables factors in expected credit loss, continued disruption and declines in the global economy could result in difficulties in our ability to collect and require increases to our allowance for doubtful accounts. As of March 31, 2021 and December 31, 2020, our allowance for trade receivables was approximately $20 million and $18 million, respectively, and allowance activity was immaterial during the three months ended March 31, 2021.
In response to the onset of the coronavirus pandemic in 2020, various governmental authorities globally announced relief programs which among other items, provided temporary deferrals of non-income based tax payments, which positively impacted our operating cash flows in 2020. These temporary deferrals of approximately $130 million as of March 31, 2021 and December 31, 2020 were included within accounts payable and other current liabilities on our unaudited condensed consolidated balance sheets.
Finally, we continue to protect and support our liquidity position in response to the global economic uncertainty created by the coronavirus pandemic. Beginning with the second quarter of 2020, our board of directors suspended our regular quarterly dividends on our Class A and Class B common and exchangeable shares.
For considerations of the effects of the coronavirus pandemic and related potential impairment risks to our goodwill and indefinite-lived intangible assets, see Note 7, "Goodwill and Intangible Assets."
Revitalization Plan
On October 28, 2019, we initiated a revitalization plan designed to allow us to invest across our portfolio to drive long-term, sustainable success. The revitalization plan established Chicago, Illinois as our North American operational headquarters. We closed our office in Denver, Colorado and consolidated certain administrative functions into our other existing office locations. As of January 1, 2020, we changed our name to Molson Coors Beverage Company and changed our management structure to two segments - North America and Europe. We began to incur charges related to these restructuring activities during the fourth quarter of 2019 and will continue to incur charges through fiscal year 2021.
See Note 5, "Special Items" for further discussion of the impacts of this plan.
Non-Cash Activity
Non-cash activity includes non-cash issuances of share-based awards, as well as non-cash investing activities related to movements in our guarantee of indebtedness of certain equity method investments. See Note 4, "Investments" for further discussion. We also had non-cash activities related to capital expenditures incurred but not yet paid of $116.2 million and $153.5 million during the three months ended March 31, 2021 and March 31, 2020, respectively.
Other than the activity mentioned above and the supplemental non-cash activity related to the recognition of leases further discussed in Note 13, "Leases," there was no other significant non-cash activity during the three months ended March 31, 2021 and March 31, 2020.
Share-Based Compensation
During the first quarter of 2021 and 2020, we granted stock options, RSUs and PSUs to certain officers and other eligible employees, and recognized share-based compensation expense of $8.3 million and $5.9 million during the three months ended March 31, 2021 and March 31, 2020, respectively.
2. New Accounting Pronouncements
New Accounting Pronouncements Recently Adopted
In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes. This guidance eliminated certain exceptions to the general approach to the income tax accounting model and added new guidance to reduce the complexity in accounting for income taxes. We adopted this guidance in the first quarter of 2021, which did not have a material impact on our financial statements.
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New Accounting Pronouncements Not Yet Adopted
In March 2020, the FASB issued authoritative guidance which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and are effective for all entities upon issuance, March 12, 2020 through December 31, 2022, which is a full year after the current expected discontinuation date of LIBOR. We are currently evaluating the potential impact of this guidance on our financial statements.
Other than the items noted above, there have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact, or potential significant impact, to our unaudited condensed consolidated interim financial statements.
3. Segment Reporting
Our reporting segments are based on the key geographic regions in which we operate, and include the North America and Europe segments. Our North America segment operates in the U.S., Canada and various countries in Latin and South America and our Europe segment operates in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K., various other European countries, and certain countries within the Middle East, Africa and Asia Pacific.
We also have certain activity that is not allocated to our segments, which has been reflected as “Unallocated” below. Specifically, "Unallocated" activity primarily includes financing-related costs such as interest expense and income, foreign exchange gains and losses on intercompany balances related to financing and other treasury-related activities, and the unrealized changes in fair value on our commodity swaps not designated in hedging relationships recorded within cost of goods sold, which are later reclassified when realized to the segment in which the underlying exposure resides. Additionally, only the service cost component of net periodic pension and OPEB cost is reported within each operating segment, and all other components remain unallocated.
Summarized Financial Information
No single customer accounted for more than 10% of our consolidated sales for the three months ended March 31, 2021 and March 31, 2020. Consolidated net sales represent sales to third-party external customers less excise taxes. Inter-segment transactions impacting net sales revenues and income (loss) before income taxes eliminate upon consolidation and are primarily related to North America segment sales to the Europe segment.
The following tables present net sales and income (loss) before income taxes by segment:
Three Months Ended
March 31, 2021March 31, 2020
(In millions)
North America$1,692.0 $1,789.7 
Europe206.9 317.6 
Inter-segment net sales eliminations(0.5)(4.5)
Consolidated net sales$1,898.4 $2,102.8 
Three Months Ended
March 31, 2021March 31, 2020
(In millions)
North America(1)
$144.2 $76.2 
Europe(2)
(89.4)(76.8)
Unallocated(3)
71.5 (158.1)
Consolidated income (loss) before income taxes$126.3 $(158.7)
(1)     The increase in income before income taxes for the North America segment for the three months ended March 31, 2021 when compared to the three months ended March 31, 2020 was primarily due to lower specials charges and lower marketing, general and administrative ("MG&A") expenses, partially offset by lower net sales. Lower net sales was primarily due to continued on-premise restrictions from the coronavirus pandemic, as well as the March 2021 cybersecurity incident and the February 2021 Fort Worth, TX brewery shutdown due to a winter storm, partially offset by the cycling of brewery downtime associated with the Milwaukee brewery tragedy in the prior year.
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(2)    The increase in the loss before income taxes for the Europe segment for the three months ended March 31, 2021 when compared to the three months ended March 31, 2020, was primarily due to lower net sales. Lower net sales was primarily due to the impacts of the coronavirus pandemic, specifically related to the closures across Europe, especially in the U.K. where the on-premise channel remained closed for the entire first quarter of 2021.
(3)    Unallocated income (loss) before taxes included the unrealized mark-to-market valuation of our commodity hedge positions. We recorded unrealized gains of $121.5 million during the three months ended March 31, 2021 and unrealized losses of $99.1 million during the three months ended March 31, 2020.
Income (loss) before income taxes includes the impact of special items. Refer to Note 5, "Special Items" for further discussion.
The following table presents total assets by segment:
As of
March 31, 2021December 31, 2020
(In millions)
North America$23,393.6 $23,375.6 
Europe3,770.0 3,955.5 
Consolidated total assets$27,163.6 $27,331.1 

4. Investments
Our investments include both equity method and consolidated investments. Those entities identified as VIEs have been evaluated to determine whether we are the primary beneficiary. The VIEs included under "Consolidated VIEs" below are those for which we have concluded that we are the primary beneficiary and accordingly, we have consolidated these entities. None of our consolidated VIEs held debt as of March 31, 2021 or December 31, 2020. We have not provided any financial support to any of our VIEs during the year that we were not previously contractually obligated to provide. Amounts due to and due from our equity method investments are recorded as affiliate accounts payable and affiliate accounts receivable.
Authoritative guidance related to the consolidation of VIEs requires that we continually reassess whether we are the primary beneficiary of VIEs in which we have an interest. As such, the conclusion regarding the primary beneficiary status is subject to change and we continually evaluate circumstances that could require consolidation or deconsolidation. Our consolidated VIEs are Cobra Beer Partnership, Ltd. ("Cobra U.K."), Rocky Mountain Metal Container ("RMMC"), Rocky Mountain Bottle Company ("RMBC") and Truss LP ("Truss"), as well as other immaterial entities. Our unconsolidated VIEs are Brewers Retail Inc. ("BRI") and Brewers' Distributor Ltd. ("BDL"), as well as other immaterial investments.
Both BRI and BDL have outstanding third party debt which is guaranteed by their respective shareholders. As a result, we have a guarantee liability of $45.4 million and $38.2 million recorded as of March 31, 2021 and December 31, 2020, respectively, which is presented within accounts payable and other current liabilities on the unaudited condensed consolidated balance sheets and represents our proportionate share of the outstanding balance of these debt instruments. The carrying value of the guarantee liability equals fair value, which considers an adjustment for our own non-performance risk and is considered a Level 2 measurement. The offset to the guarantee liability was recorded as an adjustment to our respective equity method investment within the unaudited condensed consolidated balance sheets. The resulting change in our equity method investments during the year due to movements in the guarantee represents a non-cash investing activity.
Consolidated VIEs
The following summarizes the assets and liabilities of our consolidated VIEs (including noncontrolling interests):
 As of
 March 31, 2021December 31, 2020
 Total AssetsTotal LiabilitiesTotal AssetsTotal Liabilities
 (In millions)
RMMC/RMBC$231.4 $18.8 $239.3 $17.9 
Other$81.8 $18.3 $93.4 $18.0 

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5. Special Items
We incurred charges or realized benefits that either we do not believe to be indicative of our core operations, or we believe are significant to our current operating results warranting separate classification. As such, we separately classified these charges (benefits) as special items.
Three Months Ended
March 31, 2021March 31, 2020
(In millions)
Employee-related charges
Restructuring$3.6 $32.1 
Impairments or asset abandonment charges
North America - Asset abandonment(1)
2.9 54.2 
Europe - Asset abandonment
2.1 0.3 
Termination fees and other (gains) losses
North America0.4  
Europe(2)
1.9  
Total Special items, net$10.9 $86.6 
(1)     In January 2020, we announced plans to cease production at our Irwindale, California brewery and entered into an option agreement with Pabst Brewing Company, LLC ("Pabst"), granting Pabst an option to purchase our Irwindale, California brewery, including plant equipment and machinery and the underlying land for $150 million, subject to adjustment as further specified in the option agreement. Pursuant to the option agreement, on May 4, 2020, Pabst exercised its option to purchase the Irwindale brewery and the purchase was completed in the fourth quarter of 2020. Production at the Irwindale brewery ceased during the third quarter of 2020. Charges incurred in the three months ended March 31, 2021 were immaterial. Charges associated with the brewery closure for the three months ended March 31, 2020 totaled $58 million and primarily consisted of accelerated depreciation in excess of normal depreciation, as well as other closure costs including employee related costs.
In addition, during the three months ended March 31, 2021 and March 31, 2020 we incurred asset abandonment charges, primarily related to the accelerated depreciation in excess of normal depreciation as a result of the Montreal brewery closure, which is expected to occur in 2021.
(2)     During the three months ended March 31, 2021, we recognized termination fees and other losses of $1.9 million related to the sale of a disposal group within our India business which represented an insignificant part of our Europe segment. The loss includes the reclassification of the associated cumulative foreign currency translation adjustment losses from AOCI into specials at the time of sale. See Note 10, "Accumulated Other Comprehensive Income (Loss)" for further details.
Restructuring Activities
On October 28, 2019, as part of our revitalization plan, we established Chicago, Illinois as our North American operational headquarters, closed our office in Denver, Colorado and consolidated certain administrative functions into our other existing office locations. In connection with these consolidation activities, certain impacted employees were extended an opportunity to continue their employment with MCBC in the new organization and locations and, for those not continuing with MCBC, certain of such employees were asked to provide transition assistance and offered severance and retention packages in connection with their termination of service. We expect the costs associated with the restructuring to be substantially recognized by the end of fiscal year 2021. After taking into account all changes in each of the business units, including Europe, the revitalization plan reduced employment levels, in aggregate, by approximately 600 employees globally.
In connection with the revitalization plan, we incurred and expect we may continue to incur cash and non-cash restructuring charges related to severance, retention and transition costs, employee relocation, non-cash asset related costs, lease impairment and exit costs in connection with our office lease in Denver, Colorado, and other transition activities related to the consolidation activities and related organizational and personnel changes of the revitalization plan through 2021 which is expected to aggregate in the range of approximately $100 million to $120 million. During the three months ended March 31, 2021 and March 31, 2020, we recognized severance and retention charges of $1.5 million and $22.7 million, respectively, and our remaining accrued restructuring balance related to the revitalization plan as of March 31, 2021 was approximately $13 million. Actual severance and retention costs related to this restructuring, which are primarily being recognized ratably over the
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employees' required future service period, may differ from original estimates based on actual employee turnover levels prior to achieving severance and retention eligibility requirements.
Other than those noted above, there were no material changes to our restructuring activities since December 31, 2020, as reported in Part II - Item 8. Financial Statements and Supplementary Data, Note 7, "Special Items" in our Annual Report. We continually evaluate our cost structure and seek opportunities for further efficiencies and cost savings as part of ongoing and new initiatives. As such, we may incur additional restructuring related charges or adjustments to previously recorded charges in the future, however, we are unable to estimate the amount of charges at this time.
The accrued restructuring balances as of March 31, 2021 represent expected future cash payments required to satisfy our remaining obligations to terminated employees, the majority of which we expect to be paid in the next 12 months.
 North AmericaEuropeTotal
 (In millions)
As of December 31, 2020$24.5 $2.0 $26.5 
Charges incurred3.0 0.5 3.5 
Payments made(10.9)(0.4)(11.3)
Changes in estimates0.2 (0.1)0.1 
Foreign currency and other adjustments0.1  0.1 
As of March 31, 2021$16.9 $2.0 $18.9 
 North AmericaEuropeTotal
 (In millions)
As of December 31, 2019$42.6 $4.5 $47.1 
Charges incurred26.2 7.2 33.4 
Payments made(19.4)(3.5)(22.9)
Changes in estimates(1.3) (1.3)
Foreign currency and other adjustments(0.9)(0.2)(1.1)
As of March 31, 2020$47.2 $8.0 $55.2 

6. Income Tax
Three Months Ended
March 31, 2021March 31, 2020
Effective tax rate35 %27 %

The increase in the effective tax rate during the first quarter of 2021 was primarily driven by an increase in net discrete tax expense. We recognized $18.1 million net discrete tax expense in the first quarter of 2021 versus $13.9 million net discrete tax benefit in the first quarter of 2020. In addition, jurisdictions with a higher income tax rate had proportionally higher pretax income in 2021 compared to prior year driving the effective tax rate higher.
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 will continue to monitor these regulations. The final hybrid regulations enacted in the prior year resulted in recognition of approximately $135 million of tax expense in April 2020. We currently estimate the impact of the finalized regulations could be cash tax outflows up to approximately $100 million in 2021. We continue to analyze the potential cash impacts of the final regulations to minimize cash outflows over time.
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7. Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill for the North America segment is presented in the table below.
North America
Changes in Goodwill:(In millions)
Balance as of December 31, 2020$6,151.0 
Foreign currency translation2.9 
Balance as of March 31, 2021$6,153.9 
As of December 31, 2020, due to the goodwill impairment recorded in the fourth quarter of 2020, the Europe segment had no goodwill. The North America segment had goodwill as of March 31, 2021 and December 31, 2020 as presented in the table above.
The gross amount of goodwill totaled approximately $8.4 billion as of both March 31, 2021 and December 31, 2020. Accumulated impairment losses as of March 31, 2021 and December 31, 2020 totaled $2,250.6 million and $2,264.5 million, respectively, and are comprised of a full impairment taken on the Europe reporting unit and a partial impairment taken on the North America reporting unit as well as our historic India reporting unit, which was fully impaired in 2019.
As of the date of our annual impairment test, performed as of October 1, 2020, the North America reporting unit goodwill balance was at risk of future impairment in the event of significant unfavorable changes in assumptions including the forecasted cash flows (including company-specific risks like the performance of our above premium transformation efforts and overall market performance of new innovations like hard seltzers, along with macro-economic risks such as the continued prolonged weakening of economic conditions, or significant unfavorable changes in tax rates, environmental or other regulations, including interpretations thereof), terminal growth rates, market multiples and/or weighted-average cost of capital utilized in the discounted cash flow analyses. For testing purposes of our reporting units, management's best estimates of the expected future results are the primary driver in determining the fair value. Current projections used for our North America reporting unit testing reflect growth assumptions associated with our revitalization plan to build on the strength of our iconic core brands, aggressively grow our above premium portfolio, expand beyond the beer aisle, invest in our capabilities and support our people and our communities all of which are intended to benefit the projected cash flows of the business. The cash flow assumptions were tempered somewhat by the impacts the coronavirus has had on our overall business and specifically our more profitable on-premise business.
We determined that there was no triggering event that occurred during the first quarter of 2021 that would indicate the carrying value of our goodwill was greater than its fair value.
Intangible Assets, Other than Goodwill
The following table presents details of our intangible assets, other than goodwill, as of March 31, 2021:
Useful lifeGrossAccumulated
amortization
Net
 (Years)(In millions)
Intangible assets subject to amortization:    
Brands
 10 - 50
$5,118.6 $(1,120.9)$3,997.7 
License agreements and distribution rights
 15 - 20
207.9 (102.3)105.6 
Other
 3 - 40
98.7 (28.0)70.7 
Intangible assets not subject to amortization:    
Brands Indefinite8,195.3 — 8,195.3 
Distribution networks Indefinite805.3 — 805.3 
Other Indefinite307.6 — 307.6 
Total $14,733.4 $(1,251.2)$13,482.2 
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The following table presents details of our intangible assets, other than goodwill, as of December 31, 2020:
Useful lifeGrossAccumulated
amortization
Net
 (Years)(In millions)
Intangible assets subject to amortization:    
Brands
10 - 50
$5,128.4 $(1,070.6)$4,057.8 
License agreements and distribution rights
15 - 20
206.8 (99.5)107.3 
Other
3 - 40
109.1 (36.4)72.7 
Intangible assets not subject to amortization:    
BrandsIndefinite8,215.7 — 8,215.7 
Distribution networksIndefinite795.0 — 795.0 
OtherIndefinite307.6 — 307.6 
Total $14,762.6 $(1,206.5)$13,556.1 
The changes in the gross carrying amounts of intangible assets from December 31, 2020 to March 31, 2021 are primarily driven by the impact of foreign exchange rates, as a significant amount of intangible assets are denominated in foreign currencies.
Based on foreign exchange rates as of March 31, 2021, the estimated future amortization expense of intangible assets is as follows:
Fiscal yearAmount
(In millions)
2021 - remaining$162.5 
2022$212.4 
2023$211.4 
2024$209.7 
2025$209.6 
Amortization expense of intangible assets was $54.5 million and $54.9 million for the three months ended March 31, 2021 and March 31, 2020, respectively. This expense is primarily presented within marketing, general and administrative expenses on the unaudited condensed consolidated statements of operations.
As of the date of our annual impairment test of indefinite-lived intangible assets, performed as of October 1, 2020, the fair value of the indefinite-lived Miller, Coors and Carling brands were sufficiently in excess of their carrying values. We determined at the annual impairment testing date that the Staropramen indefinite-lived intangible asset in Europe was considered to be at risk of future impairment as a result of the coronavirus' impact on the on-premise business throughout Europe that commenced in 2020 and is continuing in 2021. No triggering events occurred during the first quarter of 2021 that would indicate the carrying value of these indefinite-lived assets was greater than their fair value.
We continuously monitor the performance of the underlying definite-lived intangible assets for potential triggering events suggesting an impairment review should be performed. While no triggering events have occurred in the first quarter of 2021, we continue to monitor the impacts of the coronavirus in our key markets and the potential implications that may have on the values of definite-lived intangible assets.
Fair Value Assumptions
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. The key assumptions used to derive the estimated fair values of our reporting units and indefinite-lived intangible assets are discussed in Part II—Item 8 Financial Statements, Note 10, "Goodwill and Intangible Assets" in our Annual Report, and represent Level 3 measurements.
Overall Considerations
Based on known facts and circumstances, we evaluate and consider recent events and uncertain items, as well as the related potential implications, as part of our annual and interim assessments and incorporate into the analyses as appropriate. These facts and circumstances are subject to change and may impact future analyses. For example, we continue to monitor the progress we are making our revitalization plan, challenges within the beer industry for further weakening or additional systemic
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structural declines, as well as for adverse changes in macroeconomic conditions such as the coronavirus pandemic that could significantly impact our immediate and long-range results. Additionally, we are monitoring the impacts the coronavirus pandemic has on the market inputs used in calculating our discount rates, including risk-free rates, equity premiums and our cost of debt, which could result in a meaningful change to our weighted-average cost of capital calculation, as well as the market multiples used in our impairment assessment. Furthermore, increased volatility in the equity and debt markets or other country specific factors, including, but not limited to, extended or future government intervention in response to the pandemic, could also result in a meaningful change to our weighted-average cost of capital calculation and other inputs used in our impairment assessment. Separately, the Ontario government in Canada adopted a bill that, if enacted, could adversely impact the existing terms of the beer distribution and retail systems in the province, as further described in Note 12, "Commitments and Conti