Molson Coors Delivers Double-Digit Q4 Top-Line and Bottom-Line
Growth
Company Issues 2022 Guidance for Top and Bottom-Line Growth,
Continuing to Deliver on its Revitalization Plan and Premiumizing
its Portfolio
Board of Directors Raises Quarterly Dividend 12% to $0.38 per
share
Molson Coors Beverage Company (NYSE: TAP, TAP.A; TSX: TPX.A,
TPX.B) today reported results for the 2021 fourth quarter and full
year.
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As of December 31, 2021, we changed the names of our reporting
segments to the Americas and EMEA&APAC segments (formerly named
the North America segment and Europe segment, respectively) to
better reflect the geographic locations encompassed within the
reportable segments. This change to our segment names had no impact
on the composition of our segments, our financial position, results
of operations, cash flow or segment level results previously
reported.
2021 FOURTH QUARTER FINANCIAL HIGHLIGHTS
- Net sales increased 14.2% reported and 13.7% in constant
currency, primarily due to financial volume growth in both the
Americas and EMEA&APAC segments, positive net pricing and
favorable sales mix.
- Net sales per hectoliter increased 3.8% on a brand volume basis
in constant currency, primarily due to positive net pricing in both
the Americas and EMEA&APAC segments and favorable brand and
channel mix resulting from portfolio premiumization and fewer
on-premise channel restrictions than the prior year.
- U.S. GAAP net income attributable to Molson Coors Beverage
Company ("MCBC") of $80.0 million, $0.37 per share on a diluted
basis. Non-GAAP diluted EPS of $0.81 per share increased
102.5%.
- Underlying (Non-GAAP) EBITDA of $457.3 million increased 21.9%
in constant currency.
2021 FULL YEAR FINANCIAL HIGHLIGHTS
- Net sales increased 6.5% reported and 4.7% in constant
currency, primarily due to positive net pricing, favorable sales
mix, primarily due to portfolio premiumization and the reopening of
the on-premise channel, and increased financial volumes in the
EMEA&APAC segment, partially offset by lower financial volumes
in the Americas segment.
- Net sales per hectoliter increased 3.8% on a brand volume basis
in constant currency, primarily due to positive net pricing and
favorable sales mix resulting from portfolio premiumization and
fewer on-premise channel restrictions than the prior year.
- U.S. GAAP net income attributable to MCBC of $1.0 billion,
$4.62 per share on a diluted basis. Non-GAAP diluted EPS of $4.15
per share increased 5.9%.
- Underlying (Non-GAAP) EBITDA of $2.1 billion decreased 3.5% in
constant currency.
- Operating Cash Flow of $1.6 billion, and Underlying (Non-GAAP)
Free Cash Flow of $1.1 billion.
- Reduction in net debt of $0.9 billion since December 31,
2020.
CEO AND CFO PERSPECTIVES
This past year, we made significant progress against our
revitalization plan - from growing our top line, to premiumizing
our global portfolio to a record level, to making significant
investments in our capabilities. We accomplished this against a
challenging inflationary environment and continued impact from the
coronavirus pandemic, including returning restrictions with the
Omicron variant in the fourth quarter. Key highlights included
revenue growth of Coors Light and Miller Lite and our successful
ventures beyond beer, which are a component of our Emerging Growth
division that continues to track ahead of our $1 billion annual
revenue target for this business by 2023. We succeeded in emerging
markets, like Latin America, and saw strong performances in our
more traditional markets, like Canada. We also continued to make
investments to increase our global hard seltzer production capacity
with expansions in Canada and the U.K. as we support our
rapidly-growing global hard seltzer portfolio.
Gavin Hattersley, President and Chief Executive Officer
Statement:
“This year, we grew the top-line for the first time in a decade,
our two biggest brands each grew net sales and we now have a larger
global above premium portfolio than ever before. These were all
goals of the revitalization plan, against which we continue to make
tremendous progress. While we’re proud of the steps we’ve taken,
we’re even more excited about where we can go from here, having
established a strong foundation for 2022 successes and beyond.”
Tracey Joubert, Chief Financial Officer Statement:
“Our progress in 2021 is clear. For the year, we achieved our
top-line guidance of mid single-digit growth, delivered strong free
cash flow, further reduced our leverage ratio, and returned cash to
shareholders all despite the global macro inflationary challenges.
Building off our strong foundation, we have issued fiscal 2022
guidance for both top and bottom-line growth, which underscores our
progress against our revitalization plan goals.”
CONSOLIDATED PERFORMANCE - FOURTH
QUARTER AND FULL YEAR 2021
For the three months
ended
($ in millions, except per share data)
(Unaudited)
December 31, 2021
December 31, 2020
Reported Increase
(Decrease)
Foreign Exchange
Impact
Constant Currency Increase
(Decrease)(2)
Net sales
$
2,619.2
$
2,294.3
14.2
%
$
9.6
13.7
%
U.S. GAAP Net income (loss)(1)
$
80.0
$
(1,369.8
)
N/M
Per diluted share
$
0.37
$
(6.32
)
N/M
Underlying Net income (loss)(2)
$
176.2
$
86.6
103.5
%
Per diluted share
$
0.81
$
0.40
102.5
%
Underlying EBITDA(2)
$
457.3
$
375.1
21.9
%
$
—
21.9
%
For the years ended
($ in millions, except per share data)
(Unaudited)
December 31, 2021
December 31, 2020
Reported Increase
(Decrease)
Foreign Exchange
Impact
Constant Currency Increase
(Decrease)(2)
Net sales
$
10,279.7
$
9,654.0
6.5
%
$
173.3
4.7
%
U.S. GAAP Net income (loss)(1)
$
1,005.7
$
(949.0
)
N/M
Per diluted share
$
4.62
$
(4.38
)
N/M
Underlying Net income (loss)(2)
$
902.1
$
851.7
5.9
%
Per diluted share
$
4.15
$
3.92
5.9
%
Underlying EBITDA(2)
$
2,077.7
$
2,132.1
(2.6
)%
$
21.2
(3.5
)%
N/M = Not meaningful
(1)
Net income (loss) attributable to
MCBC.
(2)
Represents net income (loss) attributable
to MCBC and EBITDA adjusted for non-GAAP items. See Appendix for
definitions and reconciliations of non-GAAP financial measures
including constant currency.
NET SALES DRIVERS
For the three months ended
December 31, 2021
Reported
Percent change versus comparable prior
year period
Financial Volume
Price and Sales Mix
Currency
Net Sales
Net Sales per hectoliter (BV
basis)(1)
Brand Volume
Consolidated
7.4
%
6.3
%
0.5
%
14.2
%
3.8
%
2.3
%
Americas
3.6
%
3.5
%
0.5
%
7.6
%
2.9
%
(1.8
)%
EMEA&APAC
21.4
%
35.1
%
(0.1
)%
56.4
%
17.4
%
15.7
%
For the year ended December
31, 2021
Reported
Percent change versus comparable prior
year period
Financial Volume
Price and Sales Mix
Currency
Net Sales
Net Sales per hectoliter (BV
basis)(1)
Brand Volume
Consolidated
(0.5
)%
5.2
%
1.8
%
6.5
%
3.8
%
(1.7
)%
Americas
(2.0
)%
4.0
%
1.0
%
3.0
%
3.2
%
(3.2
)%
EMEA&APAC
3.9
%
15.7
%
6.3
%
25.9
%
10.1
%
3.0
%
(1)
Our net sales per hectoliter performance
discussions are presented on a brand volume ("BV") basis, which
reflects owned or actively managed brand volume, along with royalty
volume, in the denominator, as well as the financial impact of
these sales (in constant currency) in the numerator, unless
otherwise indicated.
QUARTERLY CONSOLIDATED HIGHLIGHTS (VERSUS FOURTH QUARTER 2020
RESULTS)
- Net sales: increased 14.2% on a reported basis, and
13.7% in constant currency primarily due to higher financial
volumes, positive net pricing and favorable sales mix, attributed
to premiumization and improved channel mix. Financial volumes
increased 7.4% primarily due to favorable U.S. domestic shipment
trends as we worked to rebuild distributor inventory levels and
brand volume growth, including fewer on-premise restrictions in
EMEA&APAC, Latin America and Canada. Net sales per hectoliter
increased 3.8% on a brand volume basis in constant currency
primarily due to positive net pricing in both the Americas and
EMEA&APAC segments as well as favorable brand and channel mix
resulting from portfolio premiumization and fewer on-premise
channel restrictions than the prior year.
- Cost of goods sold (COGS) per hectoliter: increased
17.2% on a reported basis primarily due to changes to our
unrealized mark-to-market commodity positions, cost inflation
mainly on input materials and transportation costs and the mix
impacts of portfolio premiumization, partially offset by volume
leverage, lower depreciation expense and cost savings.
Underlying COGS per hectoliter: increased 5.2% in constant
currency primarily due to cost inflation mainly on input materials
and transportation costs and the mix impacts of portfolio
premiumization, partially offset by volume leverage, lower
depreciation expense and cost savings.
- Marketing, general & administrative (MG&A):
increased 2.6% on a reported basis. Underlying MG&A:
increased 2.4% in constant currency as we continued to invest in
our brands as pandemic related restrictions eased compared to the
prior year.
- U.S. GAAP income (loss) before income taxes: income of
$109.5 million increased $1,446.8 million from a loss of $1,337.3
million all on a reported basis. The increase was primarily due to
the cycling of special items charges in the prior year related to
the $1.5 billion goodwill impairment of the EMEA&APAC segment,
net sales growth from higher financial volumes, positive net
pricing and favorable sales mix, partially offset by changes to our
unrealized mark-to-market commodity positions, cost inflation
mainly on input materials and transportation costs and higher
MG&A spend.
- Underlying EBITDA: increased 21.9% in constant currency,
primarily due to net sales growth from higher financial volumes,
positive net pricing and favorable sales mix, partially offset by
cost inflation mainly on input materials and transportation costs
and higher MG&A spend.
QUARTERLY SEGMENT HIGHLIGHTS (VERSUS FOURTH QUARTER 2020
RESULTS)
Americas Segment
- Net sales: increased 7.6% on a reported basis, and 7.1%
in constant currency primarily due to a 3.6% increase in financial
volumes attributed to favorable U.S. domestic shipments, which
increased 3.3% as we worked to rebuild distributor inventory
levels, higher brand volumes in Canada and Latin America, positive
net pricing and favorable sales mix. Americas brand volumes
decreased 1.8% primarily due to a 3.8% decline in the U.S. which
was entirely due to the decline in the economy portfolio including
the de-prioritization and rationalization of non-core SKUs,
partially offset by growth in the above premium portfolio. Brand
volumes in Canada and Latin America grew 6.0% and 12.4%,
respectively, reflecting the benefit of fewer on-premise
restrictions in the fourth quarter of 2021 and above premium
portfolio growth, including strong hard seltzer performance in
Canada. Net sales per hectoliter on a brand volume basis increased
2.9% in constant currency due to positive net pricing and positive
brand mix. In the U.S., net sales per hectoliter on a brand volume
basis increased 2.9% due to positive net pricing and favorable
brand mix driving a 6.4% increase in net sales. Net sales per
hectoliter on a brand volume basis increased in Canada due to
favorable brand and channel mix, as well as positive net pricing
while Latin America also increased due to favorable sales mix.
- U.S. GAAP income (loss) before income taxes: increased
34.6% on a reported basis primarily due to positive net pricing,
higher financial volumes, the cycling of special items charges in
the fourth quarter of 2020 related to certain definite-lived
tangible and intangible impairments of certain of our regional
craft brands, favorable sales mix and lower depreciation expense,
partially offset by cost inflation mainly on input materials and
transportation costs and higher MG&A spend. The higher MG&A
spend was a result of continuing to invest in our brands as
pandemic related restrictions eased compared to the prior
year.
- Underlying EBITDA: increased 3.4% in constant currency
primarily due to positive net pricing, higher financial volumes and
favorable sales mix, partially offset by cost inflation mainly on
input materials and transportation costs and higher MG&A
spend.
EMEA&APAC Segment
- Net sales: increased 56.4% on a reported basis and 56.5%
in constant currency, primarily due to higher financial volumes,
positive net pricing and favorable sales mix. Financial volumes
increased 21.4% and brand volumes increased 15.7%, primarily due to
above premium portfolio growth including the benefit of fewer
on-premise restrictions in the fourth quarter of 2021. Net sales
per hectoliter on a brand volume basis increased 17.4% in constant
currency primarily due to positive net pricing and favorable
channel, geographic and brand mix.
- U.S. GAAP income (loss) before income taxes: loss of
$16.8 million improved $1,540.0 million on a reported basis
primarily due to the cycling of special items in the prior year
related to the $1.5 billion goodwill impairment of the
EMEA&APAC segment, higher financial volumes, positive net
pricing and favorable sales mix, partially offset by cost inflation
mainly on input materials and transportation costs and higher
MG&A spend. The higher MG&A spend was primarily due to
increased marketing spend to support our brands and the cycling of
lower spend in the prior year due to cost mitigation efforts.
- Underlying EBITDA: underlying EBITDA income of $48.5
million increased $69.3 million in constant currency from a loss of
$20.8 million. The increase was primarily due to higher financial
volumes, positive net pricing and favorable sales mix, partially
offset by cost inflation mainly on input materials and
transportation costs and higher MG&A spend.
FULL YEAR CONSOLIDATED HIGHLIGHTS (VERSUS 2020
RESULTS)
- Net sales: increased 6.5% on a reported basis, and 4.7%
in constant currency primarily due to strong pricing growth,
favorable brand and channel mix resulting from portfolio
premiumization and fewer on-premise channel restrictions, partially
offset by lower financial volumes. Financial volume decreased 0.5%
primarily due to lower economy portfolio volumes, including the
de-prioritization of certain non-core SKUs in the U.S. partially
offset by growth in above premium portfolio volumes due to the
increased premiumization efforts and favorable U.S. domestic
shipments as we worked to rebuild distributor inventory levels. Net
sales per hectoliter on a brand volume basis increased 3.8% in
constant currency, primarily due to positive net pricing in both
the Americas and EMEA&APAC segments, as well as favorable sales
mix resulting from portfolio premiumization and fewer on-premise
channel restrictions.
- Cost of goods sold (COGS) per hectoliter: increased 6.4%
on a reported basis primarily due to cost inflation mainly on input
materials and transportation costs, the mix impacts of portfolio
premiumization and unfavorable foreign exchange movements,
partially offset by changes to our unrealized mark-to-market
commodity positions, lower depreciation and cost savings.
Underlying COGS per hectoliter: increased 6.9% in constant
currency primarily due to cost inflation mainly on input materials
and transportation costs, the mix impacts of portfolio
premiumization, partially offset by lower depreciation and cost
savings.
- Marketing, general & administrative (MG&A):
increased 4.8% on a reported basis. Underlying MG&A:
increased 2.9% in constant currency primarily due to higher
marketing spend in both the Americas and EMEA&APAC segments to
support new innovations and core brands, as well as the cycling of
lower spend in areas impacted by the coronavirus pandemic,
partially offset by lower depreciation expense, cost savings and
lower incentive compensation.
- U.S. GAAP income (loss) before income taxes: income of
$1,239.0 million increased $1,882.9 million from a loss of $643.9
million both on a reported basis. The increase was primarily due to
the cycling of special items charges in the prior year related to
the $1.5 billion goodwill impairment of the EMEA&APAC segment,
positive net pricing, favorable sales mix and changes in our
unrealized mark-to-market commodity positions, partially offset by
cost inflation mainly on input materials and transportation costs,
lower financial volumes and higher MG&A spend.
- Underlying EBITDA: decreased 3.5% in constant currency,
primarily due to cost inflation mainly on input materials and
transportation costs, lower financial volumes and higher MG&A
spend, partially offset by positive net pricing and favorable brand
and channel mix.
CASH FLOW AND LIQUIDITY HIGHLIGHTS
- U.S. GAAP cash from operations: net cash provided by
operating activities was $1,573.5 million for the year ended
December 31, 2021 which decreased $122.2 million compared to the
prior year primarily due to the unfavorable timing of working
capital and higher cash paid for income taxes, partially offset by
higher net income adjusted for non-cash add-backs and lower
interest paid. The unfavorable timing of working capital included
$230 million of an unfavorable impact related to prior year net tax
payment deferrals, partially offset by the timing of receipts and
payments related to higher financial volumes in the fourth quarter
of 2021 compared to the fourth quarter of 2020. Prior year working
capital benefited from approximately $130 million of net tax
payment deferrals related to various government-sponsored payment
deferral programs associated with the coronavirus pandemic, while
in 2021 we made over $100 million of net repayments against the net
tax payment deferrals.
- Underlying free cash flow: cash received of $1,082.8
million for the year ended December 31, 2021 which represents a
decrease in cash received of $183.5 million from the prior year,
primarily due to the unfavorable timing of working capital and
higher cash paid for income taxes, partially offset by lower
capital spend and lower underlying EBITDA.
- Debt: Total debt as of December 31, 2021 was $7,162.1
million and cash and cash equivalents totaled $637.4 million,
resulting in net debt of $6,524.7 million and a net debt to
underlying EBITDA ratio of 3.14x. Continuing our commitment to
deleverage, in July 2021, we repaid in full our $1.0 billion 2.1%
senior notes that matured on July 15, 2021 using a combination of
cash on hand and proceeds from commercial paper issuances. As of
December 31, 2021 we had no borrowings drawn on our revolving
credit facility and no commercial paper borrowings.
OTHER RESULTS
Tax Rates Table
(Unaudited)
For the three months
ended
For the years ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
U.S. GAAP effective tax rate
24.8
%
(2.7
%)
18.6
%
(46.9
%)
Underlying effective tax rate(1)
17.1
%
23.5
%
13.8
%
18.7
%
(1)
See the Appendix for definitions and
reconciliations of the non-GAAP financial measures.
- The increase in our fourth quarter U.S. GAAP
effective tax rate was primarily due to a $1.5 billion
goodwill impairment charge in our EMEA&APAC segment recognized
in the fourth quarter of 2020 which related to nondeductible
goodwill for income tax purposes. The increase in our full year
U.S. GAAP effective tax rate was primarily due to the $1.5
billion goodwill impairment charge in our EMEA&APAC segment
recognized in the fourth quarter of 2020 and $18 million of tax
expense recognized in the second quarter of 2021 related to the
remeasurement of our deferred tax liabilities as a result of a
corporate income tax rate increase in the U.K. from 19% to 25%.
These increases to the rate were partially offset by $135 million
of tax expense recognized in the second quarter of 2020 related to
the hybrid regulations enacted in the U.S. and the release of $73
million of reserves for unrecognized tax benefit positions as a
result of an effective settlement reached on a tax audit in
2021.
- The decrease in our fourth quarter Underlying
effective tax rate was primarily due to higher proportional
income (loss) before income taxes in jurisdictions with a lower
income tax rate in 2021 compared to the prior year, partially
offset by higher discrete tax expense recorded in the fourth
quarter of 2021. The decrease in our full year Underlying
effective tax rate was primarily due to the release of $73
million of reserves for unrecognized tax benefit positions
recognized in 2021.
Special and Other Non-Core Items
The following special and other non-core items have been
excluded from underlying results. See the Appendix for
reconciliations of non-GAAP financial measures.
- During the fourth quarter of 2021, we recognized net special
items charges of $27.2 million, consisting of an impairment
charge recorded on the remaining portion of our India business and
asset abandonment charges related to certain brewery and other
closures in the Americas and EMEA&APAC segments.
- Additionally during the fourth quarter of 2021, we recorded
other non-core net benefits of $78.8 million primarily
consisting of changes to our unrealized mark-to-market commodity
positions.
2022 OUTLOOK
Full Year Guidance
We expect to achieve the following targets for full year 2022
despite the inherent uncertainties that exist with the ongoing
coronavirus pandemic and the global supply chain:
- Net sales: mid single-digit increase versus 2021 on a
constant currency basis.
- Underlying income (loss) before income taxes: high
single-digit increase compared to 2021 on a constant currency
basis.
- Deleverage: We expect to achieve a net debt to
underlying EBITDA ratio below 3.0x by the end of 2022.
- Underlying free cash flow: $1.0 billion, plus or minus
10%.
- Underlying depreciation and amortization: approximately
$750 million, plus or minus 5%.
- Consolidated net interest expense: approximately $265
million, plus or minus 5%.
- Underlying effective tax rate: in the range of 22% to
24% for 2022.
Capital Allocation Initiatives
On February 22, 2022, our Board of Directors declared a dividend
on its Class A and Class B common shares of $0.38 per share,
payable March 18, 2022, to shareholders of record on March 7, 2022.
Similarly, the Board of Directors of Molson Coors Canada Inc., an
indirect wholly owned subsidiary of the company, on February 22,
2022, declared the Canadian dollar equivalent of the dividend
declared on Molson Coors stock payable on March 18, 2022, to its
Class A and Class B exchangeable shareholders of record on March 7,
2022.
On February 17, 2022, our Board of Directors approved a share
repurchase program authorizing the Company to purchase up to an
aggregate of $200 million of our Company's Class B common stock
through March 31, 2026, with repurchases primarily intended to
offset annual employee equity award grants.
NOTES
Unless otherwise indicated in this release, all $ amounts are in
U.S. Dollars, and all comparative results are for the Company’s
fourth quarter or full year ended December 31, 2021, compared to
the fourth quarter or full year ended December 31, 2020. Some
numbers may not sum due to rounding.
2021 FOURTH QUARTER INVESTOR CONFERENCE CALL
Molson Coors Beverage Company will conduct an earnings
conference call with financial analysts and investors at 11:00 a.m.
Eastern Time today to discuss the Company’s 2021 fourth quarter and
full year results. The live webcast will be accessible via our
website, ir.molsoncoors.com. An online replay of the webcast will
be available until 11:59 p.m. Eastern Time on May 2, 2022. The
Company will post this release and related financial statements on
its website today.
OVERVIEW OF MOLSON COORS
For over two centuries Molson Coors has been brewing beverages
that unite people to celebrate all life’s moments. From Coors
Light, Miller Lite, Molson Canadian, Carling, and Staropramen to
Coors Banquet, Blue Moon Belgian White, Blue Moon LightSky, Vizzy,
Leinenkugel’s Summer Shandy, Creemore Springs, Hop Valley and more,
Molson Coors produces many beloved and iconic beer brands. While
the company’s history is rooted in beer, Molson Coors offers a
modern portfolio that expands beyond the beer aisle as well.
Our reporting segments include: Americas, operating in the U.S.,
Canada and various countries in Latin and South America; and
EMEA&APAC, operating in Bulgaria, Croatia, Czech Republic,
Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the
U.K., various other European countries, and certain countries
within Africa and Asia Pacific. In addition to our reporting
segments, we also have certain items that are unallocated to our
reporting segments and reported as "Unallocated", which primarily
include financing related costs and impacts of other
treasury-related activities. Our Environmental, Social and
Governance ("ESG") strategy is focused on People and Planet with a
strong commitment to raising industry standards and leaving a
positive imprint on our employees, consumers, communities, and the
environment. To learn more about Molson Coors Beverage Company,
visit molsoncoors.com, MolsonCoorsOurImprint.com or on Twitter
through @MolsonCoors.
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 “believe,” "aims," “expect,” “intend,” “anticipate,”
“project,” “will,” “outlook,” and similar expressions identify
forward-looking statements, which generally are not historic in
nature. Statements that refer to projections of our future
financial performance, our anticipated results, cost savings 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 heading "2022
Outlook," expectations regarding the impacts of the coronavirus
pandemic on our operations, liquidity, financial condition and
financial results, expectations regarding future dividends, overall
volume trends, consumer preferences, pricing trends, industry
forces, cost reduction strategies, including our revitalization
plan, expectations of cost inflation, 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. 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”). These factors
include, among others, the impact of the coronavirus pandemic, the
impact of increased competition resulting from further
consolidation of brewers, competitive pricing and product
pressures; health of the beer industry and our brands in our
markets; economic conditions in our markets; additional impairment
charges; changes in our supply chain system; availability or
increase in the cost of packaging materials; success of our joint
ventures; risks relating to operations in developing and emerging
markets; changes in legal and regulatory requirements, including
the regulation of distribution systems; fluctuations in foreign
currency exchange rates; increase in the cost of commodities used
in the business; the impact of climate change and the availability
and quality of water; loss or closure of a major brewery or other
key facility; a breach of our information systems; our reliance on
third party service providers and internal and outsourced systems;
our ability to implement our strategic initiatives, including
executing and realizing cost savings; pension plan and other
post-retirement benefit costs; failure to comply with debt
covenants or deterioration in our credit rating; our ability to
maintain good labor relations; our ability to maintain brand image,
reputation and product quality; unfavorable legal or regulatory
outcomes affecting the business; and other 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 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 years ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Financial volume in hectoliters
21.137
19.676
84.028
84.479
Sales
$
3,194.4
$
2,777.8
$
12,449.9
$
11,723.8
Excise taxes
(575.2
)
(483.5
)
(2,170.2
)
(2,069.8
)
Net sales
2,619.2
2,294.3
10,279.7
9,654.0
Cost of goods sold
(1,761.9
)
(1,399.1
)
(6,226.3
)
(5,885.7
)
Gross profit
857.3
895.2
4,053.4
3,768.3
Marketing, general and administrative
expenses
(665.1
)
(648.3
)
(2,554.5
)
(2,437.0
)
Special items, net
(27.2
)
(1,529.6
)
(44.5
)
(1,740.2
)
Operating income (loss)
165.0
(1,282.7
)
1,454.4
(408.9
)
Interest income (expense), net
(61.8
)
(64.8
)
(258.3
)
(271.3
)
Other pension and postretirement benefits
(costs), net
7.5
7.6
46.4
30.3
Other income (expense), net
(1.2
)
2.6
(3.5
)
6.0
Income (loss) before income taxes
109.5
(1,337.3
)
1,239.0
(643.9
)
Income tax benefit (expense)
(27.1
)
(36.6
)
(230.5
)
(301.8
)
Net income (loss)
82.4
(1,373.9
)
1,008.5
(945.7
)
Net (income) loss attributable to
noncontrolling interests
(2.4
)
4.1
(2.8
)
(3.3
)
Net income (loss) attributable to MCBC
$
80.0
$
(1,369.8
)
$
1,005.7
$
(949.0
)
Basic net income (loss) attributable to
MCBC per share:
$
0.37
$
(6.32
)
$
4.63
$
(4.38
)
Diluted net income (loss) attributable to
MCBC per share:
$
0.37
$
(6.32
)
$
4.62
$
(4.38
)
Weighted average shares - basic
217.2
216.9
217.1
216.8
Weighted average shares - diluted
217.6
216.9
217.6
216.8
Dividends per share
$
0.34
$
—
$
0.68
$
0.57
BALANCE SHEETS - MOLSON COORS BEVERAGE COMPANY AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(In millions, except par value)
(Unaudited)
As of
December 31, 2021
December 31, 2020
Assets
Current assets
Cash and cash equivalents
$
637.4
$
770.1
Accounts receivable, net
678.9
558.0
Other receivables, net
200.5
129.1
Inventories, net
804.7
664.3
Other current assets, net
457.2
297.3
Total current assets
2,778.7
2,418.8
Properties, net
4,192.4
4,250.3
Goodwill
6,152.6
6,151.0
Other intangibles, net
13,286.8
13,556.1
Other assets
1,208.5
954.9
Total assets
$
27,619.0
$
27,331.1
Liabilities and equity
Current liabilities
Accounts payable and other current
liabilities
$
3,107.3
$
2,889.5
Current portion of long-term debt and
short-term borrowings
514.9
1,020.1
Total current liabilities
3,622.2
3,909.6
Long-term debt
6,647.2
7,208.2
Pension and postretirement benefits
654.4
763.2
Deferred tax liabilities
2,704.6
2,381.6
Other liabilities
326.5
447.2
Total liabilities
13,954.9
14,709.8
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: 210.1 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)
102.2
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 capital
6,970.9
6,937.8
Retained earnings
7,401.5
6,544.2
Accumulated other comprehensive income
(loss)
(1,006.0
)
(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' equity
13,417.1
12,365.0
Noncontrolling interests
247.0
256.3
Total equity
13,664.1
12,621.3
Total liabilities and equity
$
27,619.0
$
27,331.1
CASH FLOW STATEMENTS - MOLSON COORS BEVERAGE COMPANY AND
SUBSIDIARIES
Condensed Consolidated Statements of
Cash Flows
(In millions) (Unaudited)
For the years ended
December 31, 2021
December 31, 2020
Cash flows from operating
activities:
Net income (loss) including noncontrolling
interests
$
1,008.5
$
(945.7
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
786.1
922.0
Amortization of debt issuance costs and
discounts
6.7
8.1
Share-based compensation
32.1
24.2
(Gain) loss on sale or impairment of
properties and other assets, net
9.1
1,553.5
Unrealized (gain) loss on foreign currency
fluctuations and derivative instruments, net
(233.8
)
(111.4
)
Income tax (benefit) expense
230.5
301.8
Income tax (paid) received
(227.0
)
(127.0
)
Interest expense, excluding amortization
of debt issuance costs and discounts
253.6
266.0
Interest paid
(256.2
)
(271.9
)
Change in current assets and liabilities
and other
(36.1
)
76.1
Net cash provided by (used in) operating
activities
1,573.5
1,695.7
Cash flows from investing
activities:
Additions to properties
(522.6
)
(574.8
)
Proceeds from sales of properties and
other assets
26.0
158.8
Other
(13.3
)
2.4
Net cash provided by (used in) investing
activities
(509.9
)
(413.6
)
Cash flows from financing
activities:
Exercise of stock options under equity
compensation plans
4.6
4.1
Dividends paid
(147.8
)
(125.3
)
Payments on debt and borrowings
(1,006.6
)
(918.9
)
Proceeds on debt and borrowings
—
1.5
Net proceeds from (payments on) revolving
credit facilities and commercial paper
1.4
—
Other
(23.8
)
(31.8
)
Net cash provided by (used in) financing
activities
(1,172.2
)
(1,070.4
)
Cash and cash equivalents:
Net increase (decrease) in cash and cash
equivalents
(108.6
)
211.7
Effect of foreign exchange rate changes on
cash and cash equivalents
(24.1
)
35.0
Balance at beginning of year
770.1
523.4
Balance at end of year
$
637.4
$
770.1
SUMMARIZED SEGMENT RESULTS (volume and $ in millions)
(Unaudited)
Americas
Q4 2021
Q4 2020
Reported % Change
FX Impact
Constant Currency %
Change
Full year 2021
Full Year 2020
Reported % Change
FX Impact
Constant Currency %
Change
Financial volume(1)(2)
16.144
15.577
3.6
63.737
65.010
(2.0
)
Net sales(2)
$
2,145.9
$
1,994.8
7.6
$
9.9
7.1
$
8,485.0
$
8,237.0
3.0
$
83.5
2.0
COGS(2)
(1,352.8
)
(1,244.3
)
(8.7
)
(5,262.2
)
(4,983.1
)
(5.6
)
MG&A
(528.9
)
(521.1
)
(1.5
)
(2,021.7
)
(1,960.2
)
(3.1
)
Income (loss) before income
taxes
$
258.4
$
192.0
34.6
$
(0.9
)
35.1
$
1,176.5
$
1,080.5
8.9
$
2.1
8.7
Underlying EBITDA
$
401.9
$
388.3
3.5
$
0.3
3.4
$
1,795.7
$
1,970.3
(8.9
)
$
11.7
(9.5
)
EMEA&APAC
Q4 2021
Q4 2020
Reported % Change
FX Impact
Constant Currency %
Change
Full year 2021
Full Year 2020
Reported % Change
FX Impact
Constant Currency %
Change
Financial volume(1)(2)
4.998
4.117
21.4
20.315
19.560
3.9
Net sales(2)
$
473.9
$
303.1
56.4
$
(0.3
)
56.5
$
1,802.3
$
1,431.9
25.9
$
89.8
19.6
COGS(2)
(331.0
)
(241.3
)
(37.2
)
(1,208.3
)
(1,025.1
)
(17.9
)
MG&A
(136.2
)
(127.2
)
(7.1
)
(532.8
)
(476.8
)
(11.7
)
Income (loss) before income
taxes
$
(16.8
)
$
(1,556.8
)
98.9
$
1.2
98.8
$
32.9
$
(1,603.7
)
N/M
$
0.3
N/M
Underlying EBITDA
$
48.5
$
(20.8
)
N/M
$
—
N/M
$
237.7
$
126.5
87.9
$
9.4
80.5
Unallocated & Eliminations
Q4 2021
Q4 2020
Reported % Change
FX Impact
Constant Currency %
Change
Full year 2021
Full Year 2020
Reported % Change
FX Impact
Constant Currency %
Change
Financial volume(1)
(0.005
)
(0.018
)
72.2
(0.024
)
(0.091
)
73.6
Net Sales
$
(0.6
)
$
(3.6
)
83.3
$
(7.6
)
$
(14.9
)
49.0
COGS(2)
(78.1
)
86.5
N/M
244.2
122.5
99.3
Income (loss) before income
taxes
$
(132.1
)
$
27.5
N/M
$
(1.4
)
N/M
$
29.6
$
(120.7
)
N/M
$
2.1
N/M
Underlying EBITDA
$
6.9
$
7.6
(9.2
)
$
(0.3
)
(5.3
)
$
44.3
$
35.3
25.5
$
0.1
25.2
Consolidated
Q4 2021
Q4 2020
Reported % Change
FX Impact
Constant Currency %
Change
Full year 2021
Full Year 2020
Reported % Change
FX Impact
Constant Currency %
Change
Financial volume(1)
21.137
19.676
7.4
84.028
84.479
(0.5
)
Net sales
$
2,619.2
$
2,294.3
14.2
$
9.6
13.7
$
10,279.7
$
9,654.0
6.5
$
173.3
4.7
COGS
(1,761.9
)
(1,399.1
)
(25.9
)
(6,226.3
)
(5,885.7
)
(5.8
)
MG&A
(665.1
)
(648.2
)
(2.6
)
(2,554.5
)
(2,437.0
)
(4.8
)
Income (loss) before income
taxes
$
109.5
$
(1,337.3
)
N/M
$
(1.1
)
N/M
$
1,239.0
$
(643.9
)
N/M
$
4.5
N/M
Underlying EBITDA
$
457.3
$
375.1
21.9
$
—
21.9
$
2,077.7
$
2,132.1
(2.6
)
$
21.2
(3.5
)
The reported percent change and the constant currency percent
change in the above table are presented as (unfavorable) favorable.
N/M = Not meaningful
(1)
Financial volume in hectoliters for the
Americas and EMEA&APAC excludes royalty volume of 0.736 million
hectoliters and 0.469 million hectoliters for the three months
ended December 31, 2021, respectively, and excludes royalty volume
of 0.665 million hectoliters and 0.450 million hectoliters for
three months ended December 31, 2020, respectively. Financial
volume in hectoliters for the Americas and EMEA&APAC excludes
royalty volume of 2.507 million hectoliters and 1.968 million
hectoliters for the year ended December 31, 2021, respectively, and
excludes royalty volume of 2.052 million hectoliters and 1.731
million hectoliters for the year ended December 31, 2020,
respectively.
(2)
Includes gross inter-segment volumes,
sales and purchases, which are eliminated in the consolidated
totals. The unrealized changes in fair value on our commodity
swaps, which are economic hedges, are recorded as cost of goods
sold 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.
WORLDWIDE BRAND AND FINANCIAL VOLUME
(In millions of hectoliters)
(Unaudited)
For the three months
ended
For the years ended
December 31, 2021
December 31, 2020
Change
December 31, 2021
December 31, 2020
Change
Financial Volume
21.137
19.676
7.4
%
84.028
84.479
(0.5
)%
Contract brewing and wholesaler volume
(1.686
)
(1.453
)
16.0
%
(6.730
)
(6.355
)
5.9
%
Royalty volume
1.205
1.115
8.1
%
4.475
3.783
18.3
%
Sales-To-Wholesaler to Sales-To-Retail
adjustment
(0.903
)
(0.022
)
N/M
(1.100
)
0.126
N/M
Total Worldwide Brand Volume
19.753
19.316
2.3
%
80.673
82.033
(1.7
)%
Worldwide Brand Volume by
Segment
Americas
14.590
14.855
(1.8
)%
59.334
61.313
(3.2
)%
EMEA&APAC
5.163
4.461
15.7
%
21.339
20.720
3.0
%
Total
19.753
19.316
2.3
%
80.673
82.033
(1.7
)%
N/M = Not meaningful
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 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 wholesaler 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. 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.
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 present constant currency, "underlying COGS per hectoliter"
(COGS adjusted for non-GAAP items divided by reported financial
volume), "underlying MG&A," "underlying net income,"
"underlying income per diluted share," "underlying effective tax
rate" and "underlying free cash flow" as well as net sales and
income (loss) before income taxes in constant currency, among
others, which are non-GAAP measures and should be viewed as
supplements to (not substitutes for) our results of operations
presented under U.S. GAAP. We also present underlying earnings
before interest, taxes, depreciation, and amortization ("underlying
EBITDA") as a non-GAAP measure. Our management uses underlying
income, underlying income per diluted share, underlying EBITDA and
underlying effective tax rate as measures of operating performance,
as well as underlying free cash flow in the measure of cash
generated from core operations, 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 that
underlying income, underlying income per diluted share, underlying
EBITDA and underlying effective tax rate performance are used by,
and are useful to, investors and other users of our financial
statements in evaluating our operating performance, as well as
underlying free cash flow in evaluating our generation of cash from
core operations, because they provide an additional tool to
evaluate our performance without regard to special and non-core
items, the related tax effects and certain discrete tax items,
which can vary substantially from company to company depending upon
accounting methods and book value of assets and capital structure.
In addition to the reasons discussed above, we consider underlying
free cash flow an important measure of our ability to generate
cash, grow our business and enhance shareholder value, driven by
core operations and after adjusting for non-core items. In
addition, constant-currency results exclude the impact of foreign
currency movements. For discussion and analysis of our liquidity,
see the consolidated statements of cash flows and the Liquidity and
Capital Resources section of our Management’s Discussion and
Analysis of Financial Condition and Results of Operations in our
latest Form 10-K and 10-Q filings with the SEC.
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. These adjustments consist of special items
from our U.S. GAAP financial statements as well as other non-core
items, such as integration related costs, unrealized mark-to-market
gains and losses, and gains and losses on sales of non-operating
assets, the related tax effects and certain discrete tax items
included in our U.S. GAAP results that warrant adjustment to arrive
at non-GAAP results. We consider these items to be necessary
adjustments for purposes of evaluating our ongoing business
performance and are often considered non-recurring. Such
adjustments are subjective and involve significant management
judgment.
Our guidance for underlying depreciation and amortization,
underlying effective tax rate and underlying income (loss) before
income taxes are also non-GAAP financial measures that exclude or
otherwise have been adjusted for special items from our U.S. GAAP
financial statements as well as other non-core items, such as
integration related costs, unrealized mark-to-market gains and
losses, and gains and losses on sales of non-operating assets, the
related tax effects and certain discrete tax items included in our
U.S. GAAP results that warrant adjustment to arrive at non-GAAP
results. We consider these items to be necessary adjustments for
purposes of evaluating our ongoing business performance and are
often considered non-recurring. Such adjustments are subjective and
involve significant management judgment. We are unable to reconcile
the above described guidance measures to their nearest U.S. GAAP
measures without unreasonable efforts because we are unable to
predict with a reasonable degree of certainty the actual impact of
the special and other non-core items. By their very nature, special
and other non-core 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.
Constant currency is a non-GAAP measure utilized by Molson Coors
management to measure performance, excluding the impact of
translational and certain transactional foreign currency movements,
and is intended to be indicative of results in local currency. As
we operate in various foreign countries where the local currency
may strengthen or weaken significantly versus the U.S. dollar or
other currencies used in operations, we utilize a constant currency
measure as an additional metric to evaluate the underlying
performance of each business without consideration of foreign
currency movements. This information is non-GAAP and should be
viewed as a supplement to (not a substitute for) our reported
results of operations under U.S. GAAP. We present all percentage
changes for net sales, underlying COGS, underlying MG&A and
underlying EBITDA in constant currency and calculate the impact of
foreign exchange by translating our current period local currency
results (that also include the impact of the comparable prior
period currency hedging activities) at the average exchange rates
during the respective period throughout the year used to translate
the financial statements in the comparable prior year period. The
result is the current period results in U.S. dollars, as if foreign
exchange rates had not changed from the prior year period.
Additionally, we exclude any non-operating transactional foreign
currency impacts, reported within the Other Income/Expense, net
line item, from our current period results.
RECONCILIATION TO NEAREST U.S. GAAP MEASURES
Underlying EBITDA
($ in millions) (Unaudited)
For the three months
ended
December 31, 2021
December 31, 2020
Change
U.S. GAAP: Net income (loss)
attributable to MCBC
$
80.0
$
(1,369.8
)
N/M
Add: Net income (loss) attributable to
noncontrolling interests
2.4
(4.1
)
N/M
U.S. GAAP: Net income (loss)
82.4
(1,373.9
)
N/M
Add: Interest expense (income), net
61.8
64.8
(4.6
)%
Add: Income tax expense (benefit)
27.1
36.6
(26.0
)%
Add: Depreciation and amortization
181.9
207.1
(12.2
)%
Adjustments included in underlying
income(1)
106.0
1,445.2
(92.7
)%
Adjustments to arrive at underlying
EBITDA(2)
(1.9
)
(4.7
)
59.6
%
Underlying EBITDA
$
457.3
$
375.1
21.9
%
($ in millions) (Unaudited)
For the years ended
December 31, 2021
December 31, 2020
Change
U.S. GAAP: Net income (loss)
attributable to MCBC
$
1,005.7
$
(949.0
)
N/M
Add: Net income (loss) attributable to
noncontrolling interests
2.8
3.3
(15.2
)%
U.S. GAAP: Net income (loss)
1,008.5
(945.7
)
N/M
Add: Interest expense (income), net
258.3
271.3
(4.8
)%
Add: Income tax expense (benefit)
230.5
301.8
(23.6
)%
Add: Depreciation and amortization
786.1
922.0
(14.7
)%
Adjustments included in underlying
income(1)
(189.5
)
1,695.0
N/M
Adjustments to arrive at underlying
EBITDA(2)
(16.2
)
(112.3
)
85.6
%
Underlying EBITDA
$
2,077.7
$
2,132.1
(2.6
)%
N/M = Not meaningful
(1)
Includes adjustments to non-GAAP
underlying income related to special and non-core items. See
Reconciliations to Nearest U.S. GAAP Measures by Line Item table
for detailed adjustments.
(2)
Represents adjustments to remove amounts
related to interest, depreciation and amortization included in the
adjustments to non-GAAP underlying income above, as these items are
added back as adjustments to net income (loss) attributable to
MCBC.
Net Debt to Underlying EBITDA Ratio
(In millions except net debt to underlying
EBITDA ratio) (Unaudited)
As of
December 31, 2021
U.S. GAAP:
Current portion of long-term debt and
short-term borrowings
$
514.9
Add:
Long-term debt
6,647.2
Less:
Cash and cash equivalents
637.4
Net debt
$
6,524.7
Non-GAAP:
Underlying EBITDA
$
2,077.7
Net debt to underlying EBITDA ratio
3.14
Underlying Free Cash Flow
(In millions) (Unaudited)
For the years ended
December 31, 2021
December 31, 2020
U.S. GAAP:
Net Cash Provided by (Used In)
Operating Activities
$
1,573.5
$
1,695.7
Less:
Additions to properties(1)
(522.6
)
(574.8
)
Add/Less:
Cash impact of special items(2)
28.7
89.4
Add/Less:
Cash impact of other non-core items(3)
3.2
56.0
Non-GAAP:
Underlying Free Cash Flow
$
1,082.8
$
1,266.3
(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 years ended December 31, 2021 and
December 31, 2020.
(3)
Included in net cash provided by (used in)
operating activities and primarily reflects costs paid for the
cybersecurity incident, net of insurance recoveries, in the
Americas segment for the year ended December 31, 2021 and costs
paid for on-premise keg sales returns and "thank you" pay for
certain essential Americas segment brewery employees for the year
ended December 31, 2020.
GAAP to Underlying Effective Tax Rate
Reconciliation
(Unaudited)
For the three months
ended
For the years ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
GAAP Effective Tax Rate
24.8
%
(2.7
%)
18.6
%
(46.9
%)
Add/(less):(1)
Tax effect of special items, net and other
non-core items
(2.4
%)
26.0
%
(2.3
%)
43.0
%
Discrete and other non-core tax
items(2)
(5.3
%)
0.2
%
(2.5
%)
22.6
%
Underlying (Non-GAAP) Effective Tax
Rate
17.1
%
23.5
%
13.8
%
18.7
%
(1)
Adjustments related to the tax effect of
special items, net and non-core items as well as certain discrete
tax items excluded from our underlying effective tax rate. Discrete
and other non-core tax items include significant tax audit and
prior year reserve adjustments, the impact of significant tax
legislation and tax rate change and significant non-recurring and
period specific tax items.
(2)
The decrease in discrete and other
non-core tax expense for the full year is primarily due to
approximately $135 million of discrete tax expense related to the
enactment of the final hybrid regulations by the U.S. Department of
Treasury recognized in the second quarter of 2020. The decrease is
further due to the recognition of $18 million of tax expense
recorded in the second quarter of 2021 related to the remeasurement
of our deferred tax liabilities as a result of a corporate income
tax rate increase in the U.K. from 19% to 25%.
The decrease in discrete and other
non-core tax expense for the fourth quarter is primarily due to
higher other tax expenses in the fourth quarter of 2021 as compared
to the fourth quarter of 2020.
Reconciliation by Line Item
(In millions, except per share data)
(Unaudited)
For the three months ended
December 31, 2021
Net sales
Cost of goods sold
Marketing, general and
administrative expenses
Operating income
(loss)
Other income (expense),
net
Net income (loss) attributable
to MCBC
Net income (loss) attributable
to MCBC per diluted share
Reported (U.S. GAAP)
$
2,619.2
$
(1,761.9
)
$
(665.1
)
$
165.0
$
(1.2
)
$
80.0
$
0.37
Adjustments to arrive at underlying:
Special items, net
Employee-related charges
—
—
—
2.5
—
2.5
0.01
Impairments or asset abandonment
charges
—
—
—
21.6
—
21.6
0.10
Termination fees and other (gains)
losses
—
—
—
3.1
—
3.1
0.01
Non-Core items
Unrealized mark-to-market (gains)
losses
—
78.7
—
78.7
—
78.7
0.36
Other non-core items
—
—
0.1
0.1
—
0.1
—
Total Special and Other Non-Core items
$
—
$
78.7
$
0.1
$
106.0
$
—
$
106.0
$
0.49
Tax effects on special and other non-core
items
—
—
—
—
—
(15.6
)
(0.07
)
Discrete tax items
—
—
—
—
—
5.8
0.03
Underlying (Non-GAAP)
$
2,619.2
$
(1,683.2
)
$
(665.0
)
$
271.0
$
(1.2
)
$
176.2
$
0.81
(In millions, except per share data) (Unaudited)
For the year ended December
31, 2021
Net sales
Cost of goods sold
Marketing, general and
administrative expenses
Operating income
(loss)
Other income (expense),
net
Net income (loss) attributable
to MCBC
Net income (loss) attributable
to MCBC per diluted share
Reported (U.S. GAAP)
$
10,279.7
$
(6,226.3
)
$
(2,554.5
)
$
1,454.4
$
(3.5
)
$
1,005.7
$
4.62
Adjustments to arrive at underlying:
Special items, net
Employee-related charges
—
—
—
11.7
—
11.7
0.05
Impairments or asset abandonment
charges
—
—
—
38.7
—
38.7
0.18
Termination fees and other (gains)
losses
—
—
—
(5.9
)
—
(5.9
)
(0.03
)
Non-Core items
Unrealized mark-to-market (gains)
losses
—
(236.6
)
—
(236.6
)
—
(236.6
)
(1.09
)
Other non-core items
1.9
—
2.2
4.1
(1.5
)
2.6
0.01
Total Special and Other Non-Core items
$
1.9
$
(236.6
)
$
2.2
$
(188.0
)
$
(1.5
)
$
(189.5
)
(0.87
)
Tax effect on special and other non-core
items
—
—
—
—
—
54.5
0.25
Discrete tax Items
—
—
—
—
—
31.4
0.14
Underlying (Non-GAAP)
$
10,281.6
$
(6,462.9
)
$
(2,552.3
)
$
1,266.4
$
(5.0
)
$
902.1
$
4.15
Reconciliation to Underlying EBITDA by
Segment
(In millions) (Unaudited)
For the three months ended
December 31, 2021
Americas
EMEA&APAC
Unallocated
Consolidated
Income (loss) before income
taxes
$
258.4
$
(16.8
)
$
(132.1
)
$
109.5
Add/(less):
Net sales
—
—
—
—
Cost of goods sold(2)
—
—
78.7
78.7
Marketing, general &
administrative
—
—
—
—
Special items, net(3)
5.8
21.4
—
27.2
Other income/expense non-core items
0.1
—
—
0.1
Total Special and other Non-Core items
$
5.9
$
21.4
$
78.7
$
106.0
Underlying income (loss) before income
taxes
$
264.3
$
4.6
$
(53.4
)
$
215.5
Interest expense (income), net
0.4
1.1
60.3
61.8
Depreciation and amortization
138.0
43.9
—
181.9
Adjustments to arrive at underlying
EBITDA(4)
(0.8
)
(1.1
)
—
(1.9
)
Underlying EBITDA
$
401.9
$
48.5
$
6.9
$
457.3
(In millions) (Unaudited)
For the year ended December
31, 2021
Americas
EMEA&APAC
Unallocated
Consolidated
Income (loss) before income
taxes
$
1,176.5
$
32.9
$
29.6
$
1,239.0
Add/(less):
Net sales(1)
—
1.9
—
1.9
Cost of goods sold(2)
—
—
(236.6
)
(236.6
)
Marketing, general &
administrative
2.2
—
—
2.2
Special items, net(3)
25.2
19.3
—
44.5
Other income/expense non-core items
(1.5
)
—
—
(1.5
)
Total Special and other Non-Core items
$
25.9
$
21.2
$
(236.6
)
$
(189.5
)
Underlying income (loss) before income
taxes
$
1,202.4
$
54.1
$
(207.0
)
$
1,049.5
Interest expense (income), net
1.4
5.6
251.3
258.3
Depreciation and amortization
601.4
184.7
—
786.1
Adjustments to arrive at underlying
EBITDA(4)
(9.5
)
(6.7
)
—
(16.2
)
Underlying EBITDA
$
1,795.7
$
237.7
$
44.3
$
2,077.7
(1)
Includes keg sales returns adjustments
related to the on-premise impacts resulting from the coronavirus
pandemic.
(2)
The unrealized changes in fair value on
our commodity swaps, which are economic hedges, are recorded as
cost of goods sold 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)
See Part I—Item 1. Financial Statements,
Note 7, "Special Items" of the Form 10-K for a detailed discussion
of special items.
(4)
Represents adjustments to remove amounts
related to interest, depreciation and amortization included in the
adjustments to underlying income above, as these items are added
back as adjustments to net income attributable to MCBC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220223005283/en/
Investor Relations Greg Tierney, (414) 931-3303 Traci
Mangini, (415) 308-0151
News Media Marty Maloney, (312) 496-5669
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