GOLDEN, Colo. & MONTRÉAL--(BUSINESS WIRE)--Nov. 4, 2025-- Molson Coors Beverage Company ("MCBC," "Molson Coors" or "the Company") (NYSE: TAP, TAP.A; TSX: TPX.A, TPX.B) today reported results for the 2025 third quarter.

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2025 THIRD QUARTER FINANCIAL HIGHLIGHTS¹

• Net sales decreased 2.3% reported and 3.3% in constant currency.
• U.S. GAAP loss before income taxes of $3,495.5 million declined $3,826.9 million from income before income taxes in the prior year largely driven by a $3,645.7 million non-cash partial goodwill impairment charge as well as $273.9 million non-cash intangible asset impairment charges.
• Underlying (Non-GAAP) income before income taxes was $426.0 million, a decrease of 11.9% in constant currency.
• U.S. GAAP net loss attributable to MCBC of $2,927.6 million, $14.79 loss per share on a diluted basis. Underlying (Non-GAAP) diluted EPS of $1.67 decreased 7.2%.

CEO AND CFO PERSPECTIVES

Rahul Goyal, President and Chief Executive Officer Statement:

"Our third quarter performance was largely aligned with our expectations for the second half of the year for the industry and our share performance in the U.S. We continue to believe that the incremental softness in the industry this year is cyclical. And we believe we are well positioned with a healthy balance sheet, strong free cash flow, and great brands that serve a wide range of consumer occasions and preferences to help us navigate these near-term macroeconomic headwinds while investing in our business to support long-term growth."

"We recognize the challenges and opportunities ahead of us, and we are moving with a sense of urgency and a clear purpose to address them. Since I assumed the role of CEO on October 1, we have announced decisive moves to the leadership team and our Americas organizational structure that are designed to create a leaner, more agile organization while advancing our ability to reinvest in the business and return cash to shareholders."

"Results will take some time, but we are confident that we have the right brands and plans to be successful, and we look forward to sharing more detail on our strategy and objectives in the coming months."

Tracey Joubert, Chief Financial Officer Statement:

"Our underlying quarterly financial results were largely as expected with lower financial volumes driven by a challenging industry and increased competition as well as cycling the prior year contract brewing volumes along with continued pressure on our commodity pricing, partly offset by lower incentive compensation costs. Based on these results, we are reaffirming our full year guidance, but we now expect to come in at the low end of the ranges for our key metrics."

"In recent years, we have greatly enhanced our financial flexibility, and we remain committed to improving total shareholder returns. With a disciplined approach to capital deployment, we intend to balance investments to enhance our product portfolio, while continuing to return cash to shareholders through our share repurchase program and our dividend."

CONSOLIDATED PERFORMANCE - THIRD QUARTER 2025

QUARTERLY CONSOLIDATED HIGHLIGHTS (VERSUS THIRD QUARTER 2024 RESULTS)

• Net sales: The following table highlights the drivers of the change in net sales for the three months ended September 30, 2025, compared to September 30, 2024 (in percentages):

Net sales decreased 2.3%, driven by lower financial volume, partially offset by favorable price and sales mix and favorable foreign currency impacts. Net sales decreased 3.3% in constant currency.

Financial volume decreased 6.0%, primarily due to lower shipments in both the Americas and EMEA&APAC segments. Brand volume decreased 4.5%, including a 4.4% decrease in the Americas segment as well as a 5.0% decrease in the EMEA&APAC segment.

Price and sales mix favorably impacted net sales by 2.7%, primarily due to favorable sales mix and increased net pricing. Net sales per hectoliter increased 4.0% reported and 2.9% on a constant currency basis.

• Cost of goods sold ("COGS"): decreased 2.2% on a reported basis, primarily due to lower financial volume, partially offset by higher cost of goods sold per hectoliter and the unfavorable foreign currency impact of $19.4 million. COGS per hectoliter: increased 4.1% on a reported basis, primarily due to cost inflation related to materials and manufacturing expenses, unfavorable mix driven by lower contract brewing volume in the Americas segment and premiumization as well as volume deleverage, partially offset by cost savings initiatives and favorable changes in our unrealized mark-to-market commodity derivative positions. Underlying (Non-GAAP) COGS per hectoliter: increased 3.7% in constant currency, primarily due to cost inflation related to materials and manufacturing expenses, unfavorable mix and volume deleverage, partially offset by cost savings initiatives.
• Marketing, general & administrative ("MG&A"): increased 0.3%on a reported basis, primarily due to the timing of marketing investment and the unfavorable foreign currency impact of $6.7 million, partially offset by lower general and administrative expenses as a result of lower incentive compensation expense. Underlying (Non-GAAP) MG&A: decreased 0.6% in constant currency.
• Goodwill impairment: During the third quarter of 2025, we identified a triggering event that indicated it was more likely than not that the carrying value of the Americas reporting unit exceeded its fair value resulting in a $3,645.7 million partial goodwill impairment charge.
• Other operating income (expense), net: Other operating expense, net increased $209.4 million on a reported basis, primarily due to intangible asset impairments of $273.9 million, partially offset by the cycling of a prior year loss on the decision to wind down or sell certain of our U.S. craft businesses. During the third quarter of 2025, we identified triggering events that indicated that the carrying values of the Staropramen family of brands and the Blue Run Spirits asset group exceeded their respective fair values resulting in intangible asset impairment charges.
• U.S. GAAP income (loss) before income taxes: U.S. GAAP loss before income taxes of $3,495.5 million declined $3,826.9 million on a reported basis from income before income taxes in the prior year, primarily due to a $3,645.7 million partial goodwill impairment charge, intangible asset impairments of $273.9 million, lower financial volume and cost inflation related to materials and manufacturing expenses, partially offset by the cycling of the prior year decision to wind down or sell certain of our U.S. craft businesses and related restructuring costs, cycling of a prior year $45.8 million adjustment recorded to interest expense to increase our mandatorily redeemable noncontrolling interest ("NCI") liability to the final redemption value related to the Cobra Beer Partnership, Ltd. ("CBPL") buyout, cycling of a prior year settlement loss of $34.0 million recorded as a result of Canadian pension plan annuity purchases, increased net pricing, cost savings initiatives and favorable mix.
• Underlying (Non-GAAP) income (loss) before income taxes: Underlying income before income taxes decreased 11.9% in constant currency, primarily due to lower financial volume, cost inflation related to materials and manufacturing expenses, partially offset by increased net pricing, cost savings initiatives and favorable mix.
• Effective Tax Rate and Underlying (Non-GAAP) Effective Tax Rate

The decrease in our third quarter U.S. GAAP effective tax rate was primarily due to the impact of the $3,645.7 million partial goodwill impairment, which a portion of the goodwill was not deductible for tax purposes. The decrease was also due to the cycling of a $16.4 million valuation allowance which was recorded on deferred tax assets in the third quarter of 2024 as a result of the prior year decision to wind down or sell certain of our U.S. craft businesses and generated a capital loss for U.S. tax purposes, as well as the cycling of a $45.8 million increase in the mandatorily redeemable NCI liability of CBPL to the final redemption value, which was recorded to interest expense in the third quarter of 2024 and was non-deductible for tax purposes.

The decrease in our third quarter Underlying (Non-GAAP) effective tax rate was primarily driven by the impact of discrete tax benefits recorded during the third quarter of 2025.

• Net income (loss) attributable to MCBC per diluted share: Net loss attributable to MCBC per diluted share of $14.79 declined $15.75 from net income attributable to MCBC per diluted share in the prior year, primarily due to a higher U.S. GAAP loss before income taxes and a decrease in the weighted average diluted shares outstanding driven by share repurchases, partially offset by a decrease in the effective tax rate and the recording of a redemption value adjustment to net income (loss) attributable to noncontrolling interests.
• Underlying (Non-GAAP) net income (loss) attributable to MCBC per diluted share: Underlying net income attributable to MCBC per diluted share decreased 7.2%, primarily due to a lower underlying net income partially offset by a decrease in the weighted average diluted shares outstanding driven by share repurchases and a decrease in the underlying effective tax rate.

QUARTERLY SEGMENT HIGHLIGHTS (VERSUS THIRD QUARTER 2024 RESULTS)

Americas Segment Overview

The following tables highlight the Americas segment results for the three and nine months ended September 30, 2025, compared to September 30, 2024:

Americas Segment Highlights (Versus Third Quarter 2024 Results)

• Net sales: The following table highlights the drivers of the change in net sales for the three months ended September 30, 2025, compared to September 30, 2024 (in percentages):

Net sales decreased 3.6%, driven by lower financial volume, partially offset by favorable price and sales mix. Net sales decreased 3.5% in constant currency.

Financial volume decreased 6.5%, primarily due to lower brand volume and an approximate 3% impact from lower contract brewing volume resulting from the exit of a contract brewing arrangement in the U.S. as well as a contract brewing arrangement in Canada at the end of 2024, partially offset by favorable timing of U.S. shipments. Americas brand volume decreased 4.4%, including a 4.9% decrease in the U.S., impacted by the macroeconomic environment resulting in industry softness as well as lower share performance.

Price and sales mix favorably impacted net sales by 3.0%, primarily due to favorable sales mix as a result of lower contract brewing volume and positive brand mix as well as increased net pricing. Net sales per hectoliter increased 3.1% reported and 3.2% on a constant currency basis.

• U.S. GAAP income (loss) before income taxes: U.S. GAAP loss before income taxes of $3,345.4 million declined $3,699.2 million on a reported basis from income before income taxes in the prior year, primarily due to a $3,645.7 million partial goodwill impairment charge, a $75.3 million full impairment charge to our definite-lived intangible asset related to the Blue Run Spirits asset group, lower financial volume, cost inflation related to materials and manufacturing expenses, partially offset by the cycling of the prior year decision to wind down or sell certain of our U.S. craft businesses and related restructuring costs, favorable mix, increased net pricing and cost savings initiatives.
• Underlying (Non-GAAP) income (loss) before income taxes: Underlying income before income taxes decreased 7.1% in constant currency, primarily due to lower financial volume and cost inflation related to materials and manufacturing expenses, partially offset by favorable mix, increased net pricing and cost savings initiatives.

EMEA&APAC Segment Overview

The following tables highlight the EMEA&APAC segment results for the three and nine months ended September 30, 2025, compared to September 30, 2024:

EMEA&APAC Segment Highlights (Versus Third Quarter 2024 Results)

• Net sales: The following table highlights the drivers of the change in net sales for the three months ended September 30, 2025, compared to September 30, 2024 (in percentages):

Net sales increased 2.4%, driven by favorable foreign currency impacts as well as price and sales mix, partially offset by lower financial volume. Net sales decreased 2.4% in constant currency.

Financial and brand volume decreased 4.9% and 5.0%, respectively, primarily due to lower volume across all regions driven by soft market demand and a heightened competitive landscape.

Price and sales mix favorably impacted net sales by 2.5%, primarily due to premiumization, geographic mix and higher factored brand volume. Net sales per hectoliter increased 7.6% reported and 2.6% on a constant currency basis.

• U.S. GAAP income (loss) before income taxes: U.S. GAAP loss before income taxes of $110.4 million declined $162.0 million on a reported basis from income before income taxes in the prior year, primarily due to the partial impairment charge of $198.6 million to the indefinite-lived intangible asset related to the Staropramen family of brands, lower financial volume and unfavorable foreign currency impacts partially offset by the cycling of a prior year $45.8 million adjustment recorded to interest expense to increase our mandatorily redeemable NCI liability to the final redemption value related to the CBPL buyout and lower MG&A expense driven by lower incentive compensation and cost savings.
• Underlying (Non-GAAP) income (loss) before income taxes: Underlying income before income taxes decreased 15.1% in constant currency, primarily due to lower financial volume, partially offset by lower MG&A expense driven by lower incentive compensation and cost savings.

CASH FLOW AND LIQUIDITY HIGHLIGHTS

• U.S. GAAP cash from operations: Net cash provided by operating activities of $1,243.7 million for the nine months ended September 30, 2025, decreased $172.1 million compared to $1,415.8 million for the nine months ended September 30, 2024. The decrease in net cash provided by operating activities was primarily due to lower net income adjusted for non-cash items, a $60.6 million payment as final resolution of the Keystone litigation case and higher interest paid, partially offset by lower payments for prior year annual incentive compensation and lower income taxes paid primarily due to the passage of the One Big Beautiful Bill Act in the U.S.
• Underlying (Non-GAAP) free cash flow: Cash provided of $782.1 million for the nine months ended September 30, 2025, represents a decrease of $73.9 million from the prior year, which was primarily due to a decline in operating cash flows, partially offset by the $60.6 million payment (non-GAAP adjusted) as final resolution of the Keystone litigation case.
• Debt: Total debt as of September 30, 2025, was $6,292.0 million and cash and cash equivalents totaled $950.2 million, resulting in net debt of $5,341.8 million and a net debt to underlying EBITDA ratio of 2.28x. As of September 30, 2024, our net debt to underlying EBITDA ratio was 2.10x.
• Dividends: We paid cash dividends of $285.7 million and $279.4 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.
• Share Repurchase Program: We paid $332.8 million and $437.4 million, including brokerage commissions, for share repurchases during the nine months ended September 30, 2025 and September 30, 2024, respectively.

2025 OUTLOOK

We continue to expect to achieve the following key financial targets for full year 2025 and we anticipate being at the low end of the range for certain of those key metrics:

• Net sales (high to low end of range): 3% to 4% decline on a constant currency basis anticipating being at the low end of the range.
• Underlying (Non-GAAP) income (loss) before income taxes (high to low end of range): 12% to 15% decline on a constant currency basis anticipating being at the low end of the range.
• Underlying (Non-GAAP) diluted earnings per share (high to low end of range): 7% to 10% decline anticipating being at the low end of the range.
• Underlying (Non-GAAP) net interest expense: $225 million, plus or minus 5%.
• Capital expenditures: $650 million incurred, plus or minus 5%.
• Underlying (Non-GAAP) free cash flow: $1.3 billion, plus or minus 10% anticipating being at the low end of the range.
• Underlying (Non-GAAP) depreciation and amortization: $675 million, plus or minus 5%.
• Underlying (Non-GAAP) effective tax rate: in the range of 22% to 24%.

SUBSEQUENT EVENT

On October 20, 2025, the Company announced an Americas restructuring plan designed to create a leaner, more agile Americas segment while advancing its ability to reinvest in the business and position the Company for future growth. The restructuring plan involves the planned elimination of approximately 400 salaried positions across the Americas segment by the end of December 2025. In connection with the restructuring, the Company currently expects to incur certain restructuring charges, in the range of $35 million to $50 million, which are expected to be future cash expenditures to be made over the next 12 months. Substantially all of the charges are expected to be related to severance payments and post-employment benefits to be incurred in the fourth quarter of 2025.

NOTES

Unless otherwise indicated in this release, all $ amounts are in U.S. Dollars, and all quarterly comparative results are for the Company’s third quarter ended September 30, 2025, compared to the third quarter ended September 30, 2024. Some numbers may not sum due to rounding.

2025 THIRD QUARTER INVESTOR CONFERENCE CALL

Molson Coors Beverage Company will conduct an earnings conference call with financial analysts and investors at 8:30 a.m. Eastern Time today to discuss the Company’s 2025 third quarter results. The live webcast will be accessible via our website, ir.molsoncoors.com. An online replay of the webcast is expected to be posted within two hours following the live webcast. The Company will post this release and related financial statements on its website today.

OVERVIEW OF MOLSON COORS BEVERAGE COMPANY

For more than two centuries, we have brewed beverages that unite people to celebrate all life’s moments. From our core power brands Coors Light, Miller Lite, Coors Banquet, Molson Canadian, Carling and Ožujsko to our above premium brands including Madrí Excepcional, Staropramen, Blue Moon Belgian White and Leinenkugel’s Summer Shandy, to our economy and value brands like Miller High Life and Keystone Light, we produce many beloved and iconic beers. While our Company's history is rooted in beer, we offer a modern portfolio that expands beyond the beer aisle as well, including flavored beverages like Vizzy Hard Seltzer, spirits like Five Trail whiskey and non-alcoholic beverages. We also have partner brands, such as Simply Spiked, ZOA Energy, Fever-Tree, among others, through license, distribution, partnership and joint venture agreements. As a business, our ambition is to be the first choice for our people, our consumers and our customers, and our success depends on our ability to make our products available to meet a wide range of consumer segments and occasions.

To learn more about Molson Coors Beverage Company, visit molsoncoors.com.

ABOUT MOLSON COORS CANADA INC.

Molson Coors Canada Inc. ("MCCI") is a subsidiary of Molson Coors Beverage Company. MCCI Class A and Class B exchangeable shares offer substantially the same economic and voting rights as the respective classes of common shares of MCBC, as described in MCBC’s annual proxy statement and Form 10-K filings with the U.S. Securities and Exchange Commission. The trustee holder of the special Class A voting stock and the special Class B voting stock has the right to cast a number of votes equal to the number of then outstanding Class A exchangeable shares and Class B exchangeable shares, respectively.

FORWARD-LOOKING STATEMENTS

This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws. Generally, the words "expects," "intend," "goals," "plans," "believes," "confidence," "view," "continues," "may," "anticipate," "seek," "estimate," "outlook," "trends," "future benefits," "potential," "projects," "strategies," "implies," and variations of such words and similar expressions are intended to identify forward-looking statements. Statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements, and include, but are not limited to, statements under the headings "CEO and CFO Perspectives" and "2025 Outlook," with respect to, among others, expectations and impacts of cost inflation and tariffs, limited consumer disposable income, consumer preferences, overall volume and market share trends, our competitive position, pricing trends, macroeconomic forces, beverage industry trends, cost reduction strategies including the Americas restructuring plan announced in October of 2025 and the expected benefits of the restructuring and estimated range of related savings, charges and position eliminations and timing of such savings, charges, and position eliminations, contributions by the President and Chief Executive Officer and related expectations (financial or otherwise), execution of our strategic priorities, shipment levels and profitability, the sufficiency of capital resources, anticipated results, expectations for funding future capital expenditures and operations, effective tax rate, debt service capabilities, timing and amounts of debt and leverage levels, Preserving the Planet and related initiatives, expectations regarding the impact of the One Big Beautiful Bill Act on our cash tax payments and expectations regarding future dividends and share repurchases. In addition, statements that we make in this press release that are not statements of historical fact may also be forward-looking statements.

Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company’s historical experience, and present projections and expectations are disclosed in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the risks discussed in our filings with the SEC, including our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

MARKET AND INDUSTRY DATA

The market and industry data used, if any, in this press release are based on independent industry publications, customer specific data, trade or business organizations, reports by market research firms and other published statistical information from third parties, including Circana (formerly Information Resources, Inc.) for U.S. market data and Beer Canada for Canadian market data (collectively, the “Third Party Information”), as well as information based on management’s good faith estimates, which we derive from our review of internal information and independent sources. Such Third Party Information generally states that the information contained therein or provided by such sources has been obtained from sources believed to be reliable.

APPENDIX

STATEMENTS OF OPERATIONS - MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

BALANCE SHEETS - MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

CASH FLOW STATEMENTS - MOLSON COORS BEVERAGE COMPANY AND SUBSIDIARIES

SUMMARIZED SEGMENT RESULTS (hectoliter volume and $ in millions) (Unaudited)

WORLDWIDE AND SEGMENT BRAND AND FINANCIAL VOLUME (in millions of hectoliters) (Unaudited)

Worldwide brand volume (or "brand volume" when discussed by segment) reflects owned or actively managed brands sold to unrelated external customers within our geographic markets (net of returns and allowances), royalty volume and our proportionate share of equity investment worldwide brand volume calculated consistently with MCBC owned volume. Financial volume represents owned or actively managed brands sold to unrelated external customers within our geographical markets, net of returns and allowances as well as contract brewing, wholesale non-owned brand volume and company-owned distribution volume. Contract brewing and wholesale/factored volume is included within financial volume, but is removed from worldwide brand volume, as this is non-owned volume for which we do not directly control performance. Factored volume in our EMEA&APAC segment represents the distribution of beer, wine, spirits and other products owned and produced by other companies to the on-premise channel such as bars and restaurants, which is a common arrangement in the U.K. Royalty volume consists of our brands produced and sold by third parties under various license and contract brewing agreements and, because this is owned volume, it is included in worldwide brand volume. Our worldwide brand volume definition also includes an adjustment from Sales-to-Wholesaler ("STW") volume to Sales-to-Retailer ("STR") volume. We believe the brand volume metric is important because, unlike financial volume and STWs, it provides the closest indication of the performance of our brands in relation to market and competitor sales trends.

We also utilize net sales per hectoliter and COGS per hectoliter, as well as the year over year changes in these metrics, as key metrics for analyzing our results. These metrics are calculated as net sales and COGS per our unaudited condensed consolidated statements of operations divided by financial volume for the respective period. We believe these metrics are important and useful for investors and management because it provides an indication of the trends of price and sales mix on our net sales and the trends of mix and other cost impacts on our COGS.

NON-GAAP MEASURES AND RECONCILIATIONS

Use of Non-GAAP Measures

In addition to financial measures presented on the basis of accounting principles generally accepted in the U.S. (“U.S. GAAP”), we also use non-GAAP financial measures, as listed and defined below, for operational and financial decision making and to assess Company and segment business performance. These non-GAAP measures should be viewed as supplements to (not substitutes for) our results of operations presented under U.S. GAAP. We have provided reconciliations of all historical non-GAAP measures to their nearest U.S. GAAP measure and have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure.

Our management uses these metrics to assist in comparing performance from period to period on a consistent basis; as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; in communications with the Board of Directors, stockholders, analysts and investors concerning our financial performance; as useful comparisons to the performance of our competitors; and as metrics of certain management incentive compensation calculations. We believe these measures are used by, and are useful to, investors and other users of our financial statements in evaluating our operating performance.

• Underlying Income (Loss) before Income Taxes (Closest GAAP Metric: Income (Loss) Before Income Taxes) – Measure of the Company’s or segment's income (loss) before income taxes excluding the impact of certain non-GAAP adjustment items from our U.S. GAAP financial statements. Non-GAAP adjustment items include goodwill and other intangible and tangible asset impairments, certain restructuring and integration related costs, unrealized mark-to-market gains and losses, adjustments to the redemption value of mandatorily redeemable noncontrolling interests, potential or incurred losses related to certain litigation accruals and settlements, impacts of settlement charges related to annuity purchases and gains and losses on sales of non-operating assets, among other 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, involve significant management judgment and can vary substantially from company to company.
• Underlying COGS (Closest GAAP Metric: COGS) – Measure of the Company’s COGS adjusted to exclude non-GAAP adjustment items (as defined above). Non-GAAP adjustment items include, among other items, unrealized mark-to-market gains and losses on our commodity derivative instruments, which are economic hedges, and are recorded through COGS within Unallocated. As the exposure we are managing is realized, we reclassify the gain or loss to the segment in which the underlying exposure resides, allowing our segments to realize the economic effects of the derivatives without the resulting unrealized mark-to-market volatility.

We also use underlying COGS per hectoliter, as well as the year over year change in such metric, as a key metric for analyzing our results. This metric is calculated as underlying COGS divided by financial volume for the respective period.

• Underlying MG&A (Closest GAAP Metric: MG&A) – Measure of the Company’s MG&A expense excluding the impact of certain non-GAAP adjustment items (as defined above).
• Underlying net interest income (expense) (Closest GAAP Metric: Interest income (expense), net) – Measure of the Company's net interest expense adjusted to exclude adjustments to the redemption value of mandatorily redeemable noncontrolling interests.
• Underlying net income (loss) attributable to MCBC (Closest GAAP Metric: Net income (loss) attributable to MCBC) – Measure of net income (loss) attributable to MCBC excluding the impact of income (loss) before income tax non-GAAP adjustment items (as defined above), adjustments to the carrying value of redeemable noncontrolling interests resulting from subsequent changes in the redemption value of such interests, the related tax effects of non-GAAP adjustment items and certain other discrete tax items.
• Underlying net income (loss) attributable to MCBC per diluted share (also referred to as Underlying Diluted Earnings per Share) (Closest GAAP Metric: Net income (loss) attributable to MCBC per diluted share) – Measure of underlying net income (loss) attributable to MCBC (as defined above) per diluted share. If applicable, a reported net loss attributable to MCBC per diluted share is calculated using the basic share count due to dilutive shares being antidilutive. If underlying net income (loss) attributable to MCBC becomes income excluding the impact of our non-GAAP adjustment items, we include the incremental dilutive shares, using the treasury stock method, into the dilutive shares outstanding.
• Underlying effective tax rate (Closest GAAP Metric: Effective Tax Rate) – Measure of the Company’s effective tax rate excluding the related tax impact of pre-tax non-GAAP adjustment items (as defined above) and certain other discrete tax items. Discrete tax items include certain significant tax audit and prior year reserve adjustments, impact of significant tax legislation and tax rate changes and significant non-recurring and period specific tax items.
• Underlying free cash flow (Closest GAAP Metric: Net Cash Provided by (Used in) Operating Activities) – Measure of the Company’s operating cash flow calculated as Net Cash Provided by (Used In) Operating Activities less Additions to property, plant and equipment and excluding the pre-tax cash flow impact of certain non-GAAP adjustment items (as defined 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-GAAP adjustment items, which can vary substantially from company to company depending upon accounting methods, book value of assets and capital structure.
• Underlying depreciation and amortization (Closest GAAP Metric: Depreciation & Amortization) – Measure of the Company’s depreciation and amortization excluding the impact of non-GAAP adjustment items (as defined above). These adjustments primarily consist of accelerated depreciation or amortization taken related to the Company’s strategic exit or restructuring activities.
• Net debt and net debt to underlying earnings before interest, taxes, depreciation, and amortization ("underlying EBITDA") (Closest GAAP Metrics: Cash, Debt, & Net Income (Loss)) – Measure of the Company’s leverage calculated as net debt (defined as current portion of long-term debt and short-term borrowings plus long-term debt less cash and cash equivalents) divided by the trailing twelve month underlying EBITDA. Underlying EBITDA is calculated as Net income (loss) excluding Interest expense (income), net, Income tax expense (benefit), depreciation and amortization and the impact of non-GAAP adjustment items (as defined above). Effective January 1, 2025, on a prospective basis, Underlying EBITDA excludes amortization of cloud-based software implementation costs. This measure is not the same as the Company’s maximum leverage ratio as defined under its revolving credit facility, which allows for other adjustments in the calculation of net debt to EBITDA.
• Constant currency - Constant currency is a non-GAAP measure utilized 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. We present all percentage changes for net sales, underlying COGS, underlying MG&A and underlying income (loss) before income taxes 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 transactional foreign currency impacts, reported within the other non-operating income (expense), net line item, from our current period results.

Our guidance or long-term targets for any of the measures noted above are also non-GAAP financial measures that exclude or otherwise have been adjusted for non-GAAP adjustment items from our U.S. GAAP financial statements. When we provide guidance for any of the various non-GAAP metrics described above, we do not provide reconciliations of the U.S. GAAP measures as we are unable to predict with a reasonable degree of certainty the actual impact of the non-GAAP adjustment items. By their very nature, non-GAAP adjustment items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our Company and its financial results. Therefore, we are unable to provide a reconciliation of these measures without unreasonable efforts.

RECONCILIATION TO NEAREST U.S. GAAP MEASURES