MOLSON COORS BEVERAGE COTAP
MOLSON COORS BEVERAGE CO Commitments Disclosure
Commitments and Contingencies
Letters of Credit
As of December 31, 2025, we had $45.2 million outstanding in letters of credit with financial institutions. These letters primarily expire throughout 2026 and $10.7 million of the letters contain a feature that automatically renews the letter for an additional year if no cancellation notice is submitted. These letters of credit are being maintained as security for deferred compensation payments, reimbursements to insurance companies, reimbursements to the trustee for pension payments, deductibles or retention payments made on our behalf, various payments due to governmental agencies, operations of underground storage tanks and other general business purposes and are not included on our consolidated balance sheets.
Guarantees and Indemnities
We guarantee indebtedness and other obligations to banks and other third parties for some of our equity method investments and consolidated subsidiaries. As of December 31, 2025 and December 31, 2024, the consolidated balance sheets included liabilities related to these guarantees of $15.8 million and $34.2 million, respectively. See Note 3, "Investments" for further detail.
Kaiser
In 2006, we sold our entire equity interest in our Brazilian unit, Cervejarias Kaiser Brasil S.A. ("Kaiser") to FEMSA Cerveza S.A. de C.V. ("FEMSA"). The terms of the sale agreement require us to indemnify FEMSA for certain exposures related to tax, civil and labor contingencies arising prior to FEMSA's purchase of Kaiser and certain purchased tax credits. Our exposure related to the tax, civil and labor indemnity claims is capped at $68 million, with the indemnity limited to settlement amounts in excess of amounts disclosed for existing contingencies at the date of sale and reduced by any subsequent settlements including offsetting impacts of any favorable amounts. Related to the purchased tax credits, we settled a portion of our tax credit indemnity obligation during 2010 and the maximum potential claims amount for the remainder of the purchased tax credits was not material as of December 31, 2025.
Our estimates for a recorded liability consider a number of scenarios for the ultimate resolution of these issues, the probabilities of which are influenced not only by legal developments in Brazil but also by management's intentions with regard to various alternatives that could present themselves leading to the ultimate resolution of these issues. The liabilities are impacted by changes in estimates regarding amounts that could be paid, the timing of such payments, adjustments to the probabilities assigned to various scenarios and foreign currency exchange rates. Our indemnity may cover certain fees and expenses that Kaiser incurs to manage any cases finally determined to be unsuccessful through the administrative and judicial systems. Based on our assessment of the probability of these indemnities, we have recorded an immaterial amount as of December 31, 2025.
Future settlement procedures and related negotiation activities associated with these contingencies are largely outside of our control. Due to the uncertainty involved with the ultimate outcome and timing of these contingencies, significant adjustments to the carrying values of the indemnity obligations have been recorded to date and additional future adjustments may be required. These liabilities are denominated in Brazilian Reais and are therefore, subject to foreign exchange gains or losses. As a result, these foreign exchange gains and losses are recorded within other non-operating income (expense), net.
Purchase Obligations
We have various long-term supply contracts and distribution agreements with unaffiliated third parties and our joint venture partners to purchase materials used in production and packaging and to provide distribution services. Certain supply contracts provide that we purchase certain minimum levels of materials throughout the terms of the contracts. Additionally, we have various long-term non-cancelable commitments for advertising, sponsorships and promotions, including marketing at sports arenas, stadiums and other venues and events.
The future aggregate minimum required commitments under these purchase obligations are shown in the table below based on foreign exchange rates as of December 31, 2025. The amounts in the table do not represent all anticipated payments under long-term contracts. Rather, they represent unconditional, non-cancelable purchase commitments under contracts with remaining terms greater than one year.
| Year | Supply and Distribution | Advertising and Promotions | ||||||||||||
(In millions) | ||||||||||||||
| 2026 | $ | 217.2 | $ | 180.5 | ||||||||||
| 2027 | 114.7 | 150.6 | ||||||||||||
| 2028 | 119.7 | 114.9 | ||||||||||||
| 2029 | 113.9 | 104.0 | ||||||||||||
| 2030 | 113.6 | 58.2 | ||||||||||||
| Thereafter | 195.5 | 18.4 | ||||||||||||
| Total | $ | 874.6 | $ | 626.6 | ||||||||||
Total purchases under our long-term unconditional, non-cancellable supply and distribution contracts were approximately $0.6 billion, $0.4 billion and $0.4 billion during the years ended December 31, 2025, 2024 and 2023, respectively.
Litigation, Other Disputes and Environmental
Related to litigation, other disputes and environmental issues, we had an aggregate accrued contingent liability of $41.6 million and $71.1 million as of December 31, 2025 and December 31, 2024, respectively. While we cannot predict the eventual aggregate cost for litigation, other disputes and environmental matters in which we are currently involved, based on review with legal counsel, we believe adequate reserves have been provided for losses that are probable and estimable.
We are involved in other disputes and legal actions arising in the ordinary course of our business. While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, other than as noted, none of these disputes or legal actions are expected to have a material impact on our business, consolidated financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business.
On February 12, 2018, Stone Brewing Company filed a trademark infringement lawsuit in federal court in the Southern District of California against Molson Coors Beverage Company USA LLC ("MCBC USA"), a wholly owned subsidiary of our Company, alleging that the Keystone brand had "rebranded" itself as "Stone" and was marketing itself in a manner confusingly similar to Stone Brewing Company's registered Stone trademark. Stone Brewing Company sought treble damages and disgorgement of MCBC USA's profit from Keystone sales. MCBC USA subsequently filed an answer and counterclaims against Stone Brewing Company. A jury trial began on March 7, 2022. The jury concluded that trademark infringement had occurred and awarded Stone Brewing Company $56.0 million in damages. On October 24, 2023, MCBC USA filed a notice of appeal in the 9th Circuit Court of Appeals and on December 30, 2024, the 9th Circuit affirmed the judgment. As of December 31, 2024, our Company had recorded an accrued liability of $60.6 million within accounts payable and other current liabilities on our consolidated balance sheets and on January 29, 2025, our Company paid $60.6 million as final resolution of this matter.
Regulatory Contingencies
The Province of Ontario and Molson Canada 2005, a wholly owned indirect subsidiary of our Company, Labatt Brewing Company Limited, Sleeman Breweries Ltd. (collectively, the "Representative Owners") and BRI, operating under the name The Beer Store ("TBS") are parties to a Master Framework Agreement ("MFA") that dictates the terms of the beer distribution and retail systems in the Province of Ontario. In December 2023, the Province of Ontario notified the Representative Owners and TBS that it would not be renewing the MFA after its initial expiration date of December 31, 2025. An Early Implementation Agreement ("EIA") was entered into on May 23, 2024, between the Province of Ontario, the Representative Owners and TBS concerning the intended features of the future marketplace for beer distribution and retail systems in the Province of Ontario. The EIA was effective July 18, 2024, with provisions continuing until December 31, 2030, except certain provisions which ended December 31, 2025. TBS shall remain the primary distributor of beer to all retailers from the commencement date of the EIA to the end of the agreement, December 31, 2030. In summary, the EIA removed grocery store pack size restrictions on beer, wine, cider and RTDs as of July 18, 2024, in addition to allowing for the expansion of licensed sale of beer, wine and RTDs to all convenience stores which began on September 5, 2024 and all eligible grocery and big-box grocery stores which began on October 31, 2024.
Under the EIA, the Province of Ontario provided CAD 225 million to TBS to financially support the operation of the agreed upon retail footprint during the interim period between the commencement date of the EIA and December 31, 2025. The EIA required TBS to maintain at least 386 retail locations in Ontario to support recycling, cash and carry and to preserve employment through June 30, 2025 and to maintain a minimum of 300 stores from July 1, 2025 until December 31, 2025. From January 1, 2026 onward, TBS has the sole and absolute discretion to maintain or close any retail location. Due to the increased competition from grocery stores and convenience stores, TBS closed stores during the year ended December 31, 2025 and anticipates closing additional stores in the year ending December 31, 2026.
We continue to evaluate the impact of the new marketplace for beer distribution and retail systems in the Province of Ontario on our results of operations.
Environmental
When we determine it is probable that a liability for environmental matters or other legal actions exists and the amount of the loss is reasonably estimable, an estimate of the future costs is recorded as a liability in the financial statements. Costs that extend the life, increase the capacity or improve the safety or efficiency of our assets or are incurred to mitigate or prevent future environmental contamination may be capitalized. Other environmental costs are expensed when incurred. Total environmental expenditures recognized for the years ended December 31, 2025, 2024 and 2023 were immaterial to our consolidated statements of operations.
Our Canada brewing operations are subject to provincial environmental regulations and local permit requirements. Our Longueuil, Chilliwack and Toronto breweries have water treatment facilities to pre-treat wastewater before it goes to the respective local governmental facility for final treatment. We have environmental programs in Canada including organization, monitoring and verification, regulatory compliance, reporting, education and training and corrective action.
In the U.S., we were previously notified that we are or may be a potentially responsible party ("PRP") under the Comprehensive Environmental Response, Compensation and Liability Act or similar state laws for the cleanup of sites where hazardous substances have allegedly been released into the environment. We cannot predict with certainty the total costs of cleanup, our share of the total cost, the extent to which contributions will be available from other parties, the amount of time necessary to complete the cleanups or insurance coverage.
Lowry
We are one of a number of entities named by the Environmental Protection Agency ("EPA") as a PRP at the Lowry Superfund site in Colorado. This landfill is owned by the City and County of Denver ("Denver") and is managed by Waste Management of Colorado, Inc. ("Waste Management"). In 1990, we recorded a pretax charge of $30 million, a portion of which was put into a trust in 1993 as part of a settlement with Denver and Waste Management regarding the then-outstanding litigation. Our settlement was based on an assumed remediation cost of $120 million (in 1992 adjusted dollars). We are obligated to pay a portion of future costs in excess of that amount.
Waste Management provides us with updated annual cost estimates through 2032. We review these cost estimates in the assessment of our accrual related to this issue. Our expected liability is based on the best estimates available.
Based on the assumptions utilized, the present value and gross amount of the costs as of December 31, 2025 are approximately $5 million and $6 million, respectively. Cost estimates were discounted using a 3.94% risk-free rate of return. We did not assume any future recoveries from insurance companies in the estimate of our liability and none are expected.
Considering the estimates extend through the year 2032 and the related uncertainties at the site, including what additional remedial actions may be required by the EPA, new technologies and what costs we are required to cover, the estimate of our liability may change as further facts develop. We cannot predict the amount of any such change, but additional accruals in the future are possible.
Other
In prior years, we were notified by the EPA and certain state environmental divisions that we are a PRP, along with other parties, at certain sites in New Jersey, Georgia, and California. Certain former non-beer business operations, which we discontinued use of and subsequently sold, were involved at these sites. Potential losses associated with these sites could increase as remediation planning progresses.
We are aware of groundwater contamination at some of our properties in Colorado resulting from historical, ongoing or nearby activities. There may also be other contamination of which we are currently unaware.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 12, 2020 | |
| 2018 | Feb 12, 2019 | |
| 2017 | Feb 14, 2018 | |
| 2016 | Feb 14, 2017 | |
| 2015 | Feb 11, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.