MOLSON COORS BEVERAGE COTAP
MOLSON COORS BEVERAGE CO Income Taxes Disclosure
Income Tax
Our income (loss) before income taxes on which the provision for income taxes was computed was as follows:
| For the years ended | |||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| (In millions) | |||||||||||||||||
| Domestic | $ | (2,398.6) | $ | 1,398.3 | $ | 1,486.0 | |||||||||||
| Foreign | (119.4) | 104.7 | (233.5) | ||||||||||||||
| Total | $ | (2,518.0) | $ | 1,503.0 | $ | 1,252.5 | |||||||||||
The components of the provision for income taxes were as follows:
| For the years ended | |||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| (In millions) | |||||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | 46.0 | $ | 152.1 | $ | 200.7 | |||||||||||
State and local | 13.7 | 21.2 | 22.1 | ||||||||||||||
| Foreign | 45.4 | 54.5 | 37.3 | ||||||||||||||
| Total current tax (benefit) expense | $ | 105.1 | $ | 227.8 | $ | 260.1 | |||||||||||
| Deferred | |||||||||||||||||
| Federal | $ | (323.2) | $ | 109.7 | $ | 75.0 | |||||||||||
State and local | (87.0) | 13.3 | 27.8 | ||||||||||||||
| Foreign | (32.7) | (5.5) | (66.8) | ||||||||||||||
| Total deferred tax (benefit) expense | $ | (442.9) | $ | 117.5 | $ | 36.0 | |||||||||||
| Total income tax (benefit) expense | $ | (337.8) | $ | 345.3 | $ | 296.1 | |||||||||||
A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate was as follows:
| For the years ended | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
| ($ in millions) | |||||||||||||||||||||||||||||||||||
| U.S. federal statutory tax rate | 21.0 | % | $ | (528.8) | 21.0 | % | $ | 315.7 | 21.0 | % | $ | 263.0 | |||||||||||||||||||||||
U.S. state and local taxes, net of federal benefits(1) | 2.4 | % | (59.0) | 1.7 | % | 25.3 | 3.0 | % | 38.1 | ||||||||||||||||||||||||||
| Foreign tax effects | |||||||||||||||||||||||||||||||||||
| Canada | |||||||||||||||||||||||||||||||||||
| Canada tax rate differential | 0.4 | % | (9.7) | (0.5) | % | (8.1) | (1.2) | % | (14.7) | ||||||||||||||||||||||||||
| Canada other | (0.7) | % | 17.7 | (0.4) | % | (6.6) | (0.5) | % | (6.0) | ||||||||||||||||||||||||||
| United Kingdom | (0.4) | % | 10.5 | 1.3 | % | 18.9 | 0.1 | % | 1.7 | ||||||||||||||||||||||||||
| Czech Republic | — | % | (0.2) | — | % | 0.4 | 1.2 | % | 14.9 | ||||||||||||||||||||||||||
| Other foreign jurisdictions | — | % | (0.4) | 0.8 | % | 11.5 | 0.6 | % | 7.2 | ||||||||||||||||||||||||||
Effect of changes in tax laws or rates enacted in current period | — | % | — | — | % | — | — | % | — | ||||||||||||||||||||||||||
| Effect of cross border tax laws | (0.3) | % | 6.3 | — | % | (0.7) | (0.1) | % | (1.3) | ||||||||||||||||||||||||||
| Tax credits | 0.7 | % | (18.1) | (1.3) | % | (20.1) | (1.0) | % | (12.9) | ||||||||||||||||||||||||||
| Changes in valuation allowance | (0.2) | % | 4.8 | 1.2 | % | 18.5 | 0.1 | % | 0.7 | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
Goodwill impairment | (9.2) | % | 231.3 | — | % | — | — | % | — | ||||||||||||||||||||||||||
Other | (0.3) | % | 6.3 | (0.5) | % | (7.6) | 0.5 | % | 6.1 | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | — | % | 1.1 | (0.1) | % | (1.7) | (0.1) | % | (1.1) | ||||||||||||||||||||||||||
| Other adjustments, net | — | % | 0.4 | (0.2) | % | (0.2) | — | % | 0.4 | ||||||||||||||||||||||||||
Effective tax rate / tax (benefit) expense | 13.4 | % | $ | (337.8) | 23.0 | % | $ | 345.3 | 23.6 | % | $ | 296.1 | |||||||||||||||||||||||
(1)State income taxes from business operations in New Jersey, Colorado, Illinois, California,Virginia, Massachusetts, Florida, Georgia, Minnesota and Maryland made up the majority (greater than 50 percent) of the tax effect in this category for the year ended December 31, 2025. State income taxes from business operations in Pennsylvania, Illinois, Michigan, Texas, Colorado, New York, New Jersey, Minnesota and Tennessee made up the majority (greater than 50 percent) of the tax effect in this category for the year ended December 31, 2024. State income taxes from business operations in Virginia, Pennsylvania, Illinois, Tennessee and California made up the majority (greater than 50 percent) of the tax effect in this category for the year ended December 31, 2023.
The lower effective tax rate for the year ended December 31, 2025, compared to the U.S federal statutory rate was primarily due to the impact of the $3,645.7 million partial goodwill impairment recognized in the third quarter of 2025, a portion of which was not deductible for U.S. federal and state and Canadian tax purposes.
The higher effective tax rate for the year ended December 31, 2024, when compared to the U.S. federal statutory rate was primarily related to the impact of a valuation allowance that was recorded on deferred tax assets as a result of the sale of certain U.S. craft businesses in the third quarter of 2024. The sale resulted in the realization of a capital loss for U.S. federal tax purposes. We believe it is unlikely that the deferred tax asset generated by the capital loss will be recognized, and as a result, a $20.0 million valuation allowance was recorded. The effective tax rate was further impacted by the net effect of acquisition-related permanent items, including: (i) the non-taxable gain of $77.9 million recognized upon the consolidation of ZOA in the fourth quarter of 2024, and (ii) the $45.8 million of non-deductible interest expense recorded in the third quarter of 2024 to increase the mandatorily redeemable NCI liability of CBPL to the final redemption value.
The higher effective tax rate for the year ended December 31, 2023, when compared to the U.S. federal statutory rate was not significant and was due to the impacts of state income taxes, foreign tax rates and the impact of a foreign statutory tax rate change enacted in the fourth quarter of 2023.
The income taxes paid (net of refunds) are as follows:
| For the years ended | |||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| (In millions) | |||||||||||||||||
| United States, federal | $ | 63.0 | $ | 163.5 | $ | 183.4 | |||||||||||
| United States, state and local | 22.4 | 20.3 | 22.3 | ||||||||||||||
| Canada | 9.3 | * | * | ||||||||||||||
| Croatia | 12.0 | * | * | ||||||||||||||
Other foreign | 24.7 | 43.3 | 39.1 | ||||||||||||||
| Total net cash income taxes paid | $ | 131.4 | $ | 227.1 | $ | 244.8 | |||||||||||
*Represents income taxes paid to jurisdictions that do not meet the disaggregation threshold for that year.
The lower income taxes paid for the year ended December 31, 2025, compared to the prior year, is primarily due to the enactment of the OBBBA in the third quarter of 2025, which accelerated tax recovery for certain capital investments and research and development expenditures. While the OBBBA did not materially affect our effective tax rate for the year ended December 31, 2025, it reduced our U.S. federal cash tax payments by approximately $80 million.
Our foreign businesses operate in jurisdictions with statutory income tax rates that differ from the U.S. federal statutory rate. The statutory income tax rates in the countries in Europe in which we operate range from 9% to 25.8%. In addition, Canada has a federal and provincial statutory income tax rate of approximately 15% and 11%, respectively.
| As of | |||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||
| (In millions) | |||||||||||
| Deferred tax assets | |||||||||||
| Compensation-related obligations | $ | 43.5 | $ | 47.1 | |||||||
| Pension and postretirement benefits | (3.7) | 14.2 | |||||||||
| Tax credit carryforwards | 51.8 | 37.8 | |||||||||
| Tax loss carryforwards | 314.7 | 305.3 | |||||||||
| Accrued liabilities and other | 156.8 | 216.4 | |||||||||
| Valuation allowance | (105.4) | (79.9) | |||||||||
| Deferred tax assets | $ | 457.7 | $ | 540.9 | |||||||
| Deferred tax liabilities | |||||||||||
| Fixed assets | 346.9 | 348.6 | |||||||||
| Partnerships and investments | 50.5 | 44.9 | |||||||||
| Intangible assets | 2,232.3 | 2,738.3 | |||||||||
| Derivative instruments | 12.6 | 42.3 | |||||||||
| Accrued liabilities and other | 26.2 | 13.4 | |||||||||
| Deferred tax liabilities | $ | 2,668.5 | $ | 3,187.5 | |||||||
| Net deferred tax liabilities | $ | 2,210.8 | $ | 2,646.6 | |||||||
Our deferred tax valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax loss carryforwards from operations in various jurisdictions. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that the deferred tax assets will not be realized. We have evaluated the realizability of our deferred tax assets in each jurisdiction by assessing the adequacy of expected taxable income, including the reversal of existing temporary differences, historical and projected operating results and the availability of prudent and feasible tax planning strategies. Based on this analysis, we have determined that the valuation allowances recorded in each period presented are appropriate. The higher valuation allowance for the year ended December 31, 2025, related to lower 2025 and future forecasted results, which resulted in a higher reserve for certain deferred tax assets that are now more likely than not to expire before they can be utilized.
As of December 31, 2025, we have deferred tax assets for U.S. tax loss and credit carryforwards that expire between 2026 and 2045 of $108.3 million and U.S. tax losses that may be carried forward indefinitely of $17.4 million. We have foreign tax loss and credit carryforwards that expire between 2026 and 2045 of $189.0 million and foreign tax losses that may be carried forward indefinitely of $41.9 million.
The following table presents our net deferred tax liabilities as of December 31, 2025 and December 31, 2024.
| As of | |||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||
| (In millions) | |||||||||||
| Domestic deferred tax liabilities | $ | 1,728.7 | $ | 2,184.0 | |||||||
| Foreign deferred tax assets | 19.9 | 38.6 | |||||||||
| Foreign deferred tax liabilities | 502.0 | 501.2 | |||||||||
| Net deferred tax liabilities | $ | 2,210.8 | $ | 2,646.6 | |||||||
The total foreign deferred tax assets above are presented within other assets on the consolidated balance sheets and domestic and foreign deferred tax liabilities above are presented within deferred tax liabilities on the consolidated balance sheets. The deferred tax liability amounts as of December 31, 2025 and December 31, 2024, excluded $54.0 million and $48.2 million, respectively, of unrecognized tax benefits that have been recorded as a reduction of deferred tax assets, which was presented within deferred tax liabilities due to jurisdictional netting on the consolidated balance sheets.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, was as follows.
| For the years ended | |||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| (In millions) | |||||||||||||||||
| Balance at beginning of year | $ | 58.5 | $ | 48.9 | $ | 39.3 | |||||||||||
| Additions for current year tax positions | 8.4 | 23.7 | 12.9 | ||||||||||||||
| Additions for prior year tax positions | 1.4 | 0.8 | 0.8 | ||||||||||||||
| Reductions for current year tax positions | (2.1) | (10.7) | (2.0) | ||||||||||||||
| Reductions for prior year tax positions | — | (0.9) | (1.7) | ||||||||||||||
| Settlements | — | (0.9) | — | ||||||||||||||
| Release due to statute expirations | (0.8) | (1.7) | (0.7) | ||||||||||||||
| Foreign currency adjustment | 0.4 | (0.7) | 0.3 | ||||||||||||||
| Balance at end of year | $ | 65.8 | $ | 58.5 | $ | 48.9 | |||||||||||
Our remaining unrecognized tax benefits as of December 31, 2025, related to tax years that were open to examination. As of December 31, 2025 and December 31, 2024, we had remaining unrecognized tax benefits recorded within other liabilities in our consolidated balance sheets of $14.6 million and $11.6 million, respectively. The remaining balance of our unrecognized tax benefits was recorded within deferred tax liabilities in our consolidated balance sheets. Annual tax provisions included amounts considered sufficient to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued. We recognized immaterial interest and penalties related to unrecognized tax benefits as part of income taxes on our consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023. If we were to prevail on all uncertain tax positions, the reversal of this accrual, inclusive of interest and penalties, would result in a benefit of $55.6 million.
We file income tax returns in most of the federal, state and provincial jurisdictions in the U.S., Canada and various countries in Europe. Tax years through 2013 are closed in the U.S. In Canada, tax years through 2020 are closed or have been settled through examination except for issues relating to intercompany cross-border transactions, which are separately closed or have been settled through examination for tax years through 2017. Tax years through 2014 are closed for most European jurisdictions in which we operate, with statutes of limitations varying from 3 to 7 years for most jurisdictions.
When cash is available after satisfying working capital needs and all other business obligations, we may distribute current earnings and the associated cash from a foreign subsidiary to its U.S. parent, and record the tax impact associated with the distribution. However, to the extent current earnings of our foreign operations exist and are not otherwise distributed or planned to be distributed, such earnings accumulate. These accumulated earnings are not considered permanently reinvested in our foreign operations. The taxes associated with any future repatriation of undistributed earnings are anticipated to be insignificant.
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 Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.