Molson Coors Reports Fourth Quarter and Full Year 2008 Financial Results



    DENVER and MONTREAL, Feb. 10 /CNW/ -- Molson Coors Brewing Company (NYSE:  
TAP; TSX) today reported higher worldwide beer volume and underlying income
for the full year ending December 28, 2008.  For the fiscal fourth quarter of
2008, pro forma worldwide beer volume and underlying income declined due to
unfavorable foreign currency and slowing industry trends.
    "We looked at this past year as an opportunity to continue to strengthen
our financial base and position ourselves for long-term growth," said Peter
Swinburn, Molson Coors president and chief executive officer.  "In 2008, we
invested substantially in our strategic brands, increased global beer volume,
achieved higher pricing in all of our markets, and exceeded our cost-reduction
targets, all while successfully executing major strategic initiatives like the
launch of MillerCoors."
    "Our lower fourth quarter financial results reflect the combined
challenges of a much stronger U.S. dollar versus a year ago, significant
commodity inflation, and lower sales volume in our major markets.  Foreign
currency movements alone accounted for more than 55% of the year-over-year
decline in fourth quarter profit, and input cost inflation across all of our
businesses added another $41 million of headwinds to the quarter."
    "In this economic environment, we remain committed to building great beer
brands while diligently reducing our costs," Swinburn added.  "We are
benefiting from strategic initiatives in each of our businesses to improve
long-term performance.  While our Canada team is balancing its brand and
pricing priorities, our U.K. team is ramping up its contract brewing
arrangement and the Magners draught cider business.  At the same time,
MillerCoors is delivering synergies ahead of schedule in the U.S. and taking
important steps to strengthen its top-line."
    "As we enter 2009, we remain focused on the fundamentals that drive our
business regardless of the economic environment: building great beer brands,
increasing revenue per barrel, delivering cost savings, generating free cash,
and growing long-term returns to shareholders."
    
    Fourth Quarter Highlights
    
    Key operating and financial highlights for the Company's fiscal fourth
quarter ended December 28, 2008, compared to the fiscal fourth quarter ended
December 30, 2007, include the following:

    
    * Worldwide beer volume declined 4.2 percent on a pro forma basis.
    * Molson Coors net income decreased 44.1 percent to $96.8 million for the
      fourth quarter.
    * Underlying after-tax income(1) decreased 21.0 percent to $105.1 million,
      or $0.57 per diluted share.
    * Foreign currency movements drove over 55 percent, or $23 million, of the
      $41.0 million decline in fourth quarter underlying pretax income.
    * Excluding the impact of foreign currency, the Company's underlying
      income declined approximately seven percent in the quarter.
    Full Year 2008 Highlights
    
    Key operating and financial highlights for the Company's fiscal year
ended December 28, 2008, compared to the fiscal year ended December 30, 2007,
include the following:

    
    * Worldwide beer volume grew 4.0 percent on a reported basis.
    * Net income decreased 22.0 percent to $388.0 million.
    * Underlying after-tax income(1) increased 1.0 percent to $512.6 million,
      or $2.76 per diluted share.
    * For the full year 2008, foreign currency movements decreased total
      underlying pretax income by approximately $16 million.
    * As of December 28, 2008, cash and cash equivalents totaled $216 million,
      and total owned debt was $1.75 billion, excluding approximately $82
      million of non-owned joint venture debt.
    


    
    (1) The Company calculates non-GAAP underlying income by excluding special
        and other one-time items from the nearest U.S. GAAP earnings measure.
        To calculate underlying income in the fourth quarter of 2008, the
        Company excluded one-time expenses, particularly related to
        MillerCoors and the Foster's cash-settled total-return swap, as well
        as a net special credit of $2.1 million pretax. To calculate
        underlying income for the full year 2008, the Company excluded net
        special items of $133.9 million, as well as one-time expenses related
        to MillerCoors and debt extinguishment costs.  For further details,
        please see the section "Special and Other One-Time Items" below, along
        with tables for reconciliations to the nearest U.S. GAAP measures.
        All $ amounts are in U.S. Dollars.
    
    The Company's effective tax rate for the full year 2008 was 20 percent on
both a reported and an underlying basis.  In the fourth quarter, the Company's
effective tax rate for income from continuing operations was 20 percent on a
reported basis, and 22 percent on an underlying basis.  The Company estimates
that its full-year 2009 effective tax rate will be in the range of 16 percent
to 20 percent on an underlying basis.
    For the full year 2008, Molson Coors achieved $87 million of cost savings
as part of its Resources for Growth (RFG) cost savings program, which exceeded
the Company's 2008 goal by approximately $10 million.  In the first two years
of its three-year, $250 million RFG program, Molson Coors has delivered $178
million of cost savings.  In the fourth quarter alone, the Company delivered
$22 million of RFG cost reductions.
    MillerCoors is well on its way to deliver its stated goal of $500 million
of annual cost synergies by the third year of combined operations.  For the
quarter, MillerCoors delivered $26 million in synergies, for a total of $28
million since combining operations.  The timing to achieve the company's
original goal of $50 million in synergies in the first 12 months of operations
has accelerated, and MillerCoors now expects to realize $128 million of
synergies by June 30, 2009.  By the end of calendar year 2009, MillerCoors
expects to achieve a total of $238 million in synergies surpassing its
original forecast of $225 million.  While the timing of synergy delivery has
accelerated, MillerCoors' goal remains $500 million in three years.
    The Company's total worldwide beer volume was 10.653 million barrels in
the quarter, down 4.2 percent versus the prior year on a pro forma basis.
Fourth quarter volume increased 1.2 percent when compared to reported volume a
year ago, as shown in Table 1 below.  Full year 2008 volume increased 4.0
percent versus a year ago on a reported basis to 43.693 million barrels, as
shown in Table 2 below.



    
    Table 1:  Molson Coors 2008 Fourth Quarter Worldwide Beer Volume
    

    
                      Thirteen Weeks Ended        Thirteen Weeks Ended
    

    
                      December   December     %     December  December    %
                      28, 2008   30, 2007   Change  28, 2008  30, 2007  Change
                       Actual  Pro forma(1)          Actual    Actual
    Volume in U.S.
     barrels (000):
      Financial volume 4,202      4,537     (7.4%)   4,202    10,463   (59.8%)
      Royalty volume      82         63     30.2%       82        63    30.2%
    Owned volume       4,284      4,600     (6.9%)   4,284    10,526   (59.3%)
      Proportionate
       share of equity
       investment sales-
       to-retail (2)   6,369      6,516     (2.3%)   6,369         -   100.0%
    Total worldwide
     beer volume      10,653     11,116     (4.2%)  10,653    10,526     1.2%
    

    
    (1) Reflects the reduction of the U.S. segment volume reported for the 13
        weeks ended December 31, 2007.
    (2) Reflects the addition of Molson Coors Brewing Company's proportionate
        share of MillerCoors and Molson Modelo sales-to-retail for the periods
        presented, adjusted for comparable trading days.
    



    
    Table 2:  Molson Coors 2008 Full Year Worldwide Beer Volume
    

    
                                     Fifty Two Weeks Ended
    

    
                                  December 28,    December 30,
                                      2008            2007        % Change
                                     Actual          Actual
    Volume in U.S. barrels (000):
      Financial volume               29,656          41,796        (29.0%)
      Royalty volume                    256             214         19.6%
    Owned volume                     29,912          42,010        (28.8%)
      Proportionate share of equity
       investment sales-to-
       retail (1)                    13,781               -        100.0%
    Total worldwide beer volume      43,693          42,010          4.0%
    

    
    (1) Reflects the addition of Molson Coors Brewing Company's proportionate
        share of MillerCoors and Molson Modelo sales-to-retail for the periods
        presented, adjusted for comparable trading days.
    



    
    Business Segments
    
    Following are the Company's 2008 fourth quarter results by business
segment:
    
    Canada Business
    
    The Canada business earned underlying pretax income of $99.8 million in
the fourth quarter, a 23.0 percent decrease from the same period last year.
This profit decline was driven by a 19 percent depreciation of the Canadian
dollar, which reduced the Canada segment underlying income by approximately
$18 million.  In local currency, Canada underlying pretax income was five
percent lower than the fourth quarter 2007 due to lower sales volume,
increased competitive discounting in Quebec and continued cost inflation,
partially offset by favorable front-line pricing across Canada.
    On a comparable basis(2), Canada sales-to-retail decreased 0.6 percent in
the fourth quarter versus last year, resulting in a market-share decrease of
less than one-half share point versus a year ago.  Low-single-digit growth of
Molson's strategic brands, led by double-digit growth of Coors Light and
continued strong growth by Carling, Creemore, and our import brands was offset
by lower sales of non-strategic brands.  The Canadian beer industry slowed in
the quarter, with sales growth of approximately 0.5 percent versus a year ago.
This represents a deceleration versus earlier in 2008 and was driven by poor
weather, a softening economy, and an acceleration of Quebec industry volume to
the 3rd quarter ahead of a 4th quarter price increase.
    On a comparable basis, Canada sales volume decreased 2.1 percent during
the fourth quarter to 1.8 million barrels.  Comparable net sales per barrel
increased 3.5 percent in local currency, half driven by favorable net pricing,
led by front-line pricing in Quebec and Ontario, and half driven by favorable
sales mix, including increased sales volume of partner import brands.
    Cost of goods sold per barrel increased 9.2 percent on a comparable basis
in local currency, due to a six percent increase in commodity and packaging
materials, a 1.5 percent increase in fuel and distribution costs, and a 3.5
percent increase due to a sales mix shift toward higher-cost partner import
brands, partially offset by two percentage points of savings from the
Resources for Growth initiatives.  Comparable marketing, general and
administrative expenses increased approximately 1.3 percent in local currency
due to higher pension and other overhead expenses.
    Other income in the fourth quarter increased $4.5 million, driven by
pretax gains from foreign currency hedges.

    
    (2) Except where otherwise indicated, comparable Canada results exclude
        the effect of establishing the Modelo Molson joint venture in 2008, as
        well as the reporting effects of discontinuing the Company's Foster's
        U.S. contract in 2007.  Results for the Modelo Molson joint venture,
        which sells the Modelo brands across Canada, are recorded under the
        equity method of accounting.  Beginning in 2008, Modelo brand results
        are no longer reported on a line-item basis in the Company's Canada
        results, affecting the comparability of results with 2007.  Beginning
        in 2008, Modelo Molson sales volumes are excluded from financial
        volume.  In addition, Molson Coors now includes its 50% ownership
        share of Modelo Molson sales-to-retail in its consolidated worldwide
        beer volume for both the current year and prior year.  Comparable
        results exclude the year-over-year impact for beer sales to
        MillerCoors.  With the completion of the MillerCoors joint venture,
        the financial impact of our brand exports to the U.S. will no longer
        be treated as inter-company sales and eliminated upon consolidation of
        total Molson Coors results.  Sales volume for these U.S. exports will
        be excluded from Canada results and are now be reported by
        MillerCoors.
    


    
    United States Business (MillerCoors)(3)
    
    Molson Coors underlying U.S. segment pretax income decreased 21.2 percent
to $56.2 million in the fourth quarter, as a result of year-over-year timing
differences in sales and marketing spending, along with the impact of changes
in accounting policies.  U.S. segment results include the Company's 42% share
of MillerCoors net income and various adjustments for the equity income
calculation under U.S. GAAP, as shown in Table 8 below.
    
    MillerCoors Operating and Financial Highlights (U.S. GAAP)
    
    Underlying net income, excluding special items, for the quarter increased
16.5 percent to $135 million from the prior year pro forma result, driven
primarily by strong pricing and cost management, which more than offset
increases in commodity costs and a reduction in shipment volume.
    During the period, MillerCoors sales-to-retailers (STRs) declined 2.3
percent, reflecting a weaker quarter for the industry and softness in Miller
Lite and certain above-premium brands.  Five out of six MillerCoors priority
brands increased STRs in the fourth quarter:

    
     o    Coors Light STRs increased 1.0 percent, posting its fourteenth
          consecutive quarter of growth,
     o    MGD 64 STRs continued to deliver strong growth since its national
          launch,
     o    Blue Moon STRs were up double digits,
     o    Keystone Light delivered strong double-digit growth, while Miller
          High Life STRs increased marginally, and
     o    Miller Lite STRs declined 7.5 percent with particularly strong net
          pricing growth for the quarter.
    
    Domestic sales-to-wholesalers (STWs) dropped 4.3 percent, driven largely
by a reduction in distributor inventory levels and lower sales to retail.
Third-party contract brewing volumes declined 6 percent.
    MillerCoors total net sales increased by 3.1 percent to $1.740 billion
versus the prior pro forma quarter.  Excluding contract brewing, domestic net
sales increased 3.4 percent to $1.622 billion.  Pricing remained strong as
domestic net sales per barrel, excluding contract brewing and company-owned
distributor sales, increased 8.0 percent versus the prior year driven by
strong front line pricing, reductions in discounting and favorable mix.
    Cost of Goods Sold (COGS) per barrel increased by 5.2 percent, as cost
savings initiatives were more than offset by increasing commodity costs.
Fourth quarter results were only minimally improved by significant recent
commodity price reductions as materials were largely hedged through calendar
year 2008 and 2009 prior to the reductions.
    Marketing, general and administrative expenses increased by 6.1 percent
to $514 million, driven primarily by integration costs of $10 million and
higher spending on the launch of MGD 64, Coors Light media, increased sales
and tactical spending.

    
    (3) MillerCoors, a U.S. joint venture of Molson Coors Brewing Company and
        SABMiller plc, was launched on July 1, 2008.  MillerCoors is 42
        percent owned by Molson Coors, and is accounted for using the equity
        method.  Molson Coors' interest in MillerCoors' results, along with
        certain adjustments under U.S. GAAP, are reflected in "Equity
        Investment Income in MillerCoors."  Historical period results have not
        been reclassified to conform to this presentation, so year-over-year
        comparisons of consolidated and U.S. segment volume, net sales, cost
        of goods sold, and marketing, general and administrative results are
        less meaningful.  For comparability, the parent companies of
        MillerCoors have provided a full income statement for fourth quarter
        2008, along with pro forma results for the prior year period.  This
        release also includes reconciliation from MillerCoors Net Income to
        Molson Coors Brewing Company Equity Investment Income in MillerCoors
        (see Table 8) and Non-GAAP U.S. Segment Underlying Pretax Income (see
        Table 7).
    


    
    United Kingdom Business
    
    The U.K. business reported underlying pretax income of $30.6 million in
the fourth quarter, a 23.6 percent decrease over the same quarter last year. A
23 percent decline in the value of the British pound versus the U.S. dollar
reduced underlying pretax income by approximately $9 million.  Excluding the
effect of foreign currency, the U.K. underlying pretax income was virtually
unchanged versus last year in local currency.  Strong pricing growth, the ramp
up of our contract brewing arrangement, and reduced marketing spending were
offset by lower volumes, higher input cost inflation, and higher pension and
bad-debt costs.
    U.K. owned-brand volume decreased 9.4 percent during the quarter, while
the beer industry declined 8.3 percent, reflecting a weak economy in the U.K.
The Company grew share in the on-premise channel during the quarter, but
under-performed the market in the off-premise, as it took a tougher stance
with customers on pricing.
    In local currency, comparable U.K. net sales per barrel of owned products
increased 10.4 percent, nearly two-thirds driven by higher net pricing, with
the balance of the increase attributable to a one-time reduction in volume-
related payments to customers, and positive sales mix.
    Comparable cost of goods sold per barrel for owned brands increased 6.8
percent in local currency in the fourth quarter, due primarily to higher
energy and materials cost inflation and higher pension costs, partly offset by
results of cost-reduction initiatives.  Marketing, general and administrative
expense increased 5.2 percent in local currency due to higher bad debt charges
and pension expense, partially offset by decreased marketing expenses in line
with the trading environment.
    
    Global Markets and Corporate
    
    Our Global Markets team continues to take a disciplined approach to
building our brands in international markets.  The Global Markets grew volume
nearly 20 percent driven by the growth of Coors Light in China and Europe.
Marketing, general and administrative expense for Global Markets was $10.3
million in the quarter, virtually unchanged versus a year ago.
    Corporate general and administrative expense was $23.2 million in the
fourth quarter, a decrease of $7.6 million, or 24.8 percent, due to lower
incentive compensation and project spending.
    Net interest expense was $19.6 million in the fourth quarter, a decrease
of $7.6 million compared to a year ago.  Also in the quarter, Corporate other
expense was driven by a one-time mark-to-market expense related to the
Foster's cash-settled total-return swap.  The underlying pretax loss for
Global Markets and Corporate was $50.3 million, a 21.0 percent improvement
versus the fourth quarter of 2007.
    
    Special and Other One-Time Items
    
    During the fourth quarter 2008, the Company reported a net special credit
of $2.1 million pretax, which was composed primarily of a $10.4 million
curtailment gain related to closing a pension plan in the U.K., partially
offset by Edmonton Brewery closure costs of $4.2 million, an asset impairment
charge of $1.7 million, and MillerCoors readiness and deal costs of $1.4
million.
    Corporate other expense in the quarter totaled $20.0 million, primarily
composed of a $17.9 million one-time non-cash mark-to-market cost related to
the cash-settled total-return swap the Company arranged with respect to
Foster's common stock in 2008.
    During the fourth quarter of 2008, MillerCoors reported special or
exceptional items totaling $81 million, which included a Sparks' brand
impairment of $65 million, as well as integration costs.  These integration
costs are part of the investment which will enable MillerCoors to meet its
stated $500 million three-year synergy plan.  The Sparks' brand impairment has
been offset by a one-time adjustment in our equity method accounting and thus
had no effect on Molson Coors results.
    
    Discontinued Operations
    
    The Company reports results associated with its former Brazilian unit,
Cervejarias Kaiser ("Kaiser"), as discontinued operations.  The Company
reported a gain of $6.1 million from discontinued operations during the
quarter primarily due to the impact of favorable foreign exchange movements on
the Kaiser indemnity estimates.
    
    2008 Fourth Quarter Earnings Conference Call
    
    Molson Coors Brewing 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 2008 fourth quarter and full year results.  The Company
will provide a live webcast of the earnings call.
    Approximately two hours after the conclusion of the earnings call, the
Company also will host an online, real-time webcast of an Investor Relations
Follow-up Session with financial analysts at 2:00 p.m. Eastern Time.  Both
webcasts will be accessible via the Company's website,
http://www.molsoncoors.com.  Online replays of the webcasts will be available
until 11:59 p.m. Eastern Time on May 4, 2009.  The company will post this
release and related financial statements today on its web site,
http://www.molsoncoors.com



    
    Reconciliations to Nearest U.S. GAAP Measures
    

    
    Molson Coors Brewing Company
    Table 3: 2008 Fourth Quarter Underlying After-Tax Income
    (After-Tax Income From Continuing Operations, Excluding Special and Other
     One-time Items)
    (Note: Some numbers may not sum due to rounding.)
    

    
    (In millions of $US, except per share data)
                                                    2008 4th Q     2007 4th Q
    U.S. GAAP: After-tax income from continuing
     operations:                                        90.7          176.2
    

    
                               Per diluted share:      $0.49         $ 0.96
    

    
    Add back: Pretax special items - net                (2.1)          23.2
    Add back: Loss on environmental liability
     reserve (1)                                         0.8              -
    Add back: Loss related to the cash-settled total
     return swap (1)                                    17.9              -
    Add back: Proportionate share of MillerCoors
     pretax special items - net (2)                     34.1              -
    Add back: Impact of MillerCoors accounting policy
     elections (2)                                       4.2              -
    Minus: Basis amortization related to the Sparks
     brand impairment (2)                              (27.3)             -
    Minus: MillerCoors variable share-based
     compensation (2)                                   (3.9)             -
    Minus: Other one-time items                         (1.0)             -
    Minus: One-time tax benefits                           -          (60.4)
    Minus: Tax effects related to special and other
     one-time items                                     (8.3)          (6.0)
    Non-GAAP: Underlying after-tax income:             105.1          133.0
    

    
                              Per diluted share:       $0.57          $0.73
    

    
    Notes:
    (1) Included in Other Income (Expense)
    (2) Included in Equity Income in MillerCoors, but excluded from non-GAAP
        underlying pretax income.
    



    
    Molson Coors Brewing Company
    Table 4: 2008 Fourth Quarter Underlying Pretax Income
    (Pretax Income From Continuing Operations, Excluding Special and Other
     One-time Items)
    (Note: Some numbers may not sum due to rounding.)
    

    
    (In millions of $US)              Business                        Total
    

    
                                                         Global
                                                        Markets &
                      Canada       U.S.        U.K.     Corporate Consolidated
    U.S. GAAP: 2008
     4th Q pretax
     income (loss)
     from continuing
     operations -
     reported         $93.7       $49.1        $40.6      $(69.7)    $113.7
    Add back: Pretax
     special
     items - net        6.1           -         (9.9)        1.7       (2.1)
    Add back: Loss on
     environmental
     liability
     reserve (1)          -           -            -         0.8        0.8
    Add back: Gain
     related to the
     cash-settled
     total return
     swap (1)             -           -            -        17.9       17.9
    Add back:
     Proportionate
     share of
     MillerCoors
     pretax special
     items - net (2)      -        34.1            -           -       34.1
    Add back: Impact
     of MillerCoors
     accounting policy
     elections (2)        -         4.2            -           -        4.2
    Minus: Basis
     amortization
     related to the
     Sparks brand
     impairment (2)       -       (27.3)           -           -      (27.3)
    Minus: MillerCoors
     variable share-
     based
     compensation (2)     -        (3.9)           -           -       (3.9)
    Minus: Other
     one-time items       -           -            -        (1.0)      (1.0)
    Non-GAAP: 2008
     4th Q underlying
     pretax income
     (loss)           $99.8       $56.2        $30.6      $(50.3)    $136.3
    Percent change
     2008 4th Q vs.
     2007 4th Q
     underlying
     pretax income
     (loss)           -23.0%      -21.2%       -23.6%      -21.0%     -23.1%
    

    
    U.S. GAAP: 2007
     4th Q pretax
     income (loss)
     from continuing
     operations      $125.9       $64.6        $38.6      $(75.1)    $154.0
    Add back:
     Pretax special
     items - net        3.7         6.7          1.4        11.4       23.2
    Non-GAAP: 2007
     4th Q underlying
     pretax income
     (loss)          $129.6       $71.3        $40.0      $(63.7)    $177.3
    

    
    Notes:
    (1) Included in Other Income (Expense)
    (2) Included in Equity Income in MillerCoors, but excluded from non-GAAP
        underlying pretax income.
    



    
    Molson Coors Brewing Company
    Table 5: 2008 Full Year Underlying After-Tax Income
    (After-Tax Income From Continuing Operations, Excluding Special and Other
     One-time Items)
    (Note: Some numbers may not sum due to rounding.)
    

    
     (In millions of $US, except per share data)      FY 2008        FY 2007
    U.S. GAAP: After-tax income from continuing
     operations:                                       400.1          514.9
    

    
                                 Per diluted share:    $2.16         $ 2.84
    

    
    Add back: Pretax special items - net               133.9          112.2
    Add back: Loss on environmental liability
     reserve (1)                                         4.4              -
    Add back: Net debt extinguishment costs             12.4              -
    Add back: Loss related to the cash-settled total
     return swap (1)                                     4.3              -
    Add back: Proportionate share of MillerCoors
     pretax special items - net (2)                     43.6              -
    Add back: Other one-time items                         -            7.8
    Minus: Basis amortization related to the Sparks
     brand impairment (2)                              (27.3)             -
    Minus: Impact of MillerCoors accounting policy
     elections (2)                                     (27.7)             -
    Minus: Other one-time items                         (1.0)             -
    Minus: One-time tax benefits                           -          (84.9)
    Minus: Tax effects related to special and other
     one-time items                                    (30.2)         (42.6)
    Non-GAAP: Underlying after-tax income:             512.6          507.4
    

    
                                 Per diluted share:    $2.76          $2.80
    

    
    Notes:
    (1) Included in Other Income (Expense)
    (2) Included in Equity Income in MillerCoors, but excluded from non-GAAP
        underlying pretax income.
    



    
    Molson Coors Brewing Company
    Table 6: 2008 Full Year Underlying Pretax Income
    (Pretax Income From Continuing Operations, Excluding Special and Other
     One-time Items)
    (Note: Some numbers may not sum due to rounding.)
    

    
    (In millions of $US)               Business                      Total
    

    
                                                         Global
                                                        Markets &
                      Canada       U.S.         U.K.    Corporate Consolidated
    U.S. GAAP: FY
     2008 pretax
     income (loss)
     from continuing
     operations -
     reported         $458.4      $265.0        $85.4     $(293.6)   $515.2
    Add back: Pretax
     special items -
     net                10.9        69.3         (4.5)       58.2     133.9
    Add back: Loss
     on environmental
     liability
     reserve (1)           -           -            -         4.4       4.4
    Add back: Net
     debt
     extinguishment
     costs                 -           -            -        12.4      12.4
    Add back: Loss
     related to the
     cash-settled
     total return
     swap (1)              -           -            -         4.3       4.3
    Add back:
     Proportionate
     share of
     MillerCoors
     pretax special
     items - net (2)       -        43.6            -           -      43.6
    Minus: Basis
     amortization
     related to the
     Sparks brand
     impairment (2)        -       (27.3)           -           -     (27.3)
    Minus: Impact of
     MillerCoors
     accounting
     policy
     elections (2)         -       (27.7)           -           -     (27.7)
    Minus: Other
     one-time items        -           -            -        (1.0)     (1.0)
    Non-GAAP: FY
     2008 underlying
     pretax income
     (loss)           $469.3      $322.9        $80.9     $(215.3)   $657.8
    Percent change
     FY 2008 vs.
     FY 2007
     underlying
     pretax income
     (loss)             -3.3%        9.1%       -21.9%       -6.6%      0.5%
    

    
    U.S. GAAP:
     FY 2007
     pretax income
     (loss) from
     continuing
     operations       $427.3      $286.4        $89.5     $(268.8)   $534.4
    Add back:
     Pretax
     special
     items - net        75.2         9.5         14.1        13.4     112.2
    Add back:
     Debt
     extinguishment
     costs                 -           -            -        24.5      24.5
    Minus: Gain on
     sale of House
     of Blues equity
     investment        (16.7)          -            -                 (16.7)
    Non-GAAP: FY
     2007 underlying
     pretax income
     (loss)           $485.8      $295.9       $103.6     $(230.9)   $654.4
    

    
    Notes:
    (1) Included in Other Income (Expense)
    (2) Included in Equity Income in MillerCoors, but excluded from non-GAAP
        underlying pretax income.
    



    
    MillerCoors LLC
    Table 7: 2008 Fourth Quarter Underlying Net Income
    (Net Income, Excluding Special Items)
    

    
    (In millions of $US)      Three Months Ended        Six Months Ended
                          December 31, December 31,  December 31, December 31,
                              2008         2007          2008        2007
                                         Adjusted                  Adjusted
                                        Pro Forma(1)              Pro Forma(1)
    

    
    U.S. GAAP - Net Income:  $54.1        $90.7         $222.4      $238.7
    Add back: Special items,
     net                      81.2         25.4          103.8        28.2
    Non-GAAP - Underlying
     Net Income:            $135.3       $116.1         $326.2      $266.9
    

    
    (1) The adjusted pro forma net income excludes the benefit of a $26.3
        million and $43.1 million settlement received from Ball Corporation
        which related to the three months ended and six months ended December
        31, 2007, respectively.
    
    Pretax and After-Tax Underlying Income should be viewed as a supplement
to -- not a substitute for -- our results of operations presented on the basis
of accounting principles generally accepted in the United States.  We believe
that Underlying Income performance is used by and is useful to investors and
other users of our financial statements in evaluating our operating
performance because it provides them with an additional tool to evaluate our
performance without regard to items such as special items, which can vary
substantially from company to company depending upon accounting methods and
book value of assets and capital structure.  Our management uses Underlying
Income as a measure of operating performance 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; and in communications with the board of
directors, stockholders, analysts and investors concerning our financial
performance.



    
    Molson Coors Brewing Company
    Table 8: Reconciliation of MillerCoors Net Income to MCBC's Equity Income
     in MillerCoors and Reconciliation to U.S. Segment Underlying Pretax
     Income
    (Note: Some numbers may not sum due to rounding.)
    

    
                                                     Thirteen     Twenty-Six
                                                    Weeks Ended   Weeks Ended
                                                    December 28,  December 28,
    (In millions of $ US)                               2008          2008
    

    
    MillerCoors Net Income                             $54.1         $222.4
      Multiply: MCBC economic interest % in
       MillerCoors                                        42%            42%
      MCBC Proportionate $ Share of MillerCoors Net
       Income                                          $22.7          $93.4
      Add/(Minus): Accounting policy elections (1)      (4.2)          27.7
      Add/(Minus): Amortization of the difference
       between MCBC contributed cost basis and the
       underlying equity in net assets of
       MillerCoors (2)                                  30.7           36.7
      Add/(Minus): Share-based compensation
       adjustment (3)                                   (0.1)          (2.2)
    Equity Income in MillerCoors (Reported)            $49.1         $155.6
      Add/(Minus): Proportionate share of MillerCoors
       special items (4)                                34.1           43.6
      Add/(Minus): Portion of basis amortization
       associated with Sparks brand impairment (2)     (27.3)         (27.3)
      Add/(Minus): MillerCoors variable share-based
       compensation (5)                                 (3.9)             -
      Add/(Minus): Accounting policy elections (1)       4.2          (27.7)
    U.S. Segment Underlying Pretax Income (Non-GAAP)   $56.2         $144.3
    

    
    (1) MillerCoors made its initial accounting policy elections upon
        formation, impacting certain asset and liability balances. These
        adjustments reflect the impact to our investment in MillerCoors, which
        is based upon our contributed assets and liabilities.
    (2) MCBC's net investment in MillerCoors is based on the carrying values
        of the net assets it contributed to the joint venture. MCBC's
        investment basis in MillerCoors is less than our underlying equity
        (42%) in the total net assets of MillerCoors (contributed by both
        Coors and Miller) by approximately $652.0 million. This amount is
        being amortized over a period of time represented primarily by the
        remaining useful lives of long-lived assets giving rise to the
        difference. For non-depreciable assets, such as goodwill, no
        adjustment will be recorded to the MillerCoors equity method income
        unless there is an impairment. The amortization amounts include $27.3
        million in both the thirteen week and twenty-six week periods
        associated specifically with MillerCoors $65.1 million impairment of
        the Sparks brand during the fourth quarter of 2008. Since our portion
        of the Sparks brand impairment is an adjustment to arrive at the non-
        GAAP measure above (footnote 4), the offsetting basis amortization
        adjustment is included in the non-GAAP reconciliation as well.
    (3) The net adjustment is to record all stock-based compensation
        associated with preexisting equity awards to be settled in MCBC Class
        B common stock held by former CBC employees now employed by
        MillerCoors and eliminate all stock-based compensation impacts related
        to preexisting SABMiller equity awards held by Miller employees now
        employed by MillerCoors. The adjustment is to recognize the additional
        58% of the stock-based compensation costs associated with those awards
        recognized and reported by MCBC's U.S. business and eliminate all of
        the costs associated with equity awards to be settled in SABMiller
        equity.
    (4) MillerCoors Q4 2008 Special Items of $81.2 million, multiplied by
        MCBC's proportionate share of MillerCoors at 42%, equals
        $34.1 million.
    (5) Included in Equity Income in MillerCoors. This adjustment represents
        the fair value mark to market component of MCBC share-based
        compensation held by employees of MillerCoors.
    Forward-Looking Statements
    
    This press release includes "forward-looking statements" within the
meaning of the federal securities laws, and language indicating trends, such
as "trend improvements," "progress," "anticipated," "expected," "improving
sales trends" and "on track." It also includes financial information, of
which, as of the date of this press release, the Company's independent
auditors have not completed their review.  Although the Company believes that
the assumptions upon which the financial information and 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 projections and
expectations are disclosed in the Company's filings with the Securities and
Exchange Commission. These factors include, among others, changes in consumer
preferences and product trends; price discounting by major competitors;
failure to realize the anticipated cost savings and other benefits from
MillerCoors; failure to realize anticipated results from synergy initiatives;
and increases in costs generally.  All forward-looking statements in this
press release are expressly qualified by such cautionary statements and by
reference to the underlying assumptions. We do not undertake to update
forward-looking statements, whether as a result of new information, future
events or otherwise.




For further information:

For further information: News Media, Paul de la Plante, +1-514-843-2332,
or Investor Relations, Dave Dunnewald, +1-303-279-6565, or Leah Ramsey,
+1-303-277-7205, all of Molson Coors Brewing Company Web Site:
http://www.molsoncoors.com

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