Molson Coors Reports Second Quarter 2008 Financial Results

Market Wire, August, 2008

Molson Coors Brewing Company (TSX: TAP.A)(TSX: TAP.B)(NYSE: TAP) today reported higher sales volume and net sales and lower earnings per share for the fiscal second quarter ending June 29, 2008.

Second Quarter Highlights

Key results for the Company's fiscal second quarter ended June 29, 2008, compared to the fiscal second quarter ended July 1, 2007, include the following:

- A major achievement during the quarter was the formation of MillerCoors, creating a single, stronger, more competitive American brewer with a powerful portfolio of brands and economies of scale to win in the U.S. beer market.

- Net sales increased 4.8 percent to $1.76 billion.

- Net sales per barrel increased 3.9 percent.

- Sales volume increased 0.9 percent to 11.6 million barrels, or 13.6 million hectoliters (HLs).

- Total Company sales-to-retail (STRs) rose 2.3 percent.

- Cost of goods sold per barrel increased 5.9 percent.

- Marketing, general and administrative expenses rose 1.4 percent.

- Income from continuing operations, a U.S. GAAP earnings measure, was $93.3 million after tax, compared to $184.3 million in the second quarter of 2007. The change is attributable to higher special charges, increased energy and commodity inflation in all markets, and a higher effective tax rate for the quarter.

- Underlying after-tax income was $172.6 million, or $0.93 per diluted share, in the second quarter 2008, a 2.0 percent decline from $176.1 million, or $0.97 per diluted share, last year. 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 second quarter of 2008, the company excluded net special charges of $103.9 million pretax. The charges were driven by a non-cash write-down of the book value of the Molson brands sold in the U.S.; MillerCoors retention, planning and integration expenses; and transition costs related to the outsourcing of shared services.

All $ amounts are in U.S. Dollars. See "Special and Other One-Time Items" and "Discontinued Operations" as well as tables below for reconciliations to nearest U.S. GAAP measures.

MOLSON COORS BREWING COMPANY

Peter Swinburn, Molson Coors president and chief executive officer, said, "This was a momentous quarter for the future of our company. With the creation of MillerCoors, we completed the most significant business combination in the history of U.S. beer. This new venture fundamentally changes the game in the U.S. beer industry by creating a stronger and more competitive company with the talent, brands and scale to win. MillerCoors is bringing new energy to the beer industry and will drive profitable growth, which provides Molson Coors Brewing Company with important new financial resources to continue building our brands in our core markets and around the world."

Swinburn added, "Our financial performance in the second quarter benefited from another exceptional quarter by our U.S. business, with gains in sales volume, pricing and underlying income. We are excited about this strong momentum as we launch MillerCoors. Across our company, our top brands continue to outperform the industry in the second quarter, and we achieved net pricing gains and substantial cost savings in each of our core markets. At the same time, however, energy and commodity inflation has become a bigger challenge for our company and for the global beer industry. This cost inflation, combined with our higher tax rate, drove lower after-tax income for our total company in the quarter. In the face of challenging economic conditions, we continue to implement value-adding strategies that will allow us to build our brands, achieve positive pricing, reduce costs, and grow profits and cash for our shareholders. The fundamentals of our business remain strong, and we are more excited than ever about the future for Molson Coors Brewing Company, as we strive to become a top-performing global brewer."

During the quarter, Molson Coors achieved approximately $18 million in cost reductions as part of its three-year, Resources for Growth program. At the half-way mark for the program, the Company has achieved $138 million of the total $250 million in cost savings expected by the end of 2009.

Foreign exchange rate movements increased total-company pretax income by approximately $6 million in the quarter.

The Company's effective tax rate during the second quarter 2008 for income from continuing operations was 23 percent, both including special items and on an underlying basis, up from 13 percent and 20 percent, respectively, during the second quarter a year ago. The Company now estimates that its full-year 2008 effective tax rate will be in the range of 20 percent to 24 percent on an underlying basis.

Business Segments

Following are the Company's 2008 second quarter results by business segment:

Canada Business

The Canada business earned underlying pretax income of $154.4 million. The 5.6 percent increase compared to a year ago was driven by an $11 million benefit from favorable foreign currency and positive net pricing, partially offset by higher energy and commodity costs.