Good day, ladies and gentlemen, and welcome to the Molson Coors Brewing Company 2010 First Quarter Earnings Conference Call. [Operator Instructions] I would now like to introduce your host for today's conference call, Mr. Dave Dunnewald, Vice President of Investor Relations. You may begin, sir.

Thanks, Kevin. Before we get started, I want to paraphrase the company's Safe Harbor language. Some of the discussions today may include forward-looking statements. Actual results could differ materially from what the company projects today, so please refer to its most recent 10-K and 10-Q filings for a more complete description of factors that could affect these projections. The company does not undertake to publicly update forward-looking statements whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Regarding any non-U.S. GAAP measures that may be discussed during the call and from time to time by our executives in discussing the company's performance, please visit the company's website at www.molsoncoors.com, and click on the financial reporting tab of the Investor Relations Page for a reconciliation of these measures to the nearest U.S. GAAP results. And with that, I'd like to now turn it over to Peter Swinburn, President and CEO of Molson Coors. Peter?

Thanks, Dave. Hello, and welcome, everybody. And thanks for joining us today. With me on the call is Stewart Glendinning, Molson Coors, CFO; Leo Kiely, CEO of MillerCoors; Gavin Hattersley, CFO of MillerCoors; Dave Perkins, CEO of Molson Coors Canada; Mark Hunter, CEO of Molson Coors U.K.; Kandy Anand, President of Molson Coors International; Sam Walker, Molson Coors Chief Legal Officer; Bill Waters, Molson Coors Controller; and Dave Dunnewald, Molson Coors Vice President of Investor Relations. On the earnings call today, Stewart and I will share highlights of our first quarter 2010 results for Molson Coors Brewing Company, along with some perspectives on the balance of 2010. And then as usual, we will open it for questions. So let's get started. In the early part of 2010, we continue to face challenging economic and beer industry conditions primarily as the result of high unemployment and the slow recovery in consumer confidence. These conditions negatively affected our company's volume and financial performance with Molson Coors worldwide volume declining 3.8% and underlying pretax income down 19% versus a year ago. Adding the impact of a much higher tax rate this year, underlying after-tax income decreased 29.5% in the first quarter. More importantly from our perspective, we are seeing signs of progress in key areas of our business as a result of our continued investment and focus on brands and innovation. In Canada, as we indicated on our last earnings call, challenging pricing and cost comparisons resulted in lower earnings in the first quarter versus a year ago. But our strong volume and market share performances demonstrated the benefit of the brand innovations we rolled out late last year and early this year. Based on the current environment, the strength of our Canada portfolio will drive improving results over the balance of the…

Thanks, Peter, and hello, everyone. I'll start with the first quarter financial highlights. Worldwide beer volume for Molson Coors declined 3.8% from a year ago, driven by industry weakness in the U.S. and U.K., as well as our pricing strategy in the U.K. On the bottom line underlying after tax income of $69.7 million or $0.37 per diluted share, decreased 29.5% from a year ago due to lower volume, higher marketing, general and administrative expense and a higher effective tax rate this year. It is important to note that our first quarter underlying earnings excludes some non-core gains, losses and expenses primarily related to a sale of real estate, changes in the value of our fastest cash-settled total-return swap in MillerCoors integration costs, as well as net special charges of $2.6 million. The adjustments to our U.S. GAAP results are described in detail in the earnings release we distributed this morning. Also, unless otherwise indicated, all financial results we share with you today will be in U.S. dollars. And results comparisons will be versus the comparable prior-year period. In segment performance highlights starting with Canada. Underlying pretax income and local currency decreased 14% in the first quarter. Strong volume in operations, cost reductions in the quarter were more than offset by cycling lower levels of price discounting a year ago, along with higher commercial and overhead costs this year. Our prior-year results included overhead cost reductions, favorable impacts from consolidating the beer stores in Ontario and equity income from our interest in the Montréal Canadiens hockey club. These prior-year impacts which did not reoccur this year accounted for more than 70% of the decline in first quarter Canada local currency income. In U.S. dollars, Canada underlying earnings decreased 3.3% to $56.2 million in the first quarter, which reflects the $9…

Thank you, Stewart. In 2010 we continue to focus on brand-building, innovation, reducing costs across our company and generating cash. In Canada, we've introduced new brands and innovation to strengthen our portfolio. The early results are encouraging. As indicated by our positive Canada share trends in the last two quarters. This brand-led focus will continue with the upcoming expansion of Miller Chill across Canada early this summer. By summer, we also expect to have cycled nearly all of the step-up in price discounting activity last year. At the same time, the Canadian dollar is strong. The economy has started to show encouraging signs of improvement and based on the strength of our brands, we are achieving moderate, selective price increases in most regions of Canada. In the U.K., the business has continued to make substantial progress in improving profitability. We are succeeding with our strategy of value ahead of volume, which continues to strengthen our overall position within the U.K. market. Although the U.K. business lost market share in the first quarter, we are confident that our share trends will improve in the balance of the year. We are taking a number of actions in key areas of the business to drive momentum. In the off premise, trading deals have been signed with all major retail chains. In the on premise, nearly all major customer contracts have also been renegotiated with annual price increases on an average three-year contract life. We are growing portfolio strength in a number of areas, including Cobra performing ahead of acquisition objectives and Coors Light growing at strong double-digit rate in the off-premise, and increasing share in Ireland. In the U.S., we successfully grew profit despite a challenging selling environment in the first quarter. As we enter the key summer selling season, we're investing in…

[Operator Instructions] Our first question comes from Christine Farkas with Bank of America Merrill Lynch.

I had a question on Canada, a couple of questions on Canada, if I could. First thing on pricing, down 2.7%. It seems to me and please correct me if I'm wrong that sales mix might have been favorable. And I think there was a step up in Quebec minimum pricing in core [Audio Gap] Take us through the net of the pricing and the mix and perhaps regionally, where you might have seen some more discounting?

Yes, Christine, it's Dave Perkins. So on the 2.7, about 2/3 of that is due to the cycling, our less competitive position last year. What we've seen this year is reasonable stability in the pricing environment. I think Quebec has been quite stable. We haven't seen much change in recent quarters. What we have seen obviously as we've moved through successive quarters is a drop off of the benefit that we get from general price increases that went into effect over a year ago. So that actually is the reason that we've seen this drop off in NSR per hectoliter. There really hasn't been the kind of mix issues -- the one thing I would point out is in the last few weeks and months, and in particular, during February and March, we were able to put in place moderate price increases on selective brands and packages in nine of our 10 provinces. So there has been price increases going into effect.

And if I can follow up on cost of goods, in Canada, it's sharply different than in the U.S. where you're enjoying lower cost of goods, where in the U.S. it's higher. So I'm trying to understand the picture on the commodities front, perhaps offset by the fixed cost leverage. Maybe you compare why we're seeing such a difference in that management?

Stewart here. Maybe I could pick that up. I think the first thing is to bear in mind that each of these geographies got a fairly different mix just in terms of costs. So your U.S., for example, has about 50% of its -- roughly half of its costs are in packaging materials. Whereas in Canada, it's less than 1/3. So right there is a big difference in terms of why you're not seeing that packaging cost coming through in Canada quite as strongly. The other thing to bear in mind in Canada is that over the last year you've seen a strengthening of the U.S. dollar by approximately 20%. And that will have influence some areas they otherwise would have seen cost increases in, particularly metals and fuel.

Our next question comes from Mark Swartzberg with Stifel, Nicolaus. Mark Swartzberg - Stifel, Nicolaus & Co., Inc.: A couple questions on Canada, starting either with you, Stewart or you, Dave. On the MG&A, if we assume kind of a flat volume picture in Canada for the rest of the year, is a 4% kind of increase in MG&A the right way to be thinking about it or a reasonable way to be thinking about it, local currency?

Well, Mark, I can't give guidance on that. Let me just review a couple of facts that will be helpful. Of the 12.7% increase in MG&A in our first quarter, 1/3 of that was increased commercial spend. The balance is related to Granville and some prior-year benefits, such as BRI deconsolidation and some other overhead savings. So I just point that out and then the other thing I just remind you is last year in 2009, you'll remember in the first half of the year, our MG&A was flat over the prior year. Q3, we increased 4% and Q4, we increased 14%. So there's obviously implications to cycling that. So hopefully, that's somewhat helpful to you. Mark Swartzberg - Stifel, Nicolaus & Co., Inc.: Dave, also on Keystone, trying to get my arms around how significant this could be in Canada. Can you -- first -- I guess a couple of questions, number one, how is it priced versus Coors Light and Molson Canadian? And then secondly, how is it going? And thirdly, I think it's only, you said only in Western Ontario, what's your intention or what's the potential for it to be in other provinces as we move through the year?

Well, Keystone is actually in Ontario and Western Canada, so it's in a total of five provinces. They'd account for around 2/3 of the country. So it's in significant geography. The value -- it's priced in the value segment, so it is up against other value brands in the marketplace. And the value category in those markets that I've talked about would be in and around 20% of the market. Now the significance of the brand over time, we'll see. I mean, we're in very early days. We're driving distribution and awareness and trial right now. I'm pleased with what I'm seeing in the early days. But as I say, we've only been in a few weeks really. We're at the distribution levels that we want now, we have TV advertising supporting the brand. And so we're starting to build the awareness in trial that we need. But, it's very difficult to give you a clear sense of the upside potential on this at this point. Mark Swartzberg - Stifel, Nicolaus & Co., Inc.: And than lastly Dave, why not keep talking about Canada here. Limelight obviously had a great summer last year. Can you just give us a sense how they're performing here in the early spring? And in your mind, what are the parts of your portfolio that are most directly going against them?

So the lime products last summer did very well during their first two months. They actually tailed off quite significantly post-Labor Day, post the September long weekend. And we've seen some discounting. I think because of inventory builds on some of the competitive products. So far, what we've seen this spring is not a major pop-up. But I mean the limes are still significant. We've come in with Miller Chill, which is our product in that segment. Again, we're in early days with that as we are with Keystone, we're building trial and awareness. It is going in across the country so it'll be a full national launch. And it will be supported in a meaningful way. So we feel good about our level of competitiveness. So far, we haven't seen the big bump up in the segment yet. But I think we're watching for the May long weekend which is when the warmer weather kicks in and usually you'll see products like this start to take hold.

Our next question comes from Marc Greenberg with Deutsche Bank.

Peter, during the call, some of the press reporting that MillerCoors has bowed out of the NFL sponsorship, for Coors Light. Particularly curious here, as over the years you all have talked about how important that's been to Coors Light and its growth. So two parts really. First, with regards to the brand, how are you going to make up for losing such a big sponsor? And secondly, what kind of a cost impact might that have with regards to the U.S. business?

I'm going to pass that on to Leo and Tom because I know that they've got all the answers to those. So Leo, do you want to pick that up?

Yes, Marc. It is no secret that the trademark negotiations for the NFL marks was up for renegotiation starting with the 2011, 2012 season. So that's -- that's a year away. Until midnight last night, we had a -- what we felt was a full value offer on the table that expired at midnight. That story broke on us this morning. This was a long-term decision based on our sense that the NFL marks were fully valued. And we look at each of those situations one up and one at a time. The two important points to remember. First -- first of all, we have a full season ahead of us, where we're fully committed to in 2010 and 2011, activating behind those marks on Coors Light before there's any change. Secondly, as you probably know, we have several -- in fact, Tom may even have the number, of very successful programs and activations with teams in our key markets, and those -- those have in some cases multiple years left on those activations. So we're comfortable with this. I don't think it's going to cost us anything. I think the question is how do we get smarter about how we spend those dollars and activate them behind the portfolio. So that's our point of view.

Leo, I guess when I was talking about cost, I was really alluding to what kind of dollars may come back into the marketing portfolio as a consequence of not spending behind the NFL.

Yes. I don't think we've been public about what our baseline was on that. And we don't know, by the way, where the NFL's finally going to come out on this. So, I mean, I have to be very careful and respectful about that, but it gives us a significant amount of money to reallocate. And our judgment is we can reallocated it long-term more effectively, activating our innovation and a full mix of properties. In fact, I think it's an opportunity that's different for us as a new company than it was as Coors. So, hey, look. NFL's a great property. We're not running away from the NFL. We have tremendous advertising commitments there and we'll continue to. This is really how you activate trademarks and brands and these are decisions you have to make. I feel really confident about it.

Our next question comes from Carlos LaBoy with Credit Suisse. Carlos LaBoy - Crédit Suisse First Boston, Inc.: Can you, Peter, can you give us some more insight on this announcement you made on this China investment; why start in this province with this brewer, maybe how much you paid for it per hectoliter? But more importantly, how do you look at capital requirements for China going forward? Is there going to be a major deployment of cash behind China and is this -- this is just the start of it?

I'll let Kandy talk about the detail, Carlos, but to the general point, the answer's absolutely, no. If you remember in New York, we -- I think we tried to make it quite clear that our approach to our investment into developing markets in particular is that we don't want to send capital ahead of our brand development. So we go in, we develop the brand. We've been doing that in China in a pretty disciplined way for seven to eight years now. The brand has built up to -- it's in 42 different cities. It's national. It's got a critical mass. And so the actual equation for us is that we've got brand health scores, we've got brand momentum. And therefore, it makes it sensible for us to actually put fairly limited investment into a brewing capacity, which will give us both security of supply -- a quality of supply. But also we can justify it because we already have that critical of volume to date. So that really is the approach we take. We don't see ourselves putting more capital into China on top of this, we've got no plans for that at the moment. But obviously, as hopefully as the brand develops, we might review that, but that's a long, long way off. Kandy, any additions on that?

Just to build on what Peter said, as you know since 2003, our business in China has been growing at about 30% per annum. So we thought this is the right time for us to take the next step in China. This joint venture, what specifically it does is allows us to further expand our distribution channels, gives us greater control on our brewing, increases our cost efficiency in China as well as more flexibility on packaging and brand innovation, that allows us to grow our share in the market. The Si'hai group is an attractive partner for us because of its strength in the Hebei province, which is north of Beijing. And its proven ability to build a cost effective and portfolio -- and profitable business in a fairly intensely competitive environment. So that's the strategic rationale and Peter explained to you our overall strategy around investments over there.

[Operator Instructions] Our next question comes from a follow up from Christine Farkas from Bank of America.

I just wanted to follow up, Peter, on the Brazilian liability, now just to understand that is completely put to bed, that there'll be no more cash payments or negotiations on this topic?

Well, certainly on this specific topic, Christine. No, that is put to bed. There are some other, as Stewart outlined, we do have some other issues on our balance sheet that are pretty minimal and we're much more confident of a successful outcome on them. But Stewart can give you the details.

Yes. To Peter's point, this was a more volatile enough part of the liability. I did highlight during the call that we've got less than $25 million on the balance sheet for remaining issues in Brazil. And that we feel that, that's a fair representation of the liability there.

Finally on your Fosters stake, I realize there's mark-to-market impacts every quarter. But could you tell us if your strategic thinking has changed there? Or if that value or if that investment is actually now smaller than it was before?

No, Christine. It's not moved. The investment hasn't moved and our position really hasn't moved either. I don't think I can add much more to that which we've already said.

And there are no further questions at this time. I'd like to turn it back over to you, Peter, for closing comments.

Thanks, very much Kevin. And thank you everybody for your questions and for the interest in the business. And we look forward to speaking to you again in the end of the next quarter's results. Thanks a lot. Bye now.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect.