Good morning, welcome to the Molson Coors Brewing Company First Quarter 2014 Earnings Conference Call. Before we begin, I will paraphrase the company's Safe Harbor language. Some of the discussion today may include forward-looking statements. Actual results could differ materially from what the company projects today, so please refer to its most recent 10K 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 day they are made. Regarding any non-U.S. GAAP measures that may be discussed during the call and from time-to-time by the company's executives in discussing the company's performance, please visit the company's website, 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. Also, unless otherwise indicated, all financial results the company discusses are versus the comparable prior-year period and in U.S. dollars. Now I would like to turn the call over to Peter Swinburn, President and CEO of Molson Coors.

Thank you, Jerry. Hello, and welcome everybody to the Molson Coors earnings call, and thank you for joining us today. With me on the call this morning are Gavin Hattersley, Molson Coors' CFO; Tom Long, CEO of MillerCoors; Stewart Glendinning, CEO of Molson Coors Canada; Mark Hunter, CEO of Molson Coors Europe; Kandy Anand, CEO of Molson Coors International; Sam Walker, Molson Coors' Chief Legal and People Officer; Brian Tabolt, Molson Coors' Controller; and Dave Dunnewald Molson Coors' VP of Investor Relations. On the call today, Gavin and I will take you through highlights of our first quarter 2014 results for Molson Coors Brewing Company, along with some perspective on the balance of 2014. In the first quarter, Molson Coors more than doubled underlying after-tax income, grew underlying EBITDA more than 20% and expanded gross operating and after-tax margins. Underlying earnings per share also more than doubled. U.S. GAAP after-tax earnings increased more than $135 million versus a year ago. The improvement across our company was consistent with each of our businesses achieving improved operating margins, pretax earnings and EBITDA performance in the quarter. Our strong focus on our core brands, our portfolio shift to above-premium and value creating innovation is paying dividends. This strategy is underpinned by our Profit After Capital Charge, or PACC model, which aligns our entire team and each of our cash-use decisions with our priorities. In the first quarter, Coors Light grew more than 30% in the United Kingdom, and it more than doubled in Mexico and Latin America. Coors Light underperformed in the U.S. and in Canada and we have plans to reverse this trend as we approach the summer selling season, which I will share with you in a few minutes. Carling continued strong momentum from last year, with both volume and market…

Thank you, Peter, and hello, everybody. Molson Coors' first quarter underlying after-tax earnings increased 115.2% to $102.2 million, or $0.55 per share, driven by improved financial results in all of our businesses, along with less interest expense. This strong profit performance also increased margins versus a year ago. Our first quarter underlying tax rate of 5% was lower than prior year due to the release of valuation allowances in Europe and favorable resolution of uncertain tax positions. Worldwide beer volume for Molson Coors decreased 0.1% due to lower volume in United States and Canada, offset by higher volume in Europe and international. In the first quarter, our U.S. GAAP after-tax income from continuing operations increased $135.9 million to $165.3 million due to strong business performance and $63.1 million of special and other noncore net gains in the quarter, which compared to $21.9 million of special and other noncore net charges a year earlier. Special and other noncore items this year are excluded from our underlying results, and primarily related to income recognized upon the early termination of our joint venture that managed the Modelo brands in Canada, along with a favorable resolution of indirect tax reserves in Europe. These gains are partially offset by an intangible asset write-off associated with the Modelo JV termination in Canada, along with restructuring-related costs in Canada and Europe. Special and other noncore items are described in detail in this morning's earnings release. Overall, when considering our first quarter results, it's important to note this is a seasonally small profit quarter for our business. So relatively small changes in absolute income results can drive large percentage changes. As we have in previous quarters, I will provide an overview by results of MillerCoors presented as if it were proportionally consolidated. This is a non-GAAP approach but…

Thanks, Gavin. So overall, our strategy of building our core and above-premium brands, and driving sales with our innovation pipeline is working. In the U.S., we will continue transitioning our portfolio towards the high-margin and fast-growing above-premium segment. The rollouts of Miller Fortune lager and Smith & Forge Cider are progressing and Redd's Apple Ale continues to be one of the fastest-growing brands in the U.S. beer category. Premium Lights continue to underperform the overall market, and we are addressing this in the coming months with new advertising, fresh packaging and our Coors Light line extension, Coors Light Summer Brew. We are also putting more TV support behind our key value brands, Miller High Life and Keystone Light. We expect to see a reversal of the marketing timing benefit that contributed to the first quarter of MillerCoors' underlying income growth. Our volume and profit performance in Canada in the first quarter was impacted by the February 28 termination of our arrangement for the Modelo brands. The negative impact on underlying income of losing the Modelo brands was more than offset by the results of multi-year initiatives started last year to transform and streamline our cost base, as well as year-over-year differences in the timing of marketing and sales spending. We will introduce new advertising this month and increase activity to improve the performance of Coors Light. We have a strong innovation pipeline, which will be led by the expansion of Coors Banquet and our vented can, but which will also include 2 new products for the range [ph] of recruiting legal-aged drinkers from outside the beer category. Europe is still experiencing constrained demand, which is fueling the growth of lower margin segments and channels. While we expect this trend to continue, the work we have done on improving our brand…

[Operator Instructions] Our first question comes from the line of Judy Hong with Goldman Sachs.

First, just maybe on Canada, just a couple of questions. One is just the STR improvement that you've seen in April. Seems pretty nice just versus what you saw in Q1. So can you just talk about how much of that is just comparison getting a little bit easier versus maybe the market getting a little bit better or your brand performing better? And then staying with Canada, just this is now the second quarters in a row where you got positive net pricing realization. So can you talk about how sustainable that is and what you're seeing from a competitive perspective?

Judy, well, I'll let Stewart answer in detail in a minute. But just on the first point, with Easter, the weather really was consistently poor over Easter as it was early on in the year so that didn't help us. In terms of the overall comparisons and the improvement, Stewart can give you the fine detail. But generally, it was driven by the fact that Easter was in the second quarter and I think most of the momentum in terms of the like-for-like sales is driven by that factor. Stewart? Stewart?

Peter, sorry, I got disconnected.

Did you hear the question?

I didn't hear the question. I got disconnected right as Judy started to talk.

Okay. Judy, I don't want to misrepresent you. Would you mind repeating your question?

Yes. So just on Canada, for the first question which I think Peter answered to some extent was just the STR trend improvements in April, how much of that was timing, Easter comparison, et cetera? And then the second question was just really looking at your pricing realization in Canada. 2 quarters in a row where you actually got positive pricing realization. So can you talk about how sustainable that is in the context of the competitive landscape?

Okay, right.

Stewart, just so you're aware, in terms of Easter question, I basically said that the weather was poor over Easter as it was in the first quarter. But most of the momentum in terms of the sales was driven by the fact that it was the Easter holiday. So I'll pass it over to you now.

Yes, thanks, Peter. Peter is exactly right on that, Judy. And I think underlying trends were still there but we had the benefit of shifting the holiday from one quarter to another. So nothing I could see in the market that had changed dramatically. On the pricing side, look, we're very pleased with the result this quarter. And in truth, when you look at what's happening from a pricing perspective, we have been very focused on how we're promoting our products, how we're pricing our products to make sure that they're attractive to consumers. What you're seeing from a pricing perspective is the result of a very balanced program. So what is it going to look like in the future? Of course, I can't give you guidance on that but I think we've taken a good approach to the last couple of quarters.

And any changes in terms of the competitive landscape, Stewart?

Well, I mean, we do continue to see a fair amount of discounting. We continue to see particularly at the value end of spectrum, that people are being aggressive. And that is just a reflection of a much weaker market. So you would expect that having said that, inside of that, we've been performing relatively well. We gained share in value and we've been gaining share of the kraft segment. And our core brands outside of Coors Light have been performing well. So yes, that's maybe if you got the follow-on from that, that's how I see it.

Okay. And then just maybe for Gavin, just if we look at the quarter, certainly the quarter came in better than I think what most people expected from a cost perspective, both on the gross margin side and the operating margin side. And I guess, what I'm trying to really understand is how much is this timing-driven, which relates to the marketing spend timing that you had called out? And then how much is this really just the increased focus on your cost-savings initiatives and really the step-up -- aligning your incentives with the PACC model. So maybe you can talk about the MG&A without the marketing spending, timing, how much that would've been down on an underlying basis? And then just give as an update on your cost-savings initiatives and the focus there and how much of that is driving a better margin behavior in the last few quarters?

Okay. Well, I'll do my best for you, Judy, because there's quite a bit of detail in that, which we probably wouldn't go into. If I try and summarize it and hopefully, this will be helpful, in terms of our marketing spend overall, this year, we fully expect to spend at least the same as we did last year, if not more. In terms of our cost savings, we said last year in New York that we were aiming at an ongoing $40 million to $60 million per year. We're very comfortable that we're going to hit that number in our cost -- in terms of overall cost savings. I think really that's as much detail that I can give you at the moment.

Would you share with us what the number was on the cost savings in the quarter?

Judy, we're not doing that. We're going to give you an annual feel for that. So Peter's quite right there, we're quite comfortable we're going to hit the $40 million to $60 million. And as we said last year, we expect to be at the upper end of that range for a couple of years.

Your next question comes from John Faucher with JP Morgan. John A. Faucher - JP Morgan Chase & Co, Research Division: And looking at the gross margin performance on the European business, obviously very strong performance this quarter. It's a seasonally weak gross margin quarter for that business, the comp seemed relatively easy. Can you just talk maybe a little bit conceptually or if you want to give us numbers, sort of how we should think about that improvement as we progress to more seasonally higher gross margins and how much of this you think is structural versus just sort of an easy comparison?

Thanks, John. What I would say to you is you're quite right. I mean the first quarter is a seasonally low quarter for us. Quarters 2 and quarters 3 are our big quarters in Europe, so they're particularly important for us. As far as COGS are concerned, I would just draw your attention back to the guidance, which we've given you on COGS for Europe for the full year, which was to decrease at a low-single digit rate.

And just to put some contact to color on to that, John. You've obviously, aware that there's a number of different dynamics going on in Europe. We do have -- because of again, as Stewart mentioned in Canada, because of the prevailing economic conditions, we do have a movement towards lower value price -- value brands, I'm sorry, but also lower priced channels, and that's working against us. But on the positive sense, our core brands are performing very well across Europe and also we're managing to get good growth in our above-premium business, especially with Staropramen. And we have quite an exciting innovation program coming online as well. So all of those dynamics play to the overall gross margin and as Gavin said, you do have the guidance on the COGS. John A. Faucher - JP Morgan Chase & Co, Research Division: And I guess, just sort of trying to dig a little bit deeper on the guidance on the COGS to understand it, I guess, what's the level of structural benefit that you're seeing here that's driving that reduction in COGS per hectoliter? Can you sort of breakout raw materials versus sort of more structural cost-saving components -- just conceptually, again?

Well, we don't break down our cost-to-goods-sold to the level of detail which I know you'd probably like, John. But I mean, there are any number of factors that go into that. We've obviously got the cost savings program, so a portion of that $40 million to $60 million, which Peter and I talked about earlier, does lie in the cost-of-goods-sold area and does lie obviously in Europe. You've got brand and channel mix. you've got packaging mix. I mean, there are any number of factors and decomposing any one of them, I can't do, so we'll just point you to our full year guidance.

Your next question comes from Ian Shackleton with Nomura.

A couple of questions on the guidance. And we're reducing the COGS guidance for Canada. And I just wondered what was behind that. I think, you sort of had flagged that probably better mix will be one of the components to increase that. And the second question was around interest, where you're keeping the guidance at 145, and obviously, that's despite quite a low number in Q1 at 35. Is there something exceptional in that 35? Is the underlying rate a little higher than that, Gavin?

I think you must've misheard me on -- we have kept our guidance on cost-of-goods-sold for Canada the same, at an increase of low-single digits. The guidance I changed was for Molson Coors International, which was previously increased mid-single digits and we reduced that to increase low-single digits. And that's just a function of Molson Coors International operation in many countries and it's just a shift of where we might put -- where the cost of goods sold are coming from a country and a type of business point of view. So that's the first point. On the interest, our guidance is what it is. And we haven't changed it.

If you take my point, I mean, as the year goes on, you'd expect your net debt to be coming down and as you analyze the $35 million we still end up less than $145 million. So it just strikes me there's something a little bit exceptional in terms of credit in there?

There are no big changes to our cash flow guidance, again we spent $700 million plus or minus 10%. Obviously, we had working capital shifts during the year, which might also drive changes in our cash balances and in what we're drawing down on our commercial paper program.

And just a follow-up. Peter, just to clarify where we are with the SAB brands in Canada now?

Which brands? Sorry, the SABMiller....

Yes, the SABMiller brands in Canada?

Yes, we both tried to get to a solution on that, which didn't work. And so we are waiting for a court date, which we think will be at the end of the fall to go back to discuss the issue with a judge.

Sorry, you said in the fall, that will be... in the autumn?

Yes. I think it's going to be in November.

The next question comes from my Bryan Spillane with Bank of America.

My first, I guess, first question was just a little bit more color in Canada. And Stewart, maybe could you talk a little bit about, quickly, you lost a little bit of share but was just interesting -- interested in the dynamic between Molson Canadian and maybe Coors Light and we've just spoken before about how much progress you've made in really stabilizing Molson Canadian. So can you talk a little bit about just the duck [ph] share dynamic there in the first quarter? Has there been any improvement in Coors Light and how Canadian performed?

Can I -- I'll just jump in first, but I'm going to let Stewart give you the detail. We really don't see too much overlap between Canadian and Coors Light. It is there. What has affected Coors Light probably more than anything else in the first quarter was Banquet. So we tend to look at each brand individually. We're very pleased, obviously, with the way we turned Canadian around over the last 3 years. Coors Light remains very strong in terms of brand health metrics and so that's a real positive. But we do believe we've got more work to do in terms of the programming and also the create of execution. So Stewart, do you want to talk to the specifics of what we're planning?

Yes, sure. I mean, look, in total, we feel good about the shared performance but not great. Good in the sense that on a historical basis, we're seeing -- we're starting to see some improvement in overall shared performance. We don't feel great because, frankly, losing share is not where we want to be. When we look at the underlying components of the portfolio that we're trying to transform, there's a lot of good healthy stuff that's going on. As I mentioned earlier in the call, growing share in value, growing share in craft, we're premiumizing the portfolio, Banquet is doing really well. Canadian, we couldn't be happier with, of course -- you and the Rest of World would've seen the red fridge in Sochi. So all of the pieces of our portfolio working well. Coors Light continues to be a drag. Peter's right, there is overlap between Coors Banquet and Coors Light. When you look at the trademark in total, so those 2 combined, then the share is much closer to flat for the 2 brands combined. But nevertheless, we are very, very focused on making sure that Coors Light -- making sure that Coors Light changes its current trajectory. And as I mentioned in last quarter's call, you will see new creative very shortly and you will see an action-packed summer of execution that we're looking forward to getting on with.

That's helpful. And then could you also just a little bit or any comment on just performance in Ontario and Québec. If I remember last year, part of your overall performance relative to the market was affected by how you index in those provinces. So can you just talk about, I guess, geographic mix and how that might have affected your performance relative to the market?

Yes. got it. Well, look, on a combined basis, Coors and Coors Banquet, that performance is much better out West. Good in the Atlantic, pretty good in Ontario, not really a factor in Québec because we don't have Banquet there yet. We are expecting to launch banquet into Québec later this year and we think that will work very, very well on the portfolio. Coors Light, I would say, if you looked across the country with the Atlantic provinces excepted, Coors Light had a number of challenges across a lot of the country and it relates to the drivers that again, I covered during last quarter.

Okay. And then just I had one last question. Can we get, or maybe I missed this, just the disclosure of price and mix in terms of the revenue build for both Europe and Canada?

Yes. So I'm happy to just talk to Canada briefly. Pretty much everything that you saw coming through from a price perspective was driven by price and not by mix. Mix was not much of a factor in the quarter.

And do you have it for Europe as well?

Yes, underlying for Europe was pricing was down about 2% and mix was also down on just under 100 basis points.

Your next question comes from Rob Ottenstein with ISI.

Can you perhaps talk a little bit more about the U.S. competitive environment? I guess, ABI had these 25-ounce cans. Do you see that as a price cut? How are you dealing with that in the marketplace? Is that really having much effect? There's talk about them being aggressive on-premise and any color around that? And then also, any color around your April results or what you're seeing so far in April in light of the change in the Easter holiday?

So I'll let Tom respond to the specifics you've raised, Robert. But I think for the U.S., if you read the same for the U.S. as for most of our business, we laid out the fact that we wanted to premiumize the portfolio, check [ph] that we're moving in the right direction. We laid out the fact that we wanted a strong ongoing innovation tool around check [ph] . We're doing that. We're growing in every segment apart from the economy segments and we're seeing good pricing and mix movement so more work to do. The issue still revolves around getting Premium Lights firing on all cylinders. But Tom, do you want to respond to the specifics that Robert raised?

Yes. So just to support Peter there, we're really executing our strategy over time. I mean we took a tiny bit of share in Premium Light 0.01 point. We took almost 200-basis-point share segment in above-premium. We took about 20 basis points in Premium Regular and we lost 140 basis points in share segment in economy. And that leads to your question about the 25-ounce can and 24-ounce can. The economy business has been challenged since the recession. And it really hasn't come back and we haven't really seen that sector come back, even though jobs are increasing and it looks like that's going to take a while for that business to come back. There's been some commentary about consumers using beer as a more affordable luxury, and perhaps that business is challenged for the longer term. There are some value plays going out there in beer. I wouldn't say the effect of pricing is any more intense than it's been historically. The moves in the on-premise were addressed at the other conference call as ABI is moving in 2 states with some on-premise pricing. That's in distributorships which they wholly own. It hasn't spread yet. And it hasn't hurt our business yet, but we continue to watch that very carefully, of course. So I would simply say that the place where the competitive dynamics are becoming more intense and rightly so is the on-premise, where there's a real highly competitive arena for tap handles which are really visible to consumers and important for our business. And that's the place where our business has gotten a little soft and needs a little focus. But I don't think the value of plays or the pricing environment in the U.S. is any different structurally than it has been in the past.

Just specifically on the 25 ounces, which I think they're using across-the-board, aren't they, with also Bud and Bud light, are they having -- do you sense that they're having any impact in the market? I mean, is there any pressure for you to do something like that as well?

Well, we always look at our value equations and you've got -- as you see in C-stores, the single business continues to be a big part of that business and a growing part of that business. And it's a part where value equations play. Now there's a lot of movement between those sectors on a price point basis. I wouldn't expect us to respond in kind to a 1-ounce difference on a 25-ounce, 24-ounce can.

Sure. And then just finally, can you give us your sense of how Miller Fortune is doing compared to your expectations and the timing of the media spend? Which quarters is that likely to be the most and how that should play out?

Yes. So Miller Fortune, we've gained 30 basis points of volume share and more than that in value share. Our distributors cooperated beautifully in getting that brand out there. We're pleased with it early on, although that brand is settling into the parts of the market where we have more significant repeat rates. But we're very pleased with it at this stage and we'll continue to support it. We've had good support going forward as we launched the brand and we'll have it in the second quarter as well.

Do you have data that supports -- that it's taking share from spirits as intended? Or is it more from other beer brands, do you think?

The data that we have from our chains that are on-premise suggest that it's doing a nice job of bringing new consumers in. And our business at C-stores, from our major chains, suggest it's incremental to the beer category. I don't have the data with me that suggest it's taking from spirits in that channel but I do know about its incrementality in the C-store channel.

And Robert, just to build on that as well and Tom mentioned it in the MillerCoors call earlier, but if you look at the overall NSR per hectoliter for the U.S., it's over 3%. 50% of that is coming from mix, only 50% from pricings, that's a healthy position to be in.

[Operator Instructions] Our next question comes from Mark Swartzberg with Stifel. Mark D. Swartzberg - Stifel, Nicolaus & Company, Incorporated, Research Division: A couple of questions on Canada. I don't know if this is for Peter or Stewart or Gavin. But it sounds like you've agreed to disagree on this suit with SABMiller and you'll get clarity here in November. Can you just give us some parameters here? There's been, I think, a fair amount of confusion out there in the market about how impactful this really is from a share perspective and from an earnings perspective to your business? And then I had a kind of more delicate second question.

So what we quoted in the past, Mark, is less than 1% of our overall profit for the business. So it's immaterial as far as we're concerned. Mark D. Swartzberg - Stifel, Nicolaus & Company, Incorporated, Research Division: Great, great. And then Stewart, certainly we've gotten some color here on Canada and a lot of work yet to be done, some good things at least in the month of April. But is there -- can you give us some more color like in the month of April, particularly, that's -- obviously it's only a month but it's a big improvement. Is that purely the industry recovering here? Is it also some improvement in share? When you're kind of trying to pull the hood up, are you seeing any evidence that you're either the industry or your share trends are improving or is it all -- is that not the case?

Stewart?

Yes. So look, short answer, Mark, is I think that the underlying trend is continuing. This is an industry trend. It's underlying. And there's no data I've received coming out of April yet that would tell me anything different. Mark D. Swartzberg - Stifel, Nicolaus & Company, Incorporated, Research Division: So am I right, you said flat for Canada, that sounds like the...

No, I didn't say that what's the share was because I actually don't have share data yet for April. What I can say is that in terms of looking at the market and what I see in the market, how customers are behaving, what people tell me, how I see our competitors performing, what I'm seeing is a benefit from Easter and when I strip out what I think I lost from Q1 and I layer it into April, what I see is really the benefit of Easter and no real change to the underlying market. Mark D. Swartzberg - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. So just to make sure I'm hearing you right, and again, I realize it's only a month but it sounds like you're saying the industry simply got better from a volume perspective in the month of April?

Yes, the industry got better because of Easter.

[Operator Instructions] There are no additional questions at this time.

Okay. Thank you, Jay, and thank you, everybody, for joining us today. We look forward to catching up with you when we announce our second quarter and also with some of you on those events that I mentioned in the call script. Thank you.

This concludes today's conference call. You may now disconnect.