Good day ladies and gentlemen and welcome to the fourth quarter 2007 Boston Beer Company earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Mr. Jim Koch, Founder and Chairman; please proceed.

Thank you. Good afternoon and welcome everyone. This is Jim Koch, Founder and Chairman and I'm pleased to be here to kick off the 2007 fourth quarter earnings call for the Boston Beer Company. Joining the call from Boston Beer would be Martin Roper, our CEO and Bill Urich, our CFO. I will begin my remarks this afternoon with a few comments on where we stand competitively and then pass the microphone on to Martin who will provide an overview of our business. Martin will then turn the call over to Bill who will provide financial details for the quarter as well as our outlook for 2008. Immediately following those comments, we will open the line for questions. We feel very positive about our fourth quarter depletions growth of 19% which contributed to 17% growth for the full year 2007. We believe that we gained share in both the Better Beer and Craft Beer categories during 2007. This was our eighth consecutive quarter of double-digit depletion increases. We believe these results are driven by drinkers trading up to our full flavored Craft beers and the strength of the Samuel Adams brand and brand support and the increasing retailer and wholesaler support for the Craft category as well as for Samuel Adams. While the Craft category continues to get more competitive, I believe that the quality and variety of distinct beers with Samuel Adams brews positions us well to compete in this challenging market and the addition of the Pennsylvania Brewery will provide us with the capacity and capabilities to meet this demand. As previously reported, we entered into a contract of sale for the brewery in Lehigh Valley, Pennsylvania which is just north of Philadelphia and we completed our due diligence process. We intend to proceed with the purchase of this historic and award-winning brewery where we brewed some of our beers from 1994 to 2001. We have already started making the necessary improvements to upgrade the brewery and hope to being brewing and bottling our brands during the summer of 2008. I will now pass the call over to Martin for a more detailed overview of our results.

Thank you, Jim. Good afternoon everyone. As Jim noted we are encouraged by the depletions growth achieved in the fourth quarter. Our fourth quarter depletions growth reflected double digit growth in the Samuel Adams brand family and the Twisted Tea brand family. Our Samuel Adams brand continued to benefit from increased drinker interest, increased retailer support and the hard work of our wholesalers supporting our retail initiatives. We believe that our Samuel Adams brand health is being helped by our significant investment in media, sales force, point to sales materials and promotions. We intend to increase this investment level in order to maintain our leading position. As noted the Twisted Tea brand family achieved double digit growth in the quarter. We expect the alcoholic tea category to remain very competitive, but we are encouraged by Twisted Tea’s growth and we plan to continue to invest in the Twisted Tea brand to improve our position. The Samuel Adams depletions growth achieved in the fourth quarter of 2007 reflected growth of all of our major beer styles. We believe that our brand health has been positively impacted by the strength of the Craft category which continues to experience growth from increased drinker interest in better beers, more flavorful beers and in variety. The strengths of the Samuel Adams brand family trends during the quarter suggest that Samuel Adams continue to maintain strong brand equity with drinkers. We believe that maintaining strong brand equity in the Samuel Adams brand is vital to the continued health of our business and we remain committed to investing behind it as the number one priority to ensure long term success. We continue to test and evaluate our initiatives to determine their effectiveness and to identify the optimum investment required to generate sustainable volume growth. As Jim mentioned…

Thank you, Jim and Martin. Good afternoon everyone. The Boston Beer Company realized earnings of $0.46 per fully diluted share in the fourth quarter of 2007, an increase of $0.29 per fully diluted share over the fourth quarter of 2006 after taking into account a $2.2 million or $0.15 per diluted share provision for income taxes related to an income tax audit. This increase in earnings is primarily the result increases in net revenue and a decrease in general and administrative expenses only partially offset by increases in cost of goods sold, selling and administration expenses and income taxes. For the fourth quarter of 2007 Boston beer recorded net revenue of $92.2 million, a 25.7% increase over the same period in 2006. This increase is primarily a result of the19.5% increase in core brand shipment volume and the increase in net revenue per barrel of 5.2%. The increase in shipment volume can be attributed primarily to increases in Samuel Adams Boston Lager, Samuel Adams Seasonals, Samuel Adams Brew Masters Collection and Sam Adams Light. We believe that the wholesaler inventory levels at December 29, 2007 were at appropriate levels. Our gross margin for the fourth quarter of 2007 increased to 57.7% from 56% in the fourth quarter last year due primarily -- due to a settlement with package materials player over a 2007 pricing dispute which had been provided during the year. Excluding the impact of the, this settlement gross margin would have declined to 55.2%. This decline was due to increases in package material, ingredient cost and increased depreciation cost which were partially offset by price increases. Advertising, promotion and selling expenses increased by $3.4 million during the quarter as compared to the prior year, primarily due to increases in advertising and promotional cost and freight expenses to wholesalers.…

Your first question comes from the line of Andrew Kieley from Deutsche Bank. Please proceed.

Hi good afternoon everyone.

Hi Andrew.

Hi Andrew

Hi, a couple of questions. First I wanted to ask you about on trade trends. Obviously given the numbers that you reported today looks pretty strong, but are you seeing any tail offs in those channels because we are seeing so many of the restaurant companies talking about their accounts getting hit there.

Let me take that. I think we have seen a little bit but it’s mixed in with a bunch of other trends going on. One is at the consumer level there continues to be a strong trading up trend across a lot of food and beverage, but Samuel Adams is certainly included in that and the second is increasing retailer support. The operators want to encourage their trade up and they also want to encourage the beverage alcohol business because it’s just more profitable for them. So at this point it’s hard to tease out each of those three positive things from the overall softness especially in casual dining where we sell a lot of beers, so our trends remain reasonably good, but I think we are sort of holding our breadth to see what happens to the economy in the next three months.

And could you remind us what, maybe percent of volumes goes through the on-trade against the “at home consumptions”?

For us it’s -- we can’t get an exact hand along it because we sell to distributors who then sell to on and off premise customers. Roughly on the order and order of magnitude it’s roughly 30 some percent, maybe in the high 30’s right now. It’s been probably, I don’t know as high as 40 I think, but if I had to guess and I am just guessing because I don’t have the exact numbers I’d say it’s in the high 30’s.

Okay thanks. And secondly I had asked before, I wondered if you could give us any sense of how much distribution runs through miller and course houses and if you see that as a risk as we get later into 2008 as those companies potentially consolidate.

It’s a big piece of our volume. I don’t think we’ve added it all up, but I’d just be guessing, it’s well over half anyway and well over that number and where again it hasn’t happened -- I think there is going to be some time that is just going to be transitioned and from our point of view it’s pretty murky at this point. We certainly have a lot of miller course houses now and they perform at least as well as the end consolidated houses.

Okay and finally I just wanted to ask. As far as the 2008 outlook or the guidance goes, are you building in any cost benefit there from the new brewery? I know you are trying to get up a good part of the capacity up by the end of the year but I wasn’t sure if you were building in any actual production cost savings by the end of ’08.

You know what, I’ll let Martin handle that.

Okay, thank you.

Your next question comes from the line of James Watson with HSBC. Please proceed.

Good afternoon everyone.

Good afternoon.

Good afternoon.

I had a question about the pricing environment in ’08. You mentioned in your remarks that you were planning to take a 5% increase and I was wondering if that has been implemented so far.

Yes, -- you go ahead.

Yes, well, I think Jim just answered yes.

Most, we haven’t implemented all of it but most of it has been implemented. So it’s been fairly recently. So I don’t think we have any clarity about its impact on our depletions and obviously doesn’t all get implemented at once but the majority of it has been implemented.

Okay, so it happened midway through the quarter, so perhaps for all of ’08 we are not looking at a full 5% increase once we’ve taken into account the early part of the quarter.

James, I think what we said is we are intending to take or plan to take 5% during the quarter. I think if you look at last year you will see that we were successful in taking some pricing, so it’s not inconceivable but in total we may not get -- we may get 5% for the full year.

Okay. Yeah, so you had very good mix effect for the last -- for maybe the second half of 2007 because I think you took pricing at 3% but you’ve gotten 5% and I'm wondering what is really driving that mix effect? Is that a switch to on-premise and two, could we continue to see that into ’08?

Jim it’s Bill. It’s primarily driven by the fact that we had significantly lower discounting in the fourth quarter of this year than I should say of last year.

Okay, and will we be able to see that lack of discounting going forward or is that something that’s just going to be in the fourth quarter of ’07?

I can't predict that at this point in time.

Let me add to that. I think when we say that we intend to execute price increases of 5% we look at that on a net basis and so it includes frontline price increases and discount increases or decreases. So you should be thinking when we say pricing that we are talking about net revenue per case equivalent.

Okay, great. And just one last question on the pricing is that what are you seeing in the market. We read that some of the competitors in the craft segment are taking up pricing maybe $1 per six packs, have you guys seen that in the marketplace and does that have any effect on your strategy?

inaudible:

Great, thank you very much guys.

And your next question comes from the line of Andrew Sawyer with Goldman Sachs. Please proceed.

I got a follow-up question on the brewery investment. I guess I was just looking at, it looks like you Roth investment is going to be on the order of $120 million and I was wondering if you can kind of scope out for us how you think about getting returns on that investment and I guess if you think about this as a bogey, a 10% after-tax return you would require about $20 million of pretax cost savings. Is that the right way to think about it heading into ’09, if not, how should we be thinking about getting the returns on that investment?

Hi Andrew, it’s Martin. I think we tried to do in our communication is layout the many facts that go into the decision to buy or to build a brewery and certainly comparing the alternatives on the contract brewing front we have a declining availability of contract capacity. We have that capacity concentrating in fewer hands. We actually have our own growth causing problems in getting access to contract capacity because we are such a significant piece of it and then the prices that people are willing to provide contract capacity also increasing. So against that backdrop our decision to proceed with the purchase and operation of a brewery was based on our projections of all of those trends. So I think given that it is actually quite difficult for you to model and we are at this point unable and unwilling to provide some clarity as to what we think the cost of goods is going to be next year because frankly we haven’t brewed that yet and once we’ve brewed that and we have a good sense of yields and labor costs and efficiencies and other things, we will be in a much better position to do that and I think we will probably be there at sometime third quarter. So, at this point in time I am not sure I can directly answer your question other than to say that we compared to what we anticipated the alternatives to be and we decided it was a really good business decision.

Alright, thank you very much for that, Martin.

Your next question comes from the line of [Philip Keanes with Tritan Investment]. Please proceed.

Yes, I was just wondering if you value your inventory on a LIFO basis, would that make a big difference in the profit figures, or you value on FIFO? And that might be…

I don’t have that information in front of me. So, I just can’t comment.

Okay. And at the closing do you plan on drawing down your cash balances or using your line of credit to come up with that money?

Could you expand on the question? I don’t think I fully understand.

Okay. I mean you have $50 million line of credit. You have close to $100 million in cash and equivalents. Are you going to draw down your cash balances at the closing or you are going to draw on your line of credit instead?

I don’t think I can actually answer what are intended. I would just refer you to our historical practice which is to have the line of credit available, but I think historically, I’m trying to think whether we have ever actually drawn it down. Don’t think we have and I would just refer you to that history.

I see. And in terms of Diageo’s output from the Lehigh Valley plant. Do they plan on keeping the output at pretty much the same levels of the past couple of years? They make Smirnoff Ice there, right? Or -- and then tapered of or have they indicated a big decrease in their plans for the output there?

I don’t think it will be appropriate for me to indicate one what products they produce there or indeed what their volume plans are. What I can indicate is that we have some contractual commitments that we are required to meet to produce their needs if they should request and as such it makes it very difficult for us to estimate the effect of the brewery on our operating cost this year and even in the first half of next year.

I see. Okay, thank you.

And your next question comes from the line of [Lauren Bintowin from Suncrest Capital]. Please proceed.

Good afternoon guys. I was kind of -- I want to focus on the buyback. How much money have you guys used in the buyback over the last couple of years?

I think we’ve disclosed that in our filings.

Jim, you talked about it earlier a couple of minutes ago. What was the number you stated kind of since you started the buyback program or whatever?

Is your question how much we repurchased of stocks since the beginning our start of the buyback program?

In your initial kind of comment you had mentioned a number, it’s like a hundred and something million. I’m just trying to reconcile and just kind going to looking at it and trying to figure out kind of how many shares you bought, what average price and so forth.

8.5 million shares? Since when?

I believe it started either 2000 or late 90’s.

Late 90’s

Yeah, I wasn’t here then.

That it was in the late 90’s.

Thank you ladies and gentlemen. There are no additional questions at this time I would like to now turn the call over to your host for today for closing remarks.

Thank you very much. We look forward to --

Jim if I could just add. I think in future our intention is to issue our release after the market close and we would then propose a 4:30 conference call so we would just -- for those of you who have been on our regular conference calls, we have always tried to do the release in the afternoon and then do a 4 o’clock call but given market conditions and some advice we’ve received we are going to move to releasing our announcements after the market closes and then having a call and meet up afterwards and hopefully that will still meet everyone’s schedules and work needs and I think that’s all we currently have to say.

So, thank you.

Yeah, thank you. We appreciate the participation and will see you next call. Thanks all.

Thank you for your participation in today’s conference, this concludes the presentation. You may now disconnect. Good day.