Good day, ladies and gentlemen, and welcome to the Molson Coors Brewing Company 2009 second quarter earnings conference call. (Operator Instructions) Before we get started, we want to 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 10-K and 10-Q and proxy 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. Regarding any non-U.S. GAAP measures that may be discussed during the call, please visit the company’s website, www.molsoncoors.com, for a reconciliation of these measures to the nearest U.S. GAAP results. I would now like to turn the conference over to Mr. Peter Swinburn, President and Chief Executive Officer of Molson Coors Brewing. Sir, you may begin.

Thank you, Matthew. Hello and welcome everybody and thanks for joining us today. With me on the call are: Stewart Glendinning, Molson Coors CFO; Leo Kiely, CEO of MillerCoors; Gavin Hattersley, CFO of MillerCoors; Mark Hunter, CEO of Molson Coors U.K.; Sam Walker, Molson Coors Chief Legal Officer; Bill Waters, Molson Coors Controller; and Dave Dunnewald, Molson Coors Vice President of Investor Relations. And Dave Perkins also joins us for the first time in his new role as CEO of Molson Canada. Dave has many years of senior leadership experience in the brewing industry and brings extensive brand-building expertise to our Canadian business and we are delighted to have him in the new role. On the call today, Stewart and I will take you through highlights of our second quarter 2009 results for Molson Coors Brewing Company, along with some perspective on the back half of 2009. As usual, we will include a review of financial results for MillerCoors and then we will open it up for questions. So let’s get started -- overall, Molson Coors delivered a good performance in the second quarter, with underlying earnings growing more than 20% versus a year ago. We grew local-currency revenue per hectoliter and profits in all of our markets. Looking at regional highlights: in Canada, revenue per hectoliter grew as front-line price increases in all major markets were partially offset by higher promotional activity across Canada. In the U.K., our team drove 70% pretax profit growth via strong pricing in all major channels and also achieved excellent cost management. MillerCoors continued to achieve strong double-digit bottom-line growth in the U.S., driven by cost synergy delivery, solid pricing and lower marketing and general and administrative spending. These positive results were due to excellent cost control and front-line price management, underpinned by well-executed…

Thanks, Peter. Hello, everyone. I’ll start with the second quarter financial highlights. Worldwide pro forma beer volume for Molson Coors declined 3.2% from a year ago, driven by industry weakness in our major geographies, as well as our revenue-generation strategy in the U.K. Meanwhile, our underlying pretax income grew 16.3% to $264 million. This increase was driven by strong earnings growth from MillerCoors and our U.K. business, along with lower interest expense. Foreign currency movements decreased pretax profit by approximately $21 million in the second quarter. On the bottom line, underlying after-tax income of $205.4 million, or $1.11 per diluted share, was 20.6% higher than the second quarter a year ago. It is important to note that our second quarter underlying earnings exclude some one-time expenses, primarily related to MillerCoors and our Foster’s cash-settled total-return swap, as well as net special charges of $7.1 million. These 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. In segment performance highlights, starting with Canada, underlying pretax income in local currency grew 2% versus a year ago as a result of positive net pricing and the benefit of cost savings initiatives, which more than offset inflation impacts in the quarter. However, underlying income in U.S. dollars declined due to an $18 million foreign currency headwind. As on our last earnings call, to provide more-comparable results in our Canada discussions, we will exclude the reporting effects in Canada of deconsolidating Brewers Retail Inc., or BRI, and of setting up MillerCoors in 2008. So, let’s review the highlights -- Canada underlying pretax income was $137.3 million in the second quarter, 11% lower than a year ago as local currency…

Thanks, Stewart. Okay, so in 2009, we will continue to focus on the things we’ve been doing in the past, which is building strong brands, reducing costs in our business, and generating cash. In Canada, for the balance of 2009, we expect a challenging environment due to weak economic conditions and a continuation of consumer-seeking value propositions. In addition, we will address our market share on a national basis as we move forward by ensuring that we remain price competitive while increasing investments in our brand equities and in innovation. In the U.S., during the key summer selling season, MillerCoors remains focused on driving the great-taste platform of Miller Lite, while accelerating Coors Light growth with the new Rocky Mountain cold refreshment messaging and cold activated packaging. MillerCoors is also working to add new legal-age drinkers to the premium light category by driving repeat purchases on MGD 64. As we continue to see shifts in both segments and channels, we will be leveraging our full brand portfolio to meet changing consumer and customer needs. Finally, MillerCoors is committed to driving sustainable net revenue growth. In the U.K., we believe the challenging trading environment will continue throughout 2009 due to a weak local economy, with cost inflation also being a challenge. However, we believe that our U.K. business is now on much firmer footing as it benefits from our contract brewing arrangement, the Magners cider agreement, supplier renegotiations, and our strategy of forgoing low-margin volume. In the second quarter, we were also pleased to announce the formation of our partnership to market and produce the Cobra beer brand in the U.K. Cobra is a great investment in our U.K. brand portfolio that gives us greater access to ethnic retail accounts. Going forward, performance comparisons with prior year will become more challenging…

(Operator Instructions) Our first question is from Judy Hong of Goldman Sachs. Your line is open.

Thanks. Good morning, everyone. My first question is on Canada and I was wondering if you could give us a little more color in terms of the industry volume trends. It looks like in the second quarter, the volume trend was actually pretty strong for the industry as a whole and then it sort of weakened in July, so I’m just wondering if you can give us a little bit more color in terms of what’s happening at the industry level. And then it sounds like as you look out in the back half, you are trying to address your market share issue in Canada more broadly, and so I wanted to get a little more color there with respect to the promotional activity that you are seeing both within Quebec and outside of Quebec and as you think about the back half, whether I’m interpreting it correctly that you are thinking about stepping up promotions more actively.

Well, I’ll pass it over to Dave in a minute, Judy, to take the detail but maybe sort of a general point -- we recognize, despite the fact that [our figures] are good and strong for the first half of the year, there’s some things we’ve got to do in all our markets. We need to get Miller Light moving in the direction we want it moving in the U.S. and that’s looking good at the moment but we’ve got much more work to do. We recognize in the U.K., we’ve got to address the off-trade but we’ve built a really solid base for ourselves to do that and we are confident we can do it. And similarly in Canada, I think the issue there is that we really do need to offer our consumers more options in terms of value propositions, and we’ve got plans to do that and you’ll see more of that happening in the second half of the year. But with that as background, I’ll pass it on to Dave.

Thanks, Peter. So Judy, on the industry, you’ll remember in the first quarter it was down about 1.2% and then up 1.8 in the second quarter, so year-to-date is a half-a-point up and I think that’s probably a decent reflection. There’s noise in between the two quarters so I would tend to look at it on a year-to-date basis. What I’ve seen since coming back to Canada is that boy, the weather sure seems to have deteriorated over the years and it is a cool summer and I think that’s the biggest factor that we are seeing in July. You know, that’s anybody’s bet obviously on how that plays out through the rest of the summer. On the market share, I would comment, picking up on Peter’s point, no question in the current economy we see consumers watching their pennies and they are really responding to the value propositions out there and we have seen a pick-up on that front and so I think the challenge for us going forward is really to find that right balance between pricing, volume, and brand equity. That’s what we will be focused on for the second half.

On the competitive activity, Dave, just to follow-up on that, it sounds like up until maybe the first quarter, the competitive situation or heightened competitive activity was really more limited to Quebec and -- are you now saying that you are seeing that sort of spreading out to other provinces in Canada more broadly?

Yeah, I would say the second quarter activity was certainly up from prior year. I think that is a reflection of the consumers’ interest in these value proposition.

But just to build on that, Judy, as well -- I mean, I think the Quebec issue was specific to one competitor but if you look across the whole of Canada and you look at how the market share movements are going, the third players are actually with the lower prices are doing quite well as well, so this is a broad sort of response of consumers to available pricing out there.

Okay, and then Stewart, a couple of questions -- first on the tax rate, I understand this year you are getting the benefit of some resolutions coming in at 10%, 14%. How should we think about that in the context of your long-term tax rate of 24% to 26%?

Well, I think Judy, just to answer your question, I don’t think we are going to see a change in the long-term but we would try to give you some specific quarterly guidance this year because of the kind of volatility that we expect.

Okay, and then Stewart, on the cash flow outlook, you’ve cited some of the potential cash uses that you are not including as part of the $575 million underlying cash flow target. Can you quantify how much the potential cash uses on those other items could be this year?

Well, let’s just take it in two pieces -- I mean first of all, a couple of things I mentioned, we excluded last year from our cash and we’ll exclude them this year. So for example, we are taking a benefit this year from the MillerCoors aluminum hedges which are now being closed out. We had to post a cash collateral at year-end. That’s coming back in the benefit to our cash flow. We have not counted that in achieving our 575, so we took that -- we are taking the same treatment as in last year. The piece that I mentioned in terms of additional potential cash use was related to a tax liability that we have in Brazil, our old business -- look, it’s great news. We’ve got a liability down there. The Brazilian Government have come out with a tax amnesty program. Our shift in our balance sheet from long-term liabilities to short-term liabilities reflects our belief that this will be resolved in the shorter term. But with respect to the specific amounts, I can’t really point to an amount at this point in time because those are liabilities in which we guarantee a third party and we are still in the midst of discussions with that third party to try and resolve the actual amount.

Is the amount potentially large enough that you may be rethinking about maybe a potential use of cash from your cash flow, whether it’s share buy-back or other uses of cash?

You know, I would say for all of these things, Judy, we’ve got an ongoing dialog with the board. There are always movements in the cash balance and at this point, we really don’t have a perspective on exactly what the number is so it’s very difficult for me to answer that question. I would suggest that obviously when you get a chance to see our Q, you look at some of the footnotes. I think that will help give you a little bit of color.

Again, Judy, I think we’ve been pretty consistent that we will look to use our cash in the very best interest of our shareholders and to resolve this ongoing liability, we’ve got the opportunity to do it in the right way would be an excellent use of cash.

Okay. Thank you.

Your next question comes from Kaumil Gajrawala with UBS.

Good afternoon, everybody. Peter, some of your comment on Miller Light and the new campaign is that you are seeing some positive signs but we are not seeing volumes improve -- in fact sequentially, they appear to be getting worse, so what are some of the things that you are seeing and what you are studying that we are not as it relates to reversing trends in the brand?

Okay, well, I’ll pass it over to Leo to give you the fine detail but there’s no doubt that in the core purchase pattern of Miller Light, we are seeing improvements, which is always a good sign. It’s really too early, I think, to get any sort of brand equity scores back on the advertising but certainly it’s resonating in terms of top of mind to a much greater extent. But I mean, there’s been a lot that’s been done to that brand in terms of pricing and so on to stabilize it but Leo, can I pass it over to you to take that further?

The trends haven’t changed materially for I think pretty understandable reasons. We got into the second quarter, there was, particularly in some segments of the country a year ago very aggressive discounting going on in the big trade segment, so overlapping that has had an affect. Our pricing, however, since we moved last October has been very steady and our level of discounting continues to show productivity, which I think in some sense when you start to look at the non-promoted brand trends come up underneath it are an indication of just how big this franchise is and how responsive it is once you get things moving in the right direction. But look, it’s early days, we’ve got work to do on the copy front to sharpen the message. We know that. We know the message is resonating from a top line awareness point of view and we would hope to see progress as we come out of this year and go into next year.

Thank you.

Your next question comes from Christine Farkas of Merrill Lynch.

Thank you very much. A couple of questions. Firstly on the U.K., can you talk about the sustainability of this huge increase or price increase year over year -- what does the underlying rate look like on a comp basis, and will we see this 19% for the second half of the year?

Again, I’ll sort of take it first and I’ll pass it on to Mark in a minute -- I mean obviously, we are not going to project what our pricing is going to be for the second half of the year but you will remember that we took a price increase in September last year in the U.K. so we have to cycle that. And the only other thing I would point to is that with some of these price agreements, with the major on-trade retailers, they are actually long-term price agreements, so they run for three years and they’ve got [steppers], so they are locked into that extent. But Mark, do you want to put more color around that?

I think what you have to remember is we have now seen 10 consecutive quarters of price improvement and the step-up that we’ve seen, to Peter’s point, was because of the additional price increase that we took last year. And that was really to drive those into position where we were starting to see gross margin growth, which we hadn’t seen in our business, so we’ve not see three consecutive quarters of gross margin growth. I would expect to see the magnitude of pricing continue at the rate we’ve seen for the last couple of quarters as we lap the additional price increase from last year. But in a market that continues to shrink, and with the continued pressure we are seeing around responsible drinking, our view is that continuing on this path and staying true to our strategy is absolutely the correct thing to do.

Now, correct me if I’m wrong but industry data coming out for the second quarter showed that on-premise volumes appeared to have been slightly less bad than the second quarter. Is that fair? Are you seeing such trends?

Yeah, I don’t think we’ll call a party because things are going less bad but certainly the trend has improved. The interesting thing is really since the middle of last year, so Q3 of 2008, we’ve now seen four consecutive quarters of decline in the off-trades, ranging from 5% to 10%. On-trade has improved but certainly in the second quarter, it was still ticking down at just under 5%, so total industry remains very challenging. On a year-to-date basis, volumes are down about 6%.

Okay, thanks for that. Moving to North America and looking at the Canadian first half industry growth of a half-a-point versus the U.S., down about a point, I’m just wondering how when you look at the two markets, perhaps one is lagging the other, perhaps one is seeing greater price strength than the other -- can you maybe talk about why the Canadian market has held up a big better than the U.S. so far?

Well, I can’t really provide the comparison to the U.S. I know as we look at what’s going on in Canada, I think frankly some of the promotional value that is being delivered to the consumers is in fact helping with industry volume.

Leo, do you have any comment on the U.S.?

No, I wouldn’t have a sense of why there would be a difference, Peter.

Yeah, to be honest with you, Christine, these things, if you look at the sort of the four weekly cycles or the quarterly cycles, they do move around quite a bit, so Canada has been a bit strong and it’s not significant, I wouldn’t think.

Okay. Thanks for that and then Peter, I’ll ask the question as I did last quarter with respect to your Foster stake -- has there been a change at all in your indirect ownership in that or has your perspective change of the Australian market?

No, no, our position has not changed at all and I think we’ve been pretty consistent in our commentary on Fosters and if I were to repeat it, I would just be saying what I’ve said in the past, Christine.

Okay. Thank you very much.

(Operator Instructions) Your next question comes from Mark Swartzberg of Stifel Nicolaus.

Thanks. Good afternoon, everyone. I guess first, Stewart, as relates to FX transactionally speaking in Canada, I think in the first quarter it was a net negative, how those hedges worked out for you. Can you tell us, was it a net negative in terms of dollar impact on the U.S. dollar profits in the second quarter? And then as you look at the balance of the year, how do you think given where rates are right now for FX, what do you think kind of impact we’ll see from those hedges transactionally?

Okay, well, I think if you just reflect on our quarter for our hedges, actually our hedges would have been positive this quarter but let’s just -- let’s just look at the top level of this thing. Canadian dollar, down about 13%, impact overall just from FX for the quarter about $18 million. I think if you looked at the outlook and looking forward for the rest of the year, as we’ve shared with you we do have an active hedging program which hedges certain currency flows between Canada and the U.S. We also have a large proportion of our debt is denominated in Canadian dollars, which does provide a natural hedge against that. And if you take all that into account, you should expect that we have about 50% of our Canadian profits for the back half of the year are hedged. Also I think if you looked forward and looked at where current rates sit as against the rates last year, you will find current rates are about 4% lower than last year and I think you will find that the fourth quarter we start to cycle that and you will see actually current rates being stronger than they were in the fourth quarter last year by about 12%.

Okay, helpful. And from a -- zeroing in specifically on this transactional issue, which seems to swing from quarter to quarter, which is -- whether it’s beneficial or adverse, very understandable but knowing what you know right now about how those hedges are priced and given where the rates are right now, do you expect that that’s going to be a net positive or a net negative of any -- at least of any size in the second half for your Canadian profits, dollar denominated -- U.S. dollar denominated?

Mark, I don’t think we’ve given anybody any specific pricing on our hedges, and I think again, I would go back to the comments I just gave you -- if you looked at our rates for the third quarter, it will still be slightly down on last year, fourth quarter looking a lot better.

Mark, you know that our hedging program is essentially designed to mitigate volatility in our earnings, to the extent we can. So when Stewart mentioned that we expect a very slight FX headwind from a translational standpoint in the third quarter, that means the hedges ought to provide just a little bit of benefit, right? And then in the fourth quarter when that flips to a little bit of a tailwind from a translational standpoint, then you would expect the hedges to provide a little bit of headwind. In other words, take a little bit of that benefit off. We can’t give specifics but I think that’s the philosophy.

Excellent. Thank you, guys. And if I could just shift more to the business in Canada, Dave -- other Dave, you’re new there, running that business. Talked a little bit, we’ve heard a little from you here about your intentions with value offerings but could you give us kind of a broader report card on what you are seeing there, in terms of how you guys go to market that you think needs to change? And then operationally, incentive, compensation, anything else about how you guys actually run your business and motivate the people running the business to achieve better results going forward.

I think the -- really the key opportunity for us in Canada going forward is around the long-term brand building and as I come back into the business in Canada and I look at the things that we have that we can leverage, I mean, we have an incredible portfolio there that plays against all consumer needs. We have a corporate reputation that’s really strong and we have passionate employees that I think would go through a wall for the company. And for me, it’s really around taking the portfolio to the next level and I think that’s around the sorts of things we talked about as an enterprise -- innovation that we do behind our key brands, continuing to leverage Coors Light, which is really critical to us and doing very, very well in Canada, and addressing Molson Canadian, which I think we’ve acknowledged in the past is a brand that requires some work. And I can tell you that our marketing team has shared with me in recent weeks some really exciting thinking they are doing on the brand that will come to fruition over the next six months or so and that’s around the positioning on the brand and the programming, and I’ve been around Molson Canadian for many, many years and this is some really solid thinking, and so I feel good about that. So for me, it really is continuing to drive against taking our portfolio to another level. As far as the people aspect of this in incentives, you know, I feel good about what we are doing there. I think our employees are clearly aligned behind what we need to do. With value brought in line and with continuing to add excitement on our brands, I think we’ll be in a really good place. So I don’t see the need for changes in that aspect today.

Great, and if I could, one last thing -- on the competitive landscape, in my opinion, I don’t know if this is accurate, it’s been somewhat imbalanced, the level of commodity benefits you versus Labatt and others have had over the last 12 months. Of course, you’re not sitting inside their P&L but as you kind of look out and think about how the commodity hedges have affected behavior over the last 12 months and might affect behavior on price over the next 12 months, what -- do you have a sense of how much of a level playing field that’s going to create or not level playing field it might create over the next 12 months?

That would be a very difficult thing for me to comment on. I think -- you know, I’d come back to the consumer, Mark and from my perspective, we’re seeing the consumer responding to value propositions. I think as the economy drags along, we’ll likely see that adjust and so the way I would look forward I think on this is that it will come from the consumer.

Fair enough. Thank you, guys.

Thank you. At this time, I am showing no further questions from the phone lines.

Okay. In that case, Matthew, we’ll call it a wrap. Thank you, everybody, for taking an interest in the business and we look forward to talking to you again when we disclose our third quarter results. Thank you very much, everybody.

Ladies and gentlemen, thank you for your participation on today’s conference. This does conclude the program and you may now disconnect. Everyone have a good day.