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THE NEWSLETTER FOR MOLSON COORS PENSIONERS23rd

EditionMarch 2010

If you would like to comment on anything that appears in thisissue or suggest topics for future editions, please contactThe Editor ‘Connections’, Molson Coors Brewing Company (UK) Ltd., Pensions Department, Carling House, 137 High Street, Burton-on-Trent, Staffordshire DE14 1JZ.

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Report and Accounts SummaryThe annual report and fi nancial statements of the Molson Coors (UK) Pension Plan (“the Plan”) which covered the year ending 30 June 2009 (“the year”) was completed at the end of 2009.

The Report contains important information about the fi nancial position, administration and stewardship of the Plan. It is produced for the benefi t of members and other interested parties, in order that they may gain a greater understanding of the way in which the Plan operates. It also satisfi es the legal obligations placed upon the Trustee and companies who operate such pension arrangements.

In the Chairman’s report, Nicholas Godden includes the following comments:• When I reported to you last year we were in the fi nal throes of the triennial actuarial valuation for the Plan as at 30th

June 2007. This was the fi rst time we had considered a valuation under the new regulations. I wrote that we expected the valuation to be completed with a small defi cit, which we expected to be funded by the future investment returns and special contributions by Molson Coors Brewing Company (UK) Limited (the Company), backed up by a Parent Company guarantee from Molson Coors in the US.

• After protracted negotiations we fi nalised the valuation on a revised basis with the Trustee taking a more conservative approach to valuing the liabilities (the future projections of the benefi ts to be paid) and relying on the Company to meet any shortfall. This created a defi cit of £121.7 million. The Company has agreed to the ‘Recovery Plan’ which will clear this defi cit by 2014. The Company also made a signifi cant contribution of £66.8 million at the end of 2008 towards this.

• It was decided to take this more conservative approach as the fi nancial markets were continuing to decline, there was no positive economic news and the profi ts available in the U.K. brewing industry remained under pressure. Had similar assumptions been made at 30th June 2009, the defi cit would have increased to £723.7 million. The Trustee, working with the Company, will therefore have to consider very carefully how to handle the next triennial valuation due 30th June 2010. The support of Simon Clayson, the Scheme Actuary, and his team at Watson Wyatt is appreciated.

• As everyone is aware 2008 was the year the banking bubble burst, following on from the troubles in the sub-prime mortgage markets. This resulted in governments reacting with reductions in central bank rates, (including in the U.K. to the lowest rate ever), semi-nationalisation of the banks in many countries and latterly quantitative easing to try to avoid a deep recession or depression. As this report is drafted it is unclear what the outcome of these measures will be. It is, however, pleasing to be able to report that fi nancial markets moved upwards in the last quarter of our fi nancial year, recovering some of the extreme losses seen during the fi rst three quarters.

• During a very diffi cult period for the investment markets, against a backdrop of falls of around 20% for the year on the FTSE all share index, the Plan’s portfolio gave a negative return of only -9.7%. This outcome endorses our de-risking strategy, and a move from a heavy dependence on equities to a more diversifi ed portfolio. You can see the deployment of our investments at 30th June 2009 in the pages that follow. We intend to continue with this current asset allocation for the time being, but the Trustee will keep this under constant review given the uncertainty of the economy and the markets. I believe we continue to be well advised by the Investment Consultancy Team at KPMG.

• The other very signifi cant factor for the Plan is that the Company closed it to future accrual from 4th April 2009. This means that the former active members will no longer be accruing benefi ts in the Plan for service from that date. The Company has put in place an alternative Defi ned Contribution Plan. The Plan does, however, maintain life, incapacity and dependency cover for those members still in employment. From a Plan governance viewpoint the Trustee will be ensuring that the same high level of attention is given to the Plan, as it represents a very signifi cant obligation on the Company, and the Trustee needs to make sure that the funding in the Plan is adequate to pay the benefi ts due to the 17,355 members.

• From an administration perspective I am able to report that the team at Xafi nity Paymaster is looking after your records very well, and the small internal team in Burton likewise.

Plan Advisers:A list of those who acted as advisers to the Trustee during the year is shown below. The Trustee took the decision to change its Investment Adviser during the course of the year from Mercer Investment Consulting to KPMG.

Membership: the total number of members reduced during the year from 17,558 to 17,355.

Plan Assets: In the Investment Report produced by KPMG LLP it was noted that the strategic asset allocation for the Plan changed signifi cantly over the year. In accordance with the revised investment strategy, the Plan reduced its allocation to equities and increased exposure to alternative asset classes such as hedge funds. The Trustee also decided to invest assets into a Liability Driven Investment (LDI) program, to reduce the volatility of the Plan’s funding level. This approach involves the use of bonds, cash and derivative instruments.

The actual proportions invested in the assets identifi ed above during the period have naturally fl uctuated with market conditions. The Plan’s actual asset allocation at the end of the reporting period is shown in section below.

Net Assets: the net assets of the Plan at the end of the period to 30 June 2009 were £939.8m.

0

2000 1926

4000

6000

8000

10000

12000

10248 10359

5384

6996

PensionersActive Members

DeferredPensioners

30 Jun 093

30 Jun 08

3

3

32%

16%

8%

7%

25%

4%5% 1%2% UK Equity £42.2mU

Global Equites £239.4mG

Gottex Hedge Fund £68.6mG

NFC Hedge Fund £73mN

Insight LDI £151.6mIn

Bonds £292.3mB

Currency £14.8mC

Property £44.3mP

Cash £13.6mC

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Welcome to this addition of ‘Connections’. You will see that we have changed the

format this time to refl ect ‘Our Brew’, but more of that later.Plan Actuary Watson Wyatt LLP

Plan Auditor Deloitte LLP (previously named Deloitte & Touche LLP)

Investment Adviser KPMG (appointed 9.11.07)

Legal Adviser Allen & Overy LLP

Global Custodian Northern Trust Limited

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Income:

Expenditure:

If you wish to receive a full copy of the Report and Accounts, please write to the address given in “Editor’s Last Words”.

Triennial ValuationThe next formal triennial valuation is due June 2010. Work on the valuation is scheduled to commence in June. The valuation is undertaken to establish the value of assets, the amount needed to provide pensions and levels of additional funding that may be required. We will keep you updated on progress in the next edition.

Changes to the PlanZahir Ibrahim, Director of Financial Planning & Control has stepped down as Company Nominated Trustee and his place has been taken by Rob Eveson, Supply Chain Financial Controller. Charles Paley has also resigned as Member Nominated Trustee and recruitment is underway for a replacement. The Trustee Board is currently made up as follows:

Company Nominated:Nicholas Godden Independent Chairman Sue Albion Legal Director & Company SecretaryGordon Blasius Vice President Global Rewards, Molson Coors Brewing CompanyDavid Heede Finance Director John Heynen Sales Director Coors Off Trade & Multiple On TradeMartin Thomas Supply Chain Director Rob Eveson Supply Chain fi nancial ControllerClaire Sykes Business Partner Compensation & Benefi ts (Secretary to the Trustees)

Payment of Pensions in 2010 Pension payments are made monthly on the fi rst working day of the month. The pay days for the remainder of the 2010 calendar year are as follows:

April Guaranteed Minimum Pensions (GMPs)The increase to Post 1988 GMPs effective from April 2010 will be 0%. For those of you who will have a £1 or more increase to your pension payment (as a result of either the GMP increase or due to the start of the new tax year) a new payslip will be issued to you.

Issue of P60sP60s will be issued to all our pensioners by the beginning of May 2010. If you are a non tax payer, your P60 will show your gross and net pension amounts to be the same.

Change of Address or Bank DetailsIf you change address or your bank details, please remember to notify the Pension Plan Administrator in writing to the address below, ensuring that you provide your full name and date of birth (or National Insurance number). Should correspondence or payment be returned via the postal or banking systems, your pension will be suspended until we receive appropriate written confi rmation from you.

Paymaster (1836) Ltd Pension Payroll Services P.O. Box 576 Sutherland House Russell Way Crawley West Sussex RH10 1WL

Or email molsoncoors.pensions@xafi nitypaymaster.com

Please do NOT write to the “Connections” Editor as Paymaster hold all our pensioner records and action changes without delay.

State PensionsFrom April 2010, the basic state pension will increase to £97.65 per week for a single pensioner and to £156.15 per week for couples. However, your individual circumstances may affect the amount you get.

Company NewsThere are a number if imminent changes to the Molson Coors (UK) Board. The Board is made up as follows:

Molson Coors (UK) Board:Molson Coors Board:Mark Hunter - Chief Executive Offi cerSimon Cox - Strategy DirectorChris McDonough (from June 2010) - Marketing Director Sue Albion - Legal Director & Company SecretaryTracey Ashworth-Davies (from July 2010) - HR DirectorSteve Ellis - Sales Director, FOTDavid Heede - Finance DirectorJohn Heynen - Sales Director, COT & MOTMartin Thomas (retires June 2010) - Supply Chain DirectorLee Finney (from May 2010) - Supply Chain Director

0.0-20.0-40.0-60.0-80.0-100.0 20.0

-80.3

1.9

6.1

14.8

3.3

£m

Change in Market value of investments -£80.3mC

Age Related Rebates £1.9mAg

Investment Income £6.1mIn

Company Contributions £14.8mC

Employee Contributions £3.3mE

87%

4%

3%Retirement Benefits £59.2mR

Death Benefits £2.0mD

GMP Correction £0.8mG

Leavers £1.2mL

Inurance Premiums £0.2mIn

Administration Expenses £2.0mA

Investment Manager £3.0mIn

1%2%

0%3%

April May June July August01.04.10 04.05.10 01.06.10 01.07.10 02.08.10September October November December01.09.10 01.10.10 01.11.10 01.12.09

Member Nominated:Roy Barnes (pensioner member)Kevin Giles Colin GreatorexTBC

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To win we must be more effective than our bigger competitors – we believe that challenging the expected is absolutely pivotal to this. That said, the ultimate judge is the beer drinker – it is critical that we make our brands extraordinary so they choose us time after time.

Molson Coors leaders accept their responsibility to create an environment where people can challenge the expected. In return there is a responsibility for everyone working here to make a positive difference every day so we can all succeed.

Challenging the expected, building extraordinary brands, and taking personal accountability can be interpreted in many different ways. The "Right Way/Wrong Way" acts as the guide to ensure we are doing these things the right way for Molson Coors.

Our values also help us ensure we are right on "Brew" with our actions. In a nutshell - when we are living the values, we are performing at our very best.

By combining all of these elements and coming together as one, we will succeed and Molson Coors will become a Top 4 Global Brewer.

"+,)-,$*.During 2009 we launched the ‘Our Brew’ framework across the whole of Molson Coors. It is designed to embrace the company values and bring all employees together to work towards the company’s goals for the

future to win in beer and become a top four global brewer.

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Every Drip, Every Ripple

MCBC UK 2009 Q4 and Full Year Results

Molson Coors UK recently announced its fi nancial results for 2009 showing profi t growth of

48% versus a plan for 18% profi t growth, Mark Hunter, CEO, commented that this was a truly

outstanding performance, not only during these turbulent economic times, but also within the

beer industry which continues to feel pressure on a number of fronts. Here are the highlights:-

Overall consumer demand remains sluggish, and we see these conditions continuing to impact

volume and mix in the near term. Our strategy remains consistent, however. We are focused on

investing in innovation and our brands and ensuring we maintain a strong balance sheet, so that

when market conditions improve we are better positioned to accelerate our growth and capitalize

on opportunities.

We continued to forgo low-profi t volume and share, which helped us drive positive pricing and

margins. For the full year, we expanded our brand portfolios in the U.K., exceeded our goals for

cost savings, and maintained price discipline, all of which contributed to a signifi cant increase in

our full-year underlying earnings.

Looking to 2010, we expect volume to remain challenging, especially in the fi rst half, but we are

focused on continuing to establish a strong brand base to our business that ensures we not only

manage the current market but that we take full advantage of revenue upsides when

momentum improves.

U.K. underlying pretax earnings increased nearly 15% versus a year ago. This strong performance

was driven by positive results from the strategic actions our team has taken in the past year,

including leveraging our contract brewing arrangement and brand-building efforts. These earnings

drivers were partially offset by lower volume and higher incentive compensation expense in the

quarter. On a reported basis, fourth quarter underlying pretax income increase by 20.3% versus the

same quarter last year. These results include the benefi t of a 4% appreciation of the British Pound

versus the U.S. Dollar.

Owned-brand volume decreased 9.3% during the quarter due to declining industry volume and

the Company’s strategy to forgo low-margin volume. The U.K. beer industry volume declined

approximately 4% in the fourth quarter.

Comparable net sales of owned products increased 18%, driven by two factors. Higher pricing in all

channels and positive sales mix drove 10% and 8% of the increase, respectively.

Comparable cost of goods sold of owned brands increased 12% in the fourth quarter, driven by

input cost infl ation, adverse brand mix and the deleveraging impact of lower owned-brand volumes,

partially offset by a mark-to-market adjustment on natural gas hedges.

Marketing, general and administrative expense increased 11% due to higher incentive

compensation, information systems, and Cobra-related sales force costs, partially offset by lower

bad-debt expenses in the quarter.

You can see the full Molson Coors results on the Molson Coors website.

“The UK Water Strategy Group enjoying a rare moment of November sunshine at Carsington Water”

Without great water, we can’t make great beer. So now’s the time to act to protect one of our

most precious resources.

Water is a diminishing resource and the U.K.’s Environment Agency has warned that demand for H20

could increase by 25% in the next 10 years. The crisis is greatest in the South East of England, where at

least 10 million people have less water available per head than those living in Egypt and Morocco.

Water is essential to the brewing process, and Molson Coors takes water stewardship very seriously.

We’re committed to protecting supplies of quality water for future generations, so we care about every

drop we use and every ripple we leave.

And that’s a lot of water – in our U.K. breweries and maltings alone, we use 5 billion litres of water every

year. It currently takes 4 pints of water to brew 1 pint of beer – but if we factor in all the indirect uses of

water (for example, in growing barley or in packaging), it is close to 100 pints.

Our breweries have naturally developed in areas of exceptional water quality – it’s the purity and unique mix of minerals that make our beer taste so good! Neil Tonge, group Environment, Health and Safety manager, said: ‘At MCBC we believe everyone should have access to water as pure as that which we use to make our beers. Using resources in a sustainable way is central to the long term success of our business. Without great water we cannot make great beer.’In 2008, Molson Coors signed up to the CEO Water Mandate, a partnership between the UN and international organisations to promote collaboration around water issues; and in 2009, we agreed a strategic partnership with Circle of Blue, an international non-profi t organisation helping to infl uence consumers and decision-makers about water issues.

This November, the U.K. Water Strategy Group had their second meeting to review the

strategic activity around water for the next 3 years. Activities are based round conserving

water and ensuring water quality during the brewing process, understanding our impact on

resources, and engaging Molson Coors people and our wider communities with our plans.

Debbie Read, Corporate Responsibility Business Partner, commented: ‘The work being

carried out both within the U.K. and globally on our water strategy will demonstrate MCBC’s

ability to be recognised as an industry leader in this area and support our BHAG to be

recognised as World Class in our corporate responsibility.’

e

’ th ti t act to protect one of our

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Blond Has More Fun

Following its release on draught in the on trade last year, Grolsch Blond has now made its debut in the off trade. The distinctive continental lager is imported from Holland and will be sold in 6 x 275ml bottle packs and 4 x 440ml can packs in Sainsbury’s, Waitrose and Morrisons.

Grolsch launched its new ‘Taste Amplifi ed’ advertising campaign in October, and as part of this new £13 million campaign, a new poster announcing the launch of Grolsch Blond will be seen at targeted retailers by more than29 million shoppers.

Weathering the Storm

The recession, the smoking ban, two washed out summers…There’s no denying that times are tough in the beer industry. Around 50 bars and pubs are closing every week in the U.K. But if you look beyond the statistics, there are some inspiring success stories.Despite the gloomy economy, Molson Coors is challenging the trends through relentless innovation – and many of our customers are doing the same.

Keith Williams runs Apres Chain of bars and restaurants in Birmingham – as well as Mechu, recently voted one of the world’s top 50 bars by the Independent.

He sells Carling, Grolsch, Cobra, Coors Light and Sol, among others, and like the variety in the Molson Coors portfolio.‘They are all good beers – high-quality products,’ he says.

Although he’s been in the business almost 30 years, and has built up an impressive reputation locally, Keith admits ‘the world stopped’ when the credit crunch took hold.

‘We had to reassess our priorities,’ he said. ‘But we are still doing reasonably well.’

‘I love the business and I live it 24 hours a day – and so do my team. I think that’s what made the difference for us. It’s important for landlords and bar managers to keep their fi nger on the pulse, make decisions at the right time and do things well.’

Keith also puts his success down to the support he’s received from Molson Coors – and from account manager Wayne Spencer in particular. ‘I can’t praise the team highly enough in terms of the way they look after me as a customer,’ he says. ‘They keep in frequent contact and have always gone the extra mile to help me when I’ve been opening a new venue.’

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