Mark R. Hunter - President and Chief Executive Officer Gavin D. Hattersley - Chief Financial Officer Stewart F. Glendinning - President and Chief Executive Officer, Canada Simon Cox - Chief Executive Officer, Europe Krishnan Anand - Chief Executive Officer of Molson Coors International and President of Molson Coors International Samuel D.

Walker - Chief Legal and People Officer Brian Tabolt - Controller David Dunnewald - Vice President of Global Investor Relations Tom Long - Chief Executive Officer of MillerCoors.

Judy E. Hong - Goldman Sachs Group Inc. Vivien Azer - Cowen and Company Bryan D. Spillane - BofA Merrill Lynch John A. Faucher - JP Morgan Chase & Co. Ian Shackleton - Nomura Securities Co. Ltd. Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc. Robert E. Ottenstein - Evercore ISI, Research Division.

Welcome to the Molson Coors Brewing Company Fourth 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 the most recent 10-K and 10-Q filings for a more complete description of factors that could affect these projections.

The company does not undertake to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Regarding any non-U.S.

GAAP measures that may be discussed during the call and from time to time by 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 Mark Hunter, President and CEO of Molson Coors..

Thank you, Leann. Hello and welcome, everybody, to the Molson Coors earnings call and many thanks for joining us today. With me on the call this morning from Molson Coors we have Gavin Hattersley, our CFO; Stewart Glendinning, our Canada CEO; Simon Cox our newly appointed CEO of Europe, congratulations Simon.

Kandy Anand, our International CEO; Sam Walker, our Chief Legal and People Officer; Brian Tabolt, our Controller; and Dave Dunnewald, VP of Investor Relations, and we also have Tom Long, CEO of MillerCoors with us. And congratulations Tom and best wishes for your retirement announced earlier today.

On the call today Gavin and I will take you through highlights of our full-year and fourth quarter 2014 results for Molson Coors Brewing Company along with some perspectives on 2015. Overall, 2014 was a good year for Molson Coors.

We grew net sales in constant currency and gross margin, as well as underlying EBITDA, free cash flow, after-tax income and earnings per share.

Weak consumer demand continued across our largest markets, but we made good progress in building a stronger brand portfolio, delivering value-added innovation, strengthening our core brand positions, and increasing our share in above premium.

We also continued to improve our sales execution and revenue management capabilities, increase the efficiency of our operations, implement common systems and focus importantly on Profit After Capital Charge as the key driver for our cash and capital allocation strategy.

In performance headlines for the year, we delivered $1.47 billion of underlying EBITDA and $768.5 million of underlying after-tax income, or $4.13 per diluted share. After-tax income grew 5.7% from a year ago.

Excluding foreign currency movements and the termination of the Modelo joint venture in Canada, all of our businesses achieved improved underlying profit performance in 2014 versus the year before.

We drove working capital performance company-wide and achieved $957 million of underlying free cash flow, which exceeded our original 2014 free cash flow goal by more than $250 million and we expanded our PACC model deeper into our company, including adding this measure to our long-term incentive plan.

We over-delivered against our cost savings targets, and we reduced our net debt by nearly $800 million. We grew our global above-premium volume, net pricing and sales mix, and maintained market share in Europe despite a poor economy and really challenging floods in some of our highest-share markets.

Volume challenges included Coors Light performance in the U.S. and Canada, however, Coors Light worldwide volume grew nearly 2% on the strength of its performance in Europe and International. We also cycled the termination of the Modelo brands joint venture in Canada.

Despite these challenges, our overall profit and cash performance helped to drive a positive total shareholder return of 35.7% in 2014, which is more than two-and-a-half times the total return for the S&P500 index of large stocks last year.

Based on this performance and our commitment to returning cash to our shareholders, we also announced board approval today for a new four-year, $1 billion stock repurchase program and an 11% increase in our quarterly dividend. With this change, we have increased our quarterly dividend by 156% since 2007.

Now, regional highlights for 2014 are as follows. In the U.S. underlying pretax earnings increased nearly 3%, driven by positive pricing, sales mix and cost savings. We grew revenue per hectoliter and increased our percent of sales in above premium, while working to restore growth to Coors Light and Miller Lite.

Miller Lite returned to growth in the fourth quarter with a total brand overhaul and redesign focusing on the brand’s authenticity and heritage, and Coors Banquet grew volume for the eighth consecutive year.

We also continued to grow the Above Premium segment with higher-margin offerings, notably Redd’s, Blue Moon Belgian White and Leinenkugel’s Summer Shandy. Brand innovations designed to drive margin improvement included Miller Fortune, Smith & Forge Hard Cider, Redd’s Wicked Apple, and Coors Light Summer Brew.

Our Canada underlying earnings declined 7.1% due to unfavorable foreign currency movements and the impact of terminating our Modelo joint venture early in the year, which had a combined negative profit impact of approximately $35 million.

Canada sales to retail, or STRs, declined 4.7%, with more than half of this decline due to the loss of the Modelo brands. Molson Canadian gained share in its segment, and the combined Coors Banquet and Coors Light brand family grew Canada market share versus 2013.

In above-premium, Coors Banquet delivered strong volume and share growth in 2014, as did our Creemore craft brand, and we expanded Molson Canadian Cider and extended our partnership for the marketing and distribution of the Heineken and Strongbow brands.

Margin-enhancing innovations included introducing Mad Jack Apple Lager and new craft flavor extensions for Canada’s consumers. During the year, our Canada team drove positive pricing and sales mix, achieved significant cost savings, and invested strongly in improving the efficiency of our brewery network.

Our Europe business in 2014 delivered higher net sales and gross margins, along with double-digit underlying pretax earnings growth. We worked against a weak economy all year, and severe flooding in some of our highest-share markets in early summer clearly compounded the challenges.

Nonetheless, we maintained market share across the region on the strength of our core brands, or above-premium portfolio and innovation. Our craft and above-premium brands performed well, with Coors Light, Doom Bar, Cobra, and Staropramen outside the Czech Republic leading growth.

And innovations during the year included Carling British Cider, new craft beer launches, and cold-activated packaging across multiple markets. Our International business delivered double-digit growth in volume, net sales and gross profit in 2014, despite the continuing challenges in Ukraine and Russia.

Coors Light volume in Latin America continued to grow at a strong double-digit rate, and we recently launched Coors Light in Chile and Coors 1873 in select Latin American markets. In India, we grew volume at a double-digit rate and increased our market share.

As a result of strong topline growth and cost control, we reduced the underlying international loss by 17.9% versus 2013. Now, I'll turn it over to Gavin to give fourth quarter financial highlights and perspective on 2015. Gavin over to you..

Thank you, Mark, and hello everybody. In fourth quarter financial highlights Molson Coors net sales were down approximately 5% in the U.S. dollars entirely due to foreign currency. Constant-currency net sales grew nearly 1% from the strength of positive and sales mix globally along with higher volume in Europe and international.

Worldwide beer volume from Molson Coors decreased 1.3% due to lower volume in the U.S. and Canada partially offset by growth in Europe and international. Underlying after tax income decreased 21% to $102.1 million or $0.55 per share.

Our underlying pretax income also decreased 21% with approximately one-third of this change driven by unfavorable foreign currency and the balance due to increased brand investments and incentive compensation this year along with lower volume in the United States and Canada and the termination of our Modelo brands agreement in Canada.

Foreign currency had a negative $11 million or 31% impact on pretax income in the quarter. On a U.S.

GAAP basis, we reported income from continuing operations attributable to Molson Coors Brewing company of $93.2 million which is 31.9% lower than in the prior year due to a higher effective tax rate and favorable foreign currency, low worldwide volume and increase brand investments.

Our underlying EBITDA was $273.9 million in the fourth quarter 14.6% lower than a year ago driven by lower earnings in the United States, Canada and Europe, please see the earning release we distributed earlier this morning for a detailed review of our business unit financial results in the quarter.

In the area of cost savings we exceeded our 2014 goals by achieving more than $70 million of cost reductions across our company driven by Canada and Europe. These results exclude Molson Coors which provided another $60 million of cost savings in 2014 at our 42% ownership rate.

We expect cp0st savings over the next few years to be in our medium term range of $40 million to $60 million and come primarily from Canada, with diminished savings from Europe. We also successfully concluded our three year working capital initiatives with a total improvement of $378 million since 2012, which is $78 million above our original target.

We drove working capital lower by $66 million, $253 million and $59 million for 2012, 2013 and 2014 respectively. We intend to continue to push hard on working capital in the years ahead to generate free cash flow.

We are also pleased that we exceeded our underlying free cash flow goal for 2014 by generating a total of $957 million of free cash an increase of $65 million or 7.3% versus 2013.

Higher underlying free cash flow was driven by increased distributions from Molson Coors in higher underlying income as well as lower cash paid for pension contributions, capital expenditures, interest and taxes. These improvements were partially offset by a decreased benefit from changes in net working capital.

Our 2014 free cash flow included the following factors, $1.27 billion of operating cash flow, and $56 million of net deductions, mainly cash received for the accelerated termination of the Heineken contract brewing agreement in the United Kingdon and the Modelo joint venture and Miller brands agreement in Canada, which were partially offset by cash used for restructuring activities.

Investing cash outflows included, $260 million of capital spending. Our cash flows to and from MillerCoors were broadly neutral. A detailed reconciliation of our 2014 underlying free cash flow is available in our earnings release this morning.

Total debt at the end of the fourth quarter was $3.187 billion, and cash and cash equivalents totaled $625 million, resulting in net debt of $2.562 billion, which is $171 million lower than at the beginning of the fourth quarter and $796 million lower than a year ago.

During the past several years, we have used our cash not only for growth opportunities, but also to continue to strengthen the Company’s balance sheet and to more than double our dividends per share.

The combination of strong cash generation and significant debt reduction now gives us the opportunity to increase returns to shareholders through a stock repurchase program. Our board has approved a new program to repurchase up to $1 billion of the Company’s Class A and Class B Common shares, which we expect to implement over the next four years.

We anticipate that the stock repurchases will be weighted toward the last two years of the program. This new stock buyback program reflects our continued confidence in the long-term growth and cash generating potential of our Company, as well as our commitment to returning cash to our shareholders.

Also, our board has authorized another increase in our quarterly dividend from $0.37 per share to $0.41 per share, beginning in the first quarter of 2015. This 11% increase results in an annual dividend amount of $1.64 per share, which represents a payout ratio of 20.6% of 2014 underlying EBITDA.

We continue to target a dividend payout in the range of 18% to 22% of trailing underlying EBITDA, which we anticipate will keep our dividend in a competitive range for global beer companies for the foreseeable future.

With the buyback and dividend announcements today, we are pleased to be in a strong position to increase cash returns to Molson Coors shareholders, while preserving financial flexibility to explore growth opportunities and meet our pension obligations in the future.

As always, potential cash uses will be vetted by our disciplined process, including our PACC model, and must meet our firm criteria of providing a clear view to near-term earnings accretion and building long-term shareholder value.

Looking forward to 2015, our annual target for underlying free cash flow is $550 million, plus or minus 10% at January 31 foreign currency rates. This goal is $407 million lower than our 2014 result because of five primary factors.

Our strong push on working capital had better results than expected in 2014, including from MillerCoors, and some of these improvements were originally expected to be achieved in 2015. Second, some of our large customers paid invoices early, which we were not expecting and are unlikely to repeat.

At current rates, we expect foreign currency to be a significant headwind for both cash and profit generation in 2015. More on this in a few minutes from Mark. We anticipate increasing capital investment behind cost savings projects and innovation to drive future growth, profit and improved volumes.

And finally, increased cash tax payments as we continue to move toward a cash tax rate closer to our normalized effective tax rate. Over the two-year period of 2014 and 2015, we expect to deliver more than $1.5 billion in underlying free cash flow, which averages at the top end of our original cash guidance range for last year.

Currently, we expect cash contributions to our defined benefit pension plans to be in the range of $300 million to $320 million in 2015, up from $75 million last year, including our 42% of MillerCoors contributions. This increase is primarily due to an additional voluntary contribution of approximately $230 million we made early this year to our U.K.

pension plan, as well as moderately higher contributions to the Canada and MillerCoors plans. We do plan to exclude the additional U.K. contribution from our underlying free cash flow calculation, as we have done in the past. Meanwhile, we anticipate 2015 pension expense of approximately $27 million, down slightly from $32 million last year.

Note that all of these pension numbers include our 42% of MillerCoors. The overall funded status of our defined-benefit pension plans, again including MillerCoors, declined about 2 percentage points from a year ago to 90% at the end of 2014.

This decrease was driven by lower year-end interest rates and longer life expectancies for pensioners versus a year ago. Our 2015 capital spending outlook is approximately $330 million, up from $291 million last year, primarily due to planned supply chain capital projects in Canada and keg purchases in Europe.

We expect our 2015 MG&A expense in Corporate to be approximately $110 million. Our consolidated net interest expense outlook for 2015 is approximately $120 million.

We expect our 2015 underlying effective tax rate to be in the range of 18% to 22%, assuming no further changes in tax laws, settlement of tax audits, or adjustments to our uncertain tax positions. We continue to expect our long-term tax rate to be in a range of 20% to 24%.

As far as our cost outlook is concerned in the U.S., we expect MillerCoors cost of goods sold per hectoliter to increase at a low-single-digit rate for the full-year 2015. In Canada, we expect our 2015 COGS to increase at a mid-single-digit rate per hectoliter in local currency.

In Europe, we anticipate a mid-single-digit decrease in cost of good sold per hectoliter this year in local currency, and our International business anticipates a low-double-digit decrease primarily due to changes in geographic mix and foreign currency. In each of our businesses, we anticipate higher costs related to product and package innovation.

At this point, I'll turn it back over to Mark for outlook, wrap up and the Q&A. Mark..

Thanks, Gavin. In 2015, we will continue to drive our strategy of building a stronger brand portfolio that is delivering value-added innovation, or strengthening our core brand positions, and increasing our share in above premium, craft and cider.

We will do this while ensuring that we have a fit for purpose cost base and a deeply embedded, PACC-led capital allocation approach.

Through 2015 and beyond, I will additionally be leading for a relentless focus on delighting our consumers and our customers to ensure we are the First Choice brewer in the geographies and segments where we choose to play. 2015 will, however, throw a number of challenges our way.

For nearly a year, we have flagged for you that we expect our effective tax rate to be higher than last year. We also anticipate substantial profit and cash headwinds from foreign currency and the termination of three business contracts this year.

To provide a sense of our FX challenge, if we were to apply foreign exchange rates at the end of last month to our 2014 results, it would reduce last year’s underlying pretax earnings by more than $70 million, or approximately 8% and the impact on cash would have been even larger.

Our 2015 financial results will also be negatively affected in the U.K. by the termination of our Modelo distribution agreement and termination of our contract brewing arrangement with Heineken at the end of April. In Canada, we are terminating our Miller brands agreement at the end of March.

We expect the loss of these three contracts to present a pretax profit headwind this year totaling approximately $40 million. We are taking actions to lessen the impact of losing these income streams, including the proposed closure of our Alton brewery to adjust our U.K.

cost base to reflect the loss of the Heineken contract volume, along with the addition of the Femsa brands to our business in Canada and adding the Modelo brands in Central Europe.

Regionally in the U.S., job number 1 is to drive for share in American Light Lagers, making sure consumers know the rich heritage behind Miller Lite and the cold-filtered Rocky Mountain refreshment of Coors Light.

In 2014, we returned Miller Lite to growth in the fourth quarter with a total brand overhaul and redesign focusing on the brands authenticity and heritage. In 2015 we will bring the same focus and intensity to returning Coors Light to growth by restaging the brand while maintaining our core messaging round Rocky Mountain Refreshment.

In addition, we’ll continue to transform our portfolio to above premium with innovations like Redd's, Smith & Forge Hard Cider and further extensions Leinenkugel's and Blue Moon such as our new Blue Moon White IPA.

We will continue to build first choice customer partnerships working with our distributors to bring more resources to the on premise with our building with beer retail strategy, which leverages a higher velocity and broad appeal of American Light Lagers.

Overall, we will invest significantly on our brands and information technology and as a result we do not expect to grow our U.S. operating margins in 2015. The Canada market remains weaker than U.S. and our team will continue to invest in supply chain efficiency and capability to streamline our Canada cost base.

In core brands Molson Canadian just introduced the next chapter of its Beer Fridge campaign and Coors Light will see more retail programming and new advertising later this quarter. And above premium consumer demand remains strong for Coors Banquet, Molson Canadian Cider and Mad Jack Apple Lager.

Last month, we began the national launch of Coors Altitude, a 6.4% ABV lager that is a refreshing alternative to spirits. This year, we also plan to introduce Rickard’s Radler as a seasonal.

In addition to Heineken and Strongbow, we are now marketing and distributing the rest of Heineken’s top-end import brands in Canada, including Dos Equis, Tecate, Sol, Moretti and Desperados.

The Europe economy continues to struggle with weak overall consumer demand and a deflationary backdrop and we expect the ongoing growth of the value segment and lower margin channels and PACC configurations to be challenges again in 2015.

Our segment leading core brands such as Carling, Ozujsko and Jelen will continue to be heavily invested in 2015 while we continue the strong momentum of our above premium craft in cider portfolio.

We are also adding the Modelo to our international premium brand portfolio in Central Europe this year, but volume for these brands is currently much smaller than annualized volume of the brands that we are loosing in the UK. Our international business will focus on growth and expansion in new and existing markets.

We will continue to drive strong momentum on Coors Light and Coors 1873 in Latin America along with growth in our India business. At the same time, we will remain disciplined with our cost base as we move towards our goal of achieving profitability by 2016.

Finally, here are the most recent volume trends for each of our business season very early in the first quarter. In the U.S. through January STRs decreased at a low-single digit rate. In Canada for January, they were down high-single digits. However, excluding the Modelo brands last year, our Canada STRs in January decreased at a mid-single-digit rate.

Our January sales volume in Europe decreased at a low-double-digit rate. Excluding the Modelo brand volume in the U.K. last year, our volumes in Europe decreased at a high-single-digit rate primarily due to weak post-holiday sales in the U.K. Our International sales volume, including royalty volume, increased at a mid-single-digit rate.

As ever, please keep in mind that these numbers represent only a portion of the current quarter, and trends could change in the weeks ahead. So to summarize our discussion today, we achieved good results in 2014 and built a stronger business.

We grew underlying earnings and margins, and we exceeded our goals for cost savings, cash generation and debt pay-down, despite significant headwinds during the year.

And, based on our continued confidence in the long-term growth and cash generating potential of our Company, as well as our commitment to returning cash to our shareholders, we announced a double-digit increase in our quarterly dividend, along with a new stock repurchase program. Now, before we start the Q&A portion of the call, just a quick comment.

As usual, our prepared remarks will be on our website for your reference within a couple of hours this afternoon. Also, at 1 p.m. Eastern Time today, Dave Dunnewald will host a follow-up conference call, which is an opportunity for you to ask additional questions regarding our quarterly results.

This call will also be available for you to hear via web cast on our website. So, at this point Leann, we would like to open it up for questions please. Thank you..

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

Thank you, hi, everyone..

Hi, Judy..

Hi, Judy..

So, Gavin maybe starting with your free cash flow guidance for 2015 if we just look at your two year average for last two years 7.50 it still looks like it’s a step down in terms of 200 million I know you talked about some other factors that are driving the decline, but can you also just quantify really the bigger headwinds that’s you faced the decline in terms of year-over-year from free cash flow guidance perspective..

Okay thanks Judy, I will just pass that straight across to Gavin. Gavin, do you want to take that one..

Sure, hi, Judy. Yes I think if you want to compare the run rate as you say it’s on average about $750 million for the two years. I guess the biggest item that wasn’t there in 2014 or 2015 will be the foreign exchange headwinds that we all experiencing Judy.

Mark did reference that in his prepared remarks, from a profit of view if you’re using January 31 rates that would be around $70 million and from a cash point of view that’s slightly higher.

So that’s probably the biggest headwind and then I would say the second one is our desire to increase our capital investments behind some cost savings incentives primarily in Canada, but also innovation and as I’ve said Keg purchases in Europe.

So and then I guess the third item would be increased tax payments, as our cash tax rate moves closer to our normalized effective tax rates. So I would say those are the three biggest items if you comparing the ongoing run rate with the past..

Okay. And then within that complex as we think about your new buyback announcement up to a $1 billion over four-year period, obviously encouraging to see you are returning more cash to shareholders. At the same time I think you’ve commented that the buyback will be more backend loaded.

So can you just give us some perspective on the timing of the buyback whether it’s because of the free cash flow guidance for this year or are there any M&A opportunities in terms of looking at the pipeline that you want to preserve some of that financial flexibility?.

Hi, Judy its Mark here. I mean I think just as context to the buyback I’d direct you back to the really the guidance and the philosophy we have around use of cash within the business and we’ve said that certainly as an executive team and as a board we want to strike the right balance across three critical priorities.

So we’ll continue to strengthen our balance sheet and further reduce liabilities, clearly we have some pension liabilities that we need to deal with as we go through 2015. We’ll focus on returning cash to shareholders and we want to remain open to brand led growth opportunities.

So I think what we’re attempting to do is strike the right balance here and the phasing of the buyback I think reflects only to retain that balance, I don’t know Gavin whether you’d want to anything to that..

Yes, Judy the only thing is I would add to that is our guidance for 2015 on free cash flow is $550 million, little over $300 million of that is going for cash dividends.

And I did reference the special pension contribution we made to the UK, which is obviously taking place in 2015, in fact it’s really taking place and a net amount to about $230 million..

Got it, okay.

And then just quick last question, you cited higher incentive compensation expenses in the corporate line to be in the fourth quarter end, just wanted to see if you can quantify how much the increase was?.

Not quantifying specifically that, Judy, but I’d also start some negativity in foreign exchange in the fourth quarter for the corporate division is being a driver for the increase there..

Got it. Okay, thank you..

In fact foreign exchange was the larger driver in the fourth quarter for corporate..

Understood. Okay, thank you..

Your next question comes from the line of Vivien Azer from Cowen. Your line is open..

Hi, good morning..

Hi, Vivien.

Hi, I apologize I was not on the 9 a.m. call, so I was hoping the first half of question on MillerCoors.

If you could also a little bit more color on the deceleration that you saw for the above-premium segment please in the quarter?.

Sure, I think we have Tom on the line, Tom are you with us this morning..

Yes, I’m here Mark..

And do you want to just pick-up and talk about our ongoing ambition to continue to move our portfolio in an above-premium direction and really just reflect a little bit on the short-term Q4 performance..

Yes, thank you. So the Tenth and Blake division which is a big portion of our above-premium business did declined low single-digits in Q4 it’s primarily due to declines in strategically deprioritize brands like Kelly and Batch 19 and Q4 growth in Leinenkugel Shandy did not offset that and that’s cyclical and that's behind us.

The very important strategy of transitioning our portfolio continuously year-after-year until the above-premiums remains intact and we had pretty good numbers of 14.9% of our businesses now and above-premium was up 1.2 percentage points last year.

So that continues and we’ve got a terrific portfolio of innovation for this year including Blue Moon or Horchata, Blue Moon Wide IPA, Leinenkugel’s, cranberry ginger and IPL as well as more innovation on Red’s in March we are launching Red’s green apple which has been a terrific innovation at very high margin.

So that strategy remains intact and we look forward to advancing in 2015..

Terrific Tom, thank you so much and congrats on the retirement.

My second question has to do with Europe, clearly the investments that you made paid off from a volume perspective, so as we think about 2015, was an incredibly volatile macro backdrop continuing to present potential headwinds, how should we think about the balance between volume growth and profitability please?.

Thanks, Vivien it’s Mark here again I’ll hand over to Simon just in a second I think it’s fair to say that certainly the economic challenges in Europe that we are looking into in 2015 are not unusual and not very different to what we’ve been dealing with over the course of the last 18 months to 24 months and our business is working very, very hard to make sure that we continue to manage our cost base very effectively and we drive our portfolio in a more premium direction so that if pricing is difficult are challenging in Europe that we get a positive mixed impact.

Simon do you want to add any color to that?.

Yes, I think you hit the headlines there Mark. As was referenced we’ve got a good track record I think between bouncing volume growth and profitability, so if you look back through 2014, I think the trend in 2015 in terms of the market demand of the consumer will be very similar and we’ve shown an ability to withstand that.

So highlights for 2014, I point to star a prominent growth at some of the Chez Republic in a premium position product.

We’ve done well with above premium products like Coors Light, Doom Bar and Cobra in the UK which helps our mix in our revenues and we’ve done well on things from our own innovation, so Carling, British cider from the UK and Cherry cider across Europe and some of our craft launches in some of our cold packaging.

So when we manage that portfolio well, investing behind the premium brands and our core brands we're able to despite a difficult consumer backdrop quite elegantly navigate that volume – the growth and profitability mix. So we would be confident that we can do that again, but I would certainly point to the 2014 results as evidenced..

Thank you so much. It’s very helpful..

Your next question comes from the line of Bryan Spillane from Bank of America Merrill Lynch. Your line is opened..

Hey good morning everyone..

Hi Bryan. Good morning..

Just a couple of I guess really points of clarification and then a question.

First, in terms of the free cash flow guidance, does that include – that’s inclusive or net of the pension contribution as well?.

No Bryan that’s before the pension contribution, so..

Okay. Okay, and then in terms of Coors Light and I guess a couple of questions related to Canada. Did you actually mention what Coors Light did in the fourth quarter, I might have missed that..

I don’t think we did mention. Stewart do you want to touch on the Coors Light performance in Q4 and probably we said in the context here of the broader Coors brand family performance which you know we’re very encouraged by..

Yes. So thanks for that Mark Coors Light actually had - very much better Q4, brand was down a couple of percent, but on a sequential basis performance was much, much better. If you took Coors Light and Banquet together those brands were flat so a good result for the Coors family in total..

Stewart can we read into that. I know there has been a lot of considerable amount of focus trying to restage the Coors Light brand in Canada and so can we read into this that there has been some transaction in terms of some of the actions you have take to get Coors Light restabilize or back to growth or on a path to growth..

Well, I think we’ve done good things with both Coors Banquet and with Coors Light. There is more work to be done with Coors Light as we shared during the prepared remarks, we expect to see our new campaign release later this quarter. We got an action- packed 2015. And so, yes we feel good about the fourth quarter.

But I think we’re working hard on making sure that’s that continues into this year..

Okay. And just one last one just COGS per hectoliter in Canada being up mid single-digits on a local currency basis.

Can you just walk through why I guess I thought was that it might be a little bit lower just given where some of the raw material costs are, so can you just kind of talk through some of the factors that are driving it to the mid single digit rate?.

Okay, yes, look sure I mean I think that you’ve got to consider where you believe the average inflation to be and then we layer on top of that any expected deleverage those would be the big drivers. Of course also we may see a little bit of FX impact as a result of U.S.

denominated imports like Banquet as well as any other products we buy for out of the U.S..

Okay, thank you..

Right, Bryan just one additional comment….

Bryan I would just add to that I mean obviously that the efforts which Stewart and his team are putting behind innovation will tend to drive COGS up from a mix point of view. And then we did have MMR for Q1 of 2014.

So we will feel the impact in Q1 of 2015 of not getting the cost recoveries coming through there, so those are two items I would add to Stewart..

All right. So that’s helpful there is a mix component that’s driving at above and beyond just what you are paying for raw material..

Correct..

Correct..

All right. Thank you very much..

Thanks Bryan..

Your next question comes from line of John Faucher from JP Morgan. Your line is open..

Yes, hi good morning. I know Dave is going to be doing the modeling call a little bit later. But just conceptually if we look at those two headwinds you talked about would be FX in the last contracts that adds up to about $110 million.

And as we look to model this if we strip out that the MillerCoors piece, you’re looking at a base probably if you have about $500 million from an operating profit. So it’s a big slug there.

How do we think about the offsets or is that something where we say with those – you are just going to have those headwinds and it just going to be tough year and you work through them. So I guess I am asking what’s the big offset relative to the $110 million headwind? Thanks..

Hi, John its Mark here I mean we don’t give earnings guidance as I think you are aware what we try to do is, I can give you transparency on a couple of areas, which we’ll be leaning into very, very hard through this year.

So I’m not going to give you a sense is to the mitigation plans, but take it from me as an organization that we’re lined up to continue to drive the underlying performance of the business, make sure that we invest in the business for driving value over the medium to long-term and we won’t do anything that undermines the business to deflect some of those more material headwinds, other than continue to drive the performance across our brands and our cost base and I can’t give you and won’t give you anymore specific detail in that..

Okay, if I can just follow-up and I apologize because this might had come out in your answer to Bryan’s question, but I just want to make sure the FX guidance is inclusive of all of the transactional pieces et cetera. So you mentioned shipping Bankwood out of the U.S. internationally.

That’s all inclusive in that 70 some odd million, is that correct?.

John, let me take that one. From an FX point of view the $70 million which Mark referred to is a translational impact for Molson Coors. And when you look at how the CAD is devalued since January of last year, it’s around 14% and the Euro is devalued about 17% to the end of January. So in combination that’s what’s driving primarily the $70 million.

Any FX movements that impact cost of goods sold would be included in the cost of goods sold guidance which we gave you by business unit..

Okay, great, thank you..

Your next question comes from the line of Ian Shackleton from Nomura. Your line is open..

Yes, good morning gentlemen.

Mark, this is obviously your first call as CEO, and I also quite interested in terms of what perhaps the new approaches you see for the business that we talked about last year?.

Couple of comments I mean I think if you look at our performance through 2014 in our total TSR growth, that for me underlines volatility of our existing strategy and a direction of travel of the business and all of our businesses grew underlying profit last year, when you [indiscernible] FX in the Modelo JV.

So I don’t think our business requires any significant adjustment and direction of travel.

So expect going forward more of the same plus the relentless focus on really driving more of a first choice consumer and customer agenda in our origination really getting connected with what is going to take to one in all of our markets of course the consumer and a customer level.

Look for an accelerated thought within MCI and also expect our PACC model and our PACC approach to be driven right to the front end of our business and to the short floor and that’s something which is already work in progress through 2015. So very much the same course of direction, but heightened just focus on three specific areas..

That’s very useful thank you.

Just a couple of specifics and I think in the fourth quarter you have positive price mix in Canada, does that give you confidence that would ease something more of a trend going forward?.

I am always vary of calling any quarterly performance as a trend I think we feel very good about the progress that Stewart and his team has been making in Canada I mean both from a cost restructuring perspective and also the focus in our tough volume market really continue to drive our NSR per hectoliter.

So I think the team have made continued progress through 2014 and that was again demonstrated in the final quarter. So I think in a tough volume environment we are focused in the right areas in our Canadian business..

My final question was around oil and obviously this presume a little bit of benefit in some of the COGS guidance from lower oil, and but I was quickly interested around distribution cost I guess this is probably bigger issue in Europe for you but certainly in Canada, but I mean is there a benefit that we need to bare in mind for 2015?.

It’s already contained really within the COGS guidance that we offered Ian, so I wouldn’t call as a particular material adjustment over and above the guidance that’s been offered..

Okay, thanks very much..

Your next question comes from line of Mark Swartzberg from Stifel. Your line is open..

Yes, thanks good morning everyone.

I guess two questions one is really a follow-up to Bryan’s on the COGS you specifically for the U.S., Canada you are saying mid single-digits and again we have this favorable import environment that we don’t have transactional issues here in the U.S., so can you just speak more to why the plus to single-digits is it primarily a mix things then I had a second question..

Mark, I would just say it’s primarily a mix issue as they put a lot of focus on innovation. Yes that’s a simple and short answer..

Yes, and Mark the offset you see it comes through on the NSR per hectoliter, so I think Tom and his team have done a really nice job again in a tough volume market of really focusing on driving the revenue link and you’ll see the benefit for innovations comes through and Tracey has already mentioned guidance on NSR per hec of 2% to 4% growth.

So we got to drive the innovation portfolio and that comes as normally, but a slightly hard cost at COGS level..

Got it. And then as we think about the way you are budgeting for 2015 versus perhaps are you budgeting few months ago, pretty soft start to the year and to John’s question about in the number you have given us of about $110 million or so EBIT drag.

Is it fair to think that the soft start to the year had a big influence on how you are thinking about the budget you had a few months ago?.

No I don’t think it’s fair to say that. Our budget was coming through the fourth quarter of last year; certainly the volume numbers in the first few weeks of 2015 don’t in anyway lead us to change our thinking for 2015..

Got it..

Mark the other thing obviously is January is a very small month for us right and its just a small part of the first quarter with February I haven’t been clear on as we are continuing to drive on our cost savings programs so we are still driving on the $40 million to $60 million guidance which I gave a couple of years ago and continue to put a lot focus on that..

Got it. Got it great. Thank you guys..

[Operator Instructions] our next question comes from the line of Rob Ottenstein from ISI..

Great thank you.

I guess there is a prior question on how much the incentive comp was up and you didn’t want to answer that and I understand that but I was wondering if you could tell us to what degree the incentive comp is tied to cash flow generation and because the cash flow generation was so much higher than expected that was the driver for the increase in the incentive comp..

Hi Rob, it’s Mark.

I mean we wont go into deep, the specific details of our compensation programs, but across our business our people are rewarded for top line, bottom line in cash performance and for our senior team results are longer term component PACC, but beyond that I wont go into any specific detail other than to say that the cash element is actually the smallest element of the compensation structure.

So it doesn’t have an over bearing impact on the total incentive line..

And Rob I don’t know if you were on the call earlier, but I would also add to that actually the biggest part of the $6 million increase in corporate loss was related to unfavorable foreign currency movements, the lion share of it actually was..

Okay and a different question.

In terms of Coors Light now globally, what percentage of the volume is sold outside of the U.S?.

Well that’s a good question.

Kandy, you answer some of that?.

Yes. So Rob, in terms of the Coors Light sales outside the U.S.

and Canada, that’s your question?.

No, no, globally, just the total Coors Light sales to the entire company, how much is U.S. - what percent of volume is U.S.

and what percent is international?.

That’s not in our finger tips, we are just checking for you..

Take the 42% Robert, it still be somewhat less than 50% of the global Coors Lights sales are sold outside the U.S. that would include places in Kandy’s organization, that would include Canada, a really nice growth business in the UK, yes, those are the main headlines..

Kandy, you had the announcement that you are going to be taking the Coors brands into Chile working with CCU on that assuming would you also be interested, you think in going into Columbia with those brands?.

Yes, Rob let me pass that across to Kandy..

Thanks, Rob.

So overall as you know we are very pleased with our progress on Coors Light especially in Latin America the consumer, customer and our partner interest and acceptance of brand is at a high level, we’ve been growing strong double-digit, we’ve just launched the brand in Chile with CCU and we’ve also launched Coors 1873 which part of it - it’s early days are doing pretty well in the market, beyond that we are not going to give you guidance on specific markets for obvious competitive and other reasons..

Thank you..

Thanks, Kandy. And Rob just to come back to your specific question on the proposition of Coors Light volume outside of North America so including Canada, that’s about 15% to 17%, so principally in international business and in our UK and Ireland business..

Thank you very much. End of Q&A.

[Operator Instructions] And we have no further questions at this time. I'd like to turn the call back over to our presenters for closing remarks..

Okay. Thanks, Leann. And many thanks everybody for joining us this morning at Molson Coors Brewing Company. We do appreciate your time and your questions and we look forward to speaking with you on our Q1 earnings call and then seeing many of you in New York our Analyst Meeting later this year. Many thanks..

And this concludes today's conference call. You may now disconnect..