Molson Coors Reports 2018 Full Year and Fourth Quarter Results

____________________________________

Full Year (FY) Worldwide Brand Volume Decreased 1.9%

FY Net Sales Revenue (NSR)/HL Decreased 0.7%, and Excluding
New Revenue Recognition Accounting Impacts FY NSR/HL Decreased 0.1%

FY Net Income of $1.1 Billion ($5.15 Per Share) Decreased 28.7%,
and

FY Underlying (Non-GAAP) EPS of $5.04 Increased 12.5%

FY Operating Cash Flow of $2.3 Billion, and Underlying
(Non-GAAP) Free Cash Flow of $1.4 Billion

Management Reaffirms Previously Updated 2017-2019 $700 Million
Cost Savings Guidance and Announces New $450 Million Cost Savings Plan
for 2020-2022

Management Remains Committed to Deleverage Target and Reiterates
Dividend Expectations

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4th Quarter (4th Q) Worldwide Brand Volume Decreased 1.5%

4th Q NSR/HL Decreased 0.4%, and Excluding
New Revenue Recognition Accounting Impacts NSR/HL Decreased 0.3%

4th Q EPS of $0.35, Down from $3.31, and Underlying (Non-GAAP) EPS
of $0.84 Increased 35.5%

____________________________________

DENVER & MONTREAL–(BUSINESS WIRE)–Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) today reported
results for the 2018 full year and fourth quarter. Molson Coors
president and chief executive officer Mark Hunter said:

“We accomplished much in 2018, delivering strong free cash flow and
meeting our deleverage commitments, restoring underlying EBITDA growth
in the quarter and second half, premiumizing our portfolio across
regions including launching Truss our Canadian cannabis beverage JV,
scaling volume and profitability in our fast growing International
business and continuing to strengthen our European business. Through the
year we further scaled our cost saving program which insulated us in
part from the effects of weaker industry demand in North America, higher
than anticipated input inflationary pressures and challenges associated
with the implementation of our U.S. brewery supply chain system.”

Mark continued, “We enter 2019 with a U.S. commercial plan focused on
mix and share improvement that is fully resourced and showing early
signs of impact against Coors Light, a commercial strategy that is
working in Europe and International and continually improving commercial
trends in Canada. We are focused on further strong free cash flow
delivery and deleverage supported by more than $200 million of cost
savings in 2019 and further $450 million across 2020 – 2022. We remain
committed to our plan to reinstitute a dividend payout-ratio in the
range of 20-25% of annual trailing underlying EBITDA upon achieving
3.75x leverage, which we expect to occur around the middle of 2019.”

Consolidated Performance – Full Year 2018

				Twelve Months Ended
($ in millions, except per share data) (Unaudited)				December 31, 2018						December 31, 2017 As Restated						Reported % Increase (Decrease)					Foreign Exchange Impact ($)						Constant Currency % Increase (Decrease)(2)
Net Sales				$	10,769.6					$	11,002.8					(2.1	)%				$	58.4					(2.7	)%
U.S. GAAP Net income (loss)(1)				$	1,116.5					$	1,565.6					(28.7	)%
Per diluted share				$	5.15					$	7.23					(28.8	)%
Underlying (Non-GAAP) Net income (loss)(2)				$	1,091.2					$	970.1					12.5	%
Per diluted share				$	5.04					$	4.48					12.5	%
Underlying EBITDA (Non-GAAP)(2)				$	2,453.7					$	2,496.6					(1.7	)%				$	(4.3	)				(1.5	)%

Consolidated Performance – Fourth Quarter 2018

				Three Months Ended
($ in millions, except per share data) (Unaudited)				December 31, 2018						December 31, 2017 As Restated						Reported % Increase (Decrease)					Foreign Exchange Impact ($)						Constant Currency % Increase (Decrease)(2)
Net Sales				$	2,418.7					$	2,579.6					(6.2	)%				$	(30.8	)				(5.0	)%
U.S. GAAP Net income (loss)(1)				$	76.0					$	716.9					(89.4	)%
Per diluted share				$	0.35					$	3.31					(89.4	)%
Underlying (Non-GAAP) Net income (loss)(2)				$	182.3					$	134.3					35.7	%
Per diluted share				$	0.84					$	0.62					35.5	%
Underlying EBITDA (Non-GAAP)(2)				$	487.7					$	481.0					1.4	%				$	(12.0	)				3.9	%

(1)			Net income (loss) attributable to MCBC.
(2)			See Appendix for definitions and reconciliations of non-GAAP financial measures.

Full Year Consolidated Highlights (versus 2017 Results)

• Net Sales: $10.770 billion, decreased 2.1 percent and 2.7
  percent in constant currency driven by volume declines in the U.S. and
  Canada, impacts of adopting the new revenue recognition accounting
  standard and cycling the indirect tax provision reversal, partially
  offset by higher global net pricing.
• Volume: Worldwide brand volume of 92.1 million hectoliters
  decreased 1.9 percent due to lower volume in the U.S. and Canada,
  partially offset by growth in Europe and International. Financial
  volume of 96.6 million hectoliters decreased 2.9 percent. Global
  priority brand volume decreased 3.1 percent.
• Net sales per HL: $111.46 on a reported financial-volume basis,
  increased 0.9 percent. Net sales per HL on a brand volume basis⁽¹⁾
  in constant currency decreased by 0.7 percent, driven by the impacts
  of cycling the indirect tax provision reversal in Europe and adopting
  the new revenue recognition accounting standard, partially offset by
  higher global net pricing. Excluding the impact of the new revenue
  recognition accounting standard, net sales per hectoliter (brand
  volume basis) decreased 0.1 percent.
• U.S. GAAP net income attributable to MCBC: decreased
  28.7 percent, primarily driven by the one-time income tax benefit
  recognized in the prior year due to the reduction to the U.S. federal
  corporate income tax rate as a result of U.S. tax reform. This decline
  was also driven by unrealized mark-to-market changes on commodity
  positions and lower volume and cost inflation in the U.S. and Canada,
  partially offset by the $328 million cash payment received in January
  2018 related to a purchase price adjustment to our acquisition of the
  Miller International business, positive global net pricing, global
  marketing optimization, general and administrative spend reductions
  and cost savings, as well as lower interest expense.
• Underlying net income: increased 12.5 percent, driven by
  positive global net pricing, global marketing optimization, general
  and administrative spend reductions, cost savings, lower interest
  expense and lower income tax expense, partially offset by lower volume
  and cost inflation in the U.S. and Canada.
• Underlying EBITDA: decreased 1.7 percent on a reported basis
  and decreased 1.5 percent on a constant currency basis, largely driven
  by the same factors as underlying net income, with the exception of
  lower interest and income tax expense.
• U.S. GAAP cash from operations: net cash provided by operating
  activities for full year 2018 was approximately $2.3 billion,
  which represents an improvement of $465 million from the prior year,
  primarily driven by the $328 million cash payment received in January
  2018 related to the receipt of a purchase price adjustment for our
  acquisition of the Miller International business, as well as lower
  pension contributions and lower interest paid, partially offset by
  unfavorable changes in working capital and lower cash tax receipts.
• Underlying free cash flow: $1.4 billion for full year 2018,
  which represents a decrease of $27.1 million from the prior year,
  driven by unfavorable changes in working capital, lower full year
  underlying EBITDA, lower cash tax receipts and higher cash paid for
  capital expenditures, partially offset by lower cash paid for pension
  contributions and interest.
• Debt: Total debt at the end of 2018 was $10.488 billion, and
  cash and cash equivalents totaled $1.058 billion, resulting in net
  debt of $9.430 billion. This net debt is more than $1.4 billion lower
  than at the beginning of the year, driven by the repayment of our CAD
  400 million 2.25% notes with cash on hand as part of our deleverage
  commitment and repayment of outstanding commercial paper as well as
  higher cash and cash equivalents.

Quarterly Consolidated Highlights (versus Fourth Quarter 2017 Results)

• Net sales: $2.419 billion, decreased 6.2 percent and 5.0
  percent in constant currency due to lower volume in the U.S. and
  Canada, partially offset by higher net pricing.
• Net sales per HL: $112.21 on a reported financial-volume basis,
  increased 0.3 percent. Net sales per HL on a brand volume basis⁽¹⁾
  in constant currency decreased by 0.4 percent, driven by unfavorable
  sales mix across our segments, partially offset by higher net pricing.
  Excluding the impact of the new revenue recognition accounting
  standard, net sales per hectoliter (brand volume basis) decreased 0.3
  percent.
• Volume: Worldwide brand volume of 22.0 million hectoliters
  decreased 1.5 percent, due to lower volume in the U.S. and Canada,
  partially offset by growth in Europe and International. Financial
  volume of 21.6 million hectoliters decreased 6.5 percent, driven by
  lower volume in the U.S., in part due to quarterly timing of
  wholesaler inventories, as well as lower volume in Canada and
  International, partially offset by growth in Europe. Global priority
  brand volume decreased 1.7 percent.
• U.S. GAAP net income attributable to MCBC: totaled $76.0
  million for the fourth quarter compared to $716.9 million in the prior
  year, primarily driven by the one-time income tax benefit recognized
  in the prior year due to the reduction to the U.S. federal corporate
  income tax rate as a result of U.S. tax reform. This decline was also
  driven by unrealized mark-to-market changes on commodity positions and
  lower volume and cost inflation in the U.S. and Canada, partially
  offset by positive global net pricing, volume growth and base business
  performance in Europe and International, global marketing
  optimization, general and administrative spend reductions and cost
  savings, as well as lower interest expense.
• Underlying net income: increased 35.7 percent, driven by
  positive global net pricing, brand volume growth and base business
  performance in Europe and International, global marketing
  optimization, general and administrative spend reductions, cost
  savings, lower interest expense and lower income tax expense,
  partially offset by lower volume and cost inflation in the U.S. and
  Canada.
• Underlying EBITDA: increased 1.4 percent on a reported basis
  and increased 3.9 percent on a constant currency basis, largely driven
  by the same factors as underlying net income, with the exception of
  lower interest and income tax expense.

⁽¹⁾ Brand Volume Basis NSR/HL:
Effective in the first quarter of 2018, we revised our net sales revenue
(NSR) per HL performance discussions to be on a brand volume basis, with
all per-hectoliter calculations including owned and actively managed
brands, along with royalty volume, in the denominator, as well as the
financial impact of these sales in the numerator, unless otherwise
indicated. See appendix for definitions.

Business Review – Fourth Quarter 2018

Net Sales

($ in millions) (Unaudited)				Three Months Ended
				December 31, 2018						December 31, 2017						Reported % Increase (Decrease)					Foreign Exchange Impact ($)						Constant Currency % Increase (Decrease)(1)
United States				$	1,603.8					$	1,724.7					(7.0	)%				$	—					(7.0	)%
Canada				322.0						352.9						(8.8	)%				(13.1		)				(5.0	)%
Europe				464.3						473.2						(1.9	)%				(16.4		)				1.6	%
International				57.7						71.4						(19.2	)%				(1.5		)				(17.1	)%
Corporate				0.1						—						N/M					—						N/M
Eliminations(2)				(29.2		)				(42.6		)				31.5	%				0.2						31.0	%
Consolidated				$	2,418.7					$	2,579.6					(6.2	)%				$	(30.8	)				(5.0	)%

N/M = Not meaningful
(1)			See Appendix for definitions and reconciliations of non-GAAP financial measures.
(2)			Reflects intercompany sales that are eliminated in consolidated totals.

Pretax Income (U.S. GAAP)

($ in millions) (Unaudited)				Three Months Ended
				December 31, 2018						December 31, 2017						Reported % Increase (Decrease)					Foreign Exchange Impact ($)						Constant Currency % Increase (Decrease)(1)
United States				$	239.3					$	224.0					6.8	%				$	(0.5	)				7.1	%
Canada				9.1						42.4						(78.5	)%				(2.5		)				(72.6	)%
Europe				33.5						43.1						(22.3	)%				(1.4		)				(19.0	)%
International				(6.7		)				(7.5		)				10.7	%				(0.6		)				18.7	%
Corporate				(205.9		)				(100.4		)				(105.1	)%				(2.0		)				(103.1	)%
Consolidated				$	69.3					$	201.6					(65.6	)%				$	(7.0	)				(62.2	)%

(1)			See Appendix for definitions and reconciliations of non-GAAP financial measures.

Underlying EBITDA (Non-GAAP)⁽¹⁾

($ in millions) (Unaudited)				Three Months Ended
				December 31, 2018						December 31, 2017						Reported % Increase (Decrease)					Foreign Exchange Impact ($)						Constant Currency % Increase (Decrease)(1)
United States				$	370.1					$	347.9					6.4	%				$	(0.5	)				6.5	%
Canada				64.7						79.2						(18.3	)%				(5.0		)				(12.0	)%
Europe				80.7						90.9						(11.2	)%				(3.1		)				(7.8	)%
International				2.8						0.4						N/M					(0.7		)				N/M
Corporate				(30.6		)				(37.4		)				18.2	%				(2.7		)				25.4	%
Consolidated				$	487.7					$	481.0					1.4	%				$	(12.0	)				3.9	%

N/M = Not meaningful
(1)		See Appendix for definitions and reconciliations of non-GAAP financial measures.

Quarterly Segment Highlights (versus Fourth Quarter 2017 Results)

United States Business

• Volume: U.S. brand volume decreased 5.1 percent on a
  trading-day-adjusted basis for the quarter, driven by lower volume in
  the premium light and economy segments. Sales-to-wholesalers (STWs),
  excluding contract brewing, volume declined 8.9 percent driven by
  lower brand volume as well as quarterly timing of wholesaler
  inventories. Wholesaler inventories ended 2018 at normal levels due to
  lower inventories outside of the radius of our Milwaukee brewery,
  offset by higher inventory levels in the Milwaukee brewery area in
  preparation for our February system implementation. On a full year
  basis, brand volume and STWs largely converged as brand volume
  declined 3.9 percent and STWs declined 4.4 percent.
• Revenue: Net sales per hectoliter (brand volume basis) grew 2.7
  percent. Excluding the impact of the new revenue recognition
  accounting standard, net sales per hectoliter (brand volume basis)
  grew 2.1 percent primarily as a result of higher net pricing,
  partially offset by negative sales mix.
• Cost of goods sold (COGS) per hectoliter increased 5.0 percent,
  driven by aluminum inflation, higher transportation costs and volume
  deleverage, partially offset by cost savings.
• Marketing, general and administrative (MG&A) expense
  decreased 16.8 percent due to spending optimization and efficiencies,
  as well as lower employee-related expenses including incremental cost
  reductions related to the restructuring initiated in the third quarter
  and lower employee incentive expense.
• On a U.S. GAAP basis, U.S. pretax income increased 6.8
  percent to $239.3 million, driven by lower MG&A expenses, higher net
  pricing and the favorable impact of the new revenue recognition
  accounting standard, partially offset by lower volumes, cost inflation
  and negative sales mix.
• U.S. underlying EBITDA increased 6.4 percent to $370.1 million,
  driven by the same factors as U.S. GAAP results.

Canada Business

• Volume: Canada brand volume decreased 2.0 percent in the fourth
  quarter, primarily as a result of lower volumes particularly in the
  West and Ontario, partially offset by growth in Quebec. Financial
  volume decreased 5.7 percent due to contract manufacturing and brand
  volume declines as well as distributor inventory reductions.
• Revenue: Net sales per hectoliter (brand volume basis)
  decreased 0.7 percent in local currency, driven by our adoption of the
  new revenue recognition accounting standard, which reduced net sales
  by approximately $11 million in the quarter with a similar benefit to
  MG&A. Excluding the effect of the new accounting standard, NSR per HL
  (brand volume basis) increased 2.7 percent in local currency due to
  higher net pricing.
• COGS per hectoliter increased 7.6 percent in local currency due
  to one-time charges related to inventory write-offs, cost inflation
  and unfavorable foreign currency, partially offset by cost savings.
• MG&A expense decreased 11.8 percent in local currency,
  primarily driven by the approximate $12 million favorable impact of
  the new revenue recognition accounting standard. Excluding the impact
  of the new revenue recognition accounting standard, marketing, general
  and administrative expenses were largely flat.
• On a U.S. GAAP basis, Canada reported pretax income of
  $9.1 million, a 78.5 percent decrease from the prior year, driven by
  higher other expense related to the unrealized mark-to-market loss
  recognized on the HEXO warrants issued in connection with the
  formation of the Truss joint venture, lower volumes and one-time
  costs, partially offset by higher net pricing.
• Canada underlying EBITDA decreased 12.0 percent in constant
  currency to $64.7 million in the quarter, due to the same factors as
  U.S. GAAP results with the exception of the unrealized mark-to-market
  losses on the HEXO warrants.

Europe Business

• Volume: Europe brand volume increased 3.3 percent in the fourth
  quarter versus a year ago, as a result of improved above premium and
  core brand performance. Europe financial volume increased 3.0 percent.
• Revenue: Europe net sales per hectoliter (brand volume basis)
  decreased 2.5 percent in local currency, driven by negative pricing
  due to the impact of adopting recently revised excise-tax guidelines
  in one of our European markets as well as increasing our investment
  behind our First Choice Agenda this year.
• COGS per hectoliter increased 0.4 percent in local currency,
  due to higher fixed overhead costs, inflation and mix shift to
  higher-cost brands and geographies.
• MG&A expense increased 4.0 percent in local currency,
  primarily driven by the impact of cycling the partial reversal of a
  bad debt provision in 2017 partially offset by more efficient brand
  investments and the impact of adopting the new revenue recognition
  accounting standard.
• On a U.S. GAAP basis, Europe reported pretax income of
  $33.5 million, a decrease of 22.3 percent driven by cycling the
  partial reversal of a bad debt provision in 2017, negative pricing due
  to the impact of adopting recently revised excise-tax guidelines in
  one of our European markets as well as increasing our investment
  behind our First Choice Agenda this year.
• Europe underlying EBITDA decreased 7.8 percent in
  constant currency to $80.7 million, driven by the same factors as U.S.
  GAAP results.

International Business

• Volume: International brand volume increased by 1.1 percent in
  the fourth quarter, driven by organic growth in our focus markets.
• Revenue: Net sales per hectoliter (brand volume basis)
  decreased 20.2 percent, driven by sales mix changes and shifting to
  local production in Mexico, partially offset by positive net pricing.
• COGS per hectoliter decreased 5.3 percent, driven by lower
  integration-related non-core costs and sales mix changes.
• MG&A expense decreased 24.8 percent, driven by lower
  marketing investments along with lower overhead and integration costs.
• On a U.S. GAAP basis, International segment reported a pretax
  loss of $6.7 million, an improvement of $0.8 million versus a year
  ago, driven by shifting to a more profitable business model in Mexico,
  volume growth in our focus markets, and lower marketing and
  integration expenses, partially offset by special charges recognized
  as a result of formally exiting our China business and negative
  foreign currency movements.
• International underlying EBITDA was $2.8 million in the fourth
  quarter, compared to $0.4 million a year ago, driven by the same
  factors as U.S. GAAP results with the exception of special charges
  related to the impacts of exiting our China business, as well as
  integration costs.

Corporate

• On a U.S. GAAP basis, Corporate pretax loss on a reported basis
  was $205.9 million in the fourth quarter compared to a loss of $100.4
  million in the prior year, primarily due to unrealized mark-to-market
  losses on commodity positions compared to gains a year ago, partially
  offset by lower general and administrative costs, lower interest
  expense and lower integration costs.
• Corporate underlying EBITDA was a loss of $30.6 million for the
  fourth quarter versus a $37.4 million loss in the prior year, driven
  primarily by lower general and administrative costs.

Worldwide Brand and Financial Volume(1)

(In millions of hectoliters) (Unaudited)				Three Months Ended
				December 31, 2018							% Change							December 31, 2017
Financial Volume(1)				21.556							(6.5	)%						23.055
Contract brewing, wholesaler and non-beer volume				(1.781	)						(10.3	)%						(1.985	)
Royalty Volume				1.110							22.4	%						0.907
Sales-To-Wholesaler to Sales-To-Retail adjustment				1.126							196.3	%						0.380
Total Worldwide Brand Volume(1)				22.011							(1.5	)%						22.357

(1) See Appendix for definitions and additional discussion regarding
Financial and Worldwide Brand Volume.

Other Results

Cost Savings Update

• The company delivered $240 million of cost savings, resulting
  in a total of $495 million delivered to date within the current
  program. Cost savings for 2019 are expected to be approximately $205
  million to generate a total of $700 million over the 3 year period of
  the 2017 – 2019 program, which exceeds our original goal of $550
  million by $150 million.
• Total one-time costs to capture transaction-related synergies were
  approximately $94 million in 2018, and are now expected to be $230
  million over the 2017 – 2019 program, with approximately 70% non-core
  operating expense and 30% in capital spending. This reflects a $120
  million reduction in costs to achieve synergies versus our original
  expectation.
• We are committed to continuing to deliver cost savings across the
  organization and are constantly evaluating the business to identify
  areas for additional savings. Our next generation cost savings program
  to begin in 2020, is currently expected to deliver approximately
  $450 million over the 3 year program term and is focused around
  many of the same functions of the business as the current program. As
  all of the Acquisition transaction related synergies are expected to
  be realized by the end of the 2017 – 2019 program, the 2020 – 2022
  program reflects ongoing base business savings. With all programs,
  there are certain one-time investments required to realize these
  on-going savings. As we will have finalized our integration period
  related to the Acquisition, all operating expenses and capital
  spending associated with the 2020 – 2022 program will be reflected
  within our underlying results.

Effective Income Tax Rates

				Three Months Ended										Twelve Months Ended
				December 31, 2018					December 31, 2017					December 31, 2018					December 31, 2017
U.S. GAAP effective tax rate – As Restated				(9.2	)%				(257.8	)%				16.6	%				(14.8	)%
Underlying effective tax rate				13.7	%				28.7	%				16.5	%				27.1	%

• Our effective tax rate was negative 9.2 percent in the fourth
  quarter of 2018 and was driven by a one-time tax benefit recognized
  during the quarter. A year ago, our fourth quarter effective tax rate
  was negative 257.8 percent driven by the recognition of a net discrete
  tax benefit related to revaluing our deferred tax liabilities as a
  result of the reduction of the federal statutory corporate income tax
  rate to 21 percent as part of U.S. tax reform. The increase in our
  effective tax rate during the full year 2018 was also primarily driven
  by the previously mentioned impacts of U.S. tax reform, which resulted
  in a negative full year effective tax rate of 14.8 percent in 2017.
• Our fourth quarter underlying effective tax rate decreased to
  13.7 percent from 28.7 percent a year ago, primarily due to the change
  in the U.S. statutory rate from 35 percent to 21 percent starting in
  2018, as well as the above mentioned one time tax benefit recognized
  in the fourth quarter of 2018. The decrease in our full year
  underlying tax rate versus the prior year was also primarily driven by
  the previously mentioned reduction in the U.S. federal statutory rate
  in 2018.

Special and Other Non-Core Items

The following special and other non-core items have been excluded
from underlying results. See the Appendix for reconciliations of
non-GAAP financial measures.

• During the fourth quarter, MCBC recognized a net special charge of
  $18.

Contacts

News Media
Colin Wheeler, (303)
927-2443

Investor Relations
Mark
Swartzberg, (303) 927-2334

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