Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes, and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2008, as well as our unaudited condensed consolidated financial statements and the accompanying notes included in this Form 10-Q. Due to the seasonality of our operating results, quarterly financial results are not an appropriate basis from which to project annual results.

Effective July 1, 2008, Molson Coors Brewing Company ("MCBC") and SABMiller plc ("SABMiller") combined the U.S. and Puerto Rico operations of their respective subsidiaries, Coors Brewing Company ("CBC") and Miller Brewing Company ("Miller"). In connection with the closing of the joint venture transaction, each of MCBC, CBC, SABMiller and Miller have entered into an Amended and Restated Operating Agreement (the "LLC Operating Agreement"). The LLC Operating Agreement is the primary operating document governing the joint venture, MillerCoors LLC ("MillerCoors").

Beginning in the third quarter of 2008, the results and financial position of U.S. operations, which has historically comprised substantially all of our U.S. reporting segment was, in all material respects, prospectively deconsolidated from MCBC. In the third quarter of 2008 and prospectively, our interest in the new combined operations have been accounted for under the equity method of accounting. Our equity investment in MillerCoors represents our U.S. reporting segment from July 1, 2008 forward.

BUSINESS OVERVIEW

Financial Highlights

    The following third quarter highlights summarize components of our condensed
consolidated summary of operations for the thirteen and thirty-nine weeks ended
September 26, 2009, and September 28, 2008. See "RESULTS OF OPERATIONS" below
for further analysis of our reportable segment results (in millions, except
percentages and per share data).

                      Thirteen weeks ended                              Thirty-nine weeks ended
                September 26,      September 28,                   September 26,       September 28,
                    2009               2008          % change           2009                2008          % change
Volume in
hectoliters              5.181              5.480         (5.5 )%           14.082              29.868        (52.9 )%
Net sales        $       853.7      $       921.1         (7.3 )%   $      2,211.6      $      4,035.2        (45.2 )%
Income
attributable
to MCBC from
continuing
operations,
net of tax       $       244.3      $       168.1         45.3 %    $        511.2      $        303.2         68.6 %
Diluted
income
attributable
to MCBC per
share from
continuing
operations       $        1.31      $        0.90         45.6 %    $         2.75      $         1.63         68.7 %

Consolidated Global Volumes including Proportionate Share of Equity Investments'

volume

                                             Thirteen Weeks Ended
                                      September 26,        September 28,
                                           2009                2008           % change
                                             (In millions, except percentages)
                                          Actual              Actual
Volume in hectoliters:
  Reported financial volume                     5.181                5.480         (5.5 )%
  Royalty volume                                0.076                0.078         (2.6 )%

Owned volume                                    5.257                5.558         (5.4 )%
  Proportionate share of equity
  investment sales-to-retail(1)                 8.542                8.658         (1.3 )%

Total MCBC worldwide beer volume               13.799               14.216         (2.9 )%

                             Thirty-nine Weeks Ended                              Thirty-nine Weeks Ended
                        September 26,       September 28,                    September 26,       September 28,
                             2009                2008          % change           2009                2008          % change
                                                         (In millions, except percentages)
                            Actual           Pro forma(1)                        Actual             Reported
Volume in
hectoliters:
  Reported financial
  volume                         14.082              14.974         (6.0 )%           14.082              29.868        (52.9 )%
  Royalty volume                  0.204               0.202          1.0 %             0.204               0.202          1.0 %

Owned volume                     14.286              15.176         (5.9 )%           14.286              30.070        (52.5 )%
  Proportionate
  share of equity
  investment
  sales-to-retail(2)             23.563              23.715         (0.6 )%           23.563               8.801        167.7 %

Total MCBC worldwide
beer volume                      37.849              38.891         (2.7 )%           37.849              38.871         (2.6 )%

º (2)
º Reflects the addition of MCBC proportionate share of equity method subsidiaries sales-to-retail for the periods presented adjusted for comparable trading days.

During the first three quarters of 2009, our results reflect the adoption of hectoliters as our standard global volume measure and, as a result, prior period information presented has been adjusted to reflect this change. Worldwide beer volume is composed of our financial volume, royalty volume and proportionate share of equity investment sales-to-retail. Financial volume represents owned beer brands sold to unrelated external customers within our geographical markets. Royalty beer volume consists of product produced and sold by third parties under various license and contract-brewing agreements. Equity investment sales-to-retail volume represents the company's ownership percentage share of volume in its subsidiaries accounted for under the equity method, including MillerCoors and Modelo Molson Imports, L.P.

Third quarter 2009 highlights

Our results reflect a high level of brand investment, coupled with strong cost control and price management. These results also reflect the continued effects of weak industry volume trends and continued cost inflation, along with more promotional pricing activity in Canada. Worldwide beer volume for Molson Coors declined 2.9% from a year ago, driven by industry weakness in our major geographies, as well as our revenue-generation strategy in the U.K. Also, foreign currency movements unfavorably impacted third quarter results.

Regional highlights:

º •
º In our Canada business, comparable revenue per hectoliter and gross margin grew as front-line price increases outpaced growth in promotional activity and cost of goods sold. Lower volume and increased marketing costs, however, resulted in a 2.8% decline in local currency earnings.

º •
º Our U.K. business realized higher revenue per hectoliter and increased brand investment through marketing efforts, while growing pretax profit in local currency more than 20% in the quarter.

º •
º MillerCoors achieved its fifth consecutive quarter of double-digit profit growth in the U.S., driven by cost synergies, sustained pricing and lower marketing, general and administrative spending. Also, the U.S. brand portfolio performed well in the peak summer selling season against its competition.

MCBC cost savings initiatives

We achieved approximately $18 million and $68 million of cost savings during the third quarter and first three quarters of 2009, respectively, as part of our three-year, $250 million Resources for Growth ("RFG") cost savings program. These cost savings include our 42% of RFG cost savings initiatives that were achieved by MillerCoors, which equaled $6 million in the first three quarters of 2009. Savings from the RFG program since its inception eleven quarters ago total $246 million.

MillerCoors integration and cost synergy initiatives

MillerCoors accelerated synergy delivery timing, realizing $73 million in the third quarter, bringing the total for the first three quarters of 2009 to $183 million and $211 million since beginning operations on July 1, 2008. By the end of calendar year 2009, MillerCoors expects to achieve a total of $270 million in cumulative synergies, surpassing its original forecast of $225 million. While the timing of synergy delivery has accelerated, MillerCoors' $500 million synergy goal is unchanged. In addition to synergies, MillerCoors plans to deliver a further $200 million in cost savings by the end of 2012. MCBC's share would be 42% of the total savings.

Income taxes

Our effective tax rate for the third quarter of 2009 was approximately 9%. This rate was below our prior full year outlook due to the favorable resolution of unrecognized tax positions in the quarter, which was one quarter earlier than anticipated. Looking forward, we anticipate that our 2009 full-year effective tax rate will be in the range of (2%) to 2%. Our anticipated full-year rate is lower than our previous guidance due to the favorable resolution of unrecognized tax positions that the Company effectively settled early in the fourth quarter of 2009.

Discontinued operations

Discontinued operations are associated with the formerly-owned Kaiser business in Brazil. See Part I-Financial Statements, Item 1 Note 8 "DISCONTINUED OPERATIONS" and Note 17

"COMMITMENTS AND CONTINGENCIES" for discussions of the nature of amounts recognized in the Discontinued Operations section of the condensed consolidated statements of operations, which consists primarily of amounts associated with indemnity obligations to the owners of Kaiser related to purchased tax credits and other tax, civil and labor issues.

RESULTS OF OPERATIONS

Canada Segment Results of Operations

Our Canada segment consists primarily of the Molson Coors Canada ("MCC") beer business, including the production and sale of the Molson brands, Coors Light, and other licensed brands in Canada. Effective, January 1, 2008, MCC and Grupo Modelo, S.A.B. de C.V. established a joint venture, Modelo Molson Imports, L.P. ("MMI"), to import, distribute, and market the Modelo beer brand portfolio across all Canadian provinces and territories. MMI is accounted for using the equity method. The Canada segment also includes our arrangements related to the distribution of beer in Ontario and in Western Canada, Brewers' Retail, Inc. ("BRI") and Brewers' Distributor Ltd. ("BDL"), respectively. BRI was a consolidated joint venture through February 28, 2009. As of March 1, 2009, we deconsolidated BRI, and prospectively began accounting for BRI results under the equity method as a result of the reduction in our BRI ownership interest following Labatt's acquisition of Lakeport Brewing in Ontario and the resulting increase in their relative ownership interest in BRI. Also included in the Canada results is BDL, a joint venture accounted for under the equity method.

                                Thirteen Weeks Ended                            Thirty-Nine Weeks Ended
                    September 26,     September 28,                   September 26,     September 28,
                        2009              2008          % change          2009              2008          % change
                                                  (In millions, except percentages)
Volume in
hectoliters                  2.477             2.522         (1.8 )%           6.642             7.548        (12.0 )%

Net sales           $        493.8    $        541.7         (8.8 )%  $      1,289.5    $      1,513.6        (14.8 )%
Cost of goods
sold                        (239.7 )          (278.5 )      (13.9 )%          (658.2 )          (808.8 )      (18.6 )%

    Gross profit             254.1             263.2         (3.5 )%           631.3             704.8        (10.4 )%
Marketing,
general and
administrative
expenses                    (113.4 )          (110.9 )        2.3 %           (300.7 )          (334.7 )      (10.2 )%
Special items,
net                           (3.8 )            (3.0 )       26.7 %            (12.8 )            (4.9 )      161.2 %

    Operating
    income                   136.9             149.3         (8.3 )%           317.8             365.2        (13.0 )%
Other (expense)
income, net                   (1.2 )            (1.3 )       (7.7 )%             4.3              (0.5 )        N/M

    Earnings
    before
    income taxes    $        135.7    $        148.0         (8.3 )%  $        322.1    $        364.7        (11.7 )%

Foreign currency impact on results

The Canadian dollar ("CAD") depreciated versus the U.S. dollar ("USD") resulting in an approximate $9 million decrease to USD earnings before income taxes on a quarter over quarter basis during the third quarter. During the comparable thirty-nine week periods for 2009 and 2008, the CAD also declined versus the USD, resulting in an approximate $36 million decrease to USD earnings before income taxes.

Volume and net sales

During the third quarter of 2009, management adjusted internal financial reporting to conform sales reporting for the pre-MillerCoors periods to the post-MillerCoors periods. As a result, Canada segment sales, production costs, and volumes for the nine months ended September 28, 2008, are higher than reported in prior periods due to the inclusion of $55.6 million and 0.784 million hectoliters of intersegment/intercompany sales and volumes, respectively, which were eliminated upon consolidation. Additionally, to provide more comparable results, we have provided year-over-year changes that exclude the reporting effects in Canada of deconsolidating BRI in March 2009 and setting up MillerCoors in 2008.

Our Canada segment sales volume was 2.5 million hectoliters in the third quarter of 2009, down 1.8% from a year ago while our Canada sales to retail ("STR"), for the calendar quarter ended September 30, 2009, decreased 3.2% versus the prior year. The variance between STR and sales volume was driven by differences in reporting periods (calendar versus fiscal), along with changes in Ontario beer store inventories. Brand changes were led by low single-digit growth of Coors Light, while Molson Canadian volumes declined at a mid single-digit rate versus the prior year.

Comparable net sales per hectoliter increased 2% in local currency in the third quarter, driven by favorable net pricing, led by price increases across all major markets, partially offset by increased discounting activity.

Our Canada segment sales volume was 6.6 million hectoliters in the first three quarters of 2009, down 12% from a year ago. Our Canada STRs, for the first three quarters ended September 30, 2009, decreased 2.2% versus a year ago. The variance between STR and sales volume was driven by the inclusion of intersegment/intercompany sales in 2008 as noted above. Brand changes were led by mid single-digit growth of Coors Light and growth of Rickard's. Partner import brands and Molson Canadian volumes declined versus the prior year.

Total Canadian beer industry STRs decreased an estimated 0.7% in the calendar third quarter and were unchanged in the first three quarters of 2009. Our estimated Canada market share decreased about one share point in the third quarter of 2009, consistent with the about one share point in the first three quarters versus a year ago.

Comparable net sales per hectoliter increased 2.5% in local currency in the first three quarters, driven by favorable net pricing, led by price increases across all major markets and improved sales mix, partially offset by increased discounting activity.

Cost of goods sold

Cost of goods sold per hectoliter increased slightly in the third quarter of 2009 and 1.5% for the first three quarters of 2009 on a comparable basis in local currency. The third quarter and first three quarters increases were due to the net effect of three factors:

º •
º Commodity, packaging material, distribution and other cost of goods sold input costs including pension expenses increased approximately 1%, for the third quarter and about 2% the first three quarters,

º •
º An increase of approximately 2% for the third quarter and first three quarters was due to ongoing product mix shifts and other overhead cost changes.

º •
º These increases were fully offset by savings from our RFG initiatives in the third quarter, and 2.5% of these increases were offset in the first three quarters.

Marketing, general and administrative expenses

Comparable marketing, selling, general and administrative expense increased 4.4% in the third quarter of 2009 and decreased 0.6% in the first three quarters of 2009 in local currency, driven by a shift in brand investment spending to later in the year. Also, during the first three quarters of 2009, we incurred lower long-term incentive compensation expense versus prior year.

Special items, net

The Canada segment recognized $3.8 million of special items in the third quarter of 2009 and $12.8 million in the first three quarters of 2009 related to costs associated with the Montréal brewery employee pension curtailment and severance, and the ongoing Edmonton brewery closure and restructuring expenses. See Part I-Financial Statements, Item 1 Note 6 "UNUSUAL OR INFREQUENT ITEMS" to the condensed consolidated financial statements for further discussion.

United States Segment Results of Operations

During the first two quarters of 2008, the United States ("U.S.") segment produced, marketed and sold the Coors portfolio of brands in the United States and Puerto Rico and included the results of the Rocky Mountain Metal Corporation and Rocky Mountain Bottle Corporation, which were consolidated joint ventures. The U.S. segment also included sales of Molson products in the United States. As of July 1, 2008, MillerCoors began operations. The results and financial position of our U.S. segment operations were prospectively deconsolidated upon contribution to the joint venture, and our interest in MillerCoors is being accounted for and reported by us under the equity method of accounting. This means that 42% of the net income reported by MillerCoors is reported on the MCBC income statement as "Equity income in MillerCoors" (after being adjusted for basis difference amortization, accounting policy differences, and share based compensation). MillerCoors' revenue and expense do not directly appear on our income statement. Similarly, 42% of MillerCoors' cash distributions appear on our statement of cash flows as "Distributions from MillerCoors" and the individual components of MillerCoors' cash flow do not appear on our statement of cash flows. Thus, while our equity investment in MillerCoors represents our U.S. operating segment from and after July 1, 2008, our discussion of its results of operations are not addressed and do not reflect MillerCoors' financial statements and results of operations. See Part I-Financial Statements, Item 1 Note 1 "BASIS OF PRESENTATION," regarding the MillerCoors joint venture.

                                Thirteen Weeks Ended                              Thirty-Nine Weeks Ended
                    September 26,      September 28,                   September 26,      September 28,
                         2009              2008          % change           2009              2008          % change
                                                   (In millions, except percentages)
Volume in
hectoliters                       -             0.115          N/M                   -            14.894          N/M

Net sales             $           -     $        12.9          N/M       $           -    $      1,504.8          N/M
Cost of goods
sold                              -              (7.7 )        N/M                   -            (915.1 )        N/M

    Gross profit                  -               5.2          N/M                   -             589.7          N/M
Marketing,
general and
administrative
expenses                          -              (1.2 )        N/M                   -            (413.3 )        N/M
Special items,
net                               -                 -          N/M                   -             (69.3 )        N/M
Equity income in
MillerCoors                   101.2             106.5         (5.0 )%            332.4             106.5        212.1 %

    Operating
    income                    101.2             110.5         (8.4 )%            332.4             213.6         55.6 %
Other (expense)
income, net                       -                 -          N/M                   -               2.3          N/M

    Earnings
    before
    income taxes      $       101.2     $       110.5         (8.4 )%    $       332.4    $        215.9         54.0 %

The results of operations for MillerCoors for the three and nine months ended September 30, 2009, the three months ended September 28, 2008, and pro forma results of operations for the nine months ended September 30, 2008, are as follows:

                       For the three months ended                          For the nine months ended
                    September 30,      September 30,                   September 30,      September 30,
                        2009               2008          % change          2009                2008          % change
                       Actual             Actual                          Actual            Pro Forma
                                                    (In millions, except percentages)
Volumes in
hectoliters                 21.640             21.881         (1.1 )%          63.000              63.998         (1.6 )%

Sales               $      2,350.7     $      2,293.4          2.5 %   $      6,855.8      $      6,710.2          2.2 %
Excise taxes                (341.2 )           (343.7 )       (0.7 )%          (993.7 )          (1,004.1 )       (1.0 )%

    Net sales              2,009.5            1,949.7          3.1 %          5,862.1             5,706.1          2.7 %
Cost of goods
sold                      (1,266.6 )         (1,236.9 )        2.4 %         (3,618.8 )          (3,513.7 )        3.0 %

    Gross profit             742.9              712.8          4.2 %          2,243.3             2,192.4          2.3 %
Marketing,
general and
administrative
expenses                    (496.0 )           (519.1 )       (4.5 )%        (1,438.4 )          (1,566.2 )       (8.2 )%
Special items,
net                          (14.7 )            (22.6 )      (35.0 )%           (45.5 )            (138.7 )      (67.2 )%

    Operating
    income                   232.2              171.1         35.7 %            759.4               487.5         55.8 %
Other income,
net                            2.3                2.3          0.0 %              1.6                 7.1        (77.5 )%

    Income
    before
    income taxes             234.5              173.4         35.2 %            761.0               494.6         53.9 %
Income tax
expense                       (2.3 )             (1.9 )       21.1 %             (6.9 )              (1.9 )      263.2 %

    Net income               232.2              171.5         35.4 %            754.1               492.7         53.1 %
Less: Net income
attributable to
noncontrolling
interests                     (2.5 )             (3.3 )      (24.2 )%           (13.5 )             (13.3 )        1.5 %

    Net Income
    attributable
    to
    MillerCoors     $        229.7     $        168.2         36.6 %   $        740.6      $        479.4         54.5 %

The unaudited pro forma combined financial information has been derived from the historical financial results of the respective U.S. businesses of MCBC and Miller, giving effect to the MillerCoors transaction and other related adjustments, described below. These pro forma results are not necessarily indicative of the results of operations that would have been achieved had the MillerCoors transaction taken place at the beginning of the pro forma period, and do not purport to be indicative of future operating results.

                                MILLERCOORS, LLC
            UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
                  For the Nine Months Ended September 30, 2008

                                    Pro Forma For the Six Months Ended June 30, 2008                     Actual           Pro Forma
                                                                                                       MillerCoors       MillerCoors
                        MCBC's U.S.        Miller's U.S.                                              Three months       Nine months
                          Business           Business                                 MillerCoors         ended             ended
                       Contributed to     Contributed to        Pro Forma              Pro Forma      September 30,     September 30,
                        MillerCoors         MillerCoors        Adjustments              Results           2008              2008
                                                                       (In millions)
Net sales               $      1,491.8      $     2,257.8       $        6.8     C    $    3,756.4    $      1,949.7    $      5,706.1
. . .