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INDEX
ITEM 8. Financial Statements and Supplementary Data

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission file number 1-14829

MOLSON COORS BREWING COMPANY
(Exact name of registrant as specified in its charter)

303-279-6565
(Registrant's telephone number, including area code)

ADOLPH COORS COMPANY
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes ý    No o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ý    No o

        The aggregate market value of Class B non-voting stock held by non-affiliates of the registrant at the close of business on June 27, 2004, was $2,439,745,011 based upon the last sales price reported for such date on the New York Stock Exchange. For purposes of this disclosure, shares of Class B Common Stock held by persons holding more than 5% of the outstanding shares of Class B Common Stock and shares owned by officers and directors of the registrant as of June 27, 2004 are excluded in that such persons may be deemed to be affiliates. This determination is not necessarily conclusive of affiliate status.

        Documents Incorporated by Reference: Portions of the registrant's definitive proxy statement for the registrant's 2005 annual meeting of stockholders are incorporated by reference under Part III of this Annual Report on Form 10-K

        The number of shares outstanding of each of the registrant's classes of common stock, as of February 25, 2005:

        In addition, the registrant has outstanding one share of special Class A voting stock and one share of special Class B voting stock, through which the holders of Class A exchangeable shares and Class B exchangeable shares of Coors Canada Inc. (a subsidiary of the registrant known as Molson Coors Exchangeco), respectively, may exercise their voting rights with respect to the registrant. The special Class A and Class B voting stock are entitled to one vote for each of the Class A and Class B exchangeable shares, respectively, excluding shares held by the registrant or its subsidiaries, and generally vote together with the Class A common stock and Class B common stock, respectively, on all matters on which the Class A common stock and Class B common stock are entitled to vote. The trustee holder of the special Class A voting stock and the special Class B voting stock has the right to cast a number of votes equal to the number of then outstanding Class A exchangeable shares and Class B exchangeable shares, respectively. As of February 25, 2005, there were 2,437,513 outstanding Class A exchangeable shares and 32,161,792 Class B exchangeable shares.

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

INDEX

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PART I

ITEM 1. Business

        On February 9, 2005, Adolph Coors Company merged with Molson Inc. ("Molson"). In connection with the merger (the "Merger"), Adolph Coors Company became the parent of the merged company and changed its name to Molson Coors Brewing Company. Unless otherwise noted in this report, any description of us includes Molson Coors Brewing Company (MCBC) (formerly Adolph Coors Company), principally a holding company, its operating subsidiaries, Coors Brewing Company (CBC), operating in the United States (US); Coors Brewers Limited (CBL), operating in the United Kingdom (UK); and our other corporate entities.

        Unless otherwise indicated, information in this report excludes Molson operating in Canada and Brazil, and is presented in US Dollars (USD).

(a)   General Development of Business

Global Expansion

        Since our founding in 1873, we have been committed to producing the highest-quality beers. Our portfolio of brands is designed to appeal to a wide range of consumer tastes, styles and price preferences. Until our acquisition of CBL in February 2002, we operated and sold our beverages predominately in North America and in select international markets. The CBL acquisition expanded our international presence to include significant operations in the United Kingdom. As a result of the Merger, and the addition of significant operations in Canada and Brazil, we are now the fifth-largest brewer by volume in the world.

Molson Inc.

        Molson is Canada's largest brewer and one of the world's leading brewers of quality beer, ranking fourteenth in the world as measured by volume, before the Merger. Molson sells its beer in Canada, Brazil and the United States. Molson has five breweries in Canada and eight breweries in Brazil and distributes over 75 owned or licensed brands of beer.

        The Merger was effected by the exchange of Coors stock for Molson stock in a transaction that is valued at approximately $3.5 billion. Coors is considered the accounting acquirer, although the transaction is viewed as a merger of equals by the two companies. The transaction is discussed in Notes 2 and 20 to the accompanying Consolidated Financial Statements in Item 8. Molson's business and historical results are discussed at length in the definitive proxy, dated December 9, 2004 and supplemented on January 19, 2005, that are on file with the SEC and available on its EDGAR database.

Joint Ventures and Other Arrangements

        To focus on our core competencies in manufacturing, marketing and selling malt beverage products, we have entered into joint venture type arrangements with third parties over the past decade to leverage their strengths in areas like can and bottle manufacturing, transportation, packaging, engineering, energy production and information technology. Prior to the Merger, we participated in joint ventures with Molson to market Coors products in Canada (Coors Canada), and Molson products in the United States (Molson USA).

Our Products

        We own or license all of our trademarks for all of our brands. Brands sold primarily in the Americas include: Coors Light®, Coors®, Coors® Non-Alcoholic, Extra Gold®, Zima XXX®, Aspen

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Edge^TM, George Killian's® Irish Red™ Lager, Keystone®, Keystone Light®, Keystone Ice®, Blue Moon™ Belgian White Ale and Mexicali®. We also sell the Molson family of brands in the United States through a joint venture. Brands sold primarily through CBL include: Carling®, Coors Fine Light Beer®, Worthingtons®, Caffrey's®, Reef®, Screamers™ and Stones®. We also sell Grolsch® in the United Kingdom through a joint venture. With the Merger, we will add the Molson® family of brands and key brands in Canada, including Molson Canadian®, Molson Dry®, Molson Export®, Rickard's Red Ale®, and others in Brazil, including A Marca Bavaria™, Kaiser® and Bavaria® to our portfolio.

        In the United Kingdom, in addition to supplying our own brands, we sell other beverage companies' products to our on-premise customers to provide them with a full range of products for their retail outlets. These factored brand sales are included in our financial results, increasing our net sales and cost of goods sold, but the related volume is not included in our reported sales volumes.

(b)   Financial Information About Segments

        Prior to the Merger, we categorized our operations into two operating segments: the Americas and Europe. These segments are managed by separate operating teams, even though both segments consist of the manufacture, marketing, and sale of beer and other beverage products. We anticipate adding two additional segments as a result of the Merger—Canada and Brazil.

        See Item 8, Financial Statements and Supplementary Data, for financial information relating to our segments and operations, including geographic information.

(c)   Narrative Description of Business

        Some of the following statements may describe our expectations of future products and business plans, financial results, performance and events. Actual results may differ materially from these forward-looking statements. Please see Item 7, Management's Discussion and Analysis—Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, for factors that may negatively impact our performance. The following statements are expressly made, subject to those and other risk factors.

        We sold approximately 68% of our 2004 reported volume in the Americas segment and 32% in the Europe segment. In 2004, Coors Light accounted for about 51% of reported volume and Carling for approximately 22%.

        Our sales volume totaled 32.7 million barrels in 2004 and 2003 and 31.8 million barrels in 2002. The barrel sales figures for each year do not include barrel sales of our products sold in Canada or the United States through our joint ventures with Molson. An additional 1.6 million, 1.5 million and 1.4 million barrels of beer were sold by Molson Coors Canada in 2004, 2003 and 2002, respectively. Our Molson USA venture sold 0.8, 0.9 and 0.9 million barrels in 2004, 2003 and 2002, respectively. These volumes will be included in barrel sales for reporting periods following the Merger on February 9, 2005. Our sales volumes also do not include the CBL factored brands business. See Item 7, Management's Discussion and Analysis, for a discussion of volume changes.

        No single customer accounted for more than 10% of our consolidated or segmented sales in 2004, 2003 or 2002.

Americas Segment

        The Americas business produces, markets, and sells the Coors portfolio of brands in the United States and its territories, including the results of the Rocky Mountain Metal Corporation (RMMC) and Rocky Mountain Bottle Corporation (RMBC) joint ventures consolidated in 2004 under FIN 46R, the Coors Light business in Canada and the sale of Molson products in the United States. The Americas

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segment also includes a small amount of Coors brand volume that is sold outside of the United States and its territories, including primarily Japan, China, Mexico, and the Caribbean.

Sales and Distribution

United States

        In the United States, beer is generally distributed through a three-tier system consisting of manufacturers, distributors and retailers. A national network of 529 independent distributors purchases our products and distributes them to retail accounts. We also own three distributorships that handled less than 2% of our total domestic volume in 2004.

Canada

        Prior to the Merger, Molson Coors Canada managed all marketing activities for our products in Canada. The partnership contracted with Molson for the brewing, distribution and sale of our products. In connection with the Merger, Molson Coors Canada was dissolved into the Canadian business. Coors Light currently has an 9% market share, and is the largest-selling light beer and the 4^th-best selling beer brand overall in Canada.

Puerto Rico and the Caribbean

        In Puerto Rico, we market and sell Coors Light through an independent distributor. A team of our employees manages the marketing and promotional efforts in this market, where Coors Light is the number-one brand. We also sell our products in a number of other Caribbean markets.

Mexico

        During the second quarter of 2004, Cerveceria Cuauhtemoc Moctezuma, S.A. de C.V., a subsidiary of FEMSA Cerveza, became the sole and exclusive importer, marketer, seller and distributor of Coors Light in Mexico.

Asia

        We have small developing markets in Japan, China and Taiwan. The Japanese business is currently focused on the Zima and Coors brands and we sell Coors Light in Taiwan. We sell Coors Light and Coors in China.

Manufacturing, Production and Packaging in the United States

Brewing Raw Materials

        We use the highest-quality water, barley and hops to brew our products. We have acquired water rights to provide for long-term strategic growth and to sustain brewing operations in case of a prolonged drought. We buy barley under long-term contracts from a network of independent farmers located in five western US states.

Brewing and Packaging Facilities

        We have three domestic production facilities and one small brewery located in Mexico. We own and operate the world's largest single-site brewery located in Golden, Colorado. In addition, we have a packaging and brewing facility in Memphis, Tennessee, and a packaging facility located in the Shenandoah Valley in Virginia. We brew Coors Light, Coors, Extra Gold, Killian's and the Keystone brands in Golden, and package about 60% of the beer brewed in Golden. The remainder is shipped in bulk from the Golden brewery to either our Memphis or Shenandoah facility for packaging. We

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recently announced plans to add brewing capability to our Virginia facility and to close our Memphis facility by the end of 2006. We also plan to sell our small brewery located in Mexico.

Packaging Materials

Aluminum Cans

        Approximately 60% of our domestic products were packaged in aluminum cans in 2004. A substantial portion of those cans were purchased from RMMC, our joint venture with Ball Corporation (Ball). In addition to our supply agreement with RMMC, we also have commercial supply agreements with Ball and other third-party can manufacturers to purchase cans and ends in excess of what is supplied through RMMC.

Glass Bottles

        We used glass bottles for approximately 29% of our products in 2004. RMBC, our joint venture with Owens-Brockway Glass Container, Inc. (Owens), produces glass bottles at our glass manufacturing facility. On July 29, 2003, we extended our joint venture with Owens for 12 years, as well as a supply agreement with Owens for the glass bottles we require in excess of joint venture production.

Other Packaging

        Most of the remaining 11% of volume we sold in 2004 was packaged in quarter and half-barrel stainless steel kegs.

        We purchase most of our paperboard and label packaging from a subsidiary of Graphic Packaging Corporation (GPC), a related party. These products include paperboard, multi-can pack wrappers, bottle labels and other secondary packaging supplies.

Seasonality of the Business

        Our US sales volumes are normally lowest in the first and fourth quarters and highest in the second and third quarters.

Competitive Conditions

Known Trends and Competitive Conditions

        Industry and competitive information in this section and elsewhere in this report was compiled from various industry sources, including beverage analyst reports (Beer Marketer's Insights, Impact Databank and The Beer Institute). While management believes that these sources are reliable, we cannot guarantee the accuracy of these numbers and estimates.

2004 Americas Beer Industry Overview

        The beer industry in the United States is extremely competitive, with three major brewers controlling about 79% of the market. Growing or even maintaining market share has required increasing investments in marketing and sales efforts. US beer industry shipments had an annual growth rate during the past 10 years of less than 1%. The industry's pricing environment continued to be positive in 2004, with price increases on specific brands and packages in select markets.

        Over the past several years, the Canadian beer industry volume has been effectively flat with growth of less than 1% again in 2004. The industry's pricing environment continued to be positive in 2004, but lower priced discount beers gained both volume and share in 2004.

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        The beer market in Puerto Rico had extraordinary growth in the '70s and '80s. Since then, the market has experienced periodic growth and decline cycles. This market has traditionally been split between local brewers, US imports, and other imports. Coors Light is the market leader in Puerto Rico with approximately half the market.

Our Competitive Position

        Our malt beverages compete with numerous above-premium, premium, low-calorie, low-carbohydrate, popular-priced, non-alcoholic and imported brands. These competing brands are produced by national, regional, local and international brewers. We compete most directly with Anheuser-Busch and SABMiller, the dominant beer companies in the US industry. According to Beer Marketer's Insights estimates, we are the nation's third-largest brewer, selling approximately 10.3% of the total 2004 US brewing industry shipments (including exports and US shipments of imports). This compares to Anheuser-Busch's 50.2% share and SAB's 18.3% share.

Europe Segment

        The Europe segment consists of our production and sale of the CBL brands principally in the United Kingdom, our joint venture arrangement for the production and distribution of Grolsch in the United Kingdom and Republic of Ireland (consolidated under FIN46R in 2004) and factored brand sales (beverage brands owned by other companies but sold and delivered to retail by us), and our joint venture arrangement with Exel Logistics for the physical distribution of products throughout Great Britain (Tradeteam).

        CBL has headquarters in Burton-on-Trent, England, and is the United Kingdom's second-largest beer company with unit volume sales of approximately 10.5 million US barrels in 2004. CBL has an approximate 20.9% share of the UK beer market, Western Europe's second-largest market. Sales are primarily in England and Wales, with the Carling brand (a mainstream lager) representing approximately three quarters of CBL's total beer volume.

Sales and Distribution

        Over the past three decades, volumes have shifted from the on-trade channel, where products are consumed "on-premise," to the off-trade channel, also referred to as the "take-home" market. Unlike the United States, where manufacturers are generally not permitted to distribute beer directly to retail, the large majority of our beer in the United Kingdom is sold directly to retailers.

        Distribution activities for CBL are conducted by Tradeteam, which operates a system of satellite warehouses and a transportation fleet. Tradeteam also manages the transportation of certain raw materials, such as malt, to the CBL breweries.

On-trade

        The on-trade channel accounted for approximately 63% of our UK sales volumes in 2004. The installation and maintenance of draught beer dispense equipment in the on-trade channel is generally the responsibility of the brewer in the United Kingdom. CBL owns equipment used to dispense beer from kegs to consumers. This includes beer lines, line cooling, taps and countermounts.

        Similar to other UK brewers, CBL has traditionally used loans to secure supply relationships with customers in the on-trade market. Loans have been granted at below-market rates of interest, with the outlet purchasing beer at lower-than-average discount levels to compensate. We reclassify a portion of sales revenue to interest income to reflect the economic substance of these loans.

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Off-trade

        The off-trade channel accounted for approximately 37% of our UK sales volume in 2004, up 1.3 percentage points from 2003. The off-trade market includes sales to supermarket chains, convenience stores, liquor store chains, distributors and wholesalers.

Manufacturing, Production and Packaging

Brewing Raw Materials

        We use the highest-quality water, barley and hops to brew our products. For agricultural crops such as barley and hops, we place forward contracts to ensure we have availability of the volume and varieties we require. Because we are a global brewer, we have access to many suppliers and sources of raw materials. Due to our global status, we believe we have sufficient access to raw materials to meet our quality and production requirements.

Brewing and Packaging Facilities

        We operate three breweries in the United Kingdom. The Burton-on-Trent brewery, located in the Midlands, is the largest brewery in the United Kingdom. Other smaller breweries are located in Tadcaster and Alton.

Packaging Materials

Kegs

        We used kegs and casks for approximately 57% of our UK product in 2004. The high volume packaged in kegs and casks contrasts with the Americas business, and reflects a higher percentage of product sold on-premise.

Cans

        Approximately 34% of our products were packaged in cans in 2004. Virtually all of our cans were purchased through supply contracts with Ball.

Other Packaging

        The remaining 9% of our product is primarily packaged in glass bottles purchased through supply contracts with third-party suppliers.

Seasonality of Business

        In Great Britain, the beer industry is subject to seasonal sales fluctuation primarily influenced by holiday periods, weather and by certain major televised sporting events. There is a peak during the summer and during the Christmas and New Year period. The holiday peak is most pronounced in the off-trade channel. Consequently, our largest quarters are the third and fourth quarters, and the smallest are the first and second.

Competitive Conditions

2004 UK Beer Industry Overview

        Beer consumption in the United Kingdom has been in long-term decline since 1980, falling by an average of 0.6% per annum. However, volume has been more stable since 2001. The longer-term decline has been mainly attributable to the on-trade channel, where volumes are now approximately 40% lower than in 1980. Over the same period, off-trade volume has increased by approximately 200%.

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This trend is expected to continue and has been influenced by a number of factors, including the increasing price difference between beer in the on- and off-trade channels and changes in consumers' lifestyles. These trends continued in 2004 with off-trade market growth of 3.5% and a decline in the on-trade market of 2.5%.

        There has also been a steady trend toward lager at the expense of ales, driven predominantly by the leading mainstream and premium lager brands. In 1980, lagers accounted for 31% of beer sales, and in 2004 lagers accounted for over 71%, up from 70% in 2003. While lager volume has been growing, ales, including stouts, have declined during this period, and this trend has accelerated in the last few years. The leading beer brands are generally growing at a faster rate than the market. The top 10 brands now represent approximately 64% of the total market, compared to only 32% in 1994.

Our Competitive Position

        Our beers and flavored alcohol beverages compete not only with similar products from competitors, but also with other alcohol beverages, including wines and spirits. With the exception of stout, where we do not have our own brand, our brand portfolio gives us strong representation in all major beer categories. Our strength in the growing lager sector with Carling, Grolsch and Coors Fine Light Beer positions us well to take advantage of the continuing trend to lagers.

        Our principal competitors are Scottish Courage Ltd., Interbrew UK Ltd. and Carlsberg UK Ltd. We are the United Kingdom's second-largest brewer, with an approximate 21% market share (excluding factored brands sales), based on AC Nielsen information. This compares to Scottish Courage Ltd.'s share of 25%, Interbrew UK Ltd.'s 19% share and Carlsberg UK Ltd.'s 14% share. Our core brands—Carling, Grolsch and Coors Fine Light Beer—all increased their product sector share in 2004.

Global Intellectual Property

        We own trademarks on the majority of the brands we produce and have licenses for the remainder. We also hold several patents on innovative processes related to product formula, can making, can decorating and certain other technical operations. These patents have expiration dates ranging through 2021. These expirations are not expected to have a significant impact on our business.

Regulation

Americas

        Our business in the United States and its territories is highly regulated by federal, state and local governments. These regulations govern many parts of our operations, including brewing, marketing and advertising, transportation, distributor relationships, sales and environmental issues. To operate our facilities, we must obtain and maintain numerous permits, licenses and approvals from various governmental agencies, including the US Treasury Department; Alcohol and Tobacco Tax and Trade Bureau; the US Department of Agriculture; the US Food and Drug Administration; state alcohol regulatory agencies as well as state and federal environmental agencies.

        Governmental entities also levy taxes and may require bonds to ensure compliance with applicable laws and regulations. US federal excise taxes on malt beverages are currently $18.00 per barrel. State excise taxes also are levied at rates that ranged in 2004 from a high of $28.52 per barrel in Hawaii to a low of $0.62 per barrel in Wyoming.

Europe

        In the United Kingdom, regulations apply to many parts of our operations and products, including brewing, food safety, labeling and packaging, marketing and advertising, environmental, health and safety, employment, and data protection regulations. To operate our breweries and carry on business in

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the United Kingdom, we must obtain and maintain numerous permits and licenses from local Licensing Justices and governmental bodies, including HM Customs & Excise; the Office of Fair Trading; the Data Protection Commissioner and the Environment Agency.

        The UK government levies excise taxes on all alcohol beverages at varying rates depending on the type of product and its alcohol content by volume. In 2004, we incurred approximately $1.11 billion in excise taxes on gross revenues of approximately $2.9 billion, or approximately $106 per barrel.

Environmental Matters

Americas

        We are one of a number of entities named by the Environmental Protection Agency (EPA) as a potentially responsible party (PRP) at the Lowry Superfund site. This landfill is owned by the City and County of Denver (Denver), and is managed by Waste Management of Colorado, Inc. (Waste Management). In 1990, we recorded a pretax charge of $30 million, a portion of which was put into a trust in 1993 as part of a settlement with Denver and Waste Management regarding the then outstanding litigation. Our settlement was based on an assumed cost of $120 million (in 1992 adjusted dollars). It requires us to pay a portion of future costs in excess of that amount.

        Considering uncertainties at the site, including what additional remedial actions may be required by the EPA, new technologies, and what costs are included in the determination of when the $120 million threshold is reached, the estimate of our liability may change as facts further develop. We cannot predict the amount of any such change, but additional accruals could be required in the future.

        We are aware of groundwater contamination at some of our properties in Colorado resulting from historical, ongoing or nearby activities. There may also be other contamination of which we are currently unaware.

        From time to time, we have been notified that we are or may be a PRP under the Comprehensive Environmental Response, Compensation and Liability Act or similar state laws for the cleanup of other sites where hazardous substances have allegedly been released into the environment. While we cannot predict our eventual aggregate cost for the environmental and related matters in which we may be or are currently involved, we believe that any payments, if required, for these matters would be made over a period of time in amounts that would not be material in any one year to our operating results, cash flows or our financial or competitive position. We believe adequate reserves have been provided for losses that are probable and estimable.

Europe

        We are subject to the requirements of government and local environmental and occupational health and safety laws and regulations. Compliance with these laws and regulations did not materially affect our 2004 capital expenditures, earnings or competitive position, and we do not anticipate that they will do so in 2005.

Employees and Employee Relations

Americas

        We have approximately 5,400 employees in our Americas business. Memphis hourly employees, who constitute about 5% of our Americas work force, are represented by the Teamsters union; and a small number of other employees are represented by other unions. The Memphis union contract expires in 2005. We are currently negotiating the terms of the new contract, which will include provisions impacted by our recently announced plans to close the Memphis facility. We believe that relations with our Americas employees are good.

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Europe

        We have approximately 3,000 employees in our Europe business. Approximately 27% of this total workforce is represented by trade unions, primarily at our Burton-on-Trent and Tadcaster breweries. Separate negotiated agreements are in place with the Transport and General Workers Union at the Tadcaster Brewery and the Burton-on-Trent Brewery. The agreements do not have expiration dates, and negotiations are conducted annually. We believe that relations with our Europe employees are good.

(d)   Financial Information About Foreign and Domestic Operations and Export Sales

        See Item 8, Financial Statements and Supplementary Data, for discussion of sales, operating income and identifiable assets attributable to our country of domicile, the United States, and all foreign countries.

(e)   Available Information

        Our internet website is http://molsoncoors.com/sec/index.html. Through a direct link to our reports at the SEC's website at http://www.sec.gov, we make available, free of charge on our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the SEC.

ITEM 2. Properties

        As of December 26, 2004, our major facilities were:

        We believe our facilities are well maintained and suitable for their respective operations. In 2004, our operating facilities were not constrained by capacity issues. Our satellite warehouses are owned and operated by third parties. All other locations are owned by the Company.

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ITEM 3. Legal Proceedings

        We are involved in certain disputes and legal actions arising in the ordinary course of our business. While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, none of these disputes and legal actions is expected to have a material impact on our consolidated financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters, including the advertising practices case described below, could arise that may harm our business (see Item 8, Footnote 18, Commitments and Contingencies for additional discussion of our Legal Contingencies).

        Coors and many other brewers and distilled spirits manufacturers have been sued in several courts regarding advertising practices and underage consumption. The suits have all been brought by the same law firm and allege that each defendant intentionally marketed its products to "children and other underage consumers." In essence, each suit seeks, on behalf of an undefined class of parents and guardians, an injunction and unspecified money damages. We will vigorously defend this litigation and it is not possible at this time to estimate the possible loss or range of loss, if any, in these lawsuits.

        As with any transaction of the size and nature of the Merger, contingencies could be identified, and we are undertaking a review to determine whether any such contingencies exist.

ITEM 4. Submission of Matters to a Vote of Security Holders

        Not applicable.

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PART II

ITEM 5. Market for the Registrant's Common Equity and Related Stockholder Matters

        Our Class B non-voting common stock has traded on the New York Stock Exchange since March 11, 1999, under the symbol "RKY" and prior to that was quoted on the NASDAQ National Market under the symbol "ACCOB." Subsequent to the Merger, our Class B non-voting common stock is trading on the New York Stock Exchange and the Toronto Stock Exchange under the symbol "TAP."

        In connection with the Merger and effective February 9, 2005, our common equity is significantly different. We now have Class A and Class B common stock trading on the New York Stock Exchange under the symbols "TAP A" and "TAP," respectively, and on the Toronto Stock Exchange as "TAP.LV.A" and "TAP.NV," respectively. Our indirect subsidiary, Molson Coors Exchangeco, has Exchangeable Class A and Exchangeable Class B shares trading on the Toronto Stock Exchange under the symbols "TPX.LV.A" and "TPX.NV," respectively. The exchangeable shares are a means to defer tax in Canada. The exchangeable shares can be exchanged for Molson Coors common stock at any time and at the same exchange ratios described in the Merger documents, and will receive the same dividends. At the time of exchange, taxes are due. The exchangeable shares have voting rights through special voting shares held by a trustee and the holders thereof are able to elect members of the Board of Directors. See Note 20 to the accompanying Consolidated Financial Statements for information on the exchange ratios used to effect the Merger. Refer to the definitive proxy statement, dated December 9, 2004 and supplemented on January 19, 2005 for complete descriptions of the Molson Coors capital stock.

        The Merger was effected by the exchange of Coors stock for Molson stock in a transaction that is valued at approximately $3.5 billion. Coors is considered the accounting acquirer, although the transaction is viewed as a merger of equals by the two companies. The transaction is discussed in Notes 2 and 20 to the accompanying Consolidated Financial Statements in Item 8. Molson's business and historical results are discussed at length in the definitive proxy, dated December 9, 2004 and supplemented on January 19, 2005.

        The approximate number of record security holders by class of stock at February 25, 2005, is as follows:

        The following table sets forth the high and low sales prices per share of our Class B common stock and dividends paid for each fiscal quarter of 2004 and 2003 as reported by the New York Stock Exchange, all periods being prior to the Merger:

(1)

As a result of the Merger, we intend to declare quarterly dividends at the rate of $0.317 per share, which reflects Molson's pre-Merger dividend policy.

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Equity Compensation Plan Information

        The following table summarizes information about the 1990 Adolph Coors Equity Incentive Plan (the "EI Plan"), the Coors 1995 Supplemental Compensation Plan, and the Equity Compensation Plan for Non-Employee Directors as of December 26, 2004. All outstanding awards shown in the table below relate to our Class B common stock.

(1)

We may issue securities under our equity compensation plan in forms other than options, warrants or rights. Under the EI Plan, we may issue Restricted Stock Awards, as that term is defined in the EI Plan.

(2)

In connection with the Merger, we exchanged approximately 1.4 million Molson stock options for Molson Coors stock options under our EI Plan. In order to accommodate the exchange, the Compensation Committee of the Coors Board of Directors approved 5.0 million shares for exchange under the EI Plan in 2005.

        As of December 26, 2004, there were 16,250 restricted shares outstanding. These include shares with respect to which restrictions on ownership (i.e., vesting periods) lapsed as of the Merger on February 9, 2005.

        In 2004, we granted options for a total of 12,000 shares of our non-voting Class B common stock to our five non-employee members of the Board of Directors, under our Equity Compensation Plan for Non-Employee Directors. These options were issued as a component of the directors' annual compensation. The options were issued at an exercise price of $64.54 per share, and are exercisable for a period of ten years commencing on the earlier of the one year anniversary of the date of grant or the next following annual shareholders meeting following the date of grant, provided that the Director is still serving as our Director on such date.

        All unvested securities issued under the EI Plan and the Equity Compensation Plan for Non-Employee Directors vested immediately upon the Merger.

14

ITEM 6. Selected Financial Data

        The table below summarizes selected financial information for the five years ended as noted. For further information, refer to our consolidated financial statements and notes thereto presented under Item 8, Financial Statements and Supplementary Data.

(1)

53-week year versus 52-week year.

(2)

Results for the first five weeks of fiscal 2002 and all prior fiscal years exclude CBL.

(3)

Minority interests represent the minority owners' share of income generated in 2004 by RMBC, RMMC, and Grolsch joint ventures, all of which were consolidated for the first time in 2004 under FIN 46R.

15

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

        Our 2004 results reflect good financial performance for the Coors business, despite challenging competitive dynamics in all of our major markets. Net sales were up 7.6%, net income grew 12.6%, and earnings per share increased 8.8%. These positive results were driven by solid beer pricing and continued progress on cost-reduction initiatives. Our full-year profit growth also benefited from gains on asset sales and favorable foreign exchange rates.

        Pretax income for the Americas segment was $260.7 million, up 17.8% from a year ago, driven primarily by solid US beer pricing, sales of non-operating assets, and the lapping of lower sales and higher costs in the fourth quarter last year due to US supply chain challenges. These positive factors more than offset sales volume decreases and higher costs in the United States. In addition, higher income from our Coors Light business in Canada contributed to Americas full year profits.

        Pretax income for the Europe segment was $158.7 million, up 15.2% from a year ago. Europe financial results in 2004 benefited from a 12% year-over-year appreciation of the British pound against the US dollar, following an appreciation in 2003 of 8.4%. This boosted Europe income by $16.4 million in 2004 and $9.8 million in 2003, although part of this benefit was offset by higher interest expense on our pound-denominated debt. Besides favorable exchange rates, higher Europe income was driven by off-trade volume growth, better pricing and, subsequently, higher margins in both the on-trade and the off-trade. We also realized a $7.5 million pretax gain on the sale of our Cape Hill brewery property.

        We repaid debt obligations totaling $382.0 million in 2004. While the business continued to generate strong operating cash flow, sales of non-operating assets and controlled capital spending contributed heavily to the de-leveraging effort.

        With the completion of our Merger, we are now the fifth-largest brewer in the world. As a newly combined company, our first order of business is to focus on our core markets, investing for growth in our leading brands. Our near-term goals are:

•

to rejuvenate growth for Coors Light in the United States;



•

to drive profitable growth for Molson Canadian and Coors Light in Canada;



•

to keep the growth momentum and share gains building in the United Kingdom;



•

to capture cost synergies and other benefits of the Merger to build shareholder value; and



•

to determine the near- and long-term potential for our Kaiser business in Brazil.

Results of Operations

Americas Segment

        The Americas segment is focused on the production, marketing, and sale of the Coors portfolio of brands in the United States and its territories, including the results of RMMC and RMBC, the Coors Light business in Canada, and the sale of Molson products in the United States that, prior to the Merger, was conducted through a joint venture with Molson, Molson USA. The Americas also include

16

the small amount of Coors brand volume that is sold outside of the United States and its territories, including primarily Japan, China, Mexico, and the Caribbean.

(1)

The 2002 special items consist of expenses related to restructuring and the dissolution of our former can and end joint venture, offset by a cash payment on a debt from our former partner in a brewing business in South Korea.

(2)

Consists primarily of gains from sales of non-operating assets, water rights, a royalty settlement and equity share of Molson USA losses.

(3)

Earnings before income taxes in 2004 includes $13,015 of the minority owners' share of income attributable to the RMBC and RMMC joint ventures.

Net sales and volume

        Americas net sales improved $71.4 million or 3.0% in 2004, although sales volumes were lower year-over-year. Net sales per barrel also improved 3.7%, benefiting from a favorable industry pricing environment. Improved US base pricing and lower price promotion levels contributed $46.7 million to sales and profitability, while growth in the Canada business contributed $13.2 million. Our Americas sales benefited from the introduction of Aspen Edge in early 2004 and strong growth from our Blue Moon and Zima XXX brands in the fourth quarter 2004 (an $10.7 million product mix impact). Collection of fuel price surcharges from customers added $4.6 million.

        Net sales for the America segment increased $8.7 million or 0.4% from 2002 to 2003. On a per barrel basis, net sales increased 1.8% while volume decreased 1.4% year-over-year. Net sales were impacted positively by favorable pricing in the United States ($37.4 million), as well as significant growth in our Canadian business ($10.6 million).

        The challenges over the past two years to our sales have included volume impacted negatively by growth of consumer interest in low-carbohydrate diets and flavored alcohol beverages, competition to the beer business from wine and spirits, and a mix shift toward lower revenue-per-barrel brands such as Keystone Light, which has experienced volume growth of 12% since 2002, offset in 2004 by higher sales of Aspen Edge, Zima XXX, and Blue Moon.

Cost of goods sold and gross profit

        Americas cost of goods sold increased $4.6 million or 0.3% in 2004, compared to 2003. On a per barrel basis, the increase was approximately 1.1%. The increase is the net effect of inflation (primarily

17

higher fuel and packaging costs) ($15.1 million); as well as increased labor-related expenses ($12.1 million) and a mix shift to higher-cost brands and packages, such as Aspen Edge in 2004 ($10.9 million); offset by the lapping of extra expense related to our supply chain challenges in 2003 ($6.5 million); and the implementation of FIN 46R which had the effect of reducing our cost of sales by re-allocating certain joint venture expenses in our income statement out of cost of sales ($13.0 million).

        Overall, gross profit increased from 38.8% in 2003 to 40.4% in 2004, with pricing and other factors positively impacting revenue per barrel being the primary drivers.

        Americas cost of goods sold decreased by $7.4 million or 0.5% in 2003 versus 2002, but increased on a per barrel basis by 0.9%. The overall net increase in cost of goods per barrel was due to higher pension and other labor-related costs ($11.2 million) and additional costs due to information technology upgrades ($8.6 million); offset by lower volume, packaging rebates and cost savings from reorganizations in 2002. Our higher pension costs were the result of lower returns on pension assets in recent years and lower discount rates. In addition, we incurred approximately $6.5 million of increased costs in the fourth quarter of 2003, primarily related to extra freight, direct labor and finished goods loss associated with our new supply chain processes and systems implementation.

        Overall, gross profit increased from 38.3% to 38.8%, with pricing and Canadian growth slightly outweighing the negative impacts to cost of goods per barrel.

Marketing, general and administrative expenses

        Marketing, general and administrative expenses increased $43.0 million in 2004, compared to 2003, or 6.0%. This represents an additional $2.18 per barrel increase. The increase is due to higher investments in sales and marketing efforts ($29.6 million), in addition to modestly higher labor-related costs ($5.1 million).

        Marketing, general and administrative expenses increased $16.2 million or 2.3% in 2003, compared to 2002. On a per barrel basis, marketing, general and administrative expenses increased 3.7% in 2003 compared to 2002. This increase was driven primarily by higher pension and benefit costs ($5.6 million) and higher spending levels related to information technology ($6.0 million).

Other income, net

        Other income increased by $15.7 million comparing 2004 to 2003. This is largely due to one-time gains from the sales of non-operating real estate in the fourth quarter of 2004 totaling nearly $12.0 million, and the receipt of a lump-sum royalty payment of $4.8 million in 2004 related to a court settlement.

Europe Segment

        The Europe segment consists of our production and sale of the CBL brands, principally in the United Kingdom, our joint venture arrangement relating to the production and distribution of Grolsch in the United Kingdom and Republic of Ireland, factored brand sales (beverage brands owned by other companies, but sold and delivered to retail by us), and our joint venture arrangement with Tradeteam

18

for the physical distribution of products throughout Great Britain. It also includes the sale of Coors Fine Light Beer in the United Kingdom and Coors Light in the Republic of Ireland.

N/M = Not meaningful

(1)

2002 results exclude the first five weeks of the fiscal year, which is prior to the purchase of CBL.

(2)

The 2004 Special item represents the gain recognized on the sale of our Cape Hill property.

(3)

Earnings before income taxes in 2004 includes $6,854 ($4,798, net of tax) of the minority owner's share of income attributable to the Grolsch joint venture.

Foreign currency impact on results

        Our Europe segment benefited from a 12.0% and 8.4% year-over-year increase in the value of the British pound sterling (GBP) against the US dollar in 2004 and 2003, respectively. As a result of this exchange rate fluctuation, all results from our Europe segment in 2004 are significantly higher than in the prior year; however, the increases are tempered by increased interest costs in the Corporate segment as a result of our hedging activities related to GBP-denominated debt. For example, Corporate unallocated expense was adversely affected by foreign currency increases on GBP denominated hedges

19

by approximately $7.6 million in 2004. The following table summarizes the approximate effect the changes in exchange rate had on the Europe results as presented above in 2004 and 2003:

(1)

For 2004, assuming the same rates as 2003; for 2003, assuming the same rates as 2002.

Net sales and volume

        Net sales for the Europe segment increased 14.7% in 2004, while volume increased 1.3% from the previous year. Approximately 12.0% of the net sales increase represents the effect of currency exchange rates. The volume growth was driven by the Carling and Grolsch brands, which grew volume for the year by approximately 7% and 6%, respectively. Volume growth for the year was restricted by the cooler and wetter summer weather in the United Kingdom compared to a record breaking summer in 2003 and the comparison to a period of high off-trade discounting in the first half of 2003.

        Our on-trade business, which represents approximately two-thirds of our Europe volume and an even greater portion of margin, saw volume decline marginally by (0.5%) compared to 2003. This compared to an overall on-trade market decline of 2.5% in the year, yielding a market share gain of approximately 0.7%. Our off-trade volume for 2004 increased approximately 6% over 2003, led by Carling and Grolsch. Our off-trade market share growth for the year was approximately 0.6 percentage points.

        In addition to the volume movements documented above, we had positive pricing in both the on-trade and the off-trade, and an increase in the sales value of factored brands. These gains were partially offset by negative channel and brand mix. Owned brand net sales per barrel increased approximately 2.6% for the year.

        Net sales for the Europe segment increased 15.6% in 2003, while volume increased 13.2% from the previous year. The significant increase in net sales and volume was partly due to our owning the CBL business for the full year in 2003 versus forty-seven weeks in 2002. Currency exchange rates accounted for 8.4% of the net sales increase. On a full year comparative basis, our sales volumes increased 6.7%. This growth was driven by the Carling and Grolsch brands, both of which grew volume by more than 10% during the year.

        Our on-trade business grew volume by approximately 5.0% compared to the full year 2002 as a result of strong sales execution, particularly with Carling and Carling Extra Cold, and unusually hot weather in the United Kingdom during the summer in 2003. In a declining on-trade market, this yielded a market share gain of approximately 1.5%.

        Our off-trade volume for 2003 increased approximately 13.0% over the comparable period in 2002, led by Carling and Grolsch.

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        Contributing factors to this volume growth were the favorable summer weather and aggressive discounting, primarily in the first half of 2003. Our off-trade market share growth for 2003 was approximately one percentage point.

        Our positive volume in both the on- and off-trade and positive pricing in the on-trade were partially offset by a decline in our on-trade factored brand sales and, in the off-trade, heavy price discounting and mix shift toward lower revenue-per-barrel sales. The decline in sales of factored brands in the on-trade was driven by some of our large on-trade chain customers purchasing products from other suppliers.

Cost of goods sold and gross profit

        Cost of goods sold increased 13.5% in 2004 versus 2003, with approximately 12.0% of the increase being due to the effect of currency exchange rates.

        The increase in local currency cost of goods sold was driven by increased volume and higher labor costs, together with a mix shift to the off-trade where products have higher packaging costs, and an increase in the value of factored brand purchases where the cost is included in our cost of goods sold.

        These increases were offset by the benefit to costs of goods sold of implementing FIN46R, and a reduction in contract packaging costs from 2003, where we contracted with regional brewers to package some of our off-trade volume while we were commissioning the new and upgraded packaging lines in our Burton brewery.

        On a per-barrel basis, cost of goods sold increased 12.1%; excluding the impact of currency exchange rates cost of goods sold per barrel was broadly flat compared to 2003.

        Gross profit in the Europe segment increased 17.6%; and excluding the impact of foreign exchange, gross profit increased 5.1%. Gross profit per barrel increased 16.1%, and by 3.7% excluding the impact of foreign exchange. Gross profit as a percentage of net sales increased 0.7% during 2004.

        Cost of goods sold increased 19.3% in 2003 versus 2002. On a per-barrel basis, cost of goods sold increased 5.4%. The aggregate increase in cost of goods sold was driven by increased volume and higher foreign exchange rates, coupled with owning the business for the full year versus only a partial period in 2002. Also driving this increase, and the increase in the per barrel cost, was the reclassification of Tradeteam earnings from cost of goods sold to other income beginning in 2003 and the loss of income from contract brewing arrangements that substantially ceased near the end of 2002. Additionally, during the first three quarters of 2003, we incurred higher production costs as we contracted with regional brewers to package some of our off-trade volume while we were commissioning new packaging lines in our Burton brewery.

        We realized some benefit from right-sizing and improving our UK production infrastructure towards the latter half of 2003, which partially offset the increases noted above. The increases in cost of goods sold were also reduced by the decrease in factored brand volume where the purchase cost is included in our cost of goods sold, but the related volume is not included in reported volumes.

        Gross profit in the Europe segment increased 8.0% in 2003, compared to 2002; however, excluding the impact of foreign exchange, gross profit was essentially flat despite the inclusion of a full year of sales in 2003. Gross profit per barrel decreased 4.6% and gross profit as a percentage of net sales decreased 2.1% during 2003 as a result of the reclassification of Tradeteam earnings to other income in 2003, and our contract packaging costs incurred as we commissioned the packaging lines in Burton.

21

Marketing, general and administrative expenses

        Europe marketing, general and administrative expenses increased 16.5% during 2004; and 5.0% on a per barrel basis. Foreign exchange accounted for the great majority of this increase.

        Various factors increased marketing, general and administrative expenses during 2004: (a) we had higher labor-related and information technology costs; (b) in 2003, costs were reduced by a one-time gain of $3.5 million before tax on the sale of the rights to our Hooper's Hooch FAB brand in Russia; and (c) implementation of FIN46R transferred costs from cost of goods sold into marketing, general and administrative costs. These increases were partly offset by decreased marketing costs. Spend on marketing core brands increased nearly 20% (including investment relating to the launch of Coors Fine Light Beer), however this was more than offset by a decrease in spending on non-core brands as the business has focused on its key growth brands for the future.

        Europe marketing, general and administrative expenses increased 9.0% during 2003 almost entirely due to exchange rates and the impact of the full year of ownership of CBL. On a per-barrel basis, marketing, general and administrative expenses decreased 3.7% year-over-year. Various factors impacted marketing, general and administrative expenses during 2003, which effectively off-set each other: (a) we had higher investments in sales staff and increased depreciation charges from investments in information systems and dispense equipment, the latter supporting the sales growth in the on-trade; (b) we were impacted by the loss of reimbursements from the transitional services arrangements with Interbrew S.A. that were set up following the CBL acquisition in February 2002 and largely concluded by the end of that year. These reimbursements were recorded as a reduction to marketing, general and administrative expenses in 2002; (c) we realized savings in employee bonus costs and directors' costs; and (d) the one-time gain of $3.5 million on the sale of the rights to our Hooper's Hooch FAB brand in Russia during the third quarter.

Other (expense) income, net

        The adverse movement in other (expense) income, net in 2004 was a result of a decline in Tradeteam operating performance, currency exchange rate movements, and increased non-operating leasehold expenses.

        In 2003, other income increased as a result of the inclusion of Tradeteam income (included in cost of goods sold in 2002) and currency exchange rate movements, partially offset by an increase in non-operating leasehold expenses.

Interest income

        Interest income is earned on trade loans to UK on-trade customers. Interest income decreased 6.6% in 2004 despite favorable foreign exchange rates, as a result of lower loan balances in 2004. Interest income increased 4.7% in 2003 as a result of favorable foreign exchange rates, the inclusion of an additional five weeks of results in 2003, netted against lower loan balances in 2003.

Corporate

        Corporate includes interest and certain other general and administrative costs that are not allocated to either the Americas or Europe operating segments. Corporate contains no sales or cost of goods sold, although certain royalty income and intangible administrative costs are absorbed by

22

Corporate. The majority of these corporate costs relates to worldwide finance and administrative functions, such as corporate affairs, legal, human resources, insurance and risk management.

(1)

Relate primarily to acquisition costs for CBL, including accounting, appraisal and legal fees not eligible for capitalization. Molson merger costs will primarily be capitalized in purchase accounting. Approximately $1.8 million were expensed in marketing, general and administrative expenses during 2004.

(2)

Consists of foreign currency exchange gains (losses), bank fees and gains on sales of investments.

(3)

Loss before income taxes in 2004 includes $1,595 of the minority owner's share of interest expense attributable to debt obligations of the RMMC joint venture.

N/M = Not Meaningful

Marketing, general and administrative expenses

        Marketing, general and administrative expenses were approximately $14.7 million higher in 2004, than 2003, due to increased incentive compensation costs ($7.5 million), other labor-related costs ($2.5 million), and Merger and regulatory-compliance costs ($1.5 million). Marketing, general and administrative expenses in 2003 increased significantly from 2002 for similar reasons, except for the cost of the Merger with Molson. Regulatory compliance costs have increased of necessity, due to implementation of procedures to comply with the Sarbanes-Oxley Act of 2002 over the past two years.

Interest expense, net

        Interest expense, net decreased nearly 13% in 2004, compared to 2003 due to our paydown of debt and from swapping some of our debt from fixed to floating rates. Full-year 2004 debt repayments at $382 million, were about 40% above 2003. Our cash flow and debt pay downbenefited from asset monetizations and capital spending discipline in 2004. In the three years since we bought the UK business, we have repaid $862 million of debt principal as of year-end 2004.

        Interest expense increased $13.0 million or 19.6% in 2003. This increase was driven by having our fixed-rate debt structure in place for the full year in 2003 versus only eight months in 2002 and the currency appreciation on our GBP-denominated term debt prior to its payoff in August 2003. The increase is also due to our cross-currency swap structure and our GBP-denominated interest expense. Partially offsetting these factors was the implementation of our lower interest rate commercial paper

23

program in June 2003, the initial proceeds of which we used to pay down approximately $300 million of higher-rate GBP-denominated term debt.

Liquidity and Capital Resources

        Our primary sources of liquidity are cash provided by operating activities, external borrowings and asset monetizations. As of December 26, 2004, including cash and short-term borrowings, we had positive working capital of $91.3 million compared to negative working capital of $54.9 million at December 28, 2003. At December 28, 2003, cash and cash equivalents totaled $19.4 million, compared to $123.0 million at December 26, 2004. The improvement in our working capital is due to the consolidation of RMMC, RMBC and Grolsch ($28 million) and cash management. The increase in cash is mainly due to cash acquired when our joint ventures were consolidated in the first quarter of 2004 ($20.8 million), cash received from Interbrew ($25.8 million) related to the settlement of a pension liability dispute and reduced capital spending (approximately $28.9 million).

        We believe that cash flows from operations and cash provided by short-term borrowings, when necessary, will be sufficient to meet our ongoing operating requirements, scheduled principal and interest payments on debt, dividend payments and anticipated capital expenditures. However, our liquidity could be impacted significantly by a decrease in demand for our products, which could arise from competitive circumstances, a decline in the acceptability of alcohol beverages, any shift away from light beers and any of the other factors we describe in the section titled "Risk Factors." We also have credit facilities that contain financial and operating covenants, and provide for scheduled repayments, that could impact our liquidity on an ongoing basis.

        We continue to evaluate opportunities to supplement our operating cash flow through potential monetizations of assets. During the second quarter of 2004, CBL outsourced the ownership, procurement and tracking of its approximately 1.2 million kegs and casks with TrenStar, Inc. As a result, we received a cash payment of approximately £28 million ($50 million at second quarter rates). In the fourth quarter of 2004, we sold certain land holdings in Golden, Colorado and received cash related to the sale of our Cape Hill facility in the UK. In total, our proceeds from asset monetizations in 2004 were $72.1 million.

Operating Activities

        Net cash provided by operating activities decreased by $28.9 million, compared to 2003. The decrease is primarily due to an increase in cash taxes in 2004 versus 2003 when favorable finalization of tax audits resulted in refunds, offset by the reporting of additional cash flows as a result of consolidating certain joint ventures in 2004. Also, improved sales at the end of 2004, compared to 2003 resulted in higher receivable and inventory balances, which served to lower cash flows from operations in 2004.

        Net cash provided by operating activities increased $283.9 million in 2003 compared to 2002. The decrease was attributable primarily to cash provided by trade receivables and payables in 2003—the result of continued emphasis on working capital management by improving receivable collection in the United Kingdom, the favorable impact of tax audits in 2003 and managing the purchasing cycle throughout the company in 2003.

Investing Activities

        Cash used in investing activities decreased $147.2 million during 2004, compared to 2003. This improvement is attributable to reduced capital spending in 2004, cash received from the sale of kegs in the UK, and the pension settlement received in 2004 from Interbrew. Also, we presented as an investing activity the inclusion of the opening cash balances of the joint ventures we began

24

consolidating during the first quarter of 2004 as result of implementing FIN 46R (see Note 3 in the accompanying Consolidated Financial Statements in Item 8).

        During the fiscal year ended December 28, 2003, we used net cash of $214.6 million in investing activities compared to $1.6 billion used in 2002. The decrease in net cash used is due to the $1.6 billion payment, net of cash acquired, made to purchase CBL in 2002. However, excluding our 2002, $1.6 billion payment to acquire CBL, total cash used in investing activities increased approximately $231.2 million compared to the same period in 2002, mainly due to the absence of sales and maturities of investments in 2003 versus 2002. A significant amount of investments was sold in 2002 to help fund the acquisition of CBL.

Financing Activities

        Net cash used in financing activities was $335.6 million in 2004, compared to $357.4 million in 2003. The change is mainly the result of increased repayments of debt in 2004, offset by cash received from increased stock option exercises during the year. We have also included a new item, "Dividends paid to minority interest holders," in the Financing activities section of our Consolidated Statements of Cash Flows. This item represents distributions from our joint ventures consolidated as result of FIN 46R to the minority interest holders in those joint ventures. There is no significant net impact to cash flows as a result of the adoption of FIN 46R. However, from a year-over-year comparison standpoint, cash flows from operating activities have been increased and cash flows from financing activities have been decreased as a result of classifying dividends paid to minority interest holder in financing activities.

        Net cash used in financing activities was $357.4 million in 2003, representing a $1.6 billion decrease from cash provided by financing activities in 2002. This decrease is primarily attributable to the $2.4 billion proceeds from issuance of debt in 2002, partially offset by larger payments on debt and capital lease obligations in 2002. Debt-related activity in 2003 reflected net payments of long- and short-term debt totaling $297.1 million whereas in 2002, debt-related activity reflected a net increase in long- and short-term debt of $1.3 billion, due primarily to borrowings related to our acquisition of CBL.

        Our total borrowings as of December 26, 2004, were composed of the following:

25

        The aggregate principal debt maturities of long-term debt and short-term borrowings for the next five fiscal years are as follows:

        We incurred significant debt in 2002 to finance the purchase of CBL. Since the acquisition, we have used cash from operating activities and from asset monetizations, net of capital expenditures and other cash used in investing activities, to make payments on our debt obligations.

        Some of our debt instruments require us to meet certain covenant restrictions, including financial tests and other limitations. As of December 26, 2004, we were in compliance with all of these covenants.

        A special dividend equal to Cdn.$652 million ($523 million) was paid to the holders of record of Molson stock on February 8, 2005, as a condition for completing the Merger. As a result, the newly combined company has increased its debt obligations to pay the dividend.

        A new bank facility was negotiated in connection with the Merger, which has financed the cash requirements of the special dividend. We intend to refinance these obligations during 2005, with permanent financing.

        Standard & Poors downgraded our credit rating from BBB+ to BBB subsequent to the Merger. Concerns regarding the health of the Brazilian and Canadian businesses influenced this decision, in addition to the debt burden as a result of the special dividend. Our Moody's credit rating is BAA2.

Contractual Obligations and Commercial Commitments

Contractual Cash Obligations as of December 26, 2004

(1)

We have had several significant changes to our debt obligations in 2004: (a) Due to the implementation of FIN46R in the first quarter, we consolidated the RMMC accounts, including

26

approximately $45 million of notes payable. The debt proceeds have been used by RMMC to finance capital improvements, and totaled $40.9 at December 26, 2004. ACC and CBC have guaranteed payment of the debt. (b) At December 28, 2003, we had $86.0 million outstanding in an unsecured senior credit facility consisting of a US dollar-denominated amortizing term loan. We paid the outstanding balance off in full during the first quarter of 2004. (c) In June 2003, we issued approximately $300 million in commercial paper. At December 26, 2004, we had no balance outstanding. Subsequent to December 26, 2004, and coincident with the Merger, we, as a combined company, added approximately Cdn.$652 million ($523 million) of debt related to the payment of a special dividend to the Molson shareholders. Merger-related debt is not reflected in this table.

(2)

The "interest payments" line includes interest on our bonds and other borrowings outstanding at December 26, 2004, excluding the positive cash flow impacts of any interest rate or cross currency swaps. Current floating interest rates and currency exchange rates are assumed to be constant throughout the periods presented. The "derivative payments" line includes the interest rate swap and cross currency swap payment obligations only, which are paid to counterparties under our interest rate and cross currency swap agreements. Current floating interest rates and currency exchange rates are assumed to be constant throughout the periods presented. We will be receiving a total of $462.4 million in fixed rate payments from our counterparties under the swap arrangements, which offset the payments included in the table. As interest rates increase, payments to our counterparties will also increase. Net interest payments, including swap receipts and payments, over the periods presented are as follows. This table excludes interest payments or derivative activity contemplated as a result of the Merger.

(3)

Represents expected contributions under our defined benefit pension plans in the next twelve months and our benefits payments under retiree medical plans for all periods presented.

(4)

Includes a UK sale-leaseback included in a global information services agreement signed with Electronic Data Systems (EDS) late in 2003, effective January 2004, and totaling $6.4 million at December 26, 2004. The new EDS contract includes services to our Americas and Europe operations and our corporate offices and, unless extended, will expire in 2010.

(5)

Approximately $1.9 billion of the total other long-term obligations relate to long-term supply contracts to purchase raw material and energy used in production, including our contract with Graphic Packaging Corporation, a related party, dated March 25, 2003. Approximately $1.1 billion relates to commitments associated with Tradeteam in the United Kingdom. The remaining amounts relate to sales and marketing, information technology services, open purchase orders and other commitments, and exclude any purchasing synergies related to the Merger.

Other Commercial Commitments as of December 26, 2004

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Advertising and Promotions

        As of December 26, 2004, our aggregate commitments for advertising and promotions, including marketing at sports arenas, stadiums and other venues and events, total approximately $170.0 million over the next five years.

Capital Expenditures

        In 2004, we spent approximately $211.5 million on capital improvement projects worldwide. Of this, approximately half was in support of the Europe business and halfwas for the Americas. We currently plan capital expenditures to be significantly higher as a result of the merger. Base capital spending in the U.S. and U.K. is expected to be approximately $300 million, with the increase in 2005 due mainly to the build-out of the Shenandoah facility to a full brewery. Base capital spending in Canada and Brazil is expected to approximate $80 million, while capital spending in the US and Canada to support synergies is estimated at $50-$60 million in 2005.

Pension Plans

        During 2004 the combination of investment returns and our contributions of approximately $95 million to our combined plans resulted in a slightly improved funded position at year end 2004 versus year end 2003, despite a continued decline in discount rates. At year-end 2004, the accumulated pension benefit obligations exceeded the fair value of the plan assets on a consolidated US dollar basis by approximately $409.1 million, compared to $410.8 million at the end of 2003. We experienced actuarial losses in 2004 due to higher than expected early retirements in the US Plan and we have taken a charge to equity of $42.3 million, pre-tax in 2004 for additional minimum liabilities (See Item 8, Note 14, "Other Comprehensive Income"). At year-end 2004, our consolidated projected benefit obligations were $3.0 billion and the accumulated benefit obligations were $2.7 billion. The amounts reflected in the Consolidated Balance Sheets for accrued pension liability, accumulated other comprehensive loss and intangible asset in 2004 are $409.1 million, $401.7 million ($259.7 million, net of tax), and $34.7 million, respectively. In 2004, consolidated pension expense was $43.7 million, which represented approximately 1.1% of consolidated cost of goods sold and other operating expenses.

        It is our practice to fund amounts for pensions at least sufficient to meet the minimum requirements set forth in applicable employee benefits laws and local tax laws. Pension contributions on a consolidated basis were $95.0 million during 2004. We anticipate making voluntary contributions of approximately $78.2 million in 2005 to pension plans (including supplemental executive plans) in the US and UK, and required contributions in Canada. However, management may increase these funding levels in evaluating 2005 spending priorities. For further information regarding pension plan assets, refer to Note 15, "Employee Retirement Plans." in Item 8, Financial Statements and Supplementary Data.

        In 2004, our actuarially assumed long-term rates of return on plan asset investments were 9.0% for the US Retirement Plan and 7.8% for the UK Plan. In selecting those assumptions, we considered investment returns by asset class and applied the relevant asset allocation percentages. The discount rates used to determine pension expense in 2004 of 6.25% and 5.625% were based on prevailing yields of high-quality corporate fixed income investments and relevant indices in the United States and the United Kingdom, respectively.

        On a consolidated basis, we had unrecognized net actuarial losses of $616.4 million and $598.0 million at December 26, 2004 and December 28, 2003, respectively. Actuarial losses are primarily comprised of cumulative investment returns that are lower than actuarially assumed investment returns and liability losses due to increased pension liabilities and falling interest rates. Pension expense includes amortization of these actuarial losses after they exceed certain thresholds. As a result of losses in excess of the thresholds, we recorded actuarial loss of $14.9 million in 2004 and

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$9.1 million in 2003. We anticipate pension expense for the U.S. and U.K. plans will decrease from the $43.7 million in 2004 to approximately $37.7 million in 2005. The expected decrease in consolidated pension cost is due to the impacts of higher actuarial loss amortization and foreign exchange, net of changes in plan features announced subsequent to 2004 (see Note 20, "Subsequent Events").

Special Items, net

Cape Hill Brewery Sale

        We sold our Cape Hill brewery property in May 2004 for £26 million (approximately $50 million at current exchange rates), with £6 million payable to us in 2004 and £20 million due in 2005, resulting in a one-time pretax gain of approximately £4 million ($7.5 million, which has been included in Special items on the accompanying Consolidated Statement of Income). We recorded an insignificant portion of the ultimate gain in the second quarter of 2004 under the installment method. We recorded the remaining gain on sale in the fourth quarter of 2004 after the remaining 2004 payment was received. The note receivable is included in other current receivables.

        In 2002, we recorded charges related to the closing of our Cape Hill brewery, which were included as part of our purchase accounting upon the acquisition of CBL. Closure of the Cape Hill brewery commenced in July 2002 with the shut down of the kegging line. All production ceased in December 2002, at which time the assets, which were included in properties, net, were reclassified as held-for-sale. No impairment was taken on the assets, as their market value exceeded their carrying value. The payment of severance and other termination benefits started in July 2002 and was completed in December 2004. We reduced goodwill for unpaid restructuring liabilities upon full gain recognition in December 2004. The closure of the Cape Hill brewery was possible as a result of the cessation of the production contract for Interbrew UK Ltd., which was in existence upon acquistion of CBL. We estimate the annual savings from the Cape Hill closure, net of the loss of income from the Interbrew UK Ltd production contract, approximate £11 million (approximately $20 million), reflected primarily in cost of goods sold.

2002 Special Items

        During 2002, we incurred net pretax special charges of $6.3 million. We recorded special charges of $2.7 million related to acquisition costs for CBL, including accounting, appraisal and legal fees. Offsetting these charges was a credit of $2.8 million related to cash payments received on a debt due to us from our former partner in a brewing business in South Korea. We also incurred net restructuring charges of $6.4 million primarily related to restructuring initiatives in our US operations and Golden Brewery business in an effort to consolidate and lower our future overhead costs. The restructuring charges consisted primarily of employee severance costs, which were paid during 2003. We estimate annual savings from the US/Golden restructuring programs approximate $10 million, reflected primarily in cost of goods sold.

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

        This document and the documents incorporated in this document by reference contain forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact contained in this document and the materials accompanying this document are forward-looking statements.

        The forward-looking statements are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Frequently, but not always, forward-looking statements are identified by the use of the future tense and by words such as "believes," "expects," "anticipates," "intends," "will," "may," "could," "would," "projects," "continues,"

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"estimates," or similar expressions. Forward-looking statements are not guarantees of future performance and actual results could differ materially from those indicated by the forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements.

        The forward-looking statements contained or incorporated by reference in this document are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding our plans, intentions, beliefs or current expectations.

        Among the important factors that could cause actual results to differ materially from those indicated by forward-looking statements are the risks and uncertainties described under "Risk Factors" and elsewhere in this document and in our other filings with the SEC.

        Forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and we do not undertake any obligation to update forward-looking statements to reflect new information, subsequent events or otherwise.

Outlook for 2005

Americas Segment

        Our Americas results will continue to be driven by volume and pricing in 2005. The low-carb diet trend began to decline during 2004, which we believe has eased some of the competitive pressure on Coors Light. Still, the beer category faces significant challenges, as evidenced by soft industry sales to retail in the fourth quarter. In this environment, we have strengthened our marketing and sales efforts, especially behind Coors Light. This is reflected in the new ad creative for Coors Light that we rolled out in the fourth quarter, as well as in our refocused sales efforts, especially on chain and key accounts. We believe that these and other initiatives contributed to the fourth quarter improvement in Coors Light sales-to-retail trends, and we are working to carry that momentum into 2005. The US beer-pricing environment remains generally positive, despite some recent increases in discounting in a few important markets.

        We have announced plans to close our Memphis brewery, as part of the expected synergies related to the Merger with Molson. We expect to begin transitioning Memphis production to other facilities late in 2005. Costs related to the Memphis closure are currently being determined, with estimated annual savings of approximately $32 to $35 million per year. We plan for US marketing, general & administrative spending for 2005 to be up at a low-to-mid-single-digit percentage rate, in line with the trend over the last several years.

        The US business recently announced certain retirement plan changes to be effective in the third quarter of 2005, enacted with the intent to better match employees' retirement needs and to curb the increased costs related to these plans. The US business expects to incur approximately $52 million of combined retirement plan costs (including retiree medical), and to contribute approximately $52 million to the US plans during 2005; however, larger contributions are being considered. Because these costs are allocated between cost of sales and marketing, general and administrative expenses according to headcount, the majority of the cost savings in future years from the plan amendments in 2005 will be realized in cost of sales.

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Europe Segment

        In Europe, we expect continued volume growth in 2005 with anticipated share gains in both our on-trade and our off-trade businesses. Volumes in the first half of 2005, however, will face particularly challenging comparisons due to market trends and the beneficial impact in 2004 of the Euro 2004 football (soccer) tournament. Our pricing trends are expected to continue to be positive within both the on-trade and the off-trade channels during 2005, but this will be at least partially offset by the adverse impact of the continued market shift to lower margin sales channels. We also anticipate that shifts in our factored brand sales (beverage brands owned by other companies but delivered to retail by us) will continue to have an adverse financial impact during 2005.

        We anticipate that a shift in our mix from on-trade to off-trade will increase our cost of goods sold due to the higher packaging costs on sales to the off-trade. We expect these and other inflationary cost increases to be partly offset by continued efficiencies in the supply chain.

        Marketing, general and administrative spending is likely to be modestly higher in 2005 as a result of front-end investments and higher overhead expenses, largely on the dispense equipment required to support our strong on-trade market position.

        Other income is expected to decrease in 2005 due to the continued pressures on Tradeteam operating performance.

Other

Molson Coors Merger

        The Merger will have a significant impact on our 2005 results, due in part to the following items:

•

A number of management action plans to obtain synergies are being considered, and many of these could have a significant impact on financial results and cash flows.



•

The beer business in Canada is a mature market with aggressive competition from one large competitor, many importers, and regional and micro brewers. Price discounting in Canada significantly increased in 2004.

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•

The beer business in Brazil has been very difficult, resulting in operating losses, asset write-offs, and other restructuring actions since Molson acquired the business in 2002. In addition, results will be impacted by the addition of an additional foreign currency—the Brazilian Real.



•

Debt increased as a result of the approximately Cdn.$652 ($523 million) special dividend awarded to Molson shareholders before the Merger.



•

Cost synergies of $175 million, $50 million of which will be captured and used to boost profits in 2005.



•

Tax and interest benefits of the merger are estimated to exceed $25 million annually.



•

Molson assets will be revalued to fair market value, resulting in higher depreciation and amortization for the merged company.



•

Our effective tax rate will be more volatile due to the accrual of US income taxes on Canada's earnings and profits, which will be hard to predict based on purchase price adjustments that are anticipated to occur throughout 2005.



•

Molson employees in Canada are covered by a number of defined benefit pension plans. We will value the company's net liability with respect to the Canadian pension plans as part of purchase price accounting. Employees in Brazil are not covered by company-sponsored defined pension plans. Our pension obligations will substantially increase, as we include Molson's pension and the pension in the Brewers Retail Inc., joint venture which we expect to consolidate under FIN 46R.



•

We will make significant cash outlays for Merger-related expenses.

Debt Structure

        A special dividend equal to Cdn.$652 million ($523 million) was paid to the holders of the Molson stock on February 8, 2005, as a condition for completing the Merger. As a result, the newly combined company has increased its debt obligations to pay the dividend.

        Subsequent to the Merger we established a $1.3 billion bridge facility which was used to finance the special dividend and will be used to refinance Molson's existing debt. We also established a $1.4 billion, five-year credit facility which was used to refinance the special dividend and will also be used for general corporate purposes and as a commercial paper back-stop. Subsequent to establishing both of these facilities, the existing bank financing at both Molson and Coors were terminated.

Molson's Canada Segment

        We will work to reverse negative volume trends for some of Molson's key brands, especially in the Western provinces of Canada. As a result, we expect selling and marketing costs in Canada to increase as volume growth becomes a priority.

Molson's Brazil Segment

        We will evaluate the near- and long-term potential of the Kaiser business in Brazil during the first half of 2005, which could include significant changes to the business.

Other

        In addition to Merger-related changes, our full-year 2005 consolidated results will also be lapping approximately $24.9 million in one-time pretax gains in 2004 (or 45 cents per share after tax), mostly from non-operating land sales. We will continue to pursue opportunities to prudently monetize non-core and non-operating assets in 2005.

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Rights on Change of Control

        Coors has agreements with 12 executive officers, and certain other members of management relating to a change of control of Coors. The Merger constituted a change in control of Coors under these agreements as the Adolph Coors, Jr. Trust no longer has voting control of Coors, and as the Board of Directors of the merged company no longer has a majority of directors who were directors of Coors prior to the Merger. Certain terms of these agreements were triggered by the Merger. These agreements generally provide for continued compensation and benefits for a period of two years following the change of control.

        In addition, these employees are entitled to severance benefits if triggering events specified in the agreement occur. These events include direct or constructive termination without cause, resignation for good reason or resignation by the employee during a 30-day period beginning one year after the change of control. Upon a triggering event, the officer will be paid a multiple of annual salary and bonus and will receive continued health, pension and life insurance benefits. For terminated executives and officers, stock option exercises are subject to a floor price equal to the price of Coors' stock on the date of the change of control.

        For each of Coors' then Chairman and Chief Executive Officer, the compensation includes a payment for the rest of the current year plus three times annual salary, bonus and fringe benefits, plus benefits for the equivalent of three years coverage, plus three years credit for additional service toward pension benefits. For all other executive officers with these agreements, the compensation includes a payment for the rest of the current year plus two times annual salary, bonus and fringe benefits, plus two years equivalent benefit coverage, plus vesting and credit for two years additional service toward pension benefits.

        The Company is currently in discussions with each employee covered by the change in control agreements. In return for forfeiting their rights under the agreements, some executives are being offered a retention plan. The impact on future financial results of employees leaving the company or staying under the retention plans has not been determined at this time.

Performance Based Options and Restricted Shares

        The Merger transaction with Molson resulted in the vesting of all outstanding stock options and restricted share units held by employees of both Molson and Coors with the exception of performance based options and restricted share units held by the CEO of Molson. There are 288,000 stock options subject to performance based criteria, and 18,000 restricted shares that can increase to 54,000 based on defined performance criteria. The company will account for both the performance-based stock options and restricted stock under variable accounting, which could have an impact on future financial results depending on the likelihood of meeting the performance targets.

Critical Accounting Estimates

        Management's discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. We review our accounting policies on an on-going basis. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty. Actual

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results may differ materially from these estimates under different assumptions or conditions. We have identified the accounting estimates below as critical to our financial condition and results of operations:

Allowance for Doubtful Accounts

        In the Americas segment, our allowance for doubtful accounts and credit risk is insignificant as the majority of the Americas accounts receivable balance is generated from sales to independent distributors with whom we have a predetermined collection date arranged through electronic funds transfer. Also, in the Americas, we secure substantially all of our credit risk with purchase money security interests in inventory and proceeds, personal guarantees and other letters of credit.

        Because the majority of CBL sales are directly to retail customers and, because of the industry practice of making trade loans to customers, our ability to manage credit risk in this business is critical. At CBL, we provide allowances for trade receivables and trade loans associated with the ability to collect outstanding receivables from our customers. Generally, provisions are recorded to cover the full exposure to a specific customer (total amount of all trade accounts and loans from a specific customer less the amount of security and insurance coverage) at the point the account is considered uncollectible. We record the provision as a bad debt in general and administrative expenses. Provisions are reversed upon recoverability of the account or relieved at the point an account is written off.

        We are not able to predict changes in financial condition of our customers and, if circumstances related to our customers deteriorate, our estimates of the recoverability of our trade receivables could be materially affected, and we may be required to record additional allowances.

Pension and Postretirement Benefits

        We have defined benefit plans that cover the majority of our employees in the US and the UK. We also have postretirement welfare plans in the US that provide medical benefits for retirees and eligible dependents and life insurance for certain retirees. The accounting for these plans is subject to the guidance provided in Statement of Financial Accounting Standards No. 87, "Employers' Accounting for Pensions" (SFAS No. 87) and Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions" (SFAS No. 106). Both of these statements require that management make certain assumptions relating to the long-term rate of return on plan assets, discount rates used to measure future obligations and expenses, salary increases, inflation, health care cost trend rates and other assumptions. We believe that the accounting estimates related to our pension and postretirement plans are critical accounting estimates because they are highly susceptible to change from period to period based on market conditions.

        We performed an analysis of high yield bonds at the end of 2004 and compared the results to appropriate indices and industry trends to support the discount rates used in determining our pension liabilities in the United States and in the United Kingdom for the year ended December 26, 2004. Discount rates and expected rates of return on plan assets are selected at the end of a given fiscal year

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and impact expense in the subsequent year. A fifty basis point change in certain assumptions made at the beginning of 2004 would have had the following effects on 2004 pension expense:

        Assumed health care cost trend rates have a significant effect on the amounts reported for the retiree health care plan. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

        Both US and UK plan assets consist primarily of equity securities with smaller holdings of bonds and real estate. Equity assets are well diversified between domestic and other international investments, with additional diversification in the domestic category through allocations to large-cap, small-cap, and growth and value investments. Relative allocations reflect the demographics of the respective plan participants. The following compares target asset allocation percentages as of February 25, 2005 with actual asset allocations at December 26, 2004:

        In July 2004, we received £14 million (approximately $26 million at then-current exchange rates) from Interbrew, related to mistakes in pension participant data when CBL was purchased in 2002. The corrected data increased our pension liability at the time of the acquisition (approximately £21 million or $38 million at then current exchange rates). Goodwill associated with the purchase price of CBL was adjusted for the change in the pension liability and for the cash collected from Interbrew during the third quarter. The net effect of adjusting goodwill for the pension liability and the cash received was insignificant. The effect on equity was to increase other comprehensive income by $26.8 million, net of tax by reducing the minimum pension liability. The effect of the adjustment to pension expense will be to reduce amortization of actuarial losses by approximately £21 million (approximately $38 million at current exchange rates) over the remaining working lives of participants (estimated 10 years), and increase the interest component of annual service cost by approximately £1 million or $2 million.

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Contingencies, Environmental and Litigation Reserves

        We estimate the range of liability related to environmental matters or other legal actions where the amount and range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. As additional information becomes available, we assess the potential liability related to our pending matter and revise our estimates. Costs that extend the life, increase the capacity or improve the safety or efficiency of company-owned assets or are incurred to mitigate or prevent future environmental contamination may be capitalized. Other environmental costs are expensed when incurred. We also expense legal costs as incurred. The most significant estimates that could impact our financial statements relate to the Lowry Superfund site (See Item 8, Note 18).

Goodwill and Other Intangible Asset Valuation

        We adopted the provisions of Statement of Financial Accounting Standards No. 141, "Business Combinations" (SFAS No. 141) on July 1, 2001, and No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142) on December 31, 2001. We evaluate the carrying value of our goodwill and other indefinite-lived intangible assets annually, and we evaluate our other intangible assets when there is evidence that certain events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Significant judgments and assumptions are required in the evaluation of intangible assets for impairment, most significantly the estimated future cash flows to be generated by these assets and the rate used to discount those cash flows. For our brewing business goodwill and intangibles we used a rate of 8.0% to discount our cash flows during our annual valuation in 2004, which is a rate we believe to be representative of the weighted average cost of capital for similar assets in 2004. Changes in these estimates could have an adverse impact on the valuation of goodwill and other intangible assets, thereby requiring us to write down the assets.

Derivatives

        We use derivatives in the normal course of business to manage our exposure to fluctuations in production and packaging material prices, interest rates and foreign currency exchange rates. By policy, we do not enter into such contracts for trading purposes or for the purpose of speculation. All derivatives held by us are designated as hedges with the expectation that they will be highly effective in offsetting underlying exposures. We account for our derivatives on the Consolidated Balance Sheet as assets or liabilities at fair value in accordance with Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities, as amended and interpreted, incorporating FASB Statements No. 137, 138 and 149." (SFAS No. 133), which we early adopted on December 28, 1998. Such accounting is complex, as evidenced by significant interpretations of the primary accounting standard, which continues to evolve, as well as the significant judgments and estimates involved in the estimation of fair value in the absence of quoted market values. These estimates are based upon valuation methodologies deemed appropriate in the circumstances; however, the use of different assumptions could have a material effect on the estimated fair value amounts.

Income Taxes

        We account for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109) Judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our global business, there are many transactions for which the ultimate tax outcome is uncertain. Additionally, our income tax provision is based on calculations and assumptions that are subject to examination by many different tax authorities. We adjust our income tax provision in the period it is probable that actual results will differ from our estimates. Tax law and rate changes are reflected in the income tax provision in the period in which such changes are enacted.

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        We have not elected to permanently invest our foreign earnings in accordance with Accounting Principles Board No. 23. As a result, we have recorded a net deferred tax liability on the un-remitted earnings of our UK subsidiary that would be subject to US tax if repatriated.. In conjunction with this calculation, we estimate associated earnings and profit adjustments, potential foreign tax credits and cumulative translation adjustments relating to the foreign exchange rates.

        We do not provide deferred taxes on certain outside basis differences in our acquired foreign subsidiary's stock, Coors Brewers Limited (CBL). This outside basis difference is permanent in duration under SFAS 109 because we do not intend to take any action that would result in recognizing the gain inherent in certain book-over-tax basis differences. As a result, differences between book and tax treatment of income statement items in our UK business are treated as permanent. This treatment increases the volatility of our effective tax rate.

        We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. While we consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period a determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made. Reductions to the valuation allowance related to the acquisition of CBL that relate to deferred taxes arising from that acquisition would reduce goodwill, unless the reduction was caused by a change in law, in which case the adjustment would impact earnings.

        The recently passed "American Jobs Creation Act of 2004" provides, among other things, a deduction with respect to income of certain US manufacturing activities and allows for favorable taxing on repatriation of offshore earnings. Although the provisions of the Act do not impact the fiscal year 2004 financial statements under current accounting rules, the Act will likely impact our financial statements in future periods. We are currently evaluating the financial impact of this Act.

Equity Method Accounting

        We generally apply the equity method of accounting to 20%-50% owned investments where we exercise significant influence, but for which consolidation is not required under FIN 46R. As described below, we have an equity ownership in, and conduct business with various joint ventures, which directly relate to our beer business. There are no related parties that own interests in our equity method investments (see further discussion in Item 8, Note 4).

        Coors Canada was a general partnership that was formed to market CBC products in Canada. We owned a 50.1% interest in this non-consolidated joint venture that we accounted for using the equity method of accounting due to the effective control of the partnership being shared equally by the partners under the operating agreement. All manufacture, distribution and sale of CBC branded beers were contracted to Molson by the partnership. The partnership never took title to the beer. It was paid an amount equal to the sales proceeds Molson receives from third-party customers, less the amounts retained by Molson for its manufacture, distribution and sale of the CBC branded products. We reflect this amount in net sales in our Consolidated Statements of Income. Coors Canada was dissolved into Molson's Canadian business effective with the Merger, and in the future, Coors Light sold in Canada will be regarded as part of the Canada segment.

        In 2004 and 2003, we included our entire share of CBL's Tradeteam joint venture results in the other income, net line of our Consolidated Statements of Income, given the immateriality of its results. In 2002, we included our share of Tradeteam results in cost of goods sold. This change in presentation was attributable to Tradeteam no longer being a captive provider of distribution and logistics services to

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CBL. In November 2002, Tradeteam entered into an agreement to provide distribution services to Interbrew U.K. Limited, another large brewer in the United Kingdom.

        The other income, net line includes the equity method losses for the Molson USA joint venture. This joint venture was formed to import, market, sell and distribute Molson products in the United States. We have recorded our share of the venture's results in the other income, net line in our Consolidated Statements of Income given the immateriality of its results.

        A qualitative analysis of our results would be impacted if the results of these joint ventures were included in different lines of our Consolidated Statements of Income, as will be the case for Coors Canada and Molson USA as we either dissolve or consolidate these businesses into the merged company in 2005.

Consolidations under FIN 46R

        RMMC and RMBC are dedicated predominantly to our packaging and distribution activities and were formed with companies which have core competencies in the aluminum and glass container businesses. The CBL joint venture with Grolsch was formed to provide a long-term relationship with that brand's owner in a key segment of the UK beer market. In 2003 and 2002, our share of the pre-tax joint venture profits for each of these investments was offset against cost of goods sold in our Consolidated Statements of Income. In 2004, as a result of implementing FIN 46R, these entities have been consolidated into our Consolidated Financial Statements because we have determined that they are variable interest entities and that we are the primary beneficiary.

        We have examined another potential business relationship during 2004 when implementing FIN 46R. This is the relationship we have with Trigen, the supplier of virtually all our energy needs at our Golden facility. Trigen purchased our power plant facilities in 1995 and signed a contract to provide our energy needs in Golden. We do not own any portion of the Trigen entity, but upon review of the supply contract, we believe that the relationship could be viewed as a variable interest, as defined by FIN 46R. However, despite exhaustive efforts to obtain financial information necessary to proceed with the analysis, we have been unable to obtain the information from Trigen, which cites privacy and competitive issues with releasing this financial information. As disclosed in Item 8, Note 18 to the accompanying Consolidated Financial Statements, we purchase approximately $34.0 million of energy each year from Trigen.

        We have determined that any risk of a material loss is remote and that our total maximum loss cannot be reasonably estimated. We do not have another readily available option to obtain the steam energy required to run our plant. We could incur operational losses should we be unable to purchase steam from Trigen, and we are unable to estimate any such losses. In addition, we have a non-cancelable obligation to pay Trigen fixed costs through the remainder of the supply contract. The costs are adjusted annually for inflation and are expected to be $17.5 million in 2005. We currently purchase some of our electricity requirements from another supplier at rates that do not significantly differ from the rates we pay Trigen. Our risk of loss relating to the difference in price from having to buy electricity from another third party rather than from Trigen is not significant. In the event that Trigen would fail to perform its contractual obligations, Coors has the right to step in and operate the power plant facilities. This circumstance would involve Coors repurchasing the power plant assets, a cost that could be borne with Coors' current capital resources.

Performance Based Options and Restricted Shares

        The Merger transaction with Molson resulted in the vesting of all outstanding stock options and restricted share units held by employees of both Molson and Coors with the exception of performance based options and restricted share units held by the CEO of Molson. There are 288,000 stock options subject to performance based criteria, and 18,000 restricted shares that can increase to 54,000 based on

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defined performance criteria. The company will account for both the performance-based stock options and restricted stock under variable accounting, which could have an impact on future financial results depending on the likelihood of meeting the performance targets.

        The Merger triggered immediate vesting of all stock options, including those held by Molson option holders (excluding certain options held by the former Molson CEO, as discussed in Item 8, Note 20). The vesting of Coors options will be reflected in the notes to the first quarter financial statements as pro forma expense and the vesting of the Molson options will be reflected in Molson's historical financial statements, pre-Merger. Therefore, compensation expense recognized beginning in the 2005 third quarter will only reflect new option grants after the Merger, and could be impacted by stock options held by the former Molson CEO that are yet unvested and provisions in change in control agreements.

Recent Accounting Pronouncements

SFAS 123R, "Share-Based Payment" (Revised 2004)

        Statement of Financial Accounting Standard No. 123 (SFAS No. 123R) was revised in December 2004 and will be effective for us in the third quarter of 2005. We adopted the disclosure provisions of SFAS 123 when it became effective in 1996 but continue to account for stock options under Accounting Principles Board Opinion No. 25 (APB No. 25). Currently, under an exemption written into the guidance for qualifying stock option grants with no intrinsic value on the date of grant, SFAS No. 123 requires us to present pro forma share-based compensation expense for our stock option program in the notes to our financial statements. We have chosen the modified prospective method of adoption, therefore, beginning in the third quarter of 2005, we will be required to record these costs in our income statement. While under current guidance we have used the Black Scholes method to calculate pro forma compensation expense, the new guidance will also allow a binomial method. We are evaluating the alternative methods to value stock options.

SFAS No. 128R "Earnings Per Share" (Revised)

        Statement of Financial Accounting Standard No. 128R (SFAS No. 128R) is expected to be revised. We adopted SFAS No. 128 when it became effective in 1997 and will adopt its revised provisions when those provisions become effective, currently anticipated during our first quarter of 2005. For our year-to-date diluted calculations, we currently use a quarterly average stock price. Under SFAS No. 128R, we will be required to use a year-to-date average stock price. When stock prices are increasing year-to-date, as was the case for our company stock in 2004, the effect of the new revision to the standard will be to increase dilution of earnings per share. For example, if we had implemented the new revision in 2004, our year-to-date diluted earnings per share would have been $0.03 per share lower. The new standard will require retrospective presentation of diluted earnings per share upon implementation, meaning that prior periods' earnings per share will have to be adjusted to conform to the same method of calculation.

SFAS No. 151 "Inventory Costs"

        SFAS No. 151 is an amendment to ARB No. 43, Chapter 4 that will be effective for us in fiscal 2006. The standard clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and spoilage to require that those costs be expensed currently, as opposed to being included in overhead costs. We are currently evaluating the impact that SFAS No. 151 will have on our financial results when implemented.

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SFAS No. 153 "Exchanges of Nonmonetary Assets"

        SFAS No. 153 is an amendment to APB Opinion No. 29 that will be effective for us in the third quarter of 2005. The standard tightens the general exception for exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. We do not believe that the standard will have a significant impact on our financial results when implemented.

Related Party Transactions

Transactions with Management and Others

        We employ members of the Coors family, which collectively owned 100% of the voting common stock of the company during 2004. Hiring and placement decisions are made based upon merit, and compensation packages offered are commensurate with policies in place for all employees of the company.

Certain Business Relationships

        We purchase a large portion of our paperboard packaging requirements from Graphic Packaging Corporation (GPC), a related party. As of December 26, 2004, various Coors family trusts collectively owned all of our Class A voting common stock, approximately 30% of our Class B common stock, and approximately 30% of GPC's common stock.

        Our purchases under the GPC packaging agreement in 2004, 2003 and 2002 totaled $104.5 million, $106.4 million and $111.0 million, respectively. Related accounts payable balances included in Affiliates Accounts Payable on the Consolidated Balance Sheets were $3.4 million and $5.0 million at December 26, 2004, and December 28, 2003, respectively.

        We are also a limited partner in a real estate development partnership in which a subsidiary of GPC is the general partner. The partnership owns, develops, operates and sells certain real estate previously owned directly by us. We received no distributions from this partnership in 2004 or 2003.

Risk Factors

        The reader should carefully consider the following factors (which include risks specific to our merged business with Molson) and the other information contained within this document. The most important factors that could influence the achievement of our goals, and cause actual results to differ materially from those expressed in the forward-looking statements, include, but are not limited to, the following:

        Because we will continue to face intense competition, operating results may be negatively impacted.    The brewing industry is highly competitive and requires substantial human and capital resources. Competition in our various markets could cause us to reduce prices, increase capital and other expenditures or lose market share, any of which could have a material adverse effect on our business and financial results. In addition, in some of our markets, our primary competitors have substantially greater financial, marketing, production and distribution resources than Molson Coors will have. In all of the markets where Molson Coors will operate, aggressive marketing strategies by our main competitors could adversely affect our financial results.

        Changes in tax, environmental or other regulations or failure to comply with existing licensing, trade and other regulations could have a material adverse effect on our financial condition.    Our business is regulated by federal, state, provincial and local laws and regulations in various countries regarding such matters as licensing requirements, trade and pricing practices, labeling, advertising, promotion and marketing practices, relationships with distributors, environmental matters and other matters. Failure to comply

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with these laws and regulations could result in the loss, revocation or suspension of our licenses, permits or approvals. In addition, changes in tax, environmental or any other laws or regulations could have a material adverse effect on our business, financial condition and results of operations.

        We have indebtedness that is substantial in relation to our stockholders' equity.    As of December 26, 2004, we had $932.2 million in debt primarily related to our acquisition of CBL, with substantially higher debt subsequent to our Merger with Molson. As a result, a substantial portion of our cash flow from operations must be dedicated to the payment of principal and interest on our debt. If our financial and operating performance is insufficient to generate sufficient cash flow for all of our activities, our operations could be negatively impacted.

        We are subject to fluctuations in foreign exchange rates, most significantly the British pound and the Canadian dollar.    We hold assets and incur liabilities, earn revenues and pay expenses in different currencies, most significantly from sales of Coors Light in Canada, and in the GBP subsequent to the acquisition in 2002. Subsequent to the Merger with Molson, we will have significantly more foreign currency exposure to the Canadian dollar and the Brazilian real. Since our financial statements are presented in US dollars, we must translate our assets, liabilities, income and expenses into US dollars at current exchange rates. Increases and decreases in the value of the US dollar will affect, perhaps negatively, the value of these items in our financial statements, even if their value has not changed in their original currency.

        Our operations face significant commodity price change and foreign exchange rate exposure which could materially and adversely affect our operating results.    Molson Coors will use a large volume of agricultural and other raw materials to produce its products, including malt, hops and water. The supply and price of these raw materials can be affected by a number of factors beyond our control, including frosts, droughts and other weather conditions, economic factors affecting growth decisions, plant diseases and theft. To the extent any of the foregoing factors affect the prices of ingredients, our results of operations could be materially and adversely impacted. In addition, in Brazil agricultural and other raw materials are priced based on the US dollar and, since Molson's sales in Brazil are made in local currency, fluctuations in the exchange rate between the US dollar and the Brazilian real may negatively impact our earnings in Brazil. Both companies have active hedging programs to address commodity price and foreign exchange rate changes. However, to the extent we fail to adequately manage the foregoing risks, including if our hedging arrangements do not effectively or completely hedge changes in foreign currency rates or commodity price risks, our results of operations may be negatively impacted.

        We rely on a small number of suppliers to obtain the packaging and raw materials we need to operate our business.    For our US business, we purchase most of our paperboard and container supplies from a single supplier or a small number of suppliers. This packaging is unique to us and is not produced by any other supplier. Additionally, we are contractually obligated to purchase substantially all our can and bottle needs in the United States from our container joint ventures or from our partners in those ventures, Ball Corporation (RMMC) and Owens-Brockway Glass Container, Inc. (RMBC). Consolidation of the glass bottle industry in North America has reduced local supply alternatives and increased risks of glass bottle supply disruptions. CBL has only a single source for its can supply (Ball). The inability of any of these suppliers to meet our production requirements without sufficient time to develop an alternative source could have a material adverse effect on our business. The supply and price of raw materials, used to produce our products can be affected by a number of factors beyond our control, including frosts, droughts and other weather conditions, economic factors affecting growth decisions, various plant diseases and pests. To the extent that any of the foregoing affects the ingredients used to produce our products, our results of operations could be materially and adversely affected.

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        Our success depends largely on the success of three primary products, one each in Canada, the United States and the United Kingdom; the failure or weakening of one or more could materially adversely affect our financial results.    Although we currently have 14 products in our US portfolio, Coors Light represented more than 51% of our Americas sales volume for 2004. In the United Kingdom, Carling lager is the best-selling brand in the United Kingdom and represented approximately 75% of CBL sales volume in 2004. The Molson Canadian brand represents 26% of Molson's sales volume for the nine-months ended December 2004. Consequently, any material shift in consumer preferences away from these brands would have a disproportionately large negative impact on our business.

        If the contract we have with our current information technology service provider fails, we could experience significant disruption in our business.    We rely exclusively on one information technology services provider for our network, help desk, hardware, and software configuration, both at CBC and CBL. If the service provider fails and we are unable to find a suitable replacement in a timely manner, we could be unable to properly administer our information technology systems.

        We are and will continue to be subject to various contingent tax, environmental and other liabilities and cannot predict with certainty that our reserves for those liabilities will be sufficient. If actual costs for these contingent liabilities are higher than expected, we could be required to accrue for additional costs.    In the course of our respective businesses, we are subject to various litigation claims and other contingent liabilities. These include, among others, (i) claims asserted against Molson's subsidiary, Cervejarias Kaiser Brasil S.A., by Brazilian tax authorities, including claims for income taxes, federal excise taxes, value-added tax, revenue taxes (PIS/federal unemployment insurance contribution) and federal social security tax, (ii) claims by the U.S. Environmental Protection Agency that Coors is a potentially responsible party at the Lowry Superfund Site and (iii) various other legal claims arising in the ordinary course of our businesses. While we have estimated and accrued for costs expected to be incurred in connection with our contingent liabilities, if actual costs are higher than expected, we could be required to accrue for additional costs and make additional cash payments.

Risks specific to the Americas Segment

        Litigation directed at the alcohol beverage industry may adversely affect our sales volumes and our business.     Molson Coors and many other brewers and distilled spirits manufacturers have been sued in several courts regarding advertising practices and underage consumption. The suits allege that each defendant intentionally marketed its products to "children and other underage consumers." In essence, each suit seeks, on behalf of an undefined class of parents and guardians, an injunction and unspecified money damages. We will vigorously defend these lawsuits and it is not possible at this time to estimate the possible loss or range of loss, if any, in these lawsuits.

        We are highly dependent on independent distributors in the United States to sell our products, with no assurance that these distributors will effectively sell our products.    We sell all of our products in the United States to distributors for resale to retail outlets. Some of our distributors are at a competitive disadvantage because they are smaller than the largest distributors in their markets. Our distributors also sell products that compete with our products. These distributors may give our competitors' products higher priority, thereby reducing sales of our products. In addition, the regulatory environment of many states makes it very difficult to change distributors. Consequently, if we are not allowed or are unable to replace unproductive or inefficient distributors, our business, financial position, and results of operation may be adversely affected.

Risks specific to the Europe Segment

        Consolidation of pubs and growth in the size of pub chains in the United Kingdom could result in less ability to achieve pricing.    The trend toward consolidation of pubs, away from independent pub and club operations, is continuing in the United Kingdom. These larger entities have stronger price

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negotiating power, which could impact CBL's ability to obtain favorable pricing in on-trade (due to spillover effect of reduced negotiating leverage) and could reduce our revenues and profit margins. In addition, these larger customers are beginning to purchase directly more of the products that, in the past, we have provided as part of our factored business. This consolidation could impact us negatively.

        Due to a high concentration of unionized workers in the United Kingdom, we could be significantly affected by labor strikes, work stoppages or other employee-related issues.    Approximately 27% of CBL's total workforce is represented by trade unions. Although we believe relations with our employees are good, more stringent labor laws in the United Kingdom expose us to a greater risk of loss should we experience labor disruptions.

        Our primary production facilities in Europe are each located at a single site, so we could be more vulnerable than our competitors to transportation disruptions, fuel increases and natural disasters.    Our primary production facility in Europe is located in Burton-on-Trent, England, where we brew and package approximately two-thirds of our products sold in the Europe business. While our Europe business operations remain centralized, our competitors have multiple geographically dispersed breweries and packaging facilities. As a result, we must ship our products greater distances than some of our competitors, making us more vulnerable to fluctuations in costs such as fuel or packaging costs.

        We depend exclusively on one logistics provider in England, Wales and Scotland for distribution of our CBL products.    We are involved in a joint venture with Exel Logistics called Tradeteam. Tradeteam handles all of the physical distribution for CBL in England, Wales and Scotland, except where a different distribution system is requested by a customer. If Tradeteam were unable to continue distribution of our product and we were unable to find a suitable replacement in a timely manner, we could experience significant disruptions in our business that could have a negative impact on our operations.

Risks specific to the Molson Merger

        We may not realize the cost savings and other benefits we currently anticipate due to challenges associated with integrating the operations, technologies, sales and other aspects of the businesses of Molson and Coors.    Our success will be dependent in large part on the success of our management in integrating the operations, technologies and personnel of Molson and Coors. If we fail to meet the challenges involved in successfully integrating the operations of Molson and Coors or otherwise fail to realize any of the anticipated benefits of the Merger transaction, including the estimated cost savings of approximately $50 million, $40 million and $85 million in the first, second and third years, respectively, following the Merger, and, thereafter, approximately $175 million annually, our results of operations could be impaired. In addition, the overall integration of the two companies may result in unanticipated operations problems, expenses and liabilities, and diversion of management's attention.

        Loss of key members of management could negatively affect our ability to successfully integrate or successfully operate our business.    We have agreements with twelve executive officers and certain other members of management of the former Coors and other members of management relating to a change of control of Coors. The terms of these agreements were triggered by the Merger transaction with Molson on February 9, 2005. We are evaluating the employment status with each of these employees. However, a loss of any of these members of management, or of key members of the former Molson management could have an adverse impact on our ability to successfully combine, integrate or operate the businesses of Molson and Coors.

        If Pentland and the Coors Trust do not agree on a matter submitted to stockholders, generally the matter will not be approved, even if beneficial to the Company or favored by other stockholders.    Pentland and the Coors Trust, which together control more than two-thirds of the Company's Class A Common and Exchangeable stock, are parties to voting trust agreements through which they have combined their

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voting power over the shares of our Class A common stock and the Class A exchangeable shares that they own. However, in the event that these two stockholders do not agree to vote in favor of a matter submitted to a stockholder vote (other than the election of directors), the voting trustees will be required to vote all of the Class A common stock and Class A exchangeable shares deposited in the voting trusts against the matter. There is no other mechanism in the voting trust agreements to resolve a potential deadlock between these stockholders. Therefore, if either Pentland or the Coors Trust is unwilling to vote in favor of a transaction that is subject to a stockholder vote, we may be unable to complete the transaction even if our board, management or other stockholders believe the transaction is beneficial for Molson Coors.

        Molson has recently incurred losses in its Brazilian operations, recorded restructuring and impairment charges, and could suffer further charges as a result of the Brazilian operations, which could have a material adverse effect on our combined results of operations.    Molson's Brazilian operations incurred losses in the calendar year ended December 31, 2004. These losses were a function of the current period costs associated with plans to significantly grow volumes and regain market share associated with the sales centers put in place during the last nine months in Brazil. In light of the continuing challenges presented by the Brazilian beer market, Molson recorded restructuring and impairment charges in this business prior to the Merger. Molson's Brazilian operations may continue to incur losses and further impairment charges could be required, which could have a material adverse effect on our combined results of operations.

        We may be required to exercise control over the entity that owns the entertainment business and the Montréal Canadiens pursuant to the undertakings given to its lenders.    On July 25, 2001, Molson sold the entertainment business operated in the Bell Centre in Montréal and the Montréal Canadiens hockey team, which may be financially adversely affected as a result of the National Hockey League work stoppage. As part of the sale transaction, Molson agreed to, among other things, give a guarantee to the team's lenders for loans which as of March 31, 2004 were in the amount of Cdn.$92 million.

        In addition, Molson is the guarantor of the 99-year lease arrangements on the Bell Centre related to the land on which the Bell Centre is located. The amount of lease payments varies based on prevailing interest rates and changes in the Consumer Price Index. In Molson's fiscal year ended March 31, 2004, the payments under the lease made by the purchaser totaled Cdn.$3.2 million.

        If the purchaser is unable to meet its obligations, Molson will exercise control over the entities that own the entertainment business and the Montréal Canadiens and make required payments and fund cash flow deficiencies, which could have a material adverse effect on our liquidity position and our combined results of operations.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

        In the normal course of business, we are exposed to fluctuations in interest rates, foreign currencies and the prices of production and packaging materials. We have established policies and procedures to manage these exposures through a variety of financial instruments. By policy, we do not enter into any contracts for the purpose of trading or speculation.

        Our objective in managing our exposure to fluctuations in interest rates, foreign currency exchange rates and production and packaging materials prices is to decrease the volatility of our earnings and cash flows affected by potential changes in underlying rates and prices. To achieve this objective, we enter into foreign currency forward contracts, commodity swaps, interest rate swaps and cross currency swaps, the values of which change in the opposite direction of the anticipated cash flows. We do not hedge the value of net investments in foreign-currency-denominated operations or translated earnings of foreign subsidiaries. Our primary foreign currency exposures are British pound sterling (GBP), Canadian dollar (CAD) and Japanese yen (YEN).

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        Derivatives are either exchange-traded instruments, or over-the-counter agreements entered into with highly rated financial institutions. No losses on over-the-counter agreements due to counterparty credit issues are anticipated. All over-the-counter agreements are entered into with counterparties rated no lower than A (S&P) or A2 (Moody's). In some instances we and our counterparties have reciprocal collateralization agreements regarding fair value positions in excess of certain thresholds. These agreements call for the posting of collateral in the form of cash, treasury securities or letters of credit if a fair value loss position to us or our counterparties exceeds a certain amount. At December 26, 2004, no collateral was posted by us or our counterparties.

        At December 26, 2004, we were a party to certain cross currency swaps totaling 530 million GBP (approximately $774 million at prevailing foreign currency exchange rates in 2002, the year we entered into the swaps). The swaps included an initial exchange of principal in 2002 and will require final principal exchange on the settlement date of our 6³/8% notes due in 2012 (see Item 8, Note 12). The swaps also call for an exchange of fixed GBP interest payments for fixed US dollar interest receipts. At the initial principal exchange, we paid US dollars to a counterparty and received GBP. Upon final exchange, we will provide GBP to the counterparty and receive US dollars. The cross currency swaps have been designated as cash flow hedges of the changes in value of the future GBP interest and principal receipts that results from changes in the US dollar to GBP exchange rates on an intercompany loan between two of our subsidiaries.

        At December 26, 2004, we were a party to interest rate swap agreements related to our 6³/8% fixed rate debt. The interest rate swaps convert $201.2 million notional amount from fixed rates to floating rates and mature in 2012. We will receive fixed US dollar interest payments semi-annually at a rate of 6³/8% per annum and pay a rate to our counterparty based on a credit spread plus the three-month LIBOR rate, thereby exchanging a fixed interest obligation for a floating rate obligation. There was no exchange of principal at the inception of the swaps. We designated the interest rate swaps as fair value hedges of the changes in the fair value of $201.2 million fixed-rate debt attributable to changes in the LIBOR swap rates.

        We monitor foreign exchange risk, interest rate risk and related derivatives using two techniques-sensitivity analysis and Value-at-Risk. Our market-sensitive derivative and other financial instruments, as defined by the SEC, are foreign currency forward contracts, commodity swaps, interest rate swaps, and cross currency swaps.

        We use Value-at-Risk to monitor the foreign exchange and interest rate risk of our cross-currency swaps. The Value-at-Risk provides an estimate of the level of a one-day loss that may be equaled or exceeded due to changes in the fair value of these foreign exchange rate and interest rate-sensitive financial instruments. The type of Value-at-Risk model used to estimate the maximum potential one-day loss in the fair value is a variance/covariance method. The Value-at-Risk model assumes normal market conditions and a 95% confidence level. There are various modeling techniques that can be used to compute value at risk. The computations used to derive our values take into account various correlations between currency rates and interest rates. The correlations have been determined by observing foreign exchange currency market changes and interest rate changes over the most recent one-year period. We have excluded anticipated transactions, firm commitments, cash balances, and accounts receivable and payable denominated in foreign currencies from the Value-at-Risk calculation, some of which these instruments are intended to hedge.

        The Value-at-Risk calculation is a statistical measure of risk exposure based on probabilities and is not intended to represent actual losses in fair value that we may incur. The calculated Value-at-Risk result does not represent the full extent of the possible loss that may occur. It attempts to represent the most likely measure of potential loss that may be experienced 95 times out of 100 due to adverse market events that may occur. Actual future gains and losses will differ from those estimated by

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Value-at-Risk because of changes or differences in market rates and interrelationships, hedging instruments, hedge percentages, timing and other factors.

        The estimated maximum one-day loss in fair value on our cross-currency swaps, derived using the Value-at-Risk model, was $10.7 million, $5.9 million and $8.6 million at December 26, 2004, December 28, 2003 and December 29, 2002, respectively. Such a hypothetical loss in fair value is a combination of the foreign exchange and interest rate components of the cross currency swap. Value changes due to the foreign exchange component would be offset completely by increases in the value of our inter-company loan, the underlying transaction being hedged. The hypothetical loss in fair value attributable to the interest rate component would be deferred until termination or maturity.

        Details of all other market-sensitive derivative and other financial instruments, including their fair values, are included in the table below. These instruments include foreign currencies, commodity swaps, interest rate swap and cross-currency swaps.

        Maturities of derivative financial instruments held on December 26, 2004, are as follows (in thousands):

        A sensitivity analysis has been prepared to estimate our exposure to market risk of interest rates, foreign exchange rates and commodity prices. The sensitivity analysis reflects the impact of a hypothetical 10% adverse change in the applicable market interest rates, foreign exchange rates and commodity prices. The volatility of the applicable rates and prices are dependent on many factors that cannot be forecast with reliable accuracy. Therefore, actual changes in fair values could differ significantly from the results presented in the table below.

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        The following table presents the results of the sensitivity analysis of our derivative and debt portfolio:

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ITEM 8. Financial Statements and Supplementary Data

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MANAGEMENT'S REPORT TO SHAREHOLDERS

        The preparation, integrity and objectivity of the financial statements and all other financial information included in this annual report are the responsibility of the management of Molson Coors Brewing Company. The financial statements have been prepared in accordance with generally accepted accounting principles, applying estimates based on management's best judgment where necessary. Management believes that all material uncertainties have been appropriately accounted for and disclosed.

        The established system of accounting procedures and related internal controls provide reasonable assurance that the assets are safeguarded against loss and that the policies and procedures are implemented by qualified personnel.

        PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm, provide an objective, independent audit of the consolidated financial statements. Their accompanying report is based upon an examination conducted in accordance with generally accepted auditing standards, including tests of accounting procedures and records.

        The Board of Directors, operating through its Audit Committee composed of independent, outside directors, monitors the Company's accounting control systems and reviews the results of the Company's auditing activities. The Audit Committee meets at least quarterly, either separately or jointly, with representatives of management, PricewaterhouseCoopers LLP, and internal auditors. To ensure complete independence, PricewaterhouseCoopers LLP and the Company's internal auditors have full and free access to the Audit Committee and may meet with or without the presence of management.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Adolph Coors Company:

        We have completed an integrated audit of Adolph Coors Company's 2004 consolidated financial statements and of its internal control over financial reporting as of December 26, 2004 and audits of its 2003 and 2002 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated financial statements and financial statement schedule

        In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income and comprehensive income, of shareholders' equity and of cash flows present fairly, in all material respects, the financial position of Adolph Coors Company and its subsidiaries at December 26, 2004 and December 28, 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 26, 2004 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Internal control over financial reporting

        Also, in our opinion, management's assessment, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A Controls and Procedures, that the Company maintained effective internal control over financial reporting as of December 26, 2004 based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 26, 2004, based on criteria established in Internal Control—Integrated Framework issued by the COSO. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management's assessment and on the effectiveness of the Company's internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

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        A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP

Denver, Colorado
March 10, 2005

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MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME

(IN THOUSANDS, EXCEPT FOR SHARE DATA)