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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER 1-7823
DECEMBER 31, 1995
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ANHEUSER-BUSCH COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 43-1162835
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE BUSCH PLACE, ST. LOUIS, MISSOURI 63118
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 314-577-2000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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COMMON STOCK--$1 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
8 5/8% SINKING FUND DEBENTURES, DUE DECEMBER 1, 2016 NEW YORK STOCK EXCHANGE
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
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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 X No
--- ---
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. [X]
State the aggregate market value of the voting stock held by nonaffiliates
of the registrant.
$16,832,190,539 AS OF FEBRUARY 29, 1996
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
$1 PAR VALUE COMMON STOCK 253,113,287 SHARES AS OF MARCH 7, 1996
DOCUMENTS INCORPORATED BY REFERENCE
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Portions of Annual Report to Shareholders for the Year ended
December 31, 1995............................................... PART I, PART II, and PART IV
Portions of Definitive Proxy Statement for Annual Meeting of
Shareholders on April 24, 1996.................................. PART III
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PART I
ITEM 1. BUSINESS
Anheuser-Busch Companies, Inc. (the ``Company'') is a Delaware corporation
that was organized in 1979 as the holding company parent of Anheuser-Busch,
Incorporated (``ABI''), a Missouri corporation whose origins date back to 1875.
In addition to ABI, which is the world's largest brewer of beer, the Company is
also the parent corporation to a number of subsidiaries that conduct various
other business operations, including those related to the brewing of beer, the
manufacture of metal beverage containers, the recycling of metal and glass
beverage containers, and the operation of theme parks. On March 26, 1996, the
Company distributed all of the outstanding shares of common stock of The
Earthgrains Company, which was formerly named Campbell Taggart, Inc.
(``Earthgrains''), which represents substantially all of the Company's food
products business, as a special dividend to the Company's shareholders (the
``Spin-Off''), in a ratio of one share of Earthgrains common stock for every 25
shares of Company common stock. On February 7, 1996, the Company announced the
closing of its Eagle Snacks, Inc. (``ESI'') operations and proposed sale of
certain of the facilities of ESI to Frito-Lay, Inc. (the ``ESI Sale'').
In connection with the Spin-off and the ESI Sale, and in accordance with
generally accepted accounting principles, the Company has restated all prior
financial statements and financial information to segregate the historical
combined results of Earthgrains and ESI from all detailed financial components.
As such, all Earthgrains and ESI related financial results are reported in the
Company's Consolidated Financial Statements, on pages 48-51 of the Company's
1995 Annual Report to Shareholders, hereby incorporated by reference, as
discontinued operations. 1995 operating results and net asset information for
discontinued operations appears in Note 2 to the Consolidated Financial
Statements, ``Divestiture of Food Products Segment,'' on pages 54-55 of the 1995
Annual Report to Shareholders, which Note is hereby incorporated by reference.
Financial information with respect to the Company's remaining business segments
appears in Note 17, ``Business Segments,'' on pages 64-65 of the 1995 Annual
Report to Shareholders, which Note hereby is incorporated by reference.
BEER AND BEER-RELATED OPERATIONS
The Company's principal product is beer, produced and distributed by its
subsidiary, ABI, in a variety of containers primarily under the brand names
Budweiser, Bud Light, Bud Dry, Bud Ice, Bud Ice Light, Michelob, Michelob Light,
Michelob Dry, Michelob Golden Draft, Michelob Golden Draft Light, Michelob
Classic Dark, Busch, Busch Light, Natural Light, Natural Pilsner, King Cobra,
Elk Mountain Amber Ale, Elk Mountain Red Lager, and Red Wolf Lager. Also, ABI's
products include two non-alcohol malt beverages, O'Doul's and Busch NA. ABI
imports Carlsberg and Carlsberg Light beers and Elephant Malt Liquor in U.S.
markets as part of an agreement with the Denmark based Carlsberg A/S (formerly
United Breweries, Ltd.), brewer of the brands. Additionally, ABI imports
Elephant Red Lager (brewed in Canada by The Labatt Brewing Company Limited
(``Labatt'') and licensed by Carlsberg A/S). During 1995, the following new
brands were introduced: Michelob Malt, Michelob Amber Bock, Busch Ice, Natural
Ice Beer, ZiegenBock Amber, Hurricane Malt Liquor, Michelob Hefe-Weizen,
American Originals (comprised of three separate brands: Faust Golden Lager,
Muenchener Munich Style Amber, and Black & Tan Porter), and Christmas Brew
(introduced for the Christmas season). Additionally, Crossroads and Anheuser
Light were also introduced during 1995 but subsequently discontinued. ABI also
owns a 25% equity interest in Seattle based Redhook Ale Brewery, Inc. Through
this alliance, Redhook products are distributed exclusively by ABI wholesalers
in all new U.S. markets entered by Redhook since 1994. Through an agreement with
Kirin Brewery Company, Ltd., ABI brews Kirin Ice exclusively for export and
distribution in Japan.
Sales of beer by the Company aggregated 87.5 million barrels in 1995 as
compared with 88.5 million barrels in 1994 and accounted for approximately 78%
of the Company's consolidated net sales dollars in 1995. In 1994 and 1993 the
percentages were 81% and 82%, respectively, which reflect the restatement for
discontinued operations in 1995, as described throughout this Form 10-K.
Budweiser, Bud Light, Bud Dry, Bud Ice, Bud Ice Light, Michelob, Michelob
Light, Michelob Dry, Michelob Golden Draft, Michelob Golden Draft Light,
Michelob Classic Dark, Michelob Amber Bock, Busch, Busch Light, Natural Light,
Elk Mountain Amber Ale, Elk Mountain Red Lager, Red Wolf Lager, Carlsberg,
Elephant Red Lager, ZiegenBock Amber, the American Originals, and O'Doul's are
sold in both draught and packaged form. Natural Pilsner, Busch Ice, Natural Ice
Beer, King Cobra, Hurricane Malt Liquor, Michelob Malt, Carlsberg Light,
Elephant
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Malt Liquor, Christmas Brew, and Busch NA are sold only in packaged form.
Michelob Hefe-Weizen is sold only in draught form. Budweiser, Bud Light, Bud
Dry, Bud Ice, Bud Ice Light, Michelob, Michelob Light, Michelob Classic Dark,
Michelob Amber Bock, Natural Light, Red Wolf Lager, and O'Doul's are distributed
and sold on a nationwide basis. Michelob Dry and Christmas Brew are distributed
in 49 states; Busch, Busch Light and Elk Mountain Red Lager in 47 states;
Elephant Red Lager in 46 states; King Cobra, Carlsberg and Elk Mountain Amber
Ale in 45 states; Busch NA in 41 states; Elephant Malt Liquor in 38 states;
Carlsberg Light in 23 states; Natural Ice Beer in 13 states; Michelob Malt in 12
states; Michelob Golden Draft and Michelob Golden Draft Light in 11 states;
Natural Pilsner in 6 states; Faust Golden Lager (American Original) in 3 states;
Black & Tan Porter and Muenchener Munich Style Amber (American Originals) in
Colorado and Washington; Hurricane Malt Liquor in Washington D.C. and Maryland;
Busch Ice in Washington; ZiegenBock Amber in Texas; and Michelob Hefe-Weizen in
Oregon.
Normally, due to the seasonality of the industry, sales of ABI's beers are
at their lowest volume level in the first and fourth quarters of each year and
at their highest in the second and third quarters. During the final two months
of 1995, in a move to minimize inventory system costs and improve beer
freshness, ABI reduced wholesaler inventories. Lowering wholesaler inventories
required a one-time reduction (1.1 million barrels) in production levels at
ABI's breweries. Due to this one-time reduction, fourth quarter volume in 1995
was lowest, differing by almost 25% from barrels sold in the highest quarter
(third quarter). Without the one-time reduction, first quarter sales would have
been lowest differing by almost 19% from barrels sold in the third quarter.
ABI has developed a system of twelve breweries, strategically located across
the country, to economically serve its distribution system. (See Item 2 of Part
I--Properties.) In November 1995, ABI closed the Tampa brewery, which had been
the highest cost per barrel brewery in its system. Earlier in 1995, ABI brought
on additional capacity at its Cartersville brewery, which is the most efficient
brewery in its system. Major brewery modernizations are in progress that are
part of ABI's overall strategic initiatives. By using controlled environment
warehouses and stringent inventory monitoring policies, the quality and
freshness of the product are protected.
During 1995 approximately 93% of the beer sold by ABI, measured in barrels,
reached retail channels through approximately 900 independent wholesalers. ABI
utilizes its regional vice presidents, sales directors, key account and market
managers, as well as certain other field sales personnel, to provide
merchandising and sales assistance to its wholesalers. In addition, ABI provides
national and local media advertising, point-of-sale advertising, and sales
promotion programs to help stimulate sales. The remainder of ABI's domestic beer
sales in 1995 were made through eleven ABI owned and operated branches, which
perform similar sales, merchandising, and delivery services as wholesalers in
their respective areas.
There are over 100 companies engaged in the highly competitive brewing
industry in the United States. ABI's domestic beers are distributed and sold in
competition with other nationally distributed beers, with locally and regionally
distributed beers and, to a lesser extent, with imported beers. Although the
methods of competition in the industry vary widely among industry members and
among states due to differences in applicable state laws, the principal methods
of competition are the quality, taste and freshness of the products, packaging,
price, advertising including television, radio, sponsorships, billboards,
stadium signs, and print media, point-of-sale materials and service to retail
customers including the replacement of over-age products with fresh products at
no cost to the retailer. ABI's beers compete in different price categories.
Although all brands compete against the total market, Budweiser, Bud Light, Bud
Dry, Bud Ice, Bud Ice Light, Michelob Golden Draft, and Michelob Golden Draft
Light compete primarily with premium priced beers. Michelob, Michelob Light,
Michelob Dry, Michelob Classic Dark, and Michelob Amber Bock compete primarily
with super-premium priced beers. Busch, Busch Light, Natural Light, Natural
Pilsner, Busch Ice, and Natural Ice Beer compete with the sub-premium or popular
priced beers. King Cobra, Hurricane Malt Liquor, and Michelob Malt compete
against other brands in the malt liquor segment. Carlsberg, Carlsberg Light,
Elephant Malt Liquor, and Elephant Red Lager compete primarily with imported
malt beverages. Elk Mountain Amber Ale, Elk Mountain Red Lager, Red Wolf Lager,
ZiegenBock Amber, Christmas Brew, Michelob Hefe-Weizen, and the American
Originals compete primarily in the specialty beers segment of the malt beverage
market. O'Doul's competes in the premium priced non-alcohol malt beverage
category. Busch NA competes in the sub-premium priced non-alcohol malt beverage
category. Since 1957, ABI has led the United States brewing industry in total
sales volume. In 1995 its sales exceeded those of its nearest competitor by over
42 million barrels and constituted approximately 44.1% of domestic industry
sales volume, including imports and non-alcohol malt beverage sales. Major
competitors in the United States brewing industry during 1995 included Philip
Morris, Inc. (through its subsidiary Miller Brewing Co.), Adolph Coors Co.,
Stroh Brewery Co., and G. Heileman Brewing Co.
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Through various subsidiaries, the Company is involved in a number of
beer-related operations. Anheuser-Busch International, Inc. (``ABII''), a
wholly-owned subsidiary of the Company, negotiates and administers license and
contract brewing agreements on behalf of ABI with various foreign brewers.
Labatt brews Budweiser and Bud Light for sale in Canada. ABI, through ABII,
participates with Kirin Brewery Company, Ltd. in a joint venture in Japan,
Budweiser Japan Company, Ltd., of which the Company is a 90% shareholder, for
production, distribution and sale of Budweiser. Through Anheuser-Busch European
Trade Ltd. (``ABET''), an indirect, wholly-owned subsidiary of the Company,
certain ABI beer brands are sold, marketed and distributed in twenty-three
European countries. In the United Kingdom (U.K.), ABET has full control of
sales, marketing and distribution for the Budweiser and Michelob brands to both
the on- and off-trade sectors. In April 1995, ABII entered into a joint venture
with Scottish Courage Ltd. which consolidated the brewing and packaging of
Budweiser at the Stag Brewery in England; ABII has operating control and owns a
50% share of this joint venture. Michelob continues to be imported into the U.K.
by ABII. Guinness Ireland, Ltd. markets and brews Budweiser under license for
sale in The Republic of Ireland. Oriental Brewery Ltd. brews Budweiser under
license for sale in the Republic of Korea. In 1995, ABII entered into a license
brewing agreement with Sociedad Anonima Damm, one of the largest brewers in
Spain, that gives the Spanish brewer rights to contract brew and package beer
under the brand name Budweiser in Spain and supplements the brand's existing
distribution. As announced in early 1995, ABII will purchase an equity interest
and form a strategic partnership with Companhia Antarctica Paulista, one of
Brazil's largest beverage makers. A component of the partnership will be the
establishment of a joint venture to market and distribute locally-produced
Budweiser in Brazil. In December 1995, the Company announced that it had formed
a three-way alliance with Compania Cervecerias Unidas S.A. (``CCU''), the
leading Chilean brewer, and Buenos Aires Embotelladora S.A. (``BAESA''),
PepsiCo's South American super bottler. Under the terms of the alliance, a
wholly owned subsidiary of CCU in Argentina (``CCU-Argentina'') will brew
Budweiser under license in Argentina and BAESA will distribute Budweiser and
CCU-Argentina brands in Argentina beginning in late 1996. CCU will distribute
Budweiser in Chile. The Company will purchase a small initial minority stake in
CCU-Argentina, with options to increase its holdings in the future. In January
1996, the Company announced it had formed a partnership with France's largest
and Europe's second-largest brewer, Brasseries Kronenbourg and leading Swiss
brewer, Feldschlosschen, to distribute Budweiser in France and Switzerland,
respectively. ABI's beer products are also being sold under import-distribution
agreements in more than 70 countries and U.S. territories and to the U.S.
military and diplomatic corps outside the continental United States. ABII also
oversees the Company's investments in international brewing companies. The
Company owns a 17.7% equity interest in Mexico's largest brewer, Grupo Modelo,
S.A. de C.V. and its subsidiaries and a 5% equity interest in Tsingtao Brewery
Company Limited, China's largest brewer. In 1995, the Company purchased an 80
percent equity interest in a joint venture, Budweiser Wuhan International
Brewing Company, Ltd., that owns a brewery in Wuhan, the fifth-largest city in
China.
The Company's wholly-owned subsidiary, Metal Container Corporation
(``MCC''), manufactures beverage cans at eight plants and beverage can lids at
three plants for sale to ABI and to soft drink and export customers. (See Item 2
of Part 1--Properties). Another wholly-owned subsidiary of the Company,
Anheuser-Busch Recycling Corporation (``ABRC''), recycles aluminum cans and
non-refillable bottles in Marion, Ohio and Nashua, New Hampshire; ABRC's
facilities in Hayward, California and Cocoa, Florida recycle aluminum beverage
cans, and its facility in Bridgeport, New Jersey recycles glass containers and
aluminum cans from curbside collections from municipal systems in Pennsylvania
and New Jersey. In January 1996, ABRC ceased operation of its aluminum beverage
can recycling facility in Charlotte, North Carolina. ABRC is currently seeking a
buyer for its Cocoa, Florida facility.
The Company's wholly-owned subsidiary, Busch Agricultural Resources, Inc.
(``BARI''), operates rice drying, milling and research facilities in Arkansas
and California; twelve grain elevators in the western and midwestern United
States; barley seed processing plants in Moorhead, Minnesota, Fairfield,
Montana, Idaho Falls, Idaho, and Powell, Wyoming; a barley research facility in
Colorado; and a wild rice processing facility in Minnesota. Through wholly-owned
subsidiaries, BARI operates land application farms in Jacksonville, Florida,
Robersonville, North Carolina, Fayetteville, Tennessee, and Fort Collins,
Colorado; hop farms in northern Idaho and Germany; and an international office
in Mar del Plata, Argentina. BARI's land application farms in Robersonville,
North Carolina and Fayetteville, Tennessee will be included in the ESI Sale.
BARI also owns malt plants in Manitowoc, Wisconsin, Moorhead, Minnesota, and
Idaho Falls, Idaho.
The Company's wholly owned subsidiary, Precision Printing and Packaging,
Inc., produces metalized and paper labels at its plant in Clarksville, Tennessee
and produces plain and printed folding cartons at its plant in Paris, Texas.
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Another wholly-owned subsidiary, Anheuser-Busch Investment Capital
Corporation, shares equity positions with qualified partners in ABI independent
wholesalerships and is currently invested in 16 wholesalerships.
Through other wholly-owned subsidiaries, the Company owns and operates a
marketing communications business (Busch Creative Services Corporation) and a
transportation service business (Manufacturers Railway Co. and St. Louis
Refrigerator Car Co.).
DISCONTINUED OPERATIONS--FOOD PRODUCTS
As a result of the Spin-Off, Earthgrains became an independent publicly held
company listed on the New York Stock Exchange and its operations ceased to be
owned by the Company.
In connection with the ESI Sale, the Company plans to sell the ESI snack
food manufacturing plants in Robersonville, North Carolina, Fayetteville,
Tennessee, Visalia, California, and York, Pennsylvania to Frito-Lay, Inc.,
subject to regulatory approval. The Company has reached a preliminary agreement
with a buyer for its Hyannis, Massachusetts plant, which makes Cape Cod potato
chips and popcorn products. The sale is expected to be completed by the end of
March 1996. The Company will continue to seek a buyer for the Eagle brand and
other assets associated with its salted nut business.
FAMILY ENTERTAINMENT
The Company is active in the family entertainment field, primarily through
its wholly-owned subsidiary, Busch Entertainment Corporation (``BEC''), which
currently owns, directly and through subsidiaries, nine theme parks.
BEC operates Busch Gardens theme parks in Tampa, Florida and Williamsburg,
Virginia, and Sea World theme parks in Orlando, Florida, San Antonio, Texas,
Aurora, Ohio, and San Diego, California. BEC also operates water park
attractions in Tampa, Florida (Adventure Island) and Williamsburg, Virginia
(Water Country, U.S.A.), an educational play park for children near
Philadelphia, Pennsylvania (Sesame Place), and the Baseball City Sports Complex
near Orlando, Florida. In 1995, BEC sold Cypress Gardens in Winter Haven,
Florida to a management group led by Cypress Gardens' then current general
manager. Due to the seasonality of the theme park business BEC experiences
higher revenues in the second and third quarters and lower revenues in the first
and fourth quarters.
Through a Spanish affiliate, the Company also owns a 19.9% equity interest
in Port Aventura, S.A., which is a theme park and resort project near Barcelona,
Spain. The park opened in the spring of 1995.
In December 1995, the Company entered into an agreement to sell
substantially all of the assets of Civic Center Corporation (a wholly-owned
subsidiary of the Company that owns Busch Stadium and other properties in
downtown St. Louis) and the St. Louis National Baseball Club, Inc. (St. Louis
Cardinals) to a group comprised primarily of local investors, subject to
approval by Major League Baseball.
The Company faces competition in the family entertainment field from other
theme and amusement parks, public zoos, public parks, and other family
entertainment events and attractions.
Through its wholly-owned subsidiary, Busch Properties, Inc. (``BPI''), the
Company is engaged in the business of real estate development. BPI also owns and
operates a resort and conference center in Williamsburg, Virginia (Kingsmill).
SOURCES AND AVAILABILITY OF RAW MATERIALS
The products manufactured by the Company require a large volume of various
agricultural products, including barley for malt; hops, malt, rice, and corn
grits for beer; and rice for the rice milling and packaging operations of BARI.
The Company fulfills its commodities requirements through purchases from various
sources, including purchases from its subsidiaries, through contractual
arrangements, and through purchases on the open market. The Company believes
that adequate supplies of the aforementioned agricultural products are available
at the present time, but cannot predict future availability or prices of such
products and materials. The commodity markets have experienced and will continue
to experience major price fluctuations. The price and supply of raw materials
will be determined by, among other factors, the level of crop production,
weather conditions, export demand, and government regulations and legislation
affecting agriculture. The Company requires aluminum can sheet for manufacture
of cans and lids. Although aluminum can sheet prices rose significantly in 1995,
they are expected to be less volatile in 1996.
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ENERGY MATTERS
The Company uses natural gas, fuel oil, and coal as its primary fuel
materials. All of ABI's breweries can operate with either natural gas or fuel
oil. The St. Louis brewery has the additional capability to use coal. Supplies
of fuels in quantities sufficient to meet ABI's total requirements are expected
to be available on a year-round basis during 1996. The supply of natural gas,
fuel oils and coal is normally covered by yearly contracts and no difficulty has
been experienced in entering into these contracts. The cost of fuels used by ABI
declined in 1995 and is expected to increase in 1996. Based upon information
presently available, there can be no assurance that adequate supplies of fuel
will always be available to the Company and, should such supplies not be
available, the Company's sales and earnings would be adversely affected.
BRAND NAMES AND TRADEMARKS
Some of the Company's major brand names used in its principal business
segments are mentioned in the discussion above. The Company regards consumer
recognition of and loyalty to all of its brand names and trademarks as extremely
important to the long-term success of its principal business segments.
RESEARCH AND DEVELOPMENT
The Company is involved in a number of research activities relating to the
development of new products or services or the improvement of existing products
or services. The dollar amounts expended by the Company during the past three
years on such research activities and the number of employees engaged full time
therein during such period, however, are not considered to be material in
relation to the total business of the Company.
ENVIRONMENTAL PROTECTION
All of the Company's plants are subject to federal, state, and local
environmental protection laws and regulations, and the Company is operating
within existing laws and regulations or is taking action aimed at assuring
compliance therewith. Various proactive strategies are utilized to help assure
this compliance. Compliance with such laws and regulations is not expected to
materially affect the Company's capital expenditures, earnings, or competitive
position. The Company has devoted considerable effort to research, development
and engineering of cost effective innovative systems to minimize effects on the
environment from its operating facilities. A significant portion of pollution
prevention and pollution control expenditures in 1995 and projected for 1996 was
or will be justified on the basis of cost reduction.
These projects, coupled with the Company's environmental management system
and an overall Company emphasis on pollution prevention and resource
conservation initiatives, are improving efficiencies and creating saleable
by-products from residuals and have generally resulted in low cost operating
systems while reducing impact on the air, water, and land environments.
ENVIRONMENTAL PACKAGING LAWS AND REGULATIONS
The states of California, Connecticut, Delaware, Iowa, Maine, Massachusetts,
Michigan, New York, Oregon, and Vermont have adopted certain restrictive
packaging laws and regulations for beverages that require deposits on packages.
ABI continues to do business in these states. Such laws have not had a
significant effect on ABI's sales, but have had a significant adverse impact on
beer industry growth and are considered by the Company to be inflationary,
costly, and inefficient for recycling packaging materials. Congress and a number
of additional states continue to consider similar legislation, the adoption of
which by Congress or a substantial number of states or additional local
jurisdictions might require the Company to incur significant capital
expenditures.
NUMBER OF EMPLOYEES
As of December 31, 1995, the Company had 42,529 employees (18,548 of those
employees were employed by Earthgrains or other entities to be sold or
discontinued).
As of December 31, 1995, approximately 12,045 employees were represented by
the International Brotherhood of Teamsters. Twenty-one other unions represented
approximately 9,555 employees. Approximately 10,634 of the employees represented
by the International Brotherhood of Teamsters or other unions were employed by
Earthgrains or other entities to be sold or discontinued. The current labor
agreement between ABI and the Brewery
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and Soft Drink Workers Conference of the International Brotherhood of Teamsters,
which represents the majority of brewery workers, expires February 28, 1998.
The Company considers its employee relations to be good.
ITEM 2. PROPERTIES
ABI has twelve breweries in operation at the present time, located in St.
Louis, Missouri; Newark, New Jersey; Los Angeles and Fairfield, California;
Jacksonville, Florida; Houston, Texas; Columbus, Ohio; Merrimack, New Hampshire;
Williamsburg, Virginia; Baldwinsville, New York; Fort Collins, Colorado; and
Cartersville, Georgia. Title to the Baldwinsville, New York brewery is held by
the Onondaga County Industrial Development Agency (``OCIDA'') pursuant to a Sale
and Agency Agreement with ABI, which enabled OCIDA to issue tax exempt pollution
control and industrial development revenue notes and bonds to finance a portion
of the cost of the purchase and modification of the brewery. The brewery is not
pledged or mortgaged to secure any of the notes or bonds, and the Sale and
Agency Agreement with OCIDA gives ABI the unconditional right to require at any
time that title to the brewery be transferred to ABI. ABI's breweries operated
at approximately 90% of capacity in 1995; during the peak selling periods
(second and third quarters), they operated at maximum capacity.
The Company, through wholly-owned subsidiaries, operates malt plants in
Manitowoc, Wisconsin, Moorhead, Minnesota and Idaho Falls, Idaho; rice mills in
Jonesboro, Arkansas and Woodland, California; a wild rice processing facility in
Clearbrook, Minnesota; can manufacturing plants in Jacksonville, Florida,
Columbus, Ohio, Arnold, Missouri, Windsor, Colorado, Newburgh, New York, Ft.
Atkinson, Wisconsin, Rome, Georgia, and Mira Loma, California; and can lid
manufacturing plants in Gainesville, Florida, Oklahoma City, Oklahoma, and
Riverside, California.
BEC operates its principal family entertainment facilities in Tampa,
Florida; Williamsburg, Virginia; San Diego, California; Aurora, Ohio; Orlando,
Florida; and San Antonio, Texas. The Tampa facility is 265 acres, Williamsburg
is 364 acres, San Diego is 165 acres, Aurora is 90 acres, Orlando is 224 acres,
and the San Antonio facility is 496 acres.
Except for the Baldwinsville brewery, the can manufacturing plant in
Newburgh, New York, and the Sea World park in San Diego, California, all of the
Company's principal properties are owned in fee. The lease for the land used by
the Sea World park in San Diego, California expires in 2033. The Company
considers its buildings, improvements, and equipment to be well maintained and
in good condition, irrespective of dates of initial construction, and adequate
to meet the operating demands placed upon them. The production capacity of each
of the manufacturing facilities is adequate for current needs and, except as
described above, substantially all of each facility's capacity is utilized.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending or threatened litigation, the
outcome of which would be expected to have a material adverse effect upon its
financial condition or its operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter ended December
31, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
AUGUST A. BUSCH III (age 58) is presently Chairman of the Board and
President, and Director of the Company and has served in such capacities since
1977, 1974, and 1963, respectively. Since 1979 he has also served as Chairman of
the Board and Chief Executive Officer of the Company's subsidiary,
Anheuser-Busch, Incorporated.
JERRY E. RITTER (age 61) is presently Executive Vice President-Chief
Financial and Administrative Officer of the Company and was appointed to serve
in such capacity in 1990. He is also Vice President-Finance of the Company's
subsidiary, Anheuser-Busch, Incorporated, and has served in such capacity since
1982.
PATRICK T. STOKES (age 53) is presently Vice President and Group Executive
of the Company and has served in such capacity since 1981. He is also presently
President of the Company's subsidiary, Anheuser-Busch, Incorporated, and was
appointed to serve in such capacity in 1990.
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BARRY H. BERACHA (age 54) resigned from his position as Vice President and
Group Executive of the Company upon the Spin-Off; he had served in such capacity
since 1976. He was appointed Chairman of the Board and Chief Executive Officer
of Earthgrains in September 1993 and continued in that position following the
Spin-Off. During the past five years, he also served as Chairman of the Board
(1976-1995) and Chief Executive Officer (1976-1993) of the Company's subsidiary,
Metal Container Corporation, Chairman of the Board and Chief Executive Officer
of the Company's subsidiary, Eagle Snacks, Inc. (1993-1995), and Chairman of the
Board and Chief Executive Officer of the Company's subsidiary, Anheuser-Busch
Recycling Corporation (1978-1993).
JOHN H. PURNELL (age 54) is presently Vice President and Group Executive of
the Company and has served in such capacity since January 1991. He is also
Chairman of the Board and Chief Executive Officer of the Company's subsidiary,
Anheuser-Busch International, Inc., and has served as Chairman since 1980 and as
Chief Executive Officer since January 1991. During the past five years, he also
served as Senior Vice President-Corporate Planning and Development (1987-1991).
W. RANDOLPH BAKER (age 49) is presently Vice President and Group Executive
of the Company and has served in such capacity since 1982. During the past five
years, he also served as Chairman of the Board and President of the Company's
subsidiaries, Busch Properties, Inc. and Busch Entertainment Corporation
(1978-1991).
STEPHEN K. LAMBRIGHT (age 53) is presently Vice President and Group
Executive of the Company and has served in such capacity since 1984.
RAYMOND E. GOFF (age 50) is presently Senior Vice President-Asia Pacific and
has served in such capacity since April 1994. During the past five years, he
also served as Senior Vice President-Asia Pacific of the Company's subsidiary,
Anheuser-Busch International, Inc. (1994-December 1995), and Chairman of the
Board and Chief Executive Officer of the Company's subsidiary, Busch
Agricultural Resources, Inc. (1986-April 1994).
JAIME IGLESIAS (age 65) retired from his position as Chairman of the Board
of the Company's subsidiary, Anheuser-Busch Europe, Inc. (``ABEI'') on March 22,
1996; he was appointed to that position in January 1993. Prior to that, he
served as Chief Executive Officer (1989-January 1993) and as President
(1988-January 1993) of ABEI. He was appointed President-International Operations
of Earthgrains in 1991 and prior to that served as Vice President-International
(1983-1991). Until his retirement, he served as Chairman and President of
Earthgrains' subsidiary, Bimbo S.A., and Senior Vice President-Europe of the
Company's subsidiary, Anheuser-Busch International, Inc. (``ABII''), and had
served in such capacities since 1978 and January 1993, respectively. He also
served as President and Managing Director-Europe of ABII (1988-January 1993).
ALOYS H. LITTEKEN (age 55) is presently Vice President-Corporate Engineering
of the Company and has served in such capacity since 1981.
WILLIAM L. RAMMES (age 54) is presently Vice President-Corporate Human
Resources of the Company and has served in such capacity since June 1992. He is
also Chairman of the Board and President of the Company's subsidiary, Busch
Properties, Inc., and has served in such capacities since January 1995. During
the past five years, he also served as Vice President-Operations of the
Company's subsidiary, Anheuser-Busch Incorporated (1990-June 1992).
JOHN B. ROBERTS (age 51) is presently Chairman of the Board and President of
the Company's subsidiary, Busch Entertainment Corporation, and has served in
such capacities since June 1992 and May 1991, respectively. During the past five
years, he also served as Executive Vice President and General Manager (1990-May
1991) of Busch Entertainment Corporation.
JOSEPH L. GOLTZMAN (age 54) is presently Vice President and Group Executive
of the Company and has served in such capacity since September 1993. He is also
presently Chairman, Chief Executive Officer and President of the Company's
subsidiary, Anheuser-Busch Recycling Corporation, Chairman (since December
1995), President and Chief Executive Officer of the Company's subsidiary, Metal
Container Corporation, and Chairman of the Company's indirect subsidiary,
Precision Printing and Packaging, Inc., and has served in such capacities since
January 1993, September 1993, and December 1993, respectively. During the past
five years, he also served as President of Anheuser-Busch Recycling Corporation
(1988-December 1992) and Vice President-Recycling and Metals Planning (January
1992-September 1993) and Director-Metals Planning and Recycling (1988-December
1991) of the Company.
7
<PAGE> 9
DONALD W. KLOTH (age 54) is presently Vice President and Group Executive of
the Company and has served in such capacity since April 1994. He is also
Chairman of the Board and Chief Executive Officer of the Company's subsidiary,
Busch Agricultural Resources, Inc., and has served in such capacity since May
1994. During the past five years, he also served as Vice President-Materials
Acquisition of the Company (1983-March 1994) and President of Busch Agricultural
Resources, Inc. (1983-April 1994).
JOHN E. JACOB (age 61) is presently Executive Vice President and Chief
Communications Officer, and a Director of the Company and has served in such
capacities since July 1994 and 1990, respectively. He also served as President
and Chief Executive Officer of the National Urban League, Inc. (1982-July 1994).
PART II
The information required by Items 5, 6, 7, and 8 of this Part II are hereby
incorporated by reference from pages 34 through 73 of the Company's 1995 Annual
Report to Shareholders.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no disagreements with Price Waterhouse LLP, the Company's
independent accountants since 1961, on accounting principles or practices or
financial statement disclosures.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item with respect to Directors is hereby
incorporated by reference from pages 3 through 5 of the Company's Proxy
Statement for the Annual Meeting of Shareholders on April 24, 1996. The
information required by this Item with respect to Executive Officers is
presented on pages 6 through 8 of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is hereby incorporated by reference
from page 7 and pages 10 through 17 of the Company's Proxy Statement for the
Annual Meeting of Shareholders on April 24, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is hereby incorporated by reference
from pages 2 and 6 of the Company's Proxy Statement for the Annual Meeting of
Shareholders on April 24, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is hereby incorporated by reference
from pages 17 through 18 of the Company's Proxy Statement for the Annual Meeting
of Shareholders on April 24, 1996.
8
<PAGE> 10
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
<TABLE>
(a) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:
<CAPTION> PAGE
1. FINANCIAL STATEMENTS: ----
<C> <S> <C>
Consolidated Balance Sheet at December 31, 1995 and 1994 48<F*>
Consolidated Statement of Income for the three years ended
December 31, 1995 49<F*>
Consolidated Statement of Changes in Shareholders Equity for the
three years ended December 31, 1995 50<F*>
Consolidated Statement of Cash Flows for the three years ended
December 31, 1995 51<F*>
Notes to Consolidated Financial Statements 52-67<F*>
Report of Independent Accountants 73<F*>
<FN>
<F*>Incorporated herein by reference from the indicated pages of the 1995
Annual Report to Shareholders.
<CAPTION>
2. FINANCIAL STATEMENT SCHEDULE:
<C> <S> <C>
Report of Independent Accountants on Financial Statement Schedule F-1
FOR THE YEARS ENDED DECEMBER 31, 1995, DECEMBER 31, 1994, AND
DECEMBER 31, 1993:
Schedule VIII--Valuation and Qualifying Accounts and Reserves F-2
</TABLE>
3. EXHIBITS:
Exhibit 3.1 -- Restated Certificate of Incorporation with
amendments. (Incorporated by reference to Exhibit
3.1 to Form 10-K for the fiscal year ended December
31, 1994.)
Exhibit 3.2 -- Certificate of Designation, Rights and Preferences
of the Series C Convertible Preferred Stock of the
Company dated November 3, 1989. (Incorporated by
reference to Exhibit 3.2 to Form 10-K for the fiscal
year ended December 31, 1990.)
Exhibit 3.3 -- By-Laws of the Company (as amended and restated
October 27, 1993). (Incorporated by reference to
Exhibit 3 to Form 10-Q for the quarter ended
September 30, 1993.)
Exhibit 4.1 -- Form of Rights Agreement, dated as of October 26,
1994 between Anheuser-Busch Companies, Inc. and
Boatmen's Trust Company. (Incorporated by reference
to Exhibit 4 to Form 8-K filed November 7, 1994.)
Exhibit 4.2 -- No instruments defining the right of holders of long-
term debt are filed since the total amount of
securities authorized under any such instrument does
not exceed 10% of the assets of the Company on a
consolidated basis. The Company agrees to furnish
copies of such instruments to the Securities and
Exchange Commission upon request.
Exhibit 10.1 -- Anheuser-Busch Companies, Inc. Deferred Compensation
Plan for Non-Employee Directors (as amended and
restated February 22, 1989.) (Incorporated by
reference to Exhibit 10.1 to Form 10-K for the fiscal
year ended December 31, 1994.)<F*>
Exhibit 10.2 -- First Amendment to Anheuser-Busch Companies, Inc.
Deferred Compensation Plan for Non-Employee
Directors (as amended and restated February 22, 1989)
effective April 24, 1991. (Incorporated by reference
to Exhibit 10.2 to Form 10-K for the fiscal year
ended December 31, 1991.)<F*>
9
<PAGE> 11
Exhibit 10.3 -- Second Amendment to Anheuser-Busch Companies, Inc.
Deferred Compensation Plan for Non-Employee
Directors (as amended and restated February 22,
1989) effective January 1, 1994. (Incorporated by
reference to Exhibit 10.3 to Form 10-K for the
fiscal year ended December 31, 1993.)<F*>
Exhibit 10.4 -- Third Amendment to Anheuser-Busch Companies, Inc.
Deferred Compensation Plan for Non-Employee
Directors (as amended and restated February 22,
1989) effective January 1, 1996.<F*>
Exhibit 10.5 -- Anheuser-Busch Companies, Inc. Retirement Program
for Non-Employee Directors. (Incorporated by
reference to Exhibit 10.1 to Registration Statement
on Form S-14 filed September 14, 1982.)<F*>
Exhibit 10.6 -- Anheuser-Busch Companies, Inc. Non-Employee Director
Elective Stock Acquisition Plan effective
January 1, 1996.<F*>
Exhibit 10.7 -- Anheuser-Busch Companies, Inc. 1981 Incentive Stock
Option/Non-Qualified Stock Option Plan (As amended
December 18, 1985, December 16, 1987, December 20,
1988, July 22, 1992, September 22, 1993, and
December 20, 1995.)<F*>
Exhibit 10.8 -- Anheuser-Busch Companies, Inc. 1981 Non-Qualified
Stock Option Plan (As amended December 18, 1985,
June 24, 1987, December 20, 1988, July 22, 1992,
and December 20, 1995.)<F*>
Exhibit 10.9 -- Anheuser-Busch Companies, Inc. 1989 Incentive Stock
Plan (As amended December 20, 1989, December 19,
1990, December 15, 1993, and December 20, 1995.)<F*>
Exhibit 10.10-- Anheuser-Busch Companies, Inc. Excess Benefit Plan
amended and restated effective as of October 1,
1993. (Incorporated by reference to Exhibit 10.9 to
Form 10-K for the fiscal year ended December 31,
1994.)<F*>
Exhibit 10.11-- Anheuser-Busch Companies, Inc. Supplemental Executive
Retirement Plan amended and restated as of October
1, 1993. (Incorporated by reference to Exhibit 10.10
to Form 10-K for the fiscal year ended December 31,
1994.)<F*>
Exhibit 10.12-- First Amendment to the Anheuser-Busch Companies,
Inc. Supplemental Executive Retirement Plan as
amended and restated October 1, 1993 effective as of
December 14, 1994. (Incorporated by reference to
Exhibit 10.11 to Form 10-K for the fiscal year ended
December 31, 1994.)<F*>
Exhibit 10.13-- Second Amendment to the Anheuser-Busch Companies,
Inc. Supplemental Executive Retirement Plan as
amended and restated October 1, 1993 effective as of
January 1, 1996.
Exhibit 10.14-- Anheuser-Busch Executive Deferred Compensation Plan
effective January 1, 1994. (Incorporated by
reference to Exhibit 10.16 to Form 10-K for the
fiscal year ended December 31, 1993.)<F*>
Exhibit 10.15-- First Amendment to Anheuser-Busch Executive Deferred
Compensation Plan effective April 1, 1994.
(Incorporated by reference to Exhibit 10.13 to Form
10-K for the fiscal year ended December 31,
1994.)<F*>
Exhibit 10.16-- Anheuser-Busch 401(k) Restoration Plan effective
January 1, 1994 (true and correct as of February 6,
1995). (Incorporated by reference to Exhibit 10.14
to Form 10-K for the fiscal year ended December 31,
1994.)<F*>
Exhibit 10.17-- Form of Indemnification Agreement with Directors and
Executive Officers. (Incorporated by reference to
Exhibit 10.18 to Form 10-K for the fiscal year ended
December 31, 1993.)<F*>
10
<PAGE> 12
Exhibit 10.18-- Anheuser-Busch Officer Bonus Plan effective January
1, 1995. (Incorporated by reference to Exhibit A to
the Definitive Proxy Statement for Annual Meeting of
Shareholders on April 26, 1995.)<F*>
Exhibit 10.19-- Investment Agreement By and Among Anheuser-Busch
Companies, Inc., Anheuser-Busch International, Inc.
and Anheuser-Busch International Holdings, Inc. and
Grupo Modelo, S.A. de C.V., Diblo, S.A. de C.V. and
certain shareholders thereof, dated as of June 16,
1993. (Incorporated by reference to Exhibit 10.19
to Form 10-K for the fiscal year ended December 31,
1993.)
Exhibit 10.20-- Letter agreement between Anheuser-Busch Companies,
Inc. and the Controlling Shareholders regarding
Section 5.5 of the Investment Agreement filed as
Exhibit 10.19 of this report. (Incorporated by
reference to Exhibit 10.20 to Form 10-K for the
fiscal year ended December 31, 1993.)
Exhibit 12 -- Ratio of Earnings to Fixed Charges.
Exhibit 13 -- Pages 34 through 73 of the Anheuser-Busch Companies,
Inc. 1995 Annual Report to Shareholders, a copy of
which is furnished for the information of the
Securities and Exchange Commission. Portions of the
Annual Report not incorporated herein by reference
are not deemed ``filed'' with the Commission.
Exhibit 21 -- Subsidiaries of the Company
Exhibit 23 -- Consent of Independent Accountants, filed as page F-1
of this report.
Exhibit 27 -- Financial Data Schedules
[FN]
- --------
<F*> A management contract or compensatory plan or arrangement required to be
filed by Item 14(c) of this report.
(b) Reports on Form 8-K
The following report on Form 8-K was filed during the fourth quarter of
1995:
Form 8-K dated October 25, 1995 and filed on October 31, 1995,
consisting of the following: Item 5. Other Events (Press Release) and Item
7. Financial Statements and Exhibits (Exhibit 99-Press Release).
11
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ANHEUSER-BUSCH COMPANIES, INC.
-------------------------------------------------
(Registrant)
By AUGUST A. BUSCH III
----------------------------------------------
August A. Busch III
Chairman of the
Board and President
Date: March 27, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<C> <S> <C>
AUGUST A. BUSCH III Chairman of the Board and President March 27, 1996
- -------------------------------------------------- and Director (Principal Executive
(August A. Busch III) Officer)
JERRY E. RITTER Executive Vice President-Chief March 27, 1996
- -------------------------------------------------- Financial and Administrative
(Jerry E. Ritter) Officer (Principal Financial
Officer)
GERALD C. THAYER Vice President and Controller March 27, 1996
- -------------------------------------------------- (Principal Accounting Officer)
(Gerald C. Thayer)
ANDREW B. CRAIG III Director March 27, 1996
- --------------------------------------------------
(Andrew B. Craig III)
BERNARD A. EDISON Director March 27, 1996
- --------------------------------------------------
(Bernard A. Edison)
CARLOS FERNANDEZ G. Director March 27, 1996
- --------------------------------------------------
(Carlos Fernandez G.)
PETER M. FLANIGAN Director March 27, 1996
- --------------------------------------------------
(Peter M. Flanigan)
JOHN E. JACOB Director March 27, 1996
- --------------------------------------------------
(John E. Jacob)
CHARLES F. KNIGHT Director March 27, 1996
- --------------------------------------------------
(Charles F. Knight)
12
<PAGE> 14
VERNON R. LOUCKS, JR. Director March 27, 1996
- --------------------------------------------------
(Vernon R. Loucks, Jr.)
VILMA S. MARTINEZ Director March 27, 1996
- --------------------------------------------------
(Vilma S. Martinez)
SYBIL C. MOBLEY Director March 27, 1996
- --------------------------------------------------
(Sybil C. Mobley)
JAMES B. ORTHWEIN Director March 27, 1996
- --------------------------------------------------
(James B. Orthwein)
ANDREW C. TAYLOR Director March 27, 1996
- --------------------------------------------------
(Andrew C. Taylor)
DOUGLAS A. WARNER III Director March 27, 1996
- --------------------------------------------------
(Douglas A. Warner III)
WILLIAM H. WEBSTER Director March 27, 1996
- --------------------------------------------------
(William H. Webster)
EDWARD E. WHITACRE, JR. Director March 27, 1996
- --------------------------------------------------
(Edward E. Whitacre, Jr.)
</TABLE>
13
<PAGE> 15
ANHEUSER-BUSCH COMPANIES, INC.
INDEX TO FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants on Financial Statement Schedule............................... F-1
Consent of Independent Accountants.............................................................. F-1
Financial Statement Schedule for the Years 1995, 1994 and 1993:
Valuation and Qualifying Accounts and Reserves (Schedule VIII).............................. F-2
</TABLE>
All other schedules are omitted because they are not applicable or the
required information is shown in the Consolidated Financial Statements or Notes
thereto.
Separate financial statements of subsidiaries not consolidated have been
omitted because, in the aggregate, the proportionate shares of their profit
before income taxes and total assets are less than 20% of the respective
consolidated amounts, and investments in such companies are less than 20% of
consolidated total assets.
14
<PAGE> 16
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Anheuser-Busch Companies, Inc.
Our audits of the Consolidated Financial Statements referred to in our report
dated February 6, 1996 appearing on page 73 of the 1995 Annual Report to
Shareholders of Anheuser-Busch Companies, Inc. (which report and Consolidated
Financial Statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the Financial Statement Schedule listed in Item
14(a) of this Form 10-K. In our opinion, the Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related Consolidated Financial Statements.
PRICE WATERHOUSE LLP
St. Louis, Missouri
February 6, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-49051) and
in the Registration Statements on Forms S-8 (No. 2-77829, No. 33-4664, No. 33-
36132, No. 33-39714, No. 33-39715, No. 33-46846, No. 33-53333, No. 33-53829, No.
33-58221, and No. 33-58241) of Anheuser-Busch Companies, Inc. of our report
dated February 6, 1996 appearing on page 73 of the Annual Report to Shareholders
which is incorporated in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears on page F-1 of this Form 10-K.
PRICE WATERHOUSE LLP
St. Louis, Missouri
March 27, 1996
F-1
<PAGE> 17
<TABLE>
ANHEUSER-BUSCH COMPANIES, INC.
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(CONTINUING OPERATIONS BASIS, IN MILLIONS)
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Reserve for doubtful accounts (deducted from related assets):
Balance at beginning of period............................................. $ 1.9 $ 1.4 $ 1.6
Additions charged to costs and expenses.................................... .9 1.1 .7
Additions (recoveries of uncollectible accounts previously written off )... .4 .5 .6
Deductions (uncollectible accounts written off )........................... (1.3) (1.1) (1.5)
--------- --------- ---------
Balance at end of period................................................... $ 1.9 $ 1.9 $ 1.4
========= ========= =========
Deferred income tax asset valuation allowance under FAS 109:
Balance at beginning of period............................................. $ 52.7 $ 35.1 $ 28.9
Additions to valuation allowance charged to costs and expenses............. 15.7 17.8 15.6
Deductions from valuation allowance (utilizations and expirations)......... (1.7) (.2) (9.4)
--------- --------- ---------
Balance at end of period................................................... $ 66.7 $ 52.7 $ 35.1
========= ========= =========
</TABLE>
F-2
<PAGE> 18
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
10.4 Third Amendment to Anheuser-Busch Companies, Inc.
Deferred Compensation Plan for Non-Employee
Directors (as amended and restated February 22,
1989) effective January 1, 1996.
10.6 Anheuser-Busch Companies, Inc. Non-Employee Director
Elective Stock Acquisition Plan effective
January 1, 1996.
10.7 Anheuser-Busch Companies, Inc. 1981 Incentive Stock
Option/Non-Qualified Stock Option Plan (As amended
December 18, 1985, December 16, 1987, December 20,
1988, July 22, 1992, September 22, 1993, and
December 20, 1995.)
10.8 Anheuser-Busch Companies, Inc. 1981 Non-Qualified
Stock Option Plan (As amended December 18, 1985,
June 24, 1987, December 20, 1988, July 22, 1992,
and December 20, 1995.)
10.9 Anheuser-Busch Companies, Inc. 1989 Incentive Stock
Plan (As amended December 20, 1989, December 19,
1990, December 15, 1993, and December 20, 1995.)
10.13 Second Amendment to the Anheuser-Busch Companies,
Inc. Supplemental Executive Retirement Plan as
amended and restated October 1, 1993 effective as of
January 1, 1996.
12 Ratio of Earnings to Fixed Charges.
13 Pages 34 through 73 of the Anheuser-Busch Companies,
Inc. 1995 Annual Report to Shareholders, a copy of
which is furnished for the information of the
Securities and Exchange Commission. Portions of the
Annual Report not incorporated herein by reference
are not deemed ``filed'' with the Commission.
21 Subsidiaries of the Company
27 Financial Data Schedules
<PAGE>1
EX-10.4
THIRD AMENDMENT TO ANHEUSER-BUSCH COMPANIES, INC.
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
(AS AMENDED AND RESTATED FEBRUARY 22, 1989)
WHEREAS, Anheuser-Busch Companies, Inc. (the "Company")
maintains a certain deferred compensation plan for its Non-
Employee Directors, known as the Anheuser-Busch Companies,
Inc. Deferred Compensation Plan for Non-Employee Directors (As
Amended and Restated February 22, 1989) (the "Plan"); and
WHEREAS, The Company has terminated the Anheuser-Busch
Companies, Inc. Non-Employee Directors' Retirement Program
(the "Non-Employee Directors' Retirement Program"), effective
as of January 1, 1996; and
WHEREAS, The Company reserved to itself the right to amend the
Plan; and
WHEREAS, The Company deems it necessary and desirable to amend
the Plan to provide for deferred payment of the benefits
accrued under the Non-Employee Directors' Retirement Program
as of January 1, 1996.
NOW, THEREFORE, the Plan is hereby amended to include the
following Supplement:
SUPPLEMENT TO ANHEUSER-BUSCH COMPANIES, INC.
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
(AS AMENDED AND RESTATED FEBRUARY 22, 1989)
1. Any individual who is a Non-Employee Director as of January
1, 1996 (including any former Non-Employee Director then
serving as Advisory Member) shall be eligible for a benefit
under the Plan, in addition to any other amounts due the
individual under the Plan, determined as follows:
A. The present value as of January 1, 1996 of an annuity
commencing as of the first day of the month following the
individual's expected retirement date, payable monthly, equal
to 1/12th of the annual fee for Non-Employee Directors in
effect as of January 1, 1996, shall be determined, applying
the interest rate and mortality assumptions in use under the
Anheuser-Busch Companies, Inc. Supplemental Executive
Retirement Plan as of January 1, 1996.
<PAGE>2
B. Effective as of January 1, 1996, the amount so determined
shall be allocated to the individual's Cash Account or Stock
Account under the Plan, in such proportions as the individual
elects, and shall be subject to adjustments generally
applicable to such accounts from time to time under the Plan
from January 1, 1996 through the last day of the month in
which the individual leaves service as a Non-Employee Director
(including service in the capacity of Advisory Member);
provided that any amount allocated to the Cash Account shall
be permanently subject to the Prime Rate and shall not be
subject to any fixed rate/term election available with respect
to other amounts allocated to the Cash Account.
C. Effective as of January 1, 1996, the individual shall elect
a form of payment with respect to this amount under the
generally applicable rules of the Plan.
D. As of the first day of the month following the date the
individual leaves service as a Non-Employee Director
(including service in the capacity of an Advisory Member), the
total amount then allocated pursuant hereto to the
individual's Cash Account and Stock Account under the Plan
shall become payable in the form elected in accordance with
Paragraph C.
E. In the event of an individual's death before payment of the
amount provided for hereunder is complete, the then remaining
balance of the amount due hereunder shall be paid as provided
for in Section 8(c) of the Plan; provided: (i) the individual
shall make a separate primary beneficiary and contingent
beneficiary designation with respect to the amount due
hereunder; (ii) an individual may change the separate primary
beneficiary or contingent beneficiary from time to time with
respect to any payment due after death hereunder in the manner
provided for generally in Section 8(c) of the Plan; and (iii)
if there is no surviving primary beneficiary or contingent
beneficiary designated under the separate beneficiary
designation provided for in this Paragraph E, the amount due
hereunder shall be paid in accordance with the individual's
general beneficiary designation under Section 8(c) of the
Plan, if any, or if none, to the individual's estate.
3. Except as expressly provided herein, the generally
applicable provisions of the Plan shall apply to amounts
allocated to the Cash Account and the Stock Account thereunder
in accordance with this amendment.
<PAGE>1
EX-10.6
ANHEUSER-BUSCH COMPANIES, INC.
NON-EMPLOYEE DIRECTOR ELECTIVE STOCK ACQUISITION PLAN
-----------------------------------------------------
1. Definitions
-----------
(a) "Advisory Director" - any person designated as an
advisory member of the Board who is not an employee of the
Company or of any Subsidiary.
(b) "Annual Meeting" - the Company's annual meeting of
Stockholders in any year.
(c) "Board" - the Board of Directors of the Company.
(d) "Change of Control Date" - the earliest date on
which any of the following occurs:
(i) Any person (as defined herein) becomes the
beneficial owner directly or indirectly (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934 as amended
("Act")) of more than 50% of the Company's then outstanding
voting securities (measured on the basis of voting power);
(ii) The stockholders of the Company approve a
definitive agreement to merge or consolidate the Company with any
other entity, other than an agreement providing for (A) a merger
or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, at
least 50% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately
after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires more
than 50% of the combined voting power of the Company's then
outstanding securities;
(iii) A change occurs in the composition of the
Board of Directors of the Company during any period of
twenty-four consecutive months such that individuals who at the
beginning of such period were members of the Board of Directors
cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by the
Company's stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved;
or
<PAGE>2
- 2 -
(iv) The stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all
the Company's assets.
For purposes of this Section, "Person" shall have
the meaning given in Section 3(a)(9) of the Act, as modified and
used in Sections 13(d) and 14(d) thereof; however, a Person shall
not include (A) the Company or any of its Subsidiaries, (B) a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Subsidiaries, (C) an
underwriter temporarily holding securities pursuant to an
offering of such securities, or (D) a corporation owned, directly
or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of Company
stock.
(e) "Company" - Anheuser-Busch Companies, Inc.
(f) "Director Shares" - Shares granted pursuant to
Section 6.
(g) "Issue Date" - (i) with respect to each person who
continues to be a Non-Employee Director as of December 31 in any
year, the "Issue Date" shall be the first business day of the
following calendar year, and (ii) with respect to each person who
is newly elected or appointed as a Non-Employee Director, the
"Issue Date" in the calendar year of appointment shall be the
first business day following the date of such election or
appointment.
(h) "Non-Employee Director" - any duly elected or
appointed member of the Board who is not an employee of the
Company or of any Subsidiary and any Advisory Director.
(i) "Plan" - the Anheuser-Busch Companies, Inc.
Non-Employee Director Elective Stock Acquisition Plan.
(j) "Retainer" - the annual retainer fee (exclusive of
fees for attending meetings of the Board or committees thereof,
fees for meetings dispensed with, committee chairmanship fees and
any other fees as in effect from time to time) which becomes
payable to a Non-Employee Director for the following calendar
year.
(k) "Secretary" - the duly elected Secretary of the
Company.
(l) "Share" - a share of the Company's Common Stock
which was reacquired by the Company and is held in treasury.
<PAGE>3
- 3 -
(m) "Subsidiary" - an entity of which the Company
(directly or through one or more Subsidiaries) is the beneficial
owner of more than 50% of the entity's outstanding voting
securities (measured on the basis of voting power).
2. Administration
--------------
The Plan shall be administered by the Secretary who shall
have the authority to construe and interpret the Plan, and to
establish or adopt rules, regulations and forms relating to the
administration of the Plan. The Secretary shall have no
authority to add to, delete from or modify the terms of the Plan,
as the Plan shall be nondiscretionary as to the eligibility of
participants and the timing and amounts of the grants. Neither
the Secretary nor any member of the Board shall be liable for any
act or determination made in good faith.
3. Purpose
-------
The Plan is intended to assist in attracting, retaining
and motivating Non-Employee Directors of outstanding ability and
to promote identification of their interests with those of the
stockholders of the Company.
4. Eligibility
-----------
Subject to Section 12, all Non-Employee Directors shall
be eligible.
5. Shares Subject to the Plan
--------------------------
The maximum number of Shares that may be issued under the
Plan is 50,000.
6. Director Shares
---------------
(a) On or prior to the last day of the calendar year
each year until no Shares remain available under the Plan, each
person who is then a Non-Employee Director may make an election
to receive up to 100% of his or her Retainer in Shares in lieu of
cash. The election shall be in writing on a form prescribed by
the Company, shall specify the percentage of the Retainer to be
paid in Shares, and shall be irrevocable. Notwithstanding the
foregoing, any Advisory Director whose term in such position is
scheduled to expire at the next Annual Meeting may make the
election under this Section 6(a) only with respect to the portion
of the Retainer which is payable for the period ending on the
<PAGE>4
- 4 -
date of such Annual Meeting. Any Non-Employee Director who is
newly elected or appointed as such may make the election under
this Section 6(a) upon the date of his or her election or
appointment as a Non-Employee Director with respect to the
portion of the Retainer which is payable for the remainder of the
calendar year.
(b) The percentage of the Retainer to be paid in Shares
shall not be paid in cash, but in lieu thereof shall be paid by
the transfer of such Shares to such Non-Employee Director. On
each Issue Date, each Non-Employee Director who has elected to
receive a percentage of the Retainer in Shares pursuant to the
terms of this section shall automatically and without necessity
of any action by the Company, be entitled to receive Shares for
such percentage of the Retainer pursuant to the terms and
conditions of the Plan. For purposes of the Plan, the number of
Shares shall be determined by dividing (A) the amount of the
Retainer to be paid in Shares by (B) the mean of the high and low
sale prices per share of the Company's Common Stock on the New
York Stock Exchange on the Issue Date (provided that, if the
Issue Date is not a trading day on the New York Stock Exchange,
then on the preceding such trading day), rounding to the nearest
whole number. If on any Issue Date the number of Director Shares
otherwise issuable to the Non-Employee Directors shall exceed the
number of Shares then remaining available under the Plan, the
available Shares shall be allocated among the Non-Employee
Directors in proportion to the number of Shares they would
otherwise be entitled to receive, and the remainder of the
Retainer shall be payable in cash.
7. Capital Adjustments
-------------------
The maximum number of Shares subject to the Plan pursuant
to Section 5 shall be proportionately adjusted to reflect any
dividend or other distribution on the Company's outstanding
Common Stock payable in shares of the Company's Common Stock or
any split or consolidation of the outstanding shares of the
Company's Common Stock. If the Company's outstanding Common
Stock shall, in whole or in part, be changed into or exchangeable
for a different class or classes of securities of the Corporation
or securities of another corporation, whether through
recapitalization, merger, consolidation, reorganization or
otherwise, then (subject to the powers of the Board to amend the
Plan in whole or in part as provided in Section 14(a)) the
Director Shares which each Non-Employee Director is entitled to
receive on any Issue Date pursuant to Section 6 shall thereafter
be paid in the class, or proportionately in the classes, of
securities into which the outstanding shares of the Company's
Common Stock shall have been converted or for which they are
exchangeable, and the maximum amount of securities issuable under
the Plan under Section 5 shall be the number of securities into
or for which such number of Shares would be changed or
exchangeable.
<PAGE>5
- 5 -
8. Rights as a Stockholder
-----------------------
Prior to the Issue Date, the Non-Employee Director shall
have no rights as a Stockholder with respect to Director Shares
to be issued for the Retainer.
9. Vesting
-------
Director Shares shall be fully vested on the Issue Date
notwithstanding any subsequent cessation of the status of the
participant as a Non-Employee Director prior to the completion of
the year of service for which the Retainer was payable.
10. Issuance of Certificates, Payment of Cash Retainers and
-------------------------------------------------------
Withholding
-----------
(a) As promptly as practicable following each Issue
Date, the Company shall issue stock certificates registered in
the name of each Non-Employee Director entitled to receive the
Director Shares representing the number of Director Shares
determined pursuant to Section 6, and shall deliver such
certificates to the Non-Employee Director or his or her
beneficiary.
(b) The portion of the Retainer not paid in Director
Shares shall be payable in cash pursuant to the policies of the
Company as in effect from time to time.
(c) The Company may make such provisions as it may deem
appropriate for the withholding of any federal, state or local
taxes which the Company determines it is required to withhold.
11. Relationship to Other Compensation Plans
----------------------------------------
To the extent Non-Employee Directors elect to receive
Director Shares under the Plan, they shall not be permitted to
defer the receipt thereof under any existing deferred
compensation plans or any other such plan which the Board may
adopt from time to time.
12. Legal Restrictions on Participation
-----------------------------------
Notwithstanding any provision herein to the contrary, in
the event that in the opinion of legal counsel to the Company it
may be unlawful or create any regulatory issue for the Company
for any Non-Employee Director (due to his or her affiliation or
association with any other company or business, or other reason)
to own Shares, then such Non-Employee Director may not
participate in the Plan.
<PAGE>6
- 6 -
13. Compliance with the Securities Act of 1933
------------------------------------------
The Company has no obligation to register the Director
Shares under the Securities Act of 1933. Each recipient of
Director Shares by accepting such Shares acknowledges that he or
she is acquiring the Shares for investment and not with a view to
distribution and in addition to any other restriction on transfer
provided hereunder, the Director Shares may not be transferred
except pursuant to the requirements of Rule 144 including the
holding period thereunder, other available exemption from
registration, or an effective registration statement.
14. Miscellaneous
-------------
(a) The Board may amend this Plan at any time provided,
however, that (i) any amendment shall not affect the rights of
participants or beneficiaries to Director Shares which have been
transferred to them, (ii) the Plan may not be amended more than
once in every six months or otherwise to the extent that such
amendment would have the effect of disqualifying the participants
from administering any other stock plan of the Company for
purposes of complying with the terms of Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor rule), and
(iii) on or following the Change of Control Date, the Plan may
not be amended to affect the rights of any participants.
(b) No right or benefit under this Plan shall be subject
to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate,
sell, assign, pledge, encumber or charge the same shall be void.
The rights or interests under the Plan are not subject to the
claims of creditors provided, however, that the Company may apply
any Director Shares held in its custody or withhold the transfer
thereof, to satisfy, in whole or in part, any indebtedness of a
participant to the Company.
(c) Construction of the Plan shall be governed by the
laws of Delaware.
(d) The terms of the Plan shall be binding upon the
heirs, executors, administrators, personal representatives,
successors and assigns of all parties in interest.
(e) The headings have been inserted for convenience only
and shall not affect the meaning or interpretation of the Plan.
(f) Each participant shall submit to the Secretary, his
or her current mailing address. It shall be the duty of each
participant to notify the Secretary of any change of address. In
the absence of such notice, the Secretary shall be entitled for
all purposes to rely on the last address of the participant in
the Company's records.
<PAGE>7
- 7 -
(g) Any Director Shares to be delivered to or for the
benefit of a minor, an incompetent person or other person
incapable of receipting therefor shall be deemed delivered when
delivered to such person's guardian or to the party providing or
reasonably appearing to provide for the care of such person, and
such delivery shall fully discharge the Company and the Board
with respect thereto.
(h) Nothing in this Plan or any amendment thereto shall
give a participant, or any beneficiary of a participant, a right
not specifically provided therein. Nothing in this Plan or any
amendment thereto shall be construed as giving a participant the
right to be retained as a member of the Board or otherwise in
service to the Company.
(i) The Plan shall become effective commencing January
1, 1996.
abcboard\stock.p3c
<PAGE>1
EX-10.7
ANHEUSER-BUSCH COMPANIES, INC.
1981 INCENTIVE STOCK OPTION/NON-QUALIFIED STOCK OPTION PLAN
(As amended December 18, 1985, December 16, 1987, December 20,
1988, July 22, 1992, September 22, 1993, and December 20, 1995)
Section 1. Establishment and Purpose.
-------------------------
Anheuser-Busch Companies, Inc. hereby establishes a stock
option plan to be named the Anheuser-Busch Companies, Inc. 1981
Incentive Stock Option/Non-Qualified Stock Option Plan (the
"Plan"), for officers and key employees of the Company and its
subsidiaries. The purpose of the Plan is (1) to induce officers
and key employees of the Company and its subsidiaries who are in
a position to contribute materially to the prosperity thereof to
remain with the Company or its subsidiaries, to offer them
incentives and rewards in recognition of their contributions to
the Company's progress, and to encourage them to continue to
promote the best interests of the Company and its subsidiaries,
and (2) to aid the Company and its subsidiaries in competing with
other enterprises for the services of new officers and key
personnel needed to help insure the Company's continued progress.
Section 2. Definitions.
-----------
(a) "Board of Directors" means the Board of Directors of the
Company.
(b) "Code" means the Internal Revenue Code as in effect from
time to time.
(c) "Committee" means the Stock Option Committee provided
for in Section 3 hereof.
(d) "Company" means Anheuser-Busch Companies, Inc., a
corporation organized and existing under the laws of the State of
Delaware.
(e) "Fair Market Value", for all purposes hereunder, shall
be the mean between the highest and lowest selling prices of the
Company's common stock on the New York Stock Exchange Composite
Tape on the appropriate valuation date.
(f) "Incentive Stock Option" means an option to purchase
Stock granted pursuant to the Plan which is designated by the
Committee as an Incentive Stock Option and which is intended to
qualify as an "incentive stock option" under Section 422A of the
Code.
(g) "Non-Qualified Stock Option" means an option to purchase
Stock granted pursuant to the Plan which is designated by the<PAGE>
<PAGE>2
Committee as a Non-Qualified Stock Option or an Option which is
treated as a Non-Qualified Stock Option under Section 6(b).
(h) "Option" means an Incentive Stock Option or a
Non-Qualified Stock Option.
(i) "Optionee" means the person to whom an Option is
granted.
(j) "Option Agreement" means an Incentive Stock Option
Agreement or a Non-Qualified Stock Option Agreement, as
applicable. The terms "Incentive Stock Option Agreement" and
"Non-Qualified Stock Option Agreement" have the meanings given
them in Section 7.
(k) "Plan" means the Anheuser-Busch Companies, Inc. 1981
Incentive Stock Option/Non-Qualified Stock Option Plan.
(l) "Post-Death Representative(s)" means the executor(s) or
administrator(s) of the Optionee's estate or the person or
persons to whom the Optionee's rights under his or her Option
pass by Optionee's will or the laws of descent and distribution.
(m) "Stock" means authorized and unissued shares of common
stock of the Company or reacquired shares of the Company's common
stock held in its Treasury.
(n) "Subsidiary" means a "subsidiary corporation" as defined
in Section 425 of the Code.
(o) "Ten Per Cent Shareholder" means any individual who at
the time an Option is granted owns directly or indirectly stock
possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any subsidiary, taking
into account the provisions of Section 425(d) of the Code.
(p) "Transferee Corporation" means a corporation, or a
parent or subsidiary corporation of such corporation, issuing or
assuming an Option granted hereunder in a transaction to which
Section 425(a) of the Code applies.
(q) Generally, terms used herein shall have the meanings
which they have under Section 422A of the Code and Regulations
thereunder.
Section 3. Administration. The Plan shall be administered by a
--------------
Stock Option Committee consisting of three or more persons who
shall be members of the Board of Directors and who shall not be
eligible to receive Options under the Plan. The Board of
Directors shall appoint the members of the Committee and its
Chairman and may fill vacancies thereon, however caused. The
2
<PAGE>3
Committee shall hold its meetings at such times and places as it
may determine. A majority of the members of the Committee shall
constitute a quorum and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the members of the
Committee, shall be deemed the acts of the Committee. The
Company shall grant Options under the Plan in accordance with
determinations made by the Committee pursuant to the provisions
of the Plan. The Committee may from time to time adopt (and
thereafter may from time to time amend and rescind) such
administrative rules and regulations for carrying out the Plan,
and the Committee may take such action in the administration of
the Plan, not inconsistent with the provisions hereof, as it
shall deem proper. The interpretation and construction of any
provisions of the Plan by the Committee shall, unless otherwise
determined by the Board of Directors of the Company, be final and
conclusive.
Section 4. Total Number of Shares of Stock Subject to the Plan.
---------------------------------------------------
The maximum number of shares of Stock which may be issued
pursuant to Options granted hereunder (subject to adjustment as
provided in Section 12 hereof) shall be 9,450,000 shares.
Accordingly, 9,450,000 shares of the authorized but unissued
common stock, par value $1.00 per share, of the Company shall be
reserved for issuance upon the exercise of Options granted under
the Plan. The Company may in its discretion use reacquired
shares held in the Treasury in lieu of authorized but unissued
shares. If an Option shall terminate for any reason without
having been exercised in full, the shares previously subject to
such Option shall, unless the period during which Options under
the Plan may be granted has expired, again be available for the
purposes of the Plan and such terminated Option or any portion
thereof shall not be taken into account in computing the total
number of shares theretofore optioned.
Section 5. Eligibility.
-----------
The class of employees eligible to receive Options under the
Plan shall be officers and key employees of the Company or of any
parent or subsidiary thereof (not including directors of the
Company or of any parent or subsidiary thereof who are not
otherwise officers or employees of the Company or of any parent
or subsidiary thereof).
Section 6. Granting of Options.
-------------------
(a) The Committee shall, in its discretion, determine the
officers and key employees to be granted Options, the time or
3
<PAGE>4
times at which Options shall be granted, the number of shares
subject to each Option, and whether an Option shall be an
Incentive Stock Option or a Non-Qualified Stock Option. In
making such determination, the Committee may take into
consideration the value of the services rendered by the
respective individuals, their present and potential contributions
to the success of the Company and any parent or subsidiary, and
other factors which the Committee may deem relevant in
accomplishing the purpose of the Plan. Options granted under the
Plan shall not be affected by any change of duties or position of
the Optionee so long as the Optionee continues to be an employee
of the Company or of any parent or subsidiary thereof. An
individual may be granted more than one Option. Notwithstanding
any other provisions of the Plan, the aggregate Fair Market Value
(determined as of the time the Option is granted) of the Stock
for which any employee may be granted Options in any calendar
year (under this Plan and all other plans of his employer
corporation and its parent and subsidiary corporations providing
for the issuance of "incentive stock options" within the meaning
of Section 422A of the Code) shall not exceed $100,000 plus any
unused limit carryover to such year permitted by said Section
422A, as in effect immediately prior to the effective date of the
amendments to said Section 422A by the Tax Reform Act of 1986.
(b) To the extent that the aggregate Fair Market Value of
Stock with respect to which Incentive Stock Options (determined
without regard to this subsection (b)) which are granted after
December 31, 1986 are exercisable for the first time by an
Optionee during any calendar year (under all plans of the
Optionee's employer corporation and its parent and subsidiary
corporations) exceeds $100,000, such Options shall be treated as
Non-Qualified Stock Options. For purposes of this subsection
(b), Options shall be taken into account in the order in which
they are granted and the Fair Market Value of the Stock shall be
determined as of the time the Option is granted.
Section 7. Terms of Options.
----------------
The Committee, in its sole discretion, shall determine on and
after what date or dates Options granted hereunder shall be
exercisable and whether any particular Option shall become
exercisable in one or more installments, specifying the
installment dates and the number of shares exercisable on and
after each such date, and, within the limits herein provided,
shall determine the total period during which such Option is
exercisable. The Committee may, in its sole discretion, after
an Option is granted, accelerate the date or dates on which such
Option is exercisable. Further, regarding Non-Qualified Stock
4
<PAGE>5
Options, the Committee may include any other provisions which are
consistent with the Plan; regarding Incentive Stock Options, the
Committee may include any other provisions which are consistent
with both the Plan and Section 422A of the Code, or which are
necessary to qualify the Option's grant under the provisions of
Section 422A of the Code.
If while unexercised Options remain outstanding under the
Plan (i) any corporation (other than the Company), person or
group (within the meaning of Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Act")) makes a
tender or exchange offer which, if consummated, would make such
corporation, person or group the beneficial owner (within the
meaning of Rule 13d-3 under the Act) of more than 50% of the
Company's then outstanding Stock and, pursuant to such offer,
purchases are made ("Offer"); (ii) the shareholders of the
Company approve a definitive agreement to merge or consolidate
the Company with or into another corporation or to sell or
otherwise dispose of all or substantially all of its assets, or
adopt a plan of liquidation; or (iii) the Company becomes aware
that any person or group (within the meaning of Sections 13(d)
and 14(d)(2) of the Act) has become the beneficial owner (within
the meaning of Rule 13d-3 under the Act) of more than 50% of the
Company's then outstanding Stock, then on the date of the first
purchase of Stock pursuant to such Offer, or the date of any such
shareholder approval or adoption, or the date on which the
Company becomes aware of the acquisition of such percentage of
the Company's Stock (any such date being referred to as an
"Acceleration Date"), each outstanding option shall be
exercisable in full, even though, but for this paragraph, such
Option would not yet be exercisable because an installment date
has not yet occurred.
Notwithstanding any other provision of the Plan, each Option
granted under the Plan shall be evidenced by a written Incentive
Stock Option Agreement or a Non-Qualified Stock Option Agreement,
as applicable, in such form, not inconsistent with the Plan, as
the Committee shall determine, which shall include the substance
of the following terms and conditions:
(a) Each Incentive Stock Option Agreement shall state that
the Option is an "incentive stock option" under Section 422A of
the Code, and each Non-Qualified Stock Option Agreement shall
state that the Option is a Non-Qualified Stock Option.
(b) The option price for each share of Stock covered by such
Option shall be an amount not less than 100% (or, in the case of
an Option granted to a Ten Per Cent Shareholder, not less than
5
<PAGE>6
110%) of the Fair Market Value of the Stock on the date the
Option is granted.
(c) The Option by its terms shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and
distribution and shall be exercisable, during his or her
lifetime, only by the Optionee.
(d) The Option by its terms shall not be exercisable after
the expiration of ten years (or, if the Optionee is a Ten Per
Cent Shareholder, five years) from the date such Option is
granted.
(e) The number of shares which are issued pursuant to the
exercise of an Option shall be charged against the maximum
limitation on shares set forth in Section 4.
(f) An Option may be exercised only by the Optionee during
his or her lifetime, and only by the Optionee's Post-Death
Representatives after his or her death. Option Agreements may
contain any provision approved by the Committee, not inconsistent
with Sections 7(d), 8, or 9 of the Plan, relating to the period
for exercise of Options after termination of employment, death,
or disability.
(g) An Option granted prior to January 1, 1987 by its terms
shall not be exercisable by the Optionee while there is
outstanding any "incentive stock option" within the meaning of
Section 422A of the Code which was granted before the granting of
such Option to the Optionee to purchase stock in the Company or
in any corporation which (at the time of the granting of such
Option) is a parent or subsidiary of the Company, or is a
predecessor corporation of any such corporation. For purposes of
this subsection 7(g), an Option shall be treated as outstanding
until such Option is exercised in full or expires by reason of
lapse of time.
Section 8. Agreement to Serve.
------------------
Each Optionee shall agree that he or she will remain in the
service of the Company or a parent or subsidiary of the Company
for at least two years from the date of grant to him or her of an
Option, at the pleasure of the Board of Directors and at such
compensation as the Board of Directors or any Committee thereof
shall reasonably determine from time to time. If any Optionee
voluntarily terminates such employment prior to the expiration of
said two year period in violation of the foregoing provisions of
this Section 8, or if at any time the Optionee is dismissed from
such employment for any reason, such Option (and any other Option
6
<PAGE>7
or Options held by him or her under the Plan) to the extent not
theretofore exercised shall forthwith terminate. The Committee
may waive, in whole or part and for any reason the Committee
deems appropriate, any termination caused by this Section 8 of
any Option or group of Options.
Section 9. Condition to Exercise of Options.
--------------------------------
(a) The exercise of any Option under the Plan shall be
conditioned on the Optionee at all times during his or her
employment with the Company having continuously satisfied his or
her duties of loyalty and faithful service to the Company and
having refrained from engaging in any undisclosed conflict of
interest or from otherwise acting in any manner inimical to or
contrary to the best interests of the Company. Any violation of
law or of any Company policy or the Business Practices and Ethics
Manual of the Company shall be considered conduct inimical to or
contrary to the best interests of the Company for the purposes of
this Section 9. The exercise of any Option shall be deemed to be
the certification by the Optionee that he has satisfied this
condition. In addition, the Optionee shall furnish to the
Committee on request any other information concerning
satisfaction of such condition which the Committee may request.
(b) This Section 9 is intended to establish, as a condition
to the realization of economic benefits under the Plan, a
standard of conduct consistent with (i) the duties of loyalty and
faithful performance of services imposed on an employee by the
common law, and (ii) the Company's published standards and
policies which the Optionee is bound to observe. This Section 9
shall in no way impair or derogate from the rights or remedies
which the Company may have at law or in equity or under any
employment contract or agreement with an Optionee to prevent or
to recover damages for the disclosure of trade secrets, or to
recover any restitution or damages properly owing the Company
because of any theft, fraud, embezzlement, or other illegal
conduct on the part of an Optionee.
(c) If the Committee determines that an Optionee has not
observed the standard of conduct required by this Section 9, the
Committee may require the Optionee to forfeit any right to or in
any unexercised Options as of the date such determination is
made, and may require repayment of any economic benefit received
as a result of the exercise of any Option after the act or acts
of misconduct which gave rise to the Committee's determination.
(d) This Section 9 shall not be interpreted as requiring the
Committee to take action in each and every instance of suspected
misconduct, and in determining to attempt to enforce the
7
<PAGE>8
forfeiture and repayment provisions of this Section 9, the
Committee may consider, among other things, the possible economic
effects, the circumstances surrounding the discontinuance of the
Optionee's employment with the Company and the amount of proof
which the Company may have of any alleged misconduct. Any
decision by the Committee to forego enforcement of this Section 9
in whole or in part in any particular instance shall in no way
constitute a waiver of the right to enforce such Section in any
other instance.
(e) During the period of any investigation into whether an
Optionee has engaged in conduct prohibited by this Section 9, the
Optionee's rights to exercise any Option shall be suspended.
Section 10. Exercise of Options.
-------------------
(a) An Option shall be exercisable only (1) upon payment to
the Company on the date of exercise of the Option of cash in the
full amount of the option price of the shares with respect to
which the Option is exercised or (2) upon delivery to the Company
on the date of exercise of the Option of certificates, duly
endorsed for transfer or accompanied by a stock power,
representing shares of Stock, owned by the Optionee and
registered in the Optionee's name, having a Fair Market Value, on
the date of such exercise and delivery, equal to the full amount
of the purchase price of the shares with respect to which the
Option is exercised, or (3) a combination of (1) and (2).
(b) An Optionee shall have none of the rights of a
shareholder with respect to shares of Stock subject to his or her
Option until shares of Stock are issued to him or her upon the
exercise of his or her Option.
(c) When an Optionee's Employer becomes required to collect
Required Withholding Taxes, the Optionee shall promptly pay to
the Company or Employer (as required by the Committee) the amount
of such Required Withholding Taxes in cash, unless the Option
Agreement or the Committee permits or requires payment in another
form. In the discretion of the Committee or its delegate and at
the Optionee's request, the Committee or its delegate may cause
the Company or Employer to pay Withholding Taxes in excess of
Required Withholding Taxes on behalf of an Optionee, which shall
be reimbursed by the Optionee. The Committee may allow an
Optionee to pay or reimburse the Company or Employer with shares
of Stock (other than Restricted Stock granted under the Anheuser-
Busch Companies, Inc. 1989 Incentive Stock Plan) or other
property. The Committee may require the satisfaction of any
rules or conditions in connection with any non-cash payment of
Withholding Taxes. If an Optionee is a Reporting Person at the
8
<PAGE>9
time of grant or during an Option's term and is given an election
to pay any Withholding Taxes with Stock, the Committee shall have
the sole discretion to approve or disapprove such election at any
time after the election is made. As used in this subsection:
(i) "Withholding Taxes" means, in connection with
the exercise of an Option, (A) the total amount of
Federal and state income taxes which the Employer of the
Optionee is required to withhold ("Required Withholding
Taxes") plus (B) any other income taxes which the
Employer withholds at the request of the Optionee.
(ii) "Employer" means the Company or Subsidiary
which employs the Optionee.
(iii) "Reporting Person," as of a given date, means
an Optionee who would be required to report an ordinary
purchase or sale of Stock occurring on such date to the
Securities and Exchange Commission pursuant to Section
16(a) of the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations
thereunder.
Section 11. General Provisions.
------------------
(a) The Company shall not be required to issue or deliver
any certificates for shares of Stock to an Optionee upon the
exercise of his or her Option, prior to
(i) if requested by the Company, the filing with
the Company by the Optionee or the Optionee's Post-Death
Representative of a representation in writing that at the
time of such exercise it is his or her then present
intention to acquire the shares of Stock being purchased
for investment and not for resale, and/or the completion
of any registration or other qualification of such shares
of Stock under any state or Federal laws or rulings or
regulations of any government regulatory body, which the
Company shall determine to be necessary or advisable, and
(ii) the listing, or approval for listing upon
notice of issuance, of such shares of Stock on the New
York Stock Exchange or such other securities exchange as
may at the time be the principal market for the Stock,
and
(iii) the obtaining of any other consent, approval
or permit from any State or Federal governmental agency
which the Committee shall, in its absolute discretion
9
<PAGE>10
upon the advice of counsel, determine to be necessary or
advisable.
(b) It is intended that the portion of the Plan relating to
Incentive Stock Options and all Incentive Stock Options granted
hereunder will meet the requirements for "incentive stock
options" within the meaning of Section 422A of the Code as said
Section may be in effect at the time of grant. The Plan shall in
all respects be so interpreted and construed as to be consistent
with this intention. Notwithstanding the foregoing, nothing
shall prohibit an amendment to an Option Agreement with respect
to an Incentive Stock Option which would change its status to a
Non-Qualified Stock Option, so long as the Company and the
Optionee shall consent to such amendment.
Section 12. Adjustments and Acquisitions
----------------------------
In the event of (i) any change in the outstanding shares of
Stock by reason of any stock split, combination of shares, stock
dividend, reorganization, merger, consolidation, or other
corporate change having a similar effect, or (ii) any separation
of the Company including a spin-off or other distribution of
stock or property by the Company, or (iii) any distribution to
stockholders generally other than a normal dividend, the
Committee shall make such equitable adjustments to the Plan and
to outstanding Options as it shall deem appropriate in order to
prevent the dilution or enlargement of the economic value of
outstanding Options. Any such determination by the Committee
shall be conclusive and binding on all concerned.
Section 13. Duration, Amendment and Termination.
-----------------------------------
The Board of Directors may at any time terminate the Plan or
make such amendments thereof as it shall deem advisable and in
the best interests of the Company, without further action on the
part of the shareholders of the Company; provided, however, that
no such termination or amendment shall, without the consent of
the Optionee, adversely affect or impair the rights of such
Optionee, and provided further, that, unless the shareholders of
the Company shall have first approved thereof, no amendment of
this Plan shall be made whereby (a) the total number of shares of
Stock which may be optioned under the Plan to all individuals, or
to any of them, shall be increased, except by operation of the
adjustment provisions of Section 12 hereof, (b) the authority to
administer the Plan by a committee consisting of directors of the
Company not eligible to receive Options granted under the Plan
shall be withdrawn, (c) the term of the Options shall be
extended, (d) the minimum option price shall be decreased, or (e)
10
<PAGE>11
the class of employees to whom Options may be granted shall be
changed.
The period during which Options may be granted under the Plan
shall terminate on December 21, 1991, unless the Plan shall
therefore have been terminated as hereinabove provided.
Section 14. Shareholder Approval.
--------------------
No Option granted under the Plan may be exercised in whole or
in part until adoption of the Plan is approved by the affirmative
vote of a majority of the outstanding shares of the Company
entitled to vote at a meeting of the shareholders duly called for
the purpose of voting thereon, and unless the Plan is approved by
the shareholders within twelve months of its adoption by the
Board of Directors.
Section 15. Date of Granting of Options.
---------------------------
Nothing contained in the Plan or in any resolution adopted or
to be adopted by the Board of Directors or the shareholders of
the Company shall constitute the granting of any Option
hereunder. The date of grant of an Option pursuant to the Plan
shall be the date of grant thereof by the Committee. Within ten
business days after the date of grant of the Option, the Company
shall notify the Optionee of the grant of the Option, and shall
mail to the Optionee an Option Agreement, duly executed by and on
behalf of the Company, with the request that the Optionee execute
the Option Agreement within thirty days after the date of mailing
by the Company. If the Optionee shall fail to execute the Option
Agreement within said thirty-day period, his or her Option shall
be automatically terminated.
11
<PAGE>1
EX-10.8
ANHEUSER-BUSCH COMPANIES, INC.
1981 NON-QUALIFIED STOCK OPTION PLAN
(As amended December 18, 1985, June 24, 1987, December 20, 1988,
July 22, 1992, and December 20, 1995)
Section 1. Establishment and Purpose.
-------------------------
Anheuser-Busch Companies, Inc. hereby establishes a
non-qualified stock option plan to be named the Anheuser-Busch
Companies, Inc. 1981 Non-Qualified Stock Option Plan ("Plan"),
for officers and key employees of the Company and its
subsidiaries. The purpose of the Plan is (1) to induce officers
and key employees of the Company and its subsidiaries who are in
a position to contribute materially to the prosperity thereof to
remain with the Company or its subsidiaries, to offer them
incentives and rewards in recognition of their contributions to
the Company's progress, and to encourage them to continue to
promote the best interests of the Company and its subsidiaries,
and (2) to aid the Company and its subsidiaries in competing with
other enterprises for the services of new officers and key
personnel needed to help insure the Company's continued progress.
Section 2. Definitions.
-----------
(a) "Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(b) "Alternative Stock Appreciation Right" means a right,
granted in conjunction with the grant of an Option pursuant to
the Plan, to receive Stock having a value on the date such right
is exercised equal to (i) the excess of the Fair Market Value of
one share of Stock on the date of exercise of the Alternative
Stock Appreciation Right over (ii) the base price for the Right.
(c) "Board of Directors" means the Board of Directors of the
Company.
(d) "Cash Feature" means the feature, granted by the
Committee pursuant to Section 8(a) below in connection with an
Alternative Stock Appreciation Right, allowing the Optionee to
receive, in connection with the exercise of such Right, an amount
of cash determined and paid in accordance with paragraph (c) of
Section 8 of the Plan and the rules adopted by the Committee
pursuant to Section 8(e) below.
<PAGE>2
(e) "Cash Percentage" means that percentage from zero to
100% determined from time to time by the Committee in accordance
with the rules of the Committee adopted pursuant to Section 8(e)
below.
(f) "Code" means the Internal Revenue Code as in effect from
time to time.
(g) "Committee" means the Stock Option Committee provided
for in Section 3 hereof.
(h) "Company" means Anheuser-Busch Companies, Inc., a
corporation organized and existing under the laws of the State of
Delaware.
(i) "Fair Market Value", for all purposes hereunder, shall
be the mean between the highest and lowest selling prices of the
Company's common stock on the New York Stock Exchange Composite
Tape on the appropriate valuation date.
(j) "Option" means a non-ISO stock option, i.e. an option
which is not an "incentive stock option" under Section 422A of
the Code, granted with or without accompanying Alternative Stock
Appreciation Rights to purchase common stock of the Company
granted pursuant to the Plan.
(k) "Optionee" means the person to whom an Option is
granted.
(l) "Plan" means the Anheuser-Busch Companies, Inc. 1981
Non-Qualified Stock Option Plan.
(m) "Post-Death Representative(s)" means the executor(s) or
administrator(s) of the Optionee's estate or the person or
persons to whom the Optionee's rights under his or her Option
pass by his or her will or the laws of descent and distribution.
(n) "Reporting Person" means an Optionee who is required to
file statements relating to his or her beneficial ownership of
Stock with the Securities and Exchange Commission pursuant to
Section 16(a) of the Act.
(o) "Rule 16b-3" means Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Act as amended from
time to time.
(p) "Spread," when used in connection with Alternative Stock
Appreciation Rights having the same base price (as determined
under Section 8(c)(2) below), means (i) the difference obtained
by subtracting the base price of such Rights from the Fair Market
2
<PAGE>3
Value of a share of Stock on the date such Rights are exercised,
(ii) multiplied by the number of such Rights being exercised.
(q) "Stock" means authorized and unissued shares of common
stock of the Company or reacquired shares of the Company's common
stock held in its Treasury.
(r) "Subsidiary" means a "subsidiary corporation" as defined
in Section 425 of the Code.
(s) "Transferee Corporation" means a corporation, or a
parent or subsidiary corporation of such corporation, by reason
of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, issuing or
assuming an Option granted hereunder in a transaction to which
Section 425(a) of the Code applies.
(t) "Window Period" means the period as defined from time to
time in paragraphs (e)(3)(iii) and (e)(1)(ii) of Rule 16b-3. At
this time, the term "Window Period" as so defined means the
period beginning on the third business day following the date of
release of the financial data of the Company specified in
paragraph (e)(1)(ii) of Rule 16b-3 and ending on the twelfth
business day following such date. Such financial data includes
quarterly and annual statements of sales and earnings, and the
date of its release is the date such data (A) appears on a wire
service, (B) appears in a financial news service, (C) appears in
a newspaper of general circulation, or (D) is otherwise made
publicly available. In interpreting this definition, the
provisions of the first sentence shall be controlling, the
remaining sentences being included for informational purposes
only.
Section 3. Administration.
--------------
The Plan shall be administered by a Stock Option Committee
consisting of three or more persons who shall be members of the
Board of Directors and who shall not be eligible to receive
Options under the Plan. The Board of Directors shall appoint the
members of the Committee and its Chairman and may fill vacancies
thereon, however caused. The Committee shall hold its meetings
at such times and places as it may determine. A majority of the
members of the Committee shall constitute a quorum and the acts
of a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing by a majority of
the members of the Committee, shall be deemed the acts of the
3
<PAGE>4
Committee. The Company shall grant Options under the Plan in
accordance with determinations made by the Committee pursuant to
the provisions of the Plan. The Committee may from time to time
adopt (and thereafter may from time to time amend and rescind)
such administrative rules and regulations for carrying out the
Plan, and the Committee may take such action in the
administration of the Plan, not inconsistent with the provisions
hereof, as it shall deem proper. The interpretation and
construction of any provisions of the Plan by the Committee
shall, unless otherwise determined by the Board of Directors of
the Company, be final and conclusive.
Section 4. Total Number of Shares of Stock Subject to the Plan.
---------------------------------------------------
The maximum number of shares of Stock which may be issued
pursuant to Options or Alternative Stock Appreciation Rights
granted hereunder (subject to adjustment as provided in Section
13 hereof) shall be 5,450,000 shares. Accordingly, 5,450,000
shares of the authorized but unissued common stock, par value
$1.00 per share, of the Company shall be reserved for issuance
upon the exercise of Options or Alternative Stock Appreciation
Rights granted under the Plan. The Company may in its discretion
use reacquired shares held in the Treasury in lieu of authorized
but unissued shares. If an Option shall terminate for any reason
without having been exercised in full, the unpurchased shares
thereunder shall, unless the period during which Options under
the Plan may be granted has expired, again be available for the
purposes of the Plan and such terminated Option or any portion
thereof shall not be taken into account in computing the total
number of shares theretofore optioned; provided that, if the
Option terminates because of the exercise of Alternative Stock
Appreciation Rights, only the excess of the unpurchased shares
over the shares issued upon exercise of the Alternative Stock
Appreciation Rights shall again be available. Termination of an
Option shall automatically terminate the Alternative Stock
Appreciation Right, if any, granted in conjunction with such
Option, unless termination is caused by the exercise of such
Rights.
Section 5. Eligibility.
-----------
The class of employees eligible to receive Options under the
Plan shall be officers and key employees of the Company or of any
parent or subsidiary thereof (not including directors of the
4
<PAGE>5
Company or of any parent or subsidiary thereof who are not
otherwise officers or employees of the Company or of any parent
or subsidiary thereof).
Section 6. Granting of Options.
-------------------
The Committee shall, in its discretion, determine the
officers and key employees to be granted Options, whether the
shares covered by any particular Option shall be accompanied by
Alternative Stock Appreciation Rights, the time or times at which
Options shall be granted, and the number of shares subject to
each Option. The Committee may at any time grant new Options to
an individual who has received Options whether such prior Options
are still outstanding, have previously been exercised in whole or
in part, or are cancelled in connection with the grant of new
Options. In granting Options, the Committee may take into
consideration the value of the services rendered by the
respective individuals, their present and potential contributions
to the success of the Company and its subsidiaries and other
factors which the Committee may deem relevant in accomplishing
the purpose of the Plan. Options granted under the Plan shall
not be affected by any change of duties or position of the
Optionee so long as the Optionee continues to be an employee of
the Company or of any parent or subsidiary thereof.
Section 7. Terms of Options.
----------------
The Committee, in its sole discretion, shall determine on and
after what date or dates Options granted hereunder shall be
exercisable and whether any particular Option shall become
exercisable in one or more installments, specifying the
installment dates and the number of shares exercisable on and
after each such date, and, within the limits herein provided,
shall determine the total period during which such Option is
exercisable. The Committee may, in its sole discretion, after an
Option is granted, accelerate the date or dates on which such
Option is exercisable. The Committee may include such other
provisions as the Committee may deem acceptable or desirable.
If while unexercised Options remain outstanding under the
Plan (i) any corporation (other than the Company), person or
group (within the meaning of Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Act")) makes a
tender or exchange offer which, if consummated, would make such
corporation, person or group the beneficial owner (within the
5
<PAGE>6
meaning of Rule 13d-3 under the Act) of more than 50% of the
Company's then outstanding Stock and, pursuant to such offer,
purchases are made ("Offer"); (ii) the shareholders of the
Company approve a definitive agreement to merge or consolidate
the Company with or into another corporation or to sell or
otherwise dispose of all or substantially all of its assets, or
adopt a plan of liquidation; or (iii) the Company becomes aware
that any person or group (within the meaning of Sections 13(d)
and 14(d)(2) of the Act) has become the beneficial owner (within
the meaning of Rule 13d-3 under the Act) of more than 50% of the
Company's then outstanding Stock, then on the date of the first
purchase of Stock pursuant to such Offer, or the date of any such
shareholder approval or adoption, or the date on which the
Company becomes aware of the acquisition of such percentage of
the Company's Stock (any such date being referred to as an
"Acceleration Date"), each outstanding Option and Alternative
Stock Appreciation Right shall be exercisable in full.
Notwithstanding any other provision of the Plan, each Option
granted under the Plan shall be evidenced by a Non-Qualified
Stock Option Agreement (the "Agreement") in such form, not
inconsistent with the Plan, as the Committee shall determine,
and shall include the substance of the following terms and
conditions:
(a) The Agreement shall state that the Option is an option
which is not an "incentive stock option" under Section 422A of
the Code.
(b) The option price for each share of Stock covered by such
Option shall be an amount not less than 100% of the Fair Market
Value of the Stock on the date of grant of the Option.
(c) The Option by its terms shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and
distribution and shall be exercisable, during his or her
lifetime, only by the Optionee.
(d) The Option by its terms shall not be exercisable after
the expiration of ten years from its date of grant.
(e) If Alternative Stock Appreciation Rights are granted in
connection with an Option, the Optionee, upon exercise of the
Option, in whole or in part, shall forfeit the related
Alternative Stock Appreciation Rights or portion thereof.
6
<PAGE>7
(f) The number of shares which are issued pursuant to the
exercise of an Option or Alternative Stock Appreciation Right
shall be charged against the maximum limitation on shares set
forth in Section 4.
(g) An Option may be exercised only by the Optionee during
his or her lifetime, and only by the Optionee's Post-Death
Representatives after his or her death. Option Agreements may
contain any provision approved by the Committee, not inconsistent
with Sections 7(d) and other provisions of this Plan, relating to
the period for exercise of Options after termination of
employment, death or disability.
Section 8. Alternative Stock Appreciation Rights.
-------------------------------------
(a) Alternative Stock Appreciation Rights may, in the
discretion of the Committee, be granted in connection with any
Option granted under the Plan. If Rights are granted to an
Optionee, the number of Rights granted with respect to any
particular Option shall equal the number of shares subject to
such Option. Each such Right shall be payable in shares of Stock
as provided below, provided that, in the sole discretion of the
Committee and subject to the provisions of this Section 8, any
such Right may be granted with a Cash Feature. In addition, a
Cash Feature may be conferred by the Committee at any time in
connection with any Alternative Stock Appreciation Right which
did not originally have such Feature, provided that the Optionee
executes an amendment to his or her Non-Qualified Stock Option
Agreement reflecting the Cash Feature within 30 days after such
amendment is mailed to him or her by the Company.
(b) If Alternative Stock Appreciation Rights are granted in
connection with an Option, the Optionee, upon exercise of the
Alternative Stock Appreciation Rights, shall forfeit the related
Option or portion thereof.
(c) An Alternative Stock Appreciation Right shall be subject
to the following terms and conditions:
(1) An Alternative Stock Appreciation Right shall be
exercisable by the Optionee only at such time or times and
to the extent, but only to the extent, that the related
Option shall be exercisable, unless the Committee specifies
a more restrictive period.
7
<PAGE>8
(2) The base price of an Alternative Stock Appreciation
Right shall be the option price per share of the related
Stock Option.
(3) The Alternative Stock Appreciation Right by its
terms shall be transferable only when the underlying Option
is transferable, and under the same conditions.
(4) An exercise of an Alternative Stock Appreciation
Right having no Cash Feature or an Alternative Stock
Appreciation Right having a Cash Feature if the Cash
Percentage then in effect is zero may be made at any time,
subject to any limitations on exercisability imposed upon
such Right by the Plan or by the terms of such Right, and
shall be payable solely in Stock.
(5) If Alternative Stock Appreciation Rights which have
a Cash Feature are exercised outside of a Window Period,
they shall be payable solely in Stock.
(6) If Alternative Stock Appreciation Rights which have
a Cash Feature ("Cash Feature Rights") are exercised (the
"Current Exercise") within a Window Period, the Optionee
shall be paid in cash for:
(A) that number of Cash Feature Rights equal to
the Cash Percentage in effect on the date of exercise
(the "Current Cash Percentage") times the number of
Cash Feature Rights being exercised in the Current
Exercise, or,
(B) if greater, that number of Cash Feature
Rights (not to exceed the number of Rights being
exercised in the Current Exercise) equal to (i) the
Current Cash Percentage times the total number of Cash
Feature Rights and Options related to such Rights
exercised by the Optionee after June 24, 1987
(including the Current Exercise) less (ii) the number
of Cash Feature Rights paid in cash to the Optionee
prior to the Current Exercise.
Any remaining Cash Feature Rights being exercised in the
Current Exercise shall be paid in Stock. If Cash Feature
Rights relating to different grants of Alternative Stock
Appreciation Rights are exercised on the same day, the
exercises shall be deemed to occur in the order of the
grants.
8
<PAGE>9
(7) If, upon exercise, Alternative Stock Appreciation
Rights are payable in Stock under the above subparagraphs,
the Optionee shall be entitled to receive payment of the
number of shares of Stock determined by dividing
(A) the aggregate Spread on such Rights payable
in Stock by
(B) the Fair Market Value of a share of Stock
on the exercise date of such Rights.
If the resulting number of shares so obtained includes a
fraction of one-half or more, the number shall be raised
to the next higher whole number, but if the fraction is less
than one-half, the fraction shall be disregarded.
(8) If, upon exercise, Alternative Stock Appreciation
Rights are payable in cash under the above subparagraphs,
the Optionee shall receive cash equal to the aggregate
Spread applicable to such Rights payable in cash.
(9) Notwithstanding any other provision of this Plan,
Alternative Stock Appreciation Rights which have a Cash
Feature and Options related to such Rights shall not be
exercised during the first six months of their respective
terms, except that this limitation shall not apply in the
event death or disability of the Optionee occurs prior to
the expiration of the six-month period.
(10) If Alternative Stock Appreciation Rights have a
Cash Feature, the Options to which such Rights relate shall
not be exercisable during a Window Period, unless the Cash
Percentage then in effect is zero.
(11) For the purposes of applying the provisions of
this paragraph (c), unless otherwise specifically provided,
any deceased Optionee's past exercises of Options and
Alternative Stock Appreciation Rights shall be attributed
to his or her Post-Death Representative(s), and such
Representative(s) shall be treated as having stepped into
the Optionee's shoes.
9
<PAGE>10
(d) If an Alternative Stock Appreciation Right is exercised,
there shall be charged against the maximum limitation on shares
set forth in Section 4:
(1) the number of shares which are issued pursuant to
subparagraph (c)(7) of this Section 8, and
(2) the number of shares determined by dividing the
amount of cash paid pursuant to subparagraph (c)(8) by the
Fair Market Value of a share of Stock on the date of such
exercise, rounding any fractional shares up or down in the
manner provided in the last sentence of subparagraph (c)(7).
(e) The Committee shall be empowered to adopt, rescind and
amend such rules from time to time, with or without notice to
affected Optionees, as it may deem appropriate in order to
determine the Cash Percentage relating to exercises of
Alternative Stock Appreciation Rights having a Cash Feature, to
implement the provisions of this Section 8, and to exercise any
discretion granted to the Committee hereunder, provided that no
such rules may be inconsistent with the provisions of Rule 16b-3.
(f) Any attempted exercise of an Alternative Stock
Appreciation Right by an Optionee in contravention of this
Section 8 or the Committee's rules authorized hereunder or Rule
16b-3 shall be null and void. No Optionee shall have any vested
or enforceable interest in any Cash Feature or any Committee
rules relating thereto.
(g) This Section 8 and the related definitions in Section 2
shall be interpreted and applied so as to conform with the
requirements and limitations of Rule 16b-3, as amended from time
to time. Any amendment to or new interpretation of Rule 16b-3
which creates or makes more restrictive one or more limitations
shall automatically, upon becoming effective, apply to exercises
of Alternative Stock Appreciation Rights, whether or not this
Section 8 (or Section 2) is formally amended and conformed to
Rule 16b-3 at that time. Any amendment to or new interpretation
of Rule 16b-3 which eliminates or relaxes any such limitations
shall apply to such exercises only after this Section 8 (or
Section 2) is formally amended, provided that any such amendment
hereof may be applied retroactively to the date of any such
amendment to Rule 16b-3. As used in this paragraph, the term
"interpretation" refers to an official interpretation of the
Securities and Exchange Commission or its staff or any court of
competent jurisdiction.
10
<PAGE>11
(h) The Committee may act, pursuant to authority expressly
or implicitly given the Committee in the Plan, by any appropriate
means. Without limiting the generality of the foregoing, the
Committee may act by resolution adopted at a meeting or adopted
by written consent of the Committee members without a meeting.
Meetings may be attended in person, conducted by conference
telecommunications where each member is able to speak and be
heard by each other member, or conducted using a combination of
attendance and conference telecommunications.
Section 9. Agreement to Serve.
------------------
Each Optionee shall agree that he or she will remain in the
service of the Company or a parent or subsidiary of the Company
for at least two years from the date of grant to him or her of an
Option, at the pleasure of the Board of Directors and at such
compensation as the Board of Directors or any Committee thereof
or the appropriate officers of the Company shall reasonably
determine from time to time. If any Optionee voluntarily
terminates such employment prior to the expiration of said two
year period in violation of the foregoing provisions of this
Section 9, or if at any time the Optionee is dismissed from such
employment for any reason, such Option (and any other Option or
Options held by him or her under the Plan) to the extent not
theretofore exercised shall forthwith terminate. The Committee
may waive, in whole or part and for any reason the Committee
deems appropriate, any termination caused by this Section 9 of
any Option or group of Options.
Section 10. Condition to Exercise of Options.
--------------------------------
(a) The exercise of any Option under the Plan, including any
Alternative and Limited Stock Appreciation Rights granted in
connection with any Option, shall be conditioned on the Optionee
at all times during his or her employment with the Company having
continuously satisfied his or her duties of loyalty and faithful
service to the Company and having refrained from engaging in any
undisclosed conflict of interest or from otherwise acting in any
manner inimical to or contrary to the best interests of the
Company. Any violation of law or of any Company policy or the
Business Practices and Ethics Manual of the Company shall be
considered conduct inimical to or contrary to the best interests
11
<PAGE>12
of the Company for the purposes of this Section 10. The exercise
of any Option or Rights shall be deemed to be the certification
by the Optionee that he has satisfied this condition. In
addition, the Optionee shall furnish to the Committee on request
any other information concerning satisfaction of such condition
which the Committee may request.
(b) This Section 10 is intended to establish, as a condition
to the realization of economic benefits under the Plan, a
standard of conduct consistent with (i) the duties of loyalty and
faithful performance of services imposed on an employee by the
common law, and (ii) the Company's published standards and
policies which the Optionee is bound to observe. This Section 10
shall in no way impair or derogate from the rights or remedies
which the Company may have at law or in equity or under any
employment contract or agreement with an Optionee to prevent or
to recover damages for the disclosure of trade secrets, or to
recover any restitution or damages properly owing the Company
because of any theft, fraud, embezzlement, or other illegal
conduct on the part of an Optionee.
(c) If the Committee determines that an Optionee has not
observed the standard of conduct required by this Section 10, the
Committee may require the Optionee to forfeit any right to or in
any unexercised Options, including any Alternative and Limited
Stock Appreciation Rights granted in connection with any Option,
as of the date such determination is made, and may require
repayment of any economic benefit received as a result of the
exercise of any Option or Alternative or Limited Stock
Appreciation Right after the act or acts of misconduct which gave
rise to the Committee's determination.
(d) This Section 10 shall not be interpreted as requiring
the Committee to take action in each and every instance of
suspected misconduct, and in determining to attempt to enforce
the forfeiture and repayment provisions of this Section 10, the
Committee may consider, among other things, the possible economic
effects, the circumstances surrounding the discontinuance of the
Optionee's employment with the Company and the amount of proof
which the Company may have of any alleged misconduct. Any
decision by the Committee to forego enforcement of this Section
10 in whole or in part in any particular instance shall in no way
constitute a waiver of the right to enforce such Section in any
other instance.
12
<PAGE>13
(e) During the period of any investigation into whether an
Optionee has engaged in conduct prohibited by this Section 10,
the Optionee's rights to exercise any Option and any related
Alternative and Limited Stock Appreciation Rights shall be
suspended.
Section 11. Exercise of Options.
-------------------
(a) An Option shall be exercisable only (1) upon payment to
the Company on the date of exercise of the Option of cash in the
full amount of the purchase price of the shares with respect to
which the Option is exercised or (2) upon delivery to the Company
on the date of exercise of the Option of certificates, duly
endorsed for transfer or accompanied by a stock power,
representing shares of Stock, owned by the Optionee and
registered in the Optionee's name, having a Fair Market Value, on
the date of such exercise and delivery, equal to the full amount
of the purchase price of the shares with respect to which the
Option is exercised, or (3) a combination of (1) and (2).
(b) When an Optionee's Employer becomes required to collect
Required Withholding Taxes, the Optionee shall promptly pay to
the Company or Employer (as required by the Committee) the amount
of such Required Withholding Taxes in cash, unless the Option
Agreement or the Committee permits or requires payment in another
form. In the discretion of the Committee or its delegate and at
the Optionee's request, the Committee or its delegate may cause
the Company or Employer to pay Withholding Taxes in excess of
Required Withholding Taxes on behalf of an Optionee, which shall
be reimbursed by the Optionee. The Committee may allow an
Optionee to pay or reimburse the Company or Employer with shares
of Stock (other than Restricted Stock granted under the
Anheuser-Busch Companies, Inc. 1989 Incentive Stock Plan) or
other property. The Committee may require the satisfaction of
any rules or conditions in connection with any non-cash payment
of Withholding Taxes. If an Optionee is a Reporting Person at
the time of grant or during an Option's term and is given an
election to pay any Withholding Taxes with Stock, the Committee
shall have the sole discretion to approve or disapprove such
election at any time after the election is made. As used in this
subsection:
(i) "Withholding Taxes" means, in connection with the
exercise of an Option, (A) the total amount of Federal and
state income taxes which the Employer of the Optionee is
required to withhold ("Required Withholding Taxes") plus (B)
any other income taxes which the Employer withholds at the
request of the Optionee.
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<PAGE>14
(ii) "Employer" means the Company or Subsidiary which
employs the Optionee.
Section 12. General Provisions.
------------------
(a) The Company shall not be required to issue or deliver
any certificates for shares of Stock to an Optionee upon the
exercise of his or her Option or Alternative Stock Appreciation
Rights, prior to
(i) if requested by the Company, the filing with the
Company by the Optionee or the Optionee's Post-Death
Representative of a representation in writing that at the
time of such exercise it is his or her then present
intention to acquire the shares of Stock being purchased
for investment and not for resale, and/or the completion
of any registration or other qualification of such shares
of Stock under any State or Federal laws or rulings or
regulations of any government regulatory body, which the
Company shall determine to be necessary or advisable, and
(ii) the listing, or approval for listing upon notice
of issuance, of such shares of Stock on the New York Stock
Exchange or such other securities exchange as may at the
time be the principal market for the Stock, and
(iii) the obtaining of any other consent, approval or
permit from any State or Federal governmental agency which
the Committee shall, in its absolute discretion upon the
advice of counsel, determine to be necessary or advisable.
(b) An Optionee shall have none of the rights of a
shareholder with respect to shares of Stock subject to his or her
Option until shares of Stock are issued to him or her upon the
exercise of his or her Option.
(c) The Optionee may be required to pay to the Company the
amount of any withholding taxes which the Company is required to
withhold with respect to the exercise of an Option or Alternative
Stock Appreciation Right.
14
<PAGE>15
Section 13. Adjustments and Acquisitions
----------------------------
In the event of (i) any change in the outstanding shares of
Stock by reason of any stock split, combination of shares, stock
dividend, reorganization, merger, consolidation, or other
corporate change having a similar effect, or (ii) any separation
of the Company including a spin-off or other distribution of
stock or property by the Company, or (iii) any distribution to
stockholders generally other than a normal dividend, the
Committee shall make such equitable adjustments to the Plan and
to outstanding Options, Alternative Stock Appreciation Rights and
Limited Rights as it shall deem appropriate in order to prevent
the dilution or enlargement of the economic value of outstanding
Options, Alternative Stock Appreciation Rights. Any such
determination by the Committee shall be conclusive and binding on
all concerned.
Section 14. Duration, Amendment and Termination.
-----------------------------------
The Board of Directors may at any time terminate the Plan or
make such amendments thereof as it shall deem advisable and in
the best interests of the Company, without further action on the
part of the shareholders of the Company; provided, however, that
no such termination or amendment shall, without the consent of
the Optionee, adversely affect or impair the rights of such
Optionee, and provided further, that, unless the shareholders of
the Company shall have first approved thereof, no amendment of
this Plan shall be made whereby (a) the total number of shares of
Stock which may be optioned under the Plan to all individuals, or
to any of them, shall be increased, except by operation of the
adjustment provisions of Section 13 hereof, (b) the authority to
administer the Plan by a committee consisting of directors of the
Company not eligible to receive Options granted under the Plan
shall be withdrawn, (c) the term of the Options shall be
extended, (d) the minimum option price shall be decreased, or (e)
the class of employees to whom Options may be granted shall be
changed.
The period during which Options may be granted under the Plan
shall terminate on December 21, 1991, unless the Plan shall
theretofore have been terminated as hereinabove provided.
Section 15. Shareholder Approval.
--------------------
No Option or Alternative Stock Appreciation Right granted
under the Plan may be exercised in whole or in part until
15
<PAGE>16
adoption of the Plan is approved by the affirmative vote of a
majority of the outstanding shares of the Company entitled to
vote at a meeting of the shareholders duly called for the purpose
of voting thereon, and unless the Plan is approved by the
shareholders within one year of its adoption by the Board of
Directors.
Section 16. Date of Granting of Options.
---------------------------
Nothing contained in the Plan or in any resolution adopted or
to be adopted by the Board of Directors or the shareholders of
the Company shall constitute the granting of any Option
hereunder. The date of grant of an Option pursuant to the Plan
shall be the date of grant thereof by the Committee. Within ten
business days after the date of grant of the Option, the Company
shall notify the Optionee of the grant of the Option, and shall
mail to the Optionee a Non-Qualified Stock Option Agreement, duly
executed by and on behalf of the Company, with the request that
the Optionee execute the Agreement within thirty days after the
date of mailing by the Company of the Agreement to the Optionee.
If the Optionee shall fail to execute the written option
agreement within said thirty-day period, his or her Option shall
be automatically terminated.
Section 17. Stock Appreciation Rights - Limited Rights.
-------------------------------------------
(a) The Committee shall have authority to grant a stock
appreciation right (referred to in this Section 17 as a "Limited
Right") to the holder of any Option granted under the Plan (the
"Related Non-Qualified Stock Option") with respect to all or
some of the shares of Stock covered by such Related Non-Qualified
Stock Option. A Limited Right may be granted either at the time
of grant of the Related Non-Qualified Stock Option or at any time
thereafter during its term (except as otherwise provided in
Section 14 hereof). A Limited Right may be granted to an
Optionee irrespective of whether such Optionee is being granted
or has been granted an Alternative Stock Appreciation Right under
Section 8 hereof. A Limited Right may be exercised only during
the sixty-day period beginning on an "Acceleration Date" (as
defined in Section 7 hereof); provided, however, that if the
Acceleration Date occurs within the six-month period following
the grant of the Limited Right or the grant of the Related
Non-Qualified Stock Option and Alternative Stock Appreciation
Right, whichever is applicable as provided below, then the
Limited Right will be exercisable for a period of sixty days
following expiration of such six-month period. Each Limited
16
<PAGE>17
Right shall be exercisable only if, and to the extent
that, the Related Non-Qualified Stock Option is exercisable.
Notwithstanding the provisions of the two immediately preceding
sentences, no Limited Right may be exercised until the expiration
of six (6) months from the date of grant of the Limited Right
unless otherwise permitted under Rule 16b-3 under the Act in the
case of an Optionee whose Related Non-Qualified Stock Option was
granted prior to the grant of the Limited Right.
Upon the exercise of a Limited Right, such Related
Non-Qualified Stock Option and Alternative Stock Appreciation
Right shall cease to be exercisable to the extent of the shares
of Stock with respect to which such Limited Right is exercised,
but shall be considered to have been exercised to that extent for
purposes of determining the number of shares of Stock available
for the grant of further Options and Alternative Stock
Appreciation Rights pursuant to this Plan. Upon the exercise of
termination of a Related Non-Qualified Stock Option or
Alternative Stock Appreciation Right, the Limited Right with
respect to such Related Non-Qualified Stock Option shall
terminate to the extent of the shares of Stock with respect to
which the Related Non-Qualified Stock Option was exercised or
terminated.
(b) Upon the exercise of a Limited Right, the holder thereof
shall receive in cash whichever of the following amounts is
applicable:
(i) in the case of an exercise of Limited Rights by
reason of the occurrence of an Offer (as defined in Section
7 hereof), an amount equal to the Offer Spread (as defined
in Section 17(d) hereof);
(ii) in the case of an exercise of Limited Rights by
reason of shareholder approval of an agreement described
in Section 7, an amount equal to the Merger Spread (as
defined in Section 17(f) hereof); or
(iii) in the case of an exercise of Limited Rights
by reason of stockholder approval of a plan of liquidation
described in Section 7, an amount equal to the Liquidation
Spread (as defined in Section 17(h); or
(iv) in the case of an exercise of Limited Rights by
reason of an acquisition of Stock described in Section 7,
an amount equal to the Acquisition Spread (as defined in
Section 17(j) hereof).
17
<PAGE>18
(c) The term "Offer Price per Share" as used in this Section
17 shall mean, with respect to the exercise of any Limited Right
by reason of the occurrence of an Offer, the greater of (i) the
highest price per share of Stock paid in any Offer, which Offer
is in effect at any time during the sixty-day period ending on
the date on which such Limited Right is exercised, or (ii) the
highest Fair Market Value per Share of the Stock during such
sixty-day period. Any securities or property which are part or
all of the consideration paid for shares of Stock in the Offer
shall be valued in determining the Offer Price per Share at the
higher of (A) the valuation placed on such securities or property
by the corporation, person or other entity making such Offer or
(B) the valuation placed on such securities or property by the
Committee.
(d) The term "Offer Spread" as used in this Section 17 shall
mean an amount equal to the product computed by multiplying (i)
the excess of (A) the Offer Price per Share over (B) the Option
price per share of Stock at which the Related Non-Qualified Stock
Option is exercisable, by (ii) the number of shares of Stock with
respect to which such Limited Right is being exercised.
(e) The term "Merger Price per Share" as used in this
Section 17 shall mean, with respect to the exercise of any
Limited Right by reason of shareholder approval of an agreement
described in Section 7, the greater of (i) the fixed or formula
price for the acquisition of shares of Stock specified in such
agreement if such fixed or formula price is determinable on the
date on which such Limited Right is exercised, and (ii) the
highest Fair Market Value per Share of the Stock during the
sixty-day period ending on the date on which such Limited Right
is exercised. Any securities or property which are part or all
of the consideration paid for shares of Stock pursuant to such
agreement shall be valued in determining the Merger Price per
Share at the higher of (A) the valuation placed on such
securities or property by the corporation, person or other entity
which is a party with the Company to such agreement or (B) the
valuation placed on such securities or property by the Committee.
(f) The term "Merger Spread" as used in this Section 17
shall mean an amount equal to the product computed by multiplying
(i) the excess of (A) the Merger Price per Share over (B) the
Option price per share of Stock at which the Related
Non-Qualified Stock Option is exercisable, by (ii) the number of
shares of Stock with respect to which such Limited Right is being
exercised.
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<PAGE>19
(g) The term "Liquidation Price per Share" as used in this
Section 17 shall mean, with respect to the exercise of any
Limited Right by reason of shareholder approval of a plan of
liquidation described in Section 7, the greater of (i) the
highest amount paid or to be paid per share of Stock pursuant to
the plan of liquidation as determined by the Committee and (ii)
the highest Fair Market Value per Share of the Stock during the
sixty-day period ending on the date on which such Limited Right
is exercised. Any securities or property which (A) are part or
all of the consideration paid for shares of Stock pursuant to
such plan of liquidation or (B) are to be sold and the proceeds
distributed in liquidation shall be valued in determining the
Liquidation Price per share at the higher of (i) the valuation
placed on such securities or property by the Company upon the
distribution of such securities or property in accordance with
the plan of liquidation, if known, at the time of the exercise
of such Limited Right, or (ii) the valuation placed on such
securities or property by the Committee.
(h) The term "Liquidation Spread" as used in this Section 17
shall mean an amount equal to the product computed by multiplying
(i) the excess of (A) the Liquidation Price per Share over (B)
the Option price per share of Stock at which the Related
Non-Qualified Stock Option is exercisable by (ii) the number of
shares of Stock with respect to which such Limited Right is
being exercised.
(i) The term "Acquisition Price per Share" as used in this
Section 17 shall mean, with respect to the exercise of any
Limited Right by reason of an acquisition of Stock described in
Section 7, the greater of (i) the highest price per share stated
on the Schedule 13D, 14D-1 or similar schedule (or amendment
thereto) filed by the holder of 50% or more of the Company's
voting power which gives rise to the exercise of such Limited
Right, and (ii) the highest Fair Market Value per Share of the
Stock during the sixty-day period ending on the date the Limited
Right is exercised.
(j) The term "Acquisition Spread" as used in this Section 17
shall mean an amount equal to the product computed by multiplying
(i) the excess of (A) the Acquisition Price per Share over (B)
the Option price per share of Stock at which the Related
Non-Qualified Stock Option is exercisable, by (ii) the number of
shares of Stock with respect to which such Limited Right is being
exercised.
(k) Notwithstanding any other provision of the Plan, an
Alternative Stock Appreciation Right granted pursuant to Section
8 hereof may not be exercised at a time when any Limited Rights
held by the holder of such Right may be exercised.
19
<PAGE>20
(l) The term "Fair Market Value per Share of the Stock" as
used in this Section 17 shall mean, as of a particular date, (i)
if the shares of Stock are then listed on a national securities
exchange, the definition provided in Section 2(f) hereof, or (ii)
if the shares of Stock are not then listed on a national
securities exchange, the average of the closing bid and asked
prices for shares of Stock in the over-the-counter market for the
last preceding date on which there was a sale of Stock in such
market.
20
<PAGE>1
EX-10.9
ANHEUSER-BUSCH COMPANIES, INC.
1989 INCENTIVE STOCK PLAN
(AS AMENDED DECEMBER 20, 1989, DECEMBER 19, 1990,
DECEMBER 15, 1993, AND DECEMBER 20, 1995)
SECTION 1. PURPOSE.
The purpose of the Plan is to attract, retain, motivate and reward
employees of the Company, its Subsidiaries and Affiliates with compensatory
arrangements that involve Options and SARs.
SECTION 2. DEFINITIONS.
(a) "Act" means the Securities Exchange Act of 1934, as amended from
time to time.
(b) "Affiliate" means any entity in which the Company has a
substantial direct or indirect equity interest (other than a Subsidiary),
as determined by the Committee.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code as in effect from time to
time.
(e) "Committee" means the Stock Option Committee described in Section
12 hereof.
(f) "Company" means Anheuser-Busch Companies, Inc. and its
successors.
(g) "Disability" means the condition of being "disabled" within the
meaning of Section 422(c)(6) of the Code or any successor provision.
(h) "Eligible Employee" means a person who is eligible to receive an
option under Section 4 of the Plan.
(i) "Employer" means the Company, the Subsidiary, or the Affiliate
which employs the Optionee.
(j) "Fair Market Value" of Stock on a given date means (i) the
average of the highest and lowest selling prices per share of Stock
reported on the New York Stock Exchange Composite Tape or similar facility
for such date, (ii) if Stock is not listed on the New York Stock Exchange,
the average of the highest and lowest selling prices per share of Stock as
reported for such date on the principal stock exchange in the U.S. on which
Stock is listed (as determined by the Committee), or (iii) if neither of
the preceding clauses is applicable, the value per share determined by the
Committee in a manner consistent with the Treasury Regulations under
Section 2031 of the Internal Revenue Code. If no sale of Stock occurs on
such date, but there were sales reported within a reasonable period both
before and after such date, the weighted average of the means between the
highest and lowest selling prices on the nearest date before and the
nearest date after such date shall be used, with the average to be weighted
inversely by the respective numbers of trading days between the selling
dates and such date.
<PAGE>2
(k) "ISO" or "Incentive Stock Option" means an option to purchase
Stock which is designated by the Committee as an "Incentive Stock Option"
and which qualifies as an "incentive stock option" under Section 422 (or
any successor provision) of the Code.
(l) "Limited Right" has the meaning given in Section 7.
(m) "NQSO" or "Non-Qualified Stock Option" means an option to
purchase Stock which is designated by the Committee as a "Non-Qualified
Stock Option," or which is designated by the Committee as an ISO but which
fails or ceases to qualify as an "incentive stock option" under the Code.
(n) "Option" means an ISO or an NQSO.
(o) "Option Agreement" means the written agreement referred to in
Section 5(a) between the Company and the Optionee evidencing an Option or
SAR.
(p) "Optionee" means a person to whom an Option or SAR is granted
pursuant to the Plan.
(q) "Plan" means the Anheuser-Busch Companies, Inc. 1989 Incentive
Stock Plan, as amended from time to time.
(r) "Reporting Person," as of a given date, means an Optionee who
would be required to report a purchase or sale of Stock occurring on such
date to the Securities and Exchange Commission pursuant to Section 16(a) of
the Act and the rules and regulations thereunder.
(s) "Rule 16b-3" means Rule 16b-3 (as amended from time to time)
promulgated by the Securities and Exchange Commission under the Act, and
any successor thereto, as in effect as to the Plan.
(t) "SAR" means a stock appreciation right, which is the right to
receive cash, Stock, or other property having a value on the date the SAR
is exercised equal to (i) the excess of the Fair Market Value of one share
of Stock on the exercise date over (ii) the base price of the SAR. The
term "SAR" does not include a Limited Right.
(u) "Stock" means shares of the common stock of the Company, par
value $1.00 per share, or such other class or kind of shares or other
securities as may be applicable under Section 10.
(v) "Subsidiary" means a "subsidiary corporation" of the Company as
defined in Section 424 (or any successor provision) of the Code.
(w) "Withholding Taxes" means, in connection with an Option or SAR
(including without limitation the receipt of Stock pursuant to the exercise
of an NQSO or SAR or the disposition of ISO shares), (a) the total amount
of Federal and state income taxes, social security taxes and other taxes
which the Employer of the Optionee is required to withhold ("Required
Withholding Taxes") plus (b) any other such taxes which the Employer, in
its sole discretion, withholds at the request of the Optionee.
2
<PAGE>3
SECTION 3. MAXIMUM SHARES.
(a) The maximum number of shares of Stock which may be issued to
Eligible Employees pursuant to Options and SARs under the Plan shall be
22,000,000 shares, subject to adjustment as provided in Section 10. For
this purpose:
(i) Only shares actually issued pursuant to the grant or exercise of
an Option or SAR shall be counted against the Plan maximum.
(ii) Except to the extent prohibited by Rule 16b-3, Shares which
are forfeited by an Optionee after issuance shall be deemed to have
never been issued under the Plan and accordingly shall not be counted
against the Plan maximum.
(iii) The number of shares available for the grant of new Options
and SARs at any particular time shall be (A) the maximum number of
shares specified above (as adjusted), minus (B) the sum of the number
of shares issued under the Plan prior to that time and the number of
shares issuable upon exercise of Options and SARs outstanding at that
time.
In its discretion, the Company may issue treasury shares or authorized but
previously unissued shares.
(b) Notwithstanding paragraph (a) above, the maximum number of shares
for which ISOs may be granted under the Plan shall be 22,000,000 shares,
subject to adjustment as provided in Section 10, regardless of the fact
that a lesser number of shares is issued pursuant to the exercise of ISOs.
(c) Shares issued under other plans of the Company shall not be counted
against the Plan maximum.
(d) Notwithstanding any other provisions of this Plan, the maximum
number of options that may be granted to any Eligible Employee during any
calendar year shall be 500,000, subject to adjustment as provided in
Section 10.
SECTION 4. ELIGIBILITY.
Officers and management employees of the Company, Subsidiaries or
Affiliates shall be eligible to receive Options and SARs under the Plan. A
Director of the Company or a Subsidiary or an Affiliate shall be eligible
only if he or she also is an officer or employee of the Company, a
Subsidiary or an Affiliate. Notwithstanding the foregoing, persons
employed only by Affiliates shall not be eligible to receive ISOs.
3
<PAGE>4
SECTION 5. OPTION AND SAR GRANTS.
(a) Subject to the limitations in this Plan, the Committee may cause
the Company to grant Options and/or SARs to such Eligible Employees, at
such times, in such amounts, for such periods, becoming exercisable at such
times, with such option prices or base prices, and subject to such other
terms, conditions, and restrictions as the Committee deems appropriate.
Each Option or SAR shall be evidenced by a written Option Agreement between
the Company and the Optionee. In granting an Option or SAR, the Committee
may take into account any factor it deems appropriate and consistent with
the purpose of the Plan. Options and/or SARs may be granted as additional
compensation to the Optionee, or in lieu of other compensation. The
Committee may delegate to officers of the Company from time to time
the authority to determine the sizes, dates, and other terms and conditions
of Options and/or SARs granted hereunder, provided that (i) the Committee
may impose such limitations and conditions upon any such delegated
authority as it deems appropriate, and (ii) the Committee may not delegate
any such authority with respect to Options or SARs granted to a Reporting
Person.
(b) Options and SARs may be granted separately or as alternatives to
each other, except that (i) Options and SARs shall be granted as
alternatives to each other only if the option prices and the base prices
are equal, (ii) Limited Rights shall not be granted separately, and shall
be granted only as alternatives to Options and/or SARs, (iii) SARs and/or
Limited Rights which are alternatives to ISOs may be granted only at the
same time the ISO is granted, and (iv) SARs which are alternatives to
Options, and Limited Rights which are alternatives to Options or SARs,
shall expire or terminate at the same time as the Option or SARs to which
they are alternatives.
(c) All or any portion of any payment to an Optionee whether in cash
or shares of Stock, may be deferred to a later date if and as provided in
the Option Agreement. Deferrals may be for such periods and upon such
terms and conditions (including the provision of interest, dividend
equivalents, or other return on such amounts) as the Committee may
determine.
(d) Option Agreements may contain any provision approved by the
Committee, not inconsistent with Section 9, relating to the period for
exercise after termination of employment, death or Disability.
(e) Option Agreements may, in the discretion of the Committee,
contain a provision permitting an Optionee to designate the person who may
exercise an Option or SAR upon the Optionee's death, either by Will or by
appropriate notice to the Company.
(f) Notwithstanding any other provision of this Section 5, (i) no
Option or SAR shall contain a so-called "reload" feature under which
Options or SARs are automatically granted to Optionees upon exercise of
Options or SARs, and (ii) no Option or SAR shall be granted in exchange for
a so-called "underwater" Option or SAR which has an option price or base
price in excess of the Fair Market Value of the Stock (nor shall an
underwater Option or SAR be amended to reduce its option price or base
price).
4
<PAGE>5
SECTION 6. PROVISIONS GOVERNING OPTIONS AND SARS.
(a) If Options and SARS are alternatives to each other, the exercise
of all or part of one automatically shall cause an immediate equal and
corresponding termination of the other.
(b) An Optionee shall have none of the rights of a shareholder with
respect to shares of Stock subject to his or her Option or SAR until shares
are issued in his or her name.
(c) Nothing in the Plan or any Option Agreement shall confer on any
person any right or expectation to continue in the employ of his or her
Employer, or shall interfere in any manner with the absolute right of the
Employer to change or terminate such person's employment at any time for
any reason or for no reason.
(d) Options and SARs shall not be transferable other than by will or
the laws of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee or his or her guardian or legal
representative.
(e) Except as provided in Section 10(b), (A) the option price per
share of an Option or the base price of an SAR shall not be less than Fair
Market Value on the Option's or the SAR's grant date, nor less than the par
value of a share of Stock, except that an SAR which is an alternative to an
Option but which is granted at a later time may have a base price equal
to the option price even though the base price is less than Fair Market
Value on the date the SAR is granted.
(f) The grant of an Option and the Option Agreement for an Option
must clearly identify the Option as either an ISO or as an NQSO.
(g) In the case of an SAR, the Option Agreement may specify the form
of payment of SARs or may provide that the form is to be determined at a
later date, and may require the satisfaction of any rules or conditions in
connection with receiving payment in any particular form. If the Optionee
is a Reporting Person at the time of grant or during the SAR's term and is
given an election to receive cash in full or partial settlement of an SAR,
the Committee shall have sole discretion to approve or disapprove such
election at any time after it is made.
5
<PAGE>6
SECTION 7. LIMITED RIGHTS.
(a) The Committee shall have authority to grant limited stock
appreciation rights ("Limited Rights") to the holder of any Option or SARs
granted under the Plan (the "Related Option or SAR") with respect to all or
some of the shares of Stock covered by such Related Option or SAR. A
Limited Right may be granted either at the time of grant of the Related
Option or SAR or (except in the case of an ISO) at any time thereafter
during its term. A Limited Right may be granted to an Optionee with
respect to Options irrespective of whether such Optionee is being granted
or has been granted an SAR. Limited Rights shall be transferable only when
the Related Option or SAR is transferable and under the same conditions,
and shall be exercisable during the Optionee's lifetime only by the
Optionee or his or her guardian or legal representative. If an ISO is a
Related Option to Limited Rights, the Limited Rights may be exercised only
if the Fair Market Value per share of Stock on the exercise date exceeds
the option price per share of the ISO. A Limited Right may be
exercised only during the sixty-day period beginning on an "Acceleration
Date"(as defined in Section 11(a) hereof); provided, however, that if the
Acceleration Date occurs within the six month period following the grant of
the Limited Right or the grant of the Related Option or SAR, whichever is
applicable as provided below, to a Reporting Person, then the Limited
Right will be exercisable by the Reporting Person for a period of thirty
days following expiration of such six-month period, or, if earlier, thirty
days following the Optionee's death or Disability. Each Limited Right
shall be exercisable only if, and to the extent that, the Related Option or
SAR is exercisable (ignoring paragraph (j) below). Notwithstanding the
provisions of the two immediately preceding sentences, no Limited Right may
be exercised by a Reporting Person until the expiration of six months from
the date of grant of the Limited Right unless otherwise permitted by Rule
16b-3 in the case of an SAR granted prior to the grant of the Limited
Right.
(b) Upon the exercise of Limited Rights, the holder thereof shall
receive in cash whichever of the following amounts is applicable:
(i) in the case of an exercise of Limited Rights by reason of an
acquisition of Stock described in Section 11(a), an amount equal to the
Acquisition Spread (as defined in paragraph (d) below); or
(ii) in the case of an exercise of Limited Rights by reason of
shareholder approval of an agreement described in Section 11(a), an
amount equal to the Merger Spread (as defined in paragraph (f) below);
(iii) in the case of an exercise of Limited Rights by reason of a
change in the composition of the Board of Directors as described in
Section 11(a), an amount equal to the Board Change Spread (as defined
in paragraph (g) below);
(iv) in the case of an exercise of Limited Rights by reason of
stockholder approval of a plan of liquidation described in Section
11(a), an amount equal to the Liquidation Spread (as defined in
paragraph (i) below);
provided, however, that if an ISO is a Related Option to the Limited
Rights, the cash received for each Right shall not exceed 100% of the
6
<PAGE>7
spread under the ISO, i.e., the difference between the option price of the
ISO and the Fair Market Value of Stock on the date the Limited Right is
exercised.
(c) The term "Acquisition Price per Share" as used in this Section
shall mean, with respect to the exercise of any Limited Right by reason of
an acquisition of Stock described in Section 11(a), the greater of (i) the
highest price per share of Stock stated on the Schedule 13D, 14D-1 or
similar schedule (or amendment thereto) filed by the holder of 50% or more
of the Company's voting power which gives rise to the exercise of such
Limited Right, and (ii) the highest Fair Market Value per share of Stock
during the sixty-day period ending on the date the Limited Right is
exercised.
(d) The term "Acquisition Spread" as used in this Section shall mean an
amount equal to the product computed by multiplying (i) the excess of (A)
the Acquisition Price per Share over (B) the option or base price per share
of Stock at which the Related Option or SAR is exercisable, by (ii) the
number of Limited Rights being exercised.
(e) The term "Merger Price per Share" as used in this Section shall
mean, with respect to the exercise of any Limited Right by reason of
shareholder approval of an agreement described in Section 11(a), the
greater of (i) the fixed or formula price for the acquisition of
shares of Stock specified in such agreement if such fixed or formula price
is determinable on the date on which such Limited Right is exercised, and
(ii) the highest Fair Market Value per share of Stock during the sixty-day
period ending on the date on which such Limited Right is exercised. Any
securities or property which are part or all of the consideration paid for
shares of Stock pursuant to such agreement shall be valued in determining
the Merger Price per share at the higher of (A) the valuation placed on
such securities or property by the corporation, person or other entity
which is a party with the Company to such agreement or (B) the valuation
placed on such securities or property by the Committee.
(f) The term "Merger Spread" as used in this Section shall mean an
amount equal to the product computed by multiplying (i) the excess of (A)
the Merger Price per Share over (B) the option or base price per share of
Stock at which the Related Option or SAR is exercisable, by (ii) the number
of Limited Rights being exercised.
(g) The term "Board Change Spread" as used in this Section shall mean,
with respect to the exercise of any Limited Rights by reason of a change in
the composition of the Board described in Section 11(a), an amount equal to
the product computed by multiplying (i) the excess of (A) the highest Fair
Market Value per share of Stock during the sixty-day period ending on the
date the Limited Rights are exercised over (B) the option or base price per
share of Stock at which the Related Option or SAR is exercisable, by (ii)
the number of Limited Rights being exercised.
(h) The term "Liquidation Price per Share" as used in this Section
shall mean, with respect to the exercise of any Limited Right by reason of
shareholder approval of a plan of liquidation described in Section 11(a)
the greater of (i) the highest amount paid or to be paid per share of Stock
7
<PAGE>8
pursuant to the plan of liquidation as determined by the Committee and
(ii) the highest Fair Market Value per share of Stock during the sixty-day
period ending on the date on which such Limited Right is exercised. Any
securities or property which (A) are part or all of the consideration paid
for shares of Stock pursuant to such plan of liquidation or (B) are to be
sold and the proceeds distributed in liquidation shall be valued in
determining the Liquidation Price per share at the higher of (i) the
valuation placed on such securities or property by the Company upon the
distribution of such securities or property in accordance with the plan of
liquidation, if known, at the time of the exercise of such Limited Right,
or (ii) the valuation placed on such securities or property by the
Committee.
(i) The term "Liquidation Spread" as used in this Section shall mean an
amount equal to the product computed by multiplying (i) the excess of (A)
the Liquidation Price per Share over (B) the option or base price per share
of Stock at which the Related Option or SAR is exercisable, by (ii) the
number of Limited Rights being exercised.
(j) Notwithstanding any other provision of the Plan, an SAR may not be
exercised at a time when any Limited Rights held by the holder of such SAR
may be exercised.
(k) Notwithstanding the provisions of Section 7(a) above, if an
Acceleration Date specified in Section 11(a)(i) occurs and if such Date
occurs in connection with a Window Period Situation, then each Optionee who
is a Restricted Reporting Person may exercise his or her Limited Rights
only during the Window Period immediately following the Acceleration
Date, subject to the following exceptions: (i) if the Acceleration Date
occurs during the six-month period following the grant of a Limited Right
or the grant of the Related Option or SAR, whichever is applicable as
provided in the last sentence of Section 7(a) above, then such Limited
Right may be exercised by such Optionee only during the Window Period
immediately following the expiration of such six-month period or, if
earlier, following the death or Disability of such Optionee; and (ii) if
such Acceleration Date or the expiration of such six-month period (as
applicable) occurs during a Window Period, such Optionee may exercise such
Limited Right either during the remainder of such Window Period or during
the next whole Window Period thereafter. For the purposes of this
paragraph, a "Window Period Situation" exists (A) if one or more Reporting
Persons are the "Person" or members of the group constituting the "Person"
specified in Section 11(a)(i) below, or (B) if, by excluding all voting
securities acquired by the "Person" directly from the Company, no
Acceleration Date would occur. Each Reporting Person specified in clause
(A) above, and all Reporting Persons in the case of a clause (B) Window
Period Situation, are "Restricted Reporting Persons" for the purposes of
this paragraph. A "Window Period" is the period defined from time to time
in paragraph (e)(3)(iii) of Rule 16b-3, or the corresponding paragraph(s)
of any successor to Rule 16b-3.
8
<PAGE>9
SECTION 8. STOCK ISSUANCE, PAYMENT, AND WITHHOLDING.
(a) An Optionee may pay the option price of an Option in cash, Stock
(including shares of previously-owned Stock, or Stock issuable in
connection with the Option), or other property, to the extent permitted or
required by the Option Agreement or the Committee from time to time. The
Committee may permit deemed or constructive transfers of shares in lieu
of actual transfer and physical delivery of certificates. Except to the
extent prohibited by applicable law, the Committee or its delegate may take
any necessary or appropriate steps in order to facilitate the payment of
any such purchase price. Without limiting the foregoing, the Committee may
allow the Optionee to defer payment of the option price, or may cause
the Company to loan the option price to the Optionee or to guaranty that
any shares to be issued will be delivered to a broker or lender in order to
allow the Optionee to borrow the purchase price. The Committee may require
satisfaction of any rules or conditions in connection with paying the
Option price at any particular time, in any particular form, or with
the Company's assistance.
(b) When the Optionee's Employer becomes required to collect and pay
Required Withholding Taxes, the Optionee shall promptly reimburse the
Company or Employer (as required by the Committee) for the amount of such
Required Withholding Taxes in cash, unless the Option Agreement or the
Committee permits or requires payment in another form. In the discretion
of the Committee or its delegate and at the Optionee's request, the
Committee or its delegate may cause the Company or Employer to pay
Withholding Taxes in excess of Required Withholding Taxes on behalf of an
Optionee, which shall be reimbursed by the Optionee. The Committee may
allow an Optionee to reimburse the Company or Employer for payment of
Withholding Taxes with shares of Stock or other property. The
Committee may require the satisfaction of any rules or conditions in
connection with any non-cash payment of Withholding Taxes. If an Optionee
is a Reporting Person at the time of grant or during the Option's term and
is given an election to pay any Withholding Taxes with Stock, the Committee
shall have sole discretion to approve or disapprove such election at any
time after the election is made.
(c) If provided in the Option Agreement relating to an ISO, the
Committee may prohibit the transfer by an Optionee of shares of Stock
issued to him or her upon exercise of an ISO into the name of a nominee,
and the Committee may require the placement of a legend on certificates for
such shares reflecting such prohibition.
SECTION 9. FORFEITURES.
(a) If any Optionee voluntarily terminates employment within two years
of the grant of an Option or SAR, or is dismissed from employment at any
time for any reason, such Option or SAR shall immediately terminate and be
forfeited to the extent not previously exercised.
(b) Notwithstanding any other provision in this Plan except paragraph
(c) below, the receipt of any Option or SAR, and the receipt of any share
of Stock, cash, or other benefit in connection with such Option or SAR,
shall be subject to the following provisions:
9
<PAGE>10
(i) At all times during his or her employment with the Company or a
Subsidiary or Affiliate, the Optionee shall continuously satisfy his or
her duties of loyalty and faithful service to the Company and his or
her Employer and shall refrain from engaging in any undisclosed
conflict of interest or from otherwise acting in any manner inimical to
or contrary to the best interests of the Company or Employer. Any
violation of law or of any Company or Employer policy or the Business
Practices and Ethics Manual (or any manual, or portion thereof, which
replaces such Manual) of the Company shall be considered conduct
inimical to or contrary to the best interests of the Company and
Employer for the purposes of this Section 9(b). The exercise of any
Option or SAR, or the acceptance of any share of stock, cash, or other
benefit hereunder in connection with any Option or SAR shall be deemed
to be the certification by the Optionee that he or she has satisfied
this condition. In addition, the Optionee shall furnish to the
Committee on request any other information concerning satisfaction of
such condition which the Committee may request.
(ii) This Section 9(b) is intended to establish, as a condition to
the realization of economic benefits under the Plan, a standard of
conduct consistent with (A) the duties of loyalty and faithful
performance of services imposed on an employee by the common law, and
(B) the Company's and Employer's published standards and policies which
the Optionee is bound to observe. This Section 9(b) shall in no way
impair or derogate from the rights or remedies which the Company or
Employer may have at law or in equity or under any employment contract
or agreement with an Optionee to prevent or to recover damages for the
disclosure of trade secrets, or to recover any restitution or damages
properly owing the Company or Employer because of any theft, fraud,
embezzlement, or other illegal conduct on the part of an Optionee.
(iii) If the Committee determines that an Optionee has not observed
the standard of conduct required by this Section 9(b), the Committee
may require the Optionee to forfeit any right to or in any outstanding
Option or SAR, as of the date such determination is made, and may
require repayment of any Stock or cash received in connection with any
Option or SAR by such Optionee after the act or acts of misconduct
which gave rise to the Committee's determination.
(iv) This Section 9(b) shall not be interpreted as requiring the
Committee to take action in each and every instance of suspected
misconduct, and in determining to attempt to enforce the forfeiture and
repayment provisions of this Section 9(b), the Committee may consider,
among other things, the nature of the misconduct, its seriousness, the
impact on the Company, the possible economic effects, the circumstances
surrounding the discontinuance of the Optionee's employment with
the Employer, and the amount of proof which the Employer may have of
any alleged misconduct. Any decision by the Committee to forego
enforcement of this Section 9(b) in whole or in part in any particular
instance shall in no way constitute a waiver of the right to enforce
such Section in any other instance.
(v) During the period of any investigation into whether an Optionee
has engaged in conduct prohibited by this Section 9(b), the Optionee's
rights to receive delivery of any Stock or cash, or to have any
transfer of Stock recognized on the stock books of the Company, shall
be suspended. An Optionee may exercise Options or SARs subject to the
prior sentence.
10
<PAGE>11
(c) The Committee may include in an Option Agreement such provisions as
it shall deem appropriate, in its discretion, to deter competition with the
Company, a Subsidiary or an Affiliate, including provisions pertaining to
the refund of any economic benefit received by an Optionee from exercising
an Option. In addition, the Committee may waive, in whole or part, and for
any reason the Committee deems appropriate, any termination of an Option
or group of Options caused by this Section 9.
(d) The provisions of this Section 9 shall terminate upon the
occurrence of an Acceleration Date described in Section 11.
SECTION 10. ADJUSTMENTS AND ACQUISITIONS.
(a) In the event of (i) any change in the outstanding shares of Stock
by reason of any stock split, combination of shares, stock dividend,
reorganization, merger, consolidation, or other corporate change having a
similar effect, (ii) any separation of the Company including a spin-off or
other distribution of stock or property by the Company, or (iii) any
distribution to stockholders generally other than a normal dividend, the
Committee shall make such equitable adjustments to the Plan and to
outstanding Options, SARs and Limited Rights as it shall deem appropriate
in order to prevent the dilution or enlargement of (a) the Options,
SARs and Limited Rights which may be granted, the shares of Stock which may
be issued, or the shares for which ISOs may be granted under the Plan, (b)
the economic value of outstanding Options, SARs and Limited Rights or (c)
the limitations imposed by Section 3(d) of this Plan, provided, however,
that the Committee shall not make any adjustment which would constitute or
result in an increase in the aggregate number of Shares available under
the Plan, or the annual limit on the number of options which may be granted
to an Eligible Employee under Section 3(d) of this Plan, requiring
shareholder approval under Section 422 or Section 162(m) of the Code. Any
such determination by the Committee shall be conclusive and binding on all
concerned.
(b) In the event the Company or a Subsidiary enters into a transaction
described in Section 424(a) of the Code with any other corporation, the
Committee may grant Options, SARs, or Limited Rights to employees or former
employees of such corporation in substitution of stock options, stock
appreciation rights or limited stock appreciation rights previously granted
to them by such corporation upon such terms and conditions as shall be
necessary to qualify such grant as a substitution described in Section
424(a) of the Code.
SECTION 11. ACCELERATION.
(a) If, while unexercisable Options or SARs remain outstanding under
the Plan,
(i) any Person (as defined herein) becomes the beneficial owner
directly or indirectly (within the meaning of Rule 13d-3 under the Act)
of more than 50% of the Company's then outstanding voting securities
(measured on the basis of voting power);
(ii) the shareholders of the Company approve a definitive agreement
to merge or consolidate the Company with any other corporation, other
than an agreement providing for (x) a merger or consolidation which
11
<PAGE>12
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee
or other fiduciary holding securities under an employee benefit plan of
the Company, at least 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (y) a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person acquires more than 50% of
the combined voting power of the Company's then outstanding
securities;
(iii) a change occurs in the composition of the Board of Directors
during any period of twenty-four consecutive months such that
individuals who at the beginning of such period were members of the
Board of Directors cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved;
or
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets,
then on the date as of which any of the events described in clauses (i)
through (iv) occurs (such date being referred to as an "Acceleration
Date"), each Option and SAR automatically shall become exercisable. For
purposes of this paragraph, "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof; however, a Person shall not include (aa) the Company or
any of its subsidiaries, (bb) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries, (cc) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (dd) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of Stock.
(b) Except to the extent prohibited by Rule 16b-3 in the case of
Reporting Persons, the Committee may accelerate the date on which any
Options and SARs become exercisable and may remove any restrictions on such
Options or SAR at any time after grant and for any reason the Committee
deems appropriate.
(c) All Options and SARs shall automatically become exercisable upon a
termination of employment caused by the death or Disability of the
Optionee.
12
<PAGE>13
SECTION 12. ADMINISTRATION.
(a) The Plan shall be administered by a Stock Option Committee appointed
by the Board consisting of three or more persons, each of whom at all times
shall be a member of the Board, a "disinterested person" as defined in Rule
16b-3 and an "outside director" within the meaning of Section
162(m)(4)(C)(i) of the Code. Committee members shall not be eligible
for selection to receive Options or SARs under the Plan. The initial
Committee shall consist of the members of the "Stock Option Committee"
administering the Anheuser-Busch 1981 Non-Qualified Stock Option Plan at
the time this Plan is adopted by the Board.
(b) A majority of the members of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
members of the Committee, shall be the acts of the Committee. From time to
time the Committee may adopt, amend, and rescind such rules and regulations
for carrying out the Plan and implementing Option Agreements, and the
Committee may take such action in the administration of the Plan, as it
deems proper. The interpretation of any provisions of the Plan by the
Committee shall be final and conclusive unless otherwise determined by the
Board.
SECTION 13. AMENDMENT, TERMINATION, SHAREHOLDER APPROVAL.
(a) The Board may amend or terminate the Plan at any time, except that
without the approval of the Company's shareholders, no amendment shall (i)
increase the maximum number of shares issuable, or the maximum number of
shares for which ISOs may be granted, under the Plan, (ii) change the class
of persons eligible to be Optionees, (iii) change the annual limit on
options which may be granted to an Eligible Employee provided in Section
3(d) or (iv) change the provisions of this Section 13(a).
(b) The Committee may amend the Plan from time to time to the extent
necessary to (i) comply with Rule 16b-3 and (ii) prevent benefits under the
Plan from constituting "applicable employee remuneration" within the
meaning of Section 162(m) of the Code.
(c) No Options or SARs may be granted under the Plan after September
26, 1999.
(d) Notwithstanding any other provision of the Plan, no Option or SAR
granted under the Plan on or after December 15, 1993 may be exercised
unless and until either (i) the amendment to the Plan adopted by the Board
on December 15, 1993 which added Section 3(d) to this Plan is approved by
the Company's shareholders within twelve months of such adoption, or (ii)
if earlier, the Company receives an opinion of counsel or other evidence
satisfactory to it that such shareholder approval is not required by the
Code in order to prevent benefits under the Plan from constituting
"applicable employee remuneration" within the meaning of Section 162(m) of
the Code.
(e) The approval by shareholders described in this Section shall
consist of the approving vote of the holders of a majority of the
outstanding shares of Stock present (in person or by proxy) at a meeting of
the shareholders at which a quorum is present, unless a greater vote
is required by the Company's charter or by-laws or by applicable law.
13
<PAGE>14
SECTION 14. ADDITIONAL PAYMENTS.
The Committee may grant an Optionee the right to receive additional
compensation in cash or other property (in addition to any cash or other
property payable under the terms of the Option or SAR itself) upon an
Option or SAR becoming exercisable or being exercised provided that (i) in
the case of an ISO such compensation is includible in income under Sections
61 and 83 of the Code at the time of such exercise and (ii) no such right
may be granted in connection with any SAR or Limited Right which is an
alternative to an ISO.
SECTION 15. MISCELLANEOUS.
(a) Each provision of the Plan and each Option Agreement relating to an
ISO shall be construed so that each ISO shall be an incentive stock option
as defined in Section 422 of the Code or any statutory provision that may
replace Section 422, and any provisions thereof which cannot be so
construed shall be disregarded. Except as provided in Section 9, no
discretion granted or allowed to the Committee under the Plan shall apply
to an ISO after its grant except to the extent the Option Agreement with
respect to the ISO grant shall so provide. Notwithstanding the foregoing,
nothing shall prohibit an amendment to an Option Agreement with respect to
an ISO which would change its status to an NQSO, so long as the Company and
the Optionee shall consent to such amendment.
(b) Without amending the Plan, Options and SARs may be granted to
Eligible Employees who are foreign nationals or who are employed outside
the United States or both, on such terms and conditions different from
those specified in the Plan as may, in the judgment of the Committee, be
necessary or desirable to further the purposes of the Plan. Such different
terms and conditions may be reflected in Addenda to the Plan. However, in
the case of an ISO, no such different terms or conditions shall be employed
if such term or condition constitutes, or in effect results in, an increase
in the aggregate number of shares which may be issued under the Plan or a
change in the definition of Eligible Employee.
(c) Notwithstanding any other provision in the Plan, the Committee
shall not act with respect to any Reporting Person in a manner which would
contravene any requirement of Rule 16b-3 as in effect at the time of such
action.
(d) Amendments to this Plan which were adopted by the Board on December
15, 1993 shall not apply to Options granted prior to that date except for
(i) the definition of "Required Withholding Tax" now contained in Section
2(w) and (ii) the amendment adding the express authority for beneficiary
designations which is contained in Section 5(e).
14
<PAGE>1
EX-10.13
SECOND AMENDMENT TO THE
ANHEUSER-BUSCH COMPANIES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AS AMENDED AND RESTATED OCTOBER 1, 1993
Pursuant to Section 22 of the Anheuser-Busch Companies, Inc.
Supplemental Executive Retirement Plan (the "Plan"), Anheuser-
Busch Companies, Inc. (the "Company") reserved the right to amend
the Plan from time to time. The Company hereby amends the Plan
as set forth below, effective as of January 1, 1996.
1. Section 1(c) is amended to read as follows:
"Basic Plan" means the Supplement for the Anheuser-Busch
Salaried Employees Pension Plan maintained as part of the
Anheuser-Busch Companies Pension Plan as now in effect or as
hereafter amended.
2. The third sentence of Section 2 is amended to read as
follows:
Except as provided in Section 18, once an individual becomes a
Participant, he shall continue to participate until
termination of employment with a Participating Employer even
if such individual no longer satisfies the grade and
compensation requirements to remain an Eligible Employee.
3. The following new paragraph is added at the end of Section
3, after (d):
In no event shall a Participant's benefits calculated
hereunder be less than the difference between (a) the benefit
actually payable under the Basic Plan, and (b) the benefit
that would have been payable under the Basic Plan without
regard to the limitation imposed by Section 401(a)(17) of the
Internal Revenue Code (both amounts to be determined under the
basic method of payment). This minimum benefit shall be
separately calculated with respect to all Participants,
including those whose benefits exceed this minimum, and shall
be treated as a separate obligation payable from a separate
plan solely for the purpose of determining which, if any,
portion of a Participant's benefits is subject to income tax
in the state where the Participant resided when the benefit
was earned.
28289
<PAGE>2
4. The following Section 26 is added to the Plan:
Spin-Off of The Earthgrains Company
-----------------------------------
For purposes of determining the amount payable to Barry H.
Beracha and the time of distribution of his benefit under the
Plan, Barry H. Beracha shall be credited with thirty years of
Credited Service and shall be treated as if he had attained
age fifty-five as of the date of termination of his employment
with Anheuser-Busch Companies, Inc.
In Witness Whereof, the appropriate officers of the Company
have executed this Amendment this 28th day of February, 1996.
Anheuser-Busch Companies, Inc.
/s/Jerry E. Ritter
-----------------------------------------
Jerry E. Ritter
Chief Financial and Administrative Officer
28289
EX-12
RATIO OF EARNINGS TO FIXED CHARGES
(CONTINUING OPERATIONS)
The following table sets forth the ratio of the Company's earnings
to fixed charges, on a consolidated basis, for the periods
indicated:
Year Ended December 31,
-----------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
6.6X 7.7X 5.8X 7.7X 6.3X
For purposes of this ratio, earnings have been calculated by adding
to income before income taxes the amount of fixed charges. Fixed
charges consist of interest on all indebtedness, amortization of
debt discount and expense of that portion of rental expense deemed
to represent interest.
The ratio for 1993 includes the impact of the Company's
restructuring charge which decreased 1993 income before income
taxes by $401 million.
<PAGE>1
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
[PHOTO OF GEO. A. ROBIE & SON. BUILDING]
AND A BUDWEISER DELIVERY TRUCK
INTRODUCTION
------------
This discussion summarizes the significant factors The year 1995
affecting the consolidated operating results,
financial condition and liquidity/cash flows of was signficant not only
Anheuser-Busch Companies, Inc. during the three-
year period ended December 31, 1995. This for the business results
discussion should be read in conjunction with
the Letter to Shareholders, Consolidated achieved, but also because
Financial Statements and Notes to Consolidated
Financial Statements included in this annual of several major management
report.
decisions made during the year.
Financial results for 1995 and 1993 were
impacted by certain significant one-time, These decisions will
nonrecurring transactions and events which
make meaningful comparisons to prior years make Anheuser-Busch a
more difficult. These specific transactions
and events are summarized below. more focused and
1995 TRANSACTIONS/EVENTS competitive company
During 1995, Anheuser-Busch announced a series of in the future.
strategic initiatives designed to focus maximum
attention on the company's core businesses, improve
future profitability and enhance shareholder value
as follows:
1. DIVESTITURE OF FOOD PRODUCTS SEGMENT
Through the tax-free 100% spin-off of Campbell Taggart
to shareholders and the sale of Eagle Snacks, Anheuser-
Busch will have divested its food products segment. As
such, in accordance with generally accepted accounting
principles, Anheuser-Busch has restated all prior period
financial statements and financial information to segregate
the historical combined financial results of Campbell
34
<PAGE>2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
Taggart and Eagle Snacks from detailed financial
components. All Campbell Taggart and Eagle Snacks
related financial results and financial information are
reported in the Anheuser-Busch Consolidated Financial
Statements as discontinued operations.
In connection with the Campbell Taggart spin-off, each
Anheuser-Busch shareholder will receive a pro-rata share
of voting common stock of Campbell Taggart in a special
dividend. Campbell Taggart will become a separately
traded, publicly held company. The spin-off is expected
to be completed by the end of the first quarter 1996.
There is no reported gain or loss on the spin-off
transaction. However, Anheuser-Busch recognized $19.8
million in after-tax spin-off related costs and taxes in
1995. These costs and taxes are reported as part of
discontinued operations.
In February 1996, Anheuser-Busch reached an agreement
to sell most of its Eagle Snacks production facilities.
The sale is subject to approval by appropriate regulatory
agencies. In connection with this decision and related
shut-down and disposal costs, Anheuser-Busch recognized
a $205.7 million ($.78 per share) after-tax charge in the
fourth quarter 1995. This charge is reported as part of
discontinued operations.
Additional information concerning the divestiture of
the food products segment is included in Note 2 to the
Consolidated Financial Statements.
2. SALE OF THE ST. LOUIS NATIONAL BASEBALL CLUB
(CARDINALS)
In December 1995, the company signed a contract to sell
the St. Louis National Baseball Club. The sale will also
include Busch Memorial Stadium, nearby parking garages
and other properties in downtown St. Louis. The sale
price will approximate $150 million, resulting in a
pretax gain of approximately $50 million.
The contract is subject to Major League Baseball
approval. The sale will close in early 1996 and the gain
will be recognized in the company's 1996 financial
statements. Financial results for the Cardinals are
included in continuing operations for 1995.
3. CONSOLIDATION OF BREWING CAPACITY RESULTING IN THE
CLOSURE OF THE TAMPA BREWERY
By utilizing the full production capacity of its new
Cartersville, Ga., brewery, plus ongoing modernization
programs at its other 11 breweries, Anheuser-Busch has
been able to add a significant amount of efficient, low
-cost capacity. The Tampa brewery was the company's
highest-cost-per-barrel brewery. Accordingly, the Tampa
brewery was closed in 1995 resulting in a $160 million
pretax charge ($.38 per share) in the fourth quarter
1995. This charge is identified as a separate line item
on the company's Consolidated Statement of Income. The
company estimates closing the Tampa brewery will result
in approximately $33 million per year in ongoing pretax
operational cost savings.
4. REDUCTION OF BEER WHOLESALER INVENTORIES
In a move to achieve greater systemwide efficiencies
and reduce costs, Anheuser-Busch reduced wholesaler
inventories by about one-third during the fourth quarter
1995. Year-end inventories were at 10 days of supply.
Management estimates the lower inventory level will
result in a combined $12 million annual systemwide cost
savings shared by Anheuser-Busch and its network of beer
wholesalers through improved scheduling, lower
transportation costs and reduced working capital
requirements. This program will also further enhance the
company's product freshness and increase its competitive
advantage.
This decision resulted in lower beer shipments by
Anheuser-Busch in the fourth quarter 1995 of
approximately 1.1 million barrels, which equates to
reduced net sales of $107 million and reduced operating
profits of approximately $74.5 million. This financial
impact is not separately identified in the company's
Consolidated Statement of Income.
These actions will make Anheuser-Busch a more focused
and competitive company.
35
<PAGE>3
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
Anheuser-Busch plans to achieve three major objectives in
coming years. First, the company will continue to gain an
increased share of the brewing industry margin pool in the
United States. Second, Anheuser-Busch will continue to
globalize its beer operations. Finally, the company will
support the growth of its packaging and entertainment subsidiaries.
Focusing on these objectives will permit Anheuser-Busch to
capitalize on its market leadership and competitive advantages
in its core brewing business, gain efficiencies through the
manufacture of beverage containers and enhance profitability
through the entertainment of 20 million guests annually.
1993 TRANSACTIONS
Financial results for 1993 were affected by two nonrecurring
special charges as follows:
1. The company's Profitability Enhancement Program, which
included significant operational and organizational changes,
resulted in a one-time, pretax restructuring charge to continuing
operations of $401.3 million, or $.96 per share. This Program
included the following elements:
* An enhanced retirement program for salaried employees
($92.4 million);
* The write-down of underperforming assets included in the
entertainment segment ($114.3 million); and
* The restructuring and reorganization of the company
($194.6 million).
As anticipated, the Program generated approximately $80 million
of immediate annual cost savings. In conjunction with Program-
related capital expenditures of approximately $1.3 billion during
1994-1998, the Program is expected to generate additional cost
savings accumulating to more than $300 million a year by 1998.
Further information concerning the details of the Profitability
Enhancement Program and related restructuring charge,
including a reconciliation of the restructuring accrual for 1995
and 1994, is included in Note 6 to the Consolidated Financial
Statements.
2. The REVENUE RECONCILIATION ACT OF 1993, which increased the
federal income tax rate by one percentage point to 35% from 34%,
resulted in a $31.2 million, or $.11 per share, one-time increase
in the company's deferred tax liability, in accordance with
Financial Accounting Standard No. 109 (FAS 109), "Accounting for
Income Taxes."
CONTINUING OPERATIONS
---------------------
As previously noted, the 1995 and 1993 significant transactions
and events make it difficult to directly compare 1995 versus 1994,
and 1994 versus 1993 financial results. Accordingly, key
financial comparisons for continuing operations are presented on
both a "normal operations" basis (excluding the special items) and
---------
an "as- reported" basis (including the special items) in order to
---------
facilitate a complete understanding of company results.
Financial comparisons for continuing operations on an as-reported
and normal operations basis between 1995, 1994 and 1993 are shown
on the facing page.
36
<PAGE>4
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
FULL YEAR 1995 VS. 1994
($ IN MILLIONS, EXCEPT PER SHARE)
-------------------------------------------------------------------------------------------
| 1995
1995 % CHANGE | NORMAL % CHANGE
CONTINUING OPERATIONS: AS REPORTED VS. 1994 | OPERATIONS VS. 1994
---------------------- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Gross Sales $12,004 Up 2.6% | $12,131 Up 3.6%
Excise Taxes $1,664 Dn .9% | $1,683 Up .2%
Net Sales $10,340 Up 3.1% | $10,448 Up 4.2%
Operating Income $1,633 Dn 11.9% | $1,867 Up .8%
Income from |
Continuing Operations $887 Dn 12.6% | $1,032 Up 1.8%
Fully Diluted Earnings Per Share $3.42 Dn 10.2% | $3.98 Up 4.5%
------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
FULL YEAR 1994 VS. 1993
($ IN MILLIONS, EXCEPT PER SHARE)
------------------------------------------------------------------------------------------
| 1993 | 1993
| AS % | NORMAL %
CONTINUING OPERATIONS: 1994 | REPORTED INCREASE | OPERATIONS INCREASE
---------------------- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating Income $1,853 | $1,287 Up 44.1% | $1,688 Up 9.8%
Income from | |
Continuing Operations $1,014 | $657 Up 54.4% | $935 Up 8.5%
Fully Diluted Earnings Per Share $3.81 | $2.40 Up 58.8% | $3.39 Up 12.4%
-------------------------------------------------------------------------------------------
</TABLE>
SALES
[SALES GRAPH]
Anheuser-Busch achieved record gross sales during 1995
on an as-reported basis of $12.0 billion, an increase of
$300 million or 2.6% over 1994 gross sales of $11.7
billion. Gross sales for 1994 were 5.0% higher than
1993. Gross sales for 1993 were $11.1 billion, an
increase of 1.3% over 1992. Gross sales include $1.7
billion in federal and state beer excise taxes for each
of the years 1995, 1994 and 1993.
Net sales for 1995 on an as-reported basis were also a
record $10.3 billion, an increase of $315 million or 3.1%
over 1994 net sales of $10.0 billion. Net sales for 1994
were 5.9% higher than 1993. Net sales during 1993 were
$9.5 billion, an increase of 1.4% over 1992.
The increases in gross and net sales in 1995 as
compared to 1994 were negatively impacted by the
reduction in beer wholesaler inventories during the
fourth quarter 1995. Excluding the beer inventory
reduction, gross sales and net sales for 1995 would have
increased 3.6% and 4.2%, respectively, over 1994.
Anheuser-Busch, Inc., the company's brewing subsidiary
and largest contributor to consolidated sales, reported
1995 sales of 87.5 million barrels, a decrease of 990,000
barrels, or 1.1%, versus the 88.5 million barrels sold
during 1994. The 1995 reported volume sales amounts were
negatively impacted by the beer wholesaler inventory
reduction. Excluding the inventory reduction, Anheuser
-Busch, Inc. beer volume would have been 88.6 million
barrels, a .1% increase over 1994. Reported market share
for 1995 of 44.1% was adversely affected by the impact of
the beer inventory reduction on Anheuser-Busch, Inc.
sales volumes. The company's share of the domestic
market was unchanged. Excluding the inventory reduction,
Anheuser-Busch market share would have been 44.4%, level
as compared to 1994. Industry sales include exports,
imports, nonalcohol brews and other malt beverages and
represent estimates based on information provided by The
Beer Institute.
37
<PAGE>5
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
Sales-to-retailers, a more accurate measure of
underlying consumer demand, were slightly above those
of the previous year, a new record. Sales-to-retailers
volume was not impacted by the company's beer wholesaler
inventory reduction program.
During 1995, Anheuser-Busch's core premium brands
(the Budweiser and Michelob families) gained momentum,
with Bud Light increasing at a double-digit rate and
Michelob Light increasing 9%. Bud Ice sales trends
have steadily improved since February 1995. In addition
to Bud Ice, the company introduced seven new beer brands
in 1995. Busch Ice and Natural Ice were introduced
in selected regional markets. Michelob Amber Bock was
introduced to the national market and a special Christmas
Brew was added for the important holiday season. Three
"American Originals" specialty beers (Faust, Muenchener
and Black & Tan), crafted in the style of the
turn-of-the-century beers brewed by the company's founder,
Adolphus Busch, were introduced for test marketing in
Seattle and Denver. Additionally, the company successfully
increased beer prices in seven states in fall 1995. Price
increases will be implemented in the remainder of the country
in early 1996.
International beer performance was strong during 1995,
led by continuing sales expansion in the United Kingdom
and Ireland. International brewing's operating profit for
1995 increased at a double-digit pace versus 1994.
Metal Container Corporation, the second-largest aluminum
beverage can manufacturing company in the U.S., was also a
major contributor to Anheuser-Busch profitability. The
addition of a new can manufacturing facility in California
supported significant growth in can volume and Metal
Container profitability.
Lastly, Busch Entertainment theme parks contributed to
overall sales and profitability growth in 1995 through
the combination of higher attendance and higher ticket prices.
Anheuser-Busch, Inc. beer sales for 1994 were a record
88.5 million barrels, an increase of 1.2 million barrels,
or 1.4%, higher than the 87.3 million barrels sold during
1993. Sales-to-retailers for 1994 increased 2.8% as
compared to 1993. The difference between growth rates in
reported sales volume versus sales-to-retailers for 1994
is primarily due to the company's planned reduction in
year-end 1994 wholesaler inventories. In 1993, the company
built year-end beer inventories in anticipation of national
labor negotiations, which were successfully concluded in
1994. In addition to lowering Anheuser-Busch sales
volume growth, the planned 1994 inventory reduction also
affected the calculations for overall industry growth and
market share.
The Budweiser Family of premium beers was a
significant contributor to the increase in sales
volume for 1994 and contributed to an approximate 1%
increase in revenue per barrel. Bud Family
sales-to-retailers increased 3.5% for the year,
led by Bud Light, which continued to grow at
double-digit rates, and the introduction of Ice
Draft from Budweiser and Ice Draft Light. During
the third quarter 1994, Bud Light became the
largest-selling light beer in the country and the
second-largest beer brand overall behind Budweiser.
Anheuser-Busch, Inc. increased its brewing industry
market share during 1994 compared to 1993 by .1 share
point, with sales volume representing 44.4% of total
brewing industry sales (including exports, imports,
nonalcohol brews and other malt beverages), according to
estimates based on information provided by The Beer Institute.
Gross and net sales increased in 1993 as compared
to 1992, due to higher beer volume sales as well as
higher sales by the company's packaging and entertainment
subsidiaries. However, net revenue per barrel declined
approximately 1% in 1993 due primarily to competitive
pricing, brand and package mix shifts and geographic trends.
38
<PAGE>6
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
Anheuser-Busch, Inc. sold an industry record 87.3
million barrels of beer in 1993, an increase of .6%
compared to 1992 beer volume of 86.8 million barrels.
The company's 1993 beer volume gains, built from the
largest volume base in the industry, were achieved
despite severe economic weakness in key selling areas
such as the West Coast and Northeast. Anheuser-Busch,
Inc. maintained its market share in 1993, with sales
volume representing approximately 44.3% of total brewing
industry sales.
COST OF PRODUCTS AND SERVICES
Cost of products and services for 1995 was $6.79
billion, a 4.6% increase over the $6.49 billion reported
for 1994. This increase follows a 5.3% and 1.9% increase
in 1994 and 1993, respectively. The cost increases
primarily relate to higher production and packaging costs
for the company's brewing subsidiary and other beer
-related operations and higher attendance at the
company's entertainment operations. The increase in cost
of products and services has been partially offset each
year by the company's ongoing productivity improvement
and cost reduction programs.
[TOTAL PAYROLL
COST GRAPH] During 1995, beer packaging costs increased
substantially as a result of higher aluminum costs.
However, such increases were mitigated by the company
having protected pricing on more than half of its 1995
aluminum sheet requirements at prices below the current
market level.
Cost of products and services for 1994 and 1993
increased primarily due to higher production costs for
the company's brewing subsidiary and other beer-related
operations and higher attendance at the company's
entertainment operations. As a percent of net sales,
cost of products and services for 1995 increased to 65.7%
compared to 64.8% for 1994 and 65.1% for 1993.
MARKETING, DISTRIBUTION AND ADMINISTRATIVE EXPENSES
Marketing, distribution and administrative expenses for
1995 were $1.76 billion, an increase of 4.6% compared to
1994. These expenses increased in 1995 primarily due to
the addition of marketing and distribution expenses for
new beer brands and higher international beer marketing
expenses.
Marketing, distribution and administrative costs for
1994 were $1.68 billion and increased by 4.2% over 1993.
The increased expense level for 1994 was primarily the
result of the company's joint venture in Japan which
began operations in September 1993. Expenses for 1993
benefited from lower postretirement medical costs and the
divestiture of the company's Newark wholesale operation.
This expense category was flat in 1993 as compared to
1992.
Areas of cost increase incurred by the company since
1992 include media advertising, point-of-sale materials
and developmental expenses associated with new
advertising and marketing programs for established as
well as new products, payroll and related costs, business
taxes, depreciation, supplies and general operating
expenses.
TAXES AND PAYROLL COSTS
The company is significantly impacted by federal, state
and local taxes, especially beer excise taxes. Taxes
applicable to 1995 operations (not including the many
indirect taxes included in materials and services
purchased) totaled $2.44 billion and highlight the burden
of taxation on the company and the brewing industry in
general. Taxes for 1995 decreased $101 million or 4.0%
versus 1994 taxes of $2.54 billion. This decrease
follows an increase of 7.8% in 1994 and a decrease of
3.9% in 1993.
39
<PAGE>7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
The significant decrease in total taxes for 1995
compared to 1994 is primarily due to reduced income
taxes on lower taxable income, resulting from the
cost associated with the shutdown of the Tampa
brewery and the beer wholesaler inventory reduction.
The beer wholesaler inventory reduction also contributed
to lower beer excise taxes in 1995 versus 1994.
The significant increase in total taxes for 1994
compared to 1993 is due to higher income taxes resulting
from the company's substantially higher earnings compared
to the 1993 level, which was impacted by the nonrecurring
restructuring charges.
The decrease in total taxes for 1993 compared to 1992 is
due to the company's lower earnings level, offset partially
by higher beer excise taxes, the FAS 109 deferred tax
revaluation adjustment and the 1% increase in the federal
statutory income tax rate which took effect January 1, 1993.
Payroll costs during 1995 totaled $1.74 billion, an
increase of $30 million versus 1994 costs of $1.71 billion,
and reflect normal increases in salaries, wages and benefit
levels. Payroll costs decreased .5% in 1994, reflecting the
lower number of employees due to the 1993 Enhanced [OPERATING
Retirement Program. Payroll costs increased 3.5% in INCOME GRAPH]
1993 versus 1992, reflecting normal increases in salaries,
wages and benefit costs. Payroll costs for 1993 exclude
the one-time severance pay and other costs associated
with the company's Enhanced Retirement Program.
Salaries and wages paid during 1995 totaled $1.38 billion.
Pension, life insurance and health care benefits amounted to
$245.7 million while payroll taxes were $109.0 million.
Full-time employees for continuing operations at December 31,
1995 numbered 24,127 compared to 23,857 at December 31, 1994.
During the second quarter of 1994, a four-year labor contract
affecting the majority of the company's beer production
employees was ratified. The contract (which expires February
28, 1998) enhances a wage and benefits package which is
already the most attractive in the industry and establishes an
improved framework for the company to achieve operating
productivity increases over time.
OPERATING INCOME
Operating income represents the measure of the company's
financial performance before interest costs and other
nonoperating items. As previously noted, 1995 and 1993
operating income was affected by several significant
transactions and events.
Operating income for 1995 was $1.63 billion on an
as-reported basis, a decrease of $220 million, or 11.9%,
as compared to 1994. Operating income for 1994 increased
by 44.1% over 1993 on an as-reported basis. On a normal
operations basis, operating income increased .8% in 1995
and 9.8% in 1994.
The increase in operating income for 1995 on a normal
operations basis was primarily due to the performance
of the company's international beer, packaging and
theme park operations. The increase in operating income
for 1994 on a normal operations basis was primarily the
result of positive domestic and international beer
performance, offset by lower earnings at the St. Louis
National Baseball Club (attributable primarily to the
baseball players' strike which began in August 1994).
Operating income was $1.29 billion for 1993 on an
as-reported basis, a decline of 24.5% compared to 1992
operating income of $1.70 billion. On a normal operations
basis, operating income for 1993 decreased $16.7 million
(or 1.0%) compared to 1992. The decrease in operating
income in 1993 on a normal operations basis was
primarily attributable to a 1% lower net revenue per
40
<PAGE>8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
barrel due primarily to competitive pricing, brand and
package mix shifts and geographic trends. Operating
income (on a normal operations basis) as a percent of
net sales was 17.9% in 1995, 18.5% in 1994 and 17.8% in
1993.
NET INTEREST COST/INTEREST CAPITALIZED
Net interest cost (interest expense less interest
income) for 1995 was $216.0 million, a decrease of $.7
million compared to 1994. Net interest cost for 1994 was
$216.7 million, an increase of $15.0 million, or 7.4%,
over net interest cost of $201.7 million for 1993. The
increase in net interest cost in 1994 was due to higher
average debt balances outstanding during the period,
primarily as a result of financing capital expenditures,
share repurchases and international brewing investments.
Net interest cost for 1993 represented an increase of
$11.5 million, or 6.0%, when compared to 1992 net
[INCOME FROM interest cost of $190.2 million. The increase in net
CONTINUING interest cost during 1993 was due primarily to higher
OPERATIONS/ average debt balances outstanding, primarily as a result
DIVIDENDS ON of financing international brewing investments.
COMMON STOCK
GRAPH] Specific information regarding company financing
activity (including the level of debt activity and the
leveraged ESOP) and the company's capital expenditure and
share repurchase programs is presented in the Liquidity
and Capital Resources section of this discussion.
Interest capitalized increased $2.5 million in 1995 as
compared to 1994. The increase in interest capitalized
was due primarily to a higher level of construction
projects. Interest capitalized decreased $13.4 million in
1994 as compared to 1993. The decline in interest
capitalized for 1994 was related to the spring 1993
initial start-up of the company's brewery in
Cartersville, Ga., which resulted in the cessation of
interest capitalization for completed areas of this
facility. Interest capitalized declined $11.7 million in
1993 as compared to 1992. The decline in interest
capitalized in 1993 was also primarily related to the
phased start-up of the Cartersville brewery.
OTHER INCOME/(EXPENSE), NET
Other income/(expense), net includes numerous items of
a nonoperating nature which do not have a material impact
on the company's consolidated results of operations
(either individually or in the aggregate).
This category provided income in 1995, 1994 and 1993 of
$20.5 million, $17.6 million and $21.0 million,
respectively. This is due primarily to the recognition
of dividend income from the Grupo Modelo investment
accounted for under the cost method.
INCOME FROM CONTINUING OPERATIONS
Income from continuing operations for 1995 (on an as
-reported basis) was $887 million, a decrease of 12.6%
compared to 1994. Income from continuing operations for
1994 was $1.01 billion, an increase of $357 million, or
54.4%, over 1993 (on an as-reported basis). On a normal
operations basis, income from continuing operations
increased 1.8% and 8.5%, respectively, in 1995 and 1994.
The company reported income from continuing operations
of $657 million in 1993 (on an as-reported basis), a
decline of 25.9% compared to 1992. On a normal
operations basis, the company would have reported income
from continuing operations of $935 million in 1993, a
decline of 2.9% compared to 1992.
41
<PAGE>9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
The company's effective income tax rate was 39.3%
for 1995 versus 39.5% for 1994. The effective income
tax rate for 1993 of 42.4% is not comparable to 1995
or 1994, due to the impact of the deferred tax revaluation
adjustment to reflect the retroactive impact of the 1%
federal tax rate increase signed into law during 1993.
Excluding this nonrecurring item, the effective tax rate
for 1993 would have been 39.7%.
FULLY DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Fully diluted earnings per share from continuing operations
for 1995 were $3.42 (on an as-reported basis), a decrease of
10.2% compared to 1994. Fully diluted earnings per share
from continuing operations for 1994 were $3.81, an increase of
58.8% compared to 1993 (on an as-reported basis). On a
normalized basis, fully diluted earnings per share from
continuing operations would have increased 4.5% and 12.4%
in 1995 and 1994, respectively.
[FULLY DILUTED
The company reported fully diluted earnings per share EARNINGS PER SHARE
from continuing operations of $2.40 in 1993, a decline FROM CONTINUING
of 22.6% compared to 1992. On a normal operations basis, OPERATIONS GRAPH]
the company would have reported fully diluted earnings
per share from continuing operations of $3.39 in 1993,
an increase of .9% compared to 1992.
The difference between the company's year-to-year
percentage change in net income and earnings per
share is due to share repurchases.
Fully diluted earnings per share from continuing
operations assume the conversion (as of January 1,
1993) of the company's 8% convertible debentures.
In calculating fully diluted earnings per share, weighted
average shares outstanding are increased by the assumed
conversion of the debentures and net income from continuing
operations is increased by the after-tax interest expense on
the debentures.
FINANCIAL POSITION
------------------
LIQUIDITY AND CAPITAL RESOURCES
The company's primary sources of liquidity are cash
provided from operating activities and certain financing
activities. Information on the company's consolidated cash
flows (segregated as operating activities, financing activities
and investing activities) for the years 1995, 1994 and 1993
is presented in the Consolidated Statement of Cash Flows in
this annual report.
Working capital at December 31, 1995 was $268.6 million as
compared to December 31, 1994 working capital of $57.0 million and
a working capital deficit of $(41.3) million at December 31, 1993.
The 1993 working capital deficit was due primarily to the $137.6
million restructuring accrual associated with that year's
restructuring charge.
42
<PAGE>10
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
Total short-term and long-term debt increased a net
$203.7 million in 1995 and $46.7 million in 1994, due to
the following:
DEBT ISSUANCES
$597.6 million in debt was issued in 1995, versus $182.2
million in 1994.
----------------------------------------------------
| AMOUNT |
|YEAR TYPE (MILLIONS) YIELD|
|---------------------------------------------------|
|1995 Debentures and other, net $573.2 Various|
| IRB'S 24.4 Various|
|---------------------------------------------------|
|1994 Commercial Paper $182.2 Various|
-----------------------------------------------------
[CASH FLOW FROM
CONTINUING DEBT REDUCTIONS
OPERATIONS GRAPH]
Debt was reduced $393.9 million in 1995, versus $135.5
million in 1994.
------------------------------------------------------
| AMOUNT |
|YEAR TYPE (MILLIONS) YIELD |
|-----------------------------------------------------|
|1995 Debentures and other, net $ 69.8 Various|
| Commercial Paper, net 176.8 Various|
| Medium Term Notes 117.0 Various|
| ESOP Debt 30.3 8.3% |
|-----------------------------------------------------|
|1994 Debentures $106.4 Various|
| ESOP Debt 29.1 8.3% |
-------------------------------------------------------
Gains/losses on debt reduction activities (either
individually or in the aggregate) were not material to
the company's Consolidated Financial Statements during
1995, 1994 or 1993.
At December 31, 1995 and 1994, there were $572.5
million and $749.3 million, respectively, of outstanding
commercial paper borrowings classified as long-term debt.
The commercial paper is intended to be maintained on a
long-term basis, with ongoing credit provided by the
company's revolving credit agreements.
The company utilizes SEC shelf registration statements
to provide financing flexibility. At December 31, 1995,
a total of $300 million was available for debt issuance
under shelf registration statements.
In 1989, the company registered with the Securities and
Exchange Commission (SEC) a total of $300 million of
seven-year convertible debentures (ultimately
convertible into common stock) as part of its Wholesaler
Investment Program. A total of $241.7 million of the
debentures were issued. The debentures are subject to
mandatory redemption at the end of seven years (1996),
optional redemption/repurchase at the company's or
holder's discretion after three years, and special
redemption/repurchase based on the occurrence of certain
redemption events with respect to particular holders. As
of December 31, 1995, $166.0 million of these debentures
were still outstanding.
During the next five years, the company plans to
continue capital expenditure programs designed to take
advantage of growth and productivity improvement
opportunities for its beer and beer-related and
entertainment segments. Cash flow from operating
activities will provide the principal support for these
capital investments. However, a capital expenditure
program of this magnitude (as well as continued share
repurchases and possible international beer-related
investments) may require external financing from time to
time. The nature and timing of external financing will
vary depending upon the company's evaluation of existing
market conditions and other economic factors.
43
<PAGE>11
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
In addition to its long-term debt financing, the
company has access to the short-term capital market
utilizing its revolving bank credit agreements and
commercial paper. The company has formal bank credit
agreements which are discussed in greater detail in
Note 8 to the Consolidated Financial Statements.
During 1994, the company terminated its previous $800
million credit agreements and established new $1 billion
credit agreements. The new credit agreements expire in
January 2000. These agreements provide the company with
immediate and continuing sources of liquidity. The
company's credit rating is A1 and AA- as determined by
Moody's Investor Services and Standard & Poor's,
respectively.
The company's ratio of total debt to total capitalization
was 47.1% and 47.3% at December 31, 1995 and 1994,
respectively. The company's fixed charge coverage ratio was
7.6x for the year ended December 31, 1995 and 7.7x for
the year ended December 31, 1994.
[CAPITAL
As more fully described in Note 11 to the Consolidated EXPENDITURES/
Financial Statements, the company added an employee stock DEPRECIATION &
ownership plan (ESOP) feature to its existing Deferred AMORTIZATION
Income Stock Purchase and Savings Plans in 1989. At that GRAPH]
time, the ESOP borrowed $500 million, guaranteed by the
company, and used the proceeds to buy approximately 11.3
million shares of common stock from the company. The
ESOP shares are being allocated to participants over
15 years as contributions are made to the plan. Through
the various company stock ownership plans, employees of
Anheuser-Busch control approximately 10% of the company's
outstanding common stock.
A discussion of the company's risk management activities is
included in Note 20 to the Consolidated Financial Statements.
CAPITAL EXPENDITURES
The company has a formal and intensive review procedure
for the authorization of capital expenditures. The most
important measure of acceptability of a capital project
is its projected discounted cash flow return on investment
(DCFROI). Capital expenditures in 1995 amounted to $952.5
million as compared with $662.8 million in 1994. During the
past five years, capital expenditures totaled $3.5 billion.
Capital expenditures for 1995 for the company's beer
and beer-related operations were $845.4 million. Major
expenditures by Anheuser-Busch, Inc. included numerous
modernization projects associated with the Profitability
Enhancement Program which are designed to improve
productivity at all breweries.
The remaining 1995 capital expenditures totaling $107.1
million were made by the company's entertainment operations.
Major expenditures included new Busch Entertainment theme
park attractions.
The company expects its capital expenditures in 1996 to
approximate $1 billion. Capital expenditures during the
five-year period 1996-2000 are expected to approximate $4 billion.
44
<PAGE>12
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
ENVIRONMENTAL MATTERS
The company is subject to federal, state and local
environmental protection laws and regulations and is
operating within such laws or is taking action aimed at
assuring compliance with such laws and regulations.
Compliance with these laws and regulations is not
expected to materially affect the company's competitive
position. None of the Environmental Protection Agency
(EPA) designated clean-up sites for which Anheuser-Busch
has been identified as a Potentially Responsible Party
(PRP) are expected to have a material impact on the
company's consolidated financial statements.
The company has traditionally had a strong commitment
to environmental protection. This commitment is
manifested through the Environmental Policy Committee, a
committee of senior corporate executives which reports to
the Board of Directors.
Under the direction of the Environmental Policy
Committee, the company is implementing a corporate-wide
environmental management system based on the Business
Charter for Sustainable Development. This system is
designed to help ensure compliance with applicable laws,
and to simultaneously reduce costs.
The company's Environmental Policy, the foundation of
the management system, integrates good business practices
with sound environmental practices. The policy provides
specific guidance for how the environment must be
factored into business judgments and mandates special
consideration of environmental issues, in conjunction
with other business issues, when any of the company's
facilities or business units plan capital projects or
changes in processes. In addition, the company is
piloting systems to ensure that its environmental
compliance standards are met by outside contractors and
suppliers.
OTHER MATTERS
As more fully described in Note 5 to the Consolidated
Financial Statements, Anheuser-Busch entered into and
announced several major acquisitions and business
investments in 1995, 1994 and 1993. A summary of these
acquisitions and business investments follows.
1995 TRANSACTIONS
1. Alliance in Argentina with Compania Cervecerias
Unidas S.A. (CCU) and Buenos Aires Embotelladora S.A.
(BAESA). In connection with the alliance, CCU will
locally brew Budweiser and BAESA will begin to distribute
Budweiser in Argentina in late 1996. Anheuser-Busch will
also purchase a small equity investment in CCU-Argentina.
2. Alliance in Brazil with Companhia Antarctica
Paulista (Antarctica), one of that country's largest
brewers. The company will purchase an initial 5% equity
share in a new subsidiary which will consolidate
Antarctica's holdings in affiliated companies. The
company will have options to increase its share to
approximately 30% in the future.
45
<PAGE>13
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
3. Investment in a joint venture with Scottish Courage
Ltd., which consolidated the brewing and packaging of
Budweiser in the Stag Brewery at Mortlake in London, England.
Anheuser-Busch owns a 50% share in the joint venture.
4. Finalized the purchase of an 80% interest in a joint
venture that owns the Zhongde Brewery located in the central
region of the People's Republic of China. The brewery has
been modified to brew Budweiser for distribution in China.
1994 TRANSACTION
Purchase of a 25% equity interest in Redhook Ale Brewery,
Inc. of Seattle, Wash. During 1995, in conjunction with
Redhook's initial public offering, Anheuser-Busch invested an
additional $12 million to maintain its 25% equity ownership
level. The value of the company's investment at quoted market
prices was $58.3 million at December 31, 1995 compared to
its original acquisition cost of $30 million.
1993 TRANSACTION
Purchase of a 17.7% interest in Grupo Modelo, Mexico's
largest brewer, and its subsidiaries for $477 million. The
agreement gives Anheuser-Busch options to increase its investment
in Modelo to approximately 35% and to acquire an additional
minority interest in Modelo's subsidiaries. Due to the nature
of Anheuser-Busch's initial investment, the company is not
required to adjust its Modelo investment to fair market value.
In addition, the initial investment is configured such that
the company's return is largely protected against devaluation of
the Mexican peso. Therefore, the 1994 peso devaluation did
not have a significant effect on 1995 or 1994 earnings.
DIVIDENDS
Cash dividends paid to common shareholders were $429.5 million
in 1995 and $398.8 million in 1994. Dividends on common stock
are paid in the months of March, June, September and December of
each year.
In the second quarter of 1995, effective with the September
dividend, the Board of Directors increased the quarterly dividend
rate by 10% from $.40 to $.44 per share. This increased annual
dividends per common share 10.5%, to $1.68, compared with $1.52
per common share in 1994. In 1994, dividends were $.36 per
share for the first two quarters and $.40 per share for the
last two quarters.
The company has paid dividends in each of the past 63 years.
During that time, the company's stock has split on seven different
occasions and stock dividends were paid three times.
At December 31, 1995, common stock shareholders of record
numbered 64,118 compared with 66,001 at the end of 1994. Total
shares outstanding were 254.0 million at December 31, 1995 compared
to 257.3 million at December 31, 1994.
46
<PAGE>14
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------------------------------------------------
PRICE RANGE OF COMMON STOCK
The company's common stock is listed on the New York
Stock Exchange (NYSE) under the symbol "BUD." The table
below summarizes the high and low sales prices on the
NYSE.
--------------------------------------------------------
PRICE RANGE OF COMMON STOCK (BUD)
--------------------------------------------------------
1995 1994
--------------------------------------
QUARTER HIGH LOW HIGH LOW
First........... 59-1/8 50-3/4 53-5/8 47-1/8
Second.......... 59-7/8 55-1/4 55-3/8 50-1/2
Third........... 64-1/2 54-3/4 54-3/4 49-1/4
Fourth.......... 68 62-1/8 52-1/4 48-1/2
---------------------------------------------------------
[SHAREHOLDERS
EQUITY/LONG- The closing price of the company's common stock at
TERM DEBT GRAPH] December 31, 1995 and 1994 was $66.875 and $50.875,
respectively.
COMMON STOCK AND OTHER SHAREHOLDERS EQUITY
Shareholders equity was $4.43 billion at December 31,
1995, as compared with $4.42 billion at December 31,
1994. The slight increase in shareholders equity during
the year is primarily related to net income (on an as
-reported basis), offset by share repurchases and
dividends. The book value of each share of common stock
at December 31, 1995 was $14.44, as compared to $13.29 at
December 31, 1994.
The Board of Directors has approved various resolutions
in recent years authorizing the company to repurchase
shares of its common stock for investment purposes and to
meet the requirements of the company's various stock
purchase and incentive plans. The most recent
resolution, approved by the Board in March 1994,
authorized the repurchase of 25 million shares. The
company has acquired 6.8 million, 10.9 million and 12.6
million shares of common stock in 1995, 1994 and 1993 for
$393.4 million, $563.0 million and $639.8 million,
respectively. At December 31, 1995, approximately 12.3
million shares were available for repurchase under the
March 1994 authorization.
INFLATION
General inflation has not had a significant impact on
the company over the past three years and is not expected
to have a significant impact in the foreseeable future.
47
<PAGE>15
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
Anheuser-Busch Companies, Inc., and Subsidiaries
- ---------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
DECEMBER 31, 1995 1994
- -------------------------------------------------------------------------------------
ASSETS (In millions)
<S> <C> <C>
CURRENT ASSETS:
Cash and marketable securities........................... $ 93.6 $ 144.0
Accounts and notes receivable, less allowance for doubtful
accounts of $1.9 in 1995 and 1994...................... 544.3 598.5
Inventories
Raw materials and supplies............................. 382.2 349.6
Work in process........................................ 58.6 84.2
Finished goods......................................... 141.9 97.0
Total inventories.................................... 582.7 530.8
Other current assets..................................... 290.0 272.8
--------- --------
Total current assets................................... 1,510.6 1,546.1
INVESTMENTS AND OTHER ASSETS............................... 1,553.3 1,509.4
INVESTMENT IN DISCONTINUED OPERATIONS...................... 764.0 997.3
PLANT AND EQUIPMENT, NET................................... 6,763.0 6,494.6
--------- ---------
TOTAL ASSETS......................................... $10,590.9 $10,547.4
========= =========
LIABILITIES AND SHAREHOLDERS EQUITY (In millions)
CURRENT LIABILITIES:
Accounts payable......................................... $ 682.8 $ 756.6
Accrued salaries, wages and benefits..................... 247.0 238.9
Accrued taxes, other than income taxes................... 86.3 96.6
Restructuring accrual.................................... - 50.2
Other current liabilities................................ 225.9 346.8
--------- --------
Total current liabilities.............................. 1,242.0 1,489.1
--------- --------
POSTRETIREMENT BENEFITS.................................... 512.1 494.9
--------- --------
LONG-TERM DEBT............................................. 3,270.1 3,066.4
--------- --------
DEFERRED INCOME TAXES...................................... 1,132.8 1,081.5
--------- --------
COMMON STOCK AND OTHER SHAREHOLDERS EQUITY:
Common stock, $1.00 par value, authorized
800,000,000 shares..................................... 347.3 343.8
Capital in excess of par value........................... 1,012.2 856.8
Retained earnings........................................ 6,869.6 6,656.7
Foreign currency translation adjustment.................. (12.1) (21.8)
--------- --------
8,217.0 7,835.5
Treasury stock, at cost.................................. (3,436.0) (3,042.6)
ESOP debt guarantee offset............................... (347.1) (377.4)
--------- --------
4,433.9 4,415.5
--------- --------
COMMITMENTS AND CONTINGENCIES.............................. - -
TOTAL LIABILITIES AND EQUITY......................... $10,590.9 $10,547.4
========= =========
- -------------------------------------------------------------------------------------
</TABLE>
The accompanying statements should be read in conjunction with
the Notes to Consolidated Financial Statements appearing on
pages 52-67 of this report.
48
<PAGE>16
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME
Anheuser-Busch Companies, Inc., and Subsidiaries
- -----------------------------------------------------------------------------
(In millions, except per share data)
- ---------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1995 1994 1993
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales................................................... $12,004.5 $11,705.0 $11,147.3
Less federal and state excise taxes................... 1,664.0 1,679.7 1,679.8
--------- --------- ---------
Net sales............................................... 10,340.5 10,025.3 9,467.5
Cost of products and services......................... 6,791.0 6,492.1 6,167.6
--------- --------- ---------
Gross profit............................................ 3,549.5 3,533.2 3,299.9
Marketing, distribution and administrative expenses... 1,756.6 1,679.9 1,612.1
Shutdown of Tampa brewery............................. 160.0 - -
Restructuring charge.................................. - - 401.3
--------- --------- ---------
Operating income........................................ 1,632.9 1,853.3 1,286.5
Interest expense...................................... (225.9) (219.3) (205.1)
Interest capitalized.................................. 24.3 21.8 35.2
Interest income....................................... 9.9 2.6 3.4
Other income, net..................................... 20.5 17.6 21.0
--------- --------- ---------
Income before income taxes.............................. 1,461.7 1,676.0 1,141.0
--------- --------- ---------
Provision for income taxes:
Current............................................... 523.8 597.5 539.4
Deferred.............................................. 51.3 64.0 (86.8)
Revaluation of deferred tax liability (FAS 109)....... - - 31.2
--------- --------- ---------
575.1 661.5 483.8
--------- --------- ---------
Income from continuing operations....................... 886.6 1,014.5 657.2
Income/(loss) from discontinued operations.............. (244.3) 17.6 (62.7)
--------- --------- ---------
NET INCOME.............................................. $ 642.3 $ 1,032.1 $ 594.5
========= ========= ========
PRIMARY EARNINGS PER SHARE:
Continuing operations................................. $ 3.44 $ 3.84 $ 2.40
Discontinued operations............................... (.95) .07 (.23)
---------- --------- ---------
Net income............................................ $ 2.49 $ 3.91 $ 2.17
========== ========= =========
FULLY DILUTED EARNINGS PER SHARE:
Continuing operations................................. $ 3.42 $ 3.81 $ 2.40
Discontinued operations............................... (.93) .07 (.23)
---------- --------- ---------
Net income............................................ $ 2.49 $ 3.88 $ 2.17
========== ========== =========
</TABLE>
The accompanying statements should be read in conjunction with the
Notes to Consolidated Financial Statements appearing on pages 52-67
of this report.
49
<PAGE>17
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
Anheuser-Busch Companies, Inc., and Subsidiaries
- ----------------------------------------------------------------------------
SHAREHOLDERS EQUITY (In millions, except per share data)
- ----------------------------------------------------------------------------------------------------------------------
ESOP FOREIGN
CAPITAL IN DEBT CURRENCY
COMMONEXCESS OFRETAINEDTREASURYGUARANTEETRANSLATION
STOCKPAR VALUEEARNINGSSTOCK OFFSETADJUSTMENT
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1992 $341.3 $ 762.9 $5,794.9 $(1,842.9) $(434.4) $ (1.4)
Net income................... 594.5
Common dividends
($1.36 per share).......... (370.0)
Shares issued under
stock plans 1.2 44.2 4.0
Reduction of ESOP debt
guarantee.................. 27.9
Treasury stock acquired net
of treasury shares issued.. 1.6 (636.7)
Foreign currency translation
adjustment................. (31.6)
------ -------- -------- -------- ------- ------
BALANCE AT DECEMBER 31, 1993 342.5 808.7 6,023.4 (2,479.6) (406.5) (33.0)
Net income................... 1,032.1
Common dividends
($1.52 per share).......... (398.8)
Shares issued under
stock plans and conversion
of convertible debentures.. 1.3 48.1
Reduction of ESOP debt
guarantee.................. 29.1
Treasury stock acquired...... (563.0)
Foreign currency translation
adjustment................. 11.2
------- -------- -------- -------- ------- ------
BALANCE AT DECEMBER 31, 1994 343.8 856.8 6,656.7 (3,042.6) (377.4) (21.8)
Net income................... 642.3
Common dividends
($1.68 per share).......... (429.5)
Shares issued under
stock plans and conversion
of convertible debentures.. 3.5 155.4 .1
Reduction of ESOP debt
guarantee.................. 30.3
Treasury stock acquired...... (393.4)
Foreign currency translation
adjustment................. 9.7
------ -------- -------- -------- ------- ------
BALANCE AT DECEMBER 31, 1995 $347.3 $1,012.2 $6,869.6 $(3,436.0) $(347.1) $(12.1)
====== ======== ======== ========= ======= ======
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying statements should be read in conjunction with
the Notes to Consolidated Financial Statements appearing on
pages 52-67 of this report.
50
<PAGE>18
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
Anheuser-Busch Companies, Inc., and Subsidiaries
- -----------------------------------------------------------------------------
(In millions)
- ----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1995 1994 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income........................................ $ 642.3 $1,032.1 $ 594.5
Discontinued operations........................... 244.3 (17.6) 62.7
--------- -------- ---------
Income from continuing operations................. 886.6 1,014.5 657.2
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization................. 565.6 517.0 492.7
(Decrease)/increase in deferred
income taxes................................ 51.3 68.5 (52.4)
Shutdown of Tampa brewery..................... 112.3 - -
Restructuring charge ($401.3 million
less cash payments of $50.4 million)........ - - 350.9
Decrease/(increase) in noncash
working capital............................. (262.0) (57.0) 61.9
Other, net.................................... 72.1 120.0 74.8
--------- -------- ---------
Cash provided by continuing operations............ 1,425.9 1,663.0 1,585.1
Net cash (provided to)/provided by
discontinued operations..................... (11.0) (93.5) 44.1
--------- -------- ---------
Total cash provided by operating activities....... 1,414.9 1,569.5 1,629.2
--------- -------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures.............................. (952.5) (662.8) (656.3)
New business acquisitions......................... (82.9) (28.8) (523.9)
--------- -------- ---------
Cash (used for) investing activities.............. (1,035.4) (691.6) (1,180.2)
--------- -------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase in long-term debt........................ 597.6 182.2 689.2
Decrease in long-term debt........................ (363.6) (106.4) (267.5)
Dividends paid to shareholders.................... (429.5) (398.8) (370.0)
Acquisition of treasury stock..................... (393.4) (563.0) (639.8)
Shares issued under stock plans and
conversion of convertible debentures............ 159.0 49.4 49.4
--------- -------- ---------
Cash (used for) financing activities.............. (429.9) (836.6) (538.7)
--------- -------- ---------
Net increase/(decrease) in cash and
marketable securities during the year............. (50.4) 41.3 (89.7)
Cash and marketable securities at
beginning of year................................. 144.0 102.7 192.4
--------- -------- ---------
Cash and marketable securities at
end of year....................................... $ 93.6 $ 144.0 $ 102.7
========= ======== ========
- ---------------------------------------------------------------------------------------------
</TABLE>
The accompanying statements should be read in conjunction with
the Notes to Consolidated Financial Statements appearing on
pages 52-67 of this report.
51
<PAGE>19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
ALL OF THE FOLLOWING NOTES, EXCEPT NOTE 2, REFLECT DATA
ON A CONTINUING OPERATIONS BASIS.
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES
This summary of the significant accounting principles
and policies of Anheuser-Busch Companies, Inc. and its
subsidiaries is presented to assist in evaluating the company's
financial statements included in this report. These principles
and policies conform to generally accepted accounting principles.
The preparation of financial statements in conformity with
generally accepted accounting principles requires that management
make estimates and assumptions which impact the reported amounts
of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates and assumptions.
PRINCIPLES OF CONSOLIDATION
The Consolidated Financial Statements include the company
and all its subsidiaries. All significant intercompany transactions
have been eliminated.
FOREIGN CURRENCY TRANSLATION
Adjustments resulting from foreign currency transactions are
recognized in income. Adjustments resulting from the translation
of financial statements are reflected as a separate component of
shareholders equity.
EXCESS OF COST OVER NET ASSETS OF ACQUIRED BUSINESSES (GOODWILL)
The excess of the cost over the net assets of acquired
businesses, which is included in Investments and Other Assets
on the Consolidated Balance Sheet, is amortized on a straight-line
basis over a period of 40 years. Accumulated amortization at
December 31, 1995 and 1994 was $79.7 million and $66.8 million,
respectively.
INVENTORIES AND PRODUCTION COSTS
Inventories are valued at the lower of cost or market. Cost is
determined under the last-in, first-out method (LIFO) for
substantially all inventories.
PLANT AND EQUIPMENT
Plant and equipment is carried at cost and includes expenditures
for new facilities and expenditures which substantially increase
the useful lives of existing facilities. Maintenance, repairs
and minor renewals are expensed as incurred. When plant and
equipment are retired or otherwise disposed, the related cost and
accumulated depreciation are eliminated and any gain or loss on
disposition is reflected in income or expense.
Depreciation is provided on the straight-line method over the
estimated useful lives of the assets, resulting in depreciation
rates on buildings ranging from 2% to 10% and on machinery and
equipment ranging from 4% to 25%.
CAPITALIZATION OF INTEREST
Interest relating to the cost of acquiring certain fixed
assets is capitalized. The capitalized interest is included as
part of the cost of the related asset and is amortized over its
estimated useful life.
INCOME TAXES
The provision for income taxes is based on the income and expense
amounts as reported in the Consolidated Statement of Income. The
company has elected to utilize certain provisions of federal income
tax laws and regulations to reduce current taxes payable. Deferred
income taxes are recognized for the effect of temporary differences
between financial and tax reporting in accordance with the
requirements of Statement of Financial Accounting Standards No. 109.
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND
CONCENTRATION OF CREDIT RISK
The company is party to certain financial instruments with
off-balance-sheet risk incurred in the normal course of
business. These financial instruments include financial guarantees,
52
<PAGE>20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
forward and purchased option contracts designated as
hedges, and interest rate swaps. The company's exposure
to credit loss in the event of nonperformance by the
counterparty to these financial instruments (either
individually or in the aggregate) is not material.
The company does not have a material concentration of
accounts receivable or credit risk.
Derivative financial instruments, which are used by the
company in the management of interest rate, commodity and
foreign currency risk exposures, are accounted for on an
accrual basis. Income and expense are recognized in the
same category as that for the related asset or liability.
For example, the amount to be paid or received under the
interest rate swap agreement is recognized as interest
expense in the period in which it accrues.
Derivative financial instruments are used solely to
manage existing risks and exposures. Forward, purchased
option and swap contracts are either standard over-the
-counter and futures exchange instruments which are
highly liquid, or are counterpartied with highly rated
financial institutions. No credit loss is anticipated as
the counterparties to these agreements are major
financial institutions which have a long-term debt rating
from Standard and Poor's or Moody's that is no lower than
A+ or A1, respectively.
The fair value of derivative financial instruments is
monitored based on the estimated amounts the company
would receive or pay to terminate the contracts.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Long-term debt is the only significant financial
instrument of the company with a fair value different
than its recorded value. As of December 31, 1995, the
fair value of long-term debt was $3.6 billion, compared
to its recorded value of $3.3 billion. The fair value of
long-term debt was estimated based on the quoted market
values for the same or similar debt issues, or rates
currently available for debt with similar terms.
RESEARCH AND DEVELOPMENT, ADVERTISING, PROMOTIONAL COSTS
AND INITIAL PLANT COSTS
Research and development, advertising, promotional
costs and initial plant costs are expensed in the year in
which these costs are incurred. Advertising expenses were
$683.0 million, $672.6 million and $661.6 million in
1995, 1994 and 1993, respectively.
EARNINGS PER SHARE
Earnings per share are based on the weighted average
number of shares of common stock and common stock
equivalents outstanding during the respective years as
shown below (in millions):
---------------------------------------------------------
1995 1994 1993
-------------------
Primary weighted average shares........ 257.9 264.1 274.3
Fully diluted weighted average shares.. 262.2 269.0 279.3
---------------------------------------------------------
Fully diluted earnings per share of common stock assume
the conversion of the company's 8% convertible debentures
and the elimination of the related after-tax interest
expense.
IMPAIRMENT OF LONG-LIVED ASSETS, IDENTIFIABLE INTANGIBLES
AND GOODWILL
The company reviews long-lived assets, identifiable
intangibles and goodwill for impairment whenever events
or changes in business circumstances indicate the
carrying amount of the assets may not be fully
recoverable. The company performs nondiscounted cash flow
analyses to determine if an impairment exists. Impairment
losses on assets to be held (if any) are determined based
on the present value of cash flows using discount rates
which reflect the inherent risk of the underlying
business. Impairment losses on assets to be disposed are
based on the estimated proceeds to be received less costs
of disposal.
SYSTEMS DEVELOPMENT COSTS
The company defers systems development costs which meet
established criteria. Amounts deferred are amortized to
expense over a five-year period. Deferred systems
development costs were $43.7 million, $31.9 million and
$13.2 million in 1995, 1994 and 1993, respectively.
53
<PAGE>21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
POSTEMPLOYMENT BENEFITS
The estimated cost of postemployment benefits provided
by the company to former or inactive employees is accounted
for on the accrual basis in accordance with the requirements
of Statement of Financial Accounting Standards No. 112.
STOCK-BASED COMPENSATION
In October 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 123,
"Stock Based Compensation" (FAS 123). The standard (which is
effective in calendar 1996) defines a fair-value-based method
of accounting for employee stock options. The company currently
accounts for employee stock options in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." FAS 123 permits a choice between accounting methods
and the company intends to continue using its current methodology.
Accordingly, the new standard will have no impact on the company,
other than to require additional disclosures in 1996.
INVESTMENTS IN DEBT AND EQUITY SECURITIES
The company has certain investments in debt and equity securities.
These investments are classified as held-to-maturity as required by
Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." Unrealized
gains or losses were not material for 1995 or 1994.
- --------------------------------------------------------------------
2. DIVESTITURE OF FOOD PRODUCTS SEGMENT
In the fourth quarter 1995, the Board of Directors approved
management's plan to divest the company's food products segment,
which includes Campbell Taggart, Inc. and Eagle Snacks, Inc.
Campbell Taggart, Inc. will be divested in a tax-free 100% spin-off
to shareholders, with an estimated record date in the first quarter
of 1996. In February 1996, the company reached an agreement to sell
most of its Eagle Snacks production facilities. The sale is subject
to approval by appropriate regulatory agencies. The food products
segment is accounted for as a discontinued operation, and accordingly,
amounts in the Consolidated Financial Statements and related Notes
for all periods shown have been restated to reflect discontinued
operations accounting.
The net assets of the food products segment at December 31, 1995 and
1994 are reflected as Investment in Discontinued Operations in the
Consolidated Balance Sheet. The NET ASSETS OF THE FOOD PRODUCTS SEGMENT
at December 31, 1995 and 1994 are comprised of the following (in millions):
- ---------------------------------------------------------------
1995 1994
--------------------
Current Assets.............................. $292.7 $315.4
Property, plant and equipment, net.......... 756.3 922.3
Other assets................................ 264.6 257.7
Current Liabilities......................... (253.2) (180.0)
Deferred Income Taxes....................... (166.6) (176.7)
Other noncurrent liabilities................ (129.8) (141.4)
------ ------
Net Assets.................................. $764.0 $997.3
====== ======
- ----------------------------------------------------------------
54
<PAGE>22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
SALES, INCOME/(LOSS) BEFORE INCOME TAXES, AND RELATED
INCOME TAX PROVISION/(BENEFIT) OF THE FOOD PRODUCTS
SEGMENT (DISCONTINUED OPERATIONS) were as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Year Ended December 31,
---------------------------------
1995 1994 1993
---------------------------------
<S> <C> <C> <C>
Sales.......................................... $1,985.0 $2,028.5 $2,037.9
======== ======== ========
Pretax income/(loss)........................... $ (29.2) $ 31.1 $ (90.6)
Tax expense/(benefit).......................... (10.4) 13.5 (29.7)
Revaluation of deferred tax liability (FAS 109) - - 1.8
--------- ------- --------
Net income/(loss)............................... $ (18.8) $ 17.6 $ (62.7)
======== ======== ========
Loss on divestiture:
Loss on divestiture........................... $ (318.0) $ - $ -
Direct costs of disposal...................... (5.0) - -
Estimated operating losses during
phase-out period............................ (12.0) - -
--------- ------- --------
(335.0) - -
Income tax (benefit).......................... (109.5) - -
--------- ------- --------
Loss on divestiture of the food
products segment............................ $ (225.5) $ - $ -
======== ======== ========
Total income/(loss) from
discontinued operations....................... $ (244.3) $ 17.6 $ (62.7)
======== ======== ========
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------
3. CLOSURE OF THE TAMPA BREWERY
During the fourth quarter 1995, the company closed its
brewery located in Tampa, Fla., resulting in a
nonrecurring, pretax charge of $160 million ($.38 per
share). The charge is comprised of the write-down of the
carrying value of plant assets of $113.7 million,
employee severance costs of $19.4 million and other
disposal costs of $26.9 million. In conjunction with the
closure, the company terminated approximately 400
employees under an enhanced severance plan. The majority
of the Tampa brewery's plant equipment and facilities
will be either sold or disposed during the first half of
1996.
---------------------------------------------------------
4. SALE OF THE CARDINALS
In December 1995, the company signed a contract to sell
its Major League Baseball team, the St. Louis Cardinals.
The sale will include Busch Memorial Stadium, nearby
parking garages and other properties in downtown St.
Louis owned by the company's Civic Center Corporation
subsidiary. The sale price will approximate $150
million, resulting in an estimated pretax gain on
disposition of approximately $50 million. The
transaction is subject to Major League Baseball approval.
The sale will close in early 1996 and the gain will be
recognized in the company's 1996 financial statements.
---------------------------------------------------------
5. ACQUISITIONS AND BUSINESS INVESTMENTS
In December 1995, the company announced an alliance
with Compania Cervecerias Unidas S.A. (CCU) and Buenos
Aires Embotelladora S.A. (BAESA). The agreement calls for
CCU-Argentina, CCU's wholly owned subsidiary in
Argentina, to begin brewing Budweiser at its brewery in
Sante Fe, Argentina in late 1996. The company will
purchase a small initial equity investment in CCU
-Argentina and will have the option to increase its
investment to approximately 20% beginning on October 1,
1998.
In April 1995, the company entered into a joint venture
with Scottish Courage Ltd. which consolidated the brewing
and packaging of Budweiser in the Stag Brewery at
Mortlake in London, England.
55
<PAGE>23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
Anheuser-Busch has a 50% share of the joint venture.
Scottish Courage is leasing the Stag Brewery site to the
joint venture. The investment is accounted for under the
equity method.
In February 1995, the company finalized the purchase
of a controlling interest in the Zhongde Brewery located in
the central region of the People's Republic of China, the
world's second-largest beer market. The company purchased an
80% interest in a joint venture that owns the brewery for $52.4
million. The remaining 20% of the joint venture is owned by
the original joint venture partners. However, certain minority
shareholders may put their investment to Anheuser-Busch in
accordance with contract terms. The brewery has been
modified to brew Budweiser for distribution in China. The
investment is accounted for on a consolidated basis.
In February 1995, the company announced an alliance with
Companhia Antarctica Paulista (Antarctica), one of Brazil's
largest brewers. Under terms of the agreement, the company
will invest $52.5 million to purchase an initial 5% equity share
in a new Antarctica subsidiary that will consolidate Antarctica's
holdings in affiliatedcompanies. The company will have options
to increase its investment to approximately 30% in the future.
Closing is scheduled for early in the second quarter 1996.
In the fourth quarter 1994, the company purchased for $18
million a 25% equity interest in Redhook Ale Brewery, Inc.
(Redhook) of Seattle, Wash. In conjunction with Redhook's
initial public offering of shares in August 1995, the company
invested an additional $12 million to maintain its 25% equity
investment. Under a distribution alliance agreement, Redhook
products are distributed exclusively through Anheuser-Busch
wholesalers in substantially all major United States markets.
The value of the company's investment at market prices was
$58.3 million at December 31, 1995 compared to its original
acquisition cost of $30 million. The company is accounting
for the investment under the equity method.
In June 1993, the company purchased a 17.7% interest in
Grupo Modelo, Mexico's largest brewer, and its subsidiaries for
$477 million. The company is accounting for its investment in
Modelo under the cost method. The agreement gives Anheuser-Busch
options to increase its investment to a minority position in
Modelo of approximately 35% and to acquire an additional minority
interest in Modelo's subsidiaries. These options may be exercised
between mid-1995 and the end of 1997. The company has not made a
decision as to when, or if, to exercise the options. Under certain
circumstances involving the nonexercise of such options by Anheuser-
Busch, at either party's election, Modelo may repurchase
approximately half of Anheuser-Busch's investment at cost and
repurchase the remainder at prevailing market rates.
In July 1993, the company purchased a 5% interest in China's
largest brewer, Tsingtao Brewery Co. Ltd. (Tsingtao), for $16.4
million. The purchase occurred in conjunction with Tsingtao's
initial public offering of shares on the Stock Exchange of Hong Kong.
This public offering represented approximately 35% of Tsingtao,
including the 5% purchased by Anheuser-Busch. The value of the
company's investment at quoted market prices was $10.5 million
at December 31, 1995.
- -------------------------------------------------------------------------
6. PROFITABILITY ENHANCEMENT PROGRAM
In September 1993, the company announced a Profitability
Enhancement Program to improve sales and profitability. The
Program, which involved significant organizational and
operational changes, included the following elements:
- - An enhanced retirement program for salaried employees ($92.4
million);
- - The write-down of underperforming facilities in the entertainment
segment ($114.3 million); and
- - Restructuring and reorganization of the company ($194.6 million).
As a result of the Program, the company recognized a $401.3
million restructuring charge in 1993.
The Program included a 10% reduction in the salaried workforce,
achieved through an enhanced retirement program. The enhanced
retirement program offered salaried employees age 53 or older
certain incentives and the opportunity to retire effective
December 31, 1993. Incentives included pension credits for an
additional five years of service and five years of age. Total
cost of the enhanced retirement program was $92.4 million and is
discussed in more detail in Note 12.
As part of the Program, the company restructured and reorganized
certain operations at a cost of $194.6 million. The restructuring
and reorganization primarily included the rationalization of brewing
operations based on the successful practices employed at the
company's newer breweries.
56
<PAGE>24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
The RECONCILIATION OF RESTRUCTURING ACCRUAL ACTIVITY for
1995 and 1994 is as follows (in millions):
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
1995 1994
------------------
<S> <C> <C>
Beginning balance, January 1.................................. $50.2 $137.6
Asset write-offs associated with the beer and beer-related
segment..................................................... (23.7) (66.0)
Cash payments associated with the enhanced retirement program - (8.0)
Cash payments for systems development and training costs
associated with the enhanced retirement program.............. (25.0) (5.3)
Other miscellaneous items, net................................. (1.5) (8.1)
----- ------
Ending balance, December 31.................................... $ - $ 50.2
====== ======
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------
7. INVENTORY VALUATION
Approximately 76.0% and 78.7% of total inventories at
December 31, 1995 and 1994, respectively, are stated on
the last-in, first-out (LIFO) inventory valuation method.
Had the average-cost method (which approximates
replacement cost) been used with respect to such
inventories at December 31, 1995 and 1994, total
inventories would have been $101.5 million and $99.7
million higher, respectively.
--------------------------------------------------------
8. CREDIT AGREEMENTS
The company's committed revolving credit agreements
totaling $800 million were terminated in December 1994.
The company's new committed revolving credit agreements,
effective in December 1994 and totaling $1 billion,
expire in January 2000. The agreements provide that under
certain circumstances the company may select among
various loan arrangements with differing maturities and
among a variety of interest rates, including a negotiated
rate. At December 31, 1995 and 1994 the company had no
outstanding borrowings under these agreements. Fees under
these agreements were $.8 million, $.8 million and $.9
million in 1995, 1994 and 1993, respectively.
---------------------------------------------------------
9. LONG-TERM DEBT
LONG-TERM DEBT at December 31 consisted of the
following (in millions):
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
1995 1994
-------------------------
<S> <C> <C>
Commercial paper (interest rates from 3.2% to 6.2%)...... $ 572.5 $ 749.3
Medium-term Notes Due 1995 to 2001 (interest rates
from 4.6% to 9.0%)..................................... 108.0 225.0
8.75% Notes Due July 15, 1995............................ - 100.0
8% Convertible Debentures Due 1996....................... 166.0 233.2
8.75% Notes Due 1999..................................... 250.0 250.0
6.9% Notes Due 2002...................................... 200.0 200.0
6.75% Notes Due 2005..................................... 200.0 -
7% Notes Due 2005........................................ 100.0 -
9% Debentures Due 2009................................... 350.0 350.0
7.25% Debentures Due 2015................................ 150.0 -
7.375% Debentures Due 2023............................... 200.0 200.0
7% Debentures Due 2025................................... 200.0 -
ESOP Debt Guarantee...................................... 347.1 377.4
Sinking Fund Debentures.................................. 261.9 263.7
Industrial Revenue Bonds................................. 136.7 112.3
Other Long-term Debt..................................... 27.9 5.5
-------- --------
$3,270.1 $3,066.4
======== ========
--------------------------------------------------------------------------------
</TABLE>
57
<PAGE>25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
The company's SINKING FUND DEBENTURES at December 31 are as
follows (in millions):
- ------------------------------------------------------------------
1995 1994
--------------------
8-5/8% Debentures maturing 1997 to 2016....... $150.0 $150.0
8-1/2% Debentures maturing 1998 to 2017....... 150.0 150.0
10% Debentures maturing 1999 to 2018.......... 68.0 68.0
Less: Debentures held in treasury......... (106.1) (104.3)
------ ------
$261.9 $263.7
====== ======
- ------------------------------------------------------------------
The company utilizes SEC shelf registration statements to
provide financing flexibility. At December 31, 1995, a total
of $300 million was available for debt issuance under shelf
registration statements.
In 1989, the company registered with the SEC $300 million of
convertible debentures, $241.7 million of which were issued to
Qualified Holders. The debentures may only be held by a qualified,
independently owned beer wholesaler (and certain related parties)
and may be converted into a 5% convertible preferred stock, par
value $1.00, at a conversion price of $47.60 per share. Each share
of the convertible preferred stock may be converted into one share
of the company's common stock. The convertible debentures and
convertible preferred stock are subject to mandatory redemption at
the end of seven years, optional redemption/repurchase at the
company's or holder's discretion after three years, and special
redemption/repurchase based upon the occurrence of certain
events with respect to particular holders. In 1995 and 1994, 1.4
million and .1 million common shares were issued in conjunction
with debt conversions, respectively. These debentures are classified
as long-term at December 31, 1995, as conversion to common shares is
expected in 1996.
Gains/losses on debt redemptions (either individually or in the
aggregate) were not material to the company's Consolidated
Financial Statements.
At December 31, 1995 and 1994, there were $572.5 million and
$749.3 million, respectively, of outstanding commercial paper
borrowings classified as long-term debt. The commercial paper is
intended to be maintained on a long-term basis with ongoing credit
provided by the company's revolving credit agreements.
During 1992, the company entered into a financial fixed-rate swap
agreement on a notional amount of $200 million. The company is
obligated to pay a fixed rate of 6.54% per year for the four-year
period beginning January 1, 1994. In return, the company will
receive a floating interest rate based on commercial paper rates. The
swap agreement did not have a material impact on the company's
weighted-average interest rate.
The company utilizes interest rate swaps solely as a risk management
tool with an objective of managing the level of interest rate risk and
the mix of fixed and floating rate debt.
The aggregate maturities on all long-term debt are $167 million,
$33 million, $26 million, $265 million and $53 million, respectively,
for each of the years ending December 31, 1996 through 2000. These
aggregate maturities do not include the future maturities of the ESOP
debt guarantee or commercial paper.
- ----------------------------------------------------------------------
10. STOCK OPTION PLANS
The company had an Incentive Stock Option/Non-Qualified Stock Option
Plan and a Non-Qualified Stock Option Plan for certain qualified
employees which expired on December 21, 1991. Under the terms of the
plans, options were granted at not less than the fair market value of
the shares at the date of grant. The Non-Qualified Stock Option Plan
provided that optionees could be granted Stock Appreciation Rights (SARs)
in tandem with stock options. The exercise of a SAR cancels the related
option and the exercise of an option cancels the related SAR. At December
31, 1995 and 1994, a total of 1,319,202 and 2,172,691 shares, respectively,
were reserved for possible future issuance under these plans.
58
<PAGE>26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
In April 1990, the shareholders approved an Incentive
Stock Plan for certain qualified employees. The plan (as
amended) provides for the grant of options and SARs.
Under the terms of the plan, options may be granted at
not less than the fair market value of the shares at the
date of grant. At December 31, 1995 and 1994, a total of
16,724,999 and 18,362,145 shares, respectively, were
reserved for future issuance under this plan.
Presented below is a SUMMARY OF ACTIVITY FOR THE PLANS
for the years ended December 31:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Options outstanding at beginning of the year.. 12,219,332 11,361,418 10,887,085
Options granted during the year............... 2,843,107 2,341,472 2,023,400
Options and SARs exercised during the year.... (2,484,816) (1,239,763) (1,399,573)
Options cancelled during the year............. (147,484) (243,795) (149,494)
---------- ---------- ----------
Options outstanding at end of the year........ 12,430,139 12,219,332 11,361,418
========== ========== ==========
Options exercisable at end of the year........ 7,498,101 7,998,659 8,009,951
Option price range per share..................$26.25-$65.75 $20.84-$58.56 $12.28-$58.56
-----------------------------------------------------------------------------------------
</TABLE>
The plans provide for acceleration of exercisability of
the options upon the occurrence of certain events
relating to a change of control, merger, sale of assets
or liquidation of the company (Acceleration Events). The
Non-Qualified Plan and the Incentive Stock Plan also
provide that optionees may be granted Limited Stock
Appreciation Rights (LSARs). LSARs become exercisable, in
lieu of the option or SAR, upon the occurrence, six
months following the date of grant, of an Acceleration
Event. These LSARs entitle the holder to a cash payment
per share equivalent to the excess of the share value
(under terms of the LSAR) over the grant price. As of
December 31, 1995 and 1994, there were 843,820 and
1,371,413, respectively, of LSARs outstanding.
---------------------------------------------------------
11. EMPLOYEE STOCK OWNERSHIP PLAN
In 1989, the company added an Employee Stock Ownership
Plan (ESOP) to its existing Deferred Income Stock
Purchase and Savings Plans. Substantially all regular
salaried and hourly employees are eligible for
participation in the ESOP. The ESOP borrowed $500 million
for a term of 15 years at an interest rate of 8.3% and
used the proceeds to buy approximately 11.3 million
shares of common stock from the company. The ESOP debt is
guaranteed by the company, and ESOP shares are being
allocated to participants over 15 years as contributions
are made to the plans.
ESOP cash contributions and ESOP expense accrued during
the calendar year are determined by several factors
including the market price and number of shares allocated
to participants, ESOP debt service, dividends on
unallocated shares and the company's matching
contribution. Over the 15-year life of the ESOP, total
expense will equal the total cash contributions made by
the company.
ESOP cash contributions are made in March and
September, based on the plan year which ends March 31. A
summary of ESOP CASH CONTRIBUTIONS AND DIVIDENDS ON
UNALLOCATED ESOP SHARES for the three years ended
December 31 is presented below (in millions):
----------------------------------------------------
1995 1994 1993
-------------------------
Cash contributions.......... $45.8 $41.8 $39.4
===== ===== =====
Dividends................... $10.8 $10.9 $10.6
===== ===== =====
----------------------------------------------------
Total ESOP expense is allocated to operating expense
and interest expense based upon the ratio of principal
and interest payments on the debt. ESOP EXPENSE for the
three years ended December 31 is presented below (in
millions):
------------------------------------------------------
1995 1994 1993
-----------------------------
Operating expense......... $19.6 $23.3 $18.6
Interest expense.......... 18.0 24.0 21.8
----- ----- -----
Total expense............. $37.6 $47.3 $40.4
===== ===== =====
------------------------------------------------------
59
<PAGE>27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
12. RETIREMENT BENEFITS
As discussed in Note 6, in September 1993 the company
announced a Profitability Enhancement Program that included
an enhanced retirement program. Total costs related to the
enhanced retirement program were $92.4 million. Included in this
cost was $39.3 million in special pension benefits, offset by
$15.3 million in curtailment gains (for a net cost of $24.0
million). Additionally, a $15.4 million charge for postretirement
benefits other than pensions is included in the total cost. The
remaining portion of the cost relates to severance benefits and
other expenses of implementing the plan.
PENSION PLANS
The company has pension plans covering substantially all of
its regular employees. TOTAL PENSION EXPENSE for the three
years ended December 31 is presented below (in millions):
- ----------------------------------------------------------------
1995 1994 1993
-----------------------
Single-employer defined benefit plans..... $29.6 $27.1 $ 7.1
Multi-employer plans...................... 26.1 25.5 24.3
Defined contribution plans................ 15.0 15.1 13.2
----- ----- -----
$70.7 $67.7 $44.6
===== ===== =====
- -----------------------------------------------------------------
NET PENSION EXPENSE FOR SINGLE-EMPLOYER DEFINED BENEFIT PLANS
was comprised of the following for the three years ended
December 31 (in millions):
- ----------------------------------------------------------------------------
1995 1994 1993
---------------------------
Service cost (benefits earned during the year).... $41.0 $42.3 $41.5
Interest cost on projected benefit obligation..... 64.4 60.2 56.8
Assumed return on assets.......................... (80.6) (68.9) (82.4)
Amortization of prior service cost, actuarial
gains/losses and the excess of market value of
plan assets over projected benefit obligation
at January 1, 1986.............................. 4.8 (6.5) (8.8)
----- ----- -----
Net pension expense............................... $29.6 $27.1 $ 7.1
===== ===== =====
- ----------------------------------------------------------------------------
The KEY ACTUARIAL ASSUMPTIONS USED IN DETERMINING PENSION EXPENSE
FOR SINGLE-EMPLOYER DEFINED BENEFIT PLANS were as follows for the
years ended December 31:
- ----------------------------------------------------------------------------
1995 1994 1993
-----------------------
Discount rate......................................... 8.0% 7.5% 9.0%
Long-term rate of return on plan assets............... 10.0% 10.0% 10.0%
Weighted-average rate of compensation increase........ 5.5% 5.5% 6.5%
- ----------------------------------------------------------------------------
The actual return on pension assets was $140.9 million, $12.5
million and $96.2 million in 1995, 1994 and 1993, respectively.
The following tables set forth the FUNDED STATUS OF ALL COMPANY
SINGLE-EMPLOYER DEFINED BENEFIT PLANS at December 31 (in millions):
- --------------------------------------------------------------------------
1995 1994
-------------------
Plan assets at fair market value-primarily corporate
equity securities and publicly traded bonds.......... $935.8 $791.2
------ ------
Accumulated benefit obligation:
Vested benefits...................................... (724.5) (625.3)
Nonvested benefits................................... (61.7) (60.3)
------ ------
Accumulated benefit obligation......................... (786.2) (685.6)
Effect of projected compensation increases............. (138.6) (122.2)
------ ------
Projected benefit obligation........................... (924.8) (807.8)
------ ------
Plan assets in excess of/(less than) projected benefit
obligation............................................ $ 11.0 $(16.6)
====== ======
- ----------------------------------------------------------------------------
60
<PAGE>28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PLAN ASSETS IN EXCESS OF/(LESS THAN) PROJECTED BENEFIT
OBLIGATION consist of the following at December 31:
-------------------------------------------------------------------------
1995 1994
-----------------
<S> <C> <C>
Unamortized excess of market value of plan assets over
projected benefit obligation at January 1, 1986
being amortized over 15 years.......................... $33.6 $ 40.2
Unrecognized net actuarial (losses)...................... (21.9) (89.5)
Prior service costs...................................... (81.4) (60.5)
Prepaid pension.......................................... 80.7 93.2
----- ------
$11.0 $(16.6)
===== ======
--------------------------------------------------------------------------
</TABLE>
The ASSUMPTIONS USED IN DETERMINING THE FUNDED STATUS
of these plans as of December 31 were as follows:
---------------------------------------------------------
1995 1994
-----------
Discount rate................................. 7.5% 8.0%
Weighted-average rate of compensation increase 5.5% 5.5%
---------------------------------------------------------
Contributions to multi-employer plans in which the
company and its subsidiaries participate are determined
in accordance with the provisions of negotiated labor
contracts and are based on employee hours worked.
POSTRETIREMENT BENEFITS
The company provides certain health care and life
insurance benefits to eligible retired employees.
Salaried participants generally become eligible for
retiree health care benefits after reaching age 55 with
10 years of service or after reaching age 65. Bargaining
unit employees generally become eligible for retiree
health care benefits after reaching age 55 with 10-15
years of service or after reaching age 65.
The following table sets forth the ACCUMULATED
POSTRETIREMENT BENEFIT OBLIGATION (APBO) AND THE TOTAL
POSTRETIREMENT BENEFIT LIABILITY FOR ALL SINGLE-EMPLOYER
DEFINED BENEFIT PLANS at December 31 (in millions):
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
1995 1994
-------------------
<S> <C> <C>
Retirees................................................... $141.1 $134.1
Fully eligible active plan participants.................... 135.1 127.4
Other active plan participants............................. 74.0 73.0
------ ------
Accumulated postretirement benefit obligation (APBO)....... 350.2 334.5
Unrecognized prior service benefits........................ 125.5 138.1
Unrecognized net actuarial gains........................... 51.8 33.6
------ ------
Total postretirement benefit liability..................... $527.5 $506.2
====== ======
-----------------------------------------------------------------------------
</TABLE>
As of December 31, 1995 and 1994, $15.4 million and
$11.3 million of this obligation was classified as a
current liability and $512.1 million and $494.9 million
was classified as a long-term liability, respectively.
NET PERIODIC POSTRETIREMENT BENEFITS EXPENSE FOR SINGLE
EMPLOYER DEFINED BENEFIT PLANS for 1995, 1994 and 1993
was comprised of the following (in millions):
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
1995 1994 1993
----------------------
<S> <C> <C> <C>
Service cost (benefits attributed to service during the year)... $20.8 $16.4 $18.1
Interest cost on accumulated postretirement benefit obligation.. 23.9 25.8 33.8
Amortization of prior service (benefit)......................... (11.8) (11.5) (4.1)
Amortization of actuarial (gain)/loss........................... - .3 (.1)
----- ----- -----
Net periodic postretirement benefits expense.................... $32.9 $31.0 $47.7
===== ===== =====
-------------------------------------------------------------------------------------
</TABLE>
61
<PAGE>29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
In measuring the APBO, a 12.5% annual trend rate for
health care costs was assumed for 1995, 1994 and 1993. This
rate is assumed to decline ratably over the next 12 years to
6.5% and remain at that level thereafter. The weighted average
discount rate used in determining the APBO was 8.0% and 8.5%,
respectively, at December 31, 1995 and 1994.
If the assumed health care cost trend rate changed by 1%,
the APBO as of December 31, 1995 would change by 12.7%. The effect
of a 1% change in the cost trend rate on the service and interest
cost components of net periodic postretirement benefits expense
would be a change of 14.4%.
- ------------------------------------------------------------------
13. INCOME TAXES
The PROVISION FOR INCOME TAXES consists of the following,
for the three years ended December 31 (in millions):
- -----------------------------------------------------------------
1995 1994 1993
--------------------------------
Current Tax Provision:
Federal......................... $435.4 $480.2 $459.5
State and foreign............... 106.4 108.4 102.9
------ ------ ------
541.8 588.6 562.4
------ ------ ------
Deferred Tax Provision:
Federal......................... (76.6) 74.1 (126.2)
State and foreign............... (10.0) 12.3 (13.3)
------ ------ ------
(86.6) 86.4 (139.5)
------ ------ ------
$455.2 $675.0 $422.9
====== ====== ======
- -----------------------------------------------------------------
The PROVISION FOR INCOME TAXES included in the Consolidated
Statement of Income is as follows (in millions):
- -----------------------------------------------------------------
1995 1994 1993
--------------------------------
Continuing operations............. $575.1 $661.5 $452.6
Discontinued operations........... (119.9) 13.5 (29.7)
------ ------ ------
$455.2 $675.0 $422.9
====== ====== ======
- -----------------------------------------------------------------
The deferred tax provision results from differences in the
recognition of income and expense for tax and financial reporting
purposes. The primary differences for continuing operations are
related to fixed assets (tax effect of $45.4 million in 1995,
$63.3 million in 1994 and $23.7 million in 1993), Tampa brewery
closure benefit ($52.2 million) in 1995 and the restructuring
charge benefit ($131.3 million) in 1993.
At December 31, 1995 the company had deferred tax liabilities
of $1,641.8 million and deferred tax assets of $509.0 million. The
principal temporary differences included in deferred tax
liabilities are related to fixed assets ($1,424.9 million). The
principal temporary differences included in deferred tax assets are
related to accrued postretirement benefits ($193.5 million), closure
of the Tampa brewery ($52.2 million) and other accruals and temporary
differences ($263.3 million) which are not deductible for tax
purposes until paid or utilized.
On August 10, 1993, the Revenue Reconciliation Act of 1993 was
signed into law. As a result, the federal statutory income tax
rate was retroactively increased, effective January 1, 1993, by 1%
to 35%. This resulted in a $31.2 million nonrecurring, after-tax,
noncash charge related to revaluation of the deferred tax liability
in accordance with FAS 109.
The company's effective tax rate from continuing operations was
39.3% in 1995, 39.5% in 1994 and 42.4% in 1993.
A RECONCILIATION BETWEEN THE STATUTORY TAX RATE AND THE EFFECTIVE
TAX RATE is presented below:
- --------------------------------------------------------------------
1995 1994 1993
--------------------
Federal statutory tax rate..................... 35.0% 35.0% 35.0%
State income taxes, net of federal benefit..... 4.0 4.0 4.9
Revaluation of deferred tax liability.......... - - 2.4
Other.......................................... .3 .5 .1
----- ----- -----
Effective tax rate............................. 39.3% 39.5% 42.4%
===== ===== =====
- ---------------------------------------------------------------------
62
<PAGE>30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
14. CASH FLOWS
For purposes of the Statement of Cash Flows, all short
-term investments with maturities of 90 days or less are
considered cash equivalents. Such amounts include
marketable securities of $4.8 million in 1994. The effect
of foreign currency exchange rate fluctuations was not
material for 1995, 1994 and 1993. Accounts payable
include $86.9 million and $77.4 million, respectively, of
outstanding checks at December 31, 1995 and 1994.
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION WITH RESPECT TO THE STATEMENT
OF CASH FLOWS is presented below (in millions):
--------------------------------------------------------------------------------
1995 1994 1993
--------------------------------
<S> <C> <C> <C>
Interest paid, net of interest capitalized....... $ 198.0 $ 200.8 $ 167.5
Income taxes paid................................ 546.6 575.8 483.3
Excise taxes paid................................ 1,680.6 1,692.0 1,673.4
CHANGES IN NONCASH WORKING CAPITAL
Decrease/(increase) in noncash current assets:
Accounts receivable............................ $ 54.2 $ (47.2) $ (92.0)
Inventories.................................... (51.9) 5.0 27.6
Other current assets........................... (17.2) 1.7 (12.1)
Increase/(decrease) in current liabilities:
Accounts payable............................... (73.8) 54.2 69.7
Accrued salaries, wages and benefits........... 8.1 44.3 (11.9)
Accrued taxes, other than income taxes......... (10.3) (14.6) 4.8
Restructuring accrual.......................... (50.2) (87.3) -
Other current liabilities...................... (120.9) (13.1) 75.8
-------- -------- --------
Decrease/(increase) in noncash working capital... $ (262.0) $ (57.0) $ 61.9
======== ======== ========
---------------------------------------------------------------------------------
</TABLE>
---------------------------------------------------------
15. PREFERRED AND COMMON STOCK
STOCK ACTIVITY
ACTIVITY IN THE COMPANY'S STOCK CATEGORIES for the
three years ended December 31 is summarized below:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
COMMON STOCK COMMON STOCK
ISSUED IN TREASURY
-------------------------
<S> <C> <C>
BALANCE, DECEMBER 31, 1992..................... 341,400,328 (62,998,052)
Shares issued under stock plans................ 1,180,011 -
Conversions of convertible debentures.......... 2,100 -
Treasury stock acquired........................ - (12,643,125)
Treasury stock issued.......................... - 95,413
----------- -----------
BALANCE, DECEMBER 31, 1993..................... 342,582,439 (75,545,764)
Shares issued under stock plans................ 1,133,163 -
Conversions of convertible debentures.......... 81,927 -
Treasury stock acquired........................ - (10,961,408)
----------- -----------
BALANCE, DECEMBER 31, 1994..................... 343,797,529 (86,507,172)
Shares issued under stock plans................ 2,061,535 -
Conversions of convertible debentures.......... 1,406,060 -
Treasury stock acquired........................ - (6,781,490)
----------- -----------
BALANCE, DECEMBER 31, 1995..................... 347,265,124 (93,288,662)
=========== ============
---------------------------------------------------------------------------
</TABLE>
At December 31, 1995 and 1994, 40,000,000 shares of
$1.00 par value preferred stock were authorized and
unissued.
63
<PAGE>31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
STOCK REPURCHASE PROGRAMS
The Board of Directors has approved various resolutions
authorizing the company to purchase shares of its common stock
for investment purposes and to meet the requirements of the
company's various stock purchase and incentive plans. The
most recent resolution was approved by the Board in March 1994,
authorizing the repurchase of 25 million shares. The company has
acquired 6.8 million, 10.9 million and 12.6 million shares of
common stock in 1995, 1994 and 1993 for $393.4 million, $563.0
million and $639.8 million, respectively. At December 31, 1995,
approximately 12.3 million shares were available for repurchase
under the 1994 authorization.
STOCKHOLDER RIGHTS PLAN
The Board of Directors adopted a Stockholder Rights Plan in 1985
(extended in 1994) which in certain circumstances would permit
shareholders to purchase common stock at prices which would be
substantially below market value.
- ----------------------------------------------------------------------
16. COMMITMENTS AND CONTINGENCIES
In connection with plant expansion and improvement programs, the
company had commitments for capital expenditures of approximately
$369.8 million at December 31, 1995.
Obligations under capital and operating leases are not material.
The company and certain of its subsidiaries are involved in
certain claims and legal proceedings in which monetary damages and
other relief are sought. The company is vigorously contesting these
claims. However, resolution of these claims is not expected to occur
quickly, and their ultimate outcome cannot presently be predicted.
It is the opinion of management that the ultimate resolution of all
existing claims, legal proceedings and other contingencies, either
individually or in the aggregate, will not materially affect
either the company's financial position, liquidity or results of
operations.
- ------------------------------------------------------------------------
17. BUSINESS SEGMENTS
The company's principal business segments are beer and
beer-related and entertainment. The beer and beer-related segment
produces and sells the company's beer products. Included in this
segment are the company's raw material acquisition, malting,
can manufacturing, recycling, communications and transportation
operations.
The entertainment segment consists of the company's Sea World,
Busch Gardens and other theme parks, baseball, stadium and
real estate development operations.
Sales between segments, export sales and non-United States sales
are not material. The company's equity in earnings of affiliated
companies is included in other income and expense. No single
customer accounted for more than 10% of sales.
Summarized below is the company's BUSINESS SEGMENT INFORMATION
for 1995, 1994 and 1993 (in millions). Intersegment sales
have been eliminated from each segment's reported net sales.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
NET SALES | OPERATING INCOME (1) (2) (3)
--------------------------------------|--------------------------------
1995 1994 1993 | 1995 1994 1993
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Beer and Beer-Related.... $ 9,585.9 $ 9,283.8 $ 8,725.7 | $1,557.7 $1,784.5 $1,329.3
Entertainment............ 754.6 741.5 741.8 | 75.2 68.8 (42.8)
--------- --------- --------- | -------- -------- --------
Consolidated............. $10,340.5 $10,025.3 $ 9,467.5 | $1,632.9 $1,853.3 $1,286.5
========= ========= ========= | ======== ======== ========
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Operating income excludes other expense, net, which is
not allocated among segments. For 1995, 1994 and 1993, other
expense, net of $171.2 million, $177.3 million and $145.5
million, includes net interest expense, other income and
expense, and equity in earnings of affiliated companies.
(2) Operating income for 1995 includes the impact of the one-time,
pretax charge of $160.0 million for the closure of the Tampa
brewery, and the impact of the beer wholesaler inventory reduction.
(3) Operating income for 1993 includes the impact of the one-time,
pretax restructuring charge of $401.3 million as a result of the
company's Profitability Enhancement Program. The one-time charge
relates to business segments as follows: $269.7 million for
the beer and beer-related segment and $131.6 million for the
entertainment segment.
64
<PAGE>32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
| DEPRECIATION AND
IDENTIFIABLE ASSETS | AMORTIZATION EXPENSE (4)
--------------------------------|--------------------------
1995 1994 1993 | 1995 1994 1993
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Beer and Beer-Related............ $ 7,915.4 $ 7,719.0 $ 7,526.6| $484.7 $442.0 $416.6
Entertainment.................... 1,463.1 1,426.7 1,470.5| 80.9 75.0 76.1
Corporate (3).................... 448.4 404.4 384.4| - - -
Discontinued operations.......... 764.0 997.3 886.2| - - -
--------- --------- ---------| ------ ------ ------
Consolidated..................... $10,590.9 $10,547.4 $10,267.7| $565.6 $517.0 $492.7
========= ========= ========= ====== ====== ======
--------------------------------------------------------------------------------------------
</TABLE>
(3) Corporate assets principally include cash, marketable
securities and certain fixed assets.
(4) Consolidated depreciation and amortization expense
includes $23.1 million, $17.0 million and $15.8
million of depreciation expense related to corporate
assets for 1995, 1994 and 1993, respectively.
---------------------------------------------------
Capital Expenditures
---------------------------
1995 1994 1993
---------------------------
Beer and Beer-Related... $845.4 $563.0 $531.8
Entertainment........... 107.1 99.8 124.5
------ ------ ------
Consolidated............ $952.5 $662.8 $656.3
====== ====== ======
---------------------------------------------------------
---------------------------------------------------------
18. ADDITIONAL INFORMATION
ADDITIONAL BALANCE SHEET INFORMATION (in millions) is
summarized below:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
1995 1994
---------------------------
<S> <C> <C>
Plant and Equipment:
Land.................................................... $ 248.4 $ 225.8
Buildings............................................... 3,081.7 3,007.4
Machinery and equipment................................. 7,333.3 6,921.8
Construction in progress................................ 656.3 519.6
--------- ---------
11,319.7 10,674.6
Accumulated depreciation................................ (4,556.7) (4,180.0)
--------- ---------
$ 6,763.0 $ 6,494.6
========== ==========
Investments and Other Assets:
Investments in and advances to affiliated companies...... $ 671.6 $ 664.4
Investment properties.................................... 125.2 141.5
Deferred charges......................................... 312.7 261.5
Goodwill................................................. 443.8 442.0
--------- ---------
$ 1,553.3 $ 1,509.4
========== ==========
-------------------------------------------------------------------------------------
</TABLE>
65
<PAGE>33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
Summarized below is SELECTED FINANCIAL INFORMATION FOR
ANHEUSER-BUSCH, INC. (a wholly owned subsidiary of Anheuser-Busch
Companies, Inc.) as of and for the years ended December 31
(in millions):
- ----------------------------------------------------------------------
1995 1994 1993
--------------------------------------
Income Statement Information:
Net sales..................... $7,594.9 $7,797.3 $7,624.0
Gross profit.................. 2,889.6 2,937.7 2,844.8
Net income (1) (2) (3)........ 713.7 854.1 712.7
Balance Sheet Information:
Current assets................ 550.1 617.6
Noncurrent assets............. 13,004.6 12,096.8
Current liabilities........... 1,242.9 724.7
Noncurrent liabilities (1).... 3,152.7 3,529.9
- -----------------------------------------------------------------------
(1) Anheuser-Busch, Inc. is co-obligor for all outstanding
Anheuser-Busch Companies, Inc. indebtedness. Accordingly, all
such debt is included as an element of noncurrent liabilities
and the interest thereon is included in the determination of net
income.
(2) Net income for 1995 reflects the after-tax charge of $99.2
million relating to the closure of the Tampa brewery, and
the after-tax impact of the beer wholesaler inventory reduction.
(3) Net income for 1993 reflects $89.6 million representing
Anheuser-Busch, Inc.'s share of the $401.3 million pretax
restructuring charge.
- -----------------------------------------------------------------------
19. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER | ANNUAL
- -----------------------------------------------------------------------------------------------|------------
<S> <C> <C> <C> <C> <C>
Net Sales................... $2,318.2 $2,823.2 $2,966.5 $2,232.6 | $10,340.5
Gross Profit................ 776.8 1,027.8 1,088.0 656.9 | 3,549.5
Income/(loss) from |
continuing operations.... 221.7 329.9 343.9 (8.9) | 886.6
(Loss) from operations of |
discontinued segment..... (5.6) (0.8) (4.2) (8.2) | (18.8)
(Loss) on disposal of |
discontinued segment..... - - - (225.5) | (225.5)
- -----------------------------------------------------------------------------------------------|-------------
Net Income/(Loss)........... $ 216.1 $ 329.1 $ 339.7 $ (242.6) | $ 642.3
- -----------------------------------------------------------------------------------------------|-------------
Fully diluted earnings per share: |
Income/(loss) from |
continuing operations.. $ .85 $ 1.26 $ 1.33 $ (.03) | $ 3.42
(Loss) from operations |
of discontinued segment (.02) - (.02) (.03) | (.05)
(Loss) on disposal of |
discontinued segment - - - (.88) | (.88)
- -----------------------------------------------------------------------------------------------|--------------
Net lncome/(Loss).......... $ .83 $ 1.26 $ 1.31 $ (.94) | $ 2.49
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Fourth quarter 1995 net income from continuing operations
includes the nonrecurring after-tax charge of $99.2 million
related to the closure of the Tampa brewery, and the after-tax
impact of the beer wholesaler inventory reduction.
66
<PAGE>34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER Annual
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales................... $2,181.4 $2,697.1 $2,828.0 $2,318.8 | $10,025.3
Gross Profit................ 731.5 985.6 1,068.7 747.4 | 3,533.2
Income from |
continuing operations..... 200.7 322.5 329.5 161.8 | 1,014.5
Income from operations |
of discontinued segment... 3.7 - - 13.9 | 17.6
---------------------------------------------------------------------------------|----------
Net lncome.................. $ 204.4 $ 322.5 $ 329.5 $ 175.7 | $ 1,032.1
---------------------------------------------------------------------------------|----------
Fully diluted earnings per share: |
Income from |
continuing operations... $ .75 $ 1.20 $ 1.24 $ .62 | $ 3.81
Income from operations |
of discontinued segment. .01 - - .06 | .07
----------------------------------------------------------------------------------|----------
Net lncome.................. $ .76 $ 1.20 $ 1.24 $ .68 | $ 3.88
---------------------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------
20. RISK MANAGEMENT
The purpose of the company's hedging activities is to
protect the company from exchange rate and commodity
price volatility. Purchased option, swap and forward
contracts are utilized in the company's currency and
commodity hedging strategy. The company does not hold
or issue financial instruments for trading purposes.
Financial instruments are rarely sold before maturity,
and generally do not extend beyond two years. The
company primarily hedges foreign currency exposures
arising from the sale of product to foreign customers
or purchases from foreign suppliers, and commodity
price exposure relating to the acquisition of raw
materials. Realized and unrealized gains and losses
related to these contracts are immaterial.
The table below summarizes the NOTIONAL AMOUNT OF
OUTSTANDING CURRENCY AND COMMODITY CONTRACTS, BY
INSTRUMENT, at December 31 (in millions):
---------------------------------------------
GROSS NOTIONAL AMOUNT
----------------------
1995 1994
----------------------
Currency:
Forwards.............. $108.5 $190.0
Options............... 208.1 181.7
------ ------
$316.6 $371.7
====== ======
Commodities:
Swaps................. $153.3 $ -
====== ======
--------------------------------------------
The table below summarizes the NOTIONAL AMOUNT OF
OUTSTANDING FORWARD AND PURCHASED OPTION CONTRACTS, BY
CURRENCY, with a designation of "long" or "short" with
respect to the underlying exposure (1), at December 31
(in millions):
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
NET UNDERLYING EXPOSURE GROSS NOTIONAL AMOUNT
--------------------------------------------------------
1995 1994 1995 1994
--------------------------------------------------------
<S> <C> <C> <C> <C>
Japanese yen.............. Long Long $191.8 $243.0
German mark............... Short Short 37.1 43.5
British pound............. Long Long 43.9 54.4
Other currencies.......... Long and Short Long and Short 43.8 30.8
------ ------
$316.6 $371.7
====== ======
--------------------------------------------------------------------------------
</TABLE>
(1) "Long" indicates the company has foreign currency
in excess of its needs. "Short" indicates the
company requires additional foreign currency to
meet future needs.
67
<PAGE>35
FINANCIAL SUMMARY - OPERATIONS
Anheuser-Busch Companies, Inc., and Subsidiaries
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In millions, except per share data)
- --------------------------------------------------------------------------------------------------------------
1995 1994 1993
---------------------------------------------
<S> <C> <C> <C>
CONSOLIDATED SUMMARY OF OPERATIONS
Barrels sold...................................................... 87.5 88.5 87.3
========= ========= =========
Sales............................................................. $12,004.5 $11,705.0 $11,147.3
Federal and state excise taxes.................................. 1,664.0 1,679.7 1,679.8
--------- --------- ---------
Net sales......................................................... 10,340.5 10,025.3 9,467.5
Cost of products and services................................... 6,791.0 6,492.1 6,167.6
--------- --------- ---------
Gross profit...................................................... 3,549.5 3,533.2 3,299.9
Marketing, distribution and administrative expenses............. 1,756.6 1,679.9 1,612.1
Shutdown of Tampa brewery....................................... 160.0 - -
Restructuring charge............................................ - - 401.3
--------- --------- ---------
Operating income.................................................. 1,632.9 (1) 1,853.3 1,286.5 (2)
Interest expense................................................ (225.9) (219.3) (205.1)
Interest capitalized............................................ 24.3 21.8 35.2
Interest income................................................. 9.9 2.6 3.4
Other income/(expense), net..................................... 20.5 17.6 21.0
--------- --------- ---------
Income before income taxes........................................ 1,461.7 (1) 1,676.0 1,141.0 (2)
Income taxes (current and deferred)............................. 575.1 661.5 452.6
Revaluation of deferred tax liability........................... - - 31.2
--------- --------- ---------
Income from continuing operations................................. 886.6 (1) 1,014.5 657.2 (2)
Income/(loss) from discontinued operations........................ (244.3) 17.6 (62.7)
--------- --------- ---------
Income before cumulative effect of accounting changes............. 642.3 1,032.1 594.5
Cumulative effect of changes in the method of accounting
for postretirement benefits (FAS 106) and income taxes
(FAS 109), net of tax benefit of $186.4 million................. - - -
--------- --------- ---------
NET INCOME........................................................ $ 642.3 $ 1,032.1 $ 594.5
========= ========= =========
PRIMARY EARNINGS PER SHARE:
Continuing operations............................................. $ 3.44 $ 3.84 $ 2.40 (2)
Discontinued operations........................................... (.95) .07 (.23)
---------- ---------- ---------
Income before cumulative effect................................... 2.49 3.91 2.17
Cumulative effect of accounting changes........................... - - -
---------- ---------- ---------
Net income........................................................ $ 2.49 $ 3.91 $ 2.17
========== ========== =========
FULLY DILUTED EARNINGS PER SHARE:
Continuing operations............................................. $ 3.42 (1)$ 3.81 $ 2.40 (2)
Discontinued operations........................................... (.93) .07 (.23)
---------- ---------- ---------
Income before cumulative effect................................... 2.49 3.88 2.17
Cumulative effect of accounting changes........................... - - -
---------- ---------- ---------
Net income........................................................ $ 2.49 $ 3.88 $ 2.17
========== ========== =========
Cash dividends paid:
Common stock.................................................... 429.5 398.8 370.0
Per share..................................................... 1.68 1.52 1.36
Preferred stock................................................. - - -
Per share..................................................... - - -
Average number of common shares:
Primary......................................................... 257.9 264.1 274.3
Fully diluted................................................... 262.2 269.0 279.3
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: ALL PER SHARE INFORMATION AND AVERAGE NUMBER OF COMMON
SHARES DATA REFLECT THE SEPTEMBER 12, 1986 TWO-FOR-ONE STOCK SPLIT
AND THE JUNE 14, 1985 THREE-FOR-ONE STOCK SPLIT. ALL FINANCIAL
INFORMATION HAS BEEN RESTATED TO RECOGNIZE THE 1995 DIVESTITURE OF
THE FOOD PRODUCTS SEGMENT. ALL AMOUNTS INCLUDE THE ACQUISITION OF SEA
WORLD AS OF DECEMBER 1, 1989. FINANCIAL INFORMATION PRIOR TO 1988 HAS
BEEN RESTATED TO REFLECT THE 1988 ADOPTION OF FINANCIAL ACCOUNTING
STANDARDS NO. 94, "CONSOLIDATION OF MAJORITY-OWNED SUBSIDIARIES."
(1) 1995 results include the impact of the one-time pretax charge of $160.0
million for the closure of the Tampa brewery, and the $74.5 million
pretax impact of the beer wholesaler inventory reduction. Excluding
these nonrecurring special items, operating income, pretax income, net
income and fully diluted earnings per share would have been $1,867.3
million, $1,696.2 million, $1,032.3 million and $3.98, respectively.
68
<PAGE>36
<TABLE>
<CAPTION>
FINANCIAL SUMMARY - OPERATIONS
Anheuser-Busch Companies, Inc., and Subsidiaries
- ---------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986 1985
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
86.8 86.0 86.5 80.7 78.5 76.1 72.3 68.0
========= ========= ======== ======== ======== ======== ======== ========
$11,008.6 $10,631.9 $9,716.1 $8,553.7 $8,120.5 $7,605.0 $7,001.5 $6,420.2
1,668.6 1,637.9 868.1 802.3 781.0 760.7 724.5 683.0
- --------- --------- -------- -------- -------- -------- -------- --------
9,340.0 8,994.0 8,848.0 7,751.4 7,339.5 6,844.3 6,277.0 5,737.2
6,051.8 5,953.5 5,963.4 5,226.5 4,878.1 4,467.1 4,122.7 3,895.8
- --------- --------- -------- -------- -------- -------- -------- --------
3,288.2 3,040.5 2,884.6 2,524.9 2,461.4 2,377.2 2,154.3 1,841.4
1,583.7 1,409.5 1,364.9 1,244.3 1,245.2 1,274.4 1,179.9 1,011.4
- - - - - - - -
- - - - - - - -
- --------- --------- -------- -------- -------- -------- -------- --------
1,704.5 (3) 1,631.0 1,519.7 1,280.6 1,216.2 1,102.8 974.4 830.0
(194.6) (234.0) (277.2) (172.9) (134.6) (114.1) (85.5) (85.2)
46.9 45.6 52.5 49.8 42.9 38.9 31.0 37.2
4.4 6.6 4.3 7.9 9.8 12.8 9.6 21.0
(2.5) 1.3 (16.5) 17.7 (15.5) 3.9 (1.2) (15.2)
- --------- --------- -------- -------- -------- -------- -------- --------
1,558.7 (3) 1,450.5 1,282.8 1,183.1 1,118.8 1,044.3 928.3 (4) 787.8
594.6 549.6 481.4 438.2 422.0 439.1 419.0 348.2
- - - - - - - -
- --------- --------- -------- -------- -------- -------- -------- --------
964.1 (3) 900.9 801.4 744.9 696.8 605.2 509.3 (4) 439.6
30.1 38.9 41.0 22.3 19.1 9.5 8.7 4.1
- --------- --------- -------- -------- -------- -------- -------- --------
994.2 939.8 842.4 767.2 715.9 614.7 518.0 443.7
(76.7) - - - - - - -
- --------- --------- -------- -------- -------- -------- -------- --------
$ 917.5 $ 939.8 $ 842.4 $ 767.2 $ 715.9 $ 614.7 $ 518.0 $ 443.7
========= ========= ======== ======== ======== ======== ======== ========
$ 3.37 $ 3.12 $ 2.82 $ 2.60 $ 2.38 $ 2.01 $ 1.66 $ 1.41
.11 .14 .14 .08 .07 .03 .03 .01
- ---------- ---------- --------- --------- --------- --------- --------- ---------
3.48 3.26 2.96 2.68 2.45 2.04 1.69 1.42
(.26) - - - - - - -
- ---------- ---------- --------- --------- --------- --------- --------- ---------
$ 3.22 $ 3.26 $ 2.96 $ 2.68 $ 2.45 $ 2.04 $ 1.69 $ 1.42
========== ========== ========= ========= ========= ========= ========= =========
$ 3.36 (3) $ 3.12 $ 2.81 $ 2.60 $ 2.38 $ 2.01 $ 1.66 (4)$ 1.41
.10 .13 .14 .08 .07 .03 .03 .01
- ---------- ---------- --------- --------- --------- --------- --------- ---------
3.46 3.25 2.95 2.68 2.45 2.04 1.69 1.42
(.26) - - - - - - -
- ---------- ---------- --------- --------- --------- --------- --------- ---------
$ 3.20 $ 3.25 $ 2.95 $ 2.68 $ 2.45 $ 2.04 $ 1.69 $ 1.42
========== ========== ========= ========= ========= ========= ========= =========
338.3 301.1 265.0 226.2 188.6 148.4 120.2 102.7
1.20 1.06 .94 .80 .66 .54 .44 .36 2/3
- - - - - 20.1 26.9 27.0
- - - - - 3.23 3.60 3.60
285.8 287.9 284.6 286.2 292.2 301.5 306.6 312.6
290.8 292.9 289.7 286.2 292.2 301.5 306.6 312.6
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(2) 1993 results include the impact of two nonrecurring special charges.
These charges are (1) a restructuring charge ($401.3 million pretax)
and (2) a revaluation of the deferred tax liability due to the 1%
increase in federal tax rates ($31.2 million after-tax). Excluding
these nonrecurring special charges, operating income, pretax income,
net income and fully diluted earnings per share would have been
$1,687.8 million, $1,542.3 million, $935.2 million and $3.39,
respectively.
(3) 1992 operating income, income before income taxes, net income and
earnings per share reflect the 1992 adoption of the new Financial
Accounting Standards pertaining to Postretirement Benefits (FAS 106)
and Income Taxes (FAS 109). Excluding the financial impact of these
Standards, 1992 operating income, income before income taxes, net
income and fully diluted earnings per share would have been $1,819.3
million, $1,664.5 million, $1,022.1 million and $3.56, respectively.
(4) Effective January 1, 1986, the company adopted the provisions of
Financial Accounting Standards No. 87 (FAS 87), Employers' Accounting
For Pensions. The financial effect of FAS 87 adoption was to increase
1986 income before income taxes $33.9 million, net income $18 million
and earnings per share $.06.
69
<PAGE>37
<TABLE>
<CAPTION>
FINANCIAL SUMMARY - BALANCE SHEET AND OTHER INFORMATION
Anheuser-Busch Companies, Inc., and Subsidiaries
- ---------------------------------------------------------------------------
(In millions, except per share and statistical data)
- --------------------------------------------------------------------------------------------------------------
1995 1994 1993
------------------------------------------------------
<S> <C> <C> <C>
BALANCE SHEET INFORMATION
Working capital (deficit)............................... $ 268.6 $ 57.0 $ (41.3)
Current ratio........................................... 1.2 1.0 1.0
Plant and equipment, net................................ 6,763.0 6,494.6 6,454.7
Long-term debt.......................................... 3,270.1 3,066.4 3,019.7
Total debt to total capitalization...................... 47.1% 47.3% 47.3%
Deferred income taxes................................... 1,132.8 1,081.5 1,013.1
Convertible redeemable preferred stock - - -
Shareholders equity..................................... 4,433.9 4,415.5 4,255.5
Return on shareholders equity........................... 25.0% (4) 29.9% 18.8% (3)
Book value per share.................................... 14.44 13.29 12.62
Total assets............................................ 10,590.9 10,547.4 10,267.7
OTHER INFORMATION
Capital expenditures.................................... $ 952.5 $ 662.8 $ 656.3
Depreciation and amortization........................... 565.6 517.0 492.7
Effective tax rate...................................... 39.3% 39.5% 42.4%
Price/earnings ratio.................................... 19.6 (4) 13.1 22.6 (3)
Percent of pretax profit on net sales................... 14.1% 16.7% 12.1%
Market price range of common stock (high/low)........... 68-50 3/4 55 3/8-47 1/8 60-44 1/8
</TABLE>
NOTE: ALL PER SHARE INFORMATION REFLECTS THE SEPTEMBER 12, 1986 TWO-FOR-ONE
STOCK SPLIT AND THE JUNE 14, 1985 THREE-FOR-ONE STOCK SPLIT. ALL FINANCIAL
INFORMATION HAS BEEN RESTATED TO RECOGNIZE THE 1995 DIVESTITURE OF THE FOOD
PRODUCTS SEGMENT. ALL AMOUNTS INCLUDE THE ACQUISITION OF SEA WORLD AS OF
DECEMBER 1, 1989. FINANCIAL INFORMATION PRIOR TO 1988 HAS BEEN RESTATED TO
REFLECT THE ADOPTION IN 1988 OF FINANCIAL ACCOUNTING STANDARDS NO. 94,
"CONSOLIDATION OF MAJORITY-OWNED SUBSIDIARIES."
(1) This percentage has been calculated by including convertible redeemable
preferred stock as part of equity, as it was convertible into common
stock and traded primarily on its equity characteristics.
(2) These ratios have been calculated based on income from continuing
operations before the cumulative effect of accounting changes.
(3) These ratios have been calculated based on reported income from
continuing operations. Excluding the two nonrecurring 1993 charges
($401.3 million pretax restructuring charge and $31.2 million after-tax
FAS 109 charge), return on shareholders equity would have been 26.7%
and the price/earnings ratio would have been 13.8.
(4) These ratios have been calculated based on reported income from
continuing operations. Excluding the two nonrecurring 1995 items ($160
million pretax charge for closure of the Tampa brewery and $74.5
million impact of the beer wholesaler inventory reduction), return on
shareholders equity would have been 29.1% and the price/earnings ratio
would have been 16.8.
70
<PAGE>38
<TABLE>
<CAPTION>
FINANCIAL SUMMARY - BALANCE SHEET AND OTHER INFORMATION
Anheuser-Busch Companies, Inc., and Subsidiaries
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986 1985
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 247.8 $ 107.9 $ (62.8) $ (82.8) $ (23.7) $ 42.5 $ 9.3 $ 80.2
1.2 1.1 0.9 0.9 1.0 1.0 1.0 1.1
6,424.7 6,260.6 6,102.2 5,768.0 4,624.2 4,177.4 3,478.5 3,332.7
2,630.3 2,627.9 3,115.8 3,268.9 1,570.0 1,366.4 1,097.8 837.7
42.0% 43.9% 54.5% 60.7% 41.7% 40.6% 37.7%(1) 32.5%(1)
1,065.5 1,401.0 1,309.3 1,241.9 1,155.8 1,123.7 1,075.8 956.3
- - - - - - 286.9 287.6
4,620.4 4,438.1 3,679.1 3,099.9 3,102.9 2,892.2 2,313.7 2,173.0
27.6%(2) 30.2% 34.0% 34.6% 33.3% 31.8% 28.7%(1) 26.4%(1)
13.03 11.80 9.21 7.48 7.74 6.81 5.67 5.25
9,954.9 9,642.5 9,274.2 8,690.1 6,788.9 6,260.3 5,605.0 4,966.7
$ 628.8 $ 625.5 $ 805.3 $ 979.0 $ 858.1 $ 716.9 $ 661.1 $ 518.7
453.3 437.0 404.3 333.1 306.5 267.9 232.0 192.6
38.1% 37.9% 37.5% 37.0% 37.7% 42.0% 45.1% 44.2%
16.9 (2) 18.9 14.6 14.4 12.9 16.4 15.5 14.9
16.7% 16.1% 14.5% 15.3% 15.2% 15.3% 14.8% 13.7%
60 1/2-52 1/8 61 1/2-39 5/8 45-34 1/4 45 7/8-30 5/8 34 1/8-29 1/8 39 3/4-26 3/8 28 5/8-20 22 7/8-11 7/8
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
71
<PAGE>39
RESPONSIBILITY FOR FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------
The management of Anheuser-Busch Companies, Inc. is responsible for the
financial statements and other information included in this annual report.
Management has selected those generally accepted accounting principles it
considers appropriate to prepare the financial statements and other data
contained herein.
The company maintains accounting and reporting systems, supported by an
internal control system, which management believes are adequate to provide
reasonable assurances that assets are safeguarded against loss from
unauthorized use or disposition and financial records are reliable for
preparing financial statements. During 1995, the company's internal auditors,
in conjunction with Price Waterhouse, its independent accountants, performed
a comprehensive review of the adequacy of the company's internal accounting
control system. Based on the comprehensive review, it is management's
opinion that the company has an effective system of internal accounting
control.
The Audit Committee of the Board of Directors, which consists of seven
nonmanagement directors, oversees the company's financial reporting and
internal control systems, recommends selection of the company's public
accountants and meets with the public accountants and internal auditors to
review the overall scope and specific plans for their respective audits. The
committee held four meetings during 1995. A more complete description of the
functions performed by the Audit Committee can be found in the company's
proxy statement.
The report of Price Waterhouse on its examinations of the consolidated
financial statements of the company appears on the next page.
72
<PAGE>40
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------
PRICE WATERHOUSE LLP
[LOGO]
One Boatmen's Plaza
St. Louis, MO 63101
February 6, 1996
To the Shareholders and Board of Directors of
Anheuser-Busch Companies, Inc.
We have audited the accompanying Consolidated Balance Sheet of Anheuser
- -Busch Companies, Inc. and its subsidiaries as of December 31, 1995 and 1994,
and the related Consolidated Statements of Income, Changes in Shareholders
Equity and Cash Flows for each of the three years in the period ended
December 31, 1995. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements audited by us present
fairly, in all material respects, the financial position of Anheuser-Busch
Companies, Inc. and its subsidiaries at December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1995, in conformity with generally accepted
accounting principles.
PRICE WATERHOUSE LLP
73
<PAGE>41
APPENDIX
In Exhibit 13 to the printed Form 10-K, the following bar graphs appear,
all depicting data for 1991, 1992, 1993, 1994 and 1995: on page 37, "SALES"
depicting gross sales and net sales in billions of dollars; on page 39,
"TOTAL PAYROLL COST" depicting total payroll cost in millions of dollars; on
page 40, "OPERATING INCOME" depicting operating income in millions of
dollars; on page 41, "INCOME FROM CONTINUING OPERATIONS/DIVIDENDS ON COMMON
STOCK" depicting net income and dividends in millions of dollars; on page 42,
"FULLY DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS" depicting fully
diluted earnings per share data; on page 43, "CASH FLOW FROM CONTINUING
OPERATIONS" depicting cash flow from continuing operations in millions of
dollars; on page 44, "CAPITAL EXPENDITURES/DEPRECIATION AND AMORTIZATION"
depicting capital expenditures and depreciation and amortization in millions
of dollars; and, on page 47, "SHAREHOLDERS EQUITY/LONG-TERM DEBT" depicting
shareholders equity and long-term debt in millions of dollars.
In Exhibit 13 to the printed Form 10-K, the following also appear: on
page 34, a photo of the Geo. A. Robie & Sons. Building and a Budweiser
delivery truck; on page 73, the Logo of Price Waterhouse LLP.
EX-21
SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC.
---------------------------------------------
STATE OF DOING BUSINESS
NAME OF COMPANY INCORPORATION UNDER NAME OF
- --------------- -------------- -------------
Anheuser-Busch, Incorporated Missouri Anheuser-Busch, Incorporated
The Earthgrains Company (formerly
Campbell Taggart, Inc.) Delaware The Earthgrains Company
Busch Entertainment Corporation Delaware Busch Entertainment Corporation
All other subsidiaries of the Company, considered in the aggregate as a
single subsidiary, would not constitute a significant subsidiary as of
December 31, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from
the Form 10-K for the fiscal year ended December 31, 1995 and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 93,639
<SECURITIES> 0
<RECEIVABLES> 542,434
<ALLOWANCES> 1,906
<INVENTORY> 582,793
<CURRENT-ASSETS> 289,830
<PP&E> 11,319,741
<DEPRECIATION> 4,556,699
<TOTAL-ASSETS> 10,590,949
<CURRENT-LIABILITIES> 1,242,059
<BONDS> 3,270,118
0
0
<COMMON> 347,252
<OTHER-SE> 4,086,598
<TOTAL-LIABILITY-AND-EQUITY> 10,590,949
<SALES> 10,340,481
<TOTAL-REVENUES> 12,004,548
<CGS> 6,791,031
<TOTAL-COSTS> 8,707,640
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 225,896
<INCOME-PRETAX> 1,461,719
<INCOME-TAX> 575,100
<INCOME-CONTINUING> 886,619
<DISCONTINUED> (244,338)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 642,281
<EPS-PRIMARY> 2.49
<EPS-DILUTED> 2.49
</TABLE>
