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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM --------- TO ---------
COMMISSION FILE NUMBER 1-7823
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:
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
6 1/2% DEBENTURES DUE JANUARY 1, 2028 NEW YORK STOCK EXCHANGE
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. [ ]
State the aggregate market value of the voting stock held by nonaffiliates
of the registrant.
$28,643,738,560 AS OF FEBRUARY 29, 2000
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 452,656,492 SHARES AS OF MARCH 8, 2000
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Annual Report to Shareholders for the Year
Ended December 31, 1999............................... PART I, PART II, and PART IV
Portions of Definitive Proxy Statement for Annual
Meeting of Shareholders on April 26, 2000............. 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. The Company's operations are comprised of the
following business segments: domestic beer, international beer, packaging,
entertainment and other. Financial information with respect to the Company's
business segments appears in Note 14, "Business Segments," on pages
54-55 of the 1999 Annual Report to Shareholders, which Note hereby is
incorporated by reference.
Domestic beer volume was 95.7 million barrels in 1999 as compared with 92.7
million barrels in 1998. Worldwide sales of the Company's beer brands aggregated
102.9 million barrels in 1999 as compared with 99.8 million barrels in 1998 and
accounted for approximately 82% of the Company's consolidated net sales dollars
in 1999 and approximately 80% in 1998 and 1997. Worldwide beer volume is
comprised of domestic and international volume. Domestic volume represents
Anheuser-Busch brands produced and shipped within the United States.
International volume represents Anheuser-Busch brands produced overseas by
Company-owned breweries and under license and contract brewing agreements, plus
exports from the Company's U.S. breweries to markets around the world. Total
volume includes the Company's pro rata share of the volume of international
equity partners, Grupo Modelo, S.A. de C.V. and Companhia Antarctica Paulista
(for periods prior to July 1999 when the Company terminated its equity
partnership with Companhia Antarctica Paulista), combined with worldwide
Anheuser-Busch brand volume. Total beer volume was 118.0 million barrels and
111.0 million barrels in 1999 and 1998, respectively.
DOMESTIC BEER 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, Michelob Black & Tan Lager, Michelob Amber Bock, Michelob Pale
Ale, Michelob Honey Lager, Michelob Hefe-Weizen, Busch, Busch Light, Busch Ice,
Natural Light, Natural Ice, King Cobra, Red Wolf Lager, ZiegenBock Amber,
Hurricane Malt Liquor, Hurricane Ice, Pacific Ridge Ale, Tequiza, Safari Amber
Lager, Devon's Shandy, and Rhumba. ABI's products also include three non-alcohol
malt beverages, O'Doul's, Busch NA, and O'Doul's Amber. During 1999 ABI
introduced Rhumba and Devon's Shandy and discontinued Rio Cristal, Michelob
Malt, and Catalina Blonde. The Company brews Kirin Light, Kirin Lager, and
Kirin-Ichiban through a joint venture agreement with Kirin Brewing Company, Ltd.
of Japan for sale in the United States. ABI 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. ABI also owns a 31% interest in Portland-based Widmer
Brothers Brewing Company. Widmer products are distributed exclusively by ABI
wholesalers in all new U.S. markets entered by Widmer since 1997.
Budweiser, Bud Light, Bud Dry, Bud Ice, Bud Ice Light, Michelob, Michelob
Light, Michelob Black & Tan Lager, Michelob Golden Draft, Michelob Golden Draft
Light, Michelob Classic Dark, Michelob Amber Bock, Michelob Honey Lager,
Michelob Hefe-Weizen, Busch, Busch Light, Natural Light, Natural Ice, Red Wolf
Lager, ZiegenBock Amber, Kirin-Ichiban, O'Doul's, O'Doul's Amber, Widmer beer
products, and Redhook Ales are sold in both draught and packaged form. Busch
Ice, King Cobra, Hurricane Malt Liquor, Michelob Dry, Michelob Pale Ale, Devon's
Shandy, Rhumba, Tequiza, Hurricane Ice, Kirin Lager, Kirin Light, and Busch NA
are sold only in packaged form. Pacific Ridge Ale and Safari Amber Lager are
sold only in draught form.
Budweiser, Bud Light, Bud Ice, Bud Ice Light, Michelob, Michelob Light,
Michelob Amber Bock, Tequiza, Natural Light, Natural Ice, O'Doul's Amber, and
O'Doul's are distributed and sold on a nationwide basis. Busch, Busch Light, and
Michelob Honey Lager are sold in 49 states; King Cobra, Michelob Hefe-Weizen,
Bud Dry, Red Wolf Lager, and Redhook Ales in 48 states; Michelob Black & Tan
Lager in 47 states; Michelob Pale Ale in 46 states; Michelob Classic Dark and
Busch NA in 45 states; Hurricane Malt Liquor in 43 states; Michelob Dry in 42
states; Kirin Lager and Kirin-Ichiban in 36 states; Kirin Light in 32 states;
Busch Ice in 20 states; Widmer beer products in 18 states; Michelob Golden Draft
and Michelob Golden Draft Light in 10 states; Devon's Shandy in 5 states;
Pacific Ridge Ale in 2 states; Rhumba, Hurricane Ice, Safari Amber Lager and
ZiegenBock Amber in 1 state.
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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.) Ongoing modernization programs 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, thus providing ABI a significant competitive advantage.
During 1999 approximately 95% of the beer sold by ABI, measured in barrels,
reached retail channels through approximately 700 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 1999 were made through twelve ABI owned and operated branches, which
perform similar sales, merchandising, and delivery services as wholesalers in
their respective areas. ABI's peak selling periods are the second and third
quarters.
There are more than 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, in part due to
differences in applicable state laws, the principal methods of competition are
product quality, taste and freshness, 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 in the
super-premium priced category. Busch, Busch Light, Natural Light, Busch Ice,
and Natural Ice compete with the sub-premium or popular priced beers. King
Cobra, Hurricane Malt Liquor, and Hurricane Ice compete against other brands in
the malt liquor segment. Kirin Lager, Kirin Light, and Kirin-Ichiban compete
primarily with imported malt beverages. Michelob Honey Lager, Michelob Pale
Ale, Michelob Black & Tan Lager, Tequiza, Red Wolf Lager, ZiegenBock Amber,
Michelob Hefe-Weizen, Pacific Ridge Ale, Safari Amber Lager, Devon's Shandy,
Rhumba, the Redhook products, and Widmer beer products compete primarily in the
specialty beers segment of the malt beverage market. O'Doul's and O'Doul's
Amber (premium priced) and Busch NA (sub-premium priced) compete in the
non-alcohol malt beverage category. Since 1957, ABI has led the United States
brewing industry in total sales volume. In 1999, its sales exceeded those of
its nearest competitor by more than 52 million barrels. ABI's domestic market
share (excluding exports) for 1999 was 47.5%. Including exports, ABI's share of
U.S. shipments for 1999 was 47.3%. Major competitors in the United States
brewing industry during 1999 included Philip Morris, Inc. (through its
subsidiary Miller Brewing Co.), Adolph Coors Co., and Pabst Brewery Co.
The Company's wholly-owned subsidiary, Busch Agricultural Resources, Inc.
("BARI"), operates rice milling and research facilities in Arkansas and
California; twelve grain elevators in the western and midwestern United States;
barley seed processing plants in Fairfield, Montana, Idaho Falls, Idaho, Powell,
Wyoming, and Moorhead, Minnesota; and a barley research facility in Ft. Collins,
Colorado. BARI also owns and operates malt plants in Manitowoc, Wisconsin,
Moorhead, Minnesota, and Idaho Falls, Idaho. In 1999, BARI sold the wild rice
processing business known as Gourmet House. Through wholly-owned subsidiaries,
BARI operates land application farms in Jacksonville, Florida and Fort Collins,
Colorado; hop farms in Bonners Ferry, Idaho and Huell, Germany; and an
international office in Mar del Plata, Argentina.
Another wholly-owned subsidiary, Wholesaler Equity Development Corporation,
shares equity positions with qualified partners in independent beer
wholesalerships and is currently invested in 8 wholesalerships.
INTERNATIONAL BEER OPERATIONS
International beer volume was 7.2 million barrels in 1999, compared with 7.1
million barrels in 1998. Anheuser-Busch International, Inc. ("ABII"), a
wholly-owned subsidiary of the Company, operates breweries in the United Kingdom
(U.K.) and China, negotiates and administers license and contract brewing
agreements on behalf of ABI with various foreign brewers and negotiates and
manages equity investments in foreign brewing partners. In addition, ABI's beer
products are being sold under import-distribution agreements in more than 80
countries and U.S. territories and to the U.S. military and diplomatic corps
outside the continental United States.
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In Canada, Budweiser and Bud Light are brewed and sold through a license
agreement with Labatt Brewing Co.
ABI, through ABII, participated with Kirin Brewing Company, Ltd. in a joint
venture in Japan, Budweiser Japan Company, Ltd., of which the Company was a 90%
shareholder, for marketing, distribution and sale of Budweiser. Effective
January 2000, the joint venture was converted to an exclusive licensing
agreement with Kirin for the production and sale of Budweiser in Japan.
Through Anheuser-Busch European Trade Ltd. ("ABET"), an indirect,
wholly-owned subsidiary of the Company, certain ABI beer brands are marketed,
distributed and sold in twenty-nine European countries. In the U.K., ABET sells
Budweiser, Bud Light, Bud Ice, Michelob, and Michelob Golden Draft brands to
selected on-premise accounts, brewers, wholesalers and directly to off-premise
accounts. In 1995, ABET and Scottish Courage Ltd. entered into a joint venture,
Stag Brewing Company Ltd., which brews and packages Budweiser at the Stag
Brewery near London, England. In 1997, ABET purchased Scottish Courage's 50%
interest in the joint venture company giving ABET full control over the
management and operation of the brewery. Michelob and Michelob Golden Draft
continue to be imported into the U.K. by ABET.
Budweiser is also brewed under license and sold by brewers in Korea
(Oriental Brewery Ltd.), the Republic of Ireland and Northern Ireland (Guinness
Ireland Ltd.), Italy (Birra Peroni Industriale) and the Philippines (Asia
Brewery, Inc.). In 1995, ABII entered into a contract brewing agreement with
Sociedad Anonima Damm, one of the largest brewers in Spain, giving the Spanish
brewer rights to contract brew and package beer under the brand name Budweiser
in Spain and to distribute it on a non-exclusive basis. In 1998, the Company
formed a new partnership with Brasseries Kronenbourg, the leading brewer in
France, for sale and distribution of Bud in France.
In 1996, ABII purchased a 5% equity interest (with options to increase its
equity stake to 30%) in Antarctica Empreendimentos e Participacoes Ltda.
("ANEP"), the principal operating subsidiary of Companhia Antarctica Paulista
("Antarctica"), one of Brazil's leading brewers, and formed a strategic
partnership with Antarctica. A component of the partnership was a joint venture
company named Budweiser Brasil Ltda. ("BBL") that marketed and distributed
locally-produced Budweiser in Brazil. CADE, the Brazilian anti-trust agency,
required the Company's equity purchase options to be mandatorily exercised at
specified dates. The first of the required fixed-dollar investment options was
set to expire in September 1999, but was determined by the Company to be no
longer economically attractive. Accordingly, in July 1999, the Company exercised
its right to end its equity partnership with Antarctica, and also discontinued
the BBL joint venture, effective December 1999, converting its Budweiser
production agreement to an export arrangement.
In 1995, the Company formed an alliance with Compania Cervecerias Unidas
S.A. ("CCU"), the leading Chilean brewer. Under the terms of the alliance, a
subsidiary of CCU in Argentina ("CCU-Argentina") brews and distributes Budweiser
under license in Argentina. CCU also distributes Budweiser in Chile. The Company
initially purchased a minority stake in CCU-Argentina, increased its ownership
to 8.2% in 1998 and to 10.7% in December 1999.
In 1995, the Company purchased an initial 80% equity interest in a joint
venture, renamed the Budweiser Wuhan International Brewing Company, Ltd., that
owns and operates a brewery in Wuhan, the fifth-largest city in China. This
ownership interest was subsequently increased to 86.6%. The Company also owns a
5% equity interest in Tsingtao Brewery Company Ltd., a leading Chinese brewer.
ABII also negotiates and oversees the Company's investments in international
brewing companies. In 1993, Anheuser-Busch purchased a 17.7% direct and indirect
equity interest in Grupo Modelo's operating subsidiary, Diblo, for $477 million.
In May 1997, the Company increased its direct and indirect equity ownership in
Diblo to 37% for an additional $605 million. In September 1998, the Company
completed the purchase of an additional 13.25% of Diblo for $556.5 million,
bringing the Company's total investment to $1.6 billion. The Company now owns a
50.2% direct and indirect interest in Diblo. However, the Company does not have
voting or other effective control in either Grupo Modelo or Diblo.
PACKAGING OPERATIONS
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 customers. (See Item 2 of Part 1--Properties).
Another wholly-owned subsidiary of the Company, Anheuser-Busch Recycling
Corporation
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("ABRC"), recycles aluminum cans at its plant in Hayward, California, for
conversion into new can sheet. The Company's wholly-owned subsidiary, Precision
Printing and Packaging, Inc. ("PPPI"), manufactures metalized and paper labels
at its plant in Clarksville, Tennessee. Eagle Packaging, Inc. ("EPI") was
established during 1999 to manufacture and sell crown and closure liners,
beginning in 2000. Packaging Business Services, Inc., another wholly-owned
subsidiary of the Company, provides administrative services and develops
existing and new businesses for MCC, ABRC, PPPI, and EPI.
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's tenth
park, Discovery Cove located in Orlando, Florida, is scheduled to open in summer
2000.
BEC operates Busch Gardens theme parks in Tampa, Florida and Williamsburg,
Virginia, and SeaWorld theme parks in Orlando, Florida, San Antonio, Texas,
Aurora, Ohio, and San Diego, California. BEC operates water park attractions in
Tampa, Florida (Adventure Island) and Williamsburg, Virginia (Water Country,
U.S.A.), and an educational play park for children near Philadelphia,
Pennsylvania (Sesame Place). BEC also operates the Baseball City Sports Complex
near Orlando, Florida. Due to the seasonality of the theme park business, BEC
experiences higher revenues in the second and third quarters than 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 near Barcelona, Spain.
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.
OTHER
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 The Kingsmill Resort and Conference Center in Williamsburg, Virginia.
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.).
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 processing 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 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. Can sheet prices are impacted by supply and demand for aluminum ingot and
fabrication.
ENERGY MATTERS
The Company uses natural gas, fuel oil, and coal as its primary fuel
materials. Supplies of fuels in quantities sufficient to meet ABI's total
requirements are expected to be available on a year-round basis during 2000. The
supply of natural gas, fuel oil, and coal is normally covered by yearly
contracts and no difficulty has been experienced in entering into these
contracts. The cost of fuel used by ABI increased in 1999 and is expected to
increase in 2000. 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.
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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 facilities 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 major portion of pollution
prevention and pollution control expenditures in 1999 and projected for 2000 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. They have generally resulted in low cost operating
systems while reducing impact to air, water, and land.
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 to comply.
NUMBER OF EMPLOYEES
As of December 31, 1999, the Company had 23,645 full-time employees.
As of December 31, 1999, approximately 8,000 employees were represented by
the International Brotherhood of Teamsters. Seventeen other unions represented
approximately 1,100 employees. The labor agreement between ABI and the Brewery
and Soft Drink Workers Conference of the International Brotherhood of Teamsters,
which represents the majority of brewery workers, was scheduled to expire on
February 28, 1998; it was extended to March 29, 1998 while the parties continued
to negotiate a new agreement. Talks with the Teamsters reached impasse, and as a
result, the Company implemented its final contract offer on September 21, 1998.
The National Labor Relations Board has determined that the Company's bargaining
and implementation of its final offer did not violate federal labor law.
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
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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
97% of capacity in 1999; during the peak selling periods (second and third
quarters), they operated at maximum capacity. The Company also owns an 86.6%
equity interest in a joint venture that owns and operates a brewery in Wuhan,
China. The Company also leases and operates the Stag Brewery near London,
England.
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; 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 182 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 plants in
Newburgh, New York and Rome, Georgia, the SeaWorld park in San Diego,
California, the Stag Brewery, and the brewery in Wuhan, China, all of the
Company's principal properties are owned in fee. The lease for the land used by
the SeaWorld park in San Diego, California expires in 2048. The Company leases
the Stag Brewery from Scottish Courage, Ltd. In 1995, the joint venture that
operates the brewery in Wuhan was granted the right to use the property for a
period of 50 years from the appropriate governmental authorities. The Company
also leases a bottling line at its brewery in Cartersville, Georgia and a can
manufacturing plant in Rome, Georgia. 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, 1999.
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EXECUTIVE OFFICERS OF THE REGISTRANT
AUGUST A. BUSCH III (age 62) is presently Chairman of the Board and
President, and a 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.
PATRICK T. STOKES (age 57) 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 has
served in such capacity since 1990 and Chairman of the Board of the Company's
subsidiary, Anheuser-Busch International, Inc., and has served in such capacity
since November 1999.
JOHN H. PURNELL (age 58) is presently Executive Vice President of the
Company and has served in such capacity since January 1999. He previously served
as Vice President and Group Executive of the Company (1991-1998). He also
previously served as Chairman of the Board of the Company's subsidiary,
Anheuser-Busch International, Inc. (1980-November 1999), and as its Chief
Executive Officer (1991-1998).
W. RANDOLPH BAKER (age 53) is presently Vice President and Chief Financial
Officer of the Company and has served in such capacity since 1996. He previously
served as Vice President and Group Executive of the Company (1982-1996).
STEPHEN K. LAMBRIGHT (age 57) is presently Group Vice President and General
Counsel of the Company and has served in such capacity since 1997. He previously
served as Vice President and Group Executive of the Company (1984-1997).
ALOYS H. LITTEKEN (age 59) is presently Vice President-Corporate Engineering
of the Company and has served in such capacity since 1981.
WILLIAM L. RAMMES (age 58) is presently Vice President-Corporate Human
Resources of the Company and has served in such capacity since 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 1995.
JOSEPH L. GOLTZMAN (age 58) is presently Vice President and Group Executive
of the Company and has served in such capacity since 1993. He is also presently
Chairman, Chief Executive Officer and President of the Company's subsidiary,
Anheuser-Busch Recycling Corporation, Chairman (since 1995), President and Chief
Executive Officer (since 1993) of the Company's subsidiary, Metal Container
Corporation, Chairman, Chief Executive Officer (since 1996) and President (since
1993) of the Company's subsidiary, Packaging Business Services, Inc., Chairman
(since 1993), President (since January 1999), and Chief Executive Officer (since
1993) of the Company's indirect subsidiary, Precision Printing and Packaging,
Inc., and Chairman, Chief Executive Officer, and President (since 1999) of the
Company's indirect subsidiary, Eagle Packaging, Inc.
DONALD W. KLOTH (age 58) is presently Vice President and Group Executive of
the Company and has served in such capacity since 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 1994.
JOHN E. JACOB (age 65) is presently Executive Vice President and Chief
Communications Officer, and a Director of the Company and has served in such
capacities since 1994 and 1990, respectively.
GERHARDT A. KRAEMER (age 67) is presently Senior Vice President-World
Brewing and Technology and has served in such capacity since 1996. During the
past five years, he also served as Vice President-Brewing of the Company's
subsidiary, Anheuser-Busch, Incorporated (1985-1996).
THOMAS W. SANTEL (age 41) is presently Vice President-Corporate Development
of the Company and has served in such capacity since 1996. During the past five
years, he also served as Director of Corporate Development (1994-1996).
7
9
STEPHEN J. BURROWS (age 48) is presently Vice President-International
Operations of the Company and has served in such capacity since January 1999. He
previously served as Vice President-International Marketing of the Company
(1992-1998). He is also presently Chief Executive Officer and President of the
Company's subsidiary, Anheuser-Busch International, Inc. and has served as Chief
Executive Officer since January 1999 and as President since 1994. During the
past five years, he also served as Chief Operating Officer of Anheuser-Busch
International, Inc. (1994-1998).
VICTOR G. ABBEY (age 44) is presently Chairman of the Board and President of
the Company's subsidiary, Busch Entertainment Corporation and has served in such
capacities since March 1, 2000. During the past five years, he also served as
Executive Vice President and General Manager of the SeaWorld theme park in
Orlando, Florida (1997-February, 2000), Executive Vice President and General
Manager of the SeaWorld theme park in Cleveland, Ohio (1995-1997), and Vice
President-Administration and International of Busch Entertainment Corporation
(1992-1995).
PART II
The information required by Items 5, 6, 7, and 8 of this Part II are hereby
incorporated by reference from pages 25 through 59 of the Company's 1999 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 PricewaterhouseCoopers 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 6 of the Company's Proxy
Statement for the Annual Meeting of Shareholders on April 26, 2000.
The information required by this Item with respect to Executive Officers is
presented on pages 7 and 8 of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is hereby incorporated by reference
from page 8 and pages 19 through 25 of the Company's Proxy Statement for the
Annual Meeting of Shareholders on April 26, 2000.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is hereby incorporated by reference
from page 7 of the Company's Proxy Statement for the Annual Meeting of
Shareholders on April 26, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is hereby incorporated by reference
from pages 25 and 26 of the Company's Proxy Statement for the Annual Meeting of
Shareholders on April 26, 2000.
8
10
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
(A) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:
PAGE
----
1. FINANCIAL STATEMENTS:
Consolidated Balance Sheet at December 31, 1999 and 1998 40
Consolidated Statement of Income for the three years ended
December 31, 1999 41
Consolidated Statement of Changes in Shareholders Equity for the three
years ended December 31, 1999 42
Consolidated Statement of Cash Flows for the three years ended December
31, 1999 43
Notes to Consolidated Financial Statements 44-55
Report of Independent Accountants 39
Incorporated herein by reference from the indicated pages of the 1999
Annual Report to Shareholders.
2. FINANCIAL STATEMENT SCHEDULE:
Report of Independent Accountants on Financial Statement Schedule F-1
For the three years ended December 31, 1999:
Schedule VIII--Valuation and Qualifying Accounts and Reserves F-2
3. EXHIBITS:
Exhibit 3.1 --Restated Certificate of Incorporation.
Exhibit 3.2 --By-Laws of the Company (as amended and restated
December 16, 1998). (Incorporated by reference to
Exhibit 3.2 to Form 10-K for the fiscal year ended
December 31, 1998).
Exhibit 4.1 --Form of Rights Agreement, dated as of October
26, 1994 between Anheuser-Busch Companies, Inc. and
Boatmen's Trust Company.
Exhibit 4.2 --Letter Agreement dated March 19, 1998 between
Anheuser-Busch Companies, Inc., Boatmen's Trust
Company, and ChaseMellon Shareholder Services, L.L.C.
amending the Form of Rights Agreement filed as
Exhibit 4.1 of this report. (Incorporated by
reference to Exhibit 4.2 to Form 10-K for the fiscal
year ended December 31, 1998).
Exhibit 4.3 --Indenture dated as of August 1, 1995 between the
Company and The Chase Manhattan Bank, as Trustee
(Incorporated by reference to Exhibit 4.1 in the Form
S-3 of the Company, Registration Statement No.
33-60885.) (Other indentures are not filed, but
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 amended
and restated as of March 1, 2000.
Exhibit 10.2 --Anheuser-Busch Companies, Inc. Non-Employee
Director Elective Stock Acquisition Plan amended and
restated as of March 1, 2000.
Exhibit 10.3 --Anheuser-Busch Companies, Inc. Stock Plan for
Non-Employee Directors (Incorporated by reference
to Exhibit 4.1 in the Form S-8 of the Company,
Registration Statement No. 333-88015).
9
11
Exhibit 10.4 --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, December 20, 1995, and November 26, 1997.)
(Incorporated by reference to Exhibit 10.3 to
Form 10-K for the fiscal year ended December 31,
1997.)
Exhibit 10.5 --Anheuser-Busch Companies, Inc. 1981
Non-Qualified Stock Option Plan (As amended
December 18, 1985, June 24, 1987, December 20,
1988, July 22, 1992, December 20, 1995, and November
26, 1997.) (Incorporated by reference to Exhibit
10.4 to Form 10-K for the fiscal year ended December
31, 1997.)
Exhibit 10.6 --Anheuser-Busch Companies, Inc. 1989 Incentive
Stock Plan (As amended December 20, 1989, December
19, 1990, December 15, 1993, December 20, 1995, and
November 26, 1997.) (Incorporated by reference to
Exhibit 10.5 to Form 10-K for the fiscal year
ended December 31, 1997.)
Exhibit 10.7 --Anheuser-Busch Companies, Inc. 1998 Incentive
Stock Plan (Incorporated by reference to Exhibit A
to the Definitive Proxy Statement for Annual Meeting
of Shareholders on April 22, 1998.)
Exhibit 10.8 --U.K. Addendum to the Anheuser-Busch Companies,
Inc. 1998 Incentive Stock Plan/Rules for Inland
Revenue Approved Grants for Eligible Persons in the
United Kingdom.
Exhibit 10.9 --Anheuser-Busch Companies, Inc. Excess Benefit
Plan amended and restated as of March 1, 2000.
Exhibit 10.10--Anheuser-Busch Companies, Inc. Supplemental
Executive Retirement Plan amended and restated as
of March 1, 2000.
Exhibit 10.11--Anheuser-Busch Executive Deferred Compensation
Plan amended and restated as of March 1, 2000.
Exhibit 10.12--Anheuser-Busch 401(k) Restoration Plan amended
and restated as of March 1, 2000.
Exhibit 10.13--Form of Indemnification Agreement with Directors
and Executive Officers.
Exhibit 10.14--Anheuser-Busch Officer Bonus Plan as amended and
restated on November 24, 1999. (Incorporated by
reference to Exhibit A to the Definitive Proxy
Statement for Annual Meeting of Shareholders on
April 26, 2000.)
Exhibit 10.15--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.
Exhibit 10.16--Letter agreement between Anheuser-Busch Companies,
Inc. and the Controlling Shareholders regarding
Section 5.5 of the Investment Agreement filed as
Exhibit 10.15 of this report.
Exhibit 10.17--Fourth Amendment to the Anheuser-Busch Deferred
Income Stock Purchase and Savings Plan as amended
and restated effective April 1, 1996.
Exhibit 10.18--Fifth Amendment to the Anheuser-Busch Deferred
Income Stock Purchase and Savings Plan as amended
and restated effective April 1, 1996.
Exhibit 12 --Ratio of Earnings to Fixed Charges.
10
12
Exhibit 13 --Pages 25 through 59 of the Anheuser-Busch
Companies, Inc. 1999 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 Schedule
- --------
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
There were no reports on Form 8-K filed during the fourth quarter of 1999.
11
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 /s/ AUGUST A. BUSCH III
-------------------------------------------------
August A. Busch III
Chairman of the
Board and President
Date: March 22, 2000
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.
/s/ AUGUST A. BUSCH III Chairman of the Board and President and March 22, 2000
-------------------------------------------------- Director (Principal Executive
(August A. Busch III) Officer)
/s/ W. RANDOLPH BAKER Vice President and Chief Financial March 22, 2000
-------------------------------------------------- Officer (Principal Financial Officer)
(W. Randolph Baker)
/s/ JOHN F. KELLY Vice President and Controller March 22, 2000
-------------------------------------------------- (Principal Accounting Officer)
(John F. Kelly)
/s/ BERNARD A. EDISON Director March 22, 2000
--------------------------------------------------
(Bernard A. Edison)
/s/ CARLOS FERNANDEZ G. Director March 22, 2000
--------------------------------------------------
(Carlos Fernandez G.)
/s/ JOHN E. JACOB Director March 22, 2000
--------------------------------------------------
(John E. Jacob)
/s/ JAMES R. JONES Director March 22, 2000
--------------------------------------------------
(James R. Jones)
/s/ CHARLES F. KNIGHT Director March 22, 2000
--------------------------------------------------
(Charles F. Knight)
Director March 22, 2000
--------------------------------------------------
(Vernon R. Loucks, Jr.)
12
14
/s/ VILMA S. MARTINEZ Director March 22, 2000
--------------------------------------------------
(Vilma S. Martinez)
/s/ JAMES B. ORTHWEIN Director March 22, 2000
--------------------------------------------------
(James B. Orthwein)
/s/ WILLIAM PORTER PAYNE Director March 22, 2000
--------------------------------------------------
(William Porter Payne)
/s/ JOYCE M. ROCHE Director March 22, 2000
--------------------------------------------------
(Joyce M. Roche)
/s/ ANDREW C. TAYLOR Director March 22, 2000
--------------------------------------------------
(Andrew C. Taylor)
/s/ DOUGLAS A. WARNER III Director March 22, 2000
--------------------------------------------------
(Douglas A. Warner III)
/s/ EDWARD E. WHITACRE, JR. Director March 22, 2000
--------------------------------------------------
(Edward E. Whitacre, Jr.)
13
15
ANHEUSER-BUSCH COMPANIES, INC.
INDEX TO FINANCIAL STATEMENT SCHEDULE
PAGE
----
Report of Independent Accountants on Financial Statement
Schedule...................................................... F-1
Consent of Independent Accountants.............................. F-1
Financial Statement Schedule for the Years 1999, 1998 and 1997:
Valuation and Qualifying Accounts and Reserves (Schedule
VIII)..................................................... F-2
All other schedules are omitted because they are not applicable or the
required information is shown in the Consolidated Financial Statements and
Notes.
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
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 1, 2000 appearing in the 1999 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.
PricewaterhouseCoopers LLP
St. Louis, Missouri
February 1, 2000
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. 333-71105) 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.
33-58221, No. 33-58241, No. 333-67027, No. 333-71309, No. 333-71311, and No.
333-88015) of Anheuser-Busch Companies, Inc. of our report dated February
1, 2000 which appears in 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 dated February 1, 2000 on the
financial statement schedule, which appears on page F-1 of this Form 10-K.
PricewaterhouseCoopers LLP
St. Louis, Missouri
March 22, 2000
F-1
17
ANHEUSER-BUSCH COMPANIES, INC.
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(CONTINUING OPERATIONS BASIS, IN MILLIONS)
1999 1998 1997
---- ---- ----
Reserve for doubtful accounts (deducted from related
assets):
Balance at beginning of period.......................... $ 5.5 $ 4.9 $ 3.1
Additions charged to costs and expenses................. 1.0 1.3 2.0
Additions (recoveries of uncollectible accounts
previously written off ).............................. .1 .3 .1
Deductions (uncollectible accounts written off )........ (.2) (1.0) (.3)
------ ------ ------
Balance at end of period................................ $ 6.4 $ 5.5 $ 4.9
====== ====== ======
Deferred income tax asset valuation allowance under FAS 109:
Balance at beginning of period.......................... $117.0 $ 92.5 $ 81.7
Additions to valuation allowance charged to costs and
expenses.............................................. 3.5 28.1 13.2
Deductions from valuation allowance (utilizations and
expirations).......................................... (14.1) (3.6) (2.4)
Reductions due to changes in foreign business
operations............................................ (92.8) -- --
------ ------ ------
Balance at end of period................................ $ 13.6 $117.0 $ 92.5
====== ====== ======
F-2