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.
ABI has developed a system of twelve breweries, strategically located across the country, to economically serve its distribution system. (See Item 2
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 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.
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.
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.
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).
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.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9.
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.
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.
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.
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.
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.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
(A) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the fourth quarter of 1999.
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.
ANHEUSER-BUSCH COMPANIES, INC.
INDEX TO FINANCIAL STATEMENT SCHEDULE
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.
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 of this Form 10-K.
PricewaterhouseCoopers LLP
St. Louis, Missouri March 22, 2000