Annual Report for Annual Report for Anheuser BuschAnheuser BuschMonique DeBuskMonique DeBusk

ACG 2021.080ACG 2021.080

Executive Executive SummarySummary

Anheuser Busch will continue Anheuser Busch will continue to dominate the beer to dominate the beer manufacturing and manufacturing and

distributing market in both distributing market in both the U.S. and the rest of the the U.S. and the rest of the

world through their world through their innovation in their products, innovation in their products,

investing activities, and investing activities, and community projects. community projects.

Anheuser Busch Annual RepoAnheuser Busch Annual Reportrt

IntroductionIntroduction Patrick T. Stokes, President and C.E.O.Patrick T. Stokes, President and C.E.O. Home OfficeHome Office: One Busch Place, St. Louis, Mo. : One Busch Place, St. Louis, Mo.

6311863118 End of Fiscal YearEnd of Fiscal Year: December 31, 2004: December 31, 2004 Anheuser Busch is the largest manufacturer Anheuser Busch is the largest manufacturer

and distributor of beer. They also own 12 and distributor of beer. They also own 12 packaging and distributing centers, 9 packaging and distributing centers, 9 amusement parks across the U.S., and real amusement parks across the U.S., and real estate development, transportation and estate development, transportation and communications businesses. communications businesses.

Anheuser Busch products and services can be Anheuser Busch products and services can be found in the U.S., Canada, United Kingdom, found in the U.S., Canada, United Kingdom, Mexico, Ireland, Italy, Argentina, and China.Mexico, Ireland, Italy, Argentina, and China.

Audit ReportAudit Report The independent auditors for Anheuser Busch consist The independent auditors for Anheuser Busch consist

of five non-management directors appointed by the of five non-management directors appointed by the board of directors and an outside auditing company, board of directors and an outside auditing company, PricewaterhouseCoopers LLP, St. Louis, Mo. PricewaterhouseCoopers LLP, St. Louis, Mo.

Report of Independent Registered Public Report of Independent Registered Public Accounting Firm:Accounting Firm: All reports present Anheuser All reports present Anheuser Busch’s financial position accurately and the Busch’s financial position accurately and the Management’s Report on Internal Control Over Management’s Report on Internal Control Over Financial Reporting was presented truthfully. The Financial Reporting was presented truthfully. The company maintained accurate and effective internal company maintained accurate and effective internal control over financial reporting. However, they feel control over financial reporting. However, they feel that Internal Management has limitations that may that Internal Management has limitations that may not prevent or detect falsehoods and over time may not prevent or detect falsehoods and over time may not be as accurate because of deteriorating policies or not be as accurate because of deteriorating policies or procedures.procedures.

Stock Market Stock Market InformationInformation

As of 9/23/2005:As of 9/23/2005: Opening Price 44.07Opening Price 44.07 Closing Price 44.03Closing Price 44.03 Day’s High 44.25Day’s High 44.25 Day’s Low 43.74Day’s Low 43.74 Day’s Volume 1,371,100Day’s Volume 1,371,100 Dividend per share 0.27 Dividend per share 0.27 As of 9/23/2004:As of 9/23/2004: Opening Price 49.49Opening Price 49.49 Closing Price 49.86Closing Price 49.86 Day’s High 49.97Day’s High 49.97 Day’s Low 49.42Day’s Low 49.42 Day’s Volume 2,384,700Day’s Volume 2,384,700I think you should Hold due to decline in stock price.

Industry Situation Industry Situation and Company and Company

PlansPlansAnheuser Busch is looking to increase their Anheuser Busch is looking to increase their growth in their global markets through two growth in their global markets through two

objectives; promoting Budweiser as the objectives; promoting Budweiser as the leading international beer and investing in leading international beer and investing in

leading local markets with good volume and leading local markets with good volume and profit growth potential (profit growth potential (

Anheuser Busch WebsiteAnheuser Busch Website, October 4, 2005). , October 4, 2005). They are also looking to create new brands They are also looking to create new brands

and packaging to compete with the and packaging to compete with the increased consumption of flavored liquors, increased consumption of flavored liquors,

and becoming more involved in the and becoming more involved in the community through promoting responsible community through promoting responsible drinking, fighting alcohol abuse, and drunk drinking, fighting alcohol abuse, and drunk

driving (driving (Anheuser Busch Annual ReportAnheuser Busch Annual Report, , October 4, 2005).October 4, 2005).

Income Income StatementStatement

The income The income statement is most like statement is most like the multi-step format.the multi-step format.There is an increase There is an increase in gross profit, in gross profit, operating income, and operating income, and net income which net income which shows that over the shows that over the past year, Anheuser past year, Anheuser Busch has been Busch has been successful in its successful in its attempts to make its attempts to make its company more company more profitable. profitable.

Yr. Yr. ended ended Dec. 31 Dec. 31 (in (in millions, millions, except per except per share)share) 20042004 20032003

Gross Gross ProfitProfit

$5,951.7$5,951.700 $5,697.6$5,697.6

Income Income from from OperatioOperationsns $3,361.0$3,361.0 $3,199.3$3,199.3

Net Net IncomeIncome $2,240.3$2,240.3 $2,075.9$2,075.9

Balance SheetBalance SheetThere was an There was an increase in all increase in all current asset current asset accounts with the accounts with the largest increase largest increase occuring in occuring in Intangible Assets Intangible Assets of 705.3 million. of 705.3 million. All liabilities, All liabilities, current and current and longterm, longterm, increased while increased while shareholders shareholders equity decreased equity decreased by 43.6 million by 43.6 million probably due to probably due to the economic the economic hardships felt hardships felt throughout the throughout the US.US.

Yr. ended Yr. ended Dec. 31 (in Dec. 31 (in millions, millions, except per except per share)share) 20042004 20032003

Total AssetsTotal Assets $16,713.4$16,713.4 $14,689.5$14,689.5

Total Total LiabilitiesLiabilities $13,505.3$13,505.3 $11,977.8$11,977.8

Total Total Shareholders Shareholders EquityEquity $2,668.1$2,668.1 $2,711.7$2,711.7

Total Total Liabilities Liabilities and and Shareholders Shareholders EquityEquity $16,173.4$16,173.4 $14,689.5$14,689.5

Statement of Statement of Cash FlowsCash Flows

Over the past two years cash flows Over the past two years cash flows from operations was more than net from operations was more than net income.income.The company is growing through the The company is growing through the purchasing of new businesses and purchasing of new businesses and capital expenditures.capital expenditures.The company’s most important source The company’s most important source of financing is through the acquisition of of financing is through the acquisition of treasury stock.treasury stock.Overall, cash increased by 37 million Overall, cash increased by 37 million over the past two years.over the past two years.

Accounting Accounting PoliciesPolicies

Anheuser Busch’s accounting policies, Anheuser Busch’s accounting policies, relating to revenue, state that the relating to revenue, state that the company only recognizes revenue when company only recognizes revenue when title transfers or services have been title transfers or services have been rendered to unaffiliated customers.rendered to unaffiliated customers.Notes to Consolidated Financial Notes to Consolidated Financial Statements:Statements: Summary of significant Summary of significant accounting policies, international equity accounting policies, international equity investments, derivatives and other financial investments, derivatives and other financial instruments, Harbin group acquisition, instruments, Harbin group acquisition, intangible assets, retirement benefits, stock intangible assets, retirement benefits, stock option plans, debt, supplemental cash flow option plans, debt, supplemental cash flow information, accumulated nonowner changes information, accumulated nonowner changes in shareholders equity, income taxes, in shareholders equity, income taxes, contingencies, preferred and common stock, contingencies, preferred and common stock, employee stock ownership plans, quarterly employee stock ownership plans, quarterly financial data, and business segments.financial data, and business segments.

Financial AnalysisFinancial AnalysisLiquidity RatiosLiquidity Ratios

Working CapitalWorking Capital: 2003 (-226.9million) / 2004 (150.6 million): : 2003 (-226.9million) / 2004 (150.6 million): Anheuser Busch has increased its assets to be greater than Anheuser Busch has increased its assets to be greater than its liaibilities.its liaibilities.

Current RatioCurrent Ratio: 2003 (0.88) / 2004 (0.92): Last year, : 2003 (0.88) / 2004 (0.92): Last year, Anheuser Busch was able to cover its liabilities a little bit Anheuser Busch was able to cover its liabilities a little bit better than in 2003.better than in 2003.

Receivable turnoverReceivable turnover: 2003 (21.1 days) / 2004 (21.9 days): on : 2003 (21.1 days) / 2004 (21.9 days): on average, it took Anheuser Busch about the same amount of average, it took Anheuser Busch about the same amount of days to turn receivables into cash in 2003 and 2004.days to turn receivables into cash in 2003 and 2004.

Average days’ sales uncollectedAverage days’ sales uncollected: 2003 (17.3 days) / 2004 : 2003 (17.3 days) / 2004 (16.7 days): it took Anheuser Busch, on average, 0.6 days (16.7 days): it took Anheuser Busch, on average, 0.6 days less to collect on accounts recievable in 2004 than in 2003.less to collect on accounts recievable in 2004 than in 2003.

Inventory turnoverInventory turnover: 2003 (14.4 days) / 2004 (14.1 days): on : 2003 (14.4 days) / 2004 (14.1 days): on average, Anheuser Busch’s inventory was turned over about average, Anheuser Busch’s inventory was turned over about the same in 2003 and 2004.the same in 2003 and 2004.

Average days’ inventory on handAverage days’ inventory on hand: 2003 (25.3 days) / 2004 : 2003 (25.3 days) / 2004 (25.7 days): on average, it took Anheuser Busch the same (25.7 days): on average, it took Anheuser Busch the same amount of days to sell its inventory on hand in both 2003 amount of days to sell its inventory on hand in both 2003 and 2004.and 2004.

Financial AnalysisFinancial AnalysisProfitability RatiosProfitability Ratios

Profit marginProfit margin: 2003 (14.7%) / 2004 (15%): : 2003 (14.7%) / 2004 (15%): Profit margin increased by .3 cents.Profit margin increased by .3 cents.

Asset turnoverAsset turnover: 2003 (1) / 2004 (1): Asset : 2003 (1) / 2004 (1): Asset turnover remained the same.turnover remained the same.

Return on assetsReturn on assets: 2003 (14.5%) / 2004 (14.1%): : 2003 (14.5%) / 2004 (14.1%): Return on assets decreased by .4 cents.Return on assets decreased by .4 cents.

Return on equityReturn on equity: 2003 (76.6%) / 2004 (83.3%): : 2003 (76.6%) / 2004 (83.3%): Return on equity increased by 6.7 cents.Return on equity increased by 6.7 cents.

Financial AnalysisFinancial AnalysisSolvency RatioSolvency Ratio

Debt to equityDebt to equity: 2003 (442%) / 2004 : 2003 (442%) / 2004 (506%): Anheuser Busch gets a large (506%): Anheuser Busch gets a large portion of their financing through portion of their financing through creditors and in 2004 it increased its creditors and in 2004 it increased its debt.debt.

Financial AnalysisFinancial AnalysisMarket Strength RatiosMarket Strength Ratios

20042004 Price/earnings per share: 16.31Price/earnings per share: 16.31 Dividend yield: 0.61%Dividend yield: 0.61%