This document provides notes to the consolidated financial statements of Anheuser-Busch Companies and Subsidiaries. It summarizes the company's significant accounting policies, including principles of consolidation, foreign currency, revenue recognition, delivery costs, advertising and promotional costs, financial derivatives, stock-based compensation, income taxes, inventories, intangible assets, plant and equipment, and research and development costs. The notes disclose details on the company's accounting treatment in key areas and are intended to assist in evaluating the company's consolidated financial statements in accordance with US GAAP.
1) The document provides notes to consolidated financial statements for Anheuser-Busch Companies, Inc. and its subsidiaries.
2) It outlines significant accounting policies for areas such as principles of consolidation, revenue recognition, trade accounts receivable, foreign currency, taxes collected from customers, delivery costs, advertising and promotional costs, financial derivatives, and income taxes.
3) It also provides details on inventories, intangible assets, plant and equipment, and investments.
This document provides notes to the consolidated financial statements of Anheuser-Busch Companies, Inc. for the 2007 fiscal year. It summarizes the company's significant accounting policies, including principles of consolidation, revenue recognition, foreign currency translation, taxes collected from customers, delivery costs, advertising and promotional costs, financial derivatives, and other policies. It also provides details on international equity investments, intangible assets, plant and equipment, and securities valuation.
The document discusses changes to accounting standards for mergers and acquisitions (M&A) under FAS141R that will take effect in 2009. Key changes include stricter timing for reporting deals, requiring contingent consideration to be included in purchase price at fair value, treating in-process R&D as intangible assets rather than expenses, and expensing acquisition costs immediately rather than capitalizing them. Understanding these changes and modeling deals accordingly can help reduce potential negative effects on financial statements from new fair value requirements. While complications may arise, the changes complete international convergence of standards and M&A activity can continue with proper planning and valuation expertise.
This document discusses Ecolab's financial performance in 2000. Key points include:
- Net sales reached nearly $2.3 billion, a 9% increase over 1999, due to business acquisitions, new products, and growth in core businesses.
- Operating income was a record $343 million. Excluding unusual items, operating income rose 12% to $324 million, or 14.3% of net sales.
- Net income was $206 million. Excluding unusual items, net income increased 13% to $198 million, or 8.7% of net sales, reflecting strong operating income growth and a lower tax rate.
- The company continued its trend of strong financial results and
The document discusses key aspects of financial statements including their composition, elements, recognition, measurement and analysis. It defines the balance sheet, income statement and cash flow statement and explains that the balance sheet provides a snapshot of assets and liabilities at a moment in time, while the income statement captures transactions over a period of time and the cash flow statement shows cash impacts. Various ratios are also introduced as tools for analyzing the statements.
The document discusses Slater and Gordon, a leading law firm that floated on the stock market in 2007. It analyzes the firm's financial performance and accounting policies related to revenue recognition under IAS 18 and the newly adopted IFRS 15. Key points:
1) Slater and Gordon saw rapid growth and high shareholder expectations through an acquisition strategy. However, profits and share prices declined sharply in late 2015 when the firm adopted stricter IFRS 15 revenue recognition rules.
2) Under IAS 18, revenue was recognized based on work completed. But IFRS 15 requires revenue to be "highly probable" and contractually agreed to be recognized. This led to large write-downs of
This document reviews several Irish Financial Reporting Standards (FRS). It summarizes FRS 11 on impairment of fixed assets and goodwill, which requires impairment reviews when indicators exist and defines how to measure impairment. It also summarizes FRS 12 on provisions, contingent liabilities, and contingent assets, explaining how and when to recognize provisions versus disclose contingent liabilities. Finally, it provides high-level information on FRS 15 regarding tangible fixed assets.
This document discusses the concept of leverage in corporate finance. It defines leverage as using fixed costs or funds to increase shareholder returns. There are three types of leverage: operating, financial, and combined. Operating leverage refers to using fixed operating costs to magnify the impact of sales changes on earnings. Financial leverage magnifies the impact of changes in earnings before interest and taxes (EBIT) on earnings per share through the use of debt financing. Combined leverage results from using both operating and financial leverage, further amplifying the effect of sales changes on earnings per share. The degree of leverage depends on the fixed and variable costs for a company.
1) The document provides notes to consolidated financial statements for Anheuser-Busch Companies, Inc. and its subsidiaries.
2) It outlines significant accounting policies for areas such as principles of consolidation, revenue recognition, trade accounts receivable, foreign currency, taxes collected from customers, delivery costs, advertising and promotional costs, financial derivatives, and income taxes.
3) It also provides details on inventories, intangible assets, plant and equipment, and investments.
This document provides notes to the consolidated financial statements of Anheuser-Busch Companies, Inc. for the 2007 fiscal year. It summarizes the company's significant accounting policies, including principles of consolidation, revenue recognition, foreign currency translation, taxes collected from customers, delivery costs, advertising and promotional costs, financial derivatives, and other policies. It also provides details on international equity investments, intangible assets, plant and equipment, and securities valuation.
The document discusses changes to accounting standards for mergers and acquisitions (M&A) under FAS141R that will take effect in 2009. Key changes include stricter timing for reporting deals, requiring contingent consideration to be included in purchase price at fair value, treating in-process R&D as intangible assets rather than expenses, and expensing acquisition costs immediately rather than capitalizing them. Understanding these changes and modeling deals accordingly can help reduce potential negative effects on financial statements from new fair value requirements. While complications may arise, the changes complete international convergence of standards and M&A activity can continue with proper planning and valuation expertise.
This document discusses Ecolab's financial performance in 2000. Key points include:
- Net sales reached nearly $2.3 billion, a 9% increase over 1999, due to business acquisitions, new products, and growth in core businesses.
- Operating income was a record $343 million. Excluding unusual items, operating income rose 12% to $324 million, or 14.3% of net sales.
- Net income was $206 million. Excluding unusual items, net income increased 13% to $198 million, or 8.7% of net sales, reflecting strong operating income growth and a lower tax rate.
- The company continued its trend of strong financial results and
The document discusses key aspects of financial statements including their composition, elements, recognition, measurement and analysis. It defines the balance sheet, income statement and cash flow statement and explains that the balance sheet provides a snapshot of assets and liabilities at a moment in time, while the income statement captures transactions over a period of time and the cash flow statement shows cash impacts. Various ratios are also introduced as tools for analyzing the statements.
The document discusses Slater and Gordon, a leading law firm that floated on the stock market in 2007. It analyzes the firm's financial performance and accounting policies related to revenue recognition under IAS 18 and the newly adopted IFRS 15. Key points:
1) Slater and Gordon saw rapid growth and high shareholder expectations through an acquisition strategy. However, profits and share prices declined sharply in late 2015 when the firm adopted stricter IFRS 15 revenue recognition rules.
2) Under IAS 18, revenue was recognized based on work completed. But IFRS 15 requires revenue to be "highly probable" and contractually agreed to be recognized. This led to large write-downs of
This document reviews several Irish Financial Reporting Standards (FRS). It summarizes FRS 11 on impairment of fixed assets and goodwill, which requires impairment reviews when indicators exist and defines how to measure impairment. It also summarizes FRS 12 on provisions, contingent liabilities, and contingent assets, explaining how and when to recognize provisions versus disclose contingent liabilities. Finally, it provides high-level information on FRS 15 regarding tangible fixed assets.
This document discusses the concept of leverage in corporate finance. It defines leverage as using fixed costs or funds to increase shareholder returns. There are three types of leverage: operating, financial, and combined. Operating leverage refers to using fixed operating costs to magnify the impact of sales changes on earnings. Financial leverage magnifies the impact of changes in earnings before interest and taxes (EBIT) on earnings per share through the use of debt financing. Combined leverage results from using both operating and financial leverage, further amplifying the effect of sales changes on earnings per share. The degree of leverage depends on the fixed and variable costs for a company.
Financialrestructuring 120830091158-phpapp02Ashutosh Mot
Financial restructuring involves reshuffling a company's equity and debt capital to improve its financial structure and performance. It may involve reorganizing debt through actions like reducing interest costs or improving cash flows, and reorganizing equity through steps such as correcting overcapitalization or wiping out accumulated losses. Companies undergo financial restructuring to address issues like poor performance, market changes, or emerging opportunities, with the goal of creating the most beneficial financial environment for the business.
The document discusses key aspects of purchase price allocation (PPA) according to IFRS 3. It outlines that PPA should be an integrated part of every acquisition and involve identifying intangible assets, valuation analyses, and back testing. It describes the acquisition method under IFRS 3 which involves identifying assets/liabilities of the acquired company, measuring them at fair value, and recognizing any resulting goodwill or gain. Contingent liabilities may be recognized if the fair value can be measured reliably, unlike IAS 37.
The document summarizes some of the key differences between US GAAP, Indian GAAP, and International Financial Reporting Standards (IFRS) across various accounting topics:
- Revenue recognition, balance sheet presentation, corrections of errors, and business combinations differ between the standards. US GAAP and IFRS are more similar to each other than to Indian GAAP in many of these areas.
- IFRS and US GAAP both require comprehensive income reporting and fair value measurement of derivatives and hedges, whereas Indian GAAP has no such requirements.
- Requirements around cash flow statements, property/equipment, leases, share issue expenses, and prior period adjustments also vary between the three sets of standards
Losses & Low profits- A Transfer Pricing perspectiveAjit Jain
The document discusses transfer pricing perspectives on losses or low profits incurred by entities engaged in related party transactions. It addresses several key points:
1) Losses or low profits are not necessarily abnormal and can have commercial explanations not related to transfer pricing. The key is whether transactions were conducted at arm's length prices.
2) Losses can be justified if they are temporary and due to start-up costs, economic downturn, business strategies to gain market share, or other explainable reasons.
3) Taxpayers should maintain documentation to show losses are due to non-transfer pricing commercial factors rather than related party transaction pricing issues. Comparability analysis and economic adjustments may also be needed.
This document provides an overview and summary of MFRS 133 Earnings per Share. It discusses the following key points:
- MFRS 133 is equivalent to IAS 33 Earnings per Share and was issued by the Malaysian Accounting Standards Board in November 2011.
- The standard provides guidance on calculating and presenting both basic and diluted earnings per share amounts.
- Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
- Diluted EPS is calculated similarly but adjusts the profit or loss and shares for all dilutive potential ordinary shares.
- The standard defines key terms used and provides guidance on calculating earnings
Corporate Reporting - MFRS116, IAS16 Property Plant and Equipment_PPEDayana Mastura FCCA CA
This document discusses MFRS116 - Property, Plant and Equipment. It defines PPE and outlines the standard's scope and exceptions. PPE must meet definitions of an asset to be recognized initially at cost. Subsequent measurement can be under the cost or revaluation model. The document explains initial and subsequent measurement, self-construction, exchanges, derecognition and disclosure requirements under MFRS116 for PPE.
This document discusses General Motors' use of non-GAAP financial measures in its earnings releases and presentations to securities analysts. It provides definitions and explanations for several non-GAAP measures including adjusted net income, adjusted earnings before tax, managerial cash flow, and GM North America vehicle revenue per unit. These measures exclude certain items like restructuring charges, asset impairments, and tax adjustments that GM's management does not consider part of core operating results. The document also includes reconciliations of the non-GAAP measures to the most comparable GAAP measures. Management believes the non-GAAP measures provide useful supplemental information for investors, but notes they are not a substitute for GAAP measures and have limitations.
4 working capital management - a comparative study of different ownershipnitinsinghal2888
This document provides an overview of a study on working capital management practices of dairy cooperatives, private dairy firms, and multinational dairy firms operating in India. The study uses a two-dimensional approach to analyze working capital management internally, focusing on current asset and liability levels and operations, and externally through relationships with suppliers and customers. The document outlines the research methodology, which involves qualitative and quantitative analysis of data collected through interviews, questionnaires, and financial statements of sample firms. The goal is to provide comparative insights into different ownership structures' working capital management and identify areas for improvement.
This presentation will also provide a year end update of the technical accounting standards (ASU’s), proposed standards that are in Exposure Drafts (ED’s), and the projects of the FASB going forward.
During the presentation attendees can expect to learn the following:
Gain an understanding of the most significant changes in accounting standards over the past 12 months
Become familiar with the proposed changes that the FASB has issued in Exposure Drafts
Acquire knowledge of the big projects that the FASB will address next
After this webinar attendees will be able to answer:
What changes has the FASB made over the past year?
How will these changes impact you and your organization?
What areas will the FASB focus on next?
Accounting Standard 14 provides guidance on accounting for amalgamations. It defines key terms like amalgamation, transferor company, transferee company, and consideration. It describes two methods of accounting for amalgamations - the purchase method, where assets and liabilities are recorded at fair value, and the pooling of interest method, where they are recorded at carrying value. The standard also covers types of amalgamations, how consideration is determined using techniques like fair value, and required disclosures.
Partner Janice Snyder discussed the recent changes made by the Financial Accounting Standards Board and how those changes will impact you and your organization.
The document discusses the key changes and challenges in implementing the new revenue recognition standard Ind AS 115, which is based on IFRS 15. Some of the significant changes include focusing on control rather than risks and rewards for timing of revenue recognition. It also requires identifying separate performance obligations in contracts and allocating the transaction price to each. This will impact industries like telecom and software development. Other challenges discussed are accounting for contract modifications and transactions containing financing elements.
Group 1 presented on Tata Tea and its acquisition of Tetley Tea. Key points include:
- Tata Tea was formed in 1964 and acquired Tetley in 2000 after initially losing a bid in 1995.
- Tetley was a pioneer in tea bags and specialized in fruit and herbal teas. It had a strong presence outside of India.
- A SWOT analysis found Tata Tea's strengths were its large size and brand loyalty, while weaknesses included technology and cost control.
- Valuing Tetley used approaches like income, market, and cost. The income approach examined metrics like price and volume premiums.
- Brand valuation looked at financial performance, brand strength, and the role of brands in purchasing
Anheuser-Busch has established itself as a leading brewer in China through its Budweiser Wuhan brewery, acquisition of Harbin brewery, and strategic partnership with Tsingtao brewery. China is now the second largest profit contributor to Anheuser-Busch International and has tremendous long-term growth potential as beer consumption increases along with China's economic rise. Anheuser-Busch is well-positioned to capitalize on China's growing beer market through its existing operations and partnerships.
1) Anheuser-Busch reported disappointing financial results for 2005 as net sales increased only 0.7% while earnings per share declined 15.2%.
2) International beer sales increased due to higher volume in China, Canada, and Mexico. Packaging and entertainment operations also saw sales growth.
3) However, domestic beer sales declined 2.5% due to a 1.8% drop in volume and slightly lower revenue per barrel. The company is implementing initiatives to boost domestic sales and market share going forward.
Google reported strong revenue growth of 39% year-over-year for Q2 2008. International revenue grew significantly while search quality improvements and ad quality initiatives continued. Costs remained a focus while investing in opportunities. Free cash flow increased substantially from the prior quarter.
Google reported strong Q4 2008 results despite economic challenges:
- Revenue grew 18% year-over-year and 3% quarter-over-quarter to $5.7 billion.
- International revenue reached $2.9 billion, accounting for 50% of total revenue.
- Traffic and revenue remained solid in Q4, and investments continued in search, ads, and newer areas like display, mobile, and enterprise.
- Cost containment efforts aimed to better position Google for long-term growth.
The document is a proxy statement from Anheuser-Busch Companies, Inc. for its 2003 Annual Meeting of Stockholders. It provides information on the meeting, including details on the five items to be voted on: election of five directors, approval of an amendment to the 1998 Incentive Stock Plan, approval of the Stock Plan for Non-Employee Directors, approval of PricewaterhouseCoopers LLP as independent accountants, and a stockholder proposal. It also answers frequently asked questions about voting procedures and requirements.
This document is a Form 10-Q quarterly report filed by Google Inc. with the SEC for the quarter ended September 30, 2004. The summary provides:
- Google reported revenues of $805.9 million for the quarter, up from $393.9 million in the same quarter the previous year. Net income was $52 million compared to $20.4 million.
- Costs and expenses for the quarter were $794.8 million, primarily driven by a $201 million settlement payment to Yahoo.
- As of September 30, 2004, Google held $344.5 million in cash and cash equivalents and $1.5 billion in short-term investments.
This document provides notes to the consolidated financial statements of Anheuser-Busch Companies and Subsidiaries. It summarizes the company's significant accounting policies, including principles of consolidation, revenue recognition, foreign currency translation, valuation of securities, cash, inventories, fixed assets, intangible assets, delivery costs, advertising costs, financial derivatives, stock-based compensation, and income taxes. The notes also provide details on the composition of certain financial statement line items such as plant and equipment, changes in intangible assets, and the pro forma impact of expensing stock options.
Financialrestructuring 120830091158-phpapp02Ashutosh Mot
Financial restructuring involves reshuffling a company's equity and debt capital to improve its financial structure and performance. It may involve reorganizing debt through actions like reducing interest costs or improving cash flows, and reorganizing equity through steps such as correcting overcapitalization or wiping out accumulated losses. Companies undergo financial restructuring to address issues like poor performance, market changes, or emerging opportunities, with the goal of creating the most beneficial financial environment for the business.
The document discusses key aspects of purchase price allocation (PPA) according to IFRS 3. It outlines that PPA should be an integrated part of every acquisition and involve identifying intangible assets, valuation analyses, and back testing. It describes the acquisition method under IFRS 3 which involves identifying assets/liabilities of the acquired company, measuring them at fair value, and recognizing any resulting goodwill or gain. Contingent liabilities may be recognized if the fair value can be measured reliably, unlike IAS 37.
The document summarizes some of the key differences between US GAAP, Indian GAAP, and International Financial Reporting Standards (IFRS) across various accounting topics:
- Revenue recognition, balance sheet presentation, corrections of errors, and business combinations differ between the standards. US GAAP and IFRS are more similar to each other than to Indian GAAP in many of these areas.
- IFRS and US GAAP both require comprehensive income reporting and fair value measurement of derivatives and hedges, whereas Indian GAAP has no such requirements.
- Requirements around cash flow statements, property/equipment, leases, share issue expenses, and prior period adjustments also vary between the three sets of standards
Losses & Low profits- A Transfer Pricing perspectiveAjit Jain
The document discusses transfer pricing perspectives on losses or low profits incurred by entities engaged in related party transactions. It addresses several key points:
1) Losses or low profits are not necessarily abnormal and can have commercial explanations not related to transfer pricing. The key is whether transactions were conducted at arm's length prices.
2) Losses can be justified if they are temporary and due to start-up costs, economic downturn, business strategies to gain market share, or other explainable reasons.
3) Taxpayers should maintain documentation to show losses are due to non-transfer pricing commercial factors rather than related party transaction pricing issues. Comparability analysis and economic adjustments may also be needed.
This document provides an overview and summary of MFRS 133 Earnings per Share. It discusses the following key points:
- MFRS 133 is equivalent to IAS 33 Earnings per Share and was issued by the Malaysian Accounting Standards Board in November 2011.
- The standard provides guidance on calculating and presenting both basic and diluted earnings per share amounts.
- Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
- Diluted EPS is calculated similarly but adjusts the profit or loss and shares for all dilutive potential ordinary shares.
- The standard defines key terms used and provides guidance on calculating earnings
Corporate Reporting - MFRS116, IAS16 Property Plant and Equipment_PPEDayana Mastura FCCA CA
This document discusses MFRS116 - Property, Plant and Equipment. It defines PPE and outlines the standard's scope and exceptions. PPE must meet definitions of an asset to be recognized initially at cost. Subsequent measurement can be under the cost or revaluation model. The document explains initial and subsequent measurement, self-construction, exchanges, derecognition and disclosure requirements under MFRS116 for PPE.
This document discusses General Motors' use of non-GAAP financial measures in its earnings releases and presentations to securities analysts. It provides definitions and explanations for several non-GAAP measures including adjusted net income, adjusted earnings before tax, managerial cash flow, and GM North America vehicle revenue per unit. These measures exclude certain items like restructuring charges, asset impairments, and tax adjustments that GM's management does not consider part of core operating results. The document also includes reconciliations of the non-GAAP measures to the most comparable GAAP measures. Management believes the non-GAAP measures provide useful supplemental information for investors, but notes they are not a substitute for GAAP measures and have limitations.
4 working capital management - a comparative study of different ownershipnitinsinghal2888
This document provides an overview of a study on working capital management practices of dairy cooperatives, private dairy firms, and multinational dairy firms operating in India. The study uses a two-dimensional approach to analyze working capital management internally, focusing on current asset and liability levels and operations, and externally through relationships with suppliers and customers. The document outlines the research methodology, which involves qualitative and quantitative analysis of data collected through interviews, questionnaires, and financial statements of sample firms. The goal is to provide comparative insights into different ownership structures' working capital management and identify areas for improvement.
This presentation will also provide a year end update of the technical accounting standards (ASU’s), proposed standards that are in Exposure Drafts (ED’s), and the projects of the FASB going forward.
During the presentation attendees can expect to learn the following:
Gain an understanding of the most significant changes in accounting standards over the past 12 months
Become familiar with the proposed changes that the FASB has issued in Exposure Drafts
Acquire knowledge of the big projects that the FASB will address next
After this webinar attendees will be able to answer:
What changes has the FASB made over the past year?
How will these changes impact you and your organization?
What areas will the FASB focus on next?
Accounting Standard 14 provides guidance on accounting for amalgamations. It defines key terms like amalgamation, transferor company, transferee company, and consideration. It describes two methods of accounting for amalgamations - the purchase method, where assets and liabilities are recorded at fair value, and the pooling of interest method, where they are recorded at carrying value. The standard also covers types of amalgamations, how consideration is determined using techniques like fair value, and required disclosures.
Partner Janice Snyder discussed the recent changes made by the Financial Accounting Standards Board and how those changes will impact you and your organization.
The document discusses the key changes and challenges in implementing the new revenue recognition standard Ind AS 115, which is based on IFRS 15. Some of the significant changes include focusing on control rather than risks and rewards for timing of revenue recognition. It also requires identifying separate performance obligations in contracts and allocating the transaction price to each. This will impact industries like telecom and software development. Other challenges discussed are accounting for contract modifications and transactions containing financing elements.
Group 1 presented on Tata Tea and its acquisition of Tetley Tea. Key points include:
- Tata Tea was formed in 1964 and acquired Tetley in 2000 after initially losing a bid in 1995.
- Tetley was a pioneer in tea bags and specialized in fruit and herbal teas. It had a strong presence outside of India.
- A SWOT analysis found Tata Tea's strengths were its large size and brand loyalty, while weaknesses included technology and cost control.
- Valuing Tetley used approaches like income, market, and cost. The income approach examined metrics like price and volume premiums.
- Brand valuation looked at financial performance, brand strength, and the role of brands in purchasing
Anheuser-Busch has established itself as a leading brewer in China through its Budweiser Wuhan brewery, acquisition of Harbin brewery, and strategic partnership with Tsingtao brewery. China is now the second largest profit contributor to Anheuser-Busch International and has tremendous long-term growth potential as beer consumption increases along with China's economic rise. Anheuser-Busch is well-positioned to capitalize on China's growing beer market through its existing operations and partnerships.
1) Anheuser-Busch reported disappointing financial results for 2005 as net sales increased only 0.7% while earnings per share declined 15.2%.
2) International beer sales increased due to higher volume in China, Canada, and Mexico. Packaging and entertainment operations also saw sales growth.
3) However, domestic beer sales declined 2.5% due to a 1.8% drop in volume and slightly lower revenue per barrel. The company is implementing initiatives to boost domestic sales and market share going forward.
Google reported strong revenue growth of 39% year-over-year for Q2 2008. International revenue grew significantly while search quality improvements and ad quality initiatives continued. Costs remained a focus while investing in opportunities. Free cash flow increased substantially from the prior quarter.
Google reported strong Q4 2008 results despite economic challenges:
- Revenue grew 18% year-over-year and 3% quarter-over-quarter to $5.7 billion.
- International revenue reached $2.9 billion, accounting for 50% of total revenue.
- Traffic and revenue remained solid in Q4, and investments continued in search, ads, and newer areas like display, mobile, and enterprise.
- Cost containment efforts aimed to better position Google for long-term growth.
The document is a proxy statement from Anheuser-Busch Companies, Inc. for its 2003 Annual Meeting of Stockholders. It provides information on the meeting, including details on the five items to be voted on: election of five directors, approval of an amendment to the 1998 Incentive Stock Plan, approval of the Stock Plan for Non-Employee Directors, approval of PricewaterhouseCoopers LLP as independent accountants, and a stockholder proposal. It also answers frequently asked questions about voting procedures and requirements.
This document is a Form 10-Q quarterly report filed by Google Inc. with the SEC for the quarter ended September 30, 2004. The summary provides:
- Google reported revenues of $805.9 million for the quarter, up from $393.9 million in the same quarter the previous year. Net income was $52 million compared to $20.4 million.
- Costs and expenses for the quarter were $794.8 million, primarily driven by a $201 million settlement payment to Yahoo.
- As of September 30, 2004, Google held $344.5 million in cash and cash equivalents and $1.5 billion in short-term investments.
This document provides notes to the consolidated financial statements of Anheuser-Busch Companies and Subsidiaries. It summarizes the company's significant accounting policies, including principles of consolidation, revenue recognition, foreign currency translation, valuation of securities, cash, inventories, fixed assets, intangible assets, delivery costs, advertising costs, financial derivatives, stock-based compensation, and income taxes. The notes also provide details on the composition of certain financial statement line items such as plant and equipment, changes in intangible assets, and the pro forma impact of expensing stock options.
emerson electricl Proxy Statement for 2009 Annual Shareholders Meeting finance12
This document provides notes to the consolidated financial statements of Emerson Electric Co. for the years ended September 30, 2008, 2007 and 2006. It summarizes Emerson's significant accounting policies including principles of consolidation, foreign currency translation, cash equivalents, inventories, property, plant and equipment, goodwill and intangibles, warranty, revenue recognition, and financial instruments. It also provides details on acquisitions, divestitures, weighted average shares, other deductions, and reclassifications of prior year amounts.
- Monsanto's business focuses on agriculture globally through seeds and traits, agricultural productivity, and biotechnology. Key products include Roundup herbicide, YieldGard corn borer trait, and Roundup Ready soybeans.
- Roundup remains the leading herbicide but Monsanto is shifting strategy to improve return on capital by reducing SKUs and marketing spend. Seed and trait sales are projected to grow significantly with second-generation and stacked traits.
- Biotech trait acreage has grown to over 150 million acres worldwide led by Roundup Ready soybeans, corn, and cotton traits. However, further growth depends on approvals in Europe and value capture systems in markets like Brazil.
The document summarizes accounting principles used in preparing consolidated financial statements for Koninklijke Philips Electronics N.V. including:
- Using historical cost and Dutch GAAP. Consolidation includes majority owned companies and minority interests are disclosed.
- Foreign operations are translated to the reporting currency. Derivatives are used to manage currency risks and measured at fair value.
- Revenues are recognized upon delivery, provision for estimated losses, and royalties on accrual basis. Expenses use accrual basis. Income taxes use deferred tax assets/liabilities.
Hugh Grant, Chairman, President and CEO of Lehman Brothers, provided an overview of Monsanto's financial performance and growth opportunities. Key points include:
1) Monsanto expects continued growth in EPS and free cash flow through 2006 based on momentum in seeds and traits.
2) Seeds and traits are accelerating and becoming a larger portion of gross profit as the value shifts from chemicals to biotechnology.
3) Approvals in new markets like the EU will further expand the potential for Roundup Ready corn and other biotech traits.
The document discusses key challenges and considerations for preparing carve-out financial statements for a portion of a company's operations being sold. Some of the main issues addressed include:
1) Determining which assets and liabilities should be included, such as tangible/intangible assets, debt, pensions, and expenses.
2) Accounting for certain items like income taxes, impairments, and expenses may differ between the carve-out statements and parent company statements.
3) Additional reporting decisions arise if the carve-out entity will undergo an initial public offering. Proper identification and treatment of items is important to reflect the historical operations of the carve-out entity.
The document discusses accounting standards issued by the Institute of Chartered Accountants of India (ICAI). It provides information on the Accounting Standards Board established by ICAI and its role in preparing accounting standards for proper recognition, measurement, treatment, presentation and disclosure of accounting transactions in financial statements of organizations. The document also covers the scope and objectives of various individual accounting standards.
This document discusses the disclosure of accounting policies as outlined in Accounting Standard 1. It states that all significant accounting policies adopted in preparing financial statements must be disclosed together in one place. This includes policies around areas like fixed assets, expenditures, inventories, foreign currency transactions, contingencies, and retirement benefits. The selection of accounting policies considers principles of prudence, substance over form, and materiality to represent a true and fair view in financial statements. Any changes in policies that materially affect financial statement items must also be disclosed, along with their effects.
This document discusses principles of asset and liability valuation according to GAAP. It defines valuation as estimating worth and notes it can be done for financial assets and liabilities. Several models for valuation are described, including absolute value models like discounted cash flow that determine future cash flows, and relative value models that compare to similar assets. Key principles of GAAP that guide valuation are also summarized, such as the historical cost and revenue recognition principles.
The document provides an overview of Anheuser-Busch's financial performance for 2004. Key points include:
- Net sales increased 5.6% to $14.9 billion and earnings per share increased 11.7% to $2.77, driven by growth across all business segments.
- Domestic beer volume was flat at 103 million barrels while revenue per barrel increased. International volume grew 64.8% to 13.8 million barrels.
- Earnings per share growth of 6-9% is expected for 2005, excluding one-time items from 2004 and the adoption of stock option expensing standards.
Analysts frequently make adjustments to company financial statements to reflect a true and fair view, enable comparability between companies, and account for differences in accounting treatments. Key adjustments include reclassifying certain income/expenses as operating or non-operating, adjusting depreciation and revaluation reserves, treating goodwill and intangibles appropriately, and accounting for off-balance sheet items like operating leases. Analysts scrutinize areas like depreciation policies, impairment losses, and internally generated intangible assets to determine if reported numbers require adjustment. The purpose is to arrive at financial metrics that best indicate a company's performance, position, and credit risk.
'Business valuation' stands as a cornerstone for numerous transactions, decisions, and analyses
in the complex world of business. Whether your business is an asset you plan to sell or
something you plan to pass down to your family, it is very important to understand the nuances
of business valuations. This article aims to clarify the concept of business valuation and shed
light on getting a professional business valuation.
The document discusses the theory base of accounting, including generally accepted accounting principles (GAAP) and conceptual framework. It outlines 14 key accounting concepts and principles:
1) Accounting entity principle - Records reflect only the business activities
2) Stable money measurement principle - Assumes stable monetary value
3) Going concern principle - Assumes continuity of operations
4) Accounting period principle - Provides periodic financial information
5) Cost principle - Assets valued at historical cost less depreciation
6) Revenue recognition principle - Revenue realized upon sale/transfer of goods
7) Expense recognition principle - Expenses matched to revenue in the period
8) Matching or accrual principle - Revenue/expenses allocated to periods
Jabil Circuit is an electronics manufacturing services company that provides design, manufacturing, and supply chain management services globally. In fiscal year 2004, Jabil expanded its services, diversified its customer base across multiple industries, and grew strategically through both organic growth and acquisitions. Key highlights include expanding into new industries like instrumentation and medical, growing that sector to 16% of revenue, and increasing total revenue 32% to $3.6 billion while improving profitability and return on invested capital. Jabil aims to continue outperforming overall market growth rates through further expansion of services, customers, and regions.
In contrast, others fail to lure investors due to unrealistic valuations not supported by facts, figures, or potential. Business valuation is the foremost consideration for any person or entity who wants to buy business in Ontario or other areas.
Robert T. Fraley presented at the 15th Annual Chemical Conference. In 3 sentences:
Biotechnology has been the most rapidly adopted agricultural technology, with global planted acres of biotech crops reaching over 450 million acres. Monsanto has established seed and trait market positions through advances in breeding, first-generation biotech traits, and geographic expansion. Looking ahead, Monsanto will leverage its product pipeline, regulatory experience, and commercial infrastructure to expand biotech traits into new markets like Brazil and Argentina.
- MPG reported fourth quarter 2016 net sales of $647 million, down 12% from fourth quarter 2015, due to planned attrition of non-core wheel bearing business and lower light vehicle production in North America.
- Adjusted EBITDA for the quarter was $107 million, a 13% decrease from the previous year, driven by lower sales volumes partially offset by cost reductions.
- For the full year, MPG achieved $493 million in Adjusted EBITDA on $2.791 billion in net sales, reflecting strong cost control despite market headwinds.
MPG provides a presentation on its financial results and business prospects. It discusses forward-looking statements and risks that could impact financial estimates. It also defines several non-GAAP financial measures it uses to evaluate performance, such as Combined Net Sales, Adjusted EBITDA, Adjusted Free Cash Flow, and Adjusted EPS. MPG describes its business as a powerful cash flow engine with strong margins and market positions in powertrain applications. It sees opportunities for long-term growth through its leadership in advanced metal processes.
MPG provides a presentation on its financial results and business prospects. It discusses forward-looking statements and risks that could impact financial estimates. It also defines several non-GAAP financial measures it uses to evaluate performance, such as Combined Net Sales, Adjusted EBITDA, Adjusted Free Cash Flow, and Adjusted EPS. MPG describes its business as a powerful cash flow engine with strong margins and market positions in powertrain applications. It sees opportunities for long-term growth through its leadership in advanced metal processes.
Cost accounting vs final accounting by alex joseph@macfastAlex G Joseph
Cost accounting and financial accounting both record business transactions systematically, but have different purposes and focuses. Financial accounting provides general financial information to external parties, while cost accounting provides detailed internal information to management for planning, control, and decision making. Some key differences include that financial accounting focuses on legally required external reporting, while cost accounting focuses on voluntary internal reporting tailored to management's needs.
Similar to anheuser-busch 2005AR_NotesToConFinStatement (20)
This document is Google's Form 10-Q quarterly report filed with the SEC for the quarter ending March 31, 2005. It includes condensed consolidated financial statements and notes. The financial statements show that for the quarter, Google's revenues increased 93% year-over-year to $1.26 billion, with net income increasing 478% to $369 million. Cash and marketable securities totaled $2.5 billion as of March 31, 2005. Management's discussion and analysis provides details on financial results and business outlook.
This document is Google's Form 10-Q filing with the SEC for the quarterly period ended June 30, 2005. It includes Google's condensed consolidated balance sheets as of December 31, 2004 and June 30, 2005 (unaudited), as well as condensed consolidated statements of income and cash flows for the three and six month periods ended June 30, 2004 and 2005 (unaudited). Notes to the unaudited condensed consolidated financial statements are also provided. The filing provides key financial information about Google's financial position and performance during the reported periods.
This document is Google's Form 10-Q filing with the SEC for the quarterly period ended September 30, 2005. It includes Google's condensed consolidated balance sheets as of December 31, 2004 and September 30, 2005, which shows an increase in total assets from $2.7 billion to $8.4 billion over that period. It also includes condensed consolidated statements of income for quarters ended September 30, 2004 and 2005 and condensed consolidated statements of cash flows for the nine month periods ended September 30, 2004 and 2005. The filing also includes notes to the unaudited condensed consolidated financial statements and sections for management's discussion of financial results, market risk disclosures, and controls and procedures.
This document is Google Inc.'s Form 10-Q filing for the quarterly period ended June 30, 2006. It provides financial statements and disclosures including the condensed consolidated balance sheet, statements of income, and statements of cash flows. Revenues increased significantly year-over-year to $2.46 billion for the quarter due to growth in advertising revenues. Net income for the quarter was $721.1 million, also up significantly from the prior year.
- The document is Google Inc.'s Form 10-Q filing with the SEC for the quarter ended September 30, 2006.
- It provides Google's condensed consolidated financial statements, including balance sheets, income statements, and cash flow statements for the periods presented.
- The financial statements show Google's revenues increased to $2.7 billion for the quarter from $1.6 billion in the prior year, while net income increased to $733 million from $381 million.
- The document discusses Google's Q3 2006 earnings conference call, reporting 70% year-over-year revenue growth and 10% quarter-over-quarter growth driven by increased monetization and traffic.
- Operating income and net income reached record levels, and the company continued investing in products and infrastructure while forming new partnerships.
- Google agreed to acquire YouTube for $1.65 billion in stock, hoping to enable anyone to upload, watch and share videos worldwide.
Google reported strong financial results for Q4 2006 with 67% year-over-year revenue growth and 19% quarter-over-quarter growth. Revenues increased due to a healthy holiday season with strong traffic growth as well as international revenue growth, particularly in Germany and France. Costs and expenses grew but Google continued investing aggressively in employees and infrastructure for long term success. Non-GAAP net income was $997.3 million, up 23% from the previous quarter.
Google reported strong revenue growth in Q1 2007, with revenue up 63% year-over-year and 14% quarter-over-quarter. International markets contributed significantly to revenue growth. Non-GAAP net income was $1.16 billion, with continued investments in infrastructure and employees. Google also announced an agreement to acquire DoubleClick during the quarter.
Google reported strong revenue growth of 58% year-over-year and 6% quarter-over-quarter for Q2 2007. Investments in hiring and infrastructure remained priorities. Google continued to lead in search and ads while launching new products. International revenue increased significantly in key markets like Spain, Italy and France.
- The document is Google Inc.'s Form 10-Q filing with the SEC for the quarterly period ended September 30, 2007.
- It provides Google's consolidated financial statements including balance sheets, income statements, and cash flow statements for interim periods.
- The financial statements show Google's revenues increased over the comparable prior year periods as did costs and expenses, resulting in increased income from operations and net income.
- Google reported revenue growth of 57% year-over-year and 9% quarter-over-quarter for Q3 2007, driven by increases in Google properties revenue and network revenues.
- International markets continued to show strong growth, accounting for over 50% of total revenue.
- The company continued executing on its Search.Ads.Apps strategy and expanding its product offerings.
- Google reported strong revenue growth of 51% year-over-year and 14% quarter-over-quarter for Q4 2007, driven by growth in Google properties revenue and network revenues.
- Executing on its Search.Ads.Apps strategy led to improved search quality worldwide and better advertiser control and return on investment. Significant progress was also made in mobile with the launch of Android.
- International revenues grew to $2.3 billion in Q4 2007 and accounted for over half of total revenues, demonstrating Google's strong global performance.
Google reported strong financial results for Q1 2008 with revenue growth of 42% year-over-year and 7% quarter-over-quarter. Revenue from Google properties grew 49% year-over-year driven by growth in search and international markets. Operating expenses increased but margins remained high at 30% due to operational discipline. Free cash flow was $938 million for the quarter.
- Revenue grew 31% year-over-year and 3% quarter-over-quarter to $5.5 billion, with international revenue reaching $2.8 billion.
- Despite economic challenges, traffic and revenue remained solid in Q3 due to investments in core search and ads businesses.
- Operating margin was 30% under GAAP and 37% non-GAAP, with net income of $1.29 billion GAAP and $1.56 billion non-GAAP.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Discover the Future of Dogecoin with Our Comprehensive Guidance36 Crypto
Learn in-depth about Dogecoin's trajectory and stay informed with 36crypto's essential and up-to-date information about the crypto space.
Our presentation delves into Dogecoin's potential future, exploring whether it's destined to skyrocket to the moon or face a downward spiral. In addition, it highlights invaluable insights. Don't miss out on this opportunity to enhance your crypto understanding!
https://36crypto.com/the-future-of-dogecoin-how-high-can-this-cryptocurrency-reach/
Optimizing Net Interest Margin (NIM) in the Financial Sector (With Examples).pdfshruti1menon2
NIM is calculated as the difference between interest income earned and interest expenses paid, divided by interest-earning assets.
Importance: NIM serves as a critical measure of a financial institution's profitability and operational efficiency. It reflects how effectively the institution is utilizing its interest-earning assets to generate income while managing interest costs.
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
South Dakota State University degree offer diploma Transcriptynfqplhm
办理美国SDSU毕业证书制作南达科他州立大学假文凭定制Q微168899991做SDSU留信网教留服认证海牙认证改SDSU成绩单GPA做SDSU假学位证假文凭高仿毕业证GRE代考如何申请南达科他州立大学South Dakota State University degree offer diploma Transcript
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Every business, big or small, deals with outgoing payments. Whether it’s to suppliers for inventory, to employees for salaries, or to vendors for services rendered, keeping track of these expenses is crucial. This is where payment vouchers come in – the unsung heroes of the accounting world.
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
1. Anheuser-Busch Companies and Subsidiaries
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies from the company’s breweries. For company-owned beer
wholesalers, title transfers when products are delivered to
retail customers. The company does not recognize any revenue
ACCOUNTING PRINCIPLES AND POLICIES
when independent wholesalers sell the company’s products to
This summary of the significant accounting principles and
retail customers. For international beer operations and sales
policies of Anheuser-Busch Companies, Inc., and its
of cans and lids, title transfers on customer receipt. Entertain-
subsidiaries is provided to assist in evaluating the company’s
ment operations recognize revenue when customers actually
consolidated financial statements. These principles and policies
visit a park location, rather than when advance or season
conform to U.S. generally accepted accounting principles. The
tickets are sold.
company is required to make certain estimates in preparing
the financial statements that impact the reported amounts of
DELIVERY COSTS
certain assets, liabilities, revenues and expenses. All estimates
Pass-through finished goods delivery costs reimbursed by
are based on the company’s best information at the time and
customers are reported in sales, with an offsetting expense
are in conformity with U.S. generally accepted accounting
included in cost of sales.
principles. Actual results could differ from the estimates, and
Delivery costs incurred by company-owned beer whole-
any such differences are recognized when incurred.
salers are included in marketing, distribution and administra-
tive expenses. These costs are considered marketing related
PRINCIPLES OF CONSOLIDATION
because in addition to product delivery, drivers provide
The consolidated financial statements include the company
substantial marketing and other customer service functions to
and all its subsidiaries. The company consolidates all majority-
retailers including product display, shelf space management,
owned and controlled subsidiaries, uses the equity method of
distribution of promotional materials, draught line cleaning
accounting for investments in which the company is able to
and product rotation.
exercise significant influence, and uses the cost method for all
other equity investments. All significant intercompany transac-
ADVERTISING AND PROMOTIONAL COSTS
tions are eliminated. Minority interests in the company’s
Advertising production costs are deferred and expensed the
consolidated China subsidiaries are not material.
first time the advertisement is shown. Advertising media
costs are expensed as incurred. Advertising costs are recog-
FOREIGN CURRENCY
nized in marketing, distribution and administrative expenses
Financial statements of foreign subsidiaries where the local
and totaled $849.8 million in 2005 and $806.7 million in
currency is the functional currency are translated into U.S.
both 2004 and 2003. Sales promotion costs are recognized
dollars using period-end exchange rates for assets and liabili-
as a reduction of net sales when incurred, and totaled
ties and average exchange rates during the period for revenues
$716.7 million in 2005, $535.7 million in 2004, and
and expenses. Cumulative translation adjustments associated
$511.8 million in 2003.
with net assets are reported in nonowner changes in equity
and are not recognized in the income statement until the
FINANCIAL DERIVATIVES
investment is sold.
Anheuser-Busch uses financial derivatives to mitigate the
Exchange rate gains or losses related to foreign currency
company’s exposure to volatility in commodity prices, interest
transactions are recognized in the income statement as
rates, and foreign currency exchange rates. The company
incurred, in the same financial statement caption as the under-
hedges only exposures in the ordinary course of business and
lying transaction, and are not material for any year shown.
company policy prohibits holding or trading derivatives for
profit.
REVENUE RECOGNITION
The company accounts for its derivatives in accordance
The company’s revenue recognition practices comply with
with FAS No. 133, “Accounting for Derivative Instruments
Securities and Exchange Commission (SEC) Staff Accounting
and Hedging Activity,” which requires all derivatives to be
Bulletin No. 101, “Revenue Recognition in Financial
carried on the balance sheet at fair value and meet certain
Statements.” The company recognizes revenue only when legal
documentary and analytical requirements to qualify for hedge
title transfers or services have been rendered to unaffiliated
accounting treatment. Hedge accounting creates the potential
customers. For malt beverages shipped domestically to inde-
for an income statement match between the changes in fair
pendent wholesalers, title transfers on shipment of product
values of derivatives and the changes in cost or values of the
46
2. Anheuser-Busch Companies and Subsidiaries
associated underlying transactions. By policy, derivatives held Because the company’s employee stock options are not
by the company must be designated as hedges of specific expo- traded on an exchange, the fair value disclosed is required to
sures at inception, with an expectation that changes in the fair be based on a theoretical option-pricing model. Employees
value will essentially offset the change in cost or value for the can receive no value nor derive any benefit from holding
underlying exposure. All of the company’s derivatives qualify stock options under these plans without an increase in the
for hedge accounting under FAS 133. Liquidation of derivative market price of Anheuser-Busch stock. Such an increase in
positions is required whenever it is subsequently determined stock price benefits all shareholders.
that an underlying transaction will not occur, with the gains
2005 2004 2003
or losses recognized in the income statement on liquidation.
The fair values of derivatives are determined from market Reported net income $ 1,839.2 $ 2,240.3 $ 2,075.9
Pro forma stock option expense (94.8) (121.6) (113.4)
observation or dealer quotation. Commodities derivatives
currently outstanding at December 31, 2005, all have initial Adjusted net income $ 1,744.4 $ 2,118.7 $ 1,962.5
terms of one year or less and the associated underlying trans-
actions are expected to occur within that timeframe. Reported basic earnings per share $ 2.37 $ 2.80 $ 2.51
Pro forma stock option expense (.13) (.15) (.14)
Option premiums paid to counterparties are initially
recorded as assets and subsequently adjusted to fair value each Adjusted basic earnings per share $ 2.24 $ 2.65 $ 2.37
period, with the effective portion of the change in fair value
reported in nonowner changes in equity until the underlying Reported diluted earnings per share $ 2.35 $ 2.77 $ 2.48
Pro forma stock option expense (.12) (.15) (.14)
transaction occurs. Amounts receivable from counterparties
(unrealized hedge gains) or owed to counterparties (unrealized Adjusted diluted earnings per share $ 2.23 $ 2.62 $ 2.34
hedge losses) are included in current assets and current liabili-
ties, respectively. The fair value of stock options granted, which is hypo-
See Note 3 for additional information on underlying thetically recognized in compensation expense over the vesting
hedge categories, notional and fair values of derivatives, types period to determine the pro forma earnings impact illustrated
and classifications of derivatives used, and gains and losses above, has been estimated on the date of grant using a
from hedging activity. binomial (lattice method) option-pricing model for 2005 and
2004 and the Black-Scholes option-pricing model for 2003.
In 2005, the company began recognizing the entire fair value
STOCK-BASED COMPENSATION
The company accounts for employee stock options in associated with non-forfeitable stock options in its pro forma
accordance with FAS 123, “Accounting for Stock-Based stock compensation expense calculation as of the grant date.
Compensation.” Under FAS 123, the company elects to This means approximately 60% of total stock options expense
recognize no compensation expense related to employee stock will be recognized in the fourth quarter each year, with the
options, since options are always granted with an exercise remaining stock option expense associated with forfeitable
price equal to the market price of the company’s stock on the options recognized ratably over the three-year option vesting
day of grant. See Note 6 for information regarding shares period.
granted, outstanding and exercisable under the company’s The fair values of options granted during 2005, 2004
stock compensation plans. and 2003 determined using either the binomial or Black-
Because of its election to not recognize compensation Scholes model as noted above, are as follows (in millions,
expense for stock options, the company makes pro forma except per option).
disclosures of net income and diluted earnings per share as
2005 2004 2003
if compensation expense had been recognized, based on
the fair value of stock options on the grant date. Had Fair value of each option granted $ 8.81 $10.49 $13.58
Total number of options granted 11.4 14.1 14.4
employee compensation expense been recognized based on
the fair value methodology prescribed by FAS 123, the Total fair value of options granted $100.4 $147.9 $195.6
company’s net income and earnings per share for the three
years ended December 31 would have been impacted as
shown in the following table (in millions, except per share).
47
3. Anheuser-Busch Companies and Subsidiaries
The binomial option-pricing model was selected for the temporary differences between financial reporting and tax
valuation of 2005 and 2004 options because it accommodates filing in accordance with the requirements of FAS No. 109,
several inputs in order to take into account multiple option “Accounting for Income Taxes.” See Note 7 for additional
exercise patterns, and essentially computes an overall value information on the company’s provision for income taxes,
based on a weighting of each distinct pattern. Anheuser-Busch deferred income tax assets and liabilities, and effective tax
therefore believes the binomial model is a better measure of rate.
stock option value than Black-Scholes. The assumptions used
in applying the company’s option pricing models follow. For RESEARCH AND DEVELOPMENT COSTS AND START-UP COSTS
illustrative purposes, the expected life, risk-free rate, and fair Research and development costs and plant start-up costs are
value per option shown above are weighted averages derived expensed as incurred, and are not material for any year
from the distinct exercise patterns. presented.
2005 2004 2003 CASH
Cash includes cash in banks, demand deposits, and invest-
Expected life of option 5.5 yrs. 5.5 yrs. 7 yrs.
Risk-free interest rate 4.4% 3.7% 4.0% ments in short-term marketable securities with original matu-
Expected volatility of Anheuser-Busch rities of 90 days or less.
stock 21% 22% 22%
Expected dividend yield on
INVENTORIES
Anheuser-Busch stock 2.5% 1.8% 1.7%
Inventories are valued at the lower of cost or market. The
In December 2004, the Financial Accounting Standards company uses the last-in, first-out method (LIFO) valuation
Board issued a revised and renamed standard regarding stock approach to determine cost primarily for domestic production
compensation — FAS 123R, “Share-Based Payment.” The inventories, and uses average cost valuation primarily for
revised standard, which is effective for Anheuser-Busch in the international production and retail merchandise inventories.
first quarter of 2006, eliminates the disclosure-only election LIFO was used for 72% and 71% of total inventories at
under FAS 123 and requires the recognition of compensation December 31, 2005 and 2004, respectively. Had average cost
expense for stock options and all other forms of equity been used for all inventories at December 31, 2005 and 2004,
compensation generally based on the fair value of the instru- the value of total inventories would have been $126.6 million
ments on the date of grant. In order to enhance comparability and $126.0 million higher, respectively.
among all years presented and to provide the fullest under- Following are the components of the company’s invento-
standing of the impact that expensing stock options has on the ries as of December 31 (in millions).
company, Anheuser-Busch will retrospectively apply the new
2005 2004
standard to prior period results on adoption. As required by
FAS 123R, retrospective results will include the net income Raw materials and supplies $ 386.9 $ 405.0
Work in process 93.5 80.0
and earnings per share impacts previously disclosed under
Finished goods 174.1 205.3
FAS 123 pro forma reporting requirements. The company
Total inventories $ 654.5 $ 690.3
estimates that the impact on 2006 earnings per share from
expensing stock compensation will be comparable to the pro
forma impact disclosed for 2005. For financial reporting
INTANGIBLE ASSETS
purposes, stock compensation expense will be included in
Anheuser-Busch’s intangible assets consist of trademarks, beer
either cost of sales or marketing, distribution and administra-
distribution rights, and goodwill. Trademarks and beer distri-
tive expenses, depending on where the recipient’s cash
bution rights meeting criteria for separate recognition as speci-
compensation is reported, and will be classified as a corporate
fied by FAS 142, “Goodwill and Other Intangible Assets,” are
item for segment reporting.
recognized in distinct asset categories. Trademarks include
purchased trademarks, brand names, logos, slogans, or other
INCOME TAXES
recognizable symbols associated with the company’s products.
The provision for income taxes is based on the income and
Trademarks are not amortized because they have indefinite
expense amounts reported in the consolidated statement of
lives. Domestic beer distribution rights are associated with
income. The company utilizes federal, state and foreign
company-owned beer wholesale operations and represent the
income tax laws and regulations to reduce current cash taxes
exclusive legal right to sell the company’s products in defined
payable. Deferred income taxes are recognized for the effect of
geographic areas. The carrying values of these rights have
48
4. Anheuser-Busch Companies and Subsidiaries
indefinite lives and are not amortized, primarily due to the PLANT AND EQUIPMENT
company’s intent to operate its wholesalerships in perpetuity Fixed assets are carried at original cost less accumulated
and the lives not being contractually or statutorily limited. depreciation, and include expenditures for new facilities as
International distribution rights relate to operations in the well as expenditures that increase the useful lives of existing
United Kingdom and China and are being amortized over facilities. The cost of routine maintenance, repairs, and minor
their respective useful lives. The company’s distribution rights renewals is expensed as incurred. Depreciation expense is
in the United Kingdom are contractually limited to 32 years recognized using the straight-line method based on the
and expire in 2029. Distribution rights in China are being following weighted-average useful lives: buildings, 25 years;
amortized over seven years, through 2011, based on inde- production machinery and equipment, 15 years; furniture and
pendent valuation appraisal and normal practice in China. fixtures, 10 years; computer equipment, 3 years. When fixed
The company analyzes its trademarks and product distribution assets are retired or sold, the book value is eliminated and any
rights for potential impairment annually, based on projected gain or loss on disposition is recognized in cost of sales. The
future cash flows and observation of independent beer whole- components of plant and equipment as of December 31 are
saler exchange transactions. summarized below (in millions).
The company recognizes the excess of the cost of
2005 2004
acquired businesses over the fair value of the net assets
purchased as goodwill. Goodwill related to consolidated busi- Land $ 282.5 $ 278.9
Buildings 4,970.4 4,750.6
nesses is included in intangible assets on the balance sheet.
Machinery and equipment 12,552.9 11,907.4
Goodwill associated with the company’s equity investments
Construction in progress 403.1 475.6
(primarily Grupo Modelo, and CCU prior to its sale in late
Plant and equipment, at cost 18,208.9 17,412.5
2004) is included in investments in affiliated companies.
Accumulated depreciation (9,167.3) (8,565.1)
Goodwill is not amortized to earnings, but instead is reviewed
Plant and equipment, net $ 9,041.6 $ 8,847.4
for impairment at least annually, with ongoing recoverability
based on applicable operating unit performance, consideration
of significant events or changes in the overall business environ- VALUATION OF SECURITIES
ment and comparable market transactions. For investments accounted for under the cost basis, Anheuser-
Anheuser-Busch performs impairment analyses at the Busch applies FAS 115, “Accounting for Certain Investments
business unit level for consolidated goodwill and at the in Debt and Equity Securities.” Under FAS 115, the company
investee level for equity-method goodwill. Impairment testing classifies its investments as “available for sale” and adjusts the
for consolidated goodwill is a two-step process. The first step carrying values of those securities to fair market value each
is a comparison of the fair value of the business, determined period. Market valuation gains or losses are deferred in
using future cash flow analysis and/or comparable market nonowner changes in equity and are not recognized in the
transactions, to its recorded amount on the balance sheet. If income statement until the investment is sold.
the recorded amount exceeds the fair value, the second step
quantifies any impairment write-down by comparing the ISSUANCE OF STOCK BY EQUITY INVESTEES
current implied value of goodwill to the recorded goodwill The company has elected to treat issuances or repurchases of
balance. Recoverability testing for equity investment goodwill common stock by equity investees as equity transactions per
is based on impairment analysis of the entire equity invest- SEC Staff Accounting Bulletin No. 52, and therefore recog-
ment, using a combination of future cash flow analysis and nizes no gain or loss when shares are issued or repurchased.
consideration of pertinent business and economic factors. A
review of intangible assets completed in the fourth quarter of
2005 found no impairment. See Note 4 for additional infor-
mation on changes in the balances of intangible assets.
COMPUTER SYSTEMS DEVELOPMENT COSTS
The company capitalizes computer systems development costs
that meet established criteria, and amortizes those costs to
expense on a straight-line basis over five years. Computer
systems development costs not meeting the proper criteria for
capitalization, including reengineering costs, are expensed as
incurred.
49
5. Anheuser-Busch Companies and Subsidiaries
2. International Equity Investments 2005 2004 2003
Cash and marketable securities $1,640.5 $1,419.6 $1,044.7
Other current assets $ 933.3 $ 719.4 $ 744.7
GRUPO MODELO
Noncurrent assets $4,592.8 $4,041.3 $3,700.1
Anheuser-Busch owns a 35.12% direct interest in Grupo
Current liabilities $ 407.1 $ 406.0 $ 382.1
Modelo, S.A. de C.V. (Modelo), Mexico’s largest brewer Noncurrent liabilities $ 411.3 $ 356.9 $ 330.4
and producer of the Corona brand, and a 23.25% direct Gross sales $4,734.0 $4,220.8 $3,909.0
interest in Modelo’s operating subsidiary Diblo, S.A. de C.V. Net sales $4,399.0 $3,862.6 $3,594.6
Gross profit $2,315.1 $2,092.3 $1,959.1
(Diblo). The company’s direct investments in Modelo and
Minority interest $ 1.3 $ 3.5 $ 4.6
Diblo give Anheuser-Busch an effective (direct and indirect)
Net income $ 966.8 $ 788.1 $ 651.0
50.2% equity interest in Diblo. Anheuser-Busch holds nine
of 19 positions on Modelo’s board of directors (with the
Controlling Shareholders Trust holding the other 10 positions)
TSINGTAO
and also has membership on the audit committee. Anheuser-
In April 2003, the company announced a strategic alliance
Busch does not have voting or other effective control of either
with Tsingtao Brewery Company, Ltd., the largest brewer in
Diblo or Modelo and consequently accounts for its invest-
China, and producer of the Tsingtao brand. Under the alliance
ments using the equity method. The total cost of the
agreement, in 2003 and 2004 Anheuser-Busch invested
company’s investments was $1.6 billion.
$182 million in three mandatorily convertible bonds which
The carrying amount of the Modelo investment was
required conversion into Tsingtao equity within seven years.
$3,148.3 million and $2,686.2 million, respectively, at
The investment in the bonds, combined with an existing 4.5%
December 31, 2005 and 2004. Included in the carrying
stake in Tsingtao common stock, brought Anheuser-Busch’s
amount of the Modelo investment is goodwill of
total investment to $211 million. The first bond was converted
$558.0 million and $525.1 million, respectively, at December
in July 2003, which increased the company’s economic and
31, 2005 and 2004. Changes in goodwill during 2005 and
voting stake in Tsingtao from 4.5% to 9.9%. Anheuser-Busch
2004 are due to changes in exchange rates between the U.S.
accounted for its investment on the cost basis through April
dollar and Mexican peso.
2005, when the company converted the two remaining
Dividends received from Grupo Modelo in 2005 totaled
convertible bonds into Tsingtao Series H common shares.
$203.6 million, compared to $170.2 million in 2004 and
The April 2005 conversion increased Anheuser-Busch’s
$118.3 million in 2003. Dividends are paid based on a free-
economic ownership in Tsingtao from 9.9% to 27%, and its
cash-flow distribution formula in accordance with the
voting stake from 9.9% to 20%. Local government authorities
Investment Agreement between the companies and are
hold the proxy voting rights for the 7% difference between
recorded as a reduction in the carrying value of the company’s
the company’s voting and economic stakes. The increased
investment. During third quarter 2004, Modelo received a
economic stake allows Anheuser-Busch to nominate an addi-
$251.0 million capital infusion into certain subsidiaries in
tional director, giving the company two of eleven board seats
exchange for equity in those subsidiaries. Anheuser-Busch
and representation on related committees. Because of the
recognized its after-tax share of the capital infusion as an
increased share and voting ownership and board representa-
equity transaction and reported an $85.4 million increase in
tion, Anheuser-Busch believes it has the ability to exercise
its Grupo Modelo investment and a $74.0 million increase in
significant influence and therefore began applying the equity
capital in excess of par value, net of deferred income taxes of
method of accounting for Tsingtao in May 2005, on a one-
$11.4 million.
month lag basis.
Summary financial information for Grupo Modelo as of
In the fourth quarter 2003, the company loaned Tsingtao
and for the two years ended December 31 is presented in the
$15 million for a term of five years at an annual interest rate
following table (in millions). The amounts represent 100% of
of 1%. The loan provided Tsingtao with funding to reacquire
Grupo Modelo’s consolidated operating results and financial
minority interests in three of its brewery subsidiaries.
position based on U.S. generally accepted accounting princi-
The carrying value of the company’s Tsingtao investment
ples on a one-month lag basis, and include the impact of
was $224.8 million at December 31, 2005. Dividends received
Anheuser-Busch’s purchase accounting adjustments.
from Tsingtao totaled $6.5 million in 2005.
50
6. Anheuser-Busch Companies and Subsidiaries
net earnings impact while the derivative is outstanding. To the
CCU
In 2001, the company purchased a 20% equity interest in extent that any hedge is ineffective at offsetting cost or value
Compañía Cervecerías Unidas S.A. (CCU), the largest brewer changes in the underlying exposure, there could be a net earn-
in Chile, for $321 million which it accounted for using the ings impact. Gains and losses from the ineffective portion of a
equity method. The CCU investment indirectly increased hedge are recognized in the income statement immediately.
Anheuser-Busch’s ownership interest in a previously held Following are the notional transaction amounts and fair
investment in the Argentine subsidiary of CCU to 28.6%, and values for the company’s outstanding derivatives, summarized
the company also began applying equity accounting for that by risk category and instrument type, at December 31 (in
investment at that time. Dividends received from CCU totaled millions, with brackets indicating a deferred loss position).
$8.8 million in 2004 and $50.9 million in 2003. In November Because the company hedges only with derivatives that have
2004, Anheuser-Busch sold its 20% equity stake in CCU and high correlation with the underlying transaction cost or value,
recognized a pretax gain of $13.4 million, which is reported in changes in derivatives fair values and the underlying cost are
the income statement in other income and included in interna- expected to essentially offset.
tional beer for business segment reporting. Due to favorable
2005 2004
Chilean tax circumstances, the after-tax gain on the CCU sale
Notional Fair Notional Fair
was $14.7 million, or $.018 per share. Subsequent to the sale
Amount Value Amount Value
of CCU, the company changed the accounting for its invest-
Foreign currency:
ment in CCU-Argentina back to the cost basis because
Forwards $115.2 $(2.1) $114.7 $ 0.7
Anheuser-Busch can no longer exercise significant influence.
Options 277.2 7.6 151.0 3.8
The company’s relationship with CCU to produce and
Total foreign currency 392.4 5.5 265.7 4.5
distribute Budweiser in Chile and Argentina continues.
Interest rate:
Swaps 250.0 0.2 150.0 5.6
Commodity price:
3. Derivatives and Other Financial Instruments
Swaps 26.2 (3.8) 22.0 (2.9)
Futures and forwards 82.0 (1.9) 14.6 (0.9)
Options — — 58.3 2.4
DERIVATIVES
Under FAS 133, derivatives are classified as fair value, cash Total commodity price 108.2 (5.7) 94.9 (1.4)
flow or net investment hedges (foreign currency denominated), Total outstanding derivatives $750.6 $— $510.6 $ 8.7
depending on the nature of the underlying exposure. The
company’s interest rate hedges are fair value hedges, while
The table below shows derivatives gains and losses
commodity cost hedges and most foreign currency denomi-
deferred in nonowner changes in shareholders equity as
nated hedges are classified as cash flow hedges. Hedged
of December 31, 2005, 2004 and 2003 (in millions). The
commodity exposures are short, meaning the company must
amounts shown for 2004 and 2003 were subsequently
acquire additional quantities to meet its operating needs, and
recognized in earnings as the hedged transactions took place,
include aluminum, rice, corn and natural gas. Anheuser-
mostly in the next year. The gains and losses deferred as of
Busch’s primary foreign currency exposures result from
December 31, 2005 are generally expected to be recognized
transactions and investments denominated in Mexican pesos,
in 2006 as the underlying transactions occur. However, the
Chinese renminbi, Canadian dollars, British pounds sterling,
amounts ultimately recognized may differ, favorably or
and euros. These exposures are long, meaning the company
unfavorably, from those shown because some of the
has or generates sufficient quantities of these currencies.
company’s derivative positions are not yet settled and there-
Fair value hedges are accounted for by recognizing the
fore remain subject to ongoing market price fluctuations.
changes in fair values for both the derivative and the under-
Included in the figures below are deferred option premium
lying hedged exposure in earnings each period. For cash flow
costs of $4.4 million, $6.5 million and $26.2 million at the
hedges, the portion of the derivative gain or loss that is effec-
end of 2005, 2004, and 2003, respectively.
tive in offsetting the change in cost or value of the underlying
exposure is deferred in nonowner changes in shareholders 2005 2004 2003
equity, and later reclassified into earnings to match the impact
Deferred gains $ 2.6 $ 2.8 $ 86.0
of the underlying transaction when it occurs. Net investment Deferred losses (6.4) (4.9) (26.2)
hedges are accounted for in the foreign currency translation
Net deferred gains/(losses) $(3.8) $(2.1) $ 59.8
account in nonowner changes in shareholders equity. Regard-
less of classification, a 100% effective hedge will result in zero
51
7. Anheuser-Busch Companies and Subsidiaries
4. Intangible Assets
Following are derivative gains and losses recognized in
earnings during the years shown. As noted, effective gains and
The following table shows the activity in goodwill, beer distri-
losses had been deferred over time and recognized simultane-
bution rights and trademarks during the three years ended
ously with the impact of the underlying transactions. The inef-
December 31 (in millions).
fective gains and losses were recognized immediately when it
was evident they did not precisely offset changes in the under- Beer
Distribution
lying transactions. The ineffective gain for 2004 includes
Trademarks Goodwill Rights
$19.5 million reported in other income related to the sale of
Balance at Dec. 31, 2002 $— $1,025.4 $173.7
commodity hedges that had been in place for future years. The
Domestic beer wholesaler acquisition — — 47.3
hedges were originally placed using cost estimates which were
Domestic beer wholesaler disposition — — (1.0)
subsequently lowered during contract renewal negotiations,
Amortization of international distribution rights — — (0.8)
resulting in significant hedge ineffectiveness in accordance Foreign currency translation — (35.5) 2.1
with FAS 133. The company sold these hedges per policy and
Balance at Dec. 31, 2003 — 989.9 221.3
immediately recognized the ineffective portion of the gain.
Domestic beer wholesaler acquisition — 21.2 10.6
Disposition of domestic beer wholesaler
2005 2004 2003
equity investment — — (40.1)
Effective gains $20.1 $ 65.7 $ 14.4 Harbin acquisition 44.4 613.8 15.4
Effective losses (8.1) (15.3) (16.2) CCU disposition — (126.0) —
Amortization of international distribution rights — — (1.8)
Net effective gains/(losses) $12.0 $ 50.4 $ (1.8)
Foreign currency translation — 10.3 1.5
Net ineffective gains $ 0.2 $ 26.5 $ 1.3
Balance at Dec. 31, 2004 44.4 1,509.2 206.9
Domestic beer wholesaler disposition — — (5.6)
Disposition of domestic beer wholesaler
CONCENTRATION OF CREDIT RISK equity investment — — (20.9)
The company does not have a material concentration of Harbin purchase accounting adjustments — 34.3 —
Amortization of international distribution rights — — (3.1)
credit risk.
Foreign currency translation 1.1 49.0 (2.0)
Balance at Dec. 31, 2005 $45.5 $1,592.5 $175.3
NONDERIVATIVE FINANCIAL INSTRUMENTS
Nonderivative financial instruments included in the balance
The international beer distribution rights have a
sheet are cash, accounts receivable, accounts payable, and
combined gross cost of $45.5 million and a remaining
long-term debt. Accounts receivable include allowances for
unamortized balance of $32.0 million at December 31, 2005.
doubtful accounts of $15.3 million and $12.5 million, at
The company expects amortization expense of approximately
December 31, 2005 and 2004, respectively. The fair value of
$3.1 million per year related to international distribution
long-term debt, excluding commercial paper, and estimated
rights over the next five years.
based on future cash flows discounted at interest rates
currently available to the company for debt with similar matu-
rities and characteristics, was $8.3 billion and $7.7 billion at
December 31, 2005 and 2004, respectively.
52
8. Anheuser-Busch Companies and Subsidiaries
5. Retirement Benefits For informational purposes, following is a summary of
the potential impact on 2006 annual pension expense of a
hypothetical 1% change in actuarial assumptions (in millions).
PENSION PLANS
Brackets indicate annual pension expense would be reduced.
The company sponsors pension plans for its employees. Total
Modification of these assumptions does not impact the
pension expense for the three years ended December 31 is
company’s pension funding requirements.
presented in the following table (in millions). Contributions to
multiemployer plans in which the company and its subsidiaries Impact of Impact of
Assumption 2005 Rate 1% Increase 1% Decrease
participate are determined in accordance with the provisions
of negotiated labor contracts, based on employee hours or Long-term asset return 8.5% $(23.2) $ 23.2
Discount rate 6.0% $(43.4) $ 58.5
weeks worked. Pension expense recognized for multiemployer
Salary growth rate 4.25% $ 21.5 $(19.2)
and defined contribution plans equals cash contributions for
all years shown.
The following table provides a reconciliation between the
funded status of single-employer defined benefit plans and the
2005 2004 2003
prepaid pension asset on the balance sheet for the two years
Single-employer defined benefit plans $156.4 $118.6 $ 73.7
ended December 31 (in millions). Unrecognized actuarial
Multiemployer plans 16.8 16.8 16.8
losses represent changes in the estimated projected benefit
Defined contribution plans 19.1 18.9 18.4
obligations (primarily due to changes in assumed discount
Total pension expense $192.3 $154.3 $108.9
rates) which have not yet been recognized in the balance sheet
Net annual pension expense for single-employer defined or income statement. The impact of these actuarial changes is
benefit plans was composed of the following for the three amortized into net annual pension expense over the remaining
years ended December 31 (in millions). service period for active employees, which is approximately
ten years for each of the years shown.
2005 2004 2003
2005 2004
Service cost (benefits earned during the year) $ 94.2 $ 86.6 $ 74.7
Interest cost on projected benefit obligation 168.3 159.2 151.9 Funded status — plan assets (less than)
Assumed return on plan assets (194.9) (189.2) (188.9) projected benefit obligation $ (880.0) $ (705.9)
Amortization of prior service cost Unrecognized net actuarial loss 1,136.2 1,087.3
and net actuarial losses 88.8 62.0 36.0 Unamortized prior service cost 131.1 146.4
Net annual pension expense $ 156.4 $ 118.6 $ 73.7 Prepaid pension asset $ 387.3 $ 527.8
The key actuarial assumptions used in determining the The following tables present changes in the projected
annual pension expense and funded status for single-employer benefit obligation, changes in the fair value of plan assets, and
defined benefit plans for the three years ended December 31 a comparison of plan assets and the accumulated benefit obli-
follow. The measurement date for the company’s pension gation for single-employer defined benefit plans for the two
accounting is October 1. years ended December 31 (in millions). The projected benefit
obligation is the actuarial net present value of all benefits
2005 2004 2003 related to employee service rendered to date, including
assumptions of future annual compensation increases to the
Annual expense:
Discount rate 6.0% 6.25% 6.75% extent appropriate. The accumulated benefit obligation is the
Long-term rate of return on plan assets 8.5% 8.5% 8.5% actuarial present value of benefits for services rendered to
Wtd. avg. rate of compensation increase 4.25% 4.25% 4.25%
date, with no consideration of future compensation.
Funded status:
Discount rate 5.5% 6.0% 6.25% 2005 2004
Wtd. avg. rate of compensation increase 4.0% 4.25% 4.25%
Projected benefit obligation, beginning of year $ 2,894.0 $ 2,575.6
Service cost 94.2 86.6
Interest cost 168.3 159.2
Plan amendments 6.7 56.1
Actuarial loss 205.8 183.4
Foreign currency translation (6.6) 4.1
Benefits paid (172.5) (171.0)
Projected benefit obligation, end of year $ 3,189.9 $ 2,894.0
53
9. Anheuser-Busch Companies and Subsidiaries
Following is information regarding the allocation of the
2005 2004
company’s pension plan assets as of December 31, 2005 and
Fair value of plan assets, beginning of year $ 2,188.1 $1,935.1
2004, target allocation for 2006, and weighted average
Actual return on plan assets 282.4 211.8
expected long-term rates of return by asset category.
Employer contributions 15.8 172.7
Foreign currency translation (3.9) 2.2
Percentage of Percentage of Target Asset Wtd. Avg. Expected
Benefits paid (172.5) (171.0)
Plan Assets at Plan Assets at Allocation for Long-Term
Fair value of plan assets, end of year $ 2,309.9 $2,150.8 Asset Category Dec. 31, 2004 Dec. 31, 2005 2006 Rate of Return
Equity securities 69% 70% 69% 10.0%
2005 2004 Debt securities 27% 26% 27% 5.0%
Real estate 4% 4% 4% 7.0%
Plans with accumulated benefit obligation
in excess of assets: Total 100% 100% 100% 8.5%
Accumulated benefit obligation $(2,890.9) $(2,622.0)
Plan assets 2,309.9 2,150.8 Asset allocations are intended to achieve a total asset
return target over the long term, with an acceptable level of
Accumulated benefit obligation
exceeding assets $ (581.0) $ (471.2) risk in the shorter term. Risk is measured in terms of likely
volatility of annual investment returns, pension expense, and
Required funding for the company’s defined benefit
funding requirements. Expected returns, risk, and correlation
pension plans is determined in accordance with guidelines set
among asset classes are based on historical data and invest-
forth in the federal Employee Retirement Income Security Act
ment advisor input. As noted, annual pension expense includes
(ERISA). Additional contributions to enhance the funded
assumptions regarding the rate of return on plan assets. The
status of pension plans can be made at the company’s discre-
assumed rate of return is consistent with Anheuser-Busch’s
tion. The company plans to make required pension contribu-
long-term investment return objective, which enables the
tions totaling $58 million for all plans throughout 2006, and
company to provide competitive and secure employee retire-
provided additional discretionary pension funding of $214
ment pension benefits. The company strives to balance
million in January 2006. Anheuser-Busch made accelerated
expected long-term returns and short-term volatility of
pension contributions of $187 million and $75 million in
pension plan assets. Favorable or unfavorable differences
2004 and 2003, respectively. Projections indicated that
between the assumed and actual returns on plan assets are
Anheuser-Busch would have been required to contribute these
generally recognized in periodic pension expense over the
amounts in future years, but the company chose to make the
subsequent five years. The actual rate of return on plan assets
contributions early in order to enhance the funded status of
net of investment manager fees was 14%, 12% and 18% for
the plans.
2005, 2004 and 2003, respectively.
Recognition of a minimum pension liability in nonowner
The company assumes prudent levels of risk to meet
changes in equity is necessary whenever the accumulated
overall pension investment goals. Risk levels are managed
pension benefit obligation exceeds plan assets. Recording a
through formal and written investment guidelines. Portfolio
minimum pension liability has no impact on annual pension
risk is managed by having well-defined long-term strategic
expense or funding requirements. Summarized in the following
asset allocation targets. The company avoids tactical asset
table are the components of the company’s minimum pension
allocation and market timing and has established disciplined
liability for the two years ended December 31 (in millions).
rebalancing policies to ensure asset allocations remain close to
targets. The company’s asset allocations are designed to
2005 2004
provide broad market diversification, which reduces exposure
Minimum pension liability — domestic plans $(968.4) $(961.7)
to individual companies, industries and sectors of the market.
Minimum pension liability — equity investments (39.2) (42.4)
With the exception of the U.S. government and its agencies,
Intangible asset — unrecognized prior service costs 132.6 150.8
investment exposure to any single entity is limited to a
Deferred income taxes 345.3 336.3
maximum 5% of any single fund. Pension assets do not
Net minimum pension liability $(529.7) $(517.0)
include any direct investment in Anheuser-Busch debt or
equity securities.
Derivatives use is permitted by investment funds to hedge
exposure to foreign currency denominated stocks and securi-
tize cash in investment portfolios where appropriate to achieve
overall investment policy objectives. By policy, derivatives used
54
10. Anheuser-Busch Companies and Subsidiaries
must be simple structures with high liquidity and be either are not prefunded, and there are no assets associated with
exchange-traded or executed with high credit rated counterpar- the plans.
ties. Leveraged transactions, short selling, illiquid derivative
2005 2004
instruments, and margin transactions are prohibited.
Accumulated postretirement benefits obligation,
beginning of year $ 600.4 $600.4
POSTRETIREMENT HEALTH CARE AND INSURANCE BENEFITS
Service cost 25.6 22.3
The company provides certain health care and life insurance
Interest cost 39.3 34.8
benefits to eligible retired employees. Through December 31, Actuarial loss 152.2 3.8
2005, participants were required to have at least 10 years of Plan amendments (99.9) —
service after the age of 45 to become eligible for any retiree Benefits paid (63.3) (60.9)
health care benefits. Effective January 1, 2006, participants Accumulated postretirement benefits obligation,
must have at least 10 years of continuous service after end of year 654.3 600.4
Unrecognized prior service benefits 105.0 16.5
reaching age 48 to become eligible. Employees become eligible
Unrecognized net actuarial losses (254.0) (115.9)
for full retiree health care benefits after achieving specific age
Total postretirement benefits liability $ 505.3 $501.0
and total years of service requirements, based on hire date.
Net periodic postretirement benefits expense for company
The key actuarial assumptions used to determine net
health care and life insurance plans was comprised of the
postretirement benefits expense and the accumulated postre-
following for the three years ended December 31 (in millions).
tirement benefits obligation for the three years ended
During 2004, Anheuser-Busch began recognizing the estimated
December 31 are provided in the table below. For actuarial
impact of the Medicare Prescription Drug Improvement and
purposes, the initial health care inflation rate is assumed to
Modernization Act, which provides federal payments to spon-
decline ratably to the future rate and then remain constant
sors of retiree health care plans, such as Anheuser-Busch. On
thereafter. The measurement date for the company’s retiree
adoption of the Act, the company made a one-time $40.1
health care accounting is December 31.
million reduction to its accumulated postretirement benefits
obligation which is accounted for as an actuarial gain and 2005 2004 2003
amortized over the remaining service life of participating
Discount rate 5.5% 6.0% 6.25%
employees, approximately 9 years. Additionally, applying the Initial health care inflation rate 8.9% 9.7% 10.45%
Act has reduced annual retiree health care expense by approx- Future health care inflation rate 5.0% 5.0% 5.0%
imately $7 million. Year health care trend rate assumed
to become constant 2012 2012 2012
2005 2004 2003
For informational purposes, following is a summary of
Service cost $ 25.6 $ 22.3 $ 19.7
the potential impact on net periodic postretirement benefits
Interest cost on accumulated
expense and the accrued postretirement benefits liability of a
postretirement benefits obligation 39.3 34.8 37.9
hypothetical 1% change in the assumed health care inflation
Amortization of prior service benefit (11.4) (11.4) (11.5)
Amortization of actuarial loss/(gain) 14.1 4.2 2.3 rate (in millions). Brackets indicate a reduction in expense or
liability.
Net periodic postretirement
benefits expense $ 67.6 $ 49.9 $ 48.4
1% Increase 1% Decrease
The following table summarizes the components of
Net periodic postretirement benefits expense $ 7.9 $ (6.9)
postretirement benefits obligations for all company single- Accrued postretirement benefits liability $ 33.0 $ (38.9)
employer defined benefit health care and life insurance
plans for the two years ended December 31 (in millions).
As of December 31, 2005 and 2004, $61.0 million and ESTIMATED FUTURE RETIREMENT BENEFITS PAYMENTS
$46.8 million, respectively, of the company’s total post- Following are retirement benefits expected to be paid in future
retirement benefits liability was classified as current. years, based on employee data and plan assumptions, as of
Unrecognized net actuarial losses represent changes in the December 31, 2005 (in millions). The amounts shown for
estimated accumulated benefits obligation which have not pensions include payments related to supplemental executive
yet been recognized in the balance sheet or income statement. retirement plans of $4 million, $77 million, $3 million,
These changes are primarily due to changes in assumed $4 million and $7 million, for the years 2006 through 2010,
discount rates and unfavorable increases in health care costs. respectively, and a total of $58 million for 2011-2015.
The impact of the changes is amortized into annual postretire- Payments for supplemental executive retirement and retiree
ment benefits expense over the remaining service life of health care are unfunded and therefore constitute future cash
participating employees. Postretirement benefits obligations commitments of the company.
55
11. Anheuser-Busch Companies and Subsidiaries
Following is a summary of stock option activity and
Health Care
Pensions and Insurance pricing for the years shown (options in millions).
2006 $ 179.4 $ 56.5
Wtd. Avg. Wtd. Avg.
2007 $ 235.3 $ 56.4
Options Exercise Options Exercise
2008 $ 167.7 $ 55.9 Outstanding Price Exercisable Price
2009 $ 192.2 $ 55.6
Balance, Dec. 31, 2002 74.1 $38.33 44.0 $33.09
2010 $ 211.5 $ 55.8
Granted 14.4 $52.23
2011-2015 $1,252.8 $279.5
Exercised (5.0) $22.54
Cancelled (0.1) $45.15
EMPLOYEE STOCK PURCHASE AND SAVINGS PLANS
Balance, Dec. 31, 2003 83.4 $41.67 55.2 $37.43
The company sponsors employee stock purchase and savings Granted 14.1 $50.30
plans (401(k) plans), which are voluntary defined contribution Exercised (5.5) $26.15
Cancelled (0.2) $48.13
plans in which most regular employees are eligible for partici-
pation. Under the 401(k) plans, the company makes matching Balance, Dec. 31, 2004 91.8 $43.93 64.1 $40.92
Granted 11.4 $43.83
cash contributions for up to 6% of employee pretax savings.
Exercised (5.9) $25.48
The company’s matching contribution percentage is estab-
Cancelled (0.8) $49.38
lished annually based on a formula that considers both
Balance, Dec. 31, 2005 96.5 $45.01 71.5 $44.06
consolidated net income and total employee costs. From
1989 through the first quarter of 2004, the company’s 401(k)
expense was favorably impacted by the funding of a portion Non-employee directors may elect to receive their annual
of the company’s matching obligation through qualified retainer in shares of Anheuser-Busch common stock instead
Employee Stock Ownership Plans (ESOPs), which expired of cash. If all non-employee directors eligible to own the
in March 2004. Total 401(k) expense was $63.6 million, company’s common stock elected to receive their 2006 annual
$50.9 million and $17.0 million for 2005, 2004 and 2003, retainer in shares, the total number of shares issued would be
respectively. 16,760, based on the closing price for the company’s common
stock at December 31, 2005.
The following table provides additional information
6. Stock-Based Compensation regarding options outstanding and options that were exercis-
able as of December 31, 2005.
STOCK OPTIONS
Options Outstanding Options Exercisable
Under the terms of the company’s stock option plans, officers,
Range of Wtd. Avg. Wtd. Avg. Wtd. Avg.
certain other employees and non-employee directors may be
Exercise Remaining Exercise Exercise
granted options to purchase the company’s common stock at a
Prices Number Life Price Number Price
price equal to the market price on the date the option is
$10-29 10.1 2.2 yrs $25.90 10.1 $25.90
granted. Options generally vest over three years and have a
$30-39 8.1 3.7 yrs $37.84 8.1 $37.84
maximum term of 10 years. At December 31, 2005, 2004, and $40-49 50.2 6.6 yrs $46.49 38.8 $47.26
2003, a total of 121 million, 95 million, and 100 million $50-54 28.1 8.2 yrs $51.29 14.5 $51.60
shares, respectively, were designated for future issuance of $10-54 96.5 6.4 yrs $45.01 71.5 $44.06
common stock under existing stock option plans. The
company’s stock option plans provide for accelerated exercis-
ability on the occurrence of certain events relating to a change RESTRICTED STOCK
in control, merger, sale of substantially all company assets, or In January 2006, the company granted shares of restricted
complete liquidation of the company. stock to officers and certain other employees. Shares of
The income tax benefit related to the exercise of employee restricted stock either vest ratably over a three year period
stock options (recognized as a reduction of current taxes (time-based shares), or vest in pre-specified percentages at the
payable and an increase in paid-in-capital) was $41.6 million end of three years based on total BUD shareholder return
for the years ended December 31, 2005 and 2004, and performance ranked against the S&P 500 over that period
$41.3 million for the year ended December 31, 2003. The (performance-based shares). The performance-based shares
income tax benefit is based on the income realized by the were granted to members of the company’s Strategy
employee on the date of exercise. Committee. All other employees received time-based shares.
The company granted a total of 168,557 performance-based
shares and 403,827 time-based shares. In accordance with FAS
123R, compensation expense will be based on the grant date
56
12. Anheuser-Busch Companies and Subsidiaries
fair values of $43.39 per share for time-based shares and 2005 2004
$35.58 per share for performance-based shares, and will be
Deferred income tax liabilities:
recognized over the three year vesting or performance evalua- Fixed assets $1,839.4 $1,902.6
tion period, respectively. Accelerated pension contributions 219.8 221.3
Accrued net U.S. taxes on equity earnings 188.3 162.3
Other 177.9 211.7
7. Income Taxes Total deferred income tax liabilities 2,425.4 2,497.9
Deferred income tax assets:
Following are the components of the provision for income
Minimum pension obligation 334.3 324.4
taxes for the three years ended December 31 (in millions). Postretirement benefits 206.9 199.7
Spare parts and production supplies 77.0 74.8
2005 2004 2003 Compensation-related obligations 72.2 74.9
Accrued liabilities and other 111.6 152.6
Current tax provision:
Federal $712.0 $ 772.6 $ 813.1 Total deferred income tax assets (1) 802.0 826.4
State 129.8 170.0 142.6
Net deferred income taxes $1,623.4 $1,671.5
Foreign 8.4 33.5 8.1
Total current provision 850.2 976.1 963.8 Note 1: Deferred income tax assets of $59.0 million and $55.7 million are classified in
other current assets at December 31, 2005 and 2004, respectively.
Deferred tax provision:
Federal (3.3) 168.7 112.1 Valuation allowances of $67.0 million and $32.2 million
State (9.0) 18.4 17.0
have been provided for deferred income tax assets for which
Foreign 12.5 — 0.4
realization is uncertain as of December 31, 2005 and 2004,
Total deferred provision 0.2 187.1 129.5 respectively. The increase in valuation allowances in 2005 is
due to foreign operations and the allowance provided for the
Total tax provision $850.4 $1,163.2 $1,093.3
capital loss carry forward relating to the third quarter litiga-
tion settlement. The company has recorded the litigation
The deferred income tax provision is a non-cash expense
settlement on the basis that the entire amount is a capital loss,
and results from temporary differences between financial
which is only deductible for income tax purposes to the extent
reporting and income tax filing in the timing of certain income
Anheuser-Busch has qualifying capital gains. The company did
and expense items and in the basis of assets and liabilities. The
not have sufficient capital gains available in 2005 or the three
primary temporary differences relate to depreciation on fixed
prior tax years to allow a current deduction of the full
assets, pension contributions and accrued U.S. taxes on equity
amount. The portion of the loss not deducted in 2005 can be
income, net of applicable foreign tax credits. Anheuser-Busch
carried forward and applied against future capital gains for up
operates in multiple legal jurisdictions that subject it to tax
to five years.
audits in the U.S. and various foreign countries. The company
A reconciliation between the U.S. federal statutory
believes it has made adequate provisions in all jurisdictions for
income tax rate and Anheuser-Busch’s effective income tax
all years remaining subject to audit.
rate for the three years ended December 31 is presented below.
The company’s deferred income tax liabilities and
deferred income tax assets as of December 31, 2005 and 2005 2004 2003
2004, are summarized by category in the following table (in
Federal statutory tax rate 35.0% 35.0% 35.0%
millions). Deferred income tax liabilities result primarily from State taxes, net of federal benefit 3.6 3.9 3.7
income tax deductions being received prior to expense recog- Impact of foreign operations 0.7 0.6 0.7
nition for financial reporting purposes. Deferred income tax Other items, net (0.5) (0.7) (0.7)
assets relate primarily to expenses being recognized for finan- Effective tax rate 38.8% 38.8% 38.7%
cial reporting purposes that are not yet deductible for income
tax purposes, and for minimum pension liabilities. Deferred In October 2004, the American Jobs Creation Act was
income taxes are not provided on undistributed earnings of signed into law. The Act provides annual income tax deduc-
consolidated foreign subsidiaries that are considered to be tions on income from certain domestic manufacturing activi-
permanently reinvested outside the United States. Cumulative ties, with increasing deduction levels phased in through 2010.
foreign earnings considered permanently reinvested totaled The company recorded an initial income tax benefit under the
$205.6 million and $187.9 million, respectively, at Act of $22.2 million in 2005, and anticipates receiving
December 31, 2005 and 2004. increasing on-going future benefits related to qualifying manu-
facturing activities. The Act also created a one-time opportu-
nity to repatriate income retained by overseas operations at
substantially reduced U.S. income tax rates. The company
57