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By-laws - ANHEUSER-BUSCH INBEV S.A. - 3-26-2003

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By-laws - ANHEUSER-BUSCH INBEV S.A. - 3-26-2003 Powered By Docstoc
					Exhibit 3.2 BY-LAWS OF ANHEUSER-BUSCH COMPANIES, INC. (AS AMENDED AND RESTATED APRIL 24, 2002) INCORPORATED UNDER THE LAWS OF DELAWARE

TABLE OF CONTENTS BY-LAWS OF ANHEUSER-BUSCH COMPANIES, INC. Page ARTICLE I: LOCATION AND OFFICES Section 4:4 Section 1:1 Section 1:2 ARTICLE II: STOCKHOLDERS Section 2:1 Section 2:2 Section Section Section Section Section Section 2:3 2:4 2:5 2:6 2:7 2:8 Annual Meeting.................. Business to be Conducted at Annual Meeting............ Special Meetings................ Place of Meetings............... Notice of Meetings.............. Quorum and Voting............... Voting; Proxy................... Voting by Fiduciaries, Pledgee and Pledgors.......... Nomination of Directors......... List of Stockholders............ Appointment of Inspectors of Election and Resolution of Questions Concerning Right to Vote................ 1 1 2 2 2 3 3 3 4 5 Section 4:6 ARTICLE V: OFFICERS Section Section Section Section Section Section Section 5:1 5:2 5:3 5:4 5:5 5:6 5:7 Appointment...... Tenure........... Salaries......... Chief Executive O Chairman of the B President........ Other Officers... Principal Office................ Other Offices................... 1 1 Section 4:5 Section 4:3 Executive Committe Notice of Meet Executive Committe Quorum and Pow of Majority... Executive Committe Reporting..... Other Committees.

Section 2:9 Section 2:10 Section 2:11

ARTICLE VI: CAPITAL STOCK AND Section Section Section Section 6:1 6:2 6:3 6:4 Certificates for Stock Records.... Transfers........ Regulations Gover and Transfers Transfer Agents a Registrars.... Lost or Destroyed Certificates.. Fractions of Shar Determination of Stockholders.. Record Date......

5

ARTICLE III: DIRECTORS

Section 6:5 Section Section Section Section Section Section Section Section Section Section 3:1 3:2 3:3 3:4 3:5 3:6 3:7 3:8 3:9 3:10 General Powers.................. Number and Qualifications....... Election........................ Place of Meetings............... Regular Meetings................ Special Meetings................ Quorum.......................... Waiver of Notice................ Consent......................... Notice to Members of the Board of Directors........... Presiding Officer............... 6 6 6 6 7 7 7 8 8 8 8 Section 6:6 Section 6:7 Section 6:8 Section 6:9 ARTICLE VII:

MISCELLANEOUS Section 7:1 Section 7:2 Voting Shares in Corporations.. Execution of Othe and Documents. Corporate Seal... Amendments....... Books and Records

Section 3:11

ARTICLE IV: COMMITTEES Section 4:1 Section 4:2 Executive Committee Appointment and Tenure....... Executive Committee Powers....................... Section 7:3 Section 7:4 Section 7:5 8 9

BY-LAWS OF ANHEUSER-BUSCH COMPANIES, INC. (AS AMENDED AND RESTATED APRIL 24, 2002) ARTICLE I: LOCATION AND OFFICES PRINCIPAL OFFICE. SECTION 1:1. The principal office of the corporation shall be at such place as the Board of Directors may from time to time determine, but until a change is effected such principal office shall be at One Busch Place, in the City of St. Louis, Missouri. OTHER OFFICES. SECTION 1:2. The corporation may also have other offices, in such places (within or without the State of Delaware) as the Board of Directors may from time to time determine. ARTICLE II: STOCKHOLDERS ANNUAL MEETING. SECTION 2:1. An annual meeting of the stockholders of the corporation shall be held at 10:00 o'clock a.m. on the fourth Wednesday in April of each year if not a legal holiday, and if a legal holiday then on the next succeeding day not a legal holiday. The purpose of the meeting shall be to elect directors and to transact such other business as properly may be brought before the meeting. If the corporation shall fail to hold said meeting for the election of directors on the date aforesaid, the Board of Directors shall cause the election to be held by the stockholders as soon thereafter as convenient. BUSINESS TO BE CONDUCTED AT ANNUAL MEETING. SECTION 2:2.1 At an annual meeting of stockholders, only such business shall be conducted as shall have been brought before the meeting (i) pursuant to the corporation's notice of the meeting, (ii) by or at the direction of the Board of Directors (or any duly organized committee thereof), or (iii) by any stockholder of the corporation who is a stockholder of record on the date of giving of the notice provided for in this By-Law and on the record date for the determination of stockholders entitled to vote at such meeting and who has complied with the notice procedures set forth in this By-Law. SECTION 2:2.2 In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice in proper written form to the Secretary which notice is not withdrawn by such stockholder at or prior to such annual meeting. SECTION 2:2.3 To be timely, a stockholder's notice to the Secretary must be delivered or mailed to and received by the Secretary at the principal executive offices of the corporation, not less than ninety days nor more than one hundred twenty days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the meeting is changed by more than thirty days from such anniversary date, notice by the stockholder must be received not later than the close of business on the tenth day following the earlier of the day on which notice of the date of the annual meeting was mailed or public disclosure was made.

SECTION 2:2.4 To be in proper written form, such stockholder's notice must set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business to be brought before the annual meeting and the reasons for conducting such business at such meeting; (ii) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made; (iii) the class and the number of shares of the corporation's stock which are beneficially owned by the stockholder, and the beneficial owner, if any, on whose behalf the proposal is made; (iv) any material interest of the stockholder, and of the beneficial owner, if any, on whose behalf the proposal is made, in such business; and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. SECTION 2:2.5 Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this By-Law. The chairman of the meeting may, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with the provisions of this By-Law; and if the chairman should so determine, the chairman shall so declare to the meeting, and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this By-Law, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder with respect to the matters set forth in this By-Law. SPECIAL MEETINGS. SECTION 2:3. At any time the Chief Executive Officer may, and either the Chief Executive Officer or the Secretary at the written request of any five members of the Board of Directors shall, issue a call for a special meeting of the stockholders. Such request shall state the purpose or purposes of the proposed meeting, and at such special meeting only such matters as may be specified in the call therefor shall be considered. PLACE OF MEETINGS. SECTION 2:4. All meetings of the stockholders shall be held at the principal office of the corporation, or at such other place, within or without the State of Delaware, as may be determined by the Board of Directors and stated in the notice of the meeting. NOTICE OF MEETINGS. SECTION 2:5. Written notice of each meeting of the stockholders stating the place, date, and hour of the meeting, and, in case of a special meeting or where otherwise required by statute, the purpose or purposes for which the meeting is called, shall be delivered by mail not less than ten nor more than sixty days before the date of the meeting, by or at the direction of the person calling the meeting, to each stockholder entitled to vote at such meeting. The notice of a stockholders' meeting shall be deemed to be delivered when deposited in the United States mail with postage prepaid, addressed to each stockholder at such stockholder's address as it appears on the records of the corporation. 2

QUORUM AND VOTING. SECTION 2:6.1 The holders of a majority of the outstanding shares (exclusive of treasury stock) entitled to vote at any meeting of the stockholders, when present in person or by proxy, shall constitute a quorum for the transaction of business, except as otherwise provided by statute, the Certificate of Incorporation, or these ByLaws; but in the absence of such a quorum the holders of a majority of the shares represented at the meeting shall have the right successively to adjourn the meeting to a specified date. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. SECTION 2:6.2 The absence from any meeting of the number of shares required by statute, the Certificate of Incorporation or these By-Laws for action upon one matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting, if the number of shares required in respect of such other matters shall be present. SECTION 2:6.3 When a quorum is present at any meeting of the stockholders, the vote of the holders (present in person or represented by proxy) of a majority of the shares of stock which are actually voted (and have the power to vote) on any proposition or question properly brought to a vote at such meeting shall decide any such proposition or question, unless the proposition or question is one upon which by express provision of statute or of the Certificate of Incorporation, or of these By-Laws, a different vote is required, in which case such express provision shall govern and establish the number of votes required to determine such proposition or question. VOTING; PROXY. SECTION 2:7.1 Whenever the law requires or the chairman orders that a vote be taken by ballot, each stockholder entitled to vote on a particular question at a meeting of stockholders, pursuant to law or the Certificate of Incorporation, shall be entitled to one vote for each share of voting stock held by such stockholder. The date for determining the stockholders entitled to vote at a meeting of the stockholders shall be determined pursuant to Section 6:9. SECTION 2:7.2 Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent in writing without a meeting may authorize another person or persons to act for such stockholder by proxy; but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. VOTING BY FIDUCIARIES, PLEDGEE AND PLEDGORS. SECTION 2:8. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the corporation the pledgor has expressly empowered the pledgee to vote thereon, in which case only the pledgee or the pledgee's proxy may represent such stock and vote thereon. 3

If shares or other securities having voting power stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) If only one votes, that person's act binds all; (b) If more than one vote, the act of the majority so voting binds all; (c) If more than one vote, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or any person voting the shares, or a beneficiary, if any, may apply to the Court of Chancery or such other court as may have jurisdiction to appoint an additional person to act with the persons so voting the shares, which shall then be voted as determined by a majority of such persons and the person appointed by the Court. If the instrument so filed shows that any such tenancy is held in unequal interest, a majority or even-split for the purpose of this subsection shall be a majority or even-split in interest. NOMINATION OF DIRECTORS. SECTION 2:9.1 Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the corporation, except as may be otherwise provided in the Certificate of Incorporation of the corporation with respect to the right of holders of preferred stock of the corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors, (i) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (ii) by any stockholder of the corporation who is a stockholder of record on the date of the giving of the notice provided for in this By-Law and on the record date for the determination of stockholders entitled to vote at such meeting and who complies with the notice procedures set forth in this By-Law. SECTION 2:9.2 In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the corporation. SECTION 2:9.3 To be timely, a stockholder's notice to the Secretary must be delivered or mailed to and received by the Secretary at the principal executive offices of the corporation (i) in the case of an annual meeting, not less than ninety days nor more than one hundred twenty days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within thirty days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever occurs first, and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever occurs first. 4

SECTION 2:9.4 To be in proper written form, a stockholder's notice to the Secretary must set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and the number of shares of capital stock of the corporation which are owned beneficially or of record by the person and (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (ii) as to the stockholder giving the notice or the beneficial owner on whose behalf the nomination is made, (A) the name and address of such stockholder as they appear on the corporation's books, (B) the class or series and the number of shares of capital stock of the corporation beneficially owned by such stockholder or beneficial owner, (C) a description of all arrangements or understandings between such stockholder or beneficial owner and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder or beneficial owner, (D) a representation that such stockholder or beneficial owner intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (E) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. SECTION 2:9.5 No person shall be eligible for election as a director of the corporation, at any annual meeting of stockholders or at any special meeting of stockholders called for the purpose of electing directors, unless nominated in accordance with the procedures set forth in this By-Law. If the chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded. LIST OF STOCKHOLDERS. SECTION 2:10. The Secretary shall prepare and make, or cause to be made, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the election, either at a place within the city where the election is to be held and which place shall be specified in the notice of the meeting, or, if not so specified, at the place where said meeting is to be held, and the list shall be produced and kept at the time and place of election during the whole time thereof and subject to the inspection of any stockholder who may be present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this By-Law or the books of the corporation, or to vote in person or by proxy at any meeting of the stockholders. APPOINTMENT OF INSPECTORS OF ELECTION AND RESOLUTION OF QUESTIONS CONCERNING RIGHT TO VOTE. SECTION 2:11. The Board of Directors, in advance of the meeting of stockholders or, if it does not act, the chairman of the meeting, shall appoint not less than two persons who are not directors to serve as inspectors of election. It shall be their duty to receive and canvass the votes for election of directors and on any proposal voted on by ballot and to certify the results to the chairman. In all cases where the right to vote upon any share of the corporation shall be questioned, it shall be the duty of the inspectors to examine the stock ledger of the corporation as evidence of the shares held, and all shares that appear 5

standing thereon in the name of any person or persons may be voted upon by such person or persons. Each inspector of election before entering upon the duties of such office shall take and subscribe the following oath before an officer authorized by law to administer oaths: "I do solemnly swear that I will execute the duties of an inspector of the election now to be held with strict impartiality and according to the best of my ability." ARTICLE III: DIRECTORS GENERAL POWERS. SECTION 3:1. The Board of Directors shall control and manage the business and property of the corporation. The Board may exercise all such powers of the corporation and do all lawful acts and things as are not by law, the Certificate of Incorporation, or these By-Laws directed or required to be exercised or done by the stockholders or some particular officer of the corporation. NUMBER AND QUALIFICATIONS. SECTION 3:2. The number of directors shall be determined from time to time by resolution of the Board of Directors in accordance with the terms of Article FIFTH of the Certificate of Incorporation. From and after the first public distribution of the Common Stock of the corporation, each director shall be a stockholder of the corporation, except in such specific case or cases as shall be otherwise authorized by the Board of Directors upon a showing of reasonable cause therefor. ELECTION. SECTION 3:3. The directors who are to be elected at the annual meeting of the stockholders shall be elected by ballot by the holders of shares entitled to vote. PLACE OF MEETINGS. SECTION 3:4. The place where meetings of the Board of Directors are held shall be as follows: (a) The annual meeting shall be held in the city of the principal office of the corporation in Missouri, provided that in the event the annual meeting of shareholders is held in a metropolitan area other than St. Louis, Missouri, the annual meeting of the Board of Directors shall be held in the metropolitan area where the annual meeting of stockholders is held. (b) Regular meetings shall be held at such place within the City or County of St. Louis, Missouri as may be prescribed in the call, provided that any regular meeting may be held elsewhere, either within or without the State of Delaware, pursuant to resolution of the Board of Directors or pursuant to the call of the Chief Executive Officer acting with the consent of a majority of the directors. (c) Special meetings shall be held at such place as may be prescribed in the notice, provided that if a special meeting is held on less than three days' notice, it shall be held at the principal office of the corporation unless all directors agree upon a different location. 6

(d) Members of the Board of Directors may participate in a meeting of the Board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participating in the meeting in this manner shall constitute presence in person at such meeting. REGULAR MEETINGS. SECTION 3:5. Regular meetings shall be held at such place or places, on such date or dates, and at such times as shall be established by the Board of Directors. A notice of each regular meeting shall not be required, except any meeting at which an amendment to or repeal of these By-Laws is to be considered. SPECIAL MEETINGS. SECTION 3:6. Special meetings of the Board of Directors may be held at the call of the Chief Executive Officer or five members of the Board at such time as may be prescribed in the call of the meeting. The purpose of the special meeting need not be stated in the notice of the meeting. Notice of a special meeting may be given by any one or more of the following methods and the method used need not be the same for each director being notified: (a) Written notice sent by mail at least three days prior to the meeting; (b) Personal service at least twenty-four (24) hours prior to the date of the meeting; (c) Telegraphic notice at least twenty-four (24) hours prior to the date of the meeting, said notice to be sent as a straight full-rate telegram; (d) Telephonic notice at least twenty-four (24) hours prior to the date of the meeting. (e) Facsimile transmission at least twenty-four (24) hours prior to the date of the meeting. QUORUM. SECTION 3:7. A majority of the persons serving as directors of the corporation at the time of a meeting of the Board of Directors shall constitute a quorum for the transaction of any business by the Board at such meeting. At any meeting of the Board, no action shall be taken (except adjournment, in the manner provided below) until after a quorum has been established. The act of a majority of directors who are present at a meeting at which a quorum previously has been established (or at any adjournment of such meeting, provided that a quorum previously shall have been established at such adjourned meeting) shall be the act of the Board of Directors, regardless of whether or not a quorum is present at the time such action is taken. In determining the number of directors who are present at the time any such action is taken (for the purpose of establishing the number of votes required to take action on any proposition or question submitted to the Board), any director who is in attendance at such meeting but who, for just cause, is disqualified to vote on such proposition or question, shall not be considered as being present at the time of such action. In the event a quorum cannot be established at the beginning of a meeting, a majority of the directors present at the meeting, or the director, if there be only one person, or the Secretary of the corporation, if there be no director present, may adjourn the meeting from time to time until a quorum be present. Only such notice of such adjournment need be given as the Board may from time to time prescribe. 7

WAIVER OF NOTICE. SECTION 3:8. Any notice which is required by law or by the Certificate of Incorporation or by these By-Laws to be given to any director may be waived in writing, signed by such director, whether before or after the time stated therein. Attendance of a director at any meeting shall constitute waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. CONSENT. SECTION 3:9. Any action required or permitted to be taken at any meeting of the Board of Directors (or of any committee thereof) may be taken without a meeting if all members of the Board (or committee) consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board (or committee). NOTICE TO MEMBERS OF THE BOARD OF DIRECTORS. SECTION 3:10. Each member of the Board of Directors shall file with the Secretary of the corporation an address to which mail or telegraphic notices shall be sent and a telephone number to which a telephonic or facsimile notice may be transmitted. A notice mailed, telegraphed, telephoned or transmitted by facsimile in accordance with the instructions provided by the director shall be deemed sufficient notice. Such address or telephone number may be changed at any time and from time to time by a director by giving written notice of such change to the Secretary. Failure on the part of any director to keep an address and telephone number on file with the Secretary shall automatically constitute a waiver of notice of any regular or special meeting of the Board which might be held during the period of time that such address and telephone number are not on file with the Secretary. A notice shall be deemed to be mailed when deposited in the United States mail, postage prepaid. A notice shall be deemed to be telegraphed when the notice is delivered to the transmitter of the telegram and either payment or provision for payment is made by the corporation. Notice shall be deemed to be given by telephone if the notice is transmitted over the telephone to some person (whether or not such person is the director) answering the telephone at the number which the director has placed on file with the Secretary. Notice shall be deemed to be given by facsimile transmission when sent to the telephone number which the director has placed on file with the Secretary. PRESIDING OFFICER. SECTION 3:11. The Chairman of the Board shall preside at all meetings of the Board of Directors at which the Chairman is present. In the Chairman's absence, the Vice Chairman (if any) shall preside. In the absence of the Chairman and the Vice Chairman, the Board shall select a chairman of the meeting from among the directors present. ARTICLE IV: COMMITTEES EXECUTIVE COMMITTEE--APPOINTMENT AND TENURE. SECTION 4:1. The Board of Directors, by resolution adopted by a majority of the whole Board, may designate three or more directors, including the Chief Executive Officer, to constitute an Executive Committee, provided that a majority of said committee shall at all times be made up of members of the Board who are neither officers nor employees of the corporation and who shall serve at the pleasure of the Board. In the case of the death, resignation or removal of any member of the Executive Committee or 8

in case any such member shall cease to be a member of the Board, the vacancy shall be filled by the Board. The Board shall designate the chairman of the Executive Committee. EXECUTIVE COMMITTEE--POWERS. SECTION 4:2. The Executive Committee, to the extent provided in the resolution of the Board of Directors appointing such committee or in any subsequent resolution, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it, but shall not have the power or authority with respect to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, or recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets; nor shall the Executive Committee have the power or authority to declare a dividend or to authorize the issuance of stock; but the designation of such Executive Committee and the delegation of authority thereto shall not operate to relieve the Board, or any member thereof, of any responsibility imposed upon it or them by the provisions of the Delaware General Corporation Law, as amended. EXECUTIVE COMMITTEE--NOTICE OF MEETINGS. SECTION 4:3. A meeting of the Executive Committee may be held on call by the Chief Executive Officer or on the call of any three of the other members of the Committee. Meetings of the Executive Committee may be held, upon notice as short as twenty-four (24) hours, at such place or places as shall be determined by resolution of the Committee, or in the absence of a resolution of the Executive Committee with respect thereto, at such place or places as may be determined by the Chief Executive Officer. If notice is given at least three days prior to the meeting of the Committee, notice may be given in any of the ways set forth in Section 3:6, dealing with special meetings of the Board of Directors. If less than three days' notice is given, notice shall not be given by mail but shall be given by one of the other methods described in Section 3:6. With respect to any such notice, all the provisions of Section 3:10 shall be equally applicable in the case of notice of an Executive Committee meeting as they are in the case of a notice of a meeting of the Board of Directors. Meetings of the Executive Committee shall be held at such place either within or without the States of Missouri or Delaware as may be designated by a resolution of the Board; or in the absence of such resolution, at such place within the metropolitan St. Louis, Missouri area as may be designated in the notice. Any such notice may be waived in the same manner provided in Section 3:8 with respect to waiver of notice of a directors' meeting. EXECUTIVE COMMITTEE--QUORUM AND POWERS OF MAJORITY. SECTION 4:4. A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business at any meeting of the Executive Committee. Unless otherwise provided by the Board of Directors, a majority of the members of the Executive Committee shall constitute a quorum, and the acts of a majority of the members present at a meeting at which a quorum is present shall be the acts of the Executive Committee. EXECUTIVE COMMITTEE--REPORTING. SECTION 4:5. At each regular meeting of the Board of Directors all actions taken by the Executive Committee since the last prior meeting of the Board shall be reported, and the Board shall take such action to approve or rescind such action of the Executive Committee as the Board may deem appropriate, but no rescission of such action shall affect any rights which have attached pursuant to such Executive Committee action. 9

If no regular meeting of the Board is scheduled within seven days after the date of a meeting of the Executive Committee, then no later than five days after such meeting of the Executive Committee, the minutes thereof (even though they may not as yet have been approved by the Executive Committee) shall be deposited in the mail by the Secretary addressed to each member of the Board at the address on file with the Secretary pursuant to the provisions of Section 3:10, provided that if any member of the Board shall have failed to place an address on file with the Secretary, such member shall be deemed to have waived the right to receive a copy of the minutes of the Executive Committee meeting. OTHER COMMITTEES. SECTION 4.6. Other Committees may be established, and their members appointed, from time to time by the Board of Directors. Such other committees shall have such purpose(s) and such power(s) as the Board by resolution may confer. Unless otherwise provided by the Board, a majority of the members of such other Committee shall constitute a quorum, and the acts of a majority of the members present at a meeting at which a quorum is present shall be the act of such other Committee. ARTICLE V: OFFICERS APPOINTMENT. SECTION 5:1. The Board of Directors shall appoint from its membership a Chairman of the Board and a President. The Board shall appoint such number of Vice Presidents as the Board may from time to time determine, a Controller, a Secretary, a Treasurer, one or more Assistant Controllers, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers, as the Board may from time to time deem necessary or appropriate. The Board of Directors may appoint a Vice Chairman of the Board, but the person holding that position shall not be considered an officer of the corporation. TENURE. SECTION 5:2. Officers appointed by the Board of Directors shall hold their respective offices for the term of one year and until their respective successors shall have been duly appointed and qualified; provided, however, that any officer appointed by the Board may be removed by the Board with or without a hearing and with or without cause whenever in its judgment the best interests of the corporation will be served thereby. SALARIES. SECTION 5:3. The salaries of all officers of the corporation shall be fixed by the Board of Directors. CHIEF EXECUTIVE OFFICER. SECTION 5:4. So long as the offices of Chairman of the Board and President are held by the same person, that person shall be the Chief Executive Officer of the corporation. Otherwise, the Chief Executive Officer shall be the Chairman of the Board or the President, as designated by the Board of Directors. The Chief Executive Officer shall have general supervision and control over all the business and property of the corporation and shall be responsible at all times to the Board of Directors and the Executive Committee. The Chief Executive Officer shall also preside at all meetings of the stockholders. In the event the Chief Executive Officer shall fail or for any reason be unable to serve as such, the Board of Directors shall promptly act to fill such vacancy. 10

CHAIRMAN OF THE BOARD. SECTION 5:5. The Chairman of the Board shall preside as chairman of all meetings of the Board of Directors at which the Chairman shall be present and shall have such other powers, responsibilities and duties as shall be assigned by the Board. PRESIDENT. SECTION 5:6. The President shall have such powers, responsibilities and duties as shall be assigned by the Board of Directors. OTHER OFFICERS. SECTION 5:7. Subject to the ultimate authority of the Board of Directors, all other officers of the corporation shall have such powers, responsibilities and duties as shall be assigned to them from time to time by the Chief Executive Officer. ARTICLE VI: CAPITAL STOCK AND DIVIDENDS CERTIFICATES FOR SHARES. SECTION 6:1. Certificates for shares of the capital stock of the Company shall be in such form, not inconsistent with the Certificate of Incorporation, as shall be approved by the Board of Directors, and shall be signed by the Chairman or Vice Chairman of the Board of Directors or by the President or a Vice-President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, provided that the signatures of any such officers thereon may be facsimiles. The seal of the corporation shall be impressed, by original or by facsimile, printed or engraved, on all such certificates. The certificate shall also be signed by the transfer agent and a registrar and the signature of either the transfer agent or the registrar may also be facsimile, engraved or printed. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon any such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the corporation with the same effect as if such officer, transfer agent, or registrar had not ceased to be such officer, transfer agent, or registrar at the date of its issue. STOCK RECORDS. SECTION 6:2. The corporation shall keep at its principal office stock books in which shall be recorded the number of shares issued, the names of the owners of the shares, the number owned by them respectively, and the transfer of such shares with the date of transfer. 11

TRANSFERS. SECTION 6:3. Certificates representing shares of stock of the corporation shall be transferable only on the books of the corporation by the person or persons named in the certificate or by the attorney lawfully constituted in writing representing such person or persons and upon surrender of the certificate or certificates being transferred which certificate shall be properly endorsed for transfer or accompanied by a duly executed stock power. Whenever a certificate is endorsed by or accompanied by a stock power executed by someone other than the person or persons named in the certificate, evidence of authority to transfer shall also be submitted with the certificate. All certificates surrendered to the corporation for transfer shall be cancelled. REGULATIONS GOVERNING ISSUANCE AND TRANSFERS OF SHARES. SECTION 6:4. The Board of Directors shall have the power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the corporation. TRANSFER AGENTS AND REGISTRARS. SECTION 6:5. Transfer agents and registrars for the corporation's stock shall be banks, trust companies or other financial institutions located within or without the State of Delaware as shall be appointed by the Board of Directors. The Board shall also define the authority of such transfer agents and registrars. LOST OR DESTROYED CERTIFICATES. SECTION 6:6. Where a certificate for shares of the corporation has been lost or destroyed, the Board of Directors may authorize the issuance of a new certificate in lieu thereof upon satisfactory proof of such loss or destruction, and upon the giving of an open penalty bond with surety satisfactory to the corporation's General Counsel and Treasurer, to protect the corporation or any person injured by the issuance of the new certificate from any liability or expense which it or they may incur by reason of the original certificate's remaining outstanding, and upon payment of the corporation's reasonable costs incident thereto. FRACTIONS OF SHARES. SECTION 6:7. The corporation shall not issue fractions of a share. It shall, however, (1) arrange for the disposition of fractional interests by those entitled thereto, and (2) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined, or (3) issue scrip or warrants in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip or warrants aggregating a full share. Scrip or warrants shall not, unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, or to participate in any of the assets of the corporation in the event of liquidation. The Board of Directors may cause scrip or warrants to be issued subject to the conditions that the shares for which scrip or warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the Board may impose. 12

DETERMINATION OF STOCKHOLDERS. SECTION 6:8. The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Delaware. RECORD DATE. SECTION 6:9. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment or any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed: (1) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. (2) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. ARTICLE VII: MISCELLANEOUS VOTING SHARES IN OTHER CORPORATIONS. SECTION 7:1. The corporation may vote any and all shares of stock and other securities having voting rights which may at any time and from time to time be held by it in any other corporation or corporations and such vote may be cast either in person or by proxy by such officer of the corporation as the Board of Directors may appoint or, in default of such appointment, the Chief Executive Officer, the President or a Vice President. EXECUTION OF OTHER PAPERS AND DOCUMENTS. SECTION 7:2. All checks, bills, notes, drafts, vouchers, warehouse receipts, bonds, mortgages, contracts, registration certificates and all other papers and documents of the corporation shall be signed or endorsed for the corporation by such of its officers, other employees and agents as the Board of Directors may from time to time determine, or in the absence of such determination, by the Chief Executive Officer, the President or a Vice President, provided that instruments requiring execution with the formality of deeds shall be signed by the Chief Executive Officer, the President or a Vice President and impressed with the Seal of the corporation, duly attested by the Secretary or an Assistant Secretary. 13

CORPORATE SEAL. SECTION 7:3. The Board of Directors shall provide a suitable seal, containing the name of the corporation, which seal shall be in the custody of the Secretary of the corporation, and may provide for one or more duplicates thereof to be kept in the custody of such other officer of the corporation as the Board may prescribe. AMENDMENTS. SECTION 7:4. These By-Laws may be amended or repealed, or new By-Laws may be adopted (a) by the affirmative vote of a majority of the shares issued and outstanding and entitled to vote at any annual or special meeting of stockholders, or (b) by the affirmative vote of the majority of the Board of Directors at any regular or special meeting; provided that the notice of such meeting of stockholders or directors, whether regular or special, shall specify as one of the purposes thereof the making of such amendment or repeal, and provided further that any amendment of the By-Laws made by the Board may be further amended or repealed by the stockholders. BOOKS AND RECORDS. SECTION 7:5. Except as the Board of Directors may from time to time direct or as may be required by law, the corporation shall keep its books and records at its principal office. 14

Exhibit 4.4

ANHEUSER-BUSCH COMPANIES, INC. TO THE CHASE MANHATTAN BANK TRUSTEE

INDENTURE DATED AS OF JULY 1, 2001

DEBT SECURITIES

CROSS REFERENCE SHEET BETWEEN THE INDENTURE AND THE TRUST INDENTURE ACT OF 1939

TRUST INDENTURE ACT SECTION --------------------------Section 310 (a)(1).............................................................. (a)(2).............................................................. (a)(3).............................................................. (a)(4).............................................................. (a)(5).............................................................. (b)................................................................. (c)................................................................. Section 311 (a)................................................................. (b)................................................................. (c)................................................................. Section 312 (a)................................................................. (b)................................................................. (c)................................................................. Section 313 (a)................................................................. (b)................................................................. (c)................................................................. (d)................................................................. Section 314 (a)................................................................. (b)................................................................. (c)(1).............................................................. (c)(2).............................................................. (c)(3).............................................................. (d)................................................................. (e)................................................................. (f)................................................................. Section 315 (a)................................................................. (b)................................................................. (c)................................................................. (d)................................................................. (d)(1).............................................................. (d)(2).............................................................. (d)(3).............................................................. (e)................................................................. Section 316 (a)(1)(A)........................................................... (a)(1)(B)........................................................... (a)(2).............................................................. (b)................................................................. (c)................................................................. Section 317 (a)(1).............................................................. (a)(2).............................................................. (b)................................................................. Section 318 (a).................................................................

INDENTURE SECTION ----------------609 609 Not Applicable Not Applicable 609 608, 610 Not Applicable Not Applicable Not Applicable Not Applicable 701, 702(a) 702(b) 702(c) 703(a) Not Applicable 703(a), 703(b) 703(b) 704, 1104 Not Applicable 102 102 Not Applicable Not Applicable 102 Not Applicable 601(a) 602, 703 601(b) 601(c) 601(a) 601(c)(2) 601(c)(3) 514 502, 512 513 Not Applicable 508 104(e) 503 504 1003 107

NOTE:

This cross reference sheet shall not, for any purpose, be deemed to be a part of the Indenture.

TABLE OF CONTENTS ARTICLE ONE--DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..................................... Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. Definitions............................................................................. Compliance Certificates and Opinions.................................................... Form of Documents Delivered to Trustee.................................................. Acts of Holders......................................................................... Notices, etc., to Trustee and Company................................................... Notices to Holders; Waiver.............................................................. Conflict with Trust Indenture Act....................................................... Effect of Headings and Table of Contents................................................ Successors and Assigns.................................................................. Separability Clause..................................................................... Benefits of Indenture................................................................... Governing Law........................................................................... Legal Holidays.......................................................................... Act of Holders when Securities are Denominated in Different Currencies.................. Monies of Different Currencies to be Segregated......................................... Payment to be in Proper Currency........................................................

ARTICLE TWO--SECURITY FORMS.............................................................................. Section Section Section Section 201. 202. 203. 204. Forms Generally......................................................................... Form of Face of Security................................................................ Form of Trustee's Certificate of Authentication......................................... Form of Reverse of Security.............................................................

ARTICLE THREE--THE SECURITIES............................................................................ Section Section Section Section Section Section Section Section Section Section 301. 302. 303. 304. 305. 306. 307. 308. 309. 310. Title and Terms......................................................................... Denominations........................................................................... Execution, Authentication, Delivery and Dating.......................................... Temporary Securities.................................................................... Global Securities....................................................................... Registration, Registration of Transfer and Exchange..................................... Mutilated, Destroyed, Lost and Stolen Securities........................................ Payment of Interest; Interest Rights Preserved.......................................... Persons Deemed Owners................................................................... Cancellation............................................................................

ARTICLE FOUR--SATISFACTION AND DISCHARGE................................................................. Section 401. Section 402. Satisfaction and Discharge of Indenture................................................. Application of Trust Money..............................................................

ARTICLE FIVE--REMEDIES................................................................................... Section Section Section Section Section Section Section Section Section Section 501. 502. 503. 504. 505. 506. 507. 508. 509. 510. Events of Default....................................................................... Acceleration of Maturity; Rescission and Annulment...................................... Collection of Indebtedness and Suits for Enforcement by Trustee......................... Trustee May File Proofs of Claim........................................................ Trustee May Enforce Claims Without Possession of Securities............................. Application of Money Collected.......................................................... Limitation on Suits..................................................................... Unconditional Right of Holders to Receive Principal, Premium and Interest............... Restoration of Rights and Remedies...................................................... Rights and Remedies Cumulative.......................................................... ii

Section Section Section Section Section Section

511. 512. 513. 514. 515. 516.

Delay or Omission Not Waiver............................................................ Control by Holders...................................................................... Waiver of Past Defaults................................................................. Undertaking for Costs................................................................... Waiver of Stay or Extension Laws........................................................ Exemption from Individual Liability.....................................................

ARTICLE SIX--THE TRUSTEE................................................................................. Section Section Section Section Section Section Section Section Section Section Section Section 601. 602. 603. 604. 605. 606. 607. 608. 609. 610. 611. 612. Certain Duties and Responsibilities..................................................... Notice of Defaults...................................................................... Certain Rights of Trustee............................................................... Not Responsible for Recitals or Issuance of Securities.................................. May Hold Securities..................................................................... Money Held in Trust..................................................................... Compensation and Reimbursement.......................................................... Disqualification; Conflicting Interests................................................. Corporate Trustee Required; Eligibility................................................. Resignation and Removal; Appointment of Successor....................................... Acceptance of Appointment by Successor.................................................. Merger, Conversion, Consolidation or Succession to Business.............................

ARTICLE SEVEN--HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY......................................... Section Section Section Section 701. 702. 703. 704. Company to Furnish Trustee Names and Addresses of Holders............................... Preservation Of Information; Communications to Holders.................................. Reports by Trustee...................................................................... Reports by Company......................................................................

ARTICLE EIGHT--CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER............................................. Section 801. Section 802. Section 803. Company May Consolidate, etc., only on Certain Terms.................................... Successor Corporation Substituted....................................................... Evidence to be Furnished Trustee........................................................

ARTICLE NINE--SUPPLEMENTAL INDENTURES.................................................................... Section Section Section Section Section Section 901. 902. 903. 904. 905. 906. Supplemental Indentures without Consent of Holders...................................... Supplemental Indentures with Consent of Holders......................................... Execution of Supplemental Indentures.................................................... Effect of Supplemental Indentures....................................................... Conformity with Trust Indenture Act..................................................... Reference in Securities to Supplemental Indentures......................................

ARTICLE TEN--COVENANTS................................................................................... Section Section Section Section Section Section Section Section Section Section 1001. 1002. 1003. 1004. 1005. 1006. 1007. 1008. 1009. 1010. Payment of Principal, Premium and Interest............................................. Maintenance of Office or Agency........................................................ Money for Security Payments to be Held in Trust; Appointment of Paying Agent........... Statement as to Default................................................................ Corporate Existence.................................................................... Limitation upon Liens.................................................................. Sale-Leaseback Transactions Relating to Principal Plants............................... Limitation Upon Funded Debt of Restricted Subsidiaries................................. Maintenance of Insurance............................................................... Waiver of Certain Covenants............................................................

ARTICLE ELEVEN--REDEMPTION OF SECURITIES................................................................. Section 1101. Right of Redemption....................................................................

iii

Section Section Section Section Section Section Section

1102. 1103. 1104. 1105. 1106. 1107. 1108.

Applicability of Article............................................................... Election to Redeem; Notice to Trustee.................................................. Selection by Trustee of Securities to be Redeemed...................................... Notice of Redemption................................................................... Deposit of Redemption Price............................................................ Securities Payable on Redemption Date.................................................. Securities Redeemed in Part............................................................

ARTICLE TWELVE--SINKING FUND............................................................................. Section 1201. Section 1202. Section 1203. Sinking Fund Payments.................................................................. Satisfaction of Sinking Fund Payments with Securities.................................. Redemption of Securities for Sinking Fund..............................................

ARTICLE THIRTEEN--DEFEASANCE AND COVENANT DEFEASANCE..................................................... Section Section Section Section Section 1301. 1302. 1303. 1304. 1305. Defeasance............................................................................. Covenant Defeasance.................................................................... Conditions to Defeasance or Covenant Defeasance........................................ Application of Funds................................................................... Reinstatement..........................................................................

iv

THIS INDENTURE, dated as of July 1, 2001, is between ANHEUSER-BUSCH COMPANIES, INC., a Delaware corporation (hereinafter called the "Company") having its principal office at One Busch Place, St. Louis, Missouri 63118, and THE CHASE MANHATTAN BANK, a New York corporation (hereinafter called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured notes, debentures or other evidences of indebtedness (collectively, the "Securities"), to be issued from time to time in one or more series (a "Series") as provided in this Indenture and as shall be provided, in respect of any Series, in or pursuant to the Authorizing Resolution hereinafter referred to and in the indenture supplemental hereto (if any) relating to such Series. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities from time to time by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE ONE--DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. DEFINITIONS. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; and (4) the words "herein," "hereof," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act" when used with respect to any Holder has the meaning specified in Section 104. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "applicants" has the meaning specified in Section 702. 1

"Authenticating Agent" means the Trustee or other Person designated by the Company from time to time, on written notice to the Trustee, to authenticate and deliver Securities of one or more Series pursuant to Section 303. "Authorizing Resolution" means a Board Resolution providing for the issuance of a Series of Securities, which is to be delivered to the Trustee pursuant to Section 303 hereof. "Board of Directors" means either the board of directors of the Company, or any duly authorized committee of that board or any officer authorized to act for the board of directors. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the city in which the Corporate Trust Office is located are authorized or obligated by law or executive order to be closed. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" and "Company Order" mean, respectively, a written request or order signed in the name of the Company by the Chairman or Vice Chairman of the Board of Directors, the President, a Vice President (any reference to a Vice President of the Company herein to be deemed also to include any Vice President of the Company designated by a number or a word or words added before or after such title) or the Treasurer of the Company, and also by an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or an Assistant Secretary, and delivered to the Trustee and to the Authenticating Agent, if any, in respect of the Series to which the Company Order shall relate. "Corporate Trust Office" means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Indenture is located at 450 West 33rd Street, New York, New York 10001, Attention: Corporate Trust Department, 15th Floor. "Covenant Defeasance" has the meaning specified in Section 1302. "Default" means any event which is, or after notice or lapse of time or both, would become an Event of Default. "Defaulted Interest" has the meaning specified in Section 308. "Defeasance" has the meaning specified in Section 1301. "Depositary" means, with respect to any Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary by the Company pursuant to Section 301 until a successor Depositary shall have become such 2

pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, "Depositary", as used with respect to the Securities of any such Series, shall mean or include the Depositary with respect to the Global Securities of that Series. "Extendible Securities" means Securities of any Series issued hereunder the final maturity of which is extendible for a stated period of time, as shall be provided in, or pursuant to, the Authorizing Resolution and supplemental indenture (if any) relating to such Series. "Event of Default" has the meaning specified in Section 501. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Funded Debt" means (A) all indebtedness for money borrowed, including purchase money indebtedness, having a maturity of more than twelve months from the date as of which the amount thereof is to be determined or having a maturity of less than twelve months but by its terms being renewable or extendible beyond twelve months from such date at the option of the borrower, subject only to conditions which the borrower is then capable of fulfilling, and direct guarantees of such indebtedness for money borrowed of other Persons; or (B) indebtedness classified as "long-term indebtedness" in the financial statements of the borrower most recently filed with the Commission pursuant to the Exchange Act; provided, that Funded Debt shall not include: (i) Any indebtedness of a Person, evidence of which is held in treasury by such Person; or (ii) Any indebtedness with respect to which there shall have been deposited with a depository (or set aside and segregated by the obligor if permitted by the instrument creating such indebtedness), in trust, on or prior to maturity, funds sufficient to pay such indebtedness; or (iii) Any amount representing capitalized lease obligations; or (iv) Any indirect guarantees or other contingent obligations in respect of indebtedness of other Persons, including agreements, contingent or otherwise, with such other Persons or with third persons with respect to, or to permit or assure the payment of, obligations of such other Persons, including, without limitation, agreements to purchase or repurchase obligations of such other Persons, agreements to advance or supply funds to or to invest in such other Persons, or agreements to pay for property, products or services of such other Persons (whether or not conveyed, delivered or rendered), and any through-put, take-or-pay, keep-well, make-whole or maintenance of working capital or earnings or similar agreements; or (v) Any guarantees with respect to lease or other similar periodic payments to be made by other Persons. "Global Security" means a registered Security evidencing all or part of a Series of Securities, issued to the Depositary for such Series in accordance with Section 305, and bearing the legend prescribed in Section 305. "Holder" means a Person in whose name a Security is registered in the Security Register. 3

"Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the forms and terms of particular Series of Securities established as contemplated hereunder. "Interest" means, when used with respect to non-interest-bearing Securities, interest payable after Maturity. "Interest Payment Date" means, for any Series or Issue of Securities issued and outstanding hereunder, the date or dates in each year on which any interest on such Series is paid or made available for payment. "Issue" means, (i) with respect to any Series, Securities of such Series having the same Original Issue Date, the same Maturity Date and the same interest rate and other payment terms, except as to amount of principal or (ii) any Securities that the Company designates by one or more Authorizing Resolutions or indentures supplemental hereto as constituting all or part of an Issue. "Maturity" when used with respect to any Security means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Maturity Date" means the date specified in each Security on which the principal thereof is due and payable in full. "Net Tangible Assets" means the total assets of the Company and its Restricted Subsidiaries (including, without limitation, any net investment in Unrestricted Subsidiaries) after deducting therefrom (a) all current liabilities (excluding any thereof constituting Funded Debt) and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense, organization and developmental expenses and other like segregated intangibles, all as computed by the Company and its Restricted Subsidiaries in accordance with generally accepted accounting principles as of a date within 90 days of the date as of which the determination is being made; provided, that any items constituting deferred income taxes, deferred investment tax credit or other similar items shall not be taken into account as a liability or as a deduction from or adjustment to total assets. "Officers' Certificate" means a certificate signed by the Chairman or Vice Chairman of the Board, or the President, a Vice President (any reference to a Vice President of the Company to be deemed also to include any Vice President of the Company designated by a number or a word or words added before or after such title) or the Treasurer of the Company, and also by an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. "Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or of counsel to the Company or other counsel, and who shall be acceptable to the Trustee. Each such opinion shall include the statements provided for in Section 102, if and to the extent required by the provisions thereof. "Original Issue Date" means the date on which a Security is issued to the original purchaser thereof, as specified in such Security. 4

"Original Issue Discount Securities" means Securities which provide for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 502. "Outstanding" when used with respect to Securities, or Securities of any particular Series or Issue, means, as of the date of determination, all such Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities, provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture; provided, however, that in determining whether the Holders of the requisite principal amount of such Securities Outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder (a) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount that would be due and payable as of the date of determination upon a declaration of acceleration thereof pursuant to Section 502 and (b) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. "Packaging Business" means the assets identified as the "Packaging Segment" (or similar terminology generally describing the same operations) in the financial statements most recently delivered by the Company to the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act, and any assets substantially related to such assets that are acquired after the date of such financial statements. "Packaging Business Divestitures" means (i) the distribution (in the form of a dividend) to stockholders of the Company of the capital stock of a Subsidiary or Subsidiaries, substantially all of the assets of which consist of all or any portion of the Packaging Business or (ii) the transfer of the capital stock of a Subsidiary or Subsidiaries, substantially all of the assets of which consist of all or any portion of the Packaging Business, or the transfer of all or any portion of the Packaging Business, the consideration for such transfer (including the liabilities assumed related 5

thereto) being not less than the fair market value (as reasonably determined by the Company) of such stock or assets. "Paying Agent" means, with respect to any Series of Securities, any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any such Securities on behalf of the Company. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 307 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security. "Principal Plant" means (i) any brewery, or any manufacturing, processing or packaging plant, now owned or hereafter acquired by the Company or any Subsidiary and located within the United States (but not including any (a) brewery or plant of the Company or any Subsidiary which the Company has determined, by Board Resolution, is not of material importance to the total business conducted by the Company and its Subsidiaries or (b) any plant that the Company shall have determined, by Board Resolution, is used primarily for transportation, marketing or warehousing or (c) at the option of the Company, any plant that (A) does not constitute part of the brewing operations of the Company and its Subsidiaries and (B) has a net book value, as reflected on the balance sheet contained in the Company's financial statements most recently filed by the Company with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act, of not more than $100,000,000), and (ii) any other facility owned by the Company or any of its Subsidiaries that the Company shall, by Board Resolution, designate as a Principal Plant. Following any determination, designation or election referred to herein that a brewery or plant shall not be included as a Principal Plant, the Company may, at its option, by Board Resolution, elect that such facility subsequently be included as a Principal Plant. "Redeemable Securities" means Securities of any Series or Issue which may be redeemed, at the option of the Company, prior to the Stated Maturity thereof, on the terms specified in or pursuant to the Authorizing Resolution relating to such Series or Issue and in accordance with Article Eleven herein. "Redemption Date" when used with respect to any Security of any Series or Issue to be redeemed means the date fixed for such redemption by or pursuant to the provisions of such Security, this Indenture and the Authorizing Resolution and supplemental indenture (if any) relating to such Security. "Redemption Price" when used with respect to any Security of any Series or Issue to be redeemed means the price at which it is to be redeemed pursuant to the provisions of such Security, this Indenture and the Authorizing Resolution and supplemental indenture (if any) relating to such Security. "Regular Record Date" means, for the interest payable on any Interest Payment Date in respect of any Series or Issue of Securities, except as provided in, or pursuant to, the Authorizing 6

Resolution and supplemental indenture (if any) relating thereto, the fifteenth day (whether or not a Business Day) of the calendar month next preceding the month during which such Interest Payment Date occurs. "Required Currency" has the meaning specified in Section 116. "Responsible Officer" when used with respect to the Trustee or an Authenticating Agent means the Chairman or Vice Chairman of the Board of Directors, the Chairman or Vice Chairman of the Executive Committee of the Board of Directors, the President, any Vice President (whether or not designated by a number or a word or words added before or after the title "Vice President"), the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Senior Trust Officer or Trust Officer, the Controller and any Assistant Controller or any other officer of the Trustee or such Authenticating Agent customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Subsidiary" means (i) any Subsidiary which owns or operates a Principal Plant, except any Subsidiary incorporated, or the principal place of business of which is located, outside the present fifty states of the United States of America and the District of Columbia and (ii) any other Subsidiary which the Company shall elect, by Board Resolution, to be treated as a Restricted Subsidiary, until such time as the Company may, by Board Resolution, elect that such Subsidiary shall no longer be a Restricted Subsidiary, successive such elections being permitted without restriction. "Securities" means the securities of the Company to be issued from time to time hereunder. "Security Register" and "Security Registrar" have the respective meanings specified in Section 306. "Series" means, with respect to Securities issued hereunder, the Securities issued pursuant to any particular Authorizing Resolution, subject to the right of the Board of Directors to specify in such Authorizing Resolution that such Securities shall constitute more than one Series, and subject to the right of the Board of Directors to specify in one or more Authorizing Resolutions that the Securities issued pursuant to such Authorizing Resolutions shall constitute one Series. "Sinking Fund" means, with respect to any Sinking Fund Securities, a sinking fund provided for in Article Twelve. "Sinking Fund Securities" means Securities of any Series or Issue which are required to be redeemed from time to time prior to the Stated Maturity thereof in whole or in part under a Sinking Fund, on the terms specified in the Authorizing Resolution relating to such Series or Issue and in accordance with Article Twelve herein. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 308. "Stated Maturity" when used with respect to any Security or any installment of interest thereon means the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable. 7

"Subsidiary" of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect more than 50% of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such limited liability company, partnership or joint venture or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other subsidiaries or by one or more such Person's other subsidiaries. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean and include the Person, or each Person, who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any Series shall mean the Trustee with respect to Securities of that Series. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as amended and as in force at the date as of which this instrument was executed, except as provided in Section 905. "Unrestricted Subsidiary" means any Subsidiary which is not a Restricted Subsidiary. "U.S. Government Obligations" means securities that are (x) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof or (z) interests in funds consisting solely of such securities described in (x) and (y), including funds managed by the Trustee or its Affiliates (including such funds for which it or its affiliates receive fees in connection with such management). "Yield to Maturity" means, with respect to any Series or Issue of Securities, the yield to maturity thereof, calculated at the time of issuance thereof, or, if applicable, at the most recent redetermination of interest thereon, and calculated in accordance with accepted financial practice. SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than certificates provided pursuant to Section 1004) shall include: 8

(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company, stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 104. ACTS OF HOLDERS. (a) Any request, demand, authorization, direction, notice, consent, waiver, vote or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. 9

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any reasonable manner which the Trustee deems sufficient and in accordance with such reasonable rules as the Trustee may determine. (c) The ownership of Securities shall be proved by the Security Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (e) The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, those Persons who were Securityholders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY. Except as provided in Section 501, any request, demand, authorization, direction, notice, consent, or waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (except as provided in Section 501 (4)), if in writing and mailed, first class postage prepaid, to the Company, to the attention of the Secretary, and a copy thereof to the attention of the Treasurer, addressed to it at the address of the principal office of the Company specified in the first paragraph of this instrument or at such other address as shall have been furnished in writing to the Trustee by the Company for this purpose. SECTION 106. NOTICES TO HOLDERS; WAIVER. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears on the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such 10

notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. SECTION 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof limits, qualifies or conflicts with another provision which is required or deemed to be included in this Indenture by any of the provisions of TIA, such provision so required or deemed to be included herein shall control. SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 109. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 110. SEPARABILITY CLAUSE. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 111. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any Paying Agent and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 112. GOVERNING LAW. This Indenture shall be construed in accordance with and governed by the laws of the State of New York. SECTION 113. LEGAL HOLIDAYS. In any case where any Interest Payment Date, any Redemption Date, or the Stated Maturity of any Security, or any date on which any Defaulted Interest is proposed to be paid, shall not be a Business Day, then (notwithstanding any other provision of this Indenture) payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or Redemption Date, at the Stated Maturity, or on the date on which the Defaulted Interest is proposed to be paid, and no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity or date for the payment of Defaulted Interest, as the case may be. 11

SECTION 114. ACT OF HOLDERS WHEN SECURITIES ARE DENOMINATED IN DIFFERENT CURRENCIES. Whenever any action or Act is to be taken hereunder by the Holders of two or more Series or Issues of Securities denominated in different currencies, then, for the purposes of determining the principal amount of Securities held by such Holders, the aggregate principal amount of the Securities denominated in a currency other than United States dollars shall be deemed to be that amount of United States dollars that could be obtained for such principal amount on the basis of the spot rate of exchange for such currency as determined by the Company or by an authorized exchange rate agent and evidenced to the Trustee by an Officers' Certificate as of the date the taking of such action or Act by the Holders of the requisite percentage in principal amount of the Securities is evidenced to the Trustee. An exchange rate agent may be authorized in advance or from time to time by the Company, and may be the Trustee or its Affiliate. Any such determination by the Company or by any such exchange rate agent shall be conclusive and binding on all Holders and the Trustee, and neither the Company nor such exchange rate agent shall be liable therefor in the absence of bad faith. SECTION 115. MONIES OF DIFFERENT CURRENCIES TO BE SEGREGATED. The Trustee shall segregate monies, funds, and accounts held by the Trustee hereunder in one currency from any monies, funds or accounts in any other currencies, notwithstanding any provision herein which would otherwise permit the Trustee to commingle such amounts. SECTION 116. PAYMENT TO BE IN PROPER CURRENCY. Each reference in any Security, or in the Authorizing Resolution relating thereto, to any currency shall be of the essence. In the case of any Security denominated in any currency (the "Required Currency") other than United States dollars, except as otherwise provided therein or in the related Authorizing Resolution, the obligation of the Company to make any payment of principal, premium or interest thereon shall not be discharged or satisfied by any tender by the Company, or recovery by the Trustee, in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the Trustee timely holding the full amount of the Required Currency then due and payable. If any such tender or recovery is in a currency other than the Required Currency, the Trustee may take such actions as it considers appropriate to exchange such currency for the Required Currency. The costs and risks of any such exchange, including without limitation the risks of delay and exchange rate fluctuation, shall be borne by the Company, the Company shall remain fully liable for any shortfall or delinquency in the full amount of Required Currency then due and payable, and in no circumstances shall the Trustee be liable therefor. The Company hereby waives any defense of payment based upon any such tender or recovery which is not in the Required Currency, or which, when exchanged for the Required Currency by the Trustee, is less than the full amount of Required Currency then due and payable. ARTICLE TWO--SECURITY FORMS SECTION 201. FORMS GENERALLY. The Securities of each Series and Issue and the certificate of authentication thereon shall be in substantially the forms set forth in this Article or in such other forms, including the form of one or more Global Securities, as shall be specified in, or pursuant to, the Authorizing Resolution or in the indenture supplemental hereto (if any) relating to such Series or Issue, with such 12

appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or the said Authorizing Resolution or supplemental indenture, and they may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange, or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. The definitive Securities of each Series shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, or, if they shall not be listed on any securities exchange, in any other manner consistent herewith, all as shall be determined by the officers executing such Securities, as evidenced by their execution of such Securities. SECTION 202. FORM OF FACE OF SECURITY. [The following is to be included if the Security is an Original Issue Discount Security:] [FOR PURPOSES OF SECTION 1273 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS SECURITY IS __% OF ITS PRINCIPAL AMOUNT AND ITS ISSUE DATE IS __________, 20__.] ANHEUSER-BUSCH COMPANIES, INC.
[title of Security] Rate of Interest ---------------............ Maturity Date ------------Original Issue Date ------------------No.............

ANHEUSER-BUSCH COMPANIES, INC., a Delaware corporation (hereinafter called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to __________________, or registered assigns, the sum of ___________ on the Maturity Date shown above, and to pay interest thereon, at the annual rate of interest shown above, from the Original Issue Date shown above or from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for, payable semi-annually on _______________ and ______________ of each year and at maturity (an "Interest Payment Date"), commencing on the first such date after the Original Issue Date, except that if the Original Issue Date is on or after a Regular Record Date (which term, as well as all other capitalized terms used herein, shall have the meanings assigned in the Indenture referred to on the reverse hereof unless otherwise indicated) but before the next Interest Payment Date, interest payments will commence on the second Interest Payment Date following the Original Issue Date. [reference to currency[ies] of payment and currency exchange arrangements, if applicable] The interest payable hereon, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in said Indenture, be paid to the Person in whose name this [name of Security] (or one or more Predecessor [name of Series]) is registered at the close of business on the Regular Record Date for such interest, which shall be the fifteenth day of the 13

calendar month (whether or not a Business Day) next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Regular Record Date, and, together with any interest on such interest, may be paid to the Person in whose name this [name of Security] (or one or more Predecessor [name of Series]) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of [name of Series] not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the [name of Series] may be listed, and upon such notice as may be required by such exchange, all as more fully provided in such Indenture. Payment of the principal of (and premium, if any) and interest on this [name of Security] will be made at the office or agency of the Company maintained for that purpose in [The Borough of Manhattan, The City of New York or other place of payment], in [reference to United States dollars or other currency of payment]; provided, however, that payment of interest, other than interest due on a Maturity Date, may be made at the option of the Company by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register. [Include the following, if applicable:] Payments on the Maturity Date will be made in immediately available funds against presentment of this [name of Security]. This [name of Security] is one of a duly authorized issue of [name of Securities] of the Company designated as its [title of Series] (herein called the "[name of Series]"), issued and to be issued under an indenture dated as of July 1, 2001 (herein called the "Indenture"), between the Company and The Chase Manhattan Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), and under [reference to Authorizing Resolution and/or supplemental indenture relating to the Series] to which Indenture, [reference to Authorizing Resolution and/or supplemental indenture] and all [further] indentures supplemental thereto reference is hereby made for the definition of certain terms used herein, for a statement of the respective rights thereunder of the Company, the Trustee and the Holders of the [name of Series], and for the terms upon which the [name of Series] are, and are to be, authenticated and delivered. This [name of Series] is one of a series of securities issued or to be issued by the Company under the Indenture, limited in aggregate principal amount to ____________, subject to any subsequent issuances that may be authorized by subsequent Authorizing Resolutions or supplemental indentures. The Indenture provides that the Securities of the Company referred to therein ("Securities"), including the [name of Series], may be issued in one or more Series, each of which may consist of one or more Issues, which different Series and Issues may be issued in such principal amounts and on such terms (including, but not limited to, terms relating to interest rate or rates, provisions for determining such interest rate or rates and adjustments thereto, maturity, redemption (optional and mandatory), sinking fund, covenants and Events of Default) as may be provided in or pursuant to the Authorizing Resolutions (as defined in the Indenture) relating to the several Series. Reference is hereby made to the further provisions of this [name of Security] set forth on the reverse hereof which further provisions shall for all purposes have the same effect as if set forth at this place. 14

Unless the certificate of authentication hereon has been executed by The Chase Manhattan Bank, the Trustee under the Indenture, or its successor thereunder, or by another Authenticating Agent appointed pursuant to the Indenture, by the manual signature of one of its authorized officers, this [name of Security] shall not be entitled to any benefit under the Indenture, nor be valid or obligatory for any purpose. IN WITNESS WHEREOF, The Company has caused this instrument to be duly executed under its corporate seal.
Dated Attest: By [Assistant] Secretary ANHEUSER-BUSCH COMPANIES, INC.

By: [title of Company Officer]

SECTION 203. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. This is one of the [name of Series] referred to in the within-mentioned Indenture. The Chase Manhattan Bank, as Trustee By [reference to Authenticating Agent, if any] Authorized Officer SECTION 204. FORM OF REVERSE OF SECURITY. [The following to be included if the Securities are not redeemable prior to maturity.] This [name of Security] may not be redeemed prior to its Maturity Date. [The following paragraph, or other appropriate redemption provisions, to be included if the Securities are Redeemable Securities:] The [name of Series] are subject to redemption upon not less than 30 nor more than 60 days' notice by mail, [the following clause to be included if there is a Sinking Fund:] [(1) on [annual Sinking Fund Redemption Date] in each year commencing with the year [year of first Sinking Fund payment] through operation of the Sinking Fund at a Redemption Price equal to their principal amount and (2)] [at any time] in whole or in part, at the election of the Company at a Redemption Price equal to the percentage set forth below of the principal amount to be redeemed for the respective twelve-month periods beginning [ ] of the years indicated: [Schedule of Redemption Prices] and thereafter at 100% of the principal amount thereof, together in each case with accrued interest to the Redemption Date. [The following paragraph, or other appropriate Sinking Fund provision, to be included if there is a Sinking Fund for the Series:] 15

The Sinking Fund provides for the redemption on [first Sinking Fund Redemption Date] and on [annual Sinking Fund Redemption Date] in each year thereafter through [year of final Sinking Fund date] of not less than [minimum required Sinking Fund redemption amount] principal amount nor more than [maximum permitted Sinking Fund redemption amount] principal amount of [name of Series]. [name of Series] purchased, acquired or redeemed by the Company otherwise than by redemption through the Sinking Fund may be credited against subsequent Sinking Fund requirements. [The following paragraph to be included if the Securities are Redeemable Securities or Sinking Fund Securities:] In the event of redemption of this [name of Security] in part only, a new [name of Security] or [name of Series] for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the surrender hereof. [The following paragraph to be included if the Securities are not Original Issue Discount Securities:] If an Event of Default, as defined in the Indenture and in the Authorizing Resolution and supplemental indenture (if any) relating to the [name of Series] (if there shall be any additional Events of Default specified in respect of the [name of Series]), shall occur and be continuing, the principal of all the [name of Series] may be declared due and payable in the manner and with the effect provided in the Indenture. [If the Securities are Original Issue Discount Securities, insert schedule as to amounts which are payable on acceleration under Section 502 and provable in bankruptcy under Section 504(i) from time to time.] No Holder of any Securities shall have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee, or for any other remedy under the Indenture, unless (1) the Trustee shall have received written notice from such Holder of a continuing Event of Default in respect of such Securities; (2) the Trustee shall have received a written request from the Holders of not less than 25% in principal amount of the Outstanding Securities of the Issue or Series in respect of which the Event of Default has occurred to institute proceedings in respect of such Event of Default in its own name as trustee under the Indenture; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Holders of a majority in principal amount of the Outstanding Securities of such Series or Issue. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the [name of Series] under the Indenture at any time by the Company with the consent of the Holders of a majority in aggregate principal amount of the Securities affected thereby, voting as a single class (which may include the [name of Series]), at the time Outstanding, as defined in the Indenture. The Indenture also contains provisions permitting 16

the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding to waive compliance by the Company with certain provisions of this Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this [name of Security] shall be conclusive and binding upon such Holder and upon all future Holders of this [name of Security] and of any [name of Security] issued on transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this [name of Security]. No reference herein to the Indenture and no provision of this [name of Security] or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this [name of Security] at the times, place, and rate, and in the currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this [name of Security] is registrable on the Security Register of the Company, upon surrender of this [name of Security] for registration of transfer at the office or agency of the Company provided for that purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new [name of Series], of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The [name of Series] are issuable only as registered [name of Series] without coupons in denominations of [currency and minimum denomination] and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, [name of Series] are exchangeable for a like aggregate principal amount of [name of Series] of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment for registration of transfer of this [name of Security], the Company, the Trustee and any agent of the Company may treat the Person in whose name this [name of Security] is registered as the owner hereof for all purposes whether or not this [name of Security] be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. [Reference to Foreign Currencies] At the election of the Company, the obligations of the Company (a) as to the [name of Series] and under the Indenture with respect to the [name of Series] (except for certain obligations relating to transfers or exchanges) or (b) as to the [name of Series] under certain provisions of the Indenture, may be satisfied and discharged upon the satisfaction of certain conditions, including the deposit with the Trustee of money or U.S. Government Obligations (as defined in the Indenture) sufficient for payment of the principal, premium, if any, and interest at or before the Stated Maturity (as defined in the Indenture) on the [name of Series]. No recourse shall be had for the payment of the principal of (or premium, if any) or the interest on this [name of Security], or for any claim based hereon, or otherwise in respect 17

hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. ARTICLE THREE--THE SECURITIES SECTION 301. TITLE AND TERMS. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more Series and Issues. The terms of each Series and Issue shall be as provided in an Authorizing Resolution or supplemental indenture or shall be determined in the manner specified therein. The terms to be specified in respect of each Series or Issue in the Authorizing Resolution or supplemental indenture, or by such person and/or procedures as shall be provided therein, shall include the following: (1) The title of the Securities of such Series, which shall distinguish such Series from all other Series; (2) The aggregate principal amount of the Securities of such Series which may be authenticated and delivered under this Indenture (except for Securities of such Series authenticated and delivered upon transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 304, 305, 306, 307, 906 or 1108, and subject to any subsequent issuances that may be authorized by subsequent Authorizing Resolutions or supplemental indentures); (3) The date or dates on which the principal and premium, if any, of the Securities of such Series or Issue is payable, and, if the Series shall be Extendible Securities, the terms on which the Company or any other Person shall have the option to extend the Maturity of such Securities and the rights, if any, of the Holders to require payment of the Securities; (4) The rate or rates at which the Securities of such Series or Issue shall bear interest, if any (whether floating or fixed), the provisions, if any, for determining such interest rate or rates and adjustments thereto, the date or dates from which such interest shall accrue, the Interest Payment Dates therefor and the Regular Record Dates (if different from those provided in the form of Security herein set forth) for the determination of Holders of the Securities of such Series or Issue to whom interest is payable; (5) The place or places where the principal of, or premium, if any, and interest on Securities of such Series or Issue shall be payable (if other than as provided in Section 1002); (6) The price or prices at which, the period or periods within which and the terms and conditions upon which the Securities of such Series or Issue may be redeemed, in whole or in part, at the option of the Company, pursuant to a Sinking Fund or otherwise; (7) The obligation, if any, of the Company to redeem, purchase or repay Securities of such Series or Issue, in whole or in part, pursuant to a Sinking Fund or otherwise or at the option of a Holder thereof, and the price or prices at which, the period or periods within 18

which and the terms and conditions upon which such redemption, purchase or repayment shall be made; (8) Any Events of Default with respect to the Securities of such Series or Issue which may be in addition to those provided herein, and any covenants or obligations of the Company to the Holders of the Securities of such Series or Issue in addition to those set forth herein; (9) If less than 100% of the principal amount of the Securities of such Series or Issue is payable on acceleration under Section 502 or provable in bankruptcy under Section 504(i) at any time, a schedule of or the manner of computing the amounts which are so payable and provable from time to time; (10) The form of the Securities of such Series (which may be, but which need not be, consistent with the form set forth in Article Two hereof), including whether the Securities of the Series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depositary or Depositaries for such Global Security or Securities; (11) If other than United States dollars, the currency(ies) in which payment of the principal of (and premium, if any) or interest, if any, on the Securities of that Series or Issue shall be payable; (12) If the principal of (and premium, if any) or interest, if any, on the Securities of that Series or Issue are to be payable, at the election of the Company or a Holder thereof, in a currency or currencies other than that in which the Securities are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made; (13) If the amount of payments of principal of (and premium, if any) or interest, if any, on the Securities of the Series or Issue may be determined with reference to an index based on a currency or currencies other than that in which the Securities are stated to be payable, the manner in which such amounts shall be determined; and (14) Any other terms of the Securities of such Series or Issue; provided, that such other terms shall not be inconsistent with any express terms of this Indenture or in conflict with any express terms of any other Series or Issue of Securities which shall be issued and Outstanding. SECTION 302. DENOMINATIONS. Unless otherwise provided by Section 301 in connection with the issuance of Global Securities, the Securities of each Series or Issue may be issued only in registered form without coupons in denominations of $1,000 and any integral multiple thereof, or in such other currencies or denominations as may be specified in, or pursuant to, the Authorizing Resolution or supplemental indenture relating to the Series. SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Securities shall be executed on behalf of the Company by its Chairman or Vice Chairman of the Board, its President, one of its Vice Presidents or its Treasurer under its corporate seal reproduced thereon and attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. 19

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any Series executed by the Company to the Authenticating Agent, together with a Company Order for the authentication and delivery of such Securities. The Company Order may provide that the Securities which are the subject thereof shall be authenticated and delivered by the Authenticating Agent upon the telephonic, written or other order of Persons designated in the Company Order, and that such Persons are authorized to specify the terms and conditions of such Securities, to the extent permitted by the Authorizing Resolution or supplemental indenture relating thereto. The Trustee shall execute and deliver the supplemental indenture (if any) and the Authenticating Agent shall authenticate and deliver said Securities as specified in such Company Order; provided, that, prior to authentication and delivery of the first Securities of any Series, the Trustee and the Authenticating Agent shall have received: (1) A copy of the Authorizing Resolution; (2) A supplemental indenture in respect of the issuance of the Series, if called for by the terms of the Authorizing Resolution in respect thereof, executed on behalf of the Company; (3) An Officers' Certificate to the effect that the Securities of such Series comply or will comply with the requirements of this Indenture and the said Authorizing Resolution and supplemental indenture (if any); (4) An Opinion of Counsel (a) to the effect that (i) the Securities of such Series, the Authorizing Resolution and the supplemental indenture (if any) relating thereto comply or will comply with the requirements of this Indenture and (ii) the Securities of such Series, when authenticated and delivered by the Authenticating Agent in accordance with the said Company Order, will constitute valid and binding obligations of the Company and enforceable in accordance with their terms, subject to (A) bankruptcy and other laws affecting creditors' rights generally as in effect from time to time, (B) limitations of generally applicable equitable principles and (C) other exceptions acceptable to the Trustee and its counsel; and (b) relating to such other matters as may reasonably be requested by the Trustee or its counsel; and (5) If the Securities to be issued are Original Issue Discount Securities, an Officers' Certificate setting forth the Yield to Maturity for the Securities or other information sufficient to compute amounts due on acceleration, or specifying the manner in which such amounts are to be determined, if such Yield to Maturity and other facts are not specified in the form of the Securities. Subject to Section 601 hereof, the Authenticating Agent and the Trustee shall be fully protected in relying upon the documents delivered to it as provided above in connection with the issuance of any Series of Securities. The Authenticating Agent shall have the right to decline to authenticate and deliver any Securities under this Section if the Authenticating Agent, being advised by counsel, determines 20

that such action may not lawfully be taken or if the Authenticating Agent in good faith by a committee of its Responsible Officers shall determine that such action would expose the Authenticating Agent to liability to Holders of previously issued and Outstanding Securities. Each Security shall be dated the date of its authentication unless otherwise specified in the Authorizing Resolution relating thereto. No Security shall be entitled to any benefit under this Indenture, or be valid or obligatory for any purpose, unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Authenticating Agent by the manual signature of one of its authorized signatories, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. SECTION 304. TEMPORARY SECURITIES. Pending the preparation of definitive Securities of any Series or Issue, the Company may execute, and upon compliance with the requirements of Section 303 the Authenticating Agent shall authenticate and deliver, temporary Securities, which may be printed, lithographed, typewritten, photocopied or otherwise produced, in any denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of such Securities. If temporary Securities of any Series or Issue are issued, the Company shall thereafter cause definitive Securities for such Series or Issue to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities, at the office or agency of the Company provided for that purpose, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Company shall execute and the Authenticating Agent shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. SECTION 305. GLOBAL SECURITIES If the Company shall establish pursuant to Section 301 that the Securities of a Series are to be issued in whole or in part in the form of one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance with this Section and the Company Order with respect to such Series, authenticate and deliver one or more Global Securities in temporary or permanent form that (i) shall represent and shall be denominated in an aggregate amount equal to the aggregate principal amount of the Outstanding Securities of such Series to be represented by one or more Global Securities, (ii) shall be registered in the name of the Depositary for such Global Security of Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instruction and (iv) shall bear a legend substantially to the following effect (or such other legend as may be prescribed by the Depositary): "Unless and until it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as a whole by the Depositary to the 21

nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary." Each Depositary designated pursuant to Section 301 for a Global Security in registered form must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Exchange Act and any other applicable statute or regulation. Beneficial owners of part or all of a Global Security shall be subject to the rules of the Depositary as in effect from time to time. The Company, the Trustee and the Paying Agent shall not be responsible for any acts or omissions of the Depositary, for any Depositary records of beneficial interests or for any transactions between the Depositary and beneficial owners. Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for Securities in definitive form, a Global Security representing all or a portion of the Securities of a Series may not be transferred except as a whole by the Depositary for such Series or to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such Series or a nominee of such successor Depositary. If at any time the Depositary for any Securities of a Series notifies the Company that it is unwilling or unable to continue as Depositary for the Securities of such Series or if at any time the Depositary for the Securities of such Series shall no longer be eligible under Section 305, the Company shall appoint a successor Depositary eligible under Section 305, with respect to the Securities of such Series. If a successor Depositary eligible under Section 305 for the Securities of such Series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company's election that the Securities of such Series be represented by one or more Global Securities shall no longer be effective with respect to the Securities of such Series and the Company shall execute and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such Series, shall authenticate and deliver, Securities of such Series in definitive form in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such Series in exchange for such Global Security or Securities. The Company may at any time and in its sole discretion determine that the Securities of any Series issued in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities. In such event the Company shall execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such Series, shall authenticate and deliver, Securities of such Series in definitive form and in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such Series in exchange for such Global Security or Securities. If specified by the Company pursuant to Section 301 with respect to a Series of Securities represented by a Global Security, the Depositary for such Global Securities may surrender a Global Security for such Series of Securities in exchange in whole or in part for Securities of such Series in definitive form on such terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute, and the Trustee shall authenticate and deliver, without service charge: 22

(i) to each Person specified by such Depositary a new Security or Securities of the same Series, of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Security; and (ii) to such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities delivered pursuant to clause (i) above. In any exchange provided for in this Section, the Company will execute and the Trustee will authenticate and deliver Securities in definitive registered form in authorized denominations. Upon the exchange of a Global Security for Securities in definitive registered form, such Global Security shall be cancelled by the Trustee or an agent of the Company or the Trustee. The Trustee or such agent shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered. SECTION 306. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The Company shall cause to be kept a register at one of its offices or agencies maintained pursuant to Section 1002 (herein referred to as the "Security Register") in which, subject to such reasonable regulations as the Company may prescribe, the Company shall provide for the registration of Securities and the registration of transfers of Securities. At all reasonable times the Security Register shall be open for inspection by the Trustee. The Security Register shall be kept at the said office or agency, and said office or agency is hereby initially appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. If the Security Registrar shall not be the Authenticating Agent in respect of any Series, the Company shall promptly notify the Security Registrar as to the amounts and terms of each Security of such Series which shall be authenticated and delivered hereunder, and as to the names in which such Securities shall be registered. Upon surrender for registration of transfer of any Security at the office or agency of the Company provided for that purpose, the Company shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same Issue and Stated Maturity of a like aggregate principal amount. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1108 not involving any transfer. 23

The Company shall not be required (i) to issue, register the transfer of or exchange any Security of any Series during a period beginning at the opening of the day which is 15 Business Days before the day of the mailing of a notice of redemption of Securities of such Series selected for redemption under Section 1104 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not to be redeemed. At the option of the Holder, Securities of any Issue (other than a Global Security) may be exchanged for other Securities of the same Issue of any authorized denominations, of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Authenticating Agent shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. SECTION 307. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If (i) any mutilated Security is surrendered to the Trustee, or the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii) there is delivered to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Authenticating Agent shall authenticate and deliver, in exchange for, or in lieu of, any such mutilated, destroyed, lost or stolen Security, a new Security of like tenor, Issue and principal amount, bearing a number not assigned to any Security of the same Series then outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay the indebtedness represented by such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same Issue duly issued hereunder. The provisions of this Section are exclusive and (to the extent lawful) shall preclude all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. If a Security is replaced pursuant to Section 307, it shall cease to be Outstanding unless the Company receives proof satisfactory to it that the replaced Security is held by a protected purchaser, as defined in Section 8-303 of the New York Uniform Commercial Code. 24

SECTION 308. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Interest which is payable, and is punctually paid or duly provided for, on any Interest Payment Date, on the Securities of any Issue, shall be paid to the Persons in whose names the Securities (or one or more Predecessor Securities) are registered at the close of business on the Regular Record Date for such interest. Any interest on any Security of any Issue which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date, together with any interest thereon (herein called "Defaulted Interest"), shall forthwith cease to be payable to the Holder, as such, on the Regular Record Date for such payment; and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such Issue and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount of such Defaulted Interest proposed to be paid or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such amount as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such Issue at his address as it appears in the Security Register not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the said Securities (or their respective Predecessor Securities) are registered on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of such Series may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. 25

SECTION 309. PERSONS DEEMED OWNERS. Prior to due presentment for registration of transfer of any Security, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any), and (subject to Section 308) interest on, such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. SECTION 310. CANCELLATION. All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee. All Securities so delivered and any Securities surrendered directly to the Trustee for any such purpose shall be promptly cancelled by the Trustee and all Securities of any Series or Issue delivered to the Trustee for credit against any Sinking Fund payment in respect of such Series or Issue pursuant to Section 1202 shall be promptly cancelled by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be destroyed and certification of their destruction delivered to the Company unless by a Company Order the Company shall direct that cancelled Securities be returned to it. ARTICLE FOUR--SATISFACTION AND DISCHARGE SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for, and except as otherwise provided in the Authorizing Resolution in respect of any Series), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 307 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in 26

the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for the purpose an amount of money or U.S. Governmental Obligations sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; (3) the Company has delivered to the Trustee a Company Order setting forth its election that this Indenture shall be discharged; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607 shall survive. SECTION 402. APPLICATION OF TRUST MONEY. All money and U.S. Governmental Obligations deposited with the Trustee pursuant to Section 401 (or into which such money and U.S. Governmental Obligations are reinvested) shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for payment of which such money has been deposited with the Trustee; but such money and U.S. Governmental Obligations need not be segregated from other funds except to the extent required by law. ARTICLE FIVE--REMEDIES SECTION 501. EVENTS OF DEFAULT. "Event of Default" wherever used herein means, with respect to any Issue of Securities, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), unless it is either inapplicable to a particular Series or Issue or it is specifically deleted or modified in the Authorizing Resolution and/or supplemental indenture (if any) in respect of the Series or Issue, and any other events which may be specified as Events of Default in the Authorizing Resolution and/or supplemental indenture (if any) in respect of such Series or Issue: (1) default in the payment of any installment of interest upon any Security of such Issue when it becomes due and payable, and continuance of such default for a period of 30 days; or 27

(2) default in the payment of the principal of (or premium, if any, on) any Security of such Issue at its Maturity, and, in the case of such a Security that becomes due and payable by the terms of Article Eleven, continuance of such default for a period of 30 days; or (3) default in the deposit of any Sinking Fund installment in respect of such Issue, when and as payable by the terms of Section 1201 hereof, and continuance of such default for a period of 30 days; or (4) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than (a) a covenant or warranty relating exclusively to one or more other Issues of Securities issued hereunder and (b) a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Securities of all Issues Outstanding (or, with respect to any such covenant or agreement which is not applicable to all Issues of Securities, by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of all Issues to which it is applicable) (in each case voting as a single class), a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (5) the entry of an order for relief under the United States federal bankruptcy laws or the entry of any other decree or order by a court having jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under the United States federal bankruptcy laws or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (6) the commencement by the Company of a voluntary case under the United States federal bankruptcy laws, or the institution by the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization, an arrangement with creditors or an order for relief under the United States federal bankruptcy laws or any other applicable federal or state law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or, to the knowledge of the Trustee, the taking of corporate action by the Company in furtherance of any such action. SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If any one or more of the Events of Default described in clauses (1), (2) or (3) of Section 501 with respect to Securities of any Series or Issue shall happen, then, and in each and every such case, during the continuance of any such Event of Default, either the Trustee, by notice in writing 28

to the Company, or the Holders of at least 25% in principal amount of such Securities then Outstanding, by notice in writing to the Company and to the Trustee, may declare the principal amount (or, if such Securities are Original Issue Discount Securities, such portion of the principal amount as may then be payable on acceleration as provided in the terms thereof) of and accrued and unpaid interest on all such Securities then Outstanding (if not then due and payable) to be immediately due and payable, and upon any such declaration the same shall become and be immediately due and payable, anything in this Indenture or in the Securities contained to the contrary notwithstanding. If any one or more of the Events of Default described in clause (4) of Section 501 shall happen, then, and in each and every such case, during the continuance of any such Event of Default, either the Trustee, by notice in writing to the Company, or the Holders of at least 25% in principal amount of the Securities of all Issues then Outstanding (or, if such default is not applicable to all Issues of the Securities, the Holders of at least 25% in principal amount of the Outstanding Securities of all Issues to which it is applicable) (in each case voting as a single class), by notice in writing to the Company and to the Trustee, may declare the principal amount (or, if the Securities of any such Issues are Original Issue Discount Securities, such portion of the principal amount as may then be payable on acceleration as provided in the terms of that Issue) of and accrued and unpaid interest on all the Securities (or all the Securities of such Issues, if such default is not applicable to all Issues of the Securities) then Outstanding (if not then due and payable) to be immediately due and payable, and upon any such declaration the same shall become and be immediately due and payable, anything in this Indenture or in the Securities contained to the contrary notwithstanding. If any one or more of the Events of Default described in clauses (5) or (6) of Section 501 shall happen, then, and in each and every such case, during the continuance of any such Event of Default, either the Trustee, by notice in writing to the Company, or the Holders of at least 25% in principal amount of all the Securities then Outstanding (voting as a single class), by notice in writing to the Company and to the Trustee, may declare the principal amount (or, if any Securities are Original Issue Discount Securities, such portion of the principal amount as may then be payable on acceleration as provided in the terms thereof) of and accrued and unpaid interest on all the Securities then Outstanding (if not then due and payable), to be immediately due and payable, and upon any such declaration the same shall become and be immediately due and payable, anything in this Indenture or in the Securities contained to the contrary notwithstanding. At any time after such a declaration of acceleration has been made with respect to any Securities and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of such Securities Outstanding (voting as a single class), by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration. No such rescission shall affect any subsequent default or impair any right consequent thereon. SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE. The Company covenants that if 29

(1) default is made in the payment of any installment of interest on any Security when such interest becomes due and payable and such default continues for the period of grace, if any, provided for with respect to such payment, or (2) default is made in the payment of the principal of (or premium, if any, on) any Security at its Maturity and such default continues for the period of grace, if any, provided for with respect to such payment, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of all such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest, with interest, to the extent that payment of such interest is lawful, upon the overdue principal (and premium, if any) and installments of interest from the due date thereof at the rate borne by such Securities or, in the case of Original Issue Discount Securities, at a rate equal to the Yield to Maturity thereof, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated. If an Event of Default with respect to one or more Issues of Securities occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of such Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or its or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (i) to file and prove a claim for the whole amount (or, in the case of Original Issue Discount Securities, such portion of the principal amount thereof as shall then be provable in bankruptcy as specified therein) of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and 30

(ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. SECTION 506. APPLICATION OF MONEY COLLECTED. Any money collected by the Trustee pursuant to this Article with respect to the Securities of an Issue shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities of such Issue and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due to the Trustee under Section 607; SECOND: In case the principal of the Securities in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such Issue in default in the order of the maturity of the installments of such interest, with interest (to the extent that payment of such interest is lawful and such interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) applicable to such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference; THIRD: In case the principal of the Securities in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such Issue for principal and interest, with (to the extent that payment of such interest is lawful and such interest has been collected by the Trustee) interest upon the overdue principal, and upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue 31

Discount Securities) applicable to the Securities of such Issue; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such Issue, then to the payment of such principal and interest, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Security of such Issue over any other Security of such Issue, ratably to the aggregate of such principal and accrued and unpaid interest. FOURTH: To the Company. SECTION 507. LIMITATION ON SUITS. No Holder of any Securities shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or the Securities, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) the Trustee shall have received written notice from such Holder of a continuing Event of Default in respect of such Securities; (2) the Trustee shall have received a written request from the Holders of not less than 25% in principal amount of the Outstanding Securities of the Issue or Series in respect of which the Event of Default has occurred to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Holders of a majority in principal amount of the Outstanding Securities of such Series or Issue; it being understood and intended that no one or more Holders of Securities of any Series or Issue shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Securities of that Series or Issue, or to obtain or to seek to obtain priority or preference over any other Holders of Securities of that Series or Issue or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Securities of such Series or Issue. SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the absolute and unconditional right to receive payment of the principal of (and premium, if any) and (subject to Section 308) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. 32

SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 511. DELAY OR OMISSION NOT WAIVER. No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 512. CONTROL BY HOLDERS. The Holders of not less than a majority in principal amount of the Outstanding Securities of any Series (voting as a single class) shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee in respect of the Securities of such Series, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture or unduly prejudicial to the rights of Holders of Securities of all Series not joining in such direction or, in the opinion of the Trustee, involve the Trustee in personal liability, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 513. WAIVER OF PAST DEFAULTS. The Holders of not less than a majority in principal amount of the Outstanding Securities of all Series affected thereby (voting as a single class) may on behalf of the Holders of all such Securities waive any past default hereunder and its consequences, except a default (1) in the payment of the principal of (or premium, if any) or interest on any Security, or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. 33

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 514. UNDERTAKING FOR COSTS. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of all Series (or, if the matter in issue does not relate to all Series of Securities, then the Holders of 10% in principal amount of the Outstanding Securities of all Series to which such issue relates) (treated as a single class), or to any suit instituted by any Holder of any Securities for the enforcement of the payment of the principal of (or premium, if any) or interest on any such Security on or after the respective Stated Maturities expressed therein (or, in the case of redemption, on or after the Redemption Date). SECTION 515. WAIVER OF STAY OR EXTENSION LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. SECTION 516. EXEMPTION FROM INDIVIDUAL LIABILITY. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or of any successor Person, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations of the Company, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers, directors or employees, as such, of the Company or of any successor Person, or any of the foregoing Persons, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer, director or employee, as such, because of the creation of the 34

indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities. ARTICLE SIX--THE TRUSTEE SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES. (a) Except during the continuance of an Event of Default, (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own wilful misconduct, except that (1) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of all Series (voting as a single class) relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. 35

(d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 602. NOTICE OF DEFAULTS. Within 90 days after the occurrence of any default hereunder in respect of any Issue of Securities, the Trustee shall transmit by mail to all Holders of the Securities of such Issue, as their names and addresses appear in the Security Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security or in the payment of any Sinking Fund installment, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders; and provided, further, that in the case of any default of the character specified in Section 501(4) no such notice to Holders shall be given until at least 30 days after the occurrence thereof. SECTION 603. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in Section 601: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; and 36

(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. SECTION 605. MAY HOLD SECURITIES. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Section 608, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. SECTION 606. MONEY HELD IN TRUST. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. SECTION 607. COMPENSATION AND REIMBURSEMENT. The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities. 37

SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS. The Trustee shall comply with the terms of Section 310 (b) of the TIA. There shall be excluded from the terms of Section 310(b) of the TIA the following Indentures and all series of debt securities issued thereunder: (1) the Indenture dated as of August 1, 1995 between the Company and the Trustee, formally known as Chemical Bank; (2) the Indenture dated as of September 1, 1992 between the Company and the Trustee, formally known as Chemical Bank; and (3) the Indenture of Trust dated as of August 1, 1987 between the Company and the Trustee, as successor to Manufacturers Hanover Trust Company. SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $5,000,000, subject to supervision or examination by Federal or State authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Neither the Company nor any Affiliate of the Company shall serve as Trustee hereunder. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 611. (b) The Trustee may resign at any time with respect to the Securities of any Series by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such Series. (c) The Trustee may be removed at any time with respect to the Securities of any Series (i) by Act of the Holders of a majority in principal amount of the Outstanding Securities of such Series, delivered to the Trustee and to the Company or (ii) if there shall not have occurred and be continuing a Default or Event of Default, by written notice from the Company to the Trustee. (d) If at any time: (1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or 38

(2) the Trustee for a Series of Securities shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder of such Securities, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company may remove the Trustee with respect to all Securities, or (ii) subject to Section 514, unless the Trustee's duty to resign is stayed as provided in Section 608 of this Indenture, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more Series, the Company shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those Series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such Series and that any time there shall be only one Trustee with respect to the Securities of any particular Series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any Series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such Series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee with respect to the Securities of such Series and supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any Series shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security of such Series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such Series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any Series and each appointment of a successor Trustee with respect to the Securities of any Series by mailing written notice of such event by first class mail, postage prepaid, to the Holders of Securities of such Series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such Series and the address of its Corporate Trust Office. SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) Every successor Trustee appointed hereunder with respect to all Securities shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the 39

Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for in Section 607. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) Series, the Company, the retiring Trustee, upon payment of its charges, and each successor Trustee with respect to the Securities of one or more Series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those Series to which the appointment of such successor Trustee relates, subject nevertheless to its lien, if any, provided for in Section 607. (c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the 40

execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. ARTICLE SEVEN--HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. The Company will furnish or cause to be furnished to the Trustee (a) semi-annually, not later than March 15 and September 15 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of the Securities of each Series as of the preceding March 1 or September 1, respectively, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished, provided, however, that so long as the Trustee is the Security Registrar, no such list shall be required to be furnished. SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders of Securities of each Series contained in the most recent list furnished to the Trustee in respect of such Series as provided in Section 701 and the name and addresses of Holders received by the Trustee in its capacity as Security Registrar (if so acting). The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. (b) If three or more Holders of Securities of any Series (hereinafter referred to as "applicants") apply in writing to the Trustee, and furnish the Trustee reasonable proof that each such applicant has owned a Security of such Series for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders of Securities of such Series with respect to their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either (i) afford such applicants access to the information in respect of such Series preserved at the time by the Trustee in accordance with Section 702(a), or (ii) inform such applicants as to the approximate number of Holders of Securities of such Series whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 702(a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder of Securities of such 41

Series whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 702(a) a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of said Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 702(b), regardless of the source from which such information was derived, and that neither the Trustee nor the Company shall be held accountable by reason of mailing any material pursuant to a request made under Section 702(b). SECTION 703. REPORTS BY TRUSTEE. (a) Within 60 days after May 15 of each year commencing with the first such date after the issuance of the first series of Securities hereunder, the Trustee shall transmit by mail to all Holders of Securities of each Series, as their names and addresses appear in the Security Register, a brief report dated as of such May 15, in accordance with and to the extent required by Section 313 of the TIA. (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities of such Series are listed, with the Company, and also with the Commission. The Company will notify the Trustee when the Securities of any Series are listed on any stock exchange. SECTION 704. REPORTS BY COMPANY. The Company will (1) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it will file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and 42

periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and (3) transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. ARTICLE EIGHT--CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless: (1) the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, transfer or lease the properties and assets of the Company substantially as an entirety shall be organized and existing under the laws of the United States of America or any State thereof or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event of Default, shall have happened and be continuing; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. This Section 801 shall not apply to any merger or consolidation in which the Company is the surviving corporation or to any Packaging Business Divestiture. SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or merger, or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made (1) in the case of such a transaction with respect to the Company, shall succeed to, and be substituted for, and may exercise every right and power of, the 43

Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein and (2) the Person named as the "Company" in the first paragraph of this instrument or any successor which shall theretofore have become such in the manner prescribed in this Article shall be released from its liability under this Indenture and as obligor on any of the Securities. SECTION 803. EVIDENCE TO BE FURNISHED TRUSTEE. The Trustee may receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, conveyance, transfer or lease, and any such assumption, complies with the provisions of this Article Eight. ARTICLE NINE--SUPPLEMENTAL INDENTURES SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Securities contained; or (2) to add to the covenants of the Company, for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (3) to provide for the issuance and the terms of any particular Series of Securities, the rights and obligations of the Company and the Holders of the Securities of such Series, the form or forms of the Securities of such Series and such other matters in connection therewith as the Company shall consider appropriate, including, without limitation, provisions for (a) additional or different covenants, restrictions or conditions applicable to such Series, (b) additional or different Events of Default in respect of such Series, (c) a longer or shorter period of grace and/or notice in respect of any provision applicable to such Series than is provided in Section 501, (d) immediate enforcement of any Event of Default in respect of such Series or (e) limitations upon the remedies available in respect of any Events of Default in respect of such Series or upon the rights of the holders of Securities of such Series to waive any such Event of Default; provided, that this paragraph (3) shall not be deemed to require the execution of a supplemental indenture to provide for the issuance of any Series of Securities unless the same shall be provided for in the Authorizing Resolution relating thereto; and (4) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); and (5) to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein; and 44

(6) to make any other change which, in the opinion of counsel to the Company, does not materially adversely affect the interests of the Holders of the Series of Securities affected thereby. SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of all Series affected thereby (voting as a single class), by Act of said Holders delivered to the Company and the Trustee, the Company and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of such Securities under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security which would be due and payable upon acceleration under Section 502 or provable in bankruptcy under Section 504, or change the coin or currency in which any Security or any interest thereon is payable or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or (2) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 513 or Section 1010, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security affected thereby. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular Series of Securities, or which modifies the rights of the Holders of Securities of such Series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other Series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is 45

authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT. Unless the Company shall determine, based on an Opinion of Counsel delivered to the Trustee, that the same shall not be required, every supplemental indenture executed pursuant to this Article shall conform to the requirements of TIA as then in effect. SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Authenticating Agent in exchange for Outstanding Securities of the same Series and Issue. ARTICLE TEN--COVENANTS SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company will duly and punctually pay (or cause to be paid) the principal of (and premium, if any) and interest on the Securities of each Series in accordance with the terms of such Securities and this Indenture. The principal of (and premium, if any) and interest on Securities shall be considered paid on the date due if the Paying Agents hold in accordance with this Indenture on that date money, sufficient to pay all principal (and premium, if any) and interest then due and the Paying Agents are not prohibited from paying such money to the Holders on such date pursuant to the terms of this Indenture. SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. Except as otherwise provided in the Authorizing Resolution in respect of any Series, the Company will maintain an office or agency in The Borough of Manhattan, The City of New York, where Securities may be presented or surrendered for payment, and will maintain an office or agency in The Borough of Manhattan, The City of New York, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company initially appoints the Trustee as such agent at its Corporate Trust Office for said purposes. The Company will give prompt written notice to the Trustee of any change in the location of such office or agency. If at any time the Company shall fail to maintain such office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and 46

demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies (in or outside of such Borough) where the Securities may be presented or surrendered for any or all of such purposes, and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in such Borough for such purposes. SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST; APPOINTMENT OF PAYING AGENT. If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents, it will, on or before each due date of the principal of (and premium, if any) or interest on any Securities, deposit with a Paying Agent a sum, or make other arrangements so that there will be moneys, in each case sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal (and premium, if any) or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company initially appoints the Trustee as Paying Agent. The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal (and premium, if any) or interest; and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. 47

Any money deposited with the Trustee or any Paying Agent or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease. SECTION 1004. STATEMENT AS TO DEFAULT. The Company will deliver to the Trustee, on or before a date not more than four months after the end of each fiscal year (which on the date hereof ends on December 31) of the Company ending after the date hereof, a statement (which shall not be deemed an Officers' Certificate and need not conform with any of the provisions of Section 102) signed by the principal executive officer, principal financial officer or principal accounting officer of the Company, stating that in the course of the performance by the signers of their duties as officers of the Company and based upon a review made under their supervision of the activities of the Company during such year and of the Company's performance under this Indenture they would normally obtain knowledge whether or not the Company is in default in the performance of any covenant or agreement set forth in the Indenture, stating whether or not they have obtained knowledge that the Company is in default in the performance of any such covenant or agreement and, if so, specifying each such default of which the signers have knowledge and the nature thereof. SECTION 1005. CORPORATE EXISTENCE. Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders of the Securities. SECTION 1006. LIMITATION UPON LIENS. (a) The Company will not create, assume, guarantee or suffer to exist, and will not cause, suffer or permit any Restricted Subsidiary to create, assume, guarantee or suffer to exist, any indebtedness for borrowed money secured by pledge of, or mortgage or lien on, any of its Principal Plants, or on any capital stock of any Restricted Subsidiary, other than (i) purchase money pledges of, or purchase money mortgages or liens on, property acquired (including through merger or consolidation) after the date of execution of this Indenture, so long as such pledges, mortgages and liens shall attach only to the assets so acquired and improvements thereon, (ii) pledges, mortgages or liens on property acquired after the date of execution of this Indenture (1) existing at the time of acquisition of such property (including through merger or consolidation) or (2) which secure indebtedness the proceeds of which are used to pay, or to reimburse the Company or any Restricted Subsidiary for, the cost of the acquisition or construction of such property, 48

(iii) pledges of or mortgages or liens on property of a Restricted Subsidiary existing at the time it becomes a Restricted Subsidiary, (iv) pledges, mortgages or liens to secure all or any part of the cost of development or construction of any property or assets or improvements thereon and which shall be released or satisfied within 120 days after completion of such development or construction, (v) pledges, mortgages or liens required in connection with the acquisition, construction or development of additions or extensions to Principal Plants which shall be financed by obligations described in Sections 141-145 of the Internal Revenue Code of 1986, as amended, or by obligations entitled to substantially similar tax benefits under other legislation or regulations in effect from time to time, (vi) pledges, mortgages or liens securing indebtedness owing to the Company or a Restricted Subsidiary by a Restricted Subsidiary, (vii) pledges, mortgages or liens existing at the date of this Indenture, (viii) extensions, renewals or replacements of pledges, mortgages or liens referred to in clauses (i) to (vii), inclusive, above, or (xi) below, provided that the amount of indebtedness secured by such extension, renewal or replacement shall not exceed the principal amount of indebtedness being extended, renewed or replaced, nor shall the pledge, mortgage or lien be extended to any additional Principal Plant, (ix) as permitted under Subsection (b) or Subsection (d) of this Section 1006, (x) pledges, mortgages or liens incurred in connection with sale-leaseback transactions permitted under Section 1007, and (xi) pledges, mortgages or liens required in connection with any program, law, statute or regulation of any state or local governmental entity or authority which provides financial or tax benefits not available without such pledge, mortgage or lien, provided that substantially all of the obligations secured thereby are obligations that are in lieu of, or reduce, a property tax or other payment obligation that itself would have been secured by a pledge, mortgage or lien permitted hereunder, without effectively providing that the Securities (together with, if the Company shall so determine, any other indebtedness of the Company then existing or thereafter created ranking equally with the Securities and any other indebtedness of the Restricted Subsidiary then existing or thereafter created) shall be secured by the security of such secured indebtedness equally and ratably therewith. (b) If the Company or any Restricted Subsidiary shall at any time enter into a merger or consolidation with another corporation or purchase all or substantially all of the assets of another corporation, or if the Company shall sell all or substantially all of its assets to another corporation and if such other corporation has outstanding indebtedness secured by a mortgage or other lien which, by reason of an after-acquired property clause or similar provision therein contained, would extend, after such merger, consolidation, sale or purchase, to any Principal Plant owned by the Company or such Restricted Subsidiary immediately prior to such merger, consolidation, sale or purchase, or to the capital stock of a Restricted Subsidiary, the Company or such Restricted Subsidiary, as the case may be, shall in such event be deemed to have created a mortgage or lien, 49

within the prohibition of Subsection (a) of this Section 1006, unless (i) such merger or consolidation involving a Restricted Subsidiary shall constitute a disposition by the Company of its interest in the Restricted Subsidiary, or (ii) either (A) at or prior to the effective date of such merger, consolidation, sale or purchase, such mortgage or lien shall have been released of record or otherwise satisfied to the extent it would extend to such Principal Plant or (B) prior to such merger, consolidation, sale or purchase, the Company or such Restricted Subsidiary, as the case may be, shall have created, as security for the Securities (and, if the Company shall so determine, as security for any other indebtedness of the Company then existing or thereafter created ranking equally with the Securities and any other indebtedness of the Restricted Subsidiary then existing or thereafter created), a valid lien which, upon completion of said merger, consolidation, sale or purchase, will rank prior to the lien of such mortgage or other lien of such other corporation on such Principal Plant or such capital stock of Restricted Subsidiaries. (c) If pursuant to the provisions of this Section 1006 the Company or any Restricted Subsidiary shall at any time be obligated to secure the Securities (together with, if the Company shall so determine, any other indebtedness then existing or thereafter created ranking equally with the Securities and any other indebtedness of the Restricted Subsidiary then existing or thereafter created), the Company covenants and agrees that it will promptly furnish to the Trustee (i) an Officers' Certificate stating that the applicable covenant of the Company above set forth in this Section 1006 has been complied with; and (ii) an Opinion of Counsel to the effect that such covenant has been complied with. (d) Notwithstanding the foregoing provisions of this Section 1006, the Company and any one or more Restricted Subsidiaries may create, assume, guarantee or suffer to exist any indebtedness for borrowed money otherwise subject to the foregoing restrictions and in addition to that permitted by Subsection (a) or (b) of this Section 1006 (other than pursuant to clause (x) of said Subsection (a)), and renew, extend or replace such indebtedness for money borrowed; provided, that, at the time of such creation, assumption, guarantee, sufferance, renewal, extension or replacement, the aggregate principal amount of such indebtedness for money borrowed, when added to the fair market value of property transferred in sale-leaseback transactions and not reacquired at such time as permitted by Section 1007(c) and the aggregate principal amount of indebtedness for borrowed money created, assumed, guaranteed or permitted to exist as permitted by Section 1008(b) (computed without duplication of amounts constituting indebtedness referred to in this Subsection (d)), does not at the time exceed 10% of Net Tangible Assets. SECTION 1007. SALE-LEASEBACK TRANSACTIONS RELATING TO PRINCIPAL PLANTS. (a) Except to the extent permitted under Subsection (c) of this Section 1007, and except for any transaction involving a lease for a temporary period, not to exceed three years, by the end of which it is intended that the use of the leased property by the Company or any Restricted Subsidiary will be discontinued and except for any transaction with a state or local authority that is required in connection with any program, law, statute or regulation that provides financial or tax benefits not available without such transaction, the Company shall not sell any Principal Plant as an entirety, or any substantial portion thereof, with the intention of taking back a lease of such property and the Company will not permit any Restricted Subsidiary to sell to anyone other than the Company or a Restricted Subsidiary any Principal Plant as an entirety, or any substantial portion thereof, with the intention of taking back a lease of such property unless 50

(i) the net proceeds of such sale (including any purchase money mortgages received in connection with such sale) are at least equal to the fair market value (as determined by an officer of the Company) of such property and (ii) subject to Subsection (d) of this Section 1007, the Company shall, within 120 days after the transfer of title to such property (or, if the Company holds the net proceeds described below in cash or cash equivalents, within two years) (A) purchase, and surrender to the Trustee for retirement as provided in this Section 1007, a principal amount of Securities equal to the net proceeds derived from such sale (including the amount of any such purchase money mortgages), or (B) repay other Funded Debt of the Company or any Restricted Subsidiary in an amount equal to such net proceeds, or (C) expend an amount equal to such net proceeds for the expansion, construction or acquisition of a Principal Plant, or (D) effect a combination of such purchases, repayments and plant expenditures in an amount equal to such net proceeds. (b) At or prior to the date 120 days after a transfer of title to a Principal Plant which shall be subject to the requirements of this Section 1007, the Company shall furnish to the Trustee: (i) an Officers' Certificate stating that the covenant of the Company in Section 1007(a) has been complied with and setting forth in detail the manner of such compliance, which certificate shall contain information as to (A) the amount of Securities theretofore redeemed and the amount of Securities theretofore purchased by the Company and cancelled by the Trustee and the amount of Securities purchased by the Company and then being surrendered to the Trustee for cancellation, (B) the amount thereof previously credited under Subsection (d) of this Section 1007, (C) the amount thereof which it then elects to have credited on its obligation under Subsection (d) of this Section 1007, and (D) any amount of other indebtedness which the Company has repaid or will repay and of the expenditures which the Company has made or will make in compliance with its obligation under Subsection (a) of this Section 1007, (ii) a deposit with the Trustee for cancellation of the Securities then being surrendered as set forth in such certificate; and (iii) an Opinion of Counsel to the effect that such covenant has been complied with. (c) Notwithstanding the restriction of Subsection (a) of this Section 1007, the Company and any one or more Restricted Subsidiaries may transfer property in sale-leaseback transactions which would otherwise be subject to such restriction if the aggregate amount of the fair market value of the property so transferred and not reacquired at such time, when added to the aggregate principal amount of indebtedness for borrowed money permitted by Section 1006(d) and Section 1008(b) which shall be outstanding at the time (computed without duplication of the value of property transferred as provided in this Subsection (c)), does not at the time exceed 10% of Net Tangible Assets. (d) The Company, at its option, shall be entitled to a credit, in respect of its obligation to purchase and retire Securities under this Section 1007, for the principal amount of any Securities 51

deposited with the Trustee for the purpose and also for the principal amount of (i) any Securities theretofore redeemed at the option of the Company and (ii) any Securities previously purchased by the Company and cancelled by the Trustee, and in each case not theretofore applied as a credit under this Subsection (d) or Section 1202. (e) For purposes of this Section 1007, the amount or the principal amount of Securities which are Original Issue Discount Securities shall be the principal amount of said Original Issue Discount Securities that on the date of the purchase or redemption of such Securities referred to in this Section could be declared to be due and payable pursuant to Section 502. SECTION 1008. LIMITATION UPON FUNDED DEBT OF RESTRICTED SUBSIDIARIES. (a) The Company will not permit any Restricted Subsidiary to create, assume or permit to exist any Funded Debt other than (A) Funded Debt secured by a mortgage, pledge or lien which is permitted to such Restricted Subsidiary under the provisions of Section 1006, (B) Funded Debt owed to the Company or any Restricted Subsidiary, (C) Funded Debt of a corporation existing at the time it becomes a Restricted Subsidiary, (D) Funded Debt created in connection with, or with a view to, compliance by such Restricted Subsidiary with the requirements of any program, law, statute or regulation of any federal, state or local governmental authority, which is applicable to such Restricted Subsidiary and which provides financial or tax benefits to such Restricted Subsidiary which are not available directly to the Company or available directly to the Company only on terms which the Company determines are not as favorable as those available to the Restricted Subsidiary and (E) guarantees existing at the date of this Indenture. (b) Notwithstanding the provisions of paragraph (a) of this Section 1008, any Restricted Subsidiary may create, assume or permit to exist any Funded Debt in addition to that permitted by paragraph (a) of this Section 1008, and renew, extend or replace such Funded Debt, provided that at the time of such creation, assumption, renewal, extension or replacement, and after giving effect thereto, the aggregate principal amount of such Funded Debt which would otherwise be subject to the foregoing restriction, together with the aggregate principal amount of indebtedness for borrowed money permitted by Subsection (d) of Section 1006 and the aggregate amount of the fair market value of property transferred in sale-leaseback transactions and not reacquired at such time as permitted by Subsection (c) of Section 1007 (computed without duplication of amounts) does not at the time exceed 10% of Net Tangible Assets. SECTION 1009. MAINTENANCE OF INSURANCE. The Company will cause its property and the property of each Subsidiary to be insured at all times against loss from damage or destruction by fire and other risks to the extent and in such manner as is customary for companies comparable in size to the Company and conducting businesses similar in size and nature to the businesses carried on by the Company from time to time; provided, however, that the Company and each of its Subsidiaries may adopt (in lieu of or supplementing such insurance) any other or supplemental plan or method of protection against loss, including self-insurance plans, as may be determined by the Company to be in the overall best interests of the Company from time to time. SECTION 1010. WAIVER OF CERTAIN COVENANTS. The Company may omit in any particular instance to comply with any covenant or condition set forth in Sections 1005 to 1009, inclusive, and any other covenant or condition set forth in any 52

Authorizing Resolution or supplemental indenture for the benefit of the Holders of the Securities or any particular Series of Securities, if the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of all Series which are entitled to the benefits thereof (voting as a single class) shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. ARTICLE ELEVEN--REDEMPTION OF SECURITIES SECTION 1101. RIGHT OF REDEMPTION. Redeemable Securities may be redeemed otherwise than through the operation of the Sinking Fund provided for in Article Twelve at the election of the Company at the times, on the conditions and at the Redemption Prices specified therein, in (or pursuant to) the Authorizing Resolution relating thereto and in the supplemental indenture (if any) executed in connection with the issuance of such Securities, any Redemption Price to be accompanied by accrued interest to the Redemption Date. SECTION 1102. APPLICABILITY OF ARTICLE. Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision referred to in Section 1101, shall be made in accordance with such provision and this Article. SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or set forth in an Officers' Certificate which states that such election has been duly authorized by all requisite corporate action on the part of the Company. In case of any redemption at the election of the Company of less than all of the Securities the Company shall, at least 50 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of the Series or Issue or the several Series or Issues, as the case may be, to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If less than all the Securities of any Series or Issue are to be redeemed, the particular Securities of such Series or Issue to be redeemed shall be selected not more than 90 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such Series or Issue not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination of the Series or Issue or any integral multiple thereof) of the principal amount of such Securities of a denomination larger than such minimum denomination. If the Company shall so specify, Securities held by the Company or any Subsidiary shall not be included in the Securities selected for redemption. 53

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed. SECTION 1105. NOTICE OF REDEMPTION. Notice of redemption shall be given by first class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all Outstanding Securities of the Series or Issue are to be redeemed, the identification (and, in the case of partial redemption, the principal amount) of the particular Securities to be redeemed, (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security, and that interest thereon shall cease to accrue on and after said date, (5) that the redemption is for a Sinking Fund, if such is the case; and (6) the place or places where such Securities are to be surrendered for payment of the Redemption Price. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name of and at the expense of the Company. SECTION 1106. DEPOSIT OF REDEMPTION PRICE. On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) any accrued interest on, all the Securities or portions thereof which are to be redeemed on that date. SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price thereof and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be 54

payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Regular or Special Record Date according to their terms and the provisions of Section 308. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid or duly provided for, bear interest from the Redemption Date at the rate borne by the Security or, in the case of Original Issue Discount Securities, at a rate equal to the Yield to Maturity thereof. SECTION 1108. SECURITIES REDEEMED IN PART. Any Security which is to be redeemed only in part shall be surrendered at the office or agency of the Company maintained for that purpose pursuant to Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute and the Authenticating Agent shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities of the same Issue, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered; except that if a Global Security is so surrendered, the Company shall execute, and the Trustee shall authenticate, upon Company Order, and deliver to the Depositary for such Global Security without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed portion of the principal amount of the Global Security so surrendered. ARTICLE TWELVE--SINKING FUND SECTION 1201. SINKING FUND PAYMENTS. As and for a Sinking Fund for the retirement of Sinking Fund Securities, the Company will, until all such Securities are paid or payment thereof is duly provided for, deposit in accordance with Section 1106, at such times and subject to such terms and conditions as shall be specified in the provisions of such Securities and the Authorizing Resolution and supplemental indenture (if any) relating thereto, such amounts in cash as shall be required or permitted under such provisions in order to redeem Securities on the specified Redemption Dates at a Redemption Price equal to their principal amounts, less in each such case the amount of any credit against such payment received by the Company under Section 1202. Each such Sinking Fund payment shall be applied to the redemption of Securities on the specified Redemption Date as herein provided. SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The Company (1) may deliver Securities of the same Issue (other than any previously called for redemption or theretofore applied as a credit against a Sinking Fund payment or as a credit under Section 1007(d)) and (2) may apply as a credit Securities of the same Issue redeemed at the election of the Company pursuant to Section 1101 or through the operation of the Sinking Fund in any period in excess of the minimum amount required for such period under Section 1201 or the provisions relating to such Issue referred to in Section 1201 and not theretofore applied as a credit against a Sinking Fund payment or a credit under Section 1007(d), in each case in satisfaction of all or any part of any Sinking Fund payment required to be made pursuant to 55

Section 1201. Each such Security so delivered or applied shall be credited for such purpose by the Trustee at a Redemption Price equal to its principal amount and the required amount of such Sinking Fund payment shall be reduced accordingly. SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND. If in any year the Company shall elect to redeem in excess of the minimum principal amount of Securities required to be redeemed pursuant to Section 1201 or to satisfy all or any part of any Sinking Fund payment by delivering or crediting Securities pursuant to Section 1202, then at least 60 days prior to the date on which the Sinking Fund payment in question shall be due (or such shorter period as shall be approved by the Trustee), the Company shall deliver to the Trustee an Officers' Certificate specifying the amount of the Sinking Fund payment and the portions thereof which are to be satisfied by payment of cash, by delivery of Securities or by crediting Securities, and, at least 45 days prior to the Sinking Fund payment date (or such shorter period as shall be approved by the Trustee), will also deliver to the Trustee the Securities to be so delivered. Such Officers' Certificate shall also state that the Securities forming the basis of any such credit do not include any Securities which have been redeemed through the operation of the Sinking Fund in the minimum amount required under Section 1201, previously credited against any Sinking Fund payment or credited in accordance with Section 1007(d). The Trustee shall, upon the receipt of such Officers' Certificate (or, if it shall not have received such an Officers' Certificate at least 60 days prior to the Sinking Fund payment date, then following such 60th day), select the Securities to be redeemed upon the next Sinking Fund payment date, in the manner specified in Section 1104, and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1105. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1107 and 1108. ARTICLE THIRTEEN--DEFEASANCE AND COVENANT DEFEASANCE SECTION 1301. DEFEASANCE. Upon satisfaction of the applicable conditions specified in Section 1303, the Company shall be discharged from all of its obligations under the Securities and under this Indenture with respect to the Securities, except for its obligations under Sections 304, 306, 307, 607, 1002 and 1003 and this Article Thirteen (referred to below as a "Defeasance"). SECTION 1302. COVENANT DEFEASANCE. Upon satisfaction of the applicable conditions specified in Section 1303, the Company shall be released from its obligations under Article Eight and Sections 1005 through 1009, inclusive, with respect to the Securities and the occurrence of an event specified in Section 501(4) (with respect to Article Eight or any of said Sections 1005 through 1009, inclusive) shall not be deemed to be an Event of Default with respect to the Securities (referred to below as a "Covenant Defeasance"). Such Covenant Defeasance means that, with respect to the Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section, whether directly or indirectly by reason of any reference in this Indenture or in any other document to any such Section, and that the Securities shall thereafter be deemed not to be Outstanding for the purposes of any direction, 56

waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with the provisions of Article Eight and Sections 1005 through 1009, inclusive, but shall continue to be deemed Outstanding for all other purposes hereunder. SECTION 1303. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The following shall be the conditions to application of either Section 1301 or Section 1302 to the Securities of any Series: (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (which term, for purposes of this Article, shall also refer to another trustee satisfying the requirements of Section 609 who shall agree to comply with the applicable provisions of this Article) in trust for the Holders of such Securities (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms, and with no further reinvestment, will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the principal of (and premium, if any) and interest on such Securities at or before the Stated Maturity thereof (and to redeem any Sinking Fund Securities required to be redeemed prior to such payment and discharge) in accordance with this Indenture and such Securities. Notwithstanding the foregoing, in the case of any Redeemable Securities which are to be redeemed prior to their respective Stated Maturities, no deposit under this paragraph shall be deemed sufficient to pay and discharge such Securities as aforesaid until proper notice of such redemption shall have been given in accordance with Article XI of this Indenture or irrevocable instructions shall have been given to the Trustee to give such notice. (2) The Company shall have delivered to the Trustee an Opinion of Counsel stating that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of such deposit, Defeasance or Covenant Defeasance and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit, Defeasance or Covenant Defeasance had not occurred. (3) The Company shall have delivered to the Trustee an Officers' Certificate to the effect that such Securities, if then listed on any securities exchange, will not be delisted as a result of such deposit. (4) No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to such Securities shall have occurred and be continuing on the date of such deposit or, insofar as any event described in Section 501(5) or (6), at any time prior to the 91st day after such deposit. (5) Such deposit, Defeasance or discharge shall not result in a violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound. (6) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company as defined in the Investment Company Act of 1940, as amended, or such trust shall be qualified under such act or exempt from regulation thereunder. 57

(7) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest under the TIA with respect to any Securities of the Company or any guarantor. (8) The Company shall have delivered to the Trustee (i) an Officers' Certificate stating that all conditions precedent provided for relating to such Defeasance, discharge or deposit have been complied with, and (ii) an Opinion of Counsel stating that all conditions precedent provided for relating to such Defeasance, discharge or deposit have been complied with. SECTION 1304. APPLICATION OF FUNDS. Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 1303 in respect of one or more Series of Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay (in addition to any U.S. Government Obligations deposited pursuant to Section 1303), and indemnify the Trustee against, any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1303 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Securities for which such deposit is made. Anything in this Article Thirteen to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1303 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Defeasance or Covenant Defeasance. SECTION 1305. REINSTATEMENT. If the Trustee or the Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 1304 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Securities of such Series shall be revived and reinstated as though no deposit had occurred pursuant to this Article Thirteen until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 1304; provided, however, that if the Company makes any payment of principal of and any premium or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of the Securities of such Series to receive such payment from the money held by the Trustee or the Paying Agent. 58

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be as original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the day and year first above written.
ANHEUSER-BUSCH COMPANIES, INC. THE CHASE MANHATTAN BANK, Trustee By: /s/ ROBERT S. PESCHLER -----------------------------Robert S. Peschler Assistant Vice President

By: /s/ WILLIAM J. KIMMINS, JR. ---------------------------------William J. Kimmins, Jr. Vice President and Treasurer

59

Exhibit 10.4 ANHEUSER-BUSCH COMPANIES, INC. 1989 INCENTIVE STOCK PLAN (AS AMENDED DECEMBER 20, 1989, DECEMBER 19, 1990, DECEMBER 15, 1993, DECEMBER 20, 1995, AND NOVEMBER 26, 1997) SECTION 1. PURPOSE. The purpose of the Plan is to attract, retain, motivate and reward employees of the Company, its Subsidiaries and Affiliates with compensatory arrangements that involve Options and SARs. SECTION 2. DEFINITIONS. (a) "Act" means the Securities Exchange Act of 1934, as amended from time to time. (b) "Affiliate" means any entity in which the Company has a substantial direct or indirect equity interest (other than a Subsidiary), as determined by the Committee. (c) "Board" means the Board of Directors of the Company. (d) "Code" means the Internal Revenue Code as in effect from time to time. (e) "Committee" means the Stock Option Committee described in Section 12 hereof. (f) "Company" means Anheuser-Busch Companies, Inc. and its successors. (g) "Disability" means the condition of being "disabled" within the meaning of Section 422(c)(6) of the Code or any successor provision. (h) "Eligible Employee" means a person who is eligible to receive an option under Section 4 of the Plan. (i) "Employer" means the Company, the Subsidiary, or the Affiliate which employs the Optionee. (j) "Fair Market Value" of Stock on a given date means (i) the average of the highest and lowest selling prices per share of Stock reported on the New York Stock Exchange Composite Tape or similar facility for such date, (ii) if Stock is not listed on the New York Stock Exchange, the average of the highest and lowest selling prices per share of Stock as reported for such date on the principal stock exchange in the U.S. on which Stock is listed (as determined by the Committee), or (iii) if neither of the preceding clauses is applicable, the value per share determined by the Committee in a manner consistent with the Treasury Regulations under Section 2031 of the Internal Revenue Code. If no sale of Stock occurs on such date, but there were sales reported within a reasonable period both before and after such date, the weighted average of the means between the highest and lowest selling prices on the nearest date before and the nearest date after such date shall be used, with the average to be weighted inversely by the respective numbers of trading days between the selling dates and such date.

(k) "ISO" or "Incentive Stock Option" means an option to purchase Stock which is designated by the Committee as an "Incentive Stock Option" and which qualifies as an "incentive stock option" under Section 422 (or any successor provision) of the Code. (l) "Limited Right" has the meaning given in Section 7. (m) "NQSO" or "Non-Qualified Stock Option" means an option to purchase Stock which is designated by the Committee as a "Non-Qualified Stock Option," or which is designated by the Committee as an ISO but which fails or ceases to qualify as an "incentive stock option" under the Code. (n) "Option" means an ISO or an NQSO. (o) "Option Agreement" means the written agreement referred to in Section 5(a) between the Company and the Optionee evidencing an Option or SAR. (p) "Optionee" means a person to whom an Option or SAR is granted pursuant to the Plan. (q) "Plan" means the Anheuser-Busch Companies, Inc. 1989 Incentive Stock Plan, as amended from time to time. (r) "Reporting Person," as of a given date, means an Optionee who would be required to report a purchase or sale of Stock occurring on such date to the Securities and Exchange Commission pursuant to Section 16(a) of the Act and the rules and regulations thereunder. (s) "Rule 16b-3" means Rule 16b-3 (as amended from time to time) promulgated by the Securities and Exchange Commission under the Act, and any successor thereto, as in effect as to the Plan. (t) "SAR" means a stock appreciation right, which is the right to receive cash, Stock, or other property having a value on the date the SAR is exercised equal to (i) the excess of the Fair Market Value of one share of Stock on the exercise date over (ii) the base price of the SAR. The term "SAR" does not include a Limited Right. (u) "Stock" means shares of the common stock of the Company, par value $1.00 per share, or such other class or kind of shares or other securities as may be applicable under Section 10. (v) "Subsidiary" means a "subsidiary corporation" of the Company as defined in Section 424 (or any successor provision) of the Code. (w) "Withholding Taxes" means, in connection with an Option or SAR (including without limitation the receipt of Stock pursuant to the exercise of an NQSO or SAR or the disposition of ISO shares), (a) the total amount of Federal and state income taxes, social security taxes and other taxes which the Employer of the Optionee is required to withhold ("Required Withholding Taxes") plus (b) any other such taxes which the Employer, in its sole discretion, withholds at the request of the Optionee. SECTION 3. MAXIMUM SHARES. (a) The maximum number of shares of Stock which may be issued to Eligible Employees pursuant to Options and SARs under the Plan shall be 44,000,000 shares, subject to adjustment as provided in Section 10. For this purpose: 2

(i) Only shares actually issued pursuant to the grant or exercise of an Option or SAR shall be counted against the Plan maximum. (ii) Except to the extent prohibited by Rule 16b-3, Shares which are forfeited by an Optionee after issuance shall be deemed to have never been issued under the Plan and accordingly shall not be counted against the Plan maximum. (iii) The number of shares available for the grant of new Options and SARs at any particular time shall be (A) the maximum number of shares specified above (as adjusted), minus (B) the sum of the number of shares issued under the Plan prior to that time and the number of shares issuable upon exercise of Options and SARs outstanding at that time. In its discretion, the Company may issue treasury shares or authorized but previously unissued shares. (b) Notwithstanding paragraph (a) above, the maximum number of shares for which ISOs may be granted under the Plan shall be 44,000,000 shares, subject to adjustment as provided in Section 10, regardless of the fact that a lesser number of shares is issued pursuant to the exercise of ISOs. (c) Shares issued under other plans of the Company shall not be counted against the Plan maximum. (d) Notwithstanding any other provisions of this Plan, the maximum number of options that may be granted to any Eligible Employee during any calendar year shall be 500,000, subject to adjustment as provided in Section 10. SECTION 4. ELIGIBILITY. Officers and management employees of the Company, Subsidiaries or Affiliates shall be eligible to receive Options and SARs under the Plan. A Director of the Company or a Subsidiary or an Affiliate shall be eligible only if he or she also is an officer or employee of the Company, a Subsidiary or an Affiliate. Notwithstanding the foregoing, persons employed only by Affiliates shall not be eligible to receive ISOs. SECTION 5. OPTION AND SAR GRANTS. (a) Subject to the limitations in this Plan, the Committee may cause the Company to grant Options and/or SARs to such Eligible Employees, at such times, in such amounts, for such periods, becoming exercisable at such times, with such option prices or base prices, and subject to such other terms, conditions, and restrictions as the Committee deems appropriate. Each Option or SAR shall be evidenced by a written Option Agreement between the Company and the Optionee. In granting an Option or SAR, the Committee may take into account any factor it deems appropriate and consistent with the purpose of the Plan. Options and/or SARs may be granted as additional compensation to the Optionee, or in lieu of other compensation. The Committee may delegate to officers of the Company from time to time the authority to determine the sizes, dates, and other terms and conditions of Options and/or SARs granted hereunder, provided that (i) the Committee may impose such limitations and conditions upon any such delegated authority as it deems appropriate, and (ii) the Committee may not delegate any such authority with respect to Options or SARs granted to a Reporting Person. 3

(b) Options and SARs may be granted separately or as alternatives to each other, except that (i) Options and SARs shall be granted as alternatives to each other only if the option prices and the base prices are equal, (ii) Limited Rights shall not be granted separately, and shall be granted only as alternatives to Options and/or SARs, (iii) SARs and/or Limited Rights which are alternatives to ISOs may be granted only at the same time the ISO is granted, and (iv) SARs which are alternatives to Options, and Limited Rights which are alternatives to Options or SARs, shall expire or erminate at the same time as the Option or SARs to which they are alternatives. (c) All or any portion of any payment to an Optionee whether in cash or shares of Stock, may be deferred to a later date if and as provided in the Option Agreement. Deferrals may be for such periods and upon such terms and conditions (including the provision of interest, dividend equivalents, or other return on such amounts) as the Committee may determine. (d) Option Agreements may contain any provision approved by the Committee, not inconsistent with Section 9, relating to the period for exercise after termination of employment, death or Disability. (e) Option Agreements may, in the discretion of the Committee, contain a provision permitting an Optionee to designate the person who may exercise an Option or SAR upon the Optionee's death, either by Will or by appropriate notice to the Company. (f) Notwithstanding any other provision of this Section 5, (i) no Option or SAR shall contain a so-called reload feature under which Options or SARs are automatically granted to Optionees upon exercise of Options or SARs, and (ii) no Option or SAR shall be granted in exchange for a so-called underwater Option or SAR which has an option price or base price in excess of the Fair Market Value of the Stock (nor shall an underwater Option or SAR be amended to reduce its option price or base price). SECTION 6. PROVISIONS GOVERNING OPTIONS AND SARS. (a) If Options and SARS are alternatives to each other, the exercise of all or part of one automatically shall cause an immediate equal and corresponding termination of the other. (b) An Optionee shall have none of the rights of a shareholder with respect to shares of Stock subject to his or her Option or SAR until shares are issued in his or her name. (c) Nothing in the Plan or any Option Agreement shall confer on any person any right or expectation to continue in the employ of his or her Employer, or shall interfere in any manner with the absolute right of the Employer to change or terminate such person's employment at any time for any reason or for no reason. (d) The Committee may provide in Option Agreements for the transferability of NQSOs, SARs, and Limited Rights (other than SARs and Limited Rights which are alternatives to ISOs). Transferability may be subject to such conditions and limitations as the Committee deems appropriate; provided, however, that SARs and Limited Rights which are alternatives to NQSOs may be transferred only in tandem with such NQSOs. Except to the extent otherwise expressly set forth in the Option Agreement or expressly permitted by the Committee in writing in accordance with the foregoing, Options, SARs, and Limited Rights shall not be transferable other than by will or the laws of descent and distribution, and shall be exercisable during the Optionee's lifetime only by the Optionee or his or 4

her guardian or legal representative. The Committee shall determine the extent to which limitations, covenants, and other provisions in the Option Agreements and this Plan apply or relate to the original Optionee, his or her transferee(s), or all of them. (e) Except as provided in Section 10(b), (A) the option price per share of an Option or the base price of an SAR shall not be less than Fair Market Value on the Option's or the SAR's grant date, nor less than the par value of a share of Stock, except that an SAR which is an alternative to an Option but which is granted at a later time may have a base price equal to the option price even though the base price is less than Fair Market Value on the date the SAR is granted. (f) The grant of an Option and the Option Agreement for an Option must clearly identify the Option as either an ISO or as an NQSO. (g) In the case of an SAR, the Option Agreement may specify the form of payment of SARs or may provide that the form is to be determined at a later date, and may require the satisfaction of any rules or conditions in connection with receiving payment in any particular form. If the Optionee is a Reporting Person at the time of grant or during the SAR's term and is given an election to receive cash in full or partial settlement of an SAR, the Committee shall have sole discretion to approve or disapprove such election at any time after it is made. SECTION 7. LIMITED RIGHTS. (a) The Committee shall have authority to grant limited stock appreciation rights ("Limited Rights") to the holder of any Option or SARs granted under the Plan (the "Related Option or SAR") with respect to all or some of the shares of Stock covered by such Related Option or SAR. A Limited Right may be granted either at the time of grant of the Related Option or SAR or (except in the case of an ISO) at any time thereafter during its term. A Limited Right may be granted to an Optionee with respect to Options irrespective of whether such Optionee is being granted or has been granted an SAR. Limited Rights shall be transferable only when the Related Option or SAR is transferable and under the same conditions, and shall be exercisable during the Optionee's lifetime only by the Optionee or his or her guardian or legal representative. If an ISO is a Related Option to Limited Rights, the Limited Rights may be exercised only if the Fair Market Value per share of Stock on the exercise date exceeds the option price per share of the ISO. A Limited Right may be exercised only during the sixty-day period beginning on an "Acceleration Date" (as defined in Section 11(a) hereof); provided, however, that if the Acceleration Date occurs within the six month period following the grant of the Limited Right or the grant of the Related Option or SAR, whichever is applicable as provided below, to a Reporting Person, then the Limited Right will be exercisable by the Reporting Person for a period of thirty days following expiration of such sixmonth period, or, if earlier, thirty days following the Optionee's death or Disability. Each Limited Right shall be exercisable only if, and to the extent that, the Related Option or SAR is exercisable (ignoring paragraph (j) below). Notwithstanding the provisions of the two immediately preceding sentences, no Limited Right may be exercised by a Reporting Person until the expiration of six months from the 5

date of grant of the Limited Right unless otherwise permitted by Rule 16b-3 in the case of an SAR granted prior to the grant of the Limited Right. (b) Upon the exercise of Limited Rights, the holder thereof shall receive in cash whichever of the following amounts is applicable: (i) in the case of an exercise of Limited Rights by reason of an acquisition of Stock described in Section 11(a), an amount equal to the Acquisition Spread (as defined in paragraph (d) below); or (ii) in the case of an exercise of Limited Rights by reason of shareholder approval of an agreement described in Section 11(a), an amount equal to the Merger Spread (as defined in paragraph (f) below); (iii) in the case of an exercise of Limited Rights by reason of a change in the composition of the Board of Directors as described in Section 11(a), an amount equal to the Board Change Spread (as defined in paragraph (g) below); (iv) in the case of an exercise of Limited Rights by reason of stockholder approval of a plan of liquidation described in Section 11(a), an amount equal to the Liquidation Spread (as defined in paragraph (i) below); provided, however, that if an ISO is a Related Option to the Limited Rights, the cash received for each Right shall not exceed 100% of the spread under the ISO, i.e., the difference between the option price of the ISO and the Fair Market Value of Stock on the date the Limited Right is exercised. (c) The term "Acquisition Price per Share" as used in this Section shall mean, with respect to the exercise of any Limited Right by reason of an acquisition of Stock described in Section 11(a), the greater of (i) the highest price per share of Stock stated on the Schedule 13D, 14D-1 or similar schedule (or amendment thereto) filed by the holder of 50% or more of the Company's voting power which gives rise to the exercise of such Limited Right, and (ii) the highest Fair Market Value per share of Stock during the sixty-day period ending on the date the Limited Right is exercised. (d) The term "Acquisition Spread" as used in this Section shall mean an amount equal to the product computed by multiplying (i) the excess of (A) the Acquisition Price per Share over (B) the option or base price per share of Stock at which the Related Option or SAR is exercisable, by (ii) the number of Limited Rights being exercised. (e) The term "Merger Price per Share" as used in this Section shall mean, with respect to the exercise of any Limited Right by reason of shareholder approval of an agreement described in Section 11(a), the greater of (i) the fixed or formula price for the acquisition of shares of Stock specified in such agreement if such fixed or formula price is determinable on the date on which such Limited Right is exercised, and (ii) the highest Fair Market Value per share of Stock during the sixty-day period ending on the date on which such Limited Right is exercised. Any securities or property which are part or all of the consideration paid for shares of Stock pursuant to such agreement shall be valued in determining the Merger Price per share at the higher of (A) the valuation placed on such securities or property by the corporation, person or other entity which is a party with the Company to such agreement or (B) the valuation placed on such securities or property by the Committee. 6

(f) The term "Merger Spread" as used in this Section shall mean an amount equal to the product computed by multiplying (i) the excess of (A) the Merger Price per Share over (B) the option or base price per share of Stock at which the Related Option or SAR is exercisable, by (ii) the number of Limited Rights being exercised. (g) The term "Board Change Spread" as used in this Section shall mean, with respect to the exercise of any Limited Rights by reason of a change in the composition of the Board described in Section 11(a), an amount equal to the product computed by multiplying (i) the excess of (A) the highest Fair Market Value per share of Stock during the sixty-day period ending on the date the Limited Rights are exercised over (B) the option or base price per share of Stock at which the Related Option or SAR is exercisable, by (ii) the number of Limited Rights being exercised. (h) The term "Liquidation Price per Share" as used in this Section shall mean, with respect to the exercise of any Limited Right by reason of shareholder approval of a plan of liquidation described in Section 11(a) the greater of (i) the highest amount paid or to be paid per share of Stock pursuant to the plan of liquidation as determined by the Committee and (ii) the highest Fair Market Value per share of Stock during the sixty-day period ending on the date on which such Limited Right is exercised. Any securities or property which (A) are part or all of the consideration paid for shares of Stock pursuant to such plan of liquidation or (B) are to be sold and the proceeds distributed in liquidation shall be valued in determining the Liquidation Price per share at the higher of (i) the valuation placed on such securities or property by the Company upon the distribution of such securities or property in accordance with the plan of liquidation, if kno n, at the time of the exercise of such Limited Right, or (ii) the valuation placed on such securities or property by the Committee. (i) The term "Liquidation Spread" as used in this Section shall mean an amount equal to the product computed by multiplying (i) the excess of (A) the Liquidation Price per Share over (B) the option or base price per share of Stock at which the Related Option or SAR is exercisable, by (ii) the number of Limited Rights being exercised. (j) Notwithstanding any other provision of the Plan, an SAR may not be exercised at a time when any Limited Rights held by the holder of such SAR may be exercised. (k) Notwithstanding the provisions of Section 7(a) above, if an Acceleration Date specified in Section 11(a)(i) occurs and if such Date occurs in connection with a Window Period Situation, then each Optionee who is a Restricted Reporting Person may exercise his or her Limited Rights only during the Window Period immediately following the Acceleration Date, subject to the following exceptions: (i) if the Acceleration Date occurs during the six-month period following the grant of a Limited Right or the grant of the Related Option or SAR, whichever is applicable as provided in the last sentence of Section 7(a) above, then such Limited Right may be exercised by such Optionee only during the Window Period immediately following the expiration of such six-month period or, if earlier, following the death or Disability of such Optionee; and (ii) if such acceleration Date or the expiration of such six-month period (as applicable) occurs during a Window Period, such Optionee may exercise such Limited Right either during the remainder of such Window Period or during the next whole Window Period thereafter. For the purposes of this paragraph, a "Window Period Situation" exists (A) if one or more Reporting Persons are the Person or members of the group constituting the "Person" specified in Section 11(a)(i) below, or (B) if, by excluding all voting securities 7

acquired by the "Person" directly from the Company, no Acceleration Date would occur. Each Reporting Person specified in clause (A) above, and all Reporting Persons in the case of a clause (B) Window Period Situation, are "Restricted Reporting Persons" for the purposes of this paragraph. A "Window Period" is the period defined from time to time in paragraph (e)(3)(iii) of Rule 16b-3, or the corresponding paragraph(s) of any successor to Rule 16b-3. SECTION 8. STOCK ISSUANCE, PAYMENT, AND WITHHOLDING. (a) An Optionee may pay the option price of an Option in cash, Stock (including shares of previously-owned Stock, or Stock issuable in connection with the Option), or other property, to the extent permitted or required by the Option Agreement or the Committee from time to time. The Committee may permit deemed or constructive transfers of shares in lieu of actual transfer and physical delivery of certificates. Except to the extent prohibited by applicable law, the Committee or its delegate may take any necessary or appropriate steps in order to facilitate the payment of any such purchase price. Without limiting the foregoing, the Committee may allow the Optionee to defer payment of the option price, or may cause the Company to loan the option price to the Optionee or to guaranty that any shares to be issued will be delivered to a broker or lender in order to allow the Optionee to borrow the purchase price. The Committee may require satisfaction of any rules or conditions in connection with paying the Option price at any particular time, in any particular form, or with the Company's assistance. (b) When the Optionee's Employer becomes required to collect and pay Required Withholding Taxes, the Optionee shall promptly reimburse the Company or Employer (as required by the Committee) for the amount of such Required Withholding Taxes in cash, unless the Option Agreement or the Committee permits or requires payment in another form. In the discretion of the Committee or its delegate and at the Optionee's request, the Committee or its delegate may cause the Company or Employer to pay Withholding Taxes in excess of Required Withholding Taxes on behalf of an Optionee, which shall be reimbursed by the Optionee. The Committee may allow an Optionee to reimburse the Company or Employer for payment of Withholding Taxes with shares of Stock or other property. The Committee may require the satisfaction of any rules or conditions in connection with any non-cash payment of Withholding Taxes. If an Optionee is a Reporting Person at the time of grant or during the Option's term and is given an election to pay any Withholding Taxes with Stock, the Committee shall have sole discretion to approve or disapprove such election at any time after the election is made. (c) If provided in the Option Agreement relating to an ISO, the Committee may prohibit the transfer by an Optionee of shares of Stock issued to him or her upon exercise of an ISO into the name of a nominee, and the Committee may require the placement of a legend on certificates for such shares reflecting such prohibition. SECTION 9. FORFEITURES. (a) If any Optionee voluntarily terminates employment within two years of the grant of an Option or SAR, or is dismissed from employment at any time for any reason, such Option or SAR shall immediately terminate and be forfeited to the extent not previously exercised. 8

(b) Notwithstanding any other provision in this Plan except paragraph (c) below, the receipt of any Option or SAR, and the receipt of any share of Stock, cash, or other benefit in connection with such Option or SAR, shall be subject to the following provisions: (i) At all times during his or her employment with the Company or a Subsidiary or Affiliate, the Optionee shall continuously satisfy his or her duties of loyalty and faithful service to the Company and his or her Employer and shall refrain from engaging in any undisclosed conflict of interest or from otherwise acting in any manner inimical to or contrary to the best interests of the Company or Employer. Any violation of law or of any Company or Employer policy or the Business Practices and Ethics Manual (or any manual, or portion thereof, which replaces such Manual) of the Company shall be considered conduct inimical to or contrary to the best interests of the Company and Employer for the purposes of this Section 9(b). The exercise of any Option or SAR, or the acceptance of any share of stock, cash, or other benefit hereunder in connection with any Option or SAR shall be deemed to be the certification by the Optionee that he or she has satisfied this condition. In addition, the Optionee shall furnish to the Committee on request any other information concerning satisfaction of such condition which the Committee may request. (ii) This Section 9(b) is intended to establish, as a condition to the realization of economic benefits under the Plan, a standard of conduct consistent with (A) the duties of loyalty and faithful performance of services imposed on an employee by the common law, and (B) the Company's and Employer's published standards and policies which the Optionee is bound to observe. This Section 9(b) shall in no way impair or derogate from the rights or remedies which the Company or Employer may have at law or in equity or under any employment contract or agreement with an Optionee to prevent or to recover damages for the disclosure of trade secrets, or to recover any restitution or damages properly owing the Company or Employer because of any theft, fraud, embezzlement, or other illegal conduct on the part of an Optionee. (iii) If the Committee determines that an Optionee has not observed the standard of conduct required by this Section 9(b), the Committee may require the Optionee to forfeit any right to or in any outstanding Option or SAR, as of the date such determination is made, and may require repayment of any Stock or cash received in connection with any Option or SAR by such Optionee after the act or acts of misconduct which gave rise to the Committee's determination. (iv) This Section 9(b) shall not be interpreted as requiring the Committee to take action in each and every instance of suspected misconduct, and in determining to attempt to enforce the forfeiture and repayment provisions of this Section 9(b), the Committee may consider, among other things, the nature of the misconduct, its seriousness, the impact on the Company, the possible economic effects, the circumstances surrounding the discontinuance of the Optionee's employment with the Employer, and the amount of proof which the Employer may have of any alleged misconduct. Any decision by the Committee to forego enforcement of this Section 9(b) in whole or in part in any 9

particular instance shall in no way constitute a waiver of the right to enforce such Section in any other instance. (v) During the period of any investigation into whether an Optionee has engaged in conduct prohibited by this Section 9(b), the Optionee's rights to receive delivery of any Stock or cash, or to have any transfer of Stock recognized on the stock books of the Company, shall be suspended. An Optionee may exercise Options or SARs subject to the prior sentence. (c) The Committee may include in an Option Agreement such provisions as it shall deem appropriate, in its discretion, to deter competition with the Company, a Subsidiary or an Affiliate, including provisions pertaining to the refund of any economic benefit received by an Optionee from exercising an Option. In addition, the Committee may waive, in whole or part, and for any reason the Committee deems appropriate, any termination of an Option or group of Options caused by this Section 9. (d) The provisions of this Section 9 shall terminate upon the occurrence of an Acceleration Date described in Section 11. SECTION 10. ADJUSTMENTS AND ACQUISITIONS. (a) In the event of (i) any change in the outstanding shares of Stock by reason of any stock split, combination of shares, stock dividend, reorganization, merger, consolidation, or other corporate change having a similar effect, (ii) any separation of the Company including a spin-off or other distribution of stock or property by the Company, or (iii) any distribution to stockholders generally other than a normal dividend, the Committee shall make such equitable adjustments to the Plan and to outstanding Options, SARs and Limited Rights as it shall deem appropriate in order to prevent the dilution or enlargement of (a) the Options, SARs and Limited Rights which may be granted, the shares of Stock which may be issued, or the shares for which ISOs may be granted under the Plan, (b) the economic value of outstanding Options, SARs and Limited Rights or (c) the limitations imposed by Section 3(d) of this Plan, provided, however, that the Committee shall not make any adjustment which would constitute or result in an increase in the aggregate number of Shares available under the Plan, or the annual limit on the number of options which may be granted to an Eligible Employee under Section 3(d) of this Plan, requiring shareholder approval under Section 422 or Section 162(m) of the Code. Any such determination by the Committee shall be conclusive and binding on all concerned. (b) In the event the Company or a Subsidiary enters into a transaction described in Section 424(a) of the Code with any other corporation, the Committee may grant Options, SARs, or Limited Rights to employees or former employees of such corporation in substitution of stock options, stock appreciation rights or limited stock appreciation rights previously granted to them by such corporation upon such terms and conditions as shall be necessary to qualify such grant as a substitution described in Section 424(a) of the Code. SECTION 11. ACCELERATION. (a) If, while unexercisable Options or SARs remain outstanding under the Plan, (i) any Person (as defined herein) becomes the beneficial owner directly or indirectly (within the meaning of Rule 13d-3 under the Act) 10

of more than 50% of the Company's then outstanding voting securities (measured on the basis of voting power); (ii) the shareholders of the Company approve a definitive agreement to merge or consolidate the Company with any other corporation, other than an agreement providing for (x) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company, at least 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than 50% of the combined voting power of the Company's then outstanding securities; (iii) a change occurs in the composition of the Board of Directors during any period of twenty-four consecutive months such that individuals who at the beginning of such period were members of the Board of Directors cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Company's shareholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved; or (iv) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company's assets, then on the date as of which any of the events described in clauses (i) through (iv) occurs (such date being referred to as an "Acceleration Date"), each Option and SAR automatically shall become exercisable. For purposes of this paragraph, "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; however, a Person shall not include (aa) the Company or any of its subsidiaries, (bb) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (cc) an underwriter temporarily holding securities pursuant to an offering of such securities, or (dd) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Stock. (b) Except to the extent prohibited by Rule 16b-3 in the case of Reporting Persons, the Committee may accelerate the date on which any Options and SARs become exercisable and may remove any restrictions on such Options or SAR at any time after grant and for any reason the Committee deems appropriate. (c) All Options and SARs shall automatically become exercisable upon a termination of employment caused by the death or Disability of the Optionee. 11

SECTION 12. ADMINISTRATION. (a) The Plan shall be administered by a Stock Option Committee appointed by the Board consisting of three or more persons, each of whom at all times shall be a member of the Board, a disinterested person as defined in Rule 16b-3 and an outside director within the meaning of Section 162(m)(4)(C)(i) of the Code. Committee members shall not be eligible for selection to receive Options or SARs under the Plan. The initial Committee shall consist of the members of the "Stock Option Committee" administering the Anheuser-Busch 1981 Non-Qualified Stock Option Plan at the time this Plan is adopted by the Board. (b) A majority of the members of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority of the members of the Committee, shall be the acts of the Committee. From time to time the Committee may adopt, amend, and rescind such rules and regulations for carrying out the Plan and implementing Option Agreements, and the Committee may take such action in the administration of the Plan, as it deems proper. The interpretation of any provisions of the Plan by the Committee shall be final and conclusive unless otherwise determined by the Board. SECTION 13. AMENDMENT, TERMINATION, SHAREHOLDER APPROVAL. (a) The Board may amend or terminate the Plan at any time, except that without the approval of the Company's shareholders, no amendment shall (i) increase the maximum number of shares issuable, or the maximum number of shares for which ISOs may be granted, under the Plan, (ii) change the class of persons eligible to be Optionees, (iii) change the annual limit on options which may be granted to an Eligible Employee provided in Section 3(d) or (iv) change the provisions of this Section 13(a). (b) The Committee may amend the Plan from time to time to the extent necessary to (i) comply with Rule 16b-3 and (ii) prevent benefits under the Plan from constituting "applicable employee remuneration" within the meaning of Section 162(m) of the Code. (c) No Options or SARs may be granted under the Plan after September 26, 1999. (d) Notwithstanding any other provision of the Plan, no Option or SAR granted under the Plan on or after December 15, 1993 may be exercised unless and until either (i) the amendment to the Plan adopted by the Board on December 15, 1993 which added Section 3(d) to this Plan is approved by the Company's shareholders within twelve months of such adoption, or (ii) if earlier, the Company receives an opinion of counsel or other evidence satisfactory to it that such shareholder approval is not required by the Code in order to prevent benefits under the Plan from constituting "applicable employee remuneration" within the meaning of Section 162(m) of the Code. (e) The approval by shareholders described in this Section shall consist of the approving vote of the holders of a majority of the outstanding shares of Stock present (in person or by proxy) at a meeting of the shareholders at which a quorum is present, unless a greater vote is required by the Company's charter or by-laws or by applicable law. SECTION 14. ADDITIONAL PAYMENTS. 12

The Committee may grant an Optionee the right to receive additional compensation in cash or other property (in addition to any cash or other property payable under the terms of the Option or SAR itself) upon an Option or SAR becoming exercisable or being exercised provided that (i) in the case of an ISO such compensation is includible in income under Sections 61 and 83 of the Code at the time of such exercise and (ii) no such right may be granted in connection with any SAR or Limited Right which is an alternative to an ISO. SECTION 15. MISCELLANEOUS. (a) Each provision of the Plan and each Option Agreement relating to an ISO shall be construed so that each ISO shall be an incentive stock option as defined in Section 422 of the Code or any statutory provision that may replace Section 422, and any provisions thereof which cannot be so construed shall be disregarded. Except as provided in Section 9, no discretion granted or allowed to the Committee under the Plan shall apply to an ISO after its grant except to the extent the Option Agreement with respect to the ISO grant shall so provide. Notwithstanding the foregoing, nothing shall prohibit an amendment to an Option Agreement with respect to an ISO which would change its status to an NQSO, so long as the Company and the Optionee shall consent to such amendment. (b) Without amending the Plan, Options and SARs may be granted to Eligible Employees who are foreign nationals or who are employed outside the United States or both, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to further the purposes of the Plan. Such different terms and conditions may be reflected in Addenda to the Plan. However, in the case of an ISO, no such different terms or conditions shall be employed if such term or condition constitutes, or in effect results in, an increase in the aggregate number of shares which may be issued under the Plan or a change in the definition of Eligible Employee. (c) Notwithstanding any other provision in the Plan, the Committee shall not act with respect to any Reporting Person in a manner which would contravene any requirement of Rule 16b-3 as in effect at the time of such action. (d) Amendments to this Plan which were adopted by the Board on December 15, 1993 shall not apply to Options granted prior to that date except for (i) the definition of "Required Withholding Tax" now contained in Section 2(w) and (ii) the amendment adding the express authority for beneficiary designations which is contained in Section 5(e). 13

Exhibit 10.5 ANHEUSER-BUSCH COMPANIES, INC. 1998 INCENTIVE STOCK PLAN (RESTATED TO REFLECT A 2-FOR-1 STOCK SPLIT EFFECTIVE SEPTEMBER 18, 2000, AND AMENDMENTS EFFECTIVE APRIL 25, 2001 AND APRIL 23, 2003) SECTION 1. PURPOSE. The purpose of this Plan is to attract, retain, motivate and reward employees of the Company and its Subsidiaries and Affiliates with certain stock-related compensation arrangements. SECTION 2. MAXIMUM NUMBER OF SHARES. (a) The maximum number of shares of Stock which may be issued pursuant to Awards under this Plan, and the maximum number of shares for which ISOs may be granted under this Plan, shall be 88,000,000 shares, subject to adjustment as provided in Section 10. Of such shares, no more than 1,500,000 shares of Restricted Stock may be granted under this Plan, subject to adjustment as provided in Section 10. For this purpose: (i) The number of shares underlying an Award shall be counted against this Plan maximum ("used") at the time of grant. (ii) When an Award is payable in cash only, the number of shares of Stock on which the amount of such cash is based shall be deemed used at the time of grant. (iii) Shares which underlie Awards that (in whole or part) expire, terminate, are forfeited, or otherwise become non-payable, and shares which are recaptured by the Company in connection with a forfeiture, may be re-used in new grants to the extent of such expiration, termination, forfeiture, non-payability, or recapture. (iv) For all purposes of this Section 2, shares underlying two or more alternative Awards shall be treated as underlying only a single Award, with no multiple counting of shares. Accordingly: shares underlying alternative Awards shall be used only once at the time of grant; and, if one such Award is exercised or (in the case of Restricted Stock) vests, no re-usage of shares shall result from the termination of the unexercised or unvested alternative Awards. (b) Notwithstanding any other provisions of this Plan: (i) the maximum number of shares underlying Awards (other than Restricted Stock) that may be granted to any Eligible Person during any calendar year shall be 1,500,000, subject to adjustment as provided in Section 10; and (ii) the maximum number of shares of Restricted Stock that may be granted to any Eligible Person during any calendar year shall be 375,000, subject to adjustment as provided in Section 10. (c) In its discretion, the Company may issue treasury shares or authorized but unissued shares, but shall issue treasury shares to the extent required by the Committee or applicable law. Shares of Stock may be represented by certificates or may be issued in uncertificated form, as determined by the Company from time to time. -1-

SECTION 3. ELIGIBILITY. Officers and management employees of the Company, Subsidiaries, or Affiliates shall be eligible to receive Awards under this Plan. A director of the Company, a Subsidiary, or an Affiliate shall be eligible only if he or she also is an officer or management employee of at least one such entity. Notwithstanding the foregoing, persons employed only by Affiliates shall not be eligible to receive ISOs. SECTION 4. GENERAL PROVISIONS RELATING TO AWARDS. (a) Subject to the limitations in this Plan, the Committee may cause the Company to grant Awards to such Eligible Persons, at such times, of such types, in such amounts, for such periods, becoming exercisable or otherwise vesting at such times, with such features, with such option prices, purchase prices or base prices, and subject to such other terms, conditions, and restrictions as the Committee deems appropriate. Each Award shall be evidenced by a written Award Document, which (as determined by the Committee) may be a formal agreement between the Company and the Recipient or a communication by the Company to the Recipient. The Award Document may be written and transmitted on paper, electronically, or using any other medium selected by the Committee, and may be set forth in a single document or in several documents. In granting an Award, the Committee may take into account any factor it deems appropriate and consistent with the purposes of this Plan. Awards may be granted as additional compensation, or in lieu of other compensation. The payment or issuance of any cash or shares of Stock to a Recipient, and the vesting or delivery of any shares of Restricted Stock, may be deferred to a later date if and as provided in the Award Document. Deferrals may be for such periods and upon such terms and conditions (including the provision of interest equivalents, dividends or dividend equivalents, or other return) as the Committee may determine. (b) Except as otherwise provided in this Plan, one or more Awards may be granted separately or as alternatives to each other. If Awards are alternatives to each other: (i) the exercise of all or part of one automatically shall cause an immediate equal and corresponding termination of the other; (ii) if one of the alternative Awards is Restricted Stock, the vesting of all or part of such Stock shall cause an immediate equal and corresponding termination of the other Award; and (iii) unless the Award Document or the Committee expressly permit otherwise, alternative Awards which are transferable may be transferred only as a unit, and alternative Awards which are exercisable must be exercisable by the same person or persons. (c) Award Documents may contain any provision approved by the Committee relating to the period for exercise or vesting after termination of employment, and relating to the circumstances under which a termination is deemed to occur. Except to the extent otherwise expressly provided in the Award Document or determined by the Committee, termination of employment includes the separation of a Recipient, directly or through the separation of his or her Employer, from the group of companies comprised of the Company and its Subsidiaries and Affiliates for any reason, including: (i) separation of the Recipient by reason of death, permanent or indefinite disability, retirement, resignation, dismissal, permanent or indefinite layoff, or other event having a similar -2-

effect; and (ii) separation of the Employer by any method which results in the Employer ceasing to be a Subsidiary or an Affiliate. (d) Award Documents may, in the discretion of the Committee, contain a provision permitting a Recipient to designate the person who may exercise an Award after the Recipient's death, either by will or by appropriate notice to the Company. The Committee may impose such conditions and limitations on such designations as it deems appropriate. (e) A Recipient shall have none of the rights of a shareholder with respect to shares of Stock which underlie his or her Award until shares are issued in his or her name. (f) Except as otherwise provided in an Award Document pursuant to this Section, Awards shall not be transferable other than by will or the laws of descent and distribution, and shall be exercisable during the Recipient's lifetime only by the Recipient or his or her guardian or legal representative. However, except in the case of ISOs and Awards which are alternatives to ISOs, the Committee may expressly provide in any Award Document that the Award is transferable. Transferability (if permitted) may be subject to such conditions and limitations as the Committee deems appropriate. (g) Notwithstanding Section 15(a), in its discretion the Committee may provide in any Award Document for the acceleration of vesting or the termination of any condition, restriction, or forfeiture provision upon the happening of any specified event (including, for example, an event which results in an Acceleration Date). (h) Subject to Section 15(a) in the case of ISOs, and subject to any express limitations contained in the applicable Award Document: (i) the Committee may accelerate vesting or waive or terminate any condition, restriction, or forfeiture provision of any Award at any time and for any reason; and (ii) the Committee may amend an Award Document after grant at any time and for any reason so long as such amendment is not inconsistent with this Plan. (i) No exercisable Award by its terms shall be exercisable after the expiration of ten years from the date it is granted. SECTION 5. OPTIONS AND SARS. (a) Except as provided in Section 10, the option price per share of Options or the base price of SARs shall not be less than Fair Market Value per share of Stock on the Options' or the SARs' grant date, except that SARs which are alternatives to Options but which are granted at a later time may have a base price equal to the option price even though the base price is less than Fair Market Value on the date the SARs are granted. (b) The grant of Options and their related Award Document must identify the Options either as ISOs or as NQSOs. (c) If Options, SARs, and/or Limited Rights are granted as alternatives to each other, the option prices and the base prices (as applicable) shall be equal and the expiration dates shall be the same. (d) In the case of SARs, the Award Document may specify the form of payment or may provide that the form is to be determined at a later date, and may require the satisfaction of any rules or conditions in connection with receiving payment in any particular form. -3-

(e) Notwithstanding any other provision of Sections 4 or 5: (i) no Options or SARs shall be granted in exchange for so-called "underwater" Options or SARs (which have option or base prices in excess of the then-current Fair Market Value per share of Stock), nor shall underwater Options or SARs be amended to reduce their option or base price; and, (ii) no Options or SARs shall contain a so-called "reload" feature under which additional Options or SARs are granted automatically to Recipients upon exercise of the original Options or SARs. SECTION 6. LIMITED RIGHTS. (a) The Committee shall have authority to grant a special type of stock appreciation rights ("Limited Rights") to any Recipient of any Options or SARs granted under this Plan (the "Related Award"). Limited Rights are stock appreciation rights which are exercisable only after the occurrence of one or more extraordinary events specified by the Committee; such events may include, for example, the events which result in an Acceleration Date. Limited Rights shall not be granted separately, but shall be granted only as alternatives to their Related Award. Limited Rights may be granted either at the time of grant of the Related Award or at any time thereafter during its term. Limited Rights shall be exercisable or payable at such times, payable in such amounts, and subject to such other terms, conditions, and restrictions as the Committee deems appropriate. (b) The Committee shall place on any Limited Rights for which the Related Awards are ISOs such restrictions as may be required by the Code at the time of grant, and shall amend this Plan accordingly to the extent required by the Code. SECTION 7. RESTRICTED STOCK. (a) "Restricted Stock" means Stock issued to a Recipient which is nontransferable and is subject to forfeiture upon the happening of such events or conditions, or upon the failure to satisfy such requirements or conditions, as the Committee specifies in the Award Document or otherwise. Stock issued upon the exercise of Options or SARs is not "Restricted Stock" for purposes of this Plan, even if subject to post-issuance transfer restrictions or forfeiture conditions. When Restricted Stock vests, it ceases to be "Restricted Stock" for purposes of this Plan. (b) The certificate representing shares of Restricted Stock issued in the name of a Recipient may be held by the Company and/or may have a legend placed upon it to the effect that the shares represented by it are subject to, and may not be transferred except in accordance with, this Plan and the related Award Document. Cash dividends relating to shares of Restricted Stock may be paid to the Recipient or held by the Company for the Recipient's benefit, and if held may be made subject to the transfer restrictions, forfeiture risks, and vesting conditions of the Restricted Stock, as the Committee may provide in the Award Document or otherwise; if dividends are held by the Company, the Committee may require that the Company provide for interest equivalents or other return on any cash dividends at such rate(s) and time(s) as the Committee provides in the Award Document or otherwise. Any Stock or other securities issuable in respect of Restricted Stock pursuant to an event specified in Section 10(a) of this Plan shall be subject to the Award Document related to such Restricted Stock and all of the transfer restrictions, forfeiture risks, and vesting conditions pertaining thereto. -4-

SECTION 8. STOCK ISSUANCE, PAYMENT, AND WITHHOLDING. (a) The Recipient of Options may pay the option price in cash, Stock (including shares of previously-owned Stock or Stock issuable in connection with the Award, but not including shares of Restricted Stock), or other property, to the extent permitted or required by the Award Document or the Committee from time to time. (b) Except to the extent prohibited by applicable law, the Committee or the Company may take any necessary or appropriate steps in order to facilitate the payment of an option price. The Committee may permit deemed or constructive transfers of shares in lieu of actual transfer and physical delivery of certificates. The Committee may require satisfaction of any rules or conditions in connection with paying the option price at any particular time or in any particular form. (c) If shares used to pay the option price of Options are subject to any transfer or other restrictions, an equal number of the shares of Stock purchased shall be made subject to such prior restrictions in addition to any further restrictions imposed on such purchased shares by the terms of the Award Document or Plan. (d) After the obligation arises to collect and pay Required Withholding Taxes, the Recipient shall reimburse the Company or Employer (as required by the Committee or Company) for the amount of such Required Withholding Taxes in cash, unless the Award Document or the Committee permits or requires payment in another form. In the discretion of the Committee or its delegate and at the Recipient's request, the Committee or its delegate may cause the Company or Employer to pay to the appropriate taxing authority withholding taxes in excess of Required Withholding Taxes on behalf of a Recipient, which shall be reimbursed by the Recipient in any manner determined by the Company or the Committee from time to time. In the Award Document or otherwise, the Committee may allow a Recipient to reimburse the Company or Employer for payment of withholding taxes with shares of Stock or other property. The Committee may require the satisfaction of any rules or conditions in connection with any non-cash payment of withholding taxes. (e) If provided in the Award Document relating to an ISO, the Committee may (i) cause the Company to hold the shares of Stock issued in the Recipient's name upon exercise, or (ii) prohibit the transfer by a Recipient of such shares into the name of a nominee and require the placement of a legend on certificates for such shares reflecting such prohibition. SECTION 9. FORFEITURES. In its discretion, the Committee may adopt and amend any policies, and may include in any Award Document any provisions relating to, forfeitures. Such forfeiture provisions may include, for example, prohibitions on competing with the Company and its Subsidiaries and Affiliates and on engaging in other detrimental conduct. Forfeiture provisions for one Award type may differ from those for another type, and also may differ among Awards of the same type granted at different times or to Recipients in different circumstances. As used in this Plan, a "forfeiture" of an Award includes the recapture of Stock issued or other economic benefits derived from an Award, as well as the forfeiture of an Award itself; however, the Committee may define the term more narrowly for specific Award Documents. -5-

SECTION 10. ADJUSTMENTS AND ACQUISITIONS. (a) Subject to Section 10(c), in the event that the Committee shall determine that, as a result of any dividend or other distribution (whether in the form of cash, Stock, other securities, or other property), stock split, reverse stock split, recapitalization, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase, or exchange of Stock or other securities of the Company, issuance of warrants or other rights to purchase Stock or other securities of the Company, or any other similar corporate transaction, change, or event, an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under outstanding Awards or under the Plan (an "Adjustment Event"), then the Committee shall, in such manner as it may deem equitable, adjust any or all of: (i) the number and types of shares of Stock (or other securities or property) subject to outstanding Awards; (ii) the limitations on grants of Awards, ISOs, and Restricted Stock set forth in Section 2(a) of this Plan, and the limitations on grants to any Eligible Person during any calendar year set forth in Sections 2(b)(i) and 2(b)(ii) of this Plan (collectively the "Share Limitations"); and (iii) the option price, base price, or other similar price with respect to any Award. Alternatively to (i) and (iii), if there is an Adjustment Event and the Committee deems it appropriate, it may provide for cash payments to holders of outstanding Awards. (b) Subject to Section 10(c), in the event of an acquisition by the Company by means of a merger, consolidation, acquisition of property or stock, reorganization or otherwise, the Committee shall be authorized: (i) to cause the Company to issue Awards or assume stock options, stock appreciation rights, or restricted stock issued by the acquired company, whether or not in a transaction to which Section 424(a) of the Code applies, by means of issuance of new Awards in substitution for, or an assumption of, previously issued options, rights, or restricted stock, but only if and to the extent that such issuance or assumption is consistent with the other provisions of this Plan and any applicable law, and/or (ii) to increase the Share Limitations to reflect such issuance or assumption. (c) The Committee shall not make an adjustment under Section 10(a), issue Awards or assume options, rights, or restricted stock under Section 10(b)(i), or increase the Share Limitations under Section 10(b)(ii), (i) to the extent such action would affect ISOs or the Share Limitation relating to ISOs and would require shareholder approval under Section 422 of the Code, or (ii) to the extent such action would affect the Share Limitation set forth in Section 2(b) of this Plan and would require shareholder approval in order to qualify such Awards, such assumed options, rights, or restricted stock, or Awards granted thereafter as performance-based compensation under Section 162(m) of the Code, unless such action(s) by the Committee are made subject to shareholder approval and are so approved by the shareholders. -6-

(d) In the event that the Board approves any merger or consolidation of the Company with or into any other corporation or business entity as a result of which the Company shall not be the surviving corporation, with respect to each Award, either (i) the Committee shall, in such manner as it may deem equitable, cause such Award to vest prior to the effective date of such merger or consolidation or (ii) the Committee or the Board shall approve arrangements to substitute an award issued by the surviving corporation for such Award on terms and conditions deemed equitable by the Committee or the Board. SECTION 11. ACCELERATION AND VESTING. (a) An "Acceleration Date" occurs when any of the following events occur: (i) any Person (as defined herein) becomes the beneficial owner directly or indirectly (within the meaning of Rule 13d-3 under the Act) of more than 30% of the Company's then outstanding voting securities (measured on the basis of voting power); (ii) the shareholders of the Company approve a definitive agreement of merger or consolidation with any other corporation or business entity, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior to the consummation of the merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the surviving entity of such merger or consolidation outstanding immediately after such merger or consolidation; (iii) Continuing Directors cease to constitute at least a majority of the directors of the Company; or (iv) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company's assets. An Acceleration Date as described in (i) above shall not occur as a result of the ownership of voting securities by (A) the Company or any of its Subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries or (C) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of Stock. Securities held by an underwriter pursuant to an offering of such securities for a period not to exceed 40 days shall be deemed to be outstanding but shall not be deemed to be beneficially owned by such underwriter for purposes of clause (i) above. For purposes of this Section 11(a), (X) "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Act; (Y) "Continuing Directors" shall mean any directors of the Company who either (i) were directors of the Company on the date of adoption of the Plan, or (ii) became directors of the Company subsequent to such date and whose election or nomination for election by the shareholders of the Company was duly approved, either by a specific vote or by approval of the proxy statement issued by the Company in which such individuals were named as nominees for director of the Company, by a majority of the Continuing Directors who were at the time of election or nomination directors of the Company; and (Z) "Person" shall mean any individual, firm, corporation, partnership or other entity and shall include the Affiliates and Associates of such Person. -7-

(b) If an Acceleration Date occurs while Awards remain outstanding under this Plan, then all Awards shall vest. This Section shall apply to ISOs notwithstanding Section 15(a). (c) When Awards (other than Restricted Stock) "vest," they become fully exercisable. Vesting does not mean that such an Award becomes non-forfeitable, except to the extent provided in the Award Document or otherwise by the Committee pursuant to Sections 4(g) or 4(h) above. When shares of Restricted Stock "vest," they become non-forfeitable (except for any forfeiture conditions which this Plan or the Award Document expressly provides shall survive vesting) and freely transferable (except for any legal restrictions imposed on transfers by the Securities Act of 1933, as amended, or other applicable securities laws). SECTION 12. ADMINISTRATION. (a) This Plan shall be administered by the Stock Option Plans Committee of the Board, or another committee appointed by the Board from time to time, consisting of three or more persons, each of whom at all times shall be a member of the Board and none of whom shall be an officer or employee of the Company or any of its Subsidiaries at the time of service. Committee members shall not be eligible for selection to receive Awards under this Plan. (b) During any time when one or more Committee members may not be qualified to serve under Rule 16b-3, under Section 162(m) of the Code, or under any other rule or law which contains special qualifications for Committee members in order to avoid a penalty or to obtain a benefit, the Committee may form a subCommittee from among its qualifying members. The sub-Committee may act, in lieu of the full Committee, with respect to all or any category of Awards granted or to be granted to all or any group of Recipients, and may take other actions deemed appropriate and convenient to prevent, control, minimize, or eliminate any penalties, loss of benefits, or other adverse effects of such potential disqualification. Any such sub-Committee shall have the full authority of the full Committee under this Plan, except to the extent the full Committee limits the sub-Committee's powers. (c) At the Committee's request or on its own motion, the Board may ratify or approve grants, or any terms of any grants, made by the Committee during any time that any member of the Committee may not be qualified to approve such grants or terms under Rule 16b-3 or any other rule or law. (d) A majority of the members of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by all of the members of the Committee, shall be the acts of the Committee. The Committee may meet in person, by telephone or television conference, or in any other manner (unless prohibited by applicable law). From time to time the Committee may adopt, amend, and rescind such rules and regulations for carrying out this Plan and implementing Award Documents, and the Committee may take such action in the administration of this Plan, as it deems proper. The interpretation of any provisions of this Plan by the Committee shall be final and conclusive unless otherwise determined by the Board. (e) To the extent the Committee deems it convenient and appropriate, the Committee may delegate such of its powers and duties, including (among other things) its power to grant Awards, to one or more officers of the Company. Any such delegation shall be subject to such limitations and conditions as the Committee deems appropriate. However, notwithstanding the foregoing: (i) the power to grant Awards may not be delegated to an officer who is not also a director of the Company -8-

except in conformity with applicable Delaware law; and, (ii) no officer may grant Awards to him- or herself or to his or her superiors unless such grants are ratified by the Committee or the Board. SECTION 13. AMENDMENT, TERMINATION, SHAREHOLDER APPROVAL. (a) The Board may amend or terminate this Plan at any time, except that without the approval of the Company's shareholders, no amendment shall (i) increase the maximum number of shares issuable, or the maximum number of shares for which ISOs may be granted, under this Plan, (ii) change the class of persons eligible to receive ISOs, (iii) change the annual limit on Awards which may be granted to an Eligible Person provided in Section 2(b), or (iv) change the provisions of this Section 13(a). (b) The Committee may amend this Plan from time to time to the extent necessary to (i) comply with Rule 16b-3 and, to the extent it deems appropriate, (ii) prevent benefits under this Plan from constituting "applicable employee remuneration" within the meaning of Section 162(m) of the Code. (c) No Awards may be granted under this Plan after April 21, 2008. (d) The approval by shareholders shall consist of the approving vote of the holders of a majority of the outstanding shares of Stock present (in person or by proxy) and voted (for or against) at a meeting of the shareholders at which a quorum is present, unless a greater vote is required by the Company's charter or bylaws, by the Board, by the Company's principal stock exchange, or by applicable law (including Delaware law, Rule 16b-3, or Section 162(m) of the Code). SECTION 14. DEFINITIONS. (a) "Acceleration Date" has the meaning given in Section 11(a). (b) "Act" means the Securities Exchange Act of 1934, as amended from time to time. (c) "Adjustment Event" has the meaning given in Section 10(a). (d) "Affiliate" means any entity in which the Company has a substantial direct or indirect equity interest (other than a Subsidiary), but only if expressly so designated by the Committee from time to time. Without limiting the generality of the foregoing, the term "Affiliate" shall not include any beer wholesaler or distributor in which Anheuser-Busch Investment Capital Corporation or other Subsidiary invests, unless the Committee expressly determines otherwise; the committee may also revoke or reinstate any such designation from time-to-time. (e) "Award" means a grant of ISOs, NQSOs, SARs, Limited Rights, or Restricted Stock. (f) "Award Document" means the written agreement or other document referred to in Section 4(a) evidencing an Award. (g) "Board" means the Board of Directors of the Company. (h) Options "cease to qualify as ISOs" when they fail or cease to qualify for the exclusion from income provided in Section 421 (or any successor provision) of the Code. (i) "Code" means the U.S. Internal Revenue Code as in effect from time to time. -9-

(j) "Committee" means the committee of the Board described in Section 12 hereof and any sub-committee established by such committee pursuant to Section 12(b). (k) "Company" means Anheuser-Busch Companies, Inc. and its successors. (l) "Eligible Person" means a person who is eligible to receive an Award under Section 3 of this Plan. (m) "Employer" means the Company, the Subsidiary, or the Affiliate which employs the Recipient. (n) "Fair Market Value" of Stock on a given valuation date means (i) the average of the highest and lowest selling prices per share of Stock reported on the New York Stock Exchange Composite Tape or similar quotation service for such date, (ii) if Stock is not listed on the New York Stock Exchange, the average of the highest and lowest selling prices per share of Stock as reported for such valuation date on the principal stock exchange or quotation system in the U.S. on which Stock is listed or quoted (as determined by the Committee), or (iii) if neither of the preceding clauses is applicable, the value per share determined by the Committee in a manner consistent with the Treasury Regulations under Section 2031 of the Code. If no sale of Stock occurs on such valuation date, but there were sales reported within a reasonable period both before and after such valuation date, the weighted average of the means between the highest and lowest selling prices on the nearest date before and the nearest date after such valuation date shall be used, with the average to be weighted inversely by the respective numbers of trading days between the selling dates and such valuation date. (o) "Forfeiture" has the meaning given in Section 9. (p) "ISO" or "Incentive Stock Option" means an option to purchase one share of Stock for a specified option price which is designated by the Committee as an "Incentive Stock Option" and which qualifies as an "incentive stock option" under Section 422 (or any successor provision) of the Code. (q) "Limited Right" has the meaning given in Section 6. (r) "NQSO" or "Non-Qualified Stock Option" means an option to purchase one share of Stock for a specified option price which is designated by the Committee as a "Non-Qualified Stock Option," or which is designated by the Committee as an ISO but which ceases to qualify as an ISO. (s) "Option" means an ISO or an NQSO. (t) "Optionee" means a person to whom Options are granted pursuant to this Plan. (u) "Plan" means the Anheuser-Busch Companies, Inc. 1998 Incentive Stock Plan, as amended from time to time. (v) "Recipient" means an Eligible Person to whom an Award is granted pursuant to this Plan. (w) "Reporting Person," as of a given date, means a Recipient who would be required to report a purchase or sale of Stock occurring on such date to the Securities and Exchange Commission pursuant to Section 16(a) of the Act and the rules and regulations thereunder. (x) "Restricted Stock" has the meaning given in Section 7. - 10 -

(y) "Rule 16b-3" means Rule 16b-3 (as amended from time to time) promulgated by the Securities and Exchange Commission under the Act, and any successor thereto. (z) "Share Limitations" has the meaning given in Section 10(a). (aa) "SAR" means a stock appreciation right, which is a right to receive cash, Stock, or other property having a value on the date the SAR is exercised equal to (i) the excess of the Fair Market Value of one share of Stock on the exercise date over (ii) the base price of the SAR. The term "SAR" does not include a Limited Right. (bb) "Stock" means shares of the common stock of the Company, par value $1.00 per share, or such other class or kind of shares or other securities as may be applicable under Section 10. (cc) "Subsidiary" means a "subsidiary corporation" of the Company as defined in Section 424(f) (or any successor provision) of the Code, other than corporations expressly excluded by the Committee from time-totime. (dd) "Vest" has the meaning given in Section 11(c). (ee) "Required Withholding Taxes" means, in connection with the exercise of or other taxable event relating to an Award, the total amount of Federal and state income taxes, social security taxes, and other taxes which the Employer of the Recipient is required to withhold. SECTION 15. MISCELLANEOUS. (a) Each provision of this Plan and the Award Documents relating to ISOs shall be construed so that all ISOs shall be "incentive stock options" as defined in Section 422 of the Code or any statutory provision that may replace Section 422, and any provisions thereof which cannot be so construed shall be disregarded, subject however to Sections 4(g) and 11(b) and provided that Award Documents are permitted to have provisions which cause Options which qualify as ISOs at the time of grant to cease to qualify as ISOs at a later time or upon the happening of a later event. No discretion granted or allowed to the Committee under this Plan shall apply to ISOs after their grant except (i) to the extent the related Award Document shall so provide or (ii) to the extent that the application of such discretion would not cause such ISOs to cease to qualify as ISOs. Notwithstanding the foregoing, nothing shall prohibit an amendment to or action regarding outstanding ISOs which would cause them to cease to qualify as ISOs, so long as the Company and the Recipient shall consent to such amendment or action. (b) Without amending this Plan, Awards may be granted to Eligible Persons who are foreign nationals or who are employed outside the United States or both, on such terms and conditions different from those specified in this Plan as may, in the judgment of the Committee, be necessary or desirable to further the purposes of this Plan. Such different terms and conditions may be reflected in Addenda to this Plan. However, no such different terms or conditions shall be employed if such terms or conditions constitute, or in effect result in, an increase in the aggregate number of shares which may be issued under this Plan or a change in the definition of Eligible Person. (c) Notwithstanding any other provision in this Plan, the Committee shall not act with respect to any Reporting Person in a manner which would result in a forfeiture under Section 16(b) of the Act of some or all of the economic benefits relating to his or her Awards, without in each case the written consent of such Reporting Person. - 11 -

(d) Nothing in this Plan or any Award Document shall confer on any person any expectation to continue in the employ of his or her Employer, or shall interfere in any manner with the absolute right of the Employer to change or terminate such person's employment at any time for any reason or for no reason. - 12 -

Exhibit 10.7 ANHEUSER-BUSCH GLOBAL EMPLOYEE STOCK PURCHASE PLAN I. NAME OF THE PLAN The name of the plan is the Anheuser-Busch Global Employee Stock Purchase Plan, hereinafter referred to as the Plan. II. PURPOSE The purpose of the Plan is to advance the interest of Anheuser-Busch Companies, Inc. and its Subsidiaries by encouraging ownership of shares in the Company by employees of the Company and its Subsidiaries located outside the United States, improving their long-term incentives and aligning their interests with those of the shareholders of Anheuser-Busch Companies, Inc. III. RULES 1. Definitions As used in this Plan: a) "Compensation" means: 1) for salaried employee, basic or regular salary paid, and 2) for hourly employees, actual pay for regularly scheduled working hours actually worked, paid vacations and paid holidays, and 3) in neither case, including other forms of remuneration such as bonus, overtime, salary continuance, severance pay, redundancy pay, termination indemnities or other post-employment benefits; all except as may be determined by the Company from time to time and place to place consistent with local law. b) "Board" means the Board of Directors of the Company. c) "Booked Shares" means Shares owned by a Participant which are held in his or her name by the Broker. d) "Broker" means the securities broker selected by the Company to execute transactions pursuant to the Plan and to hold the Booked Shares. e) "Commencement Date" means March 1, 1999 or a later date to be chosen by the Company with respect to any location.

f) "Company" means Anheuser-Busch Companies, Inc. g) "Eligible Employee" means any individual who is employed on a regular basis by an Employer in a location outside the United States and Puerto Rico and is on the regular payroll of the Employer for that location; provided, any employees who: 1) are eligible to participate in any 401(k) plan maintained for employees of the Company and its Subsidiaries; 2) are not permitted to participate by reason of local law or regulation; 3) are required to report their trading in Shares pursuant to Section 16 of the United States Securities Exchange Act of 1934; 4) are classified as temporary employees, leased employees or independent contractors; or 5) are otherwise excluded by the Company under uniform and consistent rules shall not be Eligible Employees unless required by local law. h) "Employer" means the Company and any Subsidiary or division or branch of the Company or a Subsidiary with operations outside the United States which agrees in writing to be an Employer, subject to the consent of the Company. i) "Market Price" on a particular day means the closing price of a Share in United States currency on that day, as reported in the West Coast edition of The Wall Street Journal, New York Stock Exchange TransactionsComposite Transactions. j) "Offering Date" means the date of inception of the Plan at a particular location with respect to Eligible Employees at that location on the date of inception there, and any subsequent March 1 on which the Company determines to make another offer of Shares to Eligible Employees at that location in accordance with the Plan. k) "Participant" means an Eligible Employee who has enrolled in the Plan as provided for in Section 3. l) "Purchase Date" means any date specified by the Company on which Participants are authorized to purchase Shares. Except as otherwise determined by the Company, all Purchase Dates shall occur on the first day of March, June, September and December of any year, or if any such day falls on a weekend or holiday in the United States, on the next business day in the United States. 2

m) "Retained Shares" means Booked Shares held by the Broker in a Participant's name for at least two (2) years. In no event shall any Shares which are transferred by a Participant, by gift, sale, bequest, inheritance or any other means or issued to the Participant in certificate form be treated as Retained Shares. n) "Rules" means the rules of this Plan as described in this document. o) "Sale Date" means any date specified by the Company on which Participants are permitted to sell Shares. Until otherwise determined by the Company, Sale Dates shall occur on all dates on which Shares are traded on the New York Stock Exchange. p) "Savings Account" shall mean a Participant's individual savings account established for the purpose of Share purchase under the Plan by a financial institution selected by the Company or by the Participant with the consent of the Company as the Company may determine in its sole discretion. q) "Share" means a share of the $1 par value common stock of the Company. r) "Subsidiary" means any corporation as to which the Company controls, directly or indirectly, fifty percent (50%) or more of the combined voting power of all classes of stock. 2. Shares Available a) The number of Shares which may be issued pursuant to the Plan shall not exceed 500,000, subject to adjustment under Section 19. For this purpose: 1) The number of Shares subject to offer as of an Offering Date shall be counted against this maximum at the Offering Date. 2) If an offering is payable in cash only, the number of Shares on which such amount of cash is based shall be deemed used at the Offering Date. 3) Shares subject to offer that (in whole or part) expire, terminate, are forfeited or otherwise become nonpayable and Shares that are recaptured by the Company in connection with a forfeiture may be reused in new offerings to the extent of such expiration, termination, forfeiture, non-payability or recapture. b) In its sole discretion, the Company may issue treasury shares or authorized but unissued shares. No Shares shall be offered in exchange for previous Share offers with Market Prices higher than the Market Price of the Shares subject to 3

the current offer, nor shall any offer be amended to reduce the market price of the Shares under offer, nor shall any offer contain a "reload" feature under which additional Shares are offered automatically to Participants upon purchase of Shares under the offer. c) For purposes of satisfying its obligation to grant additional Shares to a Participant pursuant to Section 11, the Company or the Participant's Employer may uses Shares acquired from third parties rather than treasury shares or authorized but unissued shares. 3. Participation a) An Eligible Employee shall become eligible to become a Participant as of January 1 following his or her first day of employment; provided that all Eligible Employees on the regular payroll for a particular location on the fifteenth (15th) day of the calendar month preceding inception of the Plan in that location shall be eligible to become Participants at inception of the Plan in that location. b) Enrollment in the Plan shall include at a minimum: (1) a payroll deduction authorization specifying the amount or rate of Plan contributions per pay period, (2) an agreement to be bound by all of the applicable terms and conditions of the Plan, (3) designation of the Participant's tax residence and citizenship, (4) an agreement that information obtained in connection with the Participant's Plan participation may be communicated outside the country in which he or she is employed in furtherance of Plan purposes, (5) an authorization for the Employer and the Company to receive information on all transactions in the Participant's Savings Account for purposes of verifying compliance with the Plan either from the financial institution in which the Participant's Savings Account is maintained or from the Participant directly as determined by the Company from time to time and place to place, if so requested by the Company, (6) if determined to be appropriate by the Company, an authorization for the Employer to withdraw amounts from the Participant's Savings Account on the Participant's instruction for the purpose of buying Shares in accordance within the Plan; and (7) any other information deemed necessary or desirable by the Company, all in such form as the Company may require. c) An individual shall cease to be a Participant when he or she is no longer an Eligible Employee by reason of transfer, death, termination of employment (including retirement) or termination of the Plan in his or her location. 4. Savings Accounts a) The Company shall select a financial institution and a savings plan offered by that institution in each country where an Employer has Eligible Employees. A 4

savings plan must be available to all Eligible Employees of all Employers in each country, and provide a Savings Account for and in the name of each Participant in the country; provided, if the Company determines in its sole discretion that a suitable savings plan is not available in a particular location, the Company may authorize the use of individual Saving Accounts established by affected Participants for this purpose. Each financial institution or Participant must agree: (1) to provide the Employer and the Company with statements of the Participant's Savings Account transactions to verify compliance with Plan rules; and (2) to comply with all legal requirements regarding tax and other reporting matters with respect to the Participant's Savings Account. b) A Participant's Savings Account shall be funded solely by amounts withheld from the Participant's Compensation at the Participant's election pursuant to the Plan by means of payroll deduction or by like means approved by the Company. c) Withdrawals from a Participant's Savings Account may be made either: 1) by the Participant for any purpose at any time, in which case the amount withdrawn may not be redeposited, or 2) by the Participant or by the Employer on the instructions of the Participant for purchase of Shares in accordance with the Plan, as determined by the Company in its sole discretion. 5. Plan Contributions Each Participant shall elect to contribute a percentage of Compensation to be withheld from his or her pay for each pay period by his or her Employer. The Company may impose a maximum on Participants' contributions from time to time and place to place. The Participant may change the percentage from time to time in accordance with procedures established by the Company. A Participant's Plan contributions which are withheld by payroll deduction shall be transferred by the Employer to the Participant's Savings Account within a reasonable time after they are withheld. Neither the Company nor any Employer shall be liable for interest for the period between the date of withholding and the date of transfer to the Participant's Savings Account. A Participant may elect to cease or resume contributions from time to time pursuant to procedures established by the Company. 6. Share Offerings a) 1) On each Offering Date with respect to a location, each Eligible Employee on the regular payroll for that location shall be invited to purchase up to 100 Shares from the Company or the Eligible Employee's Employer, as determined by the Company in its sole discretion. An Eligible Employee making 5

contributions under the Plan as of an Offering Date shall be deemed to have accepted an offer made on the Offering Date. Any other Eligible Employee may accept an offer as of an Offering Date by written election to enroll in the Plan and make contributions under the Plan in accordance with procedures and by such deadlines as may be established by the Company from time to time. Notwithstanding anything, an Eligible Employee who is not making Plan contributions as of an Offering Date or does not elect to enroll and make Plan contributions in connection with an offer made on the Offering Date shall not be eligible for the offer. 2) A Participant's Savings Account shall be the only source of funds for the Participant's purchase of Shares under the Plan. 3) The Shares offered to a Participant on each Offering Date shall be in addition to any Shares offered to the Participant on prior Offering Dates. 4) The purchase price of Shares offered on each Offering Date shall be fixed at the Market Price on the United States business day immediately before the Offering Date. 5) Each Share offering shall expire on the Purchase Date coincident with the third anniversary of its Offering Date. b) Each offer to purchase Shares under the Plan shall be evidenced by a written offer from the Company or the Participant's Employer to the Participant in form determined by the Company, including the following terms and such other terms and conditions as the Company may determine in its sole discretion from time to time and place to place: 1) The number of Shares subject to the offer. 2) The price per Share subject to the offer in United States currency. 3) The expiration date of the offer. The written offers provided for herein may be transmitted on paper, electronically or by other method selected by the Company. The written offers may contain any provision approved by the Company relating to the circumstances under which a termination is deemed to occur. A Participant shall have none of the rights of a shareholder with respect to any Shares unless and until the Shares are issued in his or her name. c) A Participant's right to purchase Shares under the Plan shall be non-transferable and shall be exercisable only by the Participant by notice in form prescribed by the Company delivered to the Participant's Employer or the Company during the 6

Participant's lifetime, except as provided for in Section 14(c) with respect to a Participant whose employment is terminated on account of death. 7. Share Purchases a) As of any Purchase Date, pursuant to procedures established by the Company, with such advance notice as the Company may require from time to time, a Participant may elect to apply all or a specified part of the Participant's Savings Account to purchase Shares then available to the Participant pursuant to Section 6. b) If Shares are then available to a Participant under two or more offerings, the Participant's election to purchase Shares shall be applied in date order, earliest first, to the Share offerings then available to the Participant for which the Purchase Price is lower than the Market Price on the Purchase Date. If no Share offerings are available to the Participant for which the Purchase Price is lower than the Market Price on a Purchase Date, the Participant shall not be eligible to purchase Shares on the Purchase Date. c) A Participant's election to purchase Shares shall be in form prescribed by the Company. d) Any estimated withholding and other taxes incurred in connection with a purchase of Shares shall be funded by means of: (i) additional withholding from the Participant's current pay, subject to any legal limits on maximum withholding; or if that is insufficient to satisfy the estimated obligation as determined by the Participant's Employer, (ii) other assets of the Participant, in which case the Participant's election shall be accompanied by cash or a certified check in the amount of the estimated withholding taxes. e) A Participant's election shall include an authorization to withdraw the specified amount in local currency from the Participant's Savings Account to apply to the purchase of Shares. f) The purchase price of the Shares purchased and the amount required to be withheld by the Participant's Employer under applicable law in excess of the amounts to be withheld from the Participant's current pay by payroll deduction shall be paid by the Participant not later than the Purchase Date. g) If the amount in a Participant's Savings Account is less than the amount required to carry out the Participant's election, the Participant's election shall be carried out to the extent possible, provided that all transaction costs and tax liabilities are satisfied by the Participant. 7

h) The amount specified in a Participant's election to purchase Shares shall be converted to United States currency and used by the Company or the Participant's Employer to carry out the Participant's election; provided, if the amount of United States currency so obtained exceeds the amount required to purchase all Shares available to the Participant, the excess shall not be converted to United States currency but instead shall remain in the Participant's Savings Account for subsequent use under the Plan, or if so converted, the transaction shall be reversed to the extent of the excess, and the excess shall be redeposited in the Participant's Savings Account, without liability for interest thereon, for subsequent use under the Plan. i) Shares acquired by a Participant pursuant to the Plan shall be delivered as Booked Shares; provided that a Participant may request that the Broker issue the Shares in certificate form in accordance with the Broker's regular practices and procedures. Requests for certificates must be accompanied with information required to enable delivery of the certificates and payment of any fees charged by the Broker for issuance of the Shares in certificate form. j) The Company may establish minimum purchase requirements for all Participants similarly situated. 8. Dividends on Booked Shares Any dividends paid on Booked Shares shall be the property of the respective Participants and shall be reinvested in Shares for the benefit for the Participant, in accordance with the Broker's customary practices and procedures, or at the election of a Participant shall be retained by the Broker in United States currency for the benefit of the Participant, except as required by law to be converted to the Participants' local currencies, in which case they shall be delivered to the respective Participants. 9. Tax Withholding Where required by law, each Employer shall report to the appropriate government authority any amount subject to tax and social charges on account of any offer, purchase or sale pursuant to the Plan and shall estimate all current tax and social charge withholding liabilities, and the Participant shall satisfy this liability by means of withholding from the Participant's current pay or from the Participant's other assets. 8

10. Sale or Other Transfer of Shares a) 1) A Participant may elect to sell a specified number of Booked Shares in accordance with the Broker's regular practices and procedures as soon as practical after transfer to the Broker or on any subsequent Sale Date. 2) The Participant shall designate which Booked Shares are to be sold; provided, if the Participant uses a method of communication maintained by the Broker which does not permit designation of which Booked Shares shall be sold, the Broker shall sell the specified number of Shares on a last-in first-out basis. As of May 1, 1999, the only such method is the Broker's automated voice response unit. 3) The proceeds of sale of Booked Shares, net of any transaction fees associated to the sale, including but not limited to brokerage fees, wire transfer fees, and any taxes required to be withheld incident to the sale, shall be retained by the Broker for the benefit of the respective Participants; provided, if required by law or instructed in writing by the Participant, such net proceeds shall be converted by the Broker from United States currency to the Participant's local currency and delivered to the Participant. b) A Participant may transfer ownership of Booked Shares by gift to the extent permitted by and in accordance with the Broker's customary practices and procedures and laws applicable to the Participant. c) A Participant may sell any Shares issued to the Participant in certificate form at any time by means selected by the Participant and at the Participant's sole expense. 11. Match on Retained Shares a) On or about each Offering Date, the Company shall announce the rate at which Shares offered on that Offering Date which become Retained Shares will be matched by the Company or the Participant's Employer. This match rate shall be determined with respect to Participants in each location by the Chief Executive Officer of Anheuser-Busch International, Inc. in his or her sole discretion, in a range between 10% and 50% based on business performance for the fiscal year ending on December 31 prior to the Offering Date. b) As of the second anniversary of the Purchase Date for any Retained Shares of a Participant, the Company or the Participant's Employer, as determined by the Company in its sole discretion, shall grant the Participant additional whole and fractional shares of Booked Shares based on the applicable match rate. Notwithstanding anything, an individual whose employment with the Company and all subsidiaries ends before the second anniversary of the Purchase Date for 9

any Retained Shares shall not be eligible for this grant, unless the individual retires from status as an Eligible Employee on or after attainment of age 60. 12. Currency Conversion a) Any currency conversion required in connection with a Participant's election to purchase Shares pursuant to Section 7 or transfer of employment pursuant to Section 15 shall be carried out by the Company or the Participant's Employer by any means the Company selects in its reasonable discretion. On inception of the Plan, the rate of currency conversion used in connection with Share purchase shall be determined by the Company on the basis of rates published on the first business day of the calendar month that ends immediately prior to the affected Purchase Date. b) Any currency conversion required in connection with a transaction related to Booked Shares held by the Broker shall be carried out by the Broker in accordance with its customary practices and procedures. 13. Statements Participants shall receive statements of their Savings Accounts and Share transactions not less frequently than annually. 14. Termination of Employment a) Termination of employment includes the separation of a Participant, directly or through the separation of his or her Employer, from the group of companies comprised of the Company and its Subsidiaries for any reason, including death, permanent or indefinite disability, retirement, resignation, dismissal, permanent or indefinite layoff or other event having a similar effect, or by reason that the Participant's Employer ceases to be a Subsidiary or a division of a Subsidiary. b) In the event of a Participant's termination of employment with the Company and all of its Subsidiaries for any reason other than death, all of the Participant's outstanding offers to purchase Shares shall immediately be cancelled. The Participant or the beneficiary designated by the Participant or required by law with respect to a deceased Participant may treat any Booked Shares owned by the Participant at the time of termination of employment as his or her own property. c) A Participant or beneficiary shall not be eligible for any match of the type provided for in Section 11 after termination of employment except a Participant who retires on or after attainment of age 60. 10

d) If a Participant's termination of employment ends by reason of the Participant's death, the beneficiary designated by the Participant or required by law may elect to apply all or part of the amount of the Participant's Savings Account to purchase Shares then available to the Participant in accordance with Section 7 for a period not in excess of six (6) months from the Participant's date of death. e) Layoff or approved leave of absence shall not be treated as termination of employment for this purpose, provided that the Participant returns to work within twelve (12) months after the period of layoff begins or before the expiration of the approved leave of absence, as the case may be. In the event that the Participant does not return to work within the period of time provided for in this paragraph (d), the Participant's employment shall be deemed terminated as of the first day of such layoff or leave of absence. If the period of layoff or approved leave of absence includes the date on which the Participant would otherwise be eligible for the match on any Retained Shares pursuant to Section 11, the match shall not be awarded unless the Participant returns to work within the period of time provided for in this paragraph (d), and if the match is awarded with respect to such Retained Shares, it shall be awarded as of the Purchase Date following the Participant's return to work. 15. Transfers a) If a Participant transfers from one location where Plan participation is available to another location where Plan participation is available, to the extent permitted by law, the Participant shall continue to participate in the Plan without interruption; provided, except as limited by law: (1) the Participant shall re-enroll in the new location for purposes of authorizing Plan contributions to his or her Savings Account; (2) the Participant shall authorize transfer of the amount in his or her Savings Account in the prior location to his or her Savings Account in the new location at then prevailing exchange rates; and (3) the Participant shall be subject to any local rules in the new location with respect to Shares purchased with his or her Savings Account in the new location, including amounts transferred from his or her Savings Account in the old location. b) If a Participant transfers from a location where Plan participation is available to a location where Plan participation is not available, to the extent permitted by law, the Participant may use his or her Savings Account to purchase Shares then available to the Participant under all Share offerings on the Purchase Date preceding the transfer, and the Participant may elect to sell the Shares so purchased and any Booked Shares then owned by the Participant or to receive the Shares in certificate form pursuant to procedures then in use under Sections 7 and 10 of the Plan or retain the Shares as Booked Shares, in accordance with and subject to the practices and procedures of the Broker. If no Purchase Date occurs between the date the Participant is notified of the transfer and the 11

Participant's transfer date, the Company shall determine in its sole discretion when and how the Participant's participation in the Plan shall be terminated. c) If an Eligible Employee transfers from a location where Plan participation is not available to a location where Plan participation is available, the Eligible Employee may become a Participant as of the next regular Offering Date in the new location so long as the Employee joined the Company and its Subsidiaries before January 1 next preceding the Offering Date. 16. Plan Changes and Termination a) The Company is under no obligation to make Share offerings under this Plan. The Company may make changes to the Plan in respect of any Share offering prior to its Offering Date; provided that no change shall increase the maximum number of Shares issuable under the Plan without approval of the Stock Option Plans Committee of the Board or expand the definition of Eligible Employee. b) The Company may terminate the Plan with respect to any or all groups of Eligible Employees at any time. c) Any Employer may withdraw from the Plan at any time by three (3) months' advance written notice to the Company; provided, in that case, that affected Participants shall not be prohibited from applying amounts in their respective Savings Accounts to outstanding Share Offerings as of the Purchase Date coincident with or next preceding the date of withdrawal. 17. Variation in Plan Rules The Company in its sole discretion may change the Plan Rules with respect to specific locations and the Participants of any Employer in those locations. Such changes may be reflected in Exhibits to this document or by other methods determined by the Company. 18. Administration a) Responsibility for administration of the Plan shall be shared by the Company and each Employer in the matter determined by the Company in its sole discretion from time to time and place to place. The Company and the Employers shall appoint local representatives to handle Plan administration to the extent they deem appropriate. b) The Company shall have sole authority and responsibility to construe and interpret the Plan and establish, amend, and revoke rules, regulations and procedures for its administration. The Company in the exercise of this authority and responsibility shall generally determine all questions of policy and 12

expediency that may arise, may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any instrument associated with the Plan in a manner and to the extent it shall deem necessary or expedient. The Company's interpretation and construction of any provision of the Plan shall be final and conclusive. c) The Company shall act through its Vice President, Employee Benefits and through his or her delegates. The Company may appoint any one or more employees to act as a Committee to carry out any one or more of its administrative duties under the Plan. 19. Changes in Capital Stock a) In the event of a change in the Company's capital stock as a result of any dividend or distribution (whether in the form of cash, Shares, other securities or other property), stock split, reverse stock split, recapitalization, reorganization, merger, consolidation, split-up, split-off, spin-off combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or any other similar corporate transaction, change or event, the aggregate number and class of Shares available in subsequent offerings under the Plan and the number, class and price of Shares subject to outstanding offers under the Plan shall be adjusted in the same manner and to the same extent as under the Company's 1998 Incentive Stock Plan, except as otherwise determined by the Stock Option Plans Committee of the Board. b) If the Board approves any merger or consolidation of the Company with or into any other corporation or business entity as a result of which the Company shall not be the surviving corporation, Shares then subject to offer shall be treated in the same manner as Awards under the Company's 1998 Incentive Stock Plan, except as otherwise determined by the Stock Option Plans Committee of the Board. 20. Miscellaneous a) No discretion granted or allowed to the Company shall apply to Shares after their Offering Date. b) Nothing in this Plan shall confer on any person any expectation to continue in the employ of any Employer or interfere in any manner with the right of any Employer to change or terminate any person's employment at any time for any reason or for no reason, to the extent allowed under governing law. 13

21. Governing Law a) Except as otherwise expressly required under the laws of a country, this Plan and all rights hereunder shall be governed by and construed in accordance with the laws of the state of Delaware, United States of America. b) Should any provision of this Plan be determined by a court of competent jurisdiction to be unlawful or unenforceable for a country, such determination shall in no way affect the application of that provision in any other country, or any of the remaining provisions of the Plan. 14

Exhibit 10.8 ANHEUSER-BUSCH COMPANIES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AMENDED AND RESTATED AS OF MARCH 1, 2003 ANHEUSER-BUSCH COMPANIES, INC., a Delaware corporation, established this Supplemental Executive Retirement Plan, originally effective as of January 1, 1984. The Plan has been amended from time to time and the Company hereby amends and restates the Plan. The provisions of this restated Plan shall apply to eligible employees whose termination of employment with the Company or any other Participating Employer occurs on or after March 1, 2003. The Plan is intended to be a non-qualified, unfunded plan to provide supplemental retirement benefits to a select group of management and highly compensated employees, as described in Section 201(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"). 1. Definitions. The capitalized terms used in this Plan shall have the meanings herein set out: (a) "Accrued Benefit" means at any given time the benefit calculated in accordance with the formula in Section 3, using the Participant's Eligible Earnings and Credited Service as of the date the calculation is being made. The benefit so calculated shall be the benefit that would commence under the basic method of payment on the Participant's Normal Retirement Date. (b) "Actuarial Equivalent" means a benefit or benefits, or a payment or payments, which are of equal value at the date of determination to the benefits for which they are to be substituted. Equivalence of value is determined from actuarial calculations based on actuarial assumptions as to interest and mortality applied with respect to the particular form or forms of payment under the Basic Plan, disregarding the interest and mortality assumptions grandfathered as of December 31, 1999 with respect to single sum and installment payments. (c) "Basic Plan" means the Supplement for the Anheuser-Busch Salaried Employees Pension Plan maintained as part of the Anheuser-Busch Companies Pension Plan as now in effect or as hereafter amended. (d) "Board" means the board of directors of the Company. (e) "Committee" means the Committee designated to administer this Plan, as described in Section 18. (f) "Company" means Anheuser-Busch Companies, Inc., a Delaware corporation, and any corporation(s) into which or with which it may be liquidated, merged or consolidated. (g) "Credited Service" Except as provided herein, a Participant's Credited Service under this Plan should be the same as the Participant's Credited Service under the Basic Plan for all purposes. This generally means an individual's 1

years and completed months of salaried employment with a Participating Employer after attainment of age 21. Credited Service shall not exceed 30 years. Additional Credited Service granted under the Change in Control provisions of the Anheuser-Busch Companies Pension Plan (Section 19.14) shall not be Credited Service under this Plan. (h) "Eligible Earnings" means, for any calendar year, the sum of the employee's annual base salary as of January 1 of such year plus the bonus earned during the prior calendar year. For purposes of computing benefits under this Plan, the Eligible Earnings to be used shall be the highest of the Eligible Earnings in the calendar year of termination or any of the four preceding calendar years. Eligible Earnings shall recognize any compensation deferred under the Executive Deferred Compensation Plan and treat such compensation as if it were not deferred. (i) "Eligible Employee" means a salaried employee of a Participating Employer who is an active participant currently accruing benefits in the Basic Plan and who satisfies or in the past has satisfied one or more of the following requirements: i) He or she is a member of the Company's Strategy Committee; ii) He or she has a salary band of I or above, or the equivalent thereof as determined by the Committee, and has, for the current calendar year, Eligible Earnings of at least $140,000 (indexed as described below) or such other amount as the Committee shall determine from time to time; or iii) He or she is an officer of the Company or Anheuser-Busch, Inc., a Missouri corporation, excluding an assistant officer. The $140,000 figure shall be indexed as of January 1 of each year commencing January 1, 1994, in accordance with the Company's overall combined merit budget increase applicable for such year. (For 2001, the Eligible Earnings requirement is $178,853.) (j) "Excess Benefit Plan" means the Anheuser-Busch Companies, Inc. Excess Benefit Plan, Amended and Restated as of March 1, 2000, and as thereafter amended, or any other "excess plan" as described in Section 3(36) of ERISA, maintained by a Participating Employer and as in effect from time to time. (k) "Normal Retirement Date" means the first day of the month coincident with or next following the date on which the Participant attains his or her sixty-fifth (65th) birthday. (l) "Participant" means an Eligible Employee who is participating in this Plan in accordance with Section 2. (m) "Participating Employer" means the Company and any other member of the controlled group of corporations of which the Company is a member 2

which is a Participating Employer in the Basic Plan and which has adopted this Plan in the manner described in Section 16. (n) "Plan" means this Anheuser-Busch Companies, Inc. Supplemental Executive Retirement Plan, Amended and Restated as of March 1, 2003, and as thereafter amended. (o) "Primary Social Security Benefit" means, for retirements on or after the Normal Retirement Date, the estimated primary insurance amount that would commence immediately under the Federal Social Security Act in effect on the retirement date assuming that the Participant's earnings for Social Security purposes are equal to the benefit base as determined under Section 230 of the Federal Social Security Act from the date the Participant attained age 21 until the Participant's retirement date. For purposes of determining the Accrued Benefit prior to a Participant's Normal Retirement Date, the Primary Social Security Benefit means: (i) An amount determined as described above assuming that the Participant retires on his or her Normal Retirement Date and that the Social Security Act and benefit base remain unchanged in the future, multiplied by (ii) The ratio of the Participant's Credited Service as of the date of determination to the lesser of thirty (30) years or the Participant's Credited Service had the Participant remained an active Participant until his or her Normal Retirement Date. (p) "Subsidiary" means any business entity in which the Company has an equity interest of at least fifty percent. Miscellaneous Rules of Construction. Masculine pronouns include the feminine, the singular includes the plural, and the plural includes the singular, as the context or application demands. 2. Participation. Each Eligible Employee shall commence participation in this Plan as of the first day of the month coincident with or next following the date he or she first becomes an Eligible Employee. An individual who is an Eligible Employee solely under subparagraph (ii) of Section 1(i) shall be deemed to have first satisfied the band and compensation requirements of such provision on January 1 of the first calendar year for which such requirements are satisfied. Except as provided in Section 16, once an individual becomes a Participant, he or she shall continue to participate until termination of employment with a Participating Employer even if such individual no longer satisfies the band and compensation requirements to remain an Eligible Employee. Any Eligible Employee on October 1, 1993 who was not a Participant in this Plan prior to its restatement effective October 1, 1993 shall first participate as of October 1, 1993. 3

3. Benefit on or after Normal Retirement Date. (a) A Participant who ceases to be employed by all members of the Company's controlled group of corporations on or after his or her Normal Retirement Date shall receive a monthly benefit, payable under the basic method of payment described in Section 8, and commencing on the first day of the month coinciding with or immediately following his or her last date of employment, in an amount which is one-twelfth of the following: (i) For Strategy Committee members, one and two-thirds percent of Eligible Earnings times Credited Service; for all other Participants, one and one-half percent of Eligible Earnings times Credited Service (provided that once a Participant becomes a Strategy Committee member, the Participant's benefit will be based on the higher formula for all Credited Service even if the Participant ceases to be a Strategy Committee member prior to retirement); less (ii) The Participant's annual retirement benefit payable at Normal Retirement Date (or, if applicable, postponed retirement date) under the Basic Plan, under the basic method of payment described in such plan; less also (iii) Any other benefits from any excess benefit plan or other retirement plan or arrangement maintained or sponsored by the Company or any Subsidiary, other than a qualified or nonqualified 401(k) plan or a voluntary nonqualified deferred compensation plan. The reduction under this paragraph shall be the annual benefit under such other plan or plans, payable at Normal Retirement Date (or, if applicable, postponed retirement date), expressed as if payable under the basic method of payment described in such plan; provided, however, that if such basic method is not a form of single life annuity, then expressed as if payable solely for the lifetime of the Participant on an Actuarial Equivalent basis; less also (iv) The Participant's annual Primary Social Security Benefit. (b) In no event shall a Participant's benefits calculated under 3(a) be less than the difference between (i) the benefit actually payable under the Basic Plan, and (ii) the benefit that would have been payable under the Basic Plan without regard to the limitation imposed by Section 401(a)(17) of the Internal Revenue Code (both amounts to be determined under the basic method of payment). This minimum benefit shall be separately calculated with respect to all Participants, including those whose benefits exceed this minimum, and shall be treated as a separate obligation payable from a separate plan solely for the purpose of determining which, if any, portion of a Participant's benefits is subject to income tax in the state where the Participant resided when the benefit was earned. (c) A Participant's gross benefit calculated under 3(a)(i) hereof shall never be lower than the amount that would have been calculated under subparagraph (a)(i) if the Participant's retirement had occurred on any date after the Participant's attainment of age 55 and five years of Credited Service. 4

(d) If a Participant retires after his or her Normal Retirement Date, the Participant's gross benefit calculated under 3(a)(i) shall not be less than the Actuarial Equivalent of the Participant's gross benefit under 3(a)(i) calculated as of the date the Participant attained Normal Retirement Date. 4. Benefit on Early Retirement. The following benefits are available for Participants who retire prior to Normal Retirement Date: (a) A Participant who ceases to be employed by all members of the Company's controlled group of corporations prior to his or her Normal Retirement Date but after reaching age 62 and completing 30 years of Credited Service shall be entitled to receive a retirement benefit equal to his or her Accrued Benefit, but commencing on the first day of the month coinciding with or immediately following the Participant's last date of employment. (b) A Participant who ceases to be employed by all members of the Company's controlled group of corporations after reaching age 55 and who has at least five years of Credited Service but who is not eligible to receive a benefit under paragraph (a) above may, unless disapproved by the Company's Chief Executive Officer (or, in the case of the Chief Executive Officer, the Board of Directors), be granted a benefit equal to his or her Accrued Benefit reduced in accordance with the reduction applicable to the Participant's retirement benefits payable under the Basic Plan. Such benefit shall commence as of the first day of the month coincident with or next following the Participant's last date of employment. (c) There shall be no benefits payable from this Plan for a Participant who ceases employment prior to the attainment of age 55, except as provided in Sections 5, 6 and 11. 5. Pre-Retirement Death Benefit. (a) If a Participant dies while employed by a Participating Employer and after otherwise satisfying the requirements of Section 3, 4 or 6 to receive a retirement benefit, a death benefit may be paid. (b) The amount of the death benefit, if any, payable from this Plan shall be the single lump sum Actuarial Equivalent of the Participant's retirement benefit determined under Section 3, 4 or 6, whichever applies, as of the date of the Participant's death. (c) Any amount payable under this Section 5 shall be paid in a single lump sum to the Beneficiary determined in accordance with Section 12. 6. Disability Benefit. A Participant whose employment terminates because of disability prior to becoming eligible for benefits under Section 3 or 4 shall be entitled to the Actuarial Equivalent of his or her Accrued Benefit. Disability shall be established, as determined by the Committee, if the Participant is unable for a period reasonably 5

expected to exceed six months to perform the duties of the position held prior to the incident or the onset of the illness resulting in the disability. 7. Forfeiture for Activity Contrary to the Company's Best Interests. (a) Notwithstanding any provision of this Plan to the contrary, the right of a Participant and his or her beneficiary or beneficiaries to receive a benefit hereunder is expressly conditioned upon the Participant neither (i) having ceased to be employed by the Company or any Subsidiary under circumstances or conditions inimical or contrary to the best interests of the Company or any Subsidiary, nor (ii) thereafter engaging in any activity which in the Committee's judgment is inimical or contrary to the best interests of the Company or any Subsidiary. (b) Should a Participating Employer propose to enforce the foregoing, it shall give written notice to the Participant or other person(s) otherwise entitled to payment, and may withhold payment pending final resolution of the matter. The Committee shall thereupon investigate the alleged violation and shall consider, under such rules of procedure as the Committee shall deem reasonable, such evidence and testimony as the Participating Employer and the Participant or other person or persons receiving or otherwise entitled to receive payment may wish to submit in support or refutation of the alleged violation. The decision of the Committee shall be final and conclusive. If the Committee concludes that there has been a violation, the right of the Participant and all beneficiaries to receive payment hereunder shall thereupon cease. If the Committee concludes that there has not been a violation, the amounts withheld or suspended shall become payable as though no proceedings had been instituted nor any payment withheld or suspended, without, however, any interest for the period during which such amounts were withheld or suspended. (c) The provisions of this Section authorizing the Participating Employer to give notice of an alleged violation or possible violation of the conditions of paragraph (a) shall not be interpreted as requiring the Participating Employer to take such action in each and every instance of a violation or suspected violation, and in determining whether an attempt to enforce the forfeiture provisions of this Section shall be made, the Participating Employer may consider the possible economic damage it might suffer from the violation or suspected violation, the circumstances surrounding the discontinuance of the employment of the Participant with the Participating Employer and the quantum of proof which the Participating Employer may have of a violation of the aforesaid conditions. (d) The provisions of this Section shall in no way impair or derogate the rights which a Participating Employer may otherwise have under any employment contract with a Participant or at law or in equity, to prevent the disclosure of confidential information or to recover damages for the disclosure thereof or to prevent a Participant from engaging in competition with a Participating Employer or to recover damages therefor. (e) The Board (or the Executive Committee at any time the Board of Directors is not in session) may revoke this Section at any time, whereupon no 6

Accrued Benefit at that time shall ever be subject to forfeiture or revocation for any reason, including (but not limited to) any subsequent amendment to this Plan which reinstates the provisions of this Section or imposes similar conditions on a Participant's right to receive benefits hereunder. (f) If the provisions of this Section are invoked at any time after payments have already been made, the Participating Employer shall have the right to a refund of all monies theretofore paid. If the Participating Employer shall find it necessary to file suit to recover any amount hereunder, it shall be entitled to recover its reasonable attorney's fees and costs. 8. Payment Methods. The basic method of payment for Participants retiring on or after January 1, 1995 shall be monthly payments for life, beginning on the first day of the month coincident or next following the Participant's retirement date, with the last payment being for the month in which the Participant's death occurs, but with 120 monthly payments guaranteed. Notwithstanding the foregoing, payment shall be made in a single lump sum unless the Participant gives written notice to the Committee, at least one year prior to the date of employment termination, that the Participant elects to receive benefits under either the basic method of payment described above or one of the following optional methods which shall be the Actuarial Equivalent of the basic method of payment: (a) A two-thirds joint and survivor annuity with such contingent annuitant as the Participant may designate. If a Participant has selected this method of payment and the contingent annuitant dies before payments begin, the selection shall be revoked, but if the contingent annuitant dies after payments begin, the selection of this method of payment shall not be affected and no new contingent annuitant may be named; or (b) Level installments payable annually over a five-year period. (c) Level installments payable annually over a ten-year period. A Participant may elect an optional method of payment under this Plan which is different from the method of payment elected under either the Basic Plan or the Excess Benefit Plan. 9. Obligation to Pay Benefits Hereunder. No trust fund, escrow account or other segregation of assets shall be established or made by any Participating Employer to guarantee, secure or assure the payment of any benefit hereunder. The obligation of each Participating Employer to pay benefits pursuant to this Plan shall constitute only a general obligation of the Participating Employer to the Participants and other payees hereunder in accordance with the terms hereof. Payment of benefits by a Participating Employer hereunder shall be made only from the general funds of the Participating Employer and no Participant or other potential payee of any amount hereunder shall have any interest in any particular asset of any Participating Employer by reason of the existence of this Plan, and the amounts payable hereunder shall be subject in all respects to claims of general creditors of the respective 7

Participating Employers until actually paid over to the person(s) entitled to receive the same. 10. Special Rule for Non-Deductible Amounts. Any amount otherwise payable under the Plan in a calendar year for which the Company determines that the amount would not be deductible by any Participating Employer under section 162(m) of the Internal Revenue Code, shall not be paid until such calendar year as the Company determines that the amount has ceased to be so non-deductible. In the case of any inconsistency between this Section 10 and any other provision of the Plan, this Section 10 shall govern, except in the case of Section 11 becoming applicable. 11. Change in Control. (a) If a Change in Control (as defined in Section 11(b)) shall occur, then, notwithstanding anything to the contrary herein, a Participant's Accrued Benefit under the Plan as of the Change in Control Date shall be fully vested and non-forfeitable. Within 30 days after the Change in Control Date, the Participant shall be paid, in a single lumpsum payment, the Actuarial Equivalent of such Accrued Benefit as of the date of payment. Notwithstanding the foregoing, if, on the Change in Control date, a Participant otherwise satisfied the eligibility requirements for early or normal retirement benefits under Sections 3 or 4, such Participant's benefit shall be paid as if he or she actually retired on the Change in Control Date. The Chief Executive Officer shall be deemed to have granted any necessary approvals. (b) For purposes of this Plan, a "Change in Control" shall occur automatically if and when an "Acceleration Date" occurs as defined in the Company's 1998 Incentive Stock Plan or if and when an analogous change in control event occurs as defined in any successor to such plan, and the Change in Control Date shall be the Acceleration Date or analogous date as defined therein. (c) This Section 11 may be deleted or amended in any way pursuant to Section 20 at any time prior to a Change in Control. Notwithstanding Section 20, following a Change in Control, the provisions of this Section 11 cannot, after the Change in Control Date, be amended in any manner without the written consent of each individual who was a Participant immediately prior to the Change in Control. (d) Following a Change in Control, this Plan shall continue in effect, notwithstanding that payment of benefits shall have been made under Section 11(a), unless and until terminated by the Company. (e) If a Change in Control occurs, Section 7 shall no longer apply to any individual whose activities are not under investigation by the Committee on the Change in Control Date. (f) If by reason of this Section an excise or other special tax ("Excise Tax") is imposed on any payment under this Plan (a "Required Payment"), the amount of each Required Payment shall be increased by an amount which, after payment of 8

income taxes, payroll taxes and Excise Tax thereon, will equal such Excise Tax on the Required Payment. 12. Concerning Payment; Beneficiaries. (a) Except as otherwise provided in this Section, any amount payable under this Plan as a result of or following the death of a Participant shall be applied only for the benefit of the beneficiary or beneficiaries designated by the Participant pursuant to this Section. Each Participant shall specifically designate, by name, on forms provided by the Committee, the beneficiary (ies) to whom any such amounts shall be paid. A Participant may change or revoke a beneficiary designation without the consent of the beneficiary (ies) at any time by filing a new beneficiary designation form with the Committee. The filing of a new form shall automatically revoke any forms previously filed with the Committee. A beneficiary designation form not properly filed with the Committee prior to the death of the Participant shall have no validity under the Plan. (b) Except as provided in Section 8, any such designation shall be contingent on the designated beneficiary surviving the Participant. If a designated beneficiary survives the Participant but dies before receiving the entire amount payable to the designated beneficiary hereunder, the amount which would otherwise have been so paid shall be paid to the estate of the deceased beneficiary unless a contrary direction was made by the Participant, in which case such direction shall control. More than one beneficiary, and alternative or contingent beneficiaries, may be designated, in which case the Participant shall specify the shares, terms and conditions upon which amounts shall be paid to such multiple or alternative or contingent beneficiaries, all of which must be satisfactory to the Committee. (c) If no beneficiary designation is on file with the Committee at the time of the Participant's death or no beneficiary designated by the Participant survives the Participant, the Participant's estate shall be deemed to be the beneficiary designated to receive any amounts then remaining payable under this Plan. (d) In determining any question concerning a Participant's beneficiary, the latest designation filed with the Committee shall control and intervening changes in circumstances shall be ignored; provided, if a Participant's spouse is designated as beneficiary but thereafter is divorced from the Participant, such designation shall become invalid as of the date of divorce unless the Participant files a beneficiary designation form with the Committee after the date of divorce confirming designation of such former spouse as beneficiary. (e) Any check issued on or before the date of a Participant's death shall remain payable to the Participant, whether or not the check is received by the Participant prior to death. Any check issued after the date of the Participant's death shall be the property of the Participant's beneficiaries determined in accordance with this Section 12. 9

13. Payees Presumed Competent. Every person receiving or claiming amounts payable under this Plan shall be conclusively presumed to be mentally competent and of legal age until the Committee receives a written notice, in form, manner and substance acceptable to it, that any such person is incompetent or is a minor or that a guardian or other person legally vested with the care of the person's estate has been appointed. 14. Facility of Payment. If any amount is payable hereunder to a minor or other person under legal disability or otherwise incapable of managing his or her own affairs, as determined by the Committee in its sole discretion, payment thereof shall be made in one (or any combination) of the following ways, as the Committee shall determine in its sole discretion: (i) Directly to said minor or other person; (ii) To a custodian for said minor or other person (whether designated by the Company or any other person) under the Missouri Transfers to Minors Law, the Missouri Personal Custodian Law or a similar law of any other jurisdiction; (iii) To the conservator of the estate of said minor or other person; or (iv) To some relative or friend of such minor or other person for the support, welfare or education of such minor or other person. The Committee shall not be required to see to the application of any payment so made, and payment to the person determined by the Committee shall fully discharge the Plan and the Participating Employer from any further accountability or responsibility with respect to the amount so paid. 15. Notice of Address; Lost Payees. The address of every Participant or other person entitled to any payment hereunder on file for purposes of the Basic Plan shall be used for all purposes of this Plan. If the Committee is unable to locate any person, or the estate of such person, after a reasonable attempt to locate such person has been made, within two years after an amount becomes payable hereunder, the right and interest of such payee in and to the amount payable shall terminate on the last day of such two-year period. 16. Participating Employer. Any Participating Employer in the Basic Plan may become a Participating Employer in this Plan by submitting to the Committee a resolution of its board of directors adopting the provisions of this Plan. The adoption of this Plan by a Participating Employer shall constitute an automatic delegation by it to the Board of full authority to amend or terminate the Plan and to the Committee to administer this Plan. Benefits payable under this Plan for a Participant whose employment terminates from a Participating Employer shall be solely the obligation of that Participating Employer. A Participating Employer may withdraw from the Plan by action of its board of directors. If such a withdrawal shall occur, no benefit shall be 10

payable under this Plan to any Participant who has not otherwise satisfied the eligibility requirements of Sections 3, 4, 6 or 11, as of the date of withdrawal. Notwithstanding the foregoing, any benefits in pay status as of the date of withdrawal shall continue to be paid in full in accordance with the terms hereof. 17. No Liability for Payee's Debts. Amounts payable under this Plan shall not be liable for or subject to the debts or liabilities of any payee, and no amount payable hereunder shall at any time or in any manner be subject to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance of any kind, whether to any Participating Employer or to any other party whomsoever, and whether with or without consideration. If any payee shall attempt to, or shall anticipate, alienate, sell, transfer, assign, pledge or otherwise encumber any amounts payable hereunder or any part thereof, or if by reason of bankruptcy or other event, such amounts would at any time be received or enjoyed by persons other than such payee, except as otherwise permitted by this Plan, the Committee in its sole discretion may terminate such person's interest in any such amounts and hold or apply such amounts to or for the use of such person, his or her spouse, children or other dependents, or any of them, as the Committee may determine. 18. Administration. This Plan shall be administered by a Committee composed of the Company's Chief Executive Officer, Chief Financial Officer and Corporate Secretary. The Committee shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan. The Committee shall interpret the Plan; shall determine all questions arising in the administration, interpretation, and application of the Plan; and shall construe any ambiguity, supply any omission, and reconcile any inconsistency in such manner and to such extent as the Committee deems proper in its discretion. Any interpretation or construction placed upon any term or provision of the Plan by the Committee, any decisions and determinations of the Committee arising under the Plan, including without limiting the generality of the foregoing: (i) the eligibility of any individual to become or remain a Participant and a Participant's status as such, and Eligible Earnings for any year; (ii) the time, method and amounts of payments payable under the Plan; (iii) the rights of Participants; and any other action or determination or decision whatsoever taken or made by the Committee in good faith shall be final, conclusive, and binding upon all persons concerned, including, but not limited to, the Company, all Participating Employers and all Participants and beneficiaries. 19. Negation of Employment Contract. This Plan does not create an employment contract and nothing contained herein shall be deemed (a) to give a Participant the right to be retained in the employ of any Participating Employer; (b) to interfere with the right of any Participating Employer to discharge a Participant at any time with or without cause; (c) to give any Participating Employer the right to require a Participant to remain in its employ; or (d) to interfere with the right of a Participant to terminate employment voluntarily whenever the Participant chooses. 20. Modification, Amendment, or Termination. Except as provided in Section 11, the Company has the absolute right to modify or amend this Plan in whole or in part, at any time and from time to time, effective as of any specified prior, current or 11

future date. Such amendment shall be made in accordance with applicable corporate procedures then in effect for similar matters. The Company also reserves the right to terminate this Plan, in whole or in part, voluntarily as of any specified current or future date. This Plan shall be automatically terminated upon a termination of the Basic Plan, a dissolution of the Company (but not upon a merger, consolidation, reorganization or recapitalization of the Company unless the surviving corporation therein specifically terminates this Plan); upon the Company being legally adjudicated a bankrupt; upon the appointment of a receiver or trustee in bankruptcy with respect to the Company's assets and business if such appointment is not set aside within 90 days thereafter; or upon the making by the Company of an assignment for the benefit of creditors. Upon termination of this Plan, no additional employee shall become eligible to participate herein, and no additional benefits shall be accrued hereunder. Notwithstanding the termination of this Plan, no Participant affected thereby shall be deprived of the right to receive his or her Accrued Benefit at the time and in the manner provided by this Plan. 21. Set Off and Withholding. (a) Notwithstanding Section 17, any amount then due and payable by the Company or any Participating Employer to any Participant or the beneficiary of any Participant under this Plan may be offset by any amounts owed to the Company or any Subsidiary by the Participant and/or the beneficiary for any reason and in any capacity whatsoever, as the Company may determine in its sole and absolute discretion. (b) There shall be deducted from any amount payable under this Plan all taxes required to be withheld by any federal, state or local government. Participants and their beneficiaries shall bear any and all federal, state, local and other income taxes and other taxes imposed on amounts paid under the Plan, whether or not withholding is required or carried out in accordance with this provision. 22. Claims Procedures. (a) The Committee shall make all decisions and determinations respecting the right of any person to a payment under the Plan. (b) The following procedure shall be followed with respect to claims under the Plan: (i) Any claimant who believes he or she is entitled to a benefit under this Plan shall submit a claim for such benefit in writing to the Committee. (ii) Any decision by the Committee denying a claim in whole or in part shall be stated in writing by the Committee and delivered or mailed to the claimant within ninety (90) days after receipt of the claim by the Committee unless special circumstances require an extension of time for processing, but in any event within one hundred eighty (180) days after such receipt. If such an extension of time is taken, the Committee shall inform the claimant of the delay in writing before the 12

expiration of the initial ninety (90) day period, including the reasons therefor and the date by which the Committee expects to render a decision. Any decision denying a claim shall set forth the specific reasons for the denial with specific references to Plan provisions on which the denial is based, a description of any additional material or information necessary to perfect the claim and the reasons therefor, and an explanation of the Plan's claim review procedure, all written in a manner calculated to be understood by the claimant. If the Committee does not notify the claimant of denial of the claim or the need for an extension of time within the initial ninety (90) day period, the claim shall be deemed denied. (iii) If a claim is denied in whole or in part, the claimant or his duly authorized representative may request a review by the Committee of the decision upon written application to the Committee within sixty (60) days after notification of the decision. The claimant or his duly authorized representative may review pertinent documents and submit issues and comments in writing. The Committee shall make its decision on review not later than sixty (60) days after receipt of the request for review unless special circumstances require an extension of time for processing, in which case its decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the request for review. If such an extension of time is taken, the Committee shall inform the claimant of the delay in writing before the expiration of the initial sixty (60) day period. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant and specific references to the pertinent plan provisions on which the decision is based. If the Committee does not notify the claimant of its decision on review within the period herein provided for, the claim shall be deemed denied on review. (c) The Committee may adopt such rules as it deems necessary, desirable, or appropriate to carry out its duties under this Section 22. Any action or determination or decision whatsoever taken or made by the Committee under this Section 22 shall be final, conclusive, and binding upon all persons concerned, including, but not limited to, the Company, all Participating Employers and all Participants and beneficiaries. (d) The procedure provided for in this Section 22 shall be the sole, exclusive and mandatory procedure for resolving any dispute under this Plan; provided, that if a Participant wishes to make a valid legal challenge to the Committee's determination and he has entered into an agreement with the Company to arbitrate disputes arising from his or her employment with the Company, such legal challenge shall be resolved pursuant to the arbitration procedures in that agreement and the Participant's burden of proof in any arbitration shall be the same as if the dispute were tried in a court proceeding. (e) Notwithstanding the foregoing, upon a Change in Control as defined in Section 11, Section (d) above shall not apply. (f) In any arbitration or litigation to enforce rights and obligations hereunder, except as required by law or separate contract between the parties, the 13

unsuccessful party shall pay the successful party an amount equal to all reasonable out-of-pocket expenses (including reasonable legal expenses and court costs) incurred by the successful party. 23. Miscellaneous. (a) In any instance in which the Committee believes such action to be in the best interest of the party entitled to receive any payment under this Plan, or to be in the best interests of any Participating Employer (such as to eliminate small account balances or to avoid the administrative inconvenience and expense which might be incurred if relatively small amounts were to be paid to multiple recipients over lengthy periods of time), amounts payable hereunder may be paid in a single lump-sum payment, the amount of which shall be the Actuarial Equivalent of the payment in question. (b) In the event of the death of a Participant or any beneficiary, the Committee need not make any payment provided for by this Plan until it shall have received proof satisfactory to it of such death and of the identity, existence and location of the party thereafter entitled to receive payments under this Plan. (c) In making any payment or taking any action under this Plan, the Participating Employers and the Committee shall be absolutely protected in relying upon any finding or statement of facts believed to be true, and on any written instrument believed to have been signed by the proper party. (d) Subject to the applicable provisions of the Employee Retirement Income Security Act of 1974 which provide to the contrary, this Plan shall be administered, construed, and enforced according to the laws of the State of Missouri (other than choice of law), and in courts situated in that state. IN WITNESS WHEREOF, ANHEUSER-BUSCH COMPANIES, INC. has caused this Amended and Restated Plan to be executed by its officers thereunto duly authorized, this 17th day of March, 2003, effective as of March 1, 2003. ANHEUSER-BUSCH COMPANIES, INC.
By /s/ W. Randolph Baker -----------------------------W. Randolph Baker Chief Financial Officer

14

Exhibit 10.9 ANHEUSER-BUSCH EXECUTIVE DEFERRED COMPENSATION PLAN (AMENDED AND RESTATED AS OF JANUARY 1, 2002) Preamble Anheuser-Busch Companies, Inc. (the "Company") adopted the Anheuser-Busch Executive Deferred Compensation Plan (the "Plan") for the purpose of providing deferred compensation to a select group of management and highly compensated employees, effective as of January 1, 1994. The Company reserved to itself the right to amend the Plan. The Plan has been amended from time to time, including an amendment and restatement effective as of January 1, 2001. The Company deems it necessary and desirable to amend and restate the Plan in its entirety as hereinafter set forth, effective January 1, 2002. I. DEFINITIONS Account: The separate record of the interest of each Participant in this Plan which the Company maintains in accordance with Section IV. A Participant's Account shall include such subaccounts as may be required to account separately for amounts subject to the Participant's various elections respecting deferral and hypothetical investment under the Plan, and the term "Account" shall include subaccount where the context so requires. Base Salary: The substantially equal amounts owed by a Participating Employer to an Employee on a regular periodic basis in exchange for services rendered during a Year, regardless of when paid. Bonus: Any amount awarded by a Participating Employer to an Employee for a Year under a bonus plan, regardless of when awarded or paid. Company: Anheuser-Busch Companies, Inc. Deferral Amounts: The amounts a Participant defers under this Plan from time to time. Effective Date: The original Effective Date was January 1, 1994. The Effective Date of this amendment and restatement of the Plan is January 1, 2002. Eligible Compensation: As to any Year, a Participant's Base Salary and Bonus for such Year. No payments under the Company's Supplemental Life Insurance Program or any like program, taxable or non-taxable fringe benefits, stock-related compensation, international service premiums or other cash or in-kind compensation shall be taken into account as Eligible Compensation. 1

Eligible Employee: With respect to any Year, an Employee who satisfies the requirements for participation in the Plan for the Year, as determined pursuant to Section II. Employee: A salaried common-law employee of a Participating Employer as determined from time to time. In no event shall any individual be classified as an Employee while he or she is in any of the following categories: (a) Independent contractors, including non-employee directors of the Company and its subsidiaries. (b) Leased employees. (c) Non-resident aliens. (d) Collective bargaining unit members. Measurement Fund: Any of the measurement funds provided for under the Plan from time to time. As of January 1, 2002, the Measurement Funds include the Fixed Income Fund described in Section VI, the Vanguard Institutional Index Fund (designed to mirror approximately the return of the Standard and Poors' S&P 500 Index), the Vanguard Total Stock Market Index Fund (Institutional Shares) (designed to mirror approximately the return of the Wilshire 5000 Index) and a Money Market Rate Fund, which shall provide a yield equal to the Company's current monthly average commercial paper cost for each calendar month. Participant: With respect to any Year, an Eligible Employee who elects to defer a portion of his or her Eligible Compensation for the Year or an Eligible Employee or former Eligible Employee who so elected with respect to an earlier Year and has an Account during the Year. Participating Employer: The Company and any other business entity in which the Company has an equity interest of at least fifty percent (50%), and which maintains this Plan pursuant to Section X, as determined from time to time. Plan: Anheuser-Busch Executive Deferred Compensation Plan, the Plan set forth herein, as duly amended from time to time. Related Employer: Each Participating Employer and each other legal entity as to which the Company has at least fifty percent (50%) of the voting power. Year: Each calendar year commencing on or after January 1, 1994. 2

II. ELIGIBILITY An Employee shall be an Eligible Employee for a Year if: (a) the Employee is an Officer on the confidential payroll of a Participating Employer as of January 1 of the Year, or (b) the Employee is an executive employed in a position with a market rate of pay equal to or greater than $200,000 as of January 1 of the Year, adjusted for each Year after 2002 in accordance with the Company's budgeted internal merit increase factor for that position for that Year. III. DEFERRAL ELECTIONS 3.01 Types of Election; Time of Election. Each Participant for a Year shall make the following elections in writing on a form provided by the Company and delivered to the Company not later than the Company may direct. (a) If the Participant is an Eligible Employee for the Year, the portion of the Participant's Eligible Compensation for the Year that shall be deferred; however: (i) The maximum portion of each installment of a Participant's Base Salary subject to deferral election hereunder shall be equal to a pro rata share of the portion of the Participant's Base Salary in excess of $200,000. If by reason of section 3.04, an installment is insufficient to support any deferral, no make-up deferral shall be made from any future Base Salary installment. (ii) If a Participant's annual Base Salary rate is changed during a Year, the amounts deferred prior to the date of change shall not be changed. The maximum portion of each installment that can be deferred after the change shall be determined by: (i) adding (a) the Participant's actual Base Salary for the portion of the Year before the effective date of the change, and (b) the Participant's Base Salary rate per pay period on the effective date of the change multiplied by the number of pay periods remaining in the Year on the effective date of the change; (ii) subtracting from this sum (a)$200,000, and (b) the total amount deferred during the Year before the effective date of the change; and (iii) dividing the remainder by the number of pay periods remaining in the Year as of the effective date of the change. 3

(iii) The maximum portion of a Participant's Bonus subject to deferral election hereunder shall be equal to the amount by which the Participant's Eligible Compensation exceeds the sum of the portion of the Participant's Base Salary deferred hereunder plus $200,000. (iv) If any portion of a Participant's total compensation from all Participating Employers for a Year would not be deductible for the Year by any Participating Employer under section 162(m) of the Internal Revenue Code, the Participant may elect to defer an indefinite amount equal to such non-deductible portion of the Participant's compensation, and the Company may adopt such special rules and procedures as it deems appropriate to carry out such election. (b) The period of deferral for amounts deferred during the Year, which may be a definite period of five (5), ten (10), fifteen (15) or twenty (20) Years including the Year of deferral, or an indefinite period ending on termination of the Participant's employment with all Related Employers, subject to extension provided for in sections 3.01(d), 3.01(e) and 3.02 or acceleration as provided for in sections 7.01(b), 7.05, 7.06 and 7.07. (c) Whether payment of the Participant's Deferral Amounts for the Year and any income, gain or loss thereon shall be made in a single sum, in five (5) installments, or in ten (10) installments (subject to acceleration as provided for in sections 7.02(c), 7.05, 7.06 and 7.07), or in a series of substantially equal periodic payments (not less frequent than annually) for a period of 10 years, as provided for in 4 U.S.C. section 114. (d) Whether payment of the Participant's Deferral Amounts for the Year and any income, gain or loss thereon that become due on account of termination of the Participant's employment with all Related Employers shall begin as of the first day of the calendar month following the termination or the January 1 following the termination. (e) Except as provided for in this section 3.01(e), all elections pursuant to this section 3.01 shall be irrevocable. Notwithstanding anything, a Participant may elect (i) a longer deferral period permitted under section 3.01(b), including without limitation the period ending on termination of employment, (ii) a longer period for payment of installments permitted under section 3.01(c) for amounts previously deferred under the Plan or (iii) the later commencement date permitted in section 3.01(d); provided that such an election shall be of no force or effect unless the Participant provides the Company with written notice of the 4

change at least one year prior to the date payment would begin in the absence of such an election or termination of the Participant's employment with all Related Employers, whichever occurs first. 3.02. Special Rule for Non-deductible Amounts. Any amount otherwise payable under the Plan in a Year for which the Company determines that the amount would not be deductible by any Participating Employer under section 162(m) of the Internal Revenue Code shall not be paid until such Year as the Company determines that the amount has ceased to be non-deductible by any Participating Employer under section 162(m) of the Internal Revenue Code. In the case of any inconsistency between this section 3.02 and any other provision of the Plan, this section 3.02 shall govern, except in the case of section 7.06. 3.03. Termination of Deferrals on Termination of Employment. If a Participant's employment with all Participating Employers is terminated before the end of a Year as to which the Participant elected to defer a portion of Eligible Compensation under the Plan: (a) Except for deferrals described in section 3.01(a)(iv), all such deferrals shall cease upon such termination of employment, whether or not the Participant receives any amounts otherwise classified as Eligible Compensation after such termination, and (b) No portion of the Participant's Eligible Compensation previously deferred during the Year shall be refunded to the Participant, even though the Participant's total Eligible Compensation for the Year may be less than $200,000. 3.04. Miscellaneous Limitations on Deferral. Notwithstanding section 3.01, a Participant's deferral election for a Year shall be of no force or effect to the extent that it requires deferral of: (i) any amounts the Participant elects to contribute under the Anheuser-Busch Deferred Income Stock Purchase and Savings Plan on either a before-tax or after-tax basis and the Anheuser-Busch 401(k) Restoration Plan; (ii) any amounts the Participant elects or is required to contribute under the Group Insurance Plan for Certain Employees of Anheuser-Busch Companies, Inc., the Anheuser-Busch Dependent Care Assistance Plan, the Anheuser-Busch Salaried Long-Term Disability Plan, any cafeteria plan designed to comply with section 125 of the Internal Revenue Code or any other welfare benefit plan maintained by any Participating Employer; (iii) any payroll taxes, income taxes or any other taxes required to be withheld from the Participant's compensation which is subject to such taxes during the Year, including but not limited to FICA taxes and federal, state and local income taxes required to be withheld on the Participant's wages for the Year; and (iv) any amounts payable to a court or other individual or entity by court order. 5

IV. ACCOUNTS 4.01. Maintenance of Accounts. The Company will maintain an Account for the benefit of each Participant. 4.02. Crediting Deferral Amounts. Each Participant's Account shall be credited with his or her Deferral Amounts at the time they would have been paid to the Participant but for his or her deferral election pursuant to section 3.01(a). 4.03. Crediting or Debiting Investment Returns. The Company shall credit or debit, as the case may be, each Participant's Account to reflect the return on hypothetical investments as provided in section 5.02. 4.04. Debiting Payments. Each Participant's Account shall be debited by the amount of each payment pursuant to Section VII with respect to the Participant at the time of such payment. 6

V. HYPOTHETICAL INVESTMENTS 5.01. Election of Hypothetical Investments. (a) Prior to becoming a Participant, each Eligible Employee must select one or more Measurement Funds in which he or she wishes hypothetically to invest (including Rate/Term combinations under the Fixed Income Fund, if applicable). (b) A Participant may change his or her combination of Measurement Funds as of the first day of any calendar month, by notice in form prescribed by the Company, at such time before the effective date of the change as the Company may require, subject to the limitations of section 6.01(g), if applicable. (c) A Participant's right to change his or her combination of Measurement Funds shall continue until the entire amount of his or her Account is distributed pursuant to Section VII. If a Participant dies before distribution of the Participant's entire Account is complete, the Participant's beneficiary shall have the right to make the elections reserved to the Participant in section 5.01(b) from the date the Company receives written notice of the Participant's death through the date of final distribution; provided: (i) if a deceased Participant has two or more beneficiaries, the beneficiaries shall thereafter have the right to make such elections with respect to the shares of the Participant's Account to which they are respectively entitled as of the date the Company receives written notice of the Participant's death; and (ii) if a beneficiary is a minor or otherwise legally incompetent, a parent or legal guardian of the beneficiary, as the case may be, shall exercise such right on behalf of the beneficiary. 5.02. Crediting Returns. The Company shall, at such times and in such manner as it in its sole discretion determines to be appropriate, credit or debit each Participant's Account, as the case may be, with the appropriate amount of income, gain or loss, as if such Account had been invested in the combination of Measurement Funds the Participant has selected in accordance with Section 5.01. 5.03. If Payment Is Delayed. (a) In the event payment of an amount due a Participant occurs thirty (30) or fewer days after its due date, no income, gain or loss shall accrue during the period between the due date and the date of payment. 7

(b) In the event payment of any amount due a Participant occurs more than thirty (30) days after its due date, interest shall accrue during the period between the due date and the date of payment at an annual rate equal to the prime rate published by the Wall Street Journal, Midwest Edition, as of the due date. 5.04. If Payment Is Accelerated. If payment of an amount due a Participant is accelerated for any reason, no interest shall accrue with respect to the accelerated amount after the date scheduled for accelerated payment, notwithstanding that the Participant may previously have elected a longer term or a later payment date, except as provided for in section 5.03(b). VI. FIXED INCOME FUND 6.01. Operation of the Fixed Income Fund. The Fixed Income Fund shall be operated as follows: (a) Before the beginning of each Year, the Company shall offer one or more combinations of interest rates (hereinafter "Rates") and time periods (hereinafter "Terms") which shall be available during the Year with respect to current Deferral Amounts, prior Deferral Amounts as to which the previous Terms expired on December 31 of the prior Year, and existing Account balances in other Measurement Funds from time to time during the Year. (b) The Rates and Terms for each Year shall be determined by the Chief Financial Officer of the Company and shall correspond generally to the borrowing rates and terms that are expected to be available to the Company for the Year on the basis of market rates in effect prior to announcement to Eligible Employees of the Rates and Terms for the Year. (c) All Terms shall commence on a January 1 and expire on a December 31. For example, if a Participant elects a combination of a 3-Year Term and a 3% Rate for all amounts deferred by the Participant for 2002, the 3% Rate shall apply to all amounts deferred for 2002 from the date of deferral through December 31, 2004. (d) The Terms elected by a Participant need not be limited to the deferral period for the amount subject to the Term elected. For example, a Participant may elect a 10-Year Term for an amount the Participant has elected to be distributed after 5 Years. 8

(e) A Participant may make separate elections regarding the Rate/Term combinations for the Participant's current Deferral Amounts, existing Account balances in other Measurement Funds and amounts attributable to prior Deferral Amounts and interest accrued thereon as to which the previous Terms expired on December 31 of the prior Year. (f) Notwithstanding anything, a Participant may elect that all or any portion of his or her Account in existence as of December 31, 2000 be transferred to another Measurement Fund or another Rate/Term combination available under the Fixed Income Fund as of January 1, 2001, whether or not the Term that applies to any portion of the Participant's Account would otherwise have expired on December 31, 2000. (g) A Participant may elect transfer of his or her current Deferral Amounts or any portion of his or her existing Account then hypothetically invested in other Measurement Funds into the Fixed Income Fund after the first day of a Year. However, except as provided in section 6.01(f), any amounts that a Participant elects to transfer into the Fixed Income Fund during a Year shall remain in the Fixed Income Fund until expiration of the Term elected by the Participant with respect to such amounts, and interest shall begin to accrue on any such amounts as of the effective date of the Participant's election or the date they would have been paid to the Participant if the Participant had not elected deferral thereof, whichever is later. 6.02. Accrual of Interest on Installment Payments. If any amount in the Fixed Income Fund is paid in installments pursuant to a Participant's election in accordance with section 3.01(c) or (e), interest shall accrue on any balance thereof remaining to be paid in installments from time to time in accordance with the Participant or beneficiary's elections from time to time as provided for in section 5.01 until payment is complete; provided, in the absence of an election by a Participant or beneficiary in accordance with the foregoing, the Participant or beneficiary shall be deemed to have elected the Rate in effect for the longest time period available as of the due date of the election. 9

VII. PAYMENTS TO PARTICIPANTS 7.01. Time Payment Begins. (a) Subject to the remaining provisions of this Section VII, payment of the portion of a Participant's Account attributable to amounts deferred for a Year shall begin as of January 1 of the Year following expiration of the deferral period the Participant elected therefor in accordance with section 3.01(b) or (e). (b) Notwithstanding section 7.01(a), payment of a Participant's Account shall begin not later than the first day of the calendar month following termination of the Participant's employment with all Related Employers on account of retirement, death or any reason or the January 1 following the termination, as elected by the Participant pursuant to section 3.01(d) or (e). 7.02. Form of Payment. (a) If a Participant elects payment of any amount in a single sum pursuant to section 3.01(c), such single sum amount shall be due and payable as of the date determined pursuant to section 7.01. (b) If a Participant elects payment of any amount in five (5) or ten (10) installments pursuant to section 3.01(c) or (e), the initial installment shall be paid as of the first day of the calendar month following termination of the Participant's employment with all Related Employers or as of the January 1 following the termination, as elected by the Participant pursuant to section 3.01(d) or (e), and the remaining four (4) or nine (9) installments shall be paid as of January 1 of the next four (4) or nine (9) calendar years. (c) If a Participant elects payment of any amount in a series of substantially equal period payments (not less frequent than annually) for a period of 10 years, as provided for in 4 U.S.C. section 114, the Company shall modify the installment method provided for in sections 7.02(b) and 7.04 to the extent required to satisfy the requirements of 4 U.S.C. section 114. (d) Notwithstanding sections 7.02(b) and (c): (i) if a Participant's employment with all Related Employers terminates before age fifty-five (55) for any reason other than the Participant's death or disability, or (ii) if a Participant's termination of employment with all Related Employers occurs before the end of the Participant's first Year of deferral under the Plan, the Company may determine that payment of the 10

Participant's entire Account under the Plan shall be paid in a single sum, notwithstanding any election by the Participant to the contrary. 7.03. Set Off and Withholding. (a) Any amount then due and payable by the Company to any Participant or the successor to any Participant under this Plan may be offset by any amounts owed to any Related Employer by the Participant and/or the successor for any reason and in any capacity whatsoever, as the Company may determine in its sole and absolute discretion. (b) There shall be deducted from any amount payable under this Plan all taxes required to be withheld by any federal, state or local government. Participants and their beneficiaries shall bear any and all federal, state, local and other income taxes and other taxes imposed on amounts paid under the Plan, whether or not withholding is required or carried out in accordance with this provision. 7.04. Determination of Installment Amounts. If payment of any portion of a Participant's Account occurs in installments, the amount of each installment shall be equal to the amount thereof remaining unpaid as of the December 31 preceding payment, divided by the number of installments then remaining to be paid. For example, with respect to an Account that is payable in five (5) installments, to determine the amount of the first installment, divide the total amount of the Account as of the preceding December 31 by five (5); to determine the amount of the second installment, divide the amount of the Account remaining to be paid as of the preceding December 31 by four (4), and so on. Notwithstanding the foregoing, the company shall modify the installment method provided for in this section 7.04 to the extent required by section 7.02(c). 7.05. Acceleration of Payment for Unforeseeable Emergency. (a) The Company may determine that payment of any portion of a Participant's Account under the Plan shall be accelerated on application of the Participant or beneficiary on account of and subject to reasonable proof of unforeseeable emergency as provided for in this section 7.05. (b) For purposes of this section 7.05, an unforeseeable emergency is a severe financial hardship to the Participant or beneficiary resulting from a sudden and unexpected illness or accident of the Participant or beneficiary or of a dependent (as defined in section 152(a) of the Internal Revenue Code) of the Participant or beneficiary, loss of the Participant's or beneficiary's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a 11

result of events beyond the control of the Participant or beneficiary. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved-(i) Through reimbursement or compensation by insurance or otherwise, (ii) By liquidation of the Participant's or beneficiary's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or (iii) By cessation of deferrals under this Plan or by cessation of elective deferrals if and when possible under any other deferred compensation plan for which the Participant or beneficiary is eligible; provided that a Participant shall not be permitted to cease deferrals under this plan as of any date other than a January 1. Examples of what are not considered to be unforeseeable emergencies include the need to send a Participant's or beneficiary's child to college or the desire to purchase a home. (c) Withdrawal of amounts because of an unforeseeable emergency shall be permitted only to the extent reasonably needed to satisfy the emergency need. (d) All determinations under this section 7.05 shall be made by an Administrative Committee appointed pursuant to section 8.01(c). (e) Notwithstanding any other provision of this section 7.05, authorization of distribution on account of hardship under the Anheuser-Busch Deferred Income Stock Purchase and Savings Plan shall automatically terminate any deferral election of the Participant then in force with respect to Eligible Compensation and further deferrals under this Plan shall not be permitted for a period of twelve (12) months. 7.06. Change in Control. (a) If a Change in Control (as defined in section 7.06(b)) shall occur, then, notwithstanding anything to the contrary herein, the entire amount of a Participant's Account under the Plan as of the Change in Control Date shall be paid in a single sum within 30 days after the Change in Control Date. 12

(b) For purposes of this Plan, a "Change in Control" shall occur automatically if and when an "Acceleration Date" occurs as defined in the Company's 1998 Incentive Stock Plan or if and when an analogous change in control event occurs as defined in any successor to such plan, and the Change in Control Date shall be the Acceleration Date or analogous date as defined therein. (c) This section 7.06 may be deleted or amended in any way pursuant to Section IX at any time prior to a Change in Control. Notwithstanding Section IX, following a Change in Control, the provisions of this section 7.06 cannot, after the Change in Control Date, be amended in any manner without the written consent of each individual who was a Participant immediately prior to the Change in Control. (d) Following a Change in Control, this Plan may continue in effect, notwithstanding that payment of benefits shall have been made under section 7.06(a). (e) If by reason of this section 7.06 an excise or other special tax ("Excise Tax") is imposed on any payment under the Plan (a "Required Payment"), the amount of each Required Payment shall be increased by an amount which, after payment of income taxes, payroll taxes and Excise Tax thereon, will equal such Excise Tax on the Required Payment. 7.07. General Right to Accelerate Payment. Notwithstanding sections 7.01 and 7.02, the Company by its proper officers in its sole discretion may direct current payment of all Participants' Accounts under the Plan. 7.08. Payments After Death. (a) Except as otherwise provided in this section 7.08, any amount payable under this Plan as a result of or following the death of a Participant shall be applied only for the benefit of the beneficiary or beneficiaries designated by the Participant pursuant to this section 7.08. Each Participant shall specifically designate, by name, on forms provided by the Company, the beneficiary(ies) to whom any such amounts shall be paid. A Participant may change or revoke a beneficiary designation without the consent of the beneficiary(ies) at any time by filing a new beneficiary designation form with the Company. The filing of a new form shall automatically revoke any forms previously filed with the Company. A beneficiary designation form not properly filed with the Company prior to the death of the Participant shall have no validity under the Plan. 13

(b) Any such designation shall be contingent on the designated beneficiary surviving the Participant. If a designated beneficiary survives the Participant but dies before receiving the entire amount payable to the designated beneficiary hereunder, the amount which would otherwise have been so paid shall be paid to the estate of the deceased beneficiary unless a contrary direction was made by the Participant, in which case such direction shall control. More than one beneficiary, and alternative or contingent beneficiaries, may be designated, in which case the Participant shall specify the shares, terms and conditions upon which amounts shall be paid to such multiple or alternative or contingent beneficiaries, all of which must be satisfactory to the Company. (c) If no beneficiary designation is on file with the Company at the time of the Participant's death or no beneficiary designated by the Participant survives the Participant, the Participant's estate shall be deemed to be the beneficiary designated to receive any portion of the Participant's Account then remaining payable under this Plan. (d) In determining any question concerning a Participant's beneficiary, the latest designation filed with the Company shall control and intervening changes in circumstances shall be ignored; provided, if a Participant's spouse is designated as beneficiary but thereafter is divorced from the Participant, such designation shall become invalid as of the date of divorce unless the Participant files a beneficiary designation form with the Company after the date of divorce confirming designation of such former spouse as beneficiary. (e) Any check issued on or before the date of a Participant's death shall remain payable to the Participant, whether or not the check is received by the Participant prior to death. Any check issued after the date of the Participant's death shall be the property of the Participant's beneficiaries determined in accordance with this section 7.08. (f) A Participant's election of payment in installments shall not be altered by reason of the Participant's death. 7.09. All Payments to be Made by the Company. All payments due any Participant or beneficiary under this Plan shall be the sole responsibility of the Company. 14

VIII. ADMINISTRATION 8.01. Administrative Duties of the Company. (a) The Company shall have sole responsibility for the administration of the Plan. (b) The Company shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan. The Company shall interpret the Plan; shall determine all questions arising in the administration, interpretation, and application of the Plan; and shall construe any ambiguity, supply any omission, and reconcile any inconsistency in such manner and to such extent as the Company deems proper. Any interpretation or construction placed upon any term or provision of the Plan by the Company, any decisions and determinations of the Company arising under the Plan, including without limiting the generality of the foregoing: (i) the eligibility of any individual to become or remain a Participant and a Participant's status as such, and Eligible Compensation for any Year; (ii) the time, method and amounts of payments payable under the Plan; (iii) the rights of Participants; and any other action or determination or decision whatsoever taken or made by the Company in good faith shall be final, conclusive, and binding upon all persons concerned, including, but not limited to, the Company, all Participating Employers and all Participants and beneficiaries. (c) The Chief Financial Officer of the Company shall appoint one or more Employees to carry out the Company's duties hereunder. (d) The Company may employ accountants, counsel, specialists and other persons necessary to help carry out its duties and responsibilities under the Plan. The Company or any appointee shall be entitled to rely conclusively upon any opinions or reports which shall be furnished to it or him by such accountants, counsel, specialists, and other persons. (e) No Employee shall participate in determining his or her own entitlement under the Plan. 8.02. Claims Procedures. (a) The Company shall make all decisions and determinations respecting the right of any person to a payment under the Plan. 15

(b) The following procedure shall be followed with respect to claims under the Plan: (i) Any claimant who believes he or she is entitled to a benefit under this Plan shall submit a claim for such benefit in writing to the Company. (ii) Any decision by the Company denying a claim in whole or in part shall be stated in writing by the Company and delivered to the claimant electronically or in writing within ninety (90) days after receipt of the claim by the Company unless special circumstances require an extension of time for processing, but in any event within one hundred eighty (180) days after such receipt. If such an extension of time is taken, the Company shall inform the claimant of the delay in writing before the expiration of the initial ninety (90) day period, including the reasons therefor and the date by which the Company expects to render a decision. Any decision denying a claim shall set forth the specific reasons for the denial with specific references to Plan provisions on which the denial is based, a description of any additional material or information necessary to perfect the claim and the reasons therefor, a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant's claim for benefits, an explanation of the Plan's claim review procedure as provided for in section 8.02(b)(iii), and a statement of the claimant's right to bring a civil action under federal law following an adverse benefit determinatin on review, all written in a manner calculated to be understood by the claimant. For this purpose, a document, record or other information shall be considered relevant to a claimant's claim if it was relied on in making the benefit determination, was submitted, considered or generated in the course of making the benefit determination (without regard to whether it was relied upon in making the benefit determination), or demonstrates compliance with the administrative processes and safeguards required in making the benefit determination. If the Company does not notify the claimant of denial of the claim or the need for an extension of time within the initial ninety (90) day period, the claim shall be deemed denied. (iii) If a claim is denied in whole or in part, the claimant or his or her duly authorized representative may request a review by the Company of the decision upon written application to the 16

Company within sixty (60) days after notification of the decision. The claimant or his or her duly authorized representative may review pertinent documents and submit written comments, documents, records and other information relating to the claim. The Company shall take into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Company shall make its decision on review not later than sixty (60) days after receipt of the request for review unless special circumstances require an extension of time for processing, in which case its decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the request for review. If such an extension of time is taken, the Company shall inform the claimant of the delay in writing before the expiration of the initial sixty (60) day period. The decision on review shall be delivered to the claimant electronically or in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant and specific references to the pertinent plan provisions on which the decision is based. If the Company does not notify the claimant of its decision on review within the period herein provided for, the claim shall be deemed denied on review. (c) The Company may adopt such rules as it deems necessary, desirable, or appropriate to carry out its duties under this section 8.02. All rules, decisions and determinations of the Company under this section 8.02 shall be uniformly and consistently applied. Any action or determination or decision whatsoever taken or made by the Company under this section 8.02 in good faith shall be final, conclusive, and binding upon all persons concerned, including, but not limited to, the Company, all Participating Employers and all Participants and beneficiaries. (d) The procedure provided for in this section 8.02 shall be the sole, exclusive and mandatory procedure for resolving any dispute under this Plan; provided that if a Participant wishes to make a legal challenge to the Company's determination and he or she has entered into an agreement with the Company to arbitrate disputes arising from his or her employment with the Company, such legal challenge shall be resolved pursuant to the arbitration procedures in that agreement and the Participant's burden of proof in any arbitration shall be the same as if the dispute were tried in a court proceeding. 17

(e) Notwithstanding the foregoing, upon a Change in Control as defined in section 7.06, section 8.02(d) shall not apply. 8.03. Books and Records. (a) The Company shall keep such books, records, and other data as it deems necessary for proper administration of the Plan, including but not limited to records of each Participant's Eligible Compensation, elections, Account, amounts payable to each Participant from time to time, and amounts paid to each Participant or beneficiary from time to time. (b) The records of the Company shall be conclusive on all persons unless proved incorrect to the satisfaction of the Company. (c) The Company shall comply with all reporting and disclosure requirements of the law and shall maintain all records required by law. 8.04. Notices. (a) Any notice from the Company to any Participant shall be in writing and shall be given by delivery to the Participant, or by mailing to the last known residence address of the Participant. Any notice from a Participant to the Company shall be in writing and shall be given by delivery to the Pension Department of the Company at the Company's headquarters, except as otherwise designated by the Company. Notices shall be effective on the date of actual delivery. (b) Each Participant shall furnish all information, including post office address and each change of post office address, proofs, receipts and releases, as may be required by the Company. (c) Any communication, statement or notice addressed to any individual at the last post office address filed with the Company shall be binding for all purposes of the Plan, and the Company shall not be obligated to search for or ascertain the whereabouts of any such individual. (d) Except for Participants' deferral and investment elections under the Plan, any notice required by the Plan may be waived by the Company or any Participant. 18

IX. AMENDMENT AND TERMINATION The Chief Financial Officer of the Company shall have authority to amend or terminate the Plan on behalf of the Company in his sole discretion at any time, except as follows: (a) Amendments that provide for substantial increases in benefits shall require approval by the Compensation Committee of the Board of Directors of the Company. (b) No amendment shall reduce the amount accrued for the benefit of a Participant immediately prior to the effective date of the amendment. (c) No amendment shall reduce any Rate elected by a Participant before expiration of the Term provided therefor when the election was made unless the amount governed by the Rate and Term is distributed to the Participant in connection with termination of the Plan or otherwise pursuant to the Plan. X. PARTICIPATING EMPLOYERS OTHER THAN THE COMPANY 10.01. Adoption. A Participating Employer other than the Company shall adopt this Plan by written instrument executed by its proper officers, subject to the written approval of the Company. Adoption of the Plan by a Participating Employer shall constitute automatic delegation of all rights and duties it might otherwise reserve to itself under the Plan to the Company, including full authority to amend or terminate the Plan. 10.02. Withdrawal. A Participating Employer shall automatically withdraw from the Plan if and when the Company ceases to have an equity interest of at least fifty percent (50%) without the execution of any other instrument. A Participating Employer may voluntarily withdraw from the Plan on not less than thirty (30) days' written notice from its proper officers. 10.03. Succession. In the event of dissolution, merger, consolidation, or spin-off involving a Participating Employer, the entity surviving the transaction shall succeed to the rights and duties of the affected Participating Employer without the execution of any other instrument. XI. MISCELLANEOUS 11.01. Company's Obligations Unsecured. It is the intention of the Company and all Participants that the Plan shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended from time 19

to time. Amounts payable to Participants under this Plan shall be paid solely from the general assets of the Company as they come due from time to time. No Participant and no successor of any Participant shall have any property interest whatsoever in any asset of the Company on account of participation in this Plan. Participants' rights under this Plan shall be no greater than the right of an unsecured general creditor of the Company. Nothing in this Plan shall require the Company to invest any amount in any asset or type of asset. 11.02. No Alienation. Except as required by law, amounts payable under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary; any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to payment hereunder shall be void, and the Company shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any Participant or other person. 11.03. No Waiver of Rights. Except as provided for in section 8.02, no failure or delay by the Company or any Participant to exercise any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. 11.04. Severability. The invalidity of any particular clause, provision or covenant herein shall not invalidate all or any part of the remainder of this Plan, but such remainder shall be and remain valid in all respects as fully as the law will permit. 11.05. Legal Expenses. In any proceeding to enforce rights and obligations hereunder, the unsuccessful party shall pay the successful party an amount equal to all reasonable out-of-pocket expenses (including reasonable legal expenses and court costs) incurred by the successful party. 11.06. Presumption of Competence. Every person receiving or claiming amounts payable under this Plan shall be conclusively presumed to be mentally competent and of legal age unless and until the Company receives proof satisfactory to the Company that the person is incompetent or is a minor or that a guardian or other person legally vested with the care of the person's estate has been appointed. 11.07. Facility of Payment. If any amount is payable hereunder to a minor or other person under legal disability or otherwise incapable of managing his or her own affairs, as determined by the Company in its sole discretion, payment thereof shall be made in one (or any combination) of the following ways, as the Company shall determine in its sole discretion: (i) Directly to said minor or other person; 20

(ii) To a custodian for said minor or other person (whether designated by the Company or any other person) under the Missouri Transfers to Minors Law, the Missouri Personal Custodian Law or a similar law of any other jurisdiction; (iii) To the conservator of the estate of said minor or other person; or (iv) To some relative or friend of such minor or other person for the support, welfare or education of such minor or other person. The Company shall not be required to see to the application of any payment so made, and payment to the person determined by the Company shall fully discharge the Company from any further accountability or responsibility with respect to the amount so paid. 11.08. No Guarantee of Employment or Compensation. No provision of this Plan shall restrict any Related Employer from discharging a Participant from employment or restrict any Participant from resigning from employment with any Related Employer. No provision of this Plan shall restrict any Related Employer from increasing or decreasing the compensation of any Employee. 11.09. Plan Provisions Binding. The provisions of the Plan shall be binding upon the Company, all Participating Employers and all persons entitled to benefits under the Plan and their respective successors, heirs and legal representatives. 11.10. Rules of Interpretation. Words of gender shall include persons and entities of any gender, the plural shall include the singular, and the singular shall include the plural. Captions are intended to assist in reference and shall not be interpreted as part of the Plan. 11.11. Missouri Law Controls. Subject to the applicable provisions of the Employee Retirement Income Security Act of 1974 which provide to the contrary, this Plan shall be administered, construed, and enforced according to the laws of the State of Missouri (other than choice of law) and in Courts situated in that State. The Company and all Eligible Employees and former Eligible Employees submit to the exclusive jurisdiction of the Circuit Court for the County of St. Louis, State of Missouri ("County Court") residing in St. Louis County for purposes of all legal proceedings (including, but not limited to, actions to compel arbitration) arising out of or relating to this Plan or the transactions contemplated hereby. In the even that the County Court is for any reason not available for purposes of any such legal proceeding, then the Company and all Eligible Employees and former Eligible Employees submit to the exclusive jurisdiction of the United States District Court for the Eastern District of Missouri, Eastern Division (St. Louis). The Company and all Eligible Employees and former Eligible Employees irrevocably waive, to the fullest extent permitted by law, any 21

objections that they may now or hereafter have to the aforesaid venue, including without limitation any claim that any such proceeding brought in either such court has been brought in an inconvenient forum, provided however, this provision shall not limit the ability of the Company or any Eligible Employee or form Eligible Employee to enforce the other provisions of this section. 11.12. Counterparts. This Plan may be executed in two or more counterparts, any one of which shall constitute an original without reference to the others. IN WITNESS WHEREOF, Anheuser-Busch Companies, Inc. executed this amended and restated Plan this 12th day of December, 2002, effective as of the 1st day of January, 2002. ANHEUSER-BUSCH COMPANIES, INC.
By /s/ W. Randolph Baker ------------------------------------W. Randolph Baker Chief Financial Officer

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Exhibit 10.15 CONSULTING AND INDEMNIFICATION AGREEMENT This Consulting and Indemnification Agreement ("Agreement") is between Anheuser-Busch Companies, Inc. ("ABC") and James R. Jones (the "Director Designee"). WHEREAS, Anheuser-Busch International Holdings, Inc., a subsidiary of A-BC, has nominated Director Designee to be a director of Grupo Modelo, S.A. de C.V. ("Grupo Modelo"); and WHEREAS, Director Designee has agreed to serve as a director of Grupo Modelo and to provide certain consulting services to A-BC; NOW, THEREFORE, in consideration of the foregoing premises and respective representations, warranties, covenants and agreements, and upon the terms and subject to the conditions hereinafter set forth, and intending to be legally bound hereby, the parties do hereby agree as follows: 1. Certain Definitions: (a) Claim: any threatened, pending or completed action, suit or proceeding, or any inquiry, hearing or investigation, whether conducted by A-BC or any other party, that Director Designee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other. (b) Expenses: include attorneys' fees and all other costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal) any Claim relating to any Indemnifiable Event. (c) Indemnifiable Event: any event or occurrence related to the fact that Director Designee is or was a director, alternate director, agent or fiduciary of Grupo Modelo, or by reason of anything done or not done by Director Designee in any such capacity. (d) Reviewing Party: any appropriate person or body consisting of a member or members of A-BC's Board of Directors; any other person or body appointed by the Board who is not a party to the particular Claim for which Director Designee is seeking indemnification and, to the extent permitted by applicable law, any officer of A-BC authorized therefor.

2. Consulting Services. Director Designee agrees to serve as a director of Grupo Modelo and agrees to refrain from resigning as a director without giving A-BC at least 30 days' advance written notice. From time to time, Director Designee agrees to be reasonably available to A-BC for discussions and advice concerning Grupo Modelo. 3. Compensation. A-BC shall annually pay to the Director Designee any amount by which the aggregate cash fees that A-BC would have paid Director Designee for each calendar year had the Director Designee been a member of the Board of Directors of A-BC exceeds the cash fees actually paid to the Director Designee by Grupo Modelo for services on the Board of Directors of Grupo Modelo, taking into account (i) the committees of the Board of Directors of Grupo Modelo on which the Director Designee served and the capacities in which the Director Designee served; (ii) the meetings of the Board of Directors of Grupo Modelo and of the committees thereof on which the Director Designee served, scheduled and held during that calendar year and the number of such meetings that the Director Designee attended; and (iii) the portion of such calendar year during which Director Designee served on the Board of Directors of Grupo Modelo or any committee thereof. Within 45 days after the end of each of the first three calendar quarters in each year, A-BC shall pay to Director Designee its estimate of one-quarter of the annual amount required to be paid by A-BC under this Section 3, and on or prior to February 15 of each year A-BC shall pay to the Director Designee any amount by which the annual amount required to be paid by A-BC under this Section 3 exceeds the aggregate payments previously made by A-BC with respect to such calendar year. 4. Basic Indemnification Arrangement. (a) In the event Director Designee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, A-BC shall indemnify Director Designee to the fullest extent permitted by law, as soon as practicable but in any event no later than thirty days after written demand is presented to A-BC, against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other Charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim and any federal, state, local or foreign taxes imposed on the Director Designee as a result of the actual or deemed receipt of any payments under this Agreement. Notwithstanding anything in this Agreement to the contrary and except as provided in Section 5, Director Designee shall not be entitled to indemnification pursuant to this 2

Agreement in connection with any Claim initiated by Director Designee against A-BC or any director or officer of A-BC unless A-BC has joined in or consented to the initiation of such Claim. If so requested by Director Designee, A-BC shall advance (within two business days of such request) any and all Expenses to Director Designee (an "Expense Advance"). (b) Notwithstanding the foregoing, (i) the obligations of A-BC under Section 4(a) shall be subject to the condition that the Reviewing Party shall not have determined that the Director Designee is not entitled to be indemnified under applicable law, and (ii) the obligation of A-BC to make an Expense Advance pursuant to Section 4(a) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Director Designee would not be permitted to be so indemnified under applicable law, A-BC shall be entitled to be reimbursed by Director Designee (who hereby agrees to reimburse A-BC) for all such amounts theretofore paid; provided, however, that if Director Designee has commenced legal proceedings in a court of competent jurisdiction to secure a determination that Director Designee should be indemnified under applicable law, any determination made by the Reviewing Party that Director Designee would not be permitted to be indemnified under applicable law shall not be binding and Director Designee shall not be required to reimburse A-BC for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). Director Designee's obligation to reimburse A-BC for Expense Advances shall be unsecured and no interest shall be charged thereon. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Director Designee substantively would not be permitted to be indemnified in whole or in part under applicable law, Director Designee shall have the right to commence litigation in any court in the States of Missouri or Delaware having subject matter jurisdiction thereof and in which venue is proper, seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, and A-BC hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on ABC and Director Designee. 5. Indemnification for Additional Expenses. A-BC shall indemnify Director Designee against any and all expenses (including attorneys' fees) and, if requested by Director Designee, shall (within two business days of such request) 3

advance such expenses to Director Designee, which are incurred by Director Designee in connection with any claim asserted against or action brought by Director Designee for (i) indemnification or advance payment of Expenses by A-BC under this Agreement or any other agreement or under applicable law or the Company's Restated Certificate of Incorporation or By-laws now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors' and officers' liability insurance policies maintained by A-BC, in each case under (i) or (ii) regardless of whether Director Designee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be. 6. Partial Indemnity, Etc. If Director Designee is entitled under any provision of this Agreement to indemnification by A-BC for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, A-BC shall nevertheless indemnify Director Designee for the portion thereof to which Director Designee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Director Designee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Director Designee shall be indemnified against all Expenses incurred in connection therewith. In connection with any determination by the Reviewing Party or otherwise as to whether Director Designee is entitled to be indemnified hereunder, the burden of proof shall be on A-BC to establish that Director Designee is not so entitled. 7. No Presumption. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Director Designee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. 8. Non-exclusivity, Etc. The rights of the Director Designee hereunder shall be in addition to any other rights Director Designee may have under A-BC's Restated Certificate of Incorporation or By-laws or the Delaware General Corporation Law or otherwise. To the extent that a change in the Delaware General Corporation Law (whether by statute or judicial decision) occurring after the date hereof permits greater indemnification by agreement than would be afforded currently under A-BC's Restated Certificate of Incorporation and By-laws and this Agreement, it is the intent of the parties hereto that Director Designee shall enjoy by this Agreement the greater benefits so afforded by such change. 9. Liability Insurance. To the extent A-BC maintains an insurance policy or policies providing directors' and officers' liability insurance, Director Designee 4

shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available to Director Designee. 10. Amendments, Etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 11. Subrogation. In the event of payment under this Agreement, A-BC shall be subrogated to the extent of such payment to all of the rights of recovery of Director Designee against any other party, including Grupo Modelo, and Director Designee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable A-BC effectively to bring suit to enforce such rights. 12. No Duplication of Payments. A-BC shall not be liable under this Agreement to make any payment in connection with any claim made against Director Designee to the extent Director Designee has otherwise actually received payment (under any insurance policy, from Grupo Modelo or otherwise) of the amounts otherwise indemnifiable hereunder. 13. Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of A-BC, spouses, heirs, and personal and legal representatives. A-BC shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of A-BC, by written agreement in form and substance satisfactory to Director Designee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that A-BC would be required to perform if no such succession had taken place. 14. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 5

15. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to the principles of conflicts of laws. 16. Termination. (a) At the option of A-BC, A-BC may terminate this Agreement and its obligations hereunder by written notice to the Director Designee delivered to his address as recorded upon the records of A-BC. Upon receipt by Director Designee of such notice, A-BC shall have no further obligations hereunder; provided that such termination shall not limit the rights of the Director Designee or the obligations of A-BC with respect to any Indemnifiable Event occurring prior to such termination. (b) In the event that Director Designee terminates service as a director of Grupo Modelo, this Agreement shall terminate, but such termination shall not limit the rights or obligations of Director Designee or A-BC hereunder arising prior to such termination or the obligations of A-BC with respect to any Indemnifiable Event occurring prior to such termination. IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of October 1, 1997. ANHEUSER-BUSCH COMPANIES, INC.
By: /s/ W. Randolph Baker ----------------------Title: Vice President and Chief Financial Officer

/s/ James R. Jones ----------------------------[James R. Jones]

6

AMENDMENT TO CONSULTING AND INDEMNIFICATION AGREEMENT This Amendment to Consulting and Indemnification Agreement ("Amendment") is between Anheuser-Busch Companies, Inc. ("A-BC") and James R. Jones (the "Director Designee"). WHEREAS, A-BC and Director Designee have entered into a Consulting and Indemnification Agreement (the "Indemnification Agreement") dated as of October 1, 1997; WHEREAS, A-BC and Director Designee have agreed to clarify certain provisions in the Indemnification Agreement; NOW, THEREFORE, in consideration of the foregoing premises and the respective covenants and agreements, and upon the terms and subject to the conditions hereinafter set forth, and intending to be legally bound hereby, the parties do hereby agree as follows: 1. Section 16(a) of the Indemnification Agreement is hereby deleted and the following is hereby inserted in its place: (a) At the option of A-BC, A-BC may terminate this Agreement and its obligations hereunder by written notice to the Director Designee delivered to his address as recorded upon the records of A-BC. Upon receipt by Director Designee of such notice, A-BC shall have no further obligations hereunder; provided that such termination shall not limit the rights of the Director Designee or the obligations of A-BC with respect to any Indemnifiable Event occurring prior to such termination. 2. This Amendment shall be effective and shall apply and take effect as of the date of the Indemnification Agreement. All other provisions of the Indemnification Agreement that are not explicitly modified hereby shall remain in full force and effect, and this Amendment shall be construed in connection with and as part of the Indemnification Agreement. 3. This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to the principles of conflicts of laws.

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of January 1, 1998. ANHEUSER-BUSCH COMPANIES, INC.
By: /s/ W. Randolph Baker -------------------------Title: Vice President and Chief Financial Officer

/s/ James R. Jones -----------------------------[James R. Jones]

Exhibit 10.16 INDEMNIFICATION AGREEMENT This Indemnification Agreement ("Agreement") is between Anheuser-Busch, Incorporated ("ABI") and (the "Indemnitee"). WHEREAS, Indemnitee is a director or an officer of ABI and ABI is a direct subsidiary of Anheuser-Busch Companies, Inc. ("A-BC"). WHEREAS, ABI has determined that the service by Indemnitee as a director of other corporations, partnerships, joint ventures, trusts, employee benefit plans or other enterprises is beneficial to Indemnitee in the performance of his duties and obligations as a director or an officer of ABI. WHEREAS, at the request of ABI, Indemnitee has agreed to serve as a director or member of other governing body of other corporations, partnerships, joint ventures, trusts or other enterprises as may be specified from time to time by the board of directors of ABI or by an officer authorized by the board of directors of ABI (each, a "Company," collectively the "Companies"); WHEREAS, both ABI and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors of other corporations, partnerships, joint ventures, trusts or other enterprises in today's environment; WHEREAS, in recognition of Indemnitee's need for substantial protection against personal liability in order to enhance Indemnitee's continued service to ABI in an effective manner, and in order to induce Indemnitee to serve as a director or member of other governing body of the Companies, ABI wishes to provide in this Agreement for the indemnification of and advancing of expenses to Indemnitee. NOW, THEREFORE, in consideration of the foregoing premises and respective representations, warranties, covenants and agreements, and upon the terms and subject to the conditions hereinafter set forth, and intending to be legally bound hereby, the parties do hereby agree as follows: 1. Certain Definitions: (a) Change of Control: shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13 (d) and 14(d) of the Securities and Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of A-BC or a corporation owned directly or indirectly by the stockholders of A-BC in substantially the same proportions as their ownership of stock of A-BC, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of

securities of A-BC representing 20% or more of the total voting power represented by A-BC's then outstanding Voting Securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of A-BC and any new director whose election by the Board of Directors or nomination for election by A-BC's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved cease for any reason to constitute a majority thereof, or (iii) the stockholders of A-BC approve a merger or consolidation of A-BC with any other corporation, other than a merger or consolidation which would result in the Voting Securities of A-BC outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of A-BC or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of A-BC approve a plan of complete liquidation of A-BC or an agreement for the sale or disposition by A-BC (in one transaction or a series of transactions) of all or substantially all of A-BC's assets. (b) Claim: any threatened, pending or completed action, suit or proceeding, or any inquiry, hearing or investigation, whether conducted by a Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other. (c) Expenses: include attorneys' fees and all other costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal) any Claim relating to any Indemnifiable Event, or preparing to defend, be a witness in or participate in any Claim relating to any Indemnifiable Event. (d) Indemnifiable Event: any event or occurrence related to the fact that Indemnitee is or was a director or member of other governing body of a Company, or by reason or anything done or not done by Indemnitee in such capacity. (e) Potential Change of Control: shall be deemed to have occurred if (i) A-BC enters into an agreement or arrangement, the consummation of which would result in the occurrence of a Change in Control; (ii) any person (including A-BC) publicly announces an intention to take or to consider taking actions which if consummated would constitute a 2

Change of Control; (iii) any person, other than a trustee or other fiduciary holding securities under an employee benefit plan of A-BC acting in such capacity or a corporation owned, directly or indirectly, by the stockholders of A-BC in substantially the same proportions as their ownership of stock of A-BC, who is or becomes the beneficial owner, directly or indirectly, of securities of A-BC representing 10% or more of the combined voting power of A-BC's then outstanding Voting Securities, increases his beneficial ownership of such securities by 5% or more over the percentage so owned by such person on the date hereof; or (iv) the Board of Directors of ABI adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (f) Reviewing Party: any appropriate person or body consisting of the member or members of ABI's Board of Directors who are not parties to the particular Claim for which Indemnitee is seeking indemnification, independent legal counsel selected by such directors or the shareholders of ABI. (g) Voting Securities: any securities of A-BC which vote generally in the election of directors. 2. Basic Indemnification Arrangement. (a) In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, ABI shall, subject to the limitations described in this Agreement, indemnify Indemnitee, as soon as practicable but in any event no later than 30 days after written demand is presented to ABI, against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement (including the creation of the Trust). Notwithstanding anything in this Agreement to the contrary and except as provided in Section 5, prior to a Change in Control Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim initiated by Indemnitee against ABI or any director or officer of ABI, or against A-BC or any director or officer of A-BC, unless ABI has joined in or consented to the initiation of such Claim. If so requested by Indemnitee, ABI shall advance (within two business days of such request) any and all Expenses to Indemnitee (an "Expense Advance"). 3

(b) Notwithstanding the foregoing, (i) the obligations of ABI under Section 2(a) shall be subject to the condition that the Reviewing Party shall not have determined that Indemnitee would not be permitted to be indemnified under applicable law, (ii) the obligation of ABI to make an Expense Advance pursuant to Section 2(a) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that the Indemnitee would not be permitted to be so indemnified under applicable law, ABI shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse ABI) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse ABI for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed) and (iii) ABI's indemnification obligations under this Agreement (except for any liability imposed by Section 5 hereof), shall be subject to such limitations, monetary or otherwise, as may be set forth from time to time by resolutions of the board of directors of ABI. Indemnitee's obligation to reimburse ABI for Expense Advances shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control, the Reviewing Party shall be selected by the Board of Directors of ABI and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of A-BC's Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the special, independent counsel referred to in Section 3 hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation in any court in the State of Missouri having subject matter jurisdiction thereof and in which venue is proper, seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, and ABI hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on ABI and Indemnitee. 3. Change in Control. ABI agrees that if there is a Change in Control of A-BC (other than a Change in Control which has been approved by a majority of A-BC's Board of Directors who were directors immediately prior to such Change in Control) then with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity 4

payments and Expense Advances under this Agreement or any other agreement or under applicable law or ABI's Articles of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, ABI shall seek legal advice only from special, independent counsel selected by Indemnitee and approved by ABI (which approval shall not be unreasonably withheld), and who has not otherwise performed services for ABI within the last 10 years (other than in connection with such matters) or Indemnitee. Such independent counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either ABI or Indemnitee in an action to determine Indemnitee's rights under this Agreement. Such counsel, among other things, shall render its written opinion to ABI and Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under applicable law. ABI agrees to pay the reasonable fees of the special, independent counsel referred to above and to indemnify fully such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or the engagement of special, independent counsel pursuant hereto. 4. Establishment of Trust. In the event of a Potential Change in Control, ABI shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund such Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for and defending any Claim relating to an Indemnifiable Event, and any and all judgments, fines, penalties and settlement amounts of any and all Claims relating to an Indemnifiable Event from time to time actually paid or claimed, reasonably anticipated or proposed to be paid. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Reviewing Party, in any case in which the special, independent counsel referred to above is involved. The terms of the Trust shall provide that upon a Change in Control (i) the Trust shall not be revoked or the principal thereof invaded, without the written request of the Indemnitee, (ii) the Trustee shall advance, within two business days of a request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the circumstances under which the Indemnitee would be required to reimburse ABI under Section 2(b) of this Agreement), (iii) the Trust shall continue to be funded by ABI in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in such Trust shall revert to ABI upon a final determination by the Reviewing Party or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this Section 4 shall relieve ABI of any of its obligations under this Agreement. All income earned on the assets held in the Trust shall be reported as income by ABI for federal, state, local, and foreign tax purposes. 5. Indemnification for Additional Expenses. ABI shall indemnify Indemnitee against any and all expenses (including attorneys' fees) and, if requested by Indemnitee, 5

shall (within two business days of such request) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for (i) indemnification or advance payment of Expenses by ABI under this Agreement or any other agreement or under the Bylaws or resolutions of ABI now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors' and officers' liability insurance policies maintained by ABI or A-BC, in each case under (i) or (ii) regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance Expense payment or insurance recovery, as the case may be. 6. Partial Indemnity, Etc. (i) If Indemnitee is entitled under any provision of this Agreement to indemnification by ABI for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, ABI shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. (ii) Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith. (iii) In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on ABI to establish that Indemnitee is not so entitled. 7. No Presumption. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. 8. Exclusivity, Etc. The rights of the Indemnitee described hereunder and under ABI's Bylaws and resolutions shall be Indemnitee's exclusive rights for indemnification for Indemnifiable Events, notwithstanding any additional rights that might be provided otherwise, including pursuant to ABI's Articles of Incorporation or the General and Business Corporation Law of Missouri. Indemnitee hereby acknowledges the exclusivity of this Agreement, ABI's Bylaws and resolutions waives any such additional rights and agrees that his right to indemnification from ABI shall be limited as described by this Agreement, ABI's Bylaws and resolutions. 9. Liability Insurance. To the extent ABI or ABC maintains an insurance policy or policies providing directors' and officers' liability insurance applicable to Indemnitee, 6

Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available to Indemnitee. Nothing in this section shall limit or prevent ABI's ability to make claims or seek reimbursement under any such policy. 10. Period of Limitations. ABI's right under this Agreement for reimbursement of any amounts paid by it hereunder shall expire unless ABI provides notice to Indemnitee requesting such reimbursement within two years after ABI has reasonable notice of its right to seek reimbursement. 11. Amendments, Etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 12. Subrogation. In the event of payment under this Agreement, ABI shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee against any other party, including the Companies, and Indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable ABI effectively to bring suit to enforce such rights. 13. No Duplication of Payments. ABI shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, from any Company or otherwise) of the amounts otherwise indemnifiable hereunder. 14. Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of ABI, spouses, heirs, and personal and legal representatives. ABI shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of ABI, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that ABI would be required to perform if no such succession had taken place. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director or officer of ABI or of any Company. 15. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions 7

of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 16. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Missouri applicable to contracts made and to be performed in such State without giving effect to the principles of conflicts of laws. 17. Termination. At the option of ABI, ABI may terminate this Agreement and its obligations hereunder or may amend this Agreement by eliminating any entity previously specified as a "Company", in each case by written notice to the Indemnitee delivered to his address as recorded upon the records of ABI. Upon receipt by Indemnitee of such notice, ABI's obligations shall be terminated or amended as described in such notice; provided that such termination or amendment shall not limit the rights of the Indemnitee or the obligations of ABI with respect to any Indemnifiable Event occurring prior to such termination or amendment. 18. Rights Against A-BC. Indemnitee agrees and acknowledges that it shall not be entitled to any right of indemnity against Anheuser-Busch Companies, Inc. ("A-BC") with respect to any Indemnifiable Event arising after the effective date hereof. 19. Mutual Agreement to Arbitrate Claims. The Mutual Agreement to Arbitrate Claims between A-BC and the Indemnitee shall not apply to any claim or controversy relating to the subject matter of this Agreement. 20. Effective Date. The effective date of this Agreement shall be and the obligations and rights of the parties hereto shall commence as of . IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of . ANHEUSER-BUSCH, INCORPORATED By: Title: [Indemnitee Name] 8

Exhibit 12 RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of the Company's earnings to fixed charges, on a consolidated basis for the periods indicated:
Year Ended December 31 ---------------------------------------------------------------------------2002 2001 2000 1999 1998 1997 ------------------------------7.6X 7.0 1/ 6.7X 6.9X 6.8X 7.3X

For purposes of this ratio, earnings have been calculated by adding to income before income taxes the distributed earnings of investees accounted for under the equity method and the amount of fixed charges. Fixed charges consist of interest on all indebtedness, amortization of debt discounts and that portion of rental expense deemed to represent interest. 1/ The ratio for 2001 includes the gain from the sale of SeaWorld Cleveland, which increased income before income taxes by $17.8 million. Excluding this one-time gain, the ratio would have been 6.9X.

Exhibit 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION Management's Discussion and Analysis of Operations and Financial Condition Introduction This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity and cash flows of Anheuser-Busch Companies, Inc. for the three-year period ended December 31, 2002. This discussion should be read in conjunction with the consolidated financial statements and footnotes to the consolidated financial statements included in this annual report. This discussion contains forward-looking statements regarding the company's expectations concerning its future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent the company's expectations, but such expectations may change. These expectations involve risks and uncertainties (both favorable and unfavorable) and are based on many assumptions that the company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the company's expectations and forward-looking statements will be correct. Important factors that could cause actual results to differ (favorably or unfavorably) from the expectations stated in this discussion include, among others, changes in the pricing environment for the company's products; changes in United States demand for malt beverage products; changes in consumer preference for the company's malt beverage products; regulatory or legislative changes; changes in the litigation to which the company is a party; changes in raw materials prices; changes in packaging materials costs; changes in interest rates; changes in foreign currency exchange rates; changes in attendance and consumer spending patterns for the company's theme park operations; changes in demand for aluminum beverage containers; changes in the company's international beer business or in the beer business of the company's international equity partners; and the effect of stock market conditions on the company's share repurchase program. Anheuser-Busch disclaims any obligation to update any of these forward-looking statements. If the company determines to update any forwardlooking statement, it will do so publicly. No private statements by the company or its personnel should be interpreted as updating forward-looking statements. Objectives Anheuser-Busch remains focused on its three major objectives to enhance shareholder value: o Increasing domestic per barrel profitability which, when combined with continued market share growth, will provide the base for long-term double-digit earnings per share growth and improvement in return on capital. o Profitable expansion of the international beer segment by making investments in leading brewers in key beer growth markets, and building the Budweiser brand worldwide. The company has made significant marketing investments to build Budweiser brand recognition outside the United States and owns and operates breweries in China and the United Kingdom. The company also has a 50% equity position in Grupo Modelo, Mexico's largest brewer and producer of the Corona brand; a 20% equity position in Compania Cervecerias Unidas (CCU), the largest brewer in Chile; and an agreement to eventually acquire 27% of Tsingtao, the largest brewer in China. o Continued growth in profit and free cash flow in the packaging and entertainment segments. Packaging operations provide significant efficiencies, cost savings and quality assurance for domestic beer operations. Entertainment operations enhance the company's corporate image by showcasing Anheuser-Busch's heritage, values and commitment to quality and social responsibility to approximately 20 million visitors annually. Operating Results Led by strong growth in its domestic and international beer businesses, Anheuser-Busch had another outstanding year in 2002, selling over 100 million barrels of its beer brands domestically for the first time in history and delivering 14% earnings per share growth. The company also achieved its 17th consecutive quarter of solid double-digit earnings per share growth in the fourth quarter 2002, and has delivered 14.3% compounded annual earnings per share growth since 1998. Diluted earnings per share are calculated on a comparable basis, excluding goodwill amortization from all periods. These accomplishments reflect Anheuser-Busch's proven ability to capitalize on continued favorable domestic beer industry

26

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT fundamentals and the strong earnings growth contribution by the company's international beer segment, led primarily by the performance of the company's equity partner Grupo Modelo. The combination of revenue per barrel growth, volume growth and favorable costs has significantly enhanced profit margins and return on capital employed. Return on capital employed increased 120 basis points in 2002, and has increased a total of 410 basis points over the past four years. Anheuser-Busch enters 2003 from a position of strength. The company has the leading brands with the highest quality in the industry, substantial market share leads over its nearest competitors, successful pricing strategies and a strong financial position. The company has established a 12% earnings per share growth objective for 2003. Effective in the first quarter 2002, the company ceased amortizing goodwill in accordance with FAS No. 142, "Goodwill and Other Intangible Assets." The impact of goodwill amortization on 2001 net income and diluted earnings per share was $35.8 million and $.04, respectively. The impact of goodwill amortization on net income and diluted earnings per share for 2000 was $31.8 million and $.03, respectively. Had goodwill amortization ceased on January 1, 2000, net income for 2001 and 2000 would have been $1.74 billion and $1.58 billion, respectively, while diluted earnings per share for the same periods would have been $1.93 and $1.72. Comparisons of key operating results for the last three years are summarized in the following tables. As noted above, due to the adoption of FAS 142, operating results for 2002 do not reflect any goodwill amortization expense. Per the requirements of FAS 142, Anheuser-Busch did not restate the results of operations for 2001 and 2000 to exclude goodwill amortization, so results for those years reflect the impact of goodwill expense. The absence or presence of goodwill amortization expense in 2002 and 2001, respectively, makes direct comparison between operating results difficult. Therefore, to provide the clearest understanding of the company's operations, all discussions of operating results for 2002 vs. 2001 are based on 2001 results reported on a comparable basis, excluding the impact of goodwill amortization. Discussions of operating results for 2001 and 2000 vs. prior years are already on a comparable basis, as the results for all years include goodwill amortization expense.
Comparison of Operating Results Year Ended December 31 (in millions, except per share) ----------------------------------------------------------------------------2002 vs. 2001 --------------------Comparable 2002 2001 Reported Basis* Gross sales $15,687 $14,973 4.8% 4.8% Net sales $13,566 $12,912 5.1% 5.1% Operating income $ 2,980 $ 2,723 9.4% 8.9% Income before income taxes $ 2,624 $ 2,378 10.3% 9.6% Equity income, net of tax $ 352 $ 254 38.3% 28.2% Net income $ 1,934 $ 1,705 13.4% 11.1% Diluted earnings per share $ 2.20 $ 1.89 16.4% 14.0% * Excludes goodwill amortization in 2001. ----------------------------------------------------------------------------2001 2000 2001 vs. 2000 Gross sales $14,973 $14,534 $439 3.0% Net sales $12,912 $12,499 $413 3.3% Operating income $ 2,723 $ 2,495 $228 9.2% Income before income taxes $ 2,378 $ 2,180 $198 9.1% Equity income, net of tax $ 254 $ 246 $ 8 3.4% Net income $ 1,705 $ 1,552 $153 9.9% Diluted earnings per share $ 1.89 $ 1.69 $.20 11.8% ----------------------------------------------------------------------------2000 1999 2000 vs. 1999 Gross sales $14,534 $13,915 $619 4.5% Net sales $12,499 $11,895 $604 5.1% Operating income $ 2,495 $ 2,302 $193 8.4% Income before income taxes $ 2,180 $ 2,008 $172 8.6% Equity income, net of tax $ 246 $ 179 $ 67 37.7% Net income $ 1,552 $ 1,402 $150 10.7% Diluted earnings per share $ 1.69 $ 1.47 $.22 15.0% -----------------------------------------------------------------------------

Beer Sales Volume

Worldwide Anheuser-Busch brands volume is comprised of domestic volume and international volume. Domestic volume represents Anheuser-Busch brands produced and shipped within the United States. International volume represents exports from the company's U.S. breweries to markets around the world, plus Anheuser-Busch brands produced overseas by company breweries in China and the United Kingdom and under various license and contract-brewing agreements. Budweiser and other Anheuser-Busch beer brands are sold in more than 80 countries worldwide. Total brands sales volume combines worldwide Anheuser-Busch brand volume with the company's pro rata share of volume in international equity partners Grupo Modelo and CCU. Total worldwide beer sales volume results for the last three years are summarized on the following page. 27

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
Worldwide Beer Sales Volume Year Ended December 31 (millions of barrels) ----------------------------------------------------------------------------2002 2001 Change ----------------------------------------------------------------------------Domestic 101.8 99.7 2.1% International 8.0 7.5 5.4% --------------------------------Worldwide A-B brands 109.8 107.2 2.3% International equity partner brands 18.1 17.2 5.3% --------------------------------Total brands 127.9 124.4 2.8% ================================= ----------------------------------------------------------------------------2001 2000 Change ----------------------------------------------------------------------------Domestic 99.7 98.5 1.2% International 7.5 7.1 5.6% --------------------------------Worldwide A-B brands 107.2 105.6 1.5% International equity partner brands 17.2 15.7 9.7%(1) --------------------------------Total brands 124.4 121.3 2.6%(1) ================================= (1) Normalized to exclude incremental volume contributed by the 2001 acquisition of CCU, equity partner brands volume increased 4.9%, and total brands volume increased 2.0%, for 2001 vs. 2000. ----------------------------------------------------------------------------2000 1999 Change ----------------------------------------------------------------------------Domestic 98.5 95.8 2.7% International 7.1 7.1 1.1% --------------------------------Worldwide A-B brands 105.6 102.9 2.6% International equity partner brands 15.7 15.1 3.9%(2) --------------------------------Total brands 121.3 118.0 2.8%(2) ================================= (2) Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, equity partner brands volume increased 6.2%, and total brands volume increased 3.1%, for 2000 vs. 1999. The company sold its investment back to Antarctica in July 1999.

Sales Revenue per barrel reflects the net average sales price the company obtains from wholesaler customers for its products. The higher the net revenue per barrel, the greater the company's gross profit dollars and gross profit margin, with revenue per barrel increases having nearly twice the impact on profits as comparable percent increases in beer volume. Anheuser-Busch strives to obtain price increases that approximate, or are slightly less than, increases in the U.S. Consumer Price Index over time. The company's reported domestic sales volume is based on beer sales-to-wholesalers volume. Higher beer salesto-wholesalers volume increases gross profit dollars and gross profit margin. Wholesaler sales-to-retailers volume is a leading indicator of demand for the company's products at the consumer level. Higher wholesaler sales-toretailers require increased beer sales-to-wholesalers to meet ongoing demand. In the fourth quarter of 2001, the company changed its presentation of pass-through finished product delivery costs reimbursed by customers. These items were previously offset for zero impact within cost of sales. The company now presents these items separately as sales and cost of sales. This change had a minor impact on revenue and profit margins growth, and had no impact on cash flow, operating income, net income and earnings per share. For comparability, information for 2000 was recast to conform to this presentation.

Sales -- 2002 vs. 2001 [SALES* (1998-2002 -- COMPARES GROSS SALES AND NET SALES -- GRAPH] *The difference between gross sales and net sales represents beer excise taxes. Anheuser-Busch achieved record gross sales of $15.7 billion and record net sales of $13.6 billion in 2002, representing increases of 4.8%, or $714 million, and 5.1%, or $654 million, respectively, compared to 2001. The increases in gross and net sales were principally due to a $570 million, or 5.7% increase in domestic beer segment net sales resulting from higher domestic revenue per barrel and higher domestic beer sales volume. Revenue per barrel generated $354 million in net sales improvement, while higher beer volume contributed $216 million of the increase. International beer net sales increased $43 million, primarily due to volume growth in China. Packaging segment net sales were up $24 million due to higher soft drink can prices and increased volume. Entertainment segment net sales increased $11 million due to higher ticket prices and higher in-park spending, partially offset by slightly lower attendance. The difference between gross and net sales represents beer excise taxes of $2.12 billion. Domestic beer revenue per barrel grew 3.5% for 2002, reflecting the continued favorable domestic pricing environment, and the introductions of Michelob ULTRA and Bacardi Silver. Revenue per barrel has increased by 2% or more for 17 consecutive quarters. Excluding favorable mix, domestic revenue per barrel increased 2.8% for the year. The increases in revenue per barrel have enhanced gross and operating profit margins, which improved 160 basis points and 80 basis points, respectively, in 2002 vs. the prior year. Consistent with its practice of implementing annual price increases in two phases, the company completed the first stage of its pricing actions for 2003 by raising prices in October 2002 in markets representing almost 45% of the company's domestic volume. These actions have been very successful, as reflected in the company's strong fourth quarter revenue per barrel performance. As planned, Anheuser-Busch is implementing the second stage of 28

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT 2003 pricing actions on approximately 20% of its domestic volume. As in the past, these pricing initiatives are tailored to specific markets, brands and packages. Domestic beer sales-to-wholesalers volume increased 2.1% for the full year vs. 2001, to 101.8 million barrels. This increase was led by Bud family sales, as well as the successful 2002 introductions of Bacardi Silver and Michelob ULTRA. Wholesaler inventories at December 31, 2002 were essentially the same as inventory levels at the end of last year. Wholesaler sales-to-retailers volume was up 1.6% for the year. Worldwide Anheuser-Busch beer sales volume increased 2.3% for the year in 2002, to 109.8 million barrels. Total beer sales volume was 127.9 million barrels in 2002, up 2.8% vs. 2001. International Anheuser-Busch brand beer volume for 2002 was 8.0 million barrels, an increase of 5.4% vs. 2001. During 2002, the company's three largest markets outside the United States -- Canada, China and the United Kingdom -- all experienced volume growth. The company's domestic market share for 2002 (excluding exports) was 49.2%, an increase of 0.5 percentage point compared to 2001 market share of 48.7%. Domestic market share is determined based on estimated U.S. beer industry sales using information provided by the Beer Institute and the U.S. Department of Commerce. The company has led the U.S. brewing industry in sales volume and market share since 1957. Sales -- 2001 vs. 2000 Anheuser-Busch reported gross sales of $15.0 billion and net sales of $12.9 billion in 2001, representing increases of 3.0%, or $439 million, and 3.3%, or $413 million, respectively, compared to 2000. The increases in gross and net sales were principally due to a $429 million, or 4.5% increase in domestic beer segment net sales resulting from higher domestic revenue per barrel and a 1.2% increase in domestic beer sales volume. Revenue per barrel generated $298 million in net sales improvement, while higher beer volume contributed $131 million of the increase. Gross and net sales also benefited from sales increases from the international beer and entertainment segments. The difference between gross and net sales represents beer excise taxes of $2.06 billion. Domestic revenue per barrel grew 3.0% for full year 2001, reflecting a favorable pricing environment and Anheuser-Busch's efforts to balance price increases and market share gains. Gross and operating profit margins increased 100 and 110 basis points for the year, respectively, compared to 2000. Domestic beer sales-to-wholesalers volume increased 1.2% for full year 2001, to 99.7 million barrels, compared to prior year. Wholesaler sales-to-retailers grew 1.8% for the full year 2001. The Bud family led the increases in sales to both wholesalers and to retailers, with Bud Light continuing its strong sales performance. Worldwide Anheuser-Busch brand sales volume for 2001 grew 1.5%, to 107.2 million barrels, compared to full year 2000. Total brands sales volume was 124.4 million barrels for the year, up 2.6%. International beer volume, excluding Modelo and CCU, grew 5.6% for the full year, to 7.5 million barrels, due primarily to solid volume growth in Canada and China. The company's domestic market share (excluding exports) for 2001 was 48.7%, an increase of 0.2 percentage point over 2000 market share of 48.5%. Sales -- 2000 vs. 1999 Anheuser-Busch achieved gross sales of $14.5 billion and net sales of $12.5 billion in 2000, representing increases of 4.5%, or $619 million, and 5.1%, or $604 million, respectively, compared to 1999. The primary factors responsible for these increases were increased domestic revenue per barrel and higher domestic beer sales volume, which generated a $473 million, or 5.2% net sales increase by the domestic beer segment. Increased domestic revenue per barrel and higher domestic beer sales volume contributed $222 million and $251 million, respectively, to the increase in net sales. Gross and net sales growth were adversely impacted by lower international beer sales resulting from the conversion of the company's 90%-owned Japan joint venture into an exclusive licensing arrangement. The difference between gross and net sales in 2000 is beer excise taxes of $2.03 billion. Domestic revenue per barrel grew 2.5% for the full year 2000 compared to 1999. Domestic beer sales-to-wholesalers increased 2.7%, to 98.5 million barrels, for full year 2000. Domestic volume growth was led by the Bud family, with Bud Light registering double-digit growth. Domestic wholesaler sales-toretailers were up 2.5% for 2000 compared to 1999. Worldwide Anheuser-Busch brand sales volume grew to 105.6 million barrels, up 2.6% for 2000 compared to 1999. Total brands sales volume was 121.3 million barrels, up 2.8% for the year. Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, equity partner volume increased 6.2% for the year, and total brands sales volume increased 3.1%. The company's reported domestic market share (excluding exports) for 2000 was 48.5%, an increase of 1.0

share point over 1999 market share of 47.5%. Industry estimates provided by the Beer Institute for market share calculations were not adjusted for the impact of a wholesaler inventory reduction initiated by Miller Brewing Company in the fourth quarter of 2000. International beer volume (excluding foreign equity investment volume) grew 1.1% in 2000, due primarily to growth in Canada and China, partially offset by lower volume in the United Kingdom. 29

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITIONS Cost of Sales The company continuously strives to drive costs out of its system. Brewery modernizations have yielded longterm savings through reduced beer packaging and shipping costs and reduced maintenance and equipment replacement costs. The company's focused production methods and wholesaler support distribution centers concentrate small-volume brand and package production at three breweries to create production efficiencies, reduce costs and enhance responsiveness to changing consumer brand and package preferences. The company also works to reduce distribution costs through better systemwide coordination with its network of independent wholesalers. Cost of sales was $8.13 billion in 2002, an increase of $192 million, or 2.4% vs. 2001. The increase in 2002 is due primarily to higher domestic beer segment costs, driven by costs associated with higher beer volume of $105 million partially offset by lower brewing materials, aluminum and energy costs. Costs also increased in the international beer segment, due to costs associated with increased beer volume, and in the packaging and entertainment businesses. Gross profit as a percentage of sales was 40.1%, an increase of 160 basis points vs. 2001, reflecting higher domestic beer margins generated by improved pricing and favorable costs. Cost of sales for 2001 was $7.95 billion, an increase of 1.5%, or $121 million compared to 2000. The increase in cost of sales is principally due to increased costs in the domestic beer segment, including costs of $44 million associated with higher domestic beer volume, higher energy costs and increased packaging material costs which reflect the impact of start-up costs related to the company's bottle manufacturing operation in Houston, Texas. Gross profit as a percentage of net sales was 38.4% for 2001, an increase of 100 basis points compared to 2000, principally reflecting higher domestic beer margins. Cost of sales was $7.83 billion for 2000, an increase of 5.2%, or $384 million compared to 1999. The increase in cost of sales is primarily due to increased costs in the domestic beer segment, due primarily to costs of $96 million related to higher domestic beer volume, and increased costs at the company's entertainment, can manufacturing and commodity aluminum recycling businesses. Gross profit as a percentage of net sales was 37.4% for 2000, no change vs. 1999. Marketing, Distribution and Administrative Expenses Advertising and promotional activities for its beer brands and theme park operations are important elements of Anheuser-Busch's strategy, and represent significant annual expenditures. The company employs a variety of national, regional and local media outlets in its promotional efforts, including television, radio, print and outdoor advertising and event sponsorships. Marketing, distribution and administrative expenses of $2.46 billion in 2002 represent an increase of $201 million vs. 2001 expenses, or 8.9%. The increase is due to higher domestic beer marketing costs for the Bud and Michelob families, introductory costs and ongoing support for Michelob ULTRA and Bacardi Silver, increased distribution costs due to the acquisition of a beer wholesaler in California, higher litigation costs and a $20 million contribution to the company's charitable foundation. Marketing, distribution and administrative expenses for 2001 were $2.26 billion, an increase of 3.7%, or $81 million vs. 2000. The increase in these expenses in 2001 was principally due to higher domestic beer marketing costs, higher distribution costs related to the acquisition of a wholesaler in California and higher administrative costs. Marketing, distribution and administrative expenses for 2000 were $2.17 billion, an increase of 1.3%, or $28 million vs. 1999. The increase is due to higher marketing expenses for the domestic beer segment, higher onetime marketing costs for the entertainment segment related to the opening of the Discovery Cove park and higher general and administrative costs, significantly offset by lower international beer marketing expenses in Japan due to converting the company's joint venture to an exclusive licensing agreement. Operating Income Operating income represents the measure of the company's financial performance before net interest cost, other nonoperating items and equity income. Operating income was $2.98 billion in 2002, an increase of $244 million, or 8.9%, vs. 2001 operating income. In 2001, the company had operating income of $2.72 billion, representing a 9.2%, or $228 million, increase over 2000 operating income of $2.49 billion. Operating income in 2000 increased $193 million, or 8.4% vs. 1999. Operating margin for 2002 was 22.0%, an increase of 80 basis points vs. 2001. Operating margin in 2001 was 21.1%, a 110 basis point increase over 2000 margin of 20.0%, which increased 60 basis points vs. 1999. Excluding the impact of the $17.8 million gain on the sale of SeaWorld Cleveland recorded in the first quarter

2001, operating margin for 2002 and 2001 increased 90 and 100 basis points, respectively. Net Interest Cost Net interest cost (interest expense less interest income) was $367.4 million for 2002, $360.1 million for 2001 and $347.1 million for 2000, representing increases of 2.0%, 3.7% and 14.4%, respectively, compared to prior years. These increases primarily result from higher 30

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT average outstanding debt balances compared to prior years. The impact of higher debt balances was partially offset by lower interest rates throughout 2002 and 2001. Average interest rates increased in 2000. See the Liquidity and Capital Resources section of this discussion for additional information regarding changes in the company's debt portfolio. Interest Capitalized Interest capitalized was $17.7 million in 2002, $26.9 million in 2001 and $33.3 million in 2000. The amount of interest capitalized fluctuates depending on construction-in-progress balances, which are impacted by the amount and timing of capital spending, the timing of project completion dates and by market interest rates. Capital spending declined in 2002 and interest rates have generally declined throughout 2002 and 2001. Other Income/Expense, Net Other income/expense, net includes earnings from the company's limited partnership investments in beer wholesalers, in addition to other items of a nonoperating nature that do not have a material impact on the company's consolidated results of operations, either individually or in total. The company had net other expense of $6.4 million in 2002, $12.2 million in 2001 and $1.0 million in 2000. Income Before Income Taxes [INCOME BEFORE INCOME TAXES GRAPH (1998-2002)] Income before income taxes was $2.62 billion in 2002, an increase of $231 million, or 9.6%, vs. 2001. Income before income taxes was $2.38 billion in 2001 and $2.18 billion in 2000, representing increases of $198 million, or 9.1%, and $172 million, or 8.6%, respectively, vs. prior years. Excluding the impact of the gain on the SeaWorld Cleveland sale in 2001, which better reflects ongoing operations, pretax income increased 10.4% in 2002 and 8.3% in 2001. 2002 vs. 2001 Income before income taxes improved for all the company's major business segments in 2002. Domestic beer pretax income for the year was up 9.3%, to $2.92 billion, reflecting higher revenue per barrel and increased beer volume. International beer segment pretax income increased 37% for 2002, primarily due to volume and profit growth in China. Packaging segment pretax profits were up 42%, primarily due to higher soft drink can prices and volume, along with a profit contribution from the company's bottle manufacturing operation in 2002 compared to a loss in the 2001 start-up year. Entertainment segment pretax profits for the year were up 8% compared to 2001, excluding the $17.8 million gain on the sale of the company's SeaWorld Cleveland theme park in 2001. 2001 vs. 2000 Domestic beer income before income taxes for 2001 was $2.67 billion, an increase of $185 million, or 7.5% vs. 2000. This increase is due to higher revenue per barrel and increased beer sales volume. Pretax profit for international beer increased 86% for 2001 due to volume gains in China and Canada, along with contributions from the United Kingdom and Ireland. Income before income taxes for the packaging segment was up 6% for the year, reflecting reduced manufacturing costs partially offset by lower soft drink can pricing, and the impact of start-up costs related to the company's bottle manufacturing operation. This comparison excludes an unfavorable adjustment related to the company's label manufacturing business in 2000. Reported pretax results for the packaging segment increased 22% in 2001. Entertainment segment pretax profits for 2001 increased 14% vs. the prior year primarily due to increased attendance, increased in-park spending and a full year of Discovery Cove operations in 2001 vs. a partial year in 2000. These results exclude the impact of SeaWorld Cleveland operating results and related gain on the sale of the park. Including SeaWorld Cleveland, income before income taxes for the segment increased 29%. 2000 vs. 1999 Income before income taxes for domestic beer in 2000 was $2.48 billion, an increase of 9.7%, or $220 million compared to 1999, due to strong revenue per barrel and volume performance. International beer pretax results moved from a loss in 1999 to profit in 2000, and improved $52.6 million due to volume gains in China and the

conversion of a joint venture into a licensing agreement in Japan, which lowered operating costs. Packaging segment pretax income was down 41% for 2000 compared to 1999, reflecting lower conversion pricing on soft drink can sales and an unfavorable $14 million adjustment at the company's label manufacturing business. Excluding the label manufacturing adjustment, packaging segment pretax income was down 32% for the year. Entertainment segment income before income taxes, excluding start-up costs associated with Discovery Cove, which began 31

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION operations in July 2000, was up 7% for 2000 due primarily to attendance growth in Florida. Including Discovery Cove start-up costs, pretax income for the entertainment segment increased 2% for the year. Equity Income, Net of Tax Equity income, net of tax increased 28.2%, to $351.7 million for 2002 vs. 2001. Equity income of $254.4 million in 2001 represents a 3.4% increase compared to 2000 equity income of $246.0 million, which had increased $67.3 million, or 38% vs. 1999. These increases are primarily due to Grupo Modelo's underlying volume and earnings growth. Equity income from Grupo Modelo for 2002 includes a one-time $6.5 million after-tax charge in the third quarter related to the restructuring of Modelo's brewery operations in southeast Mexico. As a result of the restructuring, Modelo should realize improved efficiencies and operating cost savings in the future. Modelo equity income also includes a $17 million one-time deferred income tax benefit due to a gradual 3% reduction in Mexican corporate income tax rates from 35% in 2002 to 32% in 2005. The Mexican government enacted the lower corporate income tax rates in the first quarter of 2002. The Mexican tax rate benefit is largely offset by increased U.S. deferred income taxes, which are included in the company's consolidated income tax provision, resulting in minimal consolidated net income or earnings per share benefit. Excluding the impact of the Modelo tax rate benefit and brewery restructuring charge, equity income on a comparable basis increased 24% in 2002. Net Income The company earned net income of $1.93 billion in 2002, an increase of $193 million, or 11% over 2001. Net income was $1.70 billion in 2001, an increase of 9.9%, vs. 2000 net income of $1.55 billion. Net income for 2000 increased $150 million, or 10.7% compared to 1999. Effective Tax Rate The effective tax rate was 39.7% in 2002, an increase of 100 basis points vs. 2001. The effective tax rate increased in 2002 due to the Modelo deferred tax impact discussed previously and higher foreign taxes, partially offset by the write-off in 2001 of goodwill associated with the sale of SeaWorld Cleveland. The effective tax rates in 2001 and 2000 were 39.0% and 40.1%, respectively. The decrease in 2001 was primarily due to lower foreign taxes partially offset by the write-off of SeaWorld Cleveland goodwill. The effective rate in 2000 was up 100 basis points vs. 1999 due to increased foreign taxes. Diluted Earnings Per Share [DILUTED EARNINGS PER SHARE* GRAPH (1998-2002)] *On a comparable basis, which excludes goodwill amortization, diluted earnings per share for 2001, 2000, 1999 and 1998 would have been $1.93, $1.72, $1.50 and $1.29, respectively. Diluted earnings per share were $2.20 for 2002, an increase of $.27 per share, or 14%, vs. 2001. Diluted earnings per share of $1.89 for 2001 represent an increase of 11.8% over 2000 earnings per share of $1.69, which had increased 15% compared to 1999. Diluted earnings per share benefit from the company's ongoing share repurchase program. The company repurchased 40.7 million common shares in 2002 and 28.2 million shares in both 2001 and 2000. Diluted earnings per share for 2002 include a two-thirds cent negative impact from Modelo's brewery restructuring. Diluted earnings per share for 2001 include a one-half cent benefit from the sale of SeaWorld Cleveland. Employee-Related Costs [EMPLOYEE-RELATED COSTS GRAPH (1998-2002)] Employee-related costs totaled $2.07 billion in 2002, an increase of 4.2% vs. 2001 costs of $1.98 billion. Employee-related costs for 2001 increased 3.6% vs. 2000 costs of $1.92 billion, which increased 2.0% compared to 1999. The changes in employee-related costs primarily reflect normal increases in salaries, wages and benefit levels. Salaries and wages comprise the majority of employee-related costs and totaled $1.63 billion

in 2002, an increase of 1.7% vs. 2001. Salaries and wages totaled $1.61 billion in 2001, an increase of 1.8% compared to 2000 costs of $1.58 billion, which increased 2.6% vs. 1999. The remainder of employee-related costs consists of pension, life insurance, health care benefits and payroll taxes. The company had 23,176 full-time employees at December 31, 2002. Full-time employees numbered 23,432 and 23,725 at the end of 2001 and 2000, respectively. 32

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Taxes In addition to income taxes, the company is significantly impacted by other federal, state and local taxes, including beer excise taxes. Taxes applicable to 2002 operations (not including the many indirect taxes included in materials and services purchased) totaled $3.41 billion, an increase of 5.8% vs. total taxes in 2001 of $3.22 billion, and highlight the burden of taxation on the company and the brewing industry in general. Taxes in 2001 increased 2.8% compared to total taxes in 2000 of $3.13 billion, which increased 3.5% compared to 1999. In the first quarter 2002, the company began presenting U.S. income taxes relating to foreign equity investment dividends in the consolidated income tax provision. The company previously presented these taxes in equity income. This change in presentation has no impact on net income, earnings per share or cash flow. For comparability, prior year information has been recast to conform to the 2002 presentation. Liquidity and Capital Resources Anheuser-Busch's strong financial position allows it to pursue its growth strategies while providing substantial direct returns to shareholders. Accordingly, the company has established well-defined priorities for its available cash: o Reinvest in core businesses to achieve profitable growth. To enhance shareholder value, the company will continue to make investments to improve efficiency and add capacity as needed in its existing operations, and intends to make selected equity investments in leading international brewers in higher-growth markets. o Make substantial cash payments directly to shareholders through consistent dividend growth and the repurchase of common shares. The company has paid cash dividends in each of the last 69 years, and has repurchased approximately 3% of outstanding shares annually for over 10 years. [OPERATING CASH FLOW BEFORE CHANGE IN WORKING CAPITAL GRAPH (1998-2002)] The company considers its ratio of cash flow to total debt to be a key measure of ongoing liquidity, and targets a ratio toward the upper end of the 30% to 40% range in order to maintain its strong credit ratings of A1 and A+, from Moody's and Standard & Poor's, respectively. Based on its specific financial position and risk tolerance, Anheuser-Busch believes a strong Single A rating strikes the best balance between a low cost-of-capital and maintaining adequate financial flexibility. The company's ratio of cash flow to total debt was 39.7% in 2002, 38.8% in 2001 and 41.6% in 2000. Sources and Uses of Cash [RATIO TO CASH FLOW TO TOTAL DEBT GRAPH (1998-2002)] The company's primary source of liquidity is cash provided from operations. Principal uses of cash are capital expenditures, share repurchases, dividends and business investments. The company uses debt financing to lower its overall cost of capital. Information on the company's consolidated cash flows for the years 2002, 2001 and 2000 is presented in the Consolidated Statement of Cash Flows (categorized by operating activities, financing activities and investing activities) and in the business segments information in Note 15. Cash generated by the company's business segments is projected to exceed funding requirements for each segment's anticipated capital expenditures. However, corporate spending on dividend payments and share repurchases, plus possible additional investments in international brewers, will require external financing. The nature, extent and timing of external financing will vary depending upon the company's evaluation of existing market conditions and other economic factors. The company uses its share repurchase program to manage its leverage position and typically operates at a working capital deficit as it manages its cash flows. The company had working capital deficits of $283.0 million, $186.1 million and $127.8 million at December 31, 2002, 2001 and 2000, respectively. The company made $201 million in accelerated contributions to its pension plans in the fourth quarter 2002. Due to recent stock market declines, projections indicated Anheuser-Busch would have been required to contribute this amount between now and 2005, but chose instead to contribute the entire amount in 2002 in order to enhance the funded status of the plans immediately. Please see Note 8 for additional information. 33

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION The company's fixed charge coverage ratio was 7.6X, 7.0X and 6.7X for the years ended December 31, 2002, 2001 and 2000, respectively. Commitments and Contingencies See Note 12 for details of the company's cash commitments for the next five years. Anheuser-Busch has a long history of paying dividends and expects to continue paying dividends each year. The company has repurchased 2% to 3% of its outstanding common shares for the last several years, and expects to continue to repurchase common shares in the future. However, Anheuser-Busch has no commitments or obligations related to dividends, or for the repurchase or pledging of common shares. The company also has no off-balance-sheet obligations or guarantees and does not use special purpose entities for any transactions. The company's 9% debentures due 2009 and the ESOP debt guarantee that ends in 2004 (both of which are included in debt on the consolidated balance sheet) permit holders to require repayment of the debt prior to its maturity upon a decline in credit rating below investment grade. In the case of the 9% debentures, the credit downgrade must be preceded by a change in control. The total outstanding balance at December 31, 2002 for this debt is $440 million. The company occasionally provides short-term, small-scale loan guarantees for beer wholesalers to assist them in obtaining long-term bank financing. The duration of these guarantees varies. At December 31, 2002, there were no guarantees outstanding. There were $2 million in outstanding guarantees at December 31, 2001. Capital Expenditures [CAPITAL EXPENDITURES/DEPRECIATION & AMORTIZATION GRAPH (1998-2002--compares capital expenditures and depreciation & amortization (in millions))] During the next five years, the company will continue capital expenditure programs designed to take advantage of growth and productivity improvement opportunities for its beer, packaging and entertainment operations. The company has a formal and intensive review procedure for the authorization of capital expenditures. The most important financial measure of acceptability for a discretionary capital project is whether its projected discounted cash flow return on investment exceeds the company's cost of capital. Total capital expenditures amounted to $835 million in 2002, compared to $1.0 billion in 2001. Capital expenditures over the past five years totaled $4.6 billion. The company expects capital expenditures in 2003 in the range of $950 million to $1 billion and is projecting capital spending during the five-year period 2003 - 2007 of approximately $4.5 billion. Share Repurchase The company spent $2.0 billion, $1.2 billion and $987 million to repurchase common shares in 2002, 2001 and 2000, respectively. From an economic perspective, the company's share repurchase program represents an effective cash flow and opportunity cost offset to stock option grants, because the market value increase of repurchased shares directly offsets the increase in the in-the-money value of outstanding options. AnheuserBusch has historically repurchased more shares each year than it has issued under stock option plans, with average net repurchases of 2% to 3% of outstanding shares each year. Additionally, assuming the company borrows each year to repurchase shares, the cash flow benefit the company receives related to exercised stock options and associated tax benefits has historically more than offset the interest cost. See Note 7 for details of common stock activity. Dividends [NET INCOME/DIVIDENDS GRAPH (1998-2002--compares net income and dividends (in millions))] Cash dividends paid to shareholders were $649.5 million in 2002, $614.1 million in 2001 and $571.0 million in 2000. Dividends are paid in the months of March, June, September and December of each year. In the third quarter 2002, effective with the September dividend, the Board of Directors increased the quarterly dividend rate by 8.3%, from $.18 to $.195 per share. This increased annual dividends per share to $.75 in 2002, an 8.7%

increase compared with $.69 per share in 2001. In 2001, dividends were $.165 per share for the first two quarters and $.18 per share for the last two quarters, representing an annual increase vs. 2000 of 9.5%. In 2000, dividends were $.15 per share for the first two quarters and $.165 per share for the last two quarters. 34

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Financing Activities The company utilizes Securities and Exchange Commission "shelf" registration statements to provide flexibility and efficiency when obtaining long-term financing. At December 31, 2002, a total of $400 million of debt was available for issuance under an existing registration. The company subsequently issued $200 million in debt in January 2003, leaving it with $200 million available for issuance. The company's net debt balance increased a total of $619.3 million in 2002, compared to a total increase of $621.2 million in 2001. Debt issuances were $1.17 billion and $1.23 billion in 2002 and 2001, respectively, as shown below.
Amount Year Description (millions) Interest Rate (fixed unless noted) ------------------------------------------------------------------------------------2002 Debentures $850.0 $300.0 at 5.95%; $550.0 at 6.5% U.S. Dollar Notes $300.0 4.375% Industrial Revenue Bonds $ 8.8 6.11% weighted average Other, net $ 8.3 Various ------------------------------------------------------------------------------------2001 Debentures $550.0 $250.0 at 6.0%; $300.0 at 6.8% U.S. Dollar Notes $500.0 $250.0 at 6.0%; $200.0 at 5.125%; $50.0 at 5.6% EuroNotes $151.0 $100.0 at 4.51%; $51.0 at 4.6% Industrial Revenue Bonds $ 9.0 6.03% weighted average Other, net $ 24.0 Various -------------------------------------------------------------------------------------

Debt reductions were $547.8 million and $612.8 million in 2002 and 2001, respectively, as shown below.
Amount Year Description (millions) Interest Rate (fixed unless noted) ------------------------------------------------------------------------------------2002 U.S. Dollar Notes $300.0 $200 at 6.75%; $100 at 7.0% Commercial Paper $187.3 1.98% weighted average floating ESOP Note $ 41.9 8.25% Other, net $ 18.6 Various ------------------------------------------------------------------------------------2001 U.S. Dollar Notes $207.5 $200 at 6.9%; $7.5 at 7.44% Commercial Paper $167.0 4.39% weighted average floating Dual-Currency Notes $162.8 4.1% ESOP Note $ 40.0 8.25% Other, net $ 35.5 Various -------------------------------------------------------------------------------------

In addition to long-term debt financing, the company has access to short-term capital markets through the issuance of commercial paper and potential utilization of a $2 billion revolving bank credit agreement that expires June 2005. The credit agreement provides the company with an immediate and continuing source of liquidity. No borrowings have been made under the credit agreement since its inception. See Note 4 for additional information regarding the company's debt portfolio. Common Stock At December 31, 2002, registered common stock shareholders numbered 57,259 compared with 57,347 at the end of 2001. See Note 7 for a summary of common stock activity. The company's common stock is listed on the New York Stock Exchange under the symbol "BUD." The closing price of the company's common stock at December 31, 2002 and 2001 was $48.40 and $45.21, respectively. Comparative 2002 and 2001 high and low quarterly closing prices for BUD are provided in the following table. Price Range of Anheuser-Busch Common Stock (BUD)
------------------------------------------------------------2002 2001 -------------------------------------------------------------

Quarter High Low High Low First 52.73 45.24 46.46 38.50 Second 53.95 49.10 46.45 38.88 Third 54.08 44.00 44.49 39.75 Fourth 54.97 47.70 46.51 39.70 -------------------------------------------------------------

Critical Accounting Policies The SEC has defined a critical accounting policy as a policy for which there is a choice among alternatives available under U.S. generally accepted accounting principles (GAAP), and for which choosing a legitimate alternative would yield materially different results. Outlined below are accounting polices Anheuser-Busch believes are key to a full understanding of the company's operations and financial results. All the company's accounting policies are in compliance with U.S. GAAP. Revenue Recognition -- The company's revenue recognition policies are simple, straightforward and comply with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." The company recognizes revenue only when title transfers or services have been rendered to unaffiliated customers, based on negotiated arrangements and normal industry practices. As such, alternative recognition and accounting methods are not available to the company. The company does not engage in consignment sales. Equity Method Accounting -- Anheuser-Busch applies the equity method of accounting whenever it can exert significant influence on an investee company, typically 20% to 50% owned investments. Equity accounting involves recognizing the company's pro rata share of the earnings of investee companies in the income statement. Cash is received and recognized only when distributed by the investee company. As an equity investor, Anheuser-Busch does not control the amount or timing of cash distributions by investees. In 2002, AnheuserBusch recognized 35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION equity income of $351.7 million and received cash distributions from investees of $46.7 million. Consolidation of the company's equity investees would not be appropriate because Anheuser-Busch does not have effective control of these entities. Therefore, alternative accounting methods are not available. Derivatives -- The company's use of derivative financial instruments is limited to hedges of either firm commitments or anticipated transactions that expose Anheuser-Busch to cost fluctuations in the ordinary course of business. Company policy expressly prohibits active trading or speculating with derivatives. Accordingly, all the company's derivative holdings are designated as hedges and qualify for hedge accounting under FAS 133, "Accounting for Derivatives and Related Hedging Activity." The only accounting alternative available would be to forego hedge accounting which would ignore the highly effective nature of the company's hedging programs and needlessly introduce volatility into the company's reported earnings. Advertising and Promotional Costs -- Advertising and promotional activities represent significant annual expenditures by the company. Advertising production costs are accumulated and expensed the first time the advertisement is shown, while media and promotional costs are expensed as incurred. Both of these approaches are acceptable under GAAP and the company applies each consistently, based on the nature of the spending. Applying either method exclusively would not materially alter the timing of expense recognition. The company recognized $822 million in advertising and promotional expenses in 2002. Pension Costs -- Anheuser-Busch provides pension plans covering substantially all of its regular employees. The accounting for certain of these plans under FAS 87, "Employer's Accounting for Pensions," requires that the company use three key assumptions when computing estimated annual pension expense. These assumptions are the long-term return on plan assets, the discount rate applied to the projected benefit obligation and the long-term growth rate for salaries. Of the three, only the discount rate is determined by observable market pricing, with the Standard & Poor's or Moody's long-term average corporate bond yield indices being the common benchmarks. The discount rate used to value the company's pension obligation at any year-end is used for expense calculations the next year e.g., the December 31, 2002 rate is used for 2003 expense calculations. For the rates of return on plan assets and salary growth, the company uses estimates based on experience as well as future expectations. Due to the long-term nature of pension liabilities, Anheuser-Busch attempts to choose rates for these assumptions that will have long-term applicability. Following is a summary of the three key assumptions to be used in determining 2003 annual pension expense, along with the impact on pension expense of a 1% change in each assumed rate. Modification of these assumptions does not impact the company's funding requirements. Please see Note 8 for additional information.
------------------------------------------------------------------------------Assumption 2003 Rate Impact of 1% Change ------------------------------------------------------------------------------Long-term asset return 9.25% +/- $22 million Discount rate 6.75% +/- $14 million Salary growth rate 4.75% +/$9 million -------------------------------------------------------------------------------

Retiree Medical Costs -- Anheuser-Busch provides health care coverage for most of its retirees after achieving certain age and years of service requirements. Under FAS 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," the company is required to estimate the future health care cost inflation rate in order to recognize annual retiree health care cost expense and value the related long-term liabilities on the balance sheet. The company uses health care inflation rates recommended by its actuarial consultants each year. If the assumed rates changed 1% from those used, annual retiree health care expense would change approximately 13%, or $5 million, while the company's retiree health care liability at December 31, 2002 would change approximately 10%, or $48 million. Please see Note 8 for additional information. Risk Management Anheuser-Busch is exposed to foreign currency exchange, interest rate and commodity price risks. These exposures primarily relate to beer sales to foreign customers, purchases from foreign suppliers, royalty receipts from foreign license and contract brewers, acquisition of raw materials from both domestic and foreign suppliers, and changes in interest rates. The company uses derivative financial instruments, including forward exchange

contracts, futures contracts, swaps and purchased options and collars to manage certain of these exposures. Anheuser-Busch has well-established policies and procedures governing the use of derivatives. The company hedges only firm commitments or anticipated transactions in the ordinary course of business and corporate policy prohibits the use of derivatives for speculation, including the sale of freestanding instruments. The company neither holds nor issues financial instruments for trading purposes. Specific hedging strategies used depend on several factors, including the magnitude and volatility of the exposure, cost and availability of appropriate hedging instruments, the anticipated time horizon, commodity basis exposure, opportunity cost and the nature of the underlying hedged item. The company's overall risk management goal is to strike a balance between managing its 36

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT exposure to market volatility while obtaining the most favorable transaction costs possible. Derivatives are either exchange-traded instruments that are highly liquid, or over-the-counter instruments transacted with highly rated financial institutions. No credit loss is anticipated, as the counterparties to over-thecounter instruments generally have long-term credit ratings from Moody's or Standard & Poor's no lower than A1 or A+, respectively. Additionally, counterparty fair value positions favorable to Anheuser-Busch and in excess of certain thresholds are collateralized with cash, U.S. Treasury securities or letters of credit. AnheuserBusch has reciprocal collateralization responsibilities for fair value positions unfavorable to the company and in excess of the same thresholds. At December 31, 2002, the company held $400,000 in counterparty collateral and had none outstanding. The company monitors the effectiveness of its hedging structures, based either on cash offset between changes in the value of the underlying hedged exposure and changes in the fair value of the derivative, or by ongoing correlation between the price of the underlying hedged exposure and the pricing upon which the derivative is based. The fair value of derivatives is the amount the company would pay or receive when terminating any contracts. Following is a sensitivity analysis indicating potential unfavorable changes in the fair value of the company's derivative holdings under certain market movements discussed below. The company uses value-at-risk (VAR) analysis for foreign currency and interest rate derivatives exposures, and sensitivity analysis for long-term debt interest exposure and commodity price exposures. VAR forecasts fair value changes using a statistical model (Monte Carlo simulation method) that incorporates historical correlations among various currencies and interest rates. The VAR model assumes the company could liquidate its currency and interest rate positions in a single day (one-day holding period). The volatility figures provided represent the maximum one-day loss the company could experience on each portfolio for 19 out of every 20 trading days (95% confidence level), based on history. Sensitivity analysis reflects the impact of a hypothetical 10% adverse change in the market price for the company's underlying price exposures.
Estimated Fair Value Volatility at December 31, 2002 (in millions) -----------------------------------------------------------------------------Foreign Currency Risk -- Forwards and Options (VAR) $0.4 Interest Rate Risk -- Interest Rate Swaps (VAR) $0.7

Commodity Price Risk -- Futures, Swaps and Options (Sensitivity) $14.1 ------------------------------------------------------------------------------

The volatility of foreign currencies, interest rates and commodity prices is dependent on many factors that cannot be forecasted with accuracy. Therefore, changes in fair value over time could differ substantially from the illustration. Additionally, the preceding derivatives volatility analysis ignores changes in the value of the underlying hedged transactions. Because the company does not hold or trade derivatives for speculation or profit, it seeks to establish only highly effective hedging relationships and therefore expects offsetting impacts between changes in derivative values and changes in the pricing of the underlying hedged transactions. The company adopted FAS 133, "Accounting for Derivative Instruments and Hedging Activity" on January 1, 2001. FAS 133 requires all derivatives to be reported on the balance sheet at fair value, with changes in fair value recognized either in earnings or equity, depending on the nature of the underlying transaction and how effective the derivative is at offsetting price movements in the underlying exposure. All of the company's existing derivative positions qualified for hedge accounting under FAS 133, and the impact of adoption was not material. The company made no substantive changes to its risk management strategy as a result of adopting FAS 133. See Notes 1 and 3 for information regarding derivatives accounting policies and the company's derivatives portfolio. Anheuser-Busch also has interest rate risk related to its debt portfolio, but exposure to interest expense volatility is low because the company predominantly issues fixed-rate debt. At December 31, 2002, fixed-rate debt with an average maturity of 18 years represented 88% of the company's outstanding debt. Assuming the percentage of floating-rate debt at year-end remains constant in 2003, and including the impact of existing fixed-to-floating interest rate swaps, an immediate 100 basis points (1.0 percentage point) increase in interest rates would result in incremental interest expense of approximately $8 million over the course of the full year. Significant Non-U.S. Equity Investments

Grupo Modelo From 1993 to 1998, the company accumulated a 50.2% direct and indirect equity interest in Diblo, S.A. de C.V., the operating subsidiary of Grupo Modelo, S.A. de C.V., Mexico's largest brewer and producer of the Corona brand. Anheuser-Busch's total initial investment in Modelo was $1.6 billion. Anheuser-Busch does not have effective control of either Grupo Modelo or Diblo and, accordingly, the company accounts for its investment on the equity basis. The company has applied the equity method of accounting since its ownership first exceeded 20% in May 1997. 37

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION The economic benefit of the company's Modelo investment can be measured in two ways -- Anheuser-Busch's share in the earnings of Modelo (equity income) and the excess of the fair value of the investment over its cost. The excess of fair value over the company's cost, based on Grupo Modelo's closing stock price on the Mexican stock exchange at December 31, 2002, was $3.6 billion. Although this amount is appropriately not reflected in the company's income statement or balance sheet, it represents economic value to Anheuser-Busch and its shareholders. CCU During the first quarter of 2001, the company purchased a 20% equity interest in Compania Cervecerias Unidas S.A. (CCU), the largest brewer in Chile, for $321 million. Anheuser-Busch had partnered with CCU in Argentina for the six years prior to the CCU investment through the company's equity ownership in CCUArgentina, a CCU subsidiary that is licensed to brew Budweiser for Argentina, Chile, Brazil and other Latin American markets. Tsingtao In October 2002, the company announced the formation of a strategic alliance with Tsingtao Brewery Company, Ltd, the largest brewer in China, and producer of the Tsingtao brand. Anheuser-Busch currently owns a 4.5% equity interest in Tsingtao and under the agreement will invest $182 million in convertible bonds and ultimately increase its economic ownership interest to 27% of Tsingtao over the next seven years. The additional investment is expected to occur in the first half of 2003. Initially, the company will continue to account for its investment on the cost basis as it will own only 9.9% of Tsingtao voting shares and will be unable to exercise significant influence. See Note 2 for additional information on the company's international investments. Other Matters SeaWorld Cleveland In February 2001, the company sold its SeaWorld Cleveland adventure park to Six Flags, Inc. for $110 million in cash, and recognized a pretax gain of $17.8 million in the first quarter 2001. The sale did not include killer whales, dolphins or any rights to the SeaWorld name. The sale had only an insignificant ($.005 per share aftertax) impact on earnings per share growth in 2001. Anheuser-Busch continues to operate and support its remaining U.S. theme parks. Stock Split The company distributed a two-for-one stock split on September 18, 2000. All historical share and per share information in the annual report has been restated to reflect the impact of the stock split. Environmental Issues The company is strongly committed to environmental protection. Its Environmental Management System provides specific guidance for how the environment must be factored into business decisions and mandates special consideration of environmental issues in conjunction with other business issues when any of the company's facilities or business units plan capital projects or changes in processes. Anheuser-Busch also encourages its suppliers to adopt similar environmental management practices and policies. The company is subject to federal, state and local environmental protection laws and regulations and is operating within such laws or is taking action aimed at assuring compliance with such laws and regulations. Compliance with these laws and regulations is not expected to materially affect the company's competitive position. It is the opinion of management that potential costs, either individually or in the aggregate, related to any Environmental Protection Agency designated cleanup sites for which Anheuser-Busch has been identified as a Potentially Responsible Party will not materially affect the company's financial position, results of operations or liquidity. Internet Access to Anheuser-Busch Financial Documents The company provides copies of its annual reports on Forms 10-K, quarterly reports on Forms 10-Q, other reports on Forms 8-K, earnings press releases and proxy statements free of charge on its Internet website at www.anheuser-busch.com. 38

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Management's Responsibility for Financial Statements The management of Anheuser-Busch Companies is responsible for the preparation and presentation of the financial statements and other financial information included in this annual report. Management is also responsible for the reasonableness of estimates and judgments inherent in the preparation of the financial statements. These statements are prepared in accordance with accounting principles generally accepted in the United States. It is management's responsibility to ensure the company maintains accounting and reporting systems, supported by a system of internal accounting controls, designed to provide reasonable assurance as to the integrity of the underlying financial records and the protection of assets. These systems include written policies and procedures, selection and training of qualified personnel, organizational segregation of duties and a program of internal reviews and appropriate follow-up. Management believes the company's systems are adequate to provide reasonable assurances that assets are safeguarded against loss from unauthorized use or disposition and financial records are reliable for preparing financial statements. During 2002, the company's internal auditors, in conjunction with PricewaterhouseCoopers LLP, the company's independent accountants, performed a comprehensive review of the adequacy of the company's internal accounting controls system. Based on that comprehensive review, it is management's opinion that the company has an effective system of internal accounting controls. The Board of Directors is responsible for ensuring the independence and qualifications of Audit Committee members under applicable New York Stock Exchange guidelines. The Audit Committee of the Board of Directors, which consists of five nonmanagement directors, oversees the company's financial reporting and internal controls systems and meets with management, the independent accountants and internal auditors periodically to review auditing and financial reporting matters. The Audit Committee is solely responsible for the selection and retention of the company's independent accountants, subject to shareholder approval. The Audit Committee held five meetings during 2002. Its report for 2002 can be found in the company's proxy statement. PricewaterhouseCoopers LLP is responsible for conducting an independent examination of the company's financial statements in accordance with auditing standards generally accepted in the United States, and expressing an opinion as to whether the financial statements fairly present, in all material respects, the company's financial position, operating results, cash flows and changes in shareholders equity. Report of Independent Accountants 800 Market Street St. Louis, MO 63101 [PricewaterhouseCoopers LOGO] February 3, 2003 To the Shareholders and Board of Directors of Anheuser-Busch Companies, Inc. We have audited the accompanying Consolidated Balance Sheet of Anheuser-Busch Companies, Inc. and its subsidiaries as of December 31, 2002 and 2001, and the related Consolidated Statements of Income, Changes in Shareholders Equity and Cash Flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the Consolidated Financial Statements audited by us present fairly, in all material respects, the financial position of Anheuser-Busch Companies, Inc. and its subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 to the Consolidated Financial Statements, in 2002 the company changed its method of accounting for goodwill to conform to Statement of Financial Accounting Standards No. 142, "Accounting for Goodwill and Other Intangible Assets."

39

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Balance Sheet Anheuser-Busch Companies and Subsidiaries -----------------------------------------------------------------------------------------------------Year Ended December 31 (in millions) 2002 2001 -----------------------------------------------------------------------------------------------------Assets Current Assets: Cash Accounts receivable Inventories: Raw materials and supplies Work in process Finished goods Total inventories Other current assets Total current assets Investments in affiliated companies Other assets Plant and equipment, net Total Assets

$

188.9 630.4

$

162.6 620.9

294.1 352.4 82.8 79.8 186.7 159.6 563.6 591.8 121.8 175.1 --------------------------1,504.7 1,550.4 2,827.9 2,855.0 1,423.0 1,149.5 8,363.9 8,390.0 --------------------------$ 14,119.5 $13,944.9 ===========================

Liabilities and Shareholders Equity Current Liabilities: Accounts payable Accrued salaries, wages and benefits Accrued taxes Other current liabilities Total current liabilities Postretirement benefits Debt Deferred income taxes Other long-term liabilities Shareholders Equity: Common stock, $1.00 par value, authorized 1.6 billion shares Capital in excess of par value Retained earnings Treasury stock, at cost Accumulated other comprehensive income/(loss) ESOP debt guarantee Total Shareholders Equity Commitments and contingencies Total Liabilities and Shareholders Equity

986.6 $ 945.0 287.5 255.8 181.0 161.1 332.6 374.6 --------------------------1,787.7 1,736.5 --------------------------474.2 482.9 --------------------------6,603.2 5,983.9 --------------------------1,345.1 1,367.2 --------------------------857.0 312.9 --------------------------1,453.4 1,445.2 1,024.5 810.2 12,544.0 11,258.2 (11,008.6) (8,981.6) (870.7) (338.3) (90.3) (132.2) --------------------------3,052.3 4,061.5 ------------------------------------------------------$ 14,119.5 $13,944.9 ===========================

$

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

40

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Income Anheuser-Busch Companies and Subsidiaries --------------------------------------------------------------------------------------------------------Year Ended December 31 (in millions) 2002 2001 --------------------------------------------------------------------------------------------------------Gross sales Excise taxes Net sales Cost of sales Gross profit Marketing, distribution and administrative expenses Gain on sale of business Operating income Interest expense Interest capitalized Interest income Other expense, net Income before income taxes Provision for income taxes Equity income, net of tax Net income $15,686.8 $14,973.0 $1 (2,120.4) (2,061.5) ( -----------------------------13,566.4 12,911.5 1 (8,131.3) (7,950.4) ( -----------------------------5,435.1 4,961.1 (2,455.4) (2,255.9) ( -17.8 -----------------------------2,979.7 2,723.0 (368.7) (361.2) 17.7 26.9 1.3 1.1 (6.4) (12.2) -----------------------------2,623.6 2,377.6 (1,041.5) (927.5) 351.7 254.4 -----------------------------$ 1,933.8 $ 1,704.5 $ ==============================

Earnings per share: Basic Diluted

$ 2.23 $ 1.91 $ ============================== $ 2.20 $ 1.89 $ ==============================

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

41

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Change in Shareholders Equity Anheuser-Busch Companies and Subsidiaries --------------------------------------------------------------------------------------------------------Year Ended December 31 (in millions) 2002 2001 --------------------------------------------------------------------------------------------------------Common Stock, $1.00 Par Value Balance, beginning of period Shares issued under stock plans Two-for-one stock split Balance, end of period

1,445.2 $ 1,441.5 $ 8.2 3.7 --------------------------------$ 1,453.4 $ 1,445.2 $ ===============================

$

Capital in Excess of Par Value Balance, beginning of period Shares issued under stock plans Two-for-one stock split Balance, end of period

810.2 $ 725.3 $ 214.3 84.9 --------------------------------$ 1,024.5 $ 810.2 $ ===============================

$

Retained Earnings Balance, beginning of period Net income Common dividends paid (per share: 2002 - $.75; 2001 - $.69; 2000 - $.63) Shares issued under stock plans Balance, end of period

$ 11,258.2 1,933.8

$10,164.4 1,704.5

$

(649.5) (614.1) 1.5 3.4 ------------------------------$ 12,544.0 $11,258.2 $1 ===============================

Treasury Stock Balance, beginning of period Treasury stock acquired Balance, end of period

$ (8,981.6) $(7,817.8) $( (2,027.0) (1,163.8) ------------------------------$(11,008.6) $(8,981.6) $( ===============================

ESOP Debt Guarantee Balance, beginning of period Annual debt service Balance, end of period

(132.2) $ (172.2) $ 41.9 40.0 ------------------------------$ (90.3) $ (132.2) $ ===============================

$

Accumulated Other Comprehensive Income/(Loss) Balance, beginning of period Foreign currency translation gains/(losses) Deferred hedging gains/(losses) Deferred securities valuation gains/(losses) Minimum pension obligation Balance, end of period Total Shareholders Equity

(338.3) $ (212.3) $ (271.8) 44.5 33.0 (38.9) 3.0 -(296.6) (131.6) ------------------------------$ (870.7) $ (338.3) $ =============================== $ 3,052.3 $ 4,061.5 $ ===============================

$

Comprehensive Income Net income Foreign currency translation gains/(losses) Deferred hedging gains/(losses) Deferred securities valuation gains/(losses) Minimum pension obligation adjustment Total Comprehensive Income

1,933.8 $ 1,704.5 $ (271.8) 44.5 33.0 (38.9) 3.0 -(296.6) (131.6) ------------------------------$ 1,401.4 $ 1,578.5 $ ===============================

$

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

42

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Cash Flows Anheuser-Busch Companies and Subsidiaries --------------------------------------------------------------------------------------------------------Year Ended December 31 (in millions, except per share) 2002 2001 --------------------------------------------------------------------------------------------------------Cash Flow from Operating Activities: Net income Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization Deferred income taxes Gain on sale of business Undistributed earnings of affiliated companies Other, net Operating cash flow before change in working capital Decrease in working capital Cash provided by operating activities

$ 1,933.8

$ 1,704.5

$

847.3 834.5 160.2 (15.8) -(17.8) (305.0) (227.6) (12.0) 38.2 -----------------------------2,624.3 2,316.0 140.9 44.6 -----------------------------2,765.2 2,360.6 ------------------------------

Cash Flow from Investing Activities: Capital expenditures New business acquisitions Proceeds from sale of business Cash used for investing activities

(834.7) (1,022.0) ( (19.0) (370.4) -110.0 -----------------------------(853.7) (1,282.4) ( ------------------------------

Cash Flow from Financing Activities: Increase in debt Decrease in debt Dividends paid to shareholders Acquisition of treasury stock Shares issued under stock plans Cash used for financing activities Net increase in cash during the year Cash, beginning of year Cash, end of year

1,151.8 1,213.4 (505.9) (572.8) (649.5) (614.1) (2,027.0) (1,163.8) 145.4 61.8 -----------------------------(1,885.2) (1,075.5) ( -----------------------------26.3 2.7 162.6 159.9 -----------------------------$ 188.9 $ 162.6 $ ==============================

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Principles and Policies This summary of the significant accounting principles and policies of Anheuser-Busch Companies, Inc. and its subsidiaries is provided to assist in evaluating the company's consolidated financial statements. These principles and policies conform to U.S. generally accepted accounting principles. The company is required to make certain estimates in preparing the financial statements which impact the reported amounts of some assets and liabilities and the reported amounts of some revenues and expenses. All estimates are based on the company's best information at the time and made in conformity with U.S. generally accepted accounting principles. Actual results could differ from the estimates. Revenue Recognition The company's revenue recognition practices comply with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." The company recognizes revenue only when legal title transfers or services have been rendered to unaffiliated customers. The company does not engage in consignment sales. For malt beverages shipped to independent wholesalers, title transfers on shipment of product from the company's breweries. For company-owned wholesalers, title transfers when products are delivered to retail customers. The company does not recognize any revenue when independent wholesalers sell the company's products to retail customers. For cans and lids, title transfers on customer receipt. Entertainment operations recognize revenue when customers actually visit or make purchases in a park location, rather than when tickets are sold. Principles of Consolidation The consolidated financial statements include the company and all its subsidiaries. The company consolidates all majority-owned and controlled subsidiaries, uses the equity method of accounting for investments in which the company is able to exercise significant influence, and uses the cost method for all other investments. All significant intercompany transactions have been eliminated. Minority interests in the company's China subsidiary are not material. Cash Cash includes cash in banks, demand deposits and investments in short-term marketable securities with maturities of 90 days or less. Goodwill The company recognizes the excess of the cost of acquired businesses over the fair value of net assets as goodwill. In 2001 and 2000, goodwill was amortized to expense over a period of 40 years. Effective January 1, 2002, Anheuser-Busch adopted FAS No. 142, "Goodwill and Other Intangible Assets," and was required to cease the amortization of goodwill. Goodwill from future acquisitions will continue to be recognized as an asset, but will not be amortized. Under FAS 142, goodwill is subject to ongoing annual impairment reviews. See Note 14 for additional information on goodwill balances and the impact of goodwill amortization in prior years. Foreign Currency Financial statements of foreign subsidiaries where the local currency is the functional currency are translated into U.S. dollars using period-end exchange rates for assets and liabilities and weighted-average exchange rates during the period for revenues and expenses. Cumulative translation adjustments associated with net assets are reported as a separate component of other comprehensive income or loss within shareholders equity. Exchange rate gains or losses related to foreign currency transactions are recognized in the income statement as incurred. Inventories Inventories are valued at the lower of cost or market. Cost is determined under the last-in, first-out method (LIFO) for approximately 72% of total inventories at December 31, 2002 and 75% of inventories at December 31, 2001. Average cost valuation is used for the remainder. Had average cost (which approximates replacement cost) been used for all inventories at December 31, 2002 and 2001, total inventories would have been $96.7 million and $83.1 million higher, respectively.

Delivery Costs Pass-through finished goods delivery costs reimbursed by customers are reported in sales, while an offsetting expense is included in cost of sales. Delivery costs incurred by company-owned beer wholesalers are included in marketing, distribution and administrative expenses. Fixed Assets Fixed assets are carried at original cost less accumulated depreciation and include expenditures for new facilities as well as those that increase the useful lives of existing facilities. The cost of routine maintenance, repairs and minor renewals is expensed as incurred. When fixed assets are retired or sold, the net carrying 44

ANHEUSER-BUSCH COMPANIES 2002 ANNUAL REPORT amount is eliminated, with any gain or loss on disposition recognized in the income statement. Depreciation expense is recognized using the straight-line method based on the following weighted-average useful lives: buildings, 25 years; production machinery and equipment, 15 years; furniture and fixtures, 10 years; computer equipment, 3 years. Advertising and Promotional Costs Advertising production costs are accumulated and expensed the first time the advertisement is shown. Advertising media costs and promotional expenses are expensed as incurred. Total advertising and promotional expenses were $821.7 million, $722.3 million and $728.3 million in 2002, 2001 and 2000, respectively. Income Taxes The provision for income taxes is based on the income and expense amounts reported in the consolidated statement of income. The company utilizes existing federal, state and foreign income tax laws and regulations to reduce current cash taxes payable. Deferred income taxes are recognized for the effect of temporary differences between financial reporting and tax filing in accordance with the requirements of FAS No. 109, "Accounting for Income Taxes." See Note 10 for additional information on the company's provision for income taxes, deferred income tax balances and effective tax rate. Derivatives Anheuser-Busch uses derivatives to mitigate the company's exposure to volatility in commodity prices, interest rates and foreign currency exchange rates. The company hedges only exposures in the ordinary course of business and company policy prohibits holding or trading derivatives strictly for profit. All derivatives held by the company are designated as hedges at inception, with an expectation the derivative will be highly effective in offsetting the associated underlying price exposures. The company requires liquidation of derivative positions whenever it is determined that an underlying transaction will not occur, with related gains or losses recognized in the income statement on liquidation. On January 1, 2001, the company adopted FAS No. 133, "Accounting for Derivative Instruments and Hedging Activity." Under FAS 133, all derivatives are carried on the balance sheet at fair value. Changes in fair value are recognized either in the income statement or deferred in equity, depending on the nature of the underlying exposure being hedged and how effective the derivative is at offsetting price movements in the underlying exposure. All of the company's derivative positions qualified for hedge accounting on adoption of FAS 133. The impact of adoption was not material. Foreign currency denominated firm commitments and interest rate hedges are classified as fair value hedges, while commodity price hedges are cash flow hedges. With the exception of interest rate swaps, derivatives generally have initial terms of less than three years, and all hedged transactions, except long-term debt, are expected to occur within the next three years. Option premiums paid to counterparties are initially recorded as assets and subsequently adjusted to fair value each period, with the effective portion of changes in fair value deferred in equity until the underlying transaction occurs. Amounts receivable from, or owed to, derivatives counterparties are included in current assets and current liabilities, respectively. See Note 3 for additional information on derivative values, hedge categories and gains and losses from hedging activity. Securities Valuation For investments accounted for under the cost basis, Anheuser-Busch applies FAS 115, "Accounting for Certain Investments in Debt and Equity Securities." Under FAS 115, the company classifies its cost-based investments as "available for sale," and adjusts the fair values of the securities to their market values each period. Market gains or losses are deferred in equity, and not recognized in the income statement until investments are liquidated. Research and Development Costs and Start-Up Costs Research and development costs and plant start-up costs are expensed as incurred, and are not material for any year presented. 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. Systems development costs not meeting the proper criteria for capitalization, including systems reengineering costs, are expensed as incurred.

Common Stock Split All share and per share amounts have been adjusted to reflect the two-for-one stock split distributed September 18, 2000. Stock-Based Compensation The company accounts for employee stock options using the intrinsic value method in accordance with APB 25, "Accounting for Stock Issued to Employees." The company has recognized no compensation expense related to employee stock options for any year shown, since options are always granted at a price equal to the market price on the day of grant. See Note 5 for information regarding the company's stock option plans. Had employee compensation expense been recognized based on the fair value of the stock options on the grant date under the methodology prescribed by FAS 123, "Accounting for Stock-Based Compensation," the 45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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):
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Reported net income $1,933.8 $1,704.5 $1,551.6 Pro forma stock option expense (93.1) (68.6) (42.8) --------------------------------------Adjusted net income $1,840.7 $1,635.9 $1,508.8 ======================================= Reported basic earnings per share $ 2.23 $ 1.91 $ 1.71 Pro forma stock option expense (.11) (.08) (.05) --------------------------------------Adjusted basic earnings per share $ 2.12 $ 1.83 $ 1.66 ======================================= Reported diluted earnings per share $ 2.20 $ 1.89 $ 1.69 Pro forma stock option expense (.11) (.08) (.05) --------------------------------------Adjusted diluted earnings per share $ 2.09 $ 1.81 $ 1.64 =======================================

The fair value of stock options granted, which is hypothetically amortized to compensation expense over the vesting period to determine the earnings impact illustrated above, has been estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Expected life of option 7 yrs. 7 yrs. 5 yrs. Risk-free interest rate 4.1% 4.9% 5.7% Expected volatility of Anheuser-Busch stock 23% 24% 22% Expected dividend yield on Anheuser-Busch stock 1.6% 1.7% 1.4%

The weighted-average fair value of options granted during 2002, 2001 and 2000 determined using the BlackScholes model is as follows (in millions, except per option):
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Fair value of each option granted $13.86 $12.76 $13.14 Total number of options granted 14.2 13.9 13.0 --------------------------------------Total fair value of options granted $196.8 $177.4 $170.8 =======================================

For FAS 123 disclosure purposes, the weighted-average fair value of stock options granted is required to be based on a theoretical option-pricing model. In actuality, because the company's employee stock options are not traded on an exchange, employees can receive no value nor derive any benefit from holding stock options under these plans without an increase in the market price of Anheuser-Busch stock. Such an increase in stock price benefits all shareholders commensurately. 2. International Equity Investments Grupo Modelo From 1993 to 1998, Anheuser-Busch accumulated a 50.2% direct and indirect equity interest in Diblo, S.A. de C.V. (Diblo), the operating subsidiary of Grupo Modelo, S.A. de C.V. (Modelo), Mexico's largest brewer and

producer of the Corona brand, for a total cost of $1.6 billion. The company holds 9 of 19 positions on Modelo's Board of Directors, with the Controlling Shareholders holding the other 10 positions, and also has membership on the Audit Committee. Anheuser-Busch does not have voting or other effective control of either Diblo or Modelo and consequently accounts for its investments using the equity method. The carrying amount of the Modelo investment was $2,410.6 million and $2,354.1 million, respectively, at December 31, 2002 and 2001. Included in the carrying amount of the Modelo investment is goodwill of $565.6 million and $622.4 million, respectively, at December 31, 2002 and 2001. In 2001 and 2000, goodwill was amortized over a period of 40 years. Effective with the adoption of FAS 142 in January 2002, the company ceased amortization of Modelorelated goodwill. Dividends received from Grupo Modelo in 2002 totaled $40.5 million, compared to $13.5 million in 2001 and $23.9 million in 2000. Dividends are paid in accordance with the investment agreement between the companies, based on a free cash flow formula. Summary financial information for Grupo Modelo as of, and for the two years ended December 31, is presented in the following table (in millions). The amounts represent 100% of Grupo Modelo's consolidated operating results and financial position based on U.S. generally accepted accounting principles, and include the impact of Anheuser-Busch's purchase accounting adjustments.
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Cash $1,042.4 $ 865.4 Other current assets 782.4 771.7 Noncurrent assets 3,892.2 4,104.7 Current liabilities 393.1 341.7 Noncurrent liabilities 368.1 485.6 Gross sales 3,911.6 3,571.5 Net sales 3,659.4 3,334.2 Gross profit 1,999.0 1,787.5 Minority interest 17.3 32.0 Net income 692.0 516.4

Other International Equity Investments During 2001, the company purchased a 20% equity interest in Compania Cervecerias Unidas S.A. (CCU), the largest brewer in Chile, for $321 million. CCU imports and distributes Budweiser in Chile. Anheuser-Busch has Board of Directors representation of two of nine directors, and also has membership on the Audit Committee. The company believes it has the ability to exercise significant influence and therefore accounts for the CCU investment using the equity method. The company received dividends of $6.2 million and $12.3 million from CCU in 2002 and 2001, respectively. 46

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT From 1996 to 1999, Anheuser-Busch accumulated a 10.8% direct equity interest in the Argentine subsidiary of CCU, CCU-Argentina, for a total cost of $23.9 million. CCU-Argentina brews Budweiser under license for Argentina, Chile, Brazil and other Latin American markets. The CCU-Argentina investment was accounted for on the cost basis through 2000. The 20% acquisition of CCU in 2001 increased Anheuser-Busch's direct and indirect interest in CCU-Argentina to 28.6%, and the company began using the equity method of accounting at that time. The difference between income recognized on the cost basis for CCU-Argentina and what would have been recognized had equity accounting been applied in prior years is not material. The carrying value of the CCU investments was $229.6 million and $269.8 million, respectively, at December 31, 2002 and 2001. Included in the carrying amount of the CCU investments is goodwill of $111.1 million and $115.8 million at December 31, 2002 and 2001, respectively. The company ceased amortization of CCUrelated goodwill on adoption of FAS 142 in January 2002. The earnings impact resulting from the unpegging in December 2001 of the Argentine peso from its 1:1 exchange position relative to the U.S. dollar was recognized in 2001, and had an immaterial impact on equity income. Due to ongoing weakness in the Argentina economy, the company subsequently performed an impairment analysis of its CCU investments and found no impairment. In October 2002, the company announced the formation of a strategic alliance with Tsingtao Brewery Company, Ltd., the largest brewer in China, and producer of the Tsingtao brand. Anheuser-Busch currently owns a 4.5% equity interest in Tsingtao and accounts for its investment on the cost basis. Under the final agreement, which is expected to close in the first half of 2003, the company will invest $182 million in Tsingtao common stock and convertible bonds, and then convert the bonds into stock over the next seven years to ultimately increase its economic ownership interest to 27% of Tsingtao. Anheuser-Busch will initially own 9.9% of the voting stock and will continue to account for its investment on the cost basis because it cannot exert significant influence over Tsingtao operations or financial policies. The company anticipates switching to the equity method of accounting when its Tsingtao investment reaches the 20% level and it receives additional representation on the Tsingtao Board of Directors and related Board committees. Effective January 2000, the company converted its joint venture operation in Japan into an exclusive license agreement with Kirin Brewing Company, Ltd. for the production and sale of Budweiser in Japan. The pretax cost of converting to the license agreement was $9 million. 3. Derivatives and Other Financial Instruments Derivatives Under FAS 133, Anheuser-Busch appropriately defers the majority of derivatives gains or losses, for recognition in later periods when the related underlying transactions occur. Derivative gains and losses that relate to any portion of a hedge that is not 100% effective at offsetting price movements in the underlying hedged exposure are recognized in the income statement immediately, and totaled losses of $0.4 million and $0.3 million in 2002 and 2001, respectively. During 2002, the company recognized $1.6 million in gains and $12.4 million in losses from effective hedges which had been deferred in equity as of December 31, 2001. In 2001, the company recognized previously deferred effective gains of $12.2 million and losses of $29.2 million. Accumulated deferred gains and losses as of December 31, 2002 were $5.6 million and $11.5 million, respectively. Deferred losses include $9.5 million of unrecognized option premium costs. The majority of these deferred gains and losses will be recognized in cost of sales in 2003. However, the amounts ultimately recognized may differ, favorably or unfavorably, from those as of December 31, 2002 because many of the company's derivative positions are not yet settled, and therefore remain subject to ongoing market price fluctuations. Anheuser-Busch's primary foreign currency exposures are to transactions and investments denominated in British pounds sterling; euros; Mexican, Chilean and Argentine pesos; Canadian dollars; and Chinese renminbi. Principal hedged commodity exposures are aluminum, rice, corn and natural gas. The primary foreign currency exposures are long, meaning the company generates a surplus of these currencies, while the commodity exposures are short, meaning the company must acquire additional quantities to meet its operating needs. The following table summarizes the notional transaction amounts and fair values for the company's outstanding derivatives, by risk category and instrument type, at December 31, 2002 and 2001 (in millions). Because the company hedges only with derivatives that have high correlation with the underlying transaction pricing, changes in derivatives fair values and the underlying prices are expected to essentially offset. Bracketed figures in the following table indicate current settlement of the derivatives contract would result in a net loss to Anheuser-

Busch, but do not reflect the expected offsetting impact of the underlying hedged transaction. 47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------------------------------------------2002 2001 -----------------------------------------------------------------------------------Notional Fair Notional Fair Amount Value Amount Value -------------------------------------------Foreign Currency: Forwards $ 74.1 $ 0.2 $ 66.5 $ 0.2 Options 94.2 1.2 116.5 2.0 -------------------------------------------168.3 1.4 183.0 2.2 -------------------------------------------Interest Rate: Swaps

401.0 32.8 601.0 11.1 --------------------------------------------

Commodity Price: Swaps Futures/forwards Options

248.9 1.6 154.4 (1.5) 65.8 2.6 61.8 (8.4) 217.7 6.3 352.4 12.1 -------------------------------------------532.4 10.5 568.6 2.2 --------------------------------------------

Total outstanding derivatives

$1,101.7 $44.7 $1,352.6 $15.5 ============================================

Concentration of Credit Risk The company does not have a material concentration of credit risk. Nonderivative Financial Instruments Nonderivative financial instruments included in the balance sheet are cash, accounts receivable, accounts payable and long-term debt. Accounts receivable include allowances for doubtful accounts of $5.6 million and $7.7 million, at December 31, 2002 and 2001, respectively. The fair value of long-term debt, estimated based on future cash flows discounted at interest rates currently available to the company for debt with similar maturities and characteristics, was $7.3 billion and $6.3 billion at December 31, 2002 and 2001, respectively. 4. Debt The company uses Securities and Exchange Commission shelf registrations to maintain debt issuance flexibility and currently has $200 million in registered debt available for issuance. Gains or losses on debt redemptions (either individually or in the aggregate) were not material for any year presented. The fixed interest rates on the company's EuroNotes and 5.6% U.S. dollar notes (total notional value of $401.0 million in both 2002 and 2001), were swapped to LIBOR-based floating rates when issued. The weightedaverage effective interest rates for this debt were 1.75% and 4.15% during 2002 and 2001, respectively. Yearend rates were 1.53% and 2.06%, respectively. The weighted-average interest rates for commercial paper borrowings during 2002 and 2001 were 1.98% and 4.39%, respectively. The company has in place a single, committed revolving credit agreement totaling $2 billion, expiring in June 2005, which supports the company's commercial paper program. At December 31, 2002 and 2001, the company had no outstanding borrowings under the agreement. Annual fees under the agreement were $1.2 million in both 2002 and 2001 and $900,000 in 2000. Commercial paper borrowings classified as long-term are supported on a long-term basis by the $2 billion revolving credit agreement. Any commercial paper borrowings in excess of $2 billion are classified as short-term. The scheduled future maturities on long-term debt for the years 2003 through 2007 are $200 million, $251 million, zero, $420 million and $250 million, respectively. These maturities do not include future maturities of the ESOP debt guaranteed by the company or commercial paper.

Debt at December 31 consisted of the following (in millions):
---------------------------------------------------------------------------------2002 2001 ---------------------------------------------------------------------------------U.S. dollar notes due 2003 to 2013, interest rates from 4.375% to 7.5% $2,100.0 $2,100.0 U.S. dollar debentures due 2009 to 2043, interest rates from 5.95% to 9.0% 3,150.0 2,300.0 EuroNotes due 2004 to 2006, interest rates from 4.51% to 6.5% 351.0 351.0 Medium-term notes due 2010, interest rate 5.625% 200.0 200.0 Commercial paper, interest rates of 1.24% and 2.3%, respectively, at year-end 412.9 600.2 Industrial revenue bonds, weighted average interest rates of 6.11% and 6.03%, respectively 270.1 261.3 ESOP note guarantee due 2004, interest rate 8.25% 90.3 132.2 Miscellaneous items 48.0 53.1 Unamortized debt discounts (19.1) (13.9) ------------------------Total debt $6,603.2 $5,983.9 =========================

5. Stock Option Plans Under terms of the company's stock option plans, officers, certain other employees and nonemployee directors may be granted options to purchase the company's common stock at a price equal to the market price on the date the option is granted. Options generally vest over three years and have a maximum term of 10 years. At December 31, 2002, 2001 and 2000, a total of 89 million, 98 million and 71 million shares, respectively, were designated for future issuance of common stock under existing stock option plans. The company's stock option plans provide for accelerated exercisability on the occurrence of certain events relating to a change in control, merger, sale of substantially all company assets or complete liquidation of the company. 48

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT The income tax benefit related to the exercise of employee stock options (recognized as a reduction of current taxes payable and an increase in paid-in-capital) was $77.1 million, $26.7 million and $74.4 million for the years ended December 31, 2002, 2001 and 2000, respectively. Presented below is a summary of stock option activity and pricing for the years shown:
-------------------------------------------------------------------------------------Options Wtd. Avg. Options Wtd. Avg. Outstanding Exercise Price Exercisable Exercise Price -------------------------------------------------------------------------------------Balance, Dec. 31, 1999 56,570,550 $23.66 36,166,954 $18.69 Granted 13,005,810 48.68 Exercised (10,153,146) 15.99 Cancelled (252,140) 32.32 ---------------Balance, Dec. 31, 2000 59,171,074 $30.44 36,151,446 $22.53 Granted 13,895,238 42.95 Exercised (3,986,476) 18.29 Cancelled (180,803) 44.39 ---------------Balance, Dec. 31, 2001 Granted Exercised Cancelled

68,899,033 14,181,841 (8,821,350) (146,254) ----------------

$33.63 49.93 20.15 43.61

44,100,568

$27.71

Balance, Dec. 31, 2002

74,113,270 ================

$38.33

47,001,757

$33.09

Included in the figures shown above as of December 31, 2002 are 219,663 outstanding options with a weighted average exercise price of $41.68 per share under the company's stock option plan for nonemployee directors. A total of 354,000 options remain available for issuance under the plan. A description of this plan can be found in the company's proxy statement for the 2003 annual meeting of shareholders under "Approval of the Stock Plan for Nonemployee Directors." Also included above as of December 31, 2002 are 108,997 shares related to the global employee stock purchase plan with a weighted average exercise price of $42.39. A total of 869,669 shares remain available for issuance. A description of this plan can be found in the company's proxy statement. Nonemployee directors may elect to receive their annual retainer in shares of Anheuser-Busch common stock, in lieu of cash. If all nonemployee directors eligible to own the company's common stock elected to receive their annual retainer in shares, the total number of shares issued would be 12,758 based on the closing price for the company's common stock at December 31, 2002. The following tables provide additional information regarding options outstanding and options that were exercisable as of December 31, 2002:
Options Outstanding ---------------------------------------------------------------Range of Wtd. Avg. Wtd. Avg. Prices Number Remaining Life Exercise Price --------------------------------------$10-19 4,300,095 2 yrs $14.73 20-29 19,148,953 5 yrs 25.03 30-39 10,034,619 7 yrs 37.82 40-49 40,531,993 9 yrs 47.21 50-59 97,610 9 yrs 52.50 -------------$10-59 74,113,270 7 yrs $38.33 ============== Options Exercisable ---------------------------------------------------------------Range of Wtd. Avg.

Prices -------$10-19 20-29 30-39 40-49 50-59 $10-59

Number -----4,300,095 19,148,953 9,991,886 13,554,213 6,610 -------------47,001,757 ==============

Exercise Price -------------$14.73 25.03 37.84 46.78 50.85 $33.09

6. Employee Stock Ownership Plans In 1989, the company added Employee Stock Ownership Plans (ESOPs) to its existing Deferred Income Stock Purchase and Savings Plans (401(k) plans). Most regular employees are eligible for participation in the ESOPs. The ESOPs initially borrowed $500 million for a term of 15 years at an interest rate of 8.25% and used the proceeds to buy approximately 45.4 million shares of common stock from the company at market price. The ESOP debt is guaranteed by the company and the shares are being allocated to participants over the 15-year period as contributions are made to the plans. The ESOPs purchased an additional 400,000 shares from the company using proceeds from the sale of spin-off-related Earthgrains shares in 1996. Of this 45.8 million total shares purchased, 42.1 million shares have been allocated to plan participants through December 31, 2002. ESOP cash contributions and income or expense recorded during the year are determined by several factors, including the market price of Anheuser-Busch common stock, number of shares allocated to participants, debt service requirements, dividends on unallocated shares and the company's matching contribution. Over the 15year life of the ESOPs, total expense recognized will equal total cash contributions made by the company for ESOP debt service. 49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ESOP income or expense is allocated to operating expense and interest expense based on the ratio of principal and interest payments on the underlying ESOP debt. Total ESOP income or expense for the three years ended December 31 is presented below (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Operating (income)/expense $13.3 $5.2 $(1.2) Interest (income)/expense 2.7 1.0 (.9) ---------------------------Total ESOP (income)/expense $16.0 $6.2 $(2.1) ============================

Cash contributions are made to the ESOPs in March and September to correspond with debt service requirements. A summary of cash contributions and dividends on unallocated ESOP shares for the three years ended December 31 is presented below (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Cash contributions $6.1 $ 1.3 $ -Dividends 3.7 5.2 6.5

7. Preferred and Common Stock Common Stock Activity Common stock activity for the three years ended December 31 is summarized below (in millions of shares):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Common Stock: Beginning common stock 1,445.2 1,441.5 1,432.2 Shares issued under stock plans 8.2 3.7 9.3 ----------------------------------Common stock 1,453.4 1,445.2 1,441.5 ----------------------------------Treasury Stock: Beginning treasury stock (566.1) (537.9) (510.0) Treasury stock acquired (40.7) (28.2) (28.2) Treasury stock issued --0.3 ----------------------------------Cumulative treasury stock (606.8) (566.1) (537.9) ----------------------------------Net common stock outstanding 846.6 879.1 903.6 ===================================

Stock Repurchase Programs The Board of Directors has approved various resolutions authorizing the company to repurchase shares of its common stock in order to return cash to shareholders and to meet the requirements of the company's various stock purchase and incentive plans. At December 31, 2002, approximately 17 million shares remained available for repurchase under a February 2000 Board authorization totaling 100 million shares. The company repurchased 40.7 million common shares in 2002, and 28.2 million common shares in both 2001 and 2000, for $2,027.0 million, $1,163.8 million and $986.5 million, respectively. Stockholder Rights Plan The Board of Directors adopted in 1985, and extended in 1994, a Stockholder Rights Plan that would permit shareholders to purchase common stock at prices substantially below market value under certain change-in-

control scenarios. Preferred Stock At December 31, 2002 and 2001, 40 million shares of $1.00 par value preferred stock were authorized and unissued. 8. Retirement Benefits Pension Plans The company has pension plans covering substantially all of its regular employees. Total pension expense for the three years ended December 31 is presented below (in millions). Contributions to multi-employer plans in which the company and its subsidiaries participate are determined in accordance with the provisions of negotiated labor contracts, based on employee hours or weeks worked. Pension expense recognized for multi-employer and defined contribution plans equals cash contributions for all years shown.
----------------------------------------------------------------------------2002 2001 2000 ----------------------------------------------------------------------------Single-employer defined benefit plans $43.5 $12.1 $ 7.3 Multi-employer plans 16.9 16.2 15.5 Defined contribution plans 17.8 20.2 18.5 -------------------------------Total pension expense $78.2 $48.5 $41.3 ================================

Net annual pension expense for single-employer defined benefit plans was comprised of the following for the three years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Service cost (benefits earned during the year) $ 66.7 $ 59.8 $ 59.2 Interest cost on projected benefit obligation 143.6 136.7 125.6 Assumed return on plan assets (194.5) (201.6) (185.2) Amortization of prior service cost and net actuarial losses 27.7 17.2 7.7 --------------------------------Net annual pension expense $ 43.5 $ 12.1 $ 7.3 =================================

The key actuarial assumptions used in determining annual pension expense for single-employer defined benefit plans for the three years ended December 31 follow:
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Discount rate 7.25% 7.5% 7.5% Long-term rate of return on plan assets 9.25% 10.0% 10.0% Weighted average rate of compensation increase 4.75% 4.75% 4.75%

50

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT The following table provides a reconciliation between the funded status of single-employer defined benefit plans and the prepaid pension cost asset on the balance sheet for the two years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Funded status -- plan assets (less than)/in excess of projected benefit obligation $(591.9) $ (216.9) Unrecognized net actuarial loss/(gain) 881.6 313.4 Unamortized prior service cost 125.6 135.9 ------------------------Prepaid pension cost $ 415.3 $ 232.4 =========================

The following assumptions were used in determining the funded status of the single-employer defined benefit plans as of December 31:
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Discount rate 6.75% 7.25% Weighted average rate of compensation increase 4.75% 4.75%

The following tables summarize changes in the projected benefit obligation and changes in the fair value of plan assets for single-employer defined benefit plans during the two years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Projected benefit obligation, beginning of year $2,051.3 $1,880.0 Service cost 66.7 59.8 Interest cost 143.6 136.7 Plan amendments 6.7 (0.2) Actuarial loss 210.1 101.1 Benefits paid (154.8) (126.1) ------------------------Projected benefit obligation, end of year $2,323.6 $2,051.3 =========================

-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Fair market value of plan assets, beginning of year $1,834.4 $2,277.1 Actual return on plan assets (174.5) (339.9) Employer contributions 226.6 23.3 Benefits paid (154.8) (126.1) ------------------------Fair market value of plan assets, end of year $1,731.7 $1,834.4 =========================

Pension plan assets consist primarily of corporate equity securities and publicly traded bonds. Recognition of a minimum pension liability is necessary whenever the actuarial present value of accumulated pension benefits exceeds available plan assets. Recording a minimum pension liability adjustment has no impact on the results of operations or cash flow. At December 31, 2002 and 2001, the company recognized minimum pension obligations of $770.4 million and $230.7 million, respectively, for its domestic pension plans and $35.5 million and $36.7 million, respectively,

related to its equity subsidiaries. The adjustments include the recording of intangible assets for unrecognized prior service costs in 2002 and 2001 of $60.0 million and $56.9 million, respectively, and charges to equity in those years of $296.6 million and $131.6 million, respectively (net of U.S. and home country deferred income taxes of $181.9 million and $78.9 million, respectively.) The company enhanced the funded status of its defined benefit pension plans through accelerated contributions of $201 million in late 2002. Postretirement Health Care and Insurance Benefits The company provides certain health care and life insurance benefits to eligible retired employees. Participants must have 10 years of continuous service after reaching age 45 to become eligible for partial retiree health care benefits. Employees become eligible for full retiree health care benefits after achieving specific age and total years of service requirements, based on hire date. Net periodic postretirement benefits expense for company health care and life insurance plans was comprised of the following for the three years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Service cost $ 19.8 $ 18.9 $ 16.8 Interest cost on accumulated postretirement benefits obligation 33.0 30.4 27.7 Amortization of prior service benefit (11.6) (11.6) (11.6) Amortization of actuarial (gains) (3.6) (5.4) (8.6) ---------------------------------Net periodic postretirement benefits expense $ 37.6 $ 32.3 $ 24.3

The following tables summarize changes in the accumulated and total postretirement benefit obligations for all company single-employer defined benefit health care and life insurance plans for the two years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Accumulated postretirement benefits obligation, beginning of year $466.5 $400.0 Service cost 19.8 18.9 Interest cost 33.0 30.4 Actuarial loss 0.8 53.3 Benefits paid (41.6) (36.1) ------------------------Accumulated postretirement benefits obligation, end of year $478.5 $466.5 ========================= -------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Accumulated postretirement benefits obligation $478.5 $466.5 Unrecognized prior service benefits 41.3 52.9 Unrecognized net actuarial gains/(losses) (9.5) (5.1) ------------------------Total postretirement benefits liability $510.3 $514.3 =========================

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2002 and 2001, $36.1 million and $31.4 million of the company's total postretirement benefits liability was classified as current and $474.2 million and $482.9 million was classified as long-term, respectively. Postretirement benefit obligations are not prefunded and there are no assets associated with the plans. The key actuarial assumptions used in determining the accumulated postretirement benefit obligation for the three years ended December 31 are provided in the table below. For actuarial purposes, the initial health care inflation rate is assumed to decline ratably to the future rate over the next nine years, and then remain stable thereafter. If the assumed health care cost trend rate changed by 1%, the accumulated postretirement benefit obligation as of December 31, 2002 would change by approximately 10%, with a corresponding change of approximately 13% in net periodic postretirement benefits expense.
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Initial health care inflation rate 11.3% 10.6% 9.1% Future health care inflation rate 5.5% 5.3% 5.4% Discount rate 7.25% 7.75% 8.0%

9. Earnings Per Share of Common Stock Earnings per share are computed by dividing net income by weighted-average common shares outstanding during the period. Basic earnings per share are computed using an unadjusted weighted-average number of shares of common stock. Diluted earnings per share are computed using the weighted-average number of shares of common stock, plus an adjustment for the dilutive effect of unexercised in-the-money stock options. A reconciliation between basic and diluted weighted-average common shares outstanding for the three years ended December 31 follows (millions of shares). There were no adjustments to income available to common shareholders for purposes of calculating earnings per share for any year shown.
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Basic weighted average shares outstanding 866.0 890.1 906.1 Stock option shares 12.9 11.5 13.6 ---------------------------Diluted weighted average shares outstanding 878.9 901.6 919.7 ============================

10. Income Taxes In the first quarter 2002, the company began presenting incremental U.S. income taxes relating to foreign equity investment earnings in the consolidated income tax provision. The company previously presented these taxes in equity income. This change in presentation has no impact on net income, earnings per share or cash flow. For comparability, prior year information has been recast to conform to the 2002 presentation. Following are the components of the provision for income taxes for the three years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Current tax provision: Federal $ 747.5 $816.0 $706.7 State 128.5 124.2 102.0 Foreign 5.3 3.1 1.4 -----------------------------881.3 943.3 810.1 -----------------------------Deferred tax provision: Federal 141.4 (11.0) 60.9 State 19.0 (2.3) 3.2

Foreign

Total tax provision

(0.2) (2.5) 0.1 -----------------------------160.2 (15.8) 64.2 -----------------------------$1,041.5 $927.5 $874.3 ==============================

The deferred tax provision results from temporary differences between financial reporting and income tax filing for the basis of assets and liabilities, and in the timing of recognition of certain income and expense items. The primary temporary differences relate to depreciation on fixed assets and accrued United States taxes on equity income. The deferred tax provision for 2002 includes the tax impact of the $201 million accelerated pension contribution. The 2001 deferred tax provision includes the impact of reversing a deferred tax liability in conjunction with the sale of SeaWorld Cleveland. The company's deferred tax liabilities and deferred tax assets as of December 31, 2002 and 2001 are summarized by category below (in millions). Deferred tax liabilities result primarily from tax deductions being received prior to expense recognition for financial reporting purposes. Deferred tax assets relate primarily to expenses being recognized for financial reporting purposes that are not yet deductible for tax purposes and minimum pension liabilities.
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Deferred tax liabilities: Fixed assets $1,701.3 $1,648.3 Accrued U.S. taxes on equity earnings 111.1 78.6 Other 343.0 264.9 -----------------------------Total deferred tax liabilities 2,155.4 1,991.8 -----------------------------Deferred tax assets: Minimum pension obligation 248.3 66.0 Postretirement benefits 192.8 194.3 Spare parts & production supplies 67.8 64.0 Compensation-related obligations 63.9 56.3 Accrued liabilities and other 237.5 244.0 -----------------------------Total deferred tax assets 810.3 624.6 -----------------------------Net deferred tax liabilities $1,345.1 $1,367.2 ==============================

52

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT A reconciliation between the U.S. federal statutory tax rate and Anheuser-Busch's effective tax rate for the three years ended December 31 is presented below:
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Federal statutory tax rate 35.0% 35.0% 35.0% State taxes, net of federal benefit 3.6 3.3 3.2 Impact of foreign operations 1.5 0.7 2.2 Other items, net (0.4) -(0.3) -----------------------------Effective tax rate 39.7% 39.0% 40.1% ==============================

11. Supplemental Information Accounts payable include $87.4 million and $92.3 million, respectively, of outstanding checks at December 31, 2002 and 2001. Supplemental cash flow information for the three years ended December 31 is presented below (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Cash paid during the year ------------------------Interest, net of interest capitalized $ 343.0 $ 313.1 $ 304.7 Income taxes 788.7 889.8 770.8 Excise taxes 2,119.5 2,052.6 2,042.9 Change in working capital ------------------------(Increase)/decrease in current assets: Accounts receivable $ (9.5) $ (20.5) $ 28.6 Inventories 28.2 16.5 15.5 Other current assets 53.3 4.2 16.4 Increase/(decrease) in current liabilities: Accounts payable 41.6 4.2 8.2 Accrued salaries, wages and benefits 31.7 (20.6) 28.0 Accrued taxes 19.9 33.7 (36.8) Other current liabilities (42.0) 43.5 (32.4) Derivatives fair value adjustment 17.7 (16.4) ------------------------------------Net decrease in working capital $ 140.9 $ 44.6 $ 27.5 ====================================

The components of plant and equipment as of December 31 are summarized below (in millions):
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Land $ 272.8 $ 272.4 Buildings 4,326.0 4,033.9 Machinery and equipment 10,995.9 10,770.9 Construction in progress 373.2 401.1 ---------------------------15,967.9 15,478.3 Accumulated depreciation (7,604.0) (7,088.3) ---------------------------Net plant and equipment $ 8,363.9 $ 8,390.0 ============================

The components of other assets as of December 31 are summarized below (in millions):

-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Investment properties $ 117.6 $ 115.0 Goodwill 348.7 411.3 Deferred charges 956.7 623.2 ---------------------------Total other assets $1,423.0 $1,149.5 ============================

12. Commitments and Contingencies At December 31, 2002, the company had the following cash commitments for the next five years (in millions):
---------------------------------------------------------------------------------------------------2003 2004 2005 2006 2007 ---------------------------------------------------------------------------------------------------Capital expenditures $237 $ -$ -$ -$ -Maturities of long-term debt 200 251 -420 250 Operating leases 34 32 28 23 15 Brewing and packaging materials 300 11 4 -----------------------------------------------------------$771 $294 $ 32 $443 $265 ==========================================================

In January 1997, Maris Distributing Company, Inc., a former Anheuser- Busch wholesaler in Florida, initiated litigation against the company alleging breach of contract and 12 other claims. Anheuser-Busch terminated its distribution agreement with Maris Distributing in March 1997. During the course of litigation, nine claims were resolved in favor of Anheuser-Busch. In August 2001, a jury rendered a verdict against the company in the amount of $50 million on two remaining claims. The court subsequently awarded plaintiffs an additional $22.6 million in accumulated prejudgment interest on the jury award which continues to accrue at an 11% interest rate. Anheuser-Busch continues to believe it acted appropriately in terminating the distribution agreement of Maris Distributing. Both Maris and the company have appealed. Anheuser-Busch is vigorously contesting the judgment and the ultimate outcome cannot presently be predicted. The company's results do not include any expense related to the Maris Distributing judgment or interest for any year shown. The company and certain of its subsidiaries are involved in additional claims and legal proceedings in which monetary damages and other relief are sought. The company is vigorously contesting these claims; however resolution is not expected to occur quickly, and their ultimate outcome cannot presently be predicted. It is the opinion of management that the ultimate resolution of these claims, legal proceedings and other contingencies, either individually or in the aggregate, will not materially affect the company's financial position, results of operations or liquidity. 53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Quarterly Financial Data (unaudited)
Year ended December 31, 2002 ---------------------------------------------------------------------------------------------------Net Gross Net Earnings per Share Sales Profit Income Basic Diluted ---------------------------------------------------------------------------------------------------1st Qtr $ 3,136.6 $1,222.0 $ 456.1 $ .52 $ .51 2nd Qtr 3,626.1 1,506.3 586.5 .67 .66 3rd Qtr 3,706.2 1,601.0 622.0 .72 .71 4th Qtr 3,097.5 1,105.8 269.2 .32 .32 --------------------------------------------------------------Annual $13,566.4 $5,435.1 $1,933.8 $2.23 $2.20 =============================================================== Year ended December 31, 2001 ---------------------------------------------------------------------------------------------------Net Gross Net Earnings per Share Sales Profit Income Basic Diluted ---------------------------------------------------------------------------------------------------1st Qtr $ 3,044.2 $1,117.3 $ 394.4 $ .44 $ .43 2nd Qtr 3,452.0 1,371.4 523.7 .59 .58 3rd Qtr 3,522.2 1,462.0 558.6 .63 .62 4th Qtr 2,893.1 1,010.4 227.8 .26 .26 --------------------------------------------------------------Annual $12,911.5 $4,961.1 $1,704.5 $1.91 $1.89 ===============================================================

14. Goodwill and Other Intangible Assets Effective January 1, 2002, Anheuser-Busch adopted FAS 142, "Goodwill and Other Intangible Assets." Under FAS 142, goodwill existing as of the adoption date is no longer subject to periodic amortization. In lieu of amortization, goodwill and other intangible assets are now reviewed for impairment at least annually, with ongoing recoverability monitored based on applicable operating unit performance and consideration of significant events or changes in the overall business environment. The company completed a required transitional impairment analysis for FAS 142 adoption purposes in late 2001 and found no impairment related to goodwill or other indefinite-lived intangible assets. A current review of goodwill and other indefinite-lived intangible assets was completed in the fourth quarter of 2002. No impairment was found as a result of the 2002 review. The company had total unamortized goodwill of $1.3 billion at January 1, 2002 related to its consolidated and equity subsidiaries. As required by FAS 142, the company subsequently reclassified $158.9 million of purchased product distribution rights from goodwill into separate intangible asset categories, and also recharacterized as goodwill $7.5 million of miscellaneous intangible assets not qualifying for separate recognition under FAS 142. Product distribution rights consist of exclusive domestic beer distribution territories and certain distribution access rights in the United Kingdom. The domestic rights of $139.6 million at December 31, 2002 are held in perpetuity and are therefore not amortized. The international rights continue to be amortized due to having a contractually limited life, with 26 years remaining, and had an unamortized balance of $20.5 million at December 31, 2002. Amortization expense related to these rights was $750,000 in 2002 and is expected to be consistent in future years. Distribution rights comprise the majority of Anheuser-Busch's nongoodwill intangible assets. FAS 142 does not permit restatement of previously issued financial statements. For comparability, the following table sets forth reported net income and earnings per share for 2001 and 2000, and what net income and earnings per share would have been had FAS 142 been applied for those years.
---------------------------------------------------------------------------2001 2000 ---------------------------------------------------------------------------Reported net income $1,704.5 $1,551.6 Add back goodwill amortization 35.8 31.8 --------------------------Adjusted net income $1,740.3 $1,583.4 ===========================

Reported basic earnings per share Add back goodwill amortization Adjusted basic earnings per share

$1.91 $1.71 .04 .03 --------------------------$1.95 $1.74 =========================== $1.89 $1.69 .04 .03 --------------------------$1.93 $1.72 ===========================

Reported diluted earnings per share Add back goodwill amortization Adjusted diluted earnings per share

15. Business Segments The company categorizes its operations into five business segments: domestic beer, international beer, packaging, entertainment and other. The domestic beer segment consists of the company's United States beer manufacturing and wholesale operations, including vertically integrated rice, barley and hops operations. The international beer segment consists of the company's export sales and overseas beer production and marketing operations, which include company-owned operations in China and the United Kingdom, administration of contract and license brewing arrangements and equity investments. The company sells beer in more than 80 countries, with principal markets in Canada, the United Kingdom, Ireland and China. The company attributes foreign sales based on the domicile of the purchaser of the product. The Packaging segment is comprised of the company's aluminum beverage can and lid manufacturing, aluminum recycling, label printing, crown and closure liner material manufacturing and glass manufacturing operations. Cans and lids are produced for both the company's domestic beer operations and U.S. soft drink industry customers. The Entertainment segment consists of the company's SeaWorld, Busch Gardens and other adventure park operations. In the first quarter of 2001, the company sold its SeaWorld Cleveland theme park to Six Flags, Inc. for $110 million, and recognized a $17.8 million pretax gain ($.005 per share, after-tax), which is shown as a separate line item in the consolidated statement of income. The Other segment is comprised of the company's real estate development, transportation and communications businesses. Summarized on the following page is the company's business segment information for 2002, 2001 and 2000 (in millions). Intersegment sales are fully eliminated in consolidation. No single customer accounted for more than 10% of sales. General corporate expenses, including net interest expense, are not allocated to the operating segments. 54

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
--------------------------------------------------------------------------------------------------------Domestic Int'l 2002 Beer Beer Pkg. Enter. Other --------------------------------------------------------------------------------------------------------Income Statement Information: Gross sales $12,562.9 713.6 2,072.0 858.6 92.8 Net sales - intersegment $ --877.3 -18.1 Net sales - external $10,574.1 582.0 1,194.7 858.6 74.7 Depreciation & amortization $ 615.3 22.1 82.5 84.9 5.5 Income before income taxes $ 2,919.2 76.1 154.0 153.0 (3.4) Equity income, net of tax $ -351.7 ---Net income $ 1,809.9 398.9 95.5 94.9 (2.1) Balance Sheet Information: Total assets $ 7,559.1 3,182.3 830.1 1,298.2 210.2 Equity method investments $ -2,640.1 ---Goodwill $ -715.2 21.9 288.3 -Foreign-located fixed assets $ -225.5 ---Capital expenditures $ 670.7 28.2 31.9 72.2 3.4 --------------------------------------------------------------------------------------------------------Domestic Int'l 2001 Beer Beer Pkg. Enter. Other --------------------------------------------------------------------------------------------------------Income Statement Information: Gross sales $11,950.7 654.1 1,999.8 847.6 108.0 Net sales - intersegment $ --829.0 -25.0 Net sales - external $10,003.9 539.4 1,170.8 847.6 83.0 Depreciation & amortization $ 585.7 22.2 85.7 93.5 5.4 Income before income taxes $ 2,667.1 54.4 107.5 147.4 7.3 Equity income, net of tax $ -254.4 ---Net income $ 1,648.8 288.0 66.5 85.6 4.5 Balance Sheet Information: Total assets $ 7,607.5 3,109.0 904.6 1,307.3 210.2 Equity method investments $ -2,623.4 ---Goodwill $ 158.6 788.1 21.9 288.3 -Foreign-located fixed assets $ -209.6 ---Capital expenditures $ 710.0 21.5 108.4 88.8 23.2 --------------------------------------------------------------------------------------------------------Domestic Int'l 2000 Beer Beer Pkg. Enter. Other --------------------------------------------------------------------------------------------------------Income Statement Information: Gross sales $11,506.2 632.1 2,012.2 837.9 122.8 Net sales - intersegment $ --788.4 -26.2 Net sales - external $ 9,575.2 528.3 1,223.8 837.9 96.6 Depreciation & amortization $ 555.0 19.7 87.9 94.3 5.6 Income before income taxes $ 2,481.7 29.2 87.8 114.5 15.5 Equity income, net of tax $ -246.0 ---Net income $ 1,538.7 264.1 54.4 71.0 9.6 Balance Sheet Information: Total assets $ 7,474.3 2,567.9 869.2 1,387.3 206.1 Equity method investments $ -2,024.9 ---Goodwill $ 135.6 638.9 22.7 314.3 -Foreign-located fixed assets $ -213.1 ---Capital expenditures $ 744.7 21.2 125.9 128.6 17.1 --------------------------------------------------------------------------------------------------------Note 1: Corporate assets principally include cash, marketable securities, deferred charges and certain fixed assets. Eliminations impact only gross and intersegment sales. External net sales reflects the reporting of pass-through delivery costs reimbursed by customers of $282.3 million, $266.8 million and $237.6 million in 2002, 2001 and 2000, respectively. Segment results have been updated to present beer sales to overseas United States military installations and certain operating expenses in the Domestic Beer segment. These activities were previously presented within International Beer and Corporate.

55

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Financial Summary -- Operations Anheuser-Busch Companies and Subsidiaries -----------------------------------------------------------------------------------------------------Year ended December 31 (in millions except per share data) 2002 2001 2000 -----------------------------------------------------------------------------------------------------Barrels of Anheuser-Busch beer brands sold worldwide 109.8 107.2 105.6 =========================================== Gross sales $15,686.8 $14,973.0 $14,534.2 Excise taxes (2,120.4) (2,061.5) (2,034.8) ------------------------------------------Net sales 13,566.4 12,911.5 12,499.4 Cost of sales (8,131.3) (7,950.4) (7,829.9) ------------------------------------------Gross profit 5,435.1 4,961.1 4,669.5 Marketing, distribution and administrative expenses (2,455.4) (2,255.9) (2,174.8) Gain on sale of business (1) -17.8 -Shutdown of Tampa brewery ---Restructuring charge ---------------------------------------------Operating income 2,979.7 2,723.0 2,494.7 Interest expense (368.7) (361.2) (348.2) Interest capitalized 17.7 26.9 33.3 Interest income 1.3 1.1 1.1 Other income/(expense), net (6.4) (12.2) (1.0) ------------------------------------------Income before income taxes 2,623.6 2,377.6 2,179.9 Provision for income taxes (current and deferred) (1,041.5) (927.5) (874.3) Revaluation of deferred tax liability under FAS 109 ---Equity income, net of tax 351.7 254.4 246.0 ------------------------------------------Income from continuing operations 1,933.8 1,704.5 1,551.6 Income/(loss) from discontinued operations ---------------------------------------------Income before accounting changes 1,933.8 1,704.5 1,551.6 Cumulative effect of accounting changes ---------------------------------------------Net income $ 1,933.8 $ 1,704.5 $ 1,551.6 =========================================== Basic earnings per share: Income from continuing operations Income/(loss) from discontinued operations Income before accounting changes Cumulative effect of accounting changes Net income

2.23 $ 1.91 $ 1.71 ---------------------------------------------2.23 1.91 1.71 ---------------------------------------------$ 2.23 $ 1.91 $ 1.71 ===========================================

$

Diluted earnings per share: Income from continuing operations Income/(loss) from discontinued operations Income before accounting changes Cumulative effect of accounting changes Net income Cash dividends paid on common stock Per share Weighted average number of common shares: Basic Diluted

2.20 $ 1.89 $ 1.69 ---------------------------------------------2.20 1.89 1.69 ---------------------------------------------$ 2.20 $ 1.89 $ 1.69 =========================================== $ 649.5 $ 614.1 $ 571.0 .75 .69 .63

$

866.0 878.9

890.1 901.6

906.1 919.7

All share and per share information reflects the two-for-one common stock splits distributed September 18, 2000 and September 12, 1996 and the 1997 adoption of FAS 128, "Earnings per Share." Gross sales, net sales and cost of products and services for all years reflects the change made in 2001 for the presentation of pass-through finished product delivery costs reimbursed by customers. This change had a minor impact on revenue and profit margin growth, and had no impact on cash flow, operating income, net income and earnings per share. All information has been restated to recognize the 1995 divestiture of the

food products segment. Note 1: Sale of SeaWorld Cleveland in 2001; Sale of the St. Louis Cardinals in 1996. Note 2: 1997 change in accounting for deferred systems reengineering costs, net of tax benefit of $6.2 million. 1992 change in accounting for income taxes and other postretirement benefits, net of tax benefit of $186.4 million. 56

ANHEUSER-BUSCH COMPANIES, INC.

2002 ANNUAL REPORT

--------------------------------------------------------------------------------------------------------1999 1998 1997 1996 1995 1994 1993 --------------------------------------------------------------------------------------------------------102.9 99.8 96.6 95.1 90.9 91.3 89.7 ========================================================================================================= $13,914.5 $13,342.5 $12,936.0 $12,721.8 $12,100.1 $11,793.9 $11,232.5 (2,019.6) (1,962.1) (1,766.2) (1,737.8) (1,664.0) (1,679.7) (1,679.8 --------------------------------------------------------------------------------------------------------11,894.9 11,380.4 11,169.8 10,984.0 10,436.1 10,114.2 9,552.7 (7,445.6) (7,297.1) (7,200.5) (7,064.9) (6,886.6) (6,581.0) (6,252.8 --------------------------------------------------------------------------------------------------------4,449.3 4,083.3 3,969.3 3,919.1 3,549.5 3,533.2 3,299.9 (2,147.0) (1,958.0) (1,916.3) (1,890.0) (1,756.6) (1,679.9) (1,612.1 ---54.7 -------(160.0) --------(401.3 --------------------------------------------------------------------------------------------------------2,302.3 2,125.3 2,053.0 2,083.8 (3) 1,632.9 (4) 1,853.3 1,286.5 (307.8) (291.5) (261.2) (232.8) (225.9) (219.3) (205.1 18.2 26.0 42.1 35.5 24.3 21.8 35.2 4.3 5.8 7.9 9.4 9.9 2.6 3.4 (9.4) (13.0) (9.3) (3.0) 20.5 17.6 21.0 --------------------------------------------------------------------------------------------------------2,007.6 1,852.6 1,832.5 1,892.9 (3) 1,461.7 (4) 1,676.0 1,141.0 (784.1) (732.2) (715.2) (736.8) (575.1) (661.5) (452.6 ------(31.2 178.7 112.9 61.9 ------------------------------------------------------------------------------------------------------------1,402.2 1,233.3 1,179.2 1,156.1 (3) 886.6 (4) 1,014.5 657.2 ---33.8 (244.3) 17.6 (62.7 --------------------------------------------------------------------------------------------------------1,402.2 1,233.3 1,179.2 1,189.9 642.3 1,032.1 594.5 --(10.0)(2) ------------------------------------------------------------------------------------------------------------$ 1,402.2 $ 1,233.3 $ 1,169.2 $ 1,189.9 $ 642.3 $ 1,032.1 $ 594.5 =========================================================================================================

1.49 $ 1.28 $ 1.19 $ 1.16 $ .86 $ .96 $ .60 ---.03 (.23) .02 (.05 --------------------------------------------------------------------------------------------------------1.49 1.28 1.19 1.19 .63 .98 .55 --(.01)(2) ------------------------------------------------------------------------------------------------------------$ 1.49 $ 1.28 $ 1.18 $ 1.19 $ .63 $ .98 $ .55 =========================================================================================================

$

1.47 $ 1.27 $ 1.18 $ 1.14 (3) $ .85 (4) $ .95 $ .60 ---.03 (.23) .02 (.05 --------------------------------------------------------------------------------------------------------1.47 1.27 1.18 1.17 .62 .97 .55 --(.01)(2) ------------------------------------------------------------------------------------------------------------$ 1.47 $ 1.27 $ 1.17 $ 1.17 $ .62 $ .97 $ .55 ========================================================================================================= $ 544.7 $ 521.0 $ 492.6 $ 458.9 $ 429.5 $ 398.8 $ 370.0 .58 .54 .50 .46 .42 .38 .34 939.0 964.2 985.3 998.2 1,021.7 953.7 975.0 999.4 1,021.2 1,048.8 Note 3: 1996 results include the impact of the gain on the sale of the St. Louis Cardinals. Excluding the Cardinals gain, operating income, pretax income, income from continuing operations and diluted earnings per share would have been $2,029.1 million, $1,838.2 million, $1,122.7 million and $1.10, respectively. Note 4: 1995 results include the impact of the one-time pretax charge of $160 million for the closure of the Tampa brewery, and the $74.5 million pretax impact of the beer wholesaler inventory reduction. Excluding these nonrecurring special items, operating income, pretax income, income from continuing operations and diluted earnings per share would have been $1,867.4 million, $1,696.2 million, $1,032.3 million and $.99, respectively. Note 5: 1993 results include the impact of a $401.3 million pretax restructuring charge and a $31.2 million after-tax charge resulting from revaluation of the deferred tax liability due to a 1% increase in U.S. 1,049.2 1,076.1 1,088.7 1,117.2

$

federal income tax rates. Excluding these nonrecurring special charges, operating income, pretax income, income from continuing operations and diluted earnings per share would have been $1,687.8 million, $1,542.3 million, $935.2 million and $.84, respectively.

57

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Financial Summary -- Balance Sheet and Other Information Anheuser-Busch Companies and Subsidiaries
--------------------------------------------------------------------------------------------------------Year ended December 31 (in millions except per share data) 2002 2001 20 --------------------------------------------------------------------------------------------------------Balance Sheet Information: Working capital (deficit) $ (283.0) $ (186.1) $ ( Current ratio 0.8 0.9 Debt 6,603.2 5,983.9 5, Shareholders equity 3,052.3 4,061.5 4, Return on shareholders equity 54.4% 41.6% Debt to total capitalization ratio 68.4% 59.6% Book value per share 3.61 4.62 Total assets 14,119.5 13,944.9 13, Other Information: Operating cash flow before change in working capital Capital expenditures Free cash flow Price/earnings ratio Market price range of common stock (high and low closing)

$

2,624.3 834.7 1,930.5 22.0 54.97-44.00

2,316.0 1,022.0 1,338.6 23.9 46.51-38.50

$

$

2, 1, 1,

49.81-

All share and per share information reflects the two-for-one common stock splits distributed September 18, 2000 and September 12, 1996. All information has been restated to recognize the 1995 divestiture of the food products segment.

58

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
--------------------------------------------------------------------------------------------------------1999 1998 1997 1996 1995 1994 1993 --------------------------------------------------------------------------------------------------------$ (350.4) 0.8 5,122.9 3,921.5 34.5% 56.6% 4.25 12,680.5 $ (89.9) 0.9 4,718.6 4,216.0 29.9% 52.8% 4.42 12,504.5 $ 83.2 $ 1.1 4,365.6 4,041.8 29.2%(1) 51.9% 4.15 11,738.4 34.9 1.0 3,270.9 4,029.1 30.0%(2) 44.8% 4.05 10,463.6 $ 268.6 $ 1.2 3,270.1 4,433.9 25.0%(3) 47.1% 3.61 10,590.9 57.0 1.0 3,066.4 4,415.5 29.9% 47.3% 3.32 10,547.4 $ (41 1 3,019 4,255 18 47 3. 10,267

$

2,141.6 865.3 1,270.6 24.1 40.81-32.59

$

1,977.2 817.5 1,395.9 25.9 34.13-21.72

$

1,839.0 $ 1,751.7 1,199.3 1,084.6 644.4 909.2 18.6 (1) 17.6 (2) 23.94-19.75 21.44-16.25

$ 1,700.5 $ 1,729.6 952.5 662.8 494.5 1,009.8 19.6 (3) 13.1 17-12.69 13.81-11.75

$ 1,535 656 991 22 15-

Note 1: Ratios calculated based on income from continuing operations before the cumulative effect of accounting changes. Note 2: Ratios calculated based on reported income from continuing operations, which includes the $54.7 million pretax gain on the sale of the St. Louis Cardinals. Excluding the Cardinals gain, return on shareholders equity would have been 29.2% and the price/earnings ratio would have been 18.1. Note 3: Ratios calculated based on reported income from continuing operations. Excluding the two nonrecurring 1995 items ($160 million pretax charge for closure of the Tampa brewery and $74.5 million impact of the beer wholesaler inventory reduction), return on shareholders equity would have been 29.1% and the price/earnings ratio would have been 16.8. Note 4: Ratios calculated based on reported income from continuing operations. Excluding the two nonrecurring 1993 charges ($401.3 million pretax restructuring charge and $31.2 million after-tax FAS 109 charge), return on shareholders equity would have been 26.7% and the price/earnings ratio would have been 13.8.

59

Exhibit 21
SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Missouri Delaware Delaware Brazil Delaware Delaware DOING BUSINESS UNDER NAME OF -------------Anheuser-Busch, Incorporated Anheuser-Busch Asia, Inc. Anheuser-Busch Australia Limited Anheuser-Busch Brasil Holdings Ltd Anheuser-Busch Canada, Inc. Anheuser-Busch Sales and Service of New York, Inc. Anheuser-Busch Europe, Inc. Anheuser-Busch Europe Limited Anheuser-Busch Florida Investment Capital Corporation Anheuser-Busch Import Investments, Inc. Anheuser-Busch International, Inc. Anheuser-Busch International Holdings, Inc. Anheuser-Busch International Holdings, Inc. Chile I Limitada Anheuser-Busch International Holdings, Inc. Chile II Limitada Anheuser-Busch Investments, S.L. Anheuser-Busch Latin American Development Corporation

NAME OF COMPANY --------------Anheuser-Busch, Incorporated Anheuser-Busch Asia, Inc. Anheuser-Busch Australia Limited Anheuser-Busch Brasil Holdings Ltda. Anheuser-Busch Canada, Inc. Anheuser-Busch Distributors of New York, Inc. Anheuser-Busch Europe, Inc. Anheuser-Busch Europe Limited Anheuser-Busch Florida Investment Capital Corporation Anheuser-Busch Import Investments, Inc. Anheuser-Busch International, Inc. Anheuser-Busch International Holdings, Inc. Anheuser-Busch International Holdings, Inc. Chile I Limitada Anheuser-Busch International Holdings, Inc. Chile II Limitada Anheuser-Busch Investments, S.L. Anheuser-Busch Latin American Development Corporation

Delaware United Kingdom Florida

Delaware

Delaware Delaware

Chile

Chile

Barcelona, Spain Delaware

Page 2 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Delaware Delaware DOING BUSINESS UNDER NAME OF -------------Anheuser-Busch Mexico, Inc. Anheuser-Busch Overseas Holdings, L.L.C. Anheuser-Busch Packaging Group, Inc. Anheuser-Busch Recycling Corporation River North Distributing Company

NAME OF COMPANY --------------Anheuser-Busch Mexico, Inc. Anheuser-Busch Overseas Holdings, L.L.C. Anheuser-Busch Packaging Group, Inc. Anheuser-Busch Recycling Corporation Anheuser-Busch River North Investment Capital Corporation Anheuser-Busch Sales of Hawaii, Inc. Anheuser-Busch San Diego Wholesaler Development Corporation Anheuser-Busch Spanish Holdings, Inc. Anheuser-Busch Wholesaler Development Corp. Anheuser-Busch Wholesaler Development Corp. III Anheuser-Busch Wholesaler Development Corp. IV Anheuser-Busch Wisconsin Investment Capital Corporation Anheuser-Busch World Trade Ltd. August A. Busch & Co. of Massachusetts, Inc.

Delaware

Ohio

Delaware

Delaware Delaware

Anheuser-Busch Sales of Hawaii, In Anheuser-Busch Sales of San Diego

Delaware

Anheuser-Busch Spanish Holdings, Inc. Anheuser-Busch Wholesaler Development Corp. Anheuser-Busch Wholesaler Development Corp. III Anheuser-Busch Wholesaler Development Corp. IV Anheuser-Busch Wisconsin Investment Capital Corporation Anheuser-Busch World Trade Ltd. August A. Busch & Co. of Massachusetts, Inc.

Delaware

Delaware

Delaware

Wisconsin

Delaware Massachusetts

Page 3 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------DOING BUSINESS UNDER NAME OF --------------

NAME OF COMPANY ---------------

Bannon Corporation BARI-Canada, Inc. Bevo Music, Inc. Bow Tie Music, Inc. Budweiser Brasil Ltda. Budweiser Philippines, Inc. Budweiser Wuhan International Brewing Company Limited Busch Agricultural Resources, Inc. Busch Agricultural Resources International, Inc. Busch Entertainment Corporation Busch International Sales Corporation Busch Investment Corporation Busch Mechanical Services, Inc. Busch Media Group, Inc. Busch Properties, Inc. Busch Properties of Florida, Inc. Civic Center Corporation Consolidated Farms, Inc.

Delaware Delaware Delaware Delaware Brazil Delaware China

Bannon Corporation BARI-Canada, Inc. Bevo Music, Inc. Bow Tie Music, Inc. Budweiser Brasil Ltda. Budweiser Philippines, Inc. Budweiser Wuhan International Brewing Company Limited Busch Agricultural Resources, Inc. Busch Agricultural Resources International, Inc. Busch Entertainment Corporation Busch International Sales Corporation Busch Investment Corporation Busch Mechanical Services, Inc. Busch Media Group, Inc. Busch Properties, Inc. Busch Properties of Florida, Inc. Civic Center Corporation Elk Mountain Farms, Inc.

Delaware Delaware

Delaware Delaware

Delaware Delaware Delaware Delaware Florida Missouri Delaware

Page 4 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------DOING BUSINESS UNDER NAME OF --------------

NAME OF COMPANY ---------------

Eagle Packaging, Inc. Eagle Snacks, Inc. Glass Container Corporation HSH of Orlando, Inc. ILH Company Kingsmill Realty, Inc. Langhorne Food Services, Inc. Litchfield Development Corporation Manufacturers Cartage Company Manufacturers Railway Company Metal Container Corporation Metal Container Corporation of California M.R.S. Redevelopment Corporation Nutri-Turf, Inc. PBP, Inc. Pacific International Rice Mills, Inc. Pestalozzi Street Insurance Company, Ltd. Precision Printing and Packaging, Inc.

Delaware Delaware Delaware Florida Florida Virginia Delaware Delaware Missouri Missouri Delaware California

Eagle Packaging, Inc. Eagle Snacks, Inc. Longhorn Glass Corporation HSH of Orlando, Inc. ILH Company Kingsmill Realty, Inc. Langhorne Food Services, Inc. Litchfield Development Corporation Manufacturers Cartage Company Manufacturers Railway Company Metal Container Corporation Metal Container Corporation of California M.R.S. Redevelopment Corporation Nutri-Turf, Inc. PBP, Inc. Pacific International Rice Mills, Pestalozzi Street Insurance Company, Ltd. Precision Printing and Packaging,

Missouri Delaware Delaware Delaware Bermuda

Delaware

Page 5 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Mexico DOING BUSINESS UNDER NAME OF -------------Promoclonesy Desarrollos Mexico de Mexicali, S. de R. L. de C. V. PSB, Inc. Puget Sound Beverages, Inc. SeaWorld, Inc. SeaWorld of Florida, Inc. SeaWorld of Texas, Inc. SFKBPP, Inc. Anheuser-Busch Sales, Beach Cities Budweiser Stag Brewing Company Limited St. Louis Refrigerator Car Company Tune Out Music, Inc. Wholesaler Equity Development Corporation Williamsburg Transport, Inc.

NAME OF COMPANY --------------Promoclonesy Desarrollos Mexico de Mexicali, S. de R. L. de C. V. PSB, Inc. Puget Sound Beverages, Inc. SeaWorld, Inc. SeaWorld of Florida, Inc. SeaWorld of Texas, Inc. SFKBPP, Inc. Somerset Distributors, L.L.C. Stag Brewing Company Limited

Washington Washington Delaware Florida Delaware Missouri Delaware England

St. Louis Refrigerator Car Company Tune Out Music, Inc. Wholesaler Equity Development Corporation Williamsburg Transport, Inc.

Delaware Delaware Delaware

Virginia

other. (c) Expenses: include attorneys' fees and all other costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal) any Claim relating to any Indemnifiable Event, or preparing to defend, be a witness in or participate in any Claim relating to any Indemnifiable Event. (d) Indemnifiable Event: any event or occurrence related to the fact that Indemnitee is or was a director or member of other governing body of a Company, or by reason or anything done or not done by Indemnitee in such capacity. (e) Potential Change of Control: shall be deemed to have occurred if (i) A-BC enters into an agreement or arrangement, the consummation of which would result in the occurrence of a Change in Control; (ii) any person (including A-BC) publicly announces an intention to take or to consider taking actions which if consummated would constitute a 2

Change of Control; (iii) any person, other than a trustee or other fiduciary holding securities under an employee benefit plan of A-BC acting in such capacity or a corporation owned, directly or indirectly, by the stockholders of A-BC in substantially the same proportions as their ownership of stock of A-BC, who is or becomes the beneficial owner, directly or indirectly, of securities of A-BC representing 10% or more of the combined voting power of A-BC's then outstanding Voting Securities, increases his beneficial ownership of such securities by 5% or more over the percentage so owned by such person on the date hereof; or (iv) the Board of Directors of ABI adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (f) Reviewing Party: any appropriate person or body consisting of the member or members of ABI's Board of Directors who are not parties to the particular Claim for which Indemnitee is seeking indemnification, independent legal counsel selected by such directors or the shareholders of ABI. (g) Voting Securities: any securities of A-BC which vote generally in the election of directors. 2. Basic Indemnification Arrangement. (a) In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, ABI shall, subject to the limitations described in this Agreement, indemnify Indemnitee, as soon as practicable but in any event no later than 30 days after written demand is presented to ABI, against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other

Change of Control; (iii) any person, other than a trustee or other fiduciary holding securities under an employee benefit plan of A-BC acting in such capacity or a corporation owned, directly or indirectly, by the stockholders of A-BC in substantially the same proportions as their ownership of stock of A-BC, who is or becomes the beneficial owner, directly or indirectly, of securities of A-BC representing 10% or more of the combined voting power of A-BC's then outstanding Voting Securities, increases his beneficial ownership of such securities by 5% or more over the percentage so owned by such person on the date hereof; or (iv) the Board of Directors of ABI adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (f) Reviewing Party: any appropriate person or body consisting of the member or members of ABI's Board of Directors who are not parties to the particular Claim for which Indemnitee is seeking indemnification, independent legal counsel selected by such directors or the shareholders of ABI. (g) Voting Securities: any securities of A-BC which vote generally in the election of directors. 2. Basic Indemnification Arrangement. (a) In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, ABI shall, subject to the limitations described in this Agreement, indemnify Indemnitee, as soon as practicable but in any event no later than 30 days after written demand is presented to ABI, against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement (including the creation of the Trust). Notwithstanding anything in this Agreement to the contrary and except as provided in Section 5, prior to a Change in Control Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim initiated by Indemnitee against ABI or any director or officer of ABI, or against A-BC or any director or officer of A-BC, unless ABI has joined in or consented to the initiation of such Claim. If so requested by Indemnitee, ABI shall advance (within two business days of such request) any and all Expenses to Indemnitee (an "Expense Advance"). 3

(b) Notwithstanding the foregoing, (i) the obligations of ABI under Section 2(a) shall be subject to the condition that the Reviewing Party shall not have determined that Indemnitee would not be permitted to be indemnified under applicable law, (ii) the obligation of ABI to make an Expense Advance pursuant to Section 2(a) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that the Indemnitee would not be permitted to be so indemnified under applicable law, ABI shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse ABI) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse ABI for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed) and (iii) ABI's indemnification obligations under this Agreement (except for any liability imposed by Section 5 hereof), shall be subject to such limitations, monetary or otherwise, as may be set forth from time to time by resolutions of the board of directors of ABI. Indemnitee's obligation to reimburse ABI for Expense Advances shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control, the Reviewing Party shall be selected by the Board of Directors of ABI and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of A-BC's Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the special, independent counsel referred to in Section 3 hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation in any court in the State of Missouri having subject matter jurisdiction thereof and in which venue is proper, seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, and ABI hereby consents to

(b) Notwithstanding the foregoing, (i) the obligations of ABI under Section 2(a) shall be subject to the condition that the Reviewing Party shall not have determined that Indemnitee would not be permitted to be indemnified under applicable law, (ii) the obligation of ABI to make an Expense Advance pursuant to Section 2(a) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that the Indemnitee would not be permitted to be so indemnified under applicable law, ABI shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse ABI) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse ABI for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed) and (iii) ABI's indemnification obligations under this Agreement (except for any liability imposed by Section 5 hereof), shall be subject to such limitations, monetary or otherwise, as may be set forth from time to time by resolutions of the board of directors of ABI. Indemnitee's obligation to reimburse ABI for Expense Advances shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control, the Reviewing Party shall be selected by the Board of Directors of ABI and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of A-BC's Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the special, independent counsel referred to in Section 3 hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation in any court in the State of Missouri having subject matter jurisdiction thereof and in which venue is proper, seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, and ABI hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on ABI and Indemnitee. 3. Change in Control. ABI agrees that if there is a Change in Control of A-BC (other than a Change in Control which has been approved by a majority of A-BC's Board of Directors who were directors immediately prior to such Change in Control) then with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity 4

payments and Expense Advances under this Agreement or any other agreement or under applicable law or ABI's Articles of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, ABI shall seek legal advice only from special, independent counsel selected by Indemnitee and approved by ABI (which approval shall not be unreasonably withheld), and who has not otherwise performed services for ABI within the last 10 years (other than in connection with such matters) or Indemnitee. Such independent counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either ABI or Indemnitee in an action to determine Indemnitee's rights under this Agreement. Such counsel, among other things, shall render its written opinion to ABI and Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under applicable law. ABI agrees to pay the reasonable fees of the special, independent counsel referred to above and to indemnify fully such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or the engagement of special, independent counsel pursuant hereto. 4. Establishment of Trust. In the event of a Potential Change in Control, ABI shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund such Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for and defending any Claim relating to an Indemnifiable Event, and any and all judgments, fines, penalties and settlement amounts of any and all Claims relating to an Indemnifiable Event from time to time actually paid or claimed, reasonably anticipated or proposed to be paid. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Reviewing Party, in any case in which the special, independent counsel referred to above is involved. The terms of the Trust shall provide that upon a Change in Control (i) the Trust shall not be revoked or the principal thereof invaded, without the written request of the Indemnitee, (ii) the Trustee shall advance, within two business days of a request by the Indemnitee, any and all

payments and Expense Advances under this Agreement or any other agreement or under applicable law or ABI's Articles of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, ABI shall seek legal advice only from special, independent counsel selected by Indemnitee and approved by ABI (which approval shall not be unreasonably withheld), and who has not otherwise performed services for ABI within the last 10 years (other than in connection with such matters) or Indemnitee. Such independent counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either ABI or Indemnitee in an action to determine Indemnitee's rights under this Agreement. Such counsel, among other things, shall render its written opinion to ABI and Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under applicable law. ABI agrees to pay the reasonable fees of the special, independent counsel referred to above and to indemnify fully such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or the engagement of special, independent counsel pursuant hereto. 4. Establishment of Trust. In the event of a Potential Change in Control, ABI shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund such Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for and defending any Claim relating to an Indemnifiable Event, and any and all judgments, fines, penalties and settlement amounts of any and all Claims relating to an Indemnifiable Event from time to time actually paid or claimed, reasonably anticipated or proposed to be paid. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Reviewing Party, in any case in which the special, independent counsel referred to above is involved. The terms of the Trust shall provide that upon a Change in Control (i) the Trust shall not be revoked or the principal thereof invaded, without the written request of the Indemnitee, (ii) the Trustee shall advance, within two business days of a request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the circumstances under which the Indemnitee would be required to reimburse ABI under Section 2(b) of this Agreement), (iii) the Trust shall continue to be funded by ABI in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in such Trust shall revert to ABI upon a final determination by the Reviewing Party or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this Section 4 shall relieve ABI of any of its obligations under this Agreement. All income earned on the assets held in the Trust shall be reported as income by ABI for federal, state, local, and foreign tax purposes. 5. Indemnification for Additional Expenses. ABI shall indemnify Indemnitee against any and all expenses (including attorneys' fees) and, if requested by Indemnitee, 5

shall (within two business days of such request) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for (i) indemnification or advance payment of Expenses by ABI under this Agreement or any other agreement or under the Bylaws or resolutions of ABI now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors' and officers' liability insurance policies maintained by ABI or A-BC, in each case under (i) or (ii) regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance Expense payment or insurance recovery, as the case may be. 6. Partial Indemnity, Etc. (i) If Indemnitee is entitled under any provision of this Agreement to indemnification by ABI for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, ABI shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. (ii) Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in

shall (within two business days of such request) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for (i) indemnification or advance payment of Expenses by ABI under this Agreement or any other agreement or under the Bylaws or resolutions of ABI now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors' and officers' liability insurance policies maintained by ABI or A-BC, in each case under (i) or (ii) regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance Expense payment or insurance recovery, as the case may be. 6. Partial Indemnity, Etc. (i) If Indemnitee is entitled under any provision of this Agreement to indemnification by ABI for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, ABI shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. (ii) Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith. (iii) In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on ABI to establish that Indemnitee is not so entitled. 7. No Presumption. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. 8. Exclusivity, Etc. The rights of the Indemnitee described hereunder and under ABI's Bylaws and resolutions shall be Indemnitee's exclusive rights for indemnification for Indemnifiable Events, notwithstanding any additional rights that might be provided otherwise, including pursuant to ABI's Articles of Incorporation or the General and Business Corporation Law of Missouri. Indemnitee hereby acknowledges the exclusivity of this Agreement, ABI's Bylaws and resolutions waives any such additional rights and agrees that his right to indemnification from ABI shall be limited as described by this Agreement, ABI's Bylaws and resolutions. 9. Liability Insurance. To the extent ABI or ABC maintains an insurance policy or policies providing directors' and officers' liability insurance applicable to Indemnitee, 6

Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available to Indemnitee. Nothing in this section shall limit or prevent ABI's ability to make claims or seek reimbursement under any such policy. 10. Period of Limitations. ABI's right under this Agreement for reimbursement of any amounts paid by it hereunder shall expire unless ABI provides notice to Indemnitee requesting such reimbursement within two years after ABI has reasonable notice of its right to seek reimbursement. 11. Amendments, Etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 12. Subrogation. In the event of payment under this Agreement, ABI shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee against any other party, including the Companies, and Indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights,

Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available to Indemnitee. Nothing in this section shall limit or prevent ABI's ability to make claims or seek reimbursement under any such policy. 10. Period of Limitations. ABI's right under this Agreement for reimbursement of any amounts paid by it hereunder shall expire unless ABI provides notice to Indemnitee requesting such reimbursement within two years after ABI has reasonable notice of its right to seek reimbursement. 11. Amendments, Etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 12. Subrogation. In the event of payment under this Agreement, ABI shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee against any other party, including the Companies, and Indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable ABI effectively to bring suit to enforce such rights. 13. No Duplication of Payments. ABI shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, from any Company or otherwise) of the amounts otherwise indemnifiable hereunder. 14. Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of ABI, spouses, heirs, and personal and legal representatives. ABI shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of ABI, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that ABI would be required to perform if no such succession had taken place. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director or officer of ABI or of any Company. 15. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions 7

of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 16. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Missouri applicable to contracts made and to be performed in such State without giving effect to the principles of conflicts of laws. 17. Termination. At the option of ABI, ABI may terminate this Agreement and its obligations hereunder or may amend this Agreement by eliminating any entity previously specified as a "Company", in each case by written notice to the Indemnitee delivered to his address as recorded upon the records of ABI. Upon receipt by Indemnitee of such notice, ABI's obligations shall be terminated or amended as described in such notice; provided that such termination or amendment shall not limit the rights of the Indemnitee or the obligations of ABI with respect to any Indemnifiable Event occurring prior to such termination or amendment. 18. Rights Against A-BC. Indemnitee agrees and acknowledges that it shall not be entitled to any right of indemnity against Anheuser-Busch Companies, Inc. ("A-BC") with respect to any Indemnifiable Event arising

of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 16. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Missouri applicable to contracts made and to be performed in such State without giving effect to the principles of conflicts of laws. 17. Termination. At the option of ABI, ABI may terminate this Agreement and its obligations hereunder or may amend this Agreement by eliminating any entity previously specified as a "Company", in each case by written notice to the Indemnitee delivered to his address as recorded upon the records of ABI. Upon receipt by Indemnitee of such notice, ABI's obligations shall be terminated or amended as described in such notice; provided that such termination or amendment shall not limit the rights of the Indemnitee or the obligations of ABI with respect to any Indemnifiable Event occurring prior to such termination or amendment. 18. Rights Against A-BC. Indemnitee agrees and acknowledges that it shall not be entitled to any right of indemnity against Anheuser-Busch Companies, Inc. ("A-BC") with respect to any Indemnifiable Event arising after the effective date hereof. 19. Mutual Agreement to Arbitrate Claims. The Mutual Agreement to Arbitrate Claims between A-BC and the Indemnitee shall not apply to any claim or controversy relating to the subject matter of this Agreement. 20. Effective Date. The effective date of this Agreement shall be and the obligations and rights of the parties hereto shall commence as of . IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of . ANHEUSER-BUSCH, INCORPORATED By: Title: [Indemnitee Name] 8

Exhibit 12 RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of the Company's earnings to fixed charges, on a consolidated basis for the periods indicated:
Year Ended December 31 ---------------------------------------------------------------------------2002 2001 2000 1999 1998 1997 ------------------------------7.6X 7.0 1/ 6.7X 6.9X 6.8X 7.3X

For purposes of this ratio, earnings have been calculated by adding to income before income taxes the distributed earnings of investees accounted for under the equity method and the amount of fixed charges. Fixed charges consist of interest on all indebtedness, amortization of debt discounts and that portion of rental expense deemed to represent interest.

Exhibit 12 RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of the Company's earnings to fixed charges, on a consolidated basis for the periods indicated:
Year Ended December 31 ---------------------------------------------------------------------------2002 2001 2000 1999 1998 1997 ------------------------------7.6X 7.0 1/ 6.7X 6.9X 6.8X 7.3X

For purposes of this ratio, earnings have been calculated by adding to income before income taxes the distributed earnings of investees accounted for under the equity method and the amount of fixed charges. Fixed charges consist of interest on all indebtedness, amortization of debt discounts and that portion of rental expense deemed to represent interest. 1/ The ratio for 2001 includes the gain from the sale of SeaWorld Cleveland, which increased income before income taxes by $17.8 million. Excluding this one-time gain, the ratio would have been 6.9X.

Exhibit 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION Management's Discussion and Analysis of Operations and Financial Condition Introduction This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity and cash flows of Anheuser-Busch Companies, Inc. for the three-year period ended December 31, 2002. This discussion should be read in conjunction with the consolidated financial statements and footnotes to the consolidated financial statements included in this annual report. This discussion contains forward-looking statements regarding the company's expectations concerning its future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent the company's expectations, but such expectations may change. These expectations involve risks and uncertainties (both favorable and unfavorable) and are based on many assumptions that the company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the company's expectations and forward-looking statements will be correct. Important factors that could cause actual results to differ (favorably or unfavorably) from the expectations stated in this discussion include, among others, changes in the pricing environment for the company's products; changes in United States demand for malt beverage products; changes in consumer preference for the company's malt beverage products; regulatory or legislative changes; changes in the litigation to which the company is a party; changes in raw materials prices; changes in packaging materials costs; changes in interest rates; changes in foreign currency exchange rates; changes in attendance and consumer spending patterns for the company's theme park operations; changes in demand for aluminum beverage containers; changes in the company's international beer business or in the beer business of the company's international equity partners; and the effect of stock market conditions on the company's share repurchase program. Anheuser-Busch disclaims any obligation to update any of these forward-looking statements. If the company determines to update any forwardlooking statement, it will do so publicly. No private statements by the company or its personnel should be interpreted as updating forward-looking statements. Objectives Anheuser-Busch remains focused on its three major objectives to enhance shareholder value:

Exhibit 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION Management's Discussion and Analysis of Operations and Financial Condition Introduction This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity and cash flows of Anheuser-Busch Companies, Inc. for the three-year period ended December 31, 2002. This discussion should be read in conjunction with the consolidated financial statements and footnotes to the consolidated financial statements included in this annual report. This discussion contains forward-looking statements regarding the company's expectations concerning its future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent the company's expectations, but such expectations may change. These expectations involve risks and uncertainties (both favorable and unfavorable) and are based on many assumptions that the company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the company's expectations and forward-looking statements will be correct. Important factors that could cause actual results to differ (favorably or unfavorably) from the expectations stated in this discussion include, among others, changes in the pricing environment for the company's products; changes in United States demand for malt beverage products; changes in consumer preference for the company's malt beverage products; regulatory or legislative changes; changes in the litigation to which the company is a party; changes in raw materials prices; changes in packaging materials costs; changes in interest rates; changes in foreign currency exchange rates; changes in attendance and consumer spending patterns for the company's theme park operations; changes in demand for aluminum beverage containers; changes in the company's international beer business or in the beer business of the company's international equity partners; and the effect of stock market conditions on the company's share repurchase program. Anheuser-Busch disclaims any obligation to update any of these forward-looking statements. If the company determines to update any forwardlooking statement, it will do so publicly. No private statements by the company or its personnel should be interpreted as updating forward-looking statements. Objectives Anheuser-Busch remains focused on its three major objectives to enhance shareholder value: o Increasing domestic per barrel profitability which, when combined with continued market share growth, will provide the base for long-term double-digit earnings per share growth and improvement in return on capital. o Profitable expansion of the international beer segment by making investments in leading brewers in key beer growth markets, and building the Budweiser brand worldwide. The company has made significant marketing investments to build Budweiser brand recognition outside the United States and owns and operates breweries in China and the United Kingdom. The company also has a 50% equity position in Grupo Modelo, Mexico's largest brewer and producer of the Corona brand; a 20% equity position in Compania Cervecerias Unidas (CCU), the largest brewer in Chile; and an agreement to eventually acquire 27% of Tsingtao, the largest brewer in China. o Continued growth in profit and free cash flow in the packaging and entertainment segments. Packaging operations provide significant efficiencies, cost savings and quality assurance for domestic beer operations. Entertainment operations enhance the company's corporate image by showcasing Anheuser-Busch's heritage, values and commitment to quality and social responsibility to approximately 20 million visitors annually. Operating Results Led by strong growth in its domestic and international beer businesses, Anheuser-Busch had another outstanding year in 2002, selling over 100 million barrels of its beer brands domestically for the first time in history and delivering 14% earnings per share growth. The company also achieved its 17th consecutive quarter of solid double-digit earnings per share growth in the fourth quarter 2002, and has delivered 14.3% compounded annual earnings per share growth since 1998. Diluted earnings per share are calculated on a comparable basis, excluding goodwill amortization from all periods. These accomplishments reflect Anheuser-Busch's proven ability to capitalize on continued favorable domestic beer industry

26

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT fundamentals and the strong earnings growth contribution by the company's international beer segment, led primarily by the performance of the company's equity partner Grupo Modelo. The combination of revenue per barrel growth, volume growth and favorable costs has significantly enhanced profit margins and return on capital employed. Return on capital employed increased 120 basis points in 2002, and has increased a total of 410 basis points over the past four years. Anheuser-Busch enters 2003 from a position of strength. The company has the leading brands with the highest quality in the industry, substantial market share leads over its nearest competitors, successful pricing strategies and a strong financial position. The company has established a 12% earnings per share growth objective for 2003. Effective in the first quarter 2002, the company ceased amortizing goodwill in accordance with FAS No. 142, "Goodwill and Other Intangible Assets." The impact of goodwill amortization on 2001 net income and diluted earnings per share was $35.8 million and $.04, respectively. The impact of goodwill amortization on net income and diluted earnings per share for 2000 was $31.8 million and $.03, respectively. Had goodwill amortization ceased on January 1, 2000, net income for 2001 and 2000 would have been $1.74 billion and $1.58 billion, respectively, while diluted earnings per share for the same periods would have been $1.93 and $1.72. Comparisons of key operating results for the last three years are summarized in the following tables. As noted above, due to the adoption of FAS 142, operating results for 2002 do not reflect any goodwill amortization expense. Per the requirements of FAS 142, Anheuser-Busch did not restate the results of operations for 2001 and 2000 to exclude goodwill amortization, so results for those years reflect the impact of goodwill expense. The absence or presence of goodwill amortization expense in 2002 and 2001, respectively, makes direct comparison between operating results difficult. Therefore, to provide the clearest understanding of the company's operations, all discussions of operating results for 2002 vs. 2001 are based on 2001 results reported on a comparable basis, excluding the impact of goodwill amortization. Discussions of operating results for 2001 and 2000 vs. prior years are already on a comparable basis, as the results for all years include goodwill amortization expense.
Comparison of Operating Results Year Ended December 31 (in millions, except per share) ----------------------------------------------------------------------------2002 vs. 2001 --------------------Comparable 2002 2001 Reported Basis* Gross sales $15,687 $14,973 4.8% 4.8% Net sales $13,566 $12,912 5.1% 5.1% Operating income $ 2,980 $ 2,723 9.4% 8.9% Income before income taxes $ 2,624 $ 2,378 10.3% 9.6% Equity income, net of tax $ 352 $ 254 38.3% 28.2% Net income $ 1,934 $ 1,705 13.4% 11.1% Diluted earnings per share $ 2.20 $ 1.89 16.4% 14.0% * Excludes goodwill amortization in 2001. ----------------------------------------------------------------------------2001 2000 2001 vs. 2000 Gross sales $14,973 $14,534 $439 3.0% Net sales $12,912 $12,499 $413 3.3% Operating income $ 2,723 $ 2,495 $228 9.2% Income before income taxes $ 2,378 $ 2,180 $198 9.1% Equity income, net of tax $ 254 $ 246 $ 8 3.4% Net income $ 1,705 $ 1,552 $153 9.9% Diluted earnings per share $ 1.89 $ 1.69 $.20 11.8% ----------------------------------------------------------------------------2000 1999 2000 vs. 1999 Gross sales $14,534 $13,915 $619 4.5% Net sales $12,499 $11,895 $604 5.1% Operating income $ 2,495 $ 2,302 $193 8.4% Income before income taxes $ 2,180 $ 2,008 $172 8.6% Equity income, net of tax $ 246 $ 179 $ 67 37.7% Net income $ 1,552 $ 1,402 $150 10.7% Diluted earnings per share $ 1.69 $ 1.47 $.22 15.0% -----------------------------------------------------------------------------

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT fundamentals and the strong earnings growth contribution by the company's international beer segment, led primarily by the performance of the company's equity partner Grupo Modelo. The combination of revenue per barrel growth, volume growth and favorable costs has significantly enhanced profit margins and return on capital employed. Return on capital employed increased 120 basis points in 2002, and has increased a total of 410 basis points over the past four years. Anheuser-Busch enters 2003 from a position of strength. The company has the leading brands with the highest quality in the industry, substantial market share leads over its nearest competitors, successful pricing strategies and a strong financial position. The company has established a 12% earnings per share growth objective for 2003. Effective in the first quarter 2002, the company ceased amortizing goodwill in accordance with FAS No. 142, "Goodwill and Other Intangible Assets." The impact of goodwill amortization on 2001 net income and diluted earnings per share was $35.8 million and $.04, respectively. The impact of goodwill amortization on net income and diluted earnings per share for 2000 was $31.8 million and $.03, respectively. Had goodwill amortization ceased on January 1, 2000, net income for 2001 and 2000 would have been $1.74 billion and $1.58 billion, respectively, while diluted earnings per share for the same periods would have been $1.93 and $1.72. Comparisons of key operating results for the last three years are summarized in the following tables. As noted above, due to the adoption of FAS 142, operating results for 2002 do not reflect any goodwill amortization expense. Per the requirements of FAS 142, Anheuser-Busch did not restate the results of operations for 2001 and 2000 to exclude goodwill amortization, so results for those years reflect the impact of goodwill expense. The absence or presence of goodwill amortization expense in 2002 and 2001, respectively, makes direct comparison between operating results difficult. Therefore, to provide the clearest understanding of the company's operations, all discussions of operating results for 2002 vs. 2001 are based on 2001 results reported on a comparable basis, excluding the impact of goodwill amortization. Discussions of operating results for 2001 and 2000 vs. prior years are already on a comparable basis, as the results for all years include goodwill amortization expense.
Comparison of Operating Results Year Ended December 31 (in millions, except per share) ----------------------------------------------------------------------------2002 vs. 2001 --------------------Comparable 2002 2001 Reported Basis* Gross sales $15,687 $14,973 4.8% 4.8% Net sales $13,566 $12,912 5.1% 5.1% Operating income $ 2,980 $ 2,723 9.4% 8.9% Income before income taxes $ 2,624 $ 2,378 10.3% 9.6% Equity income, net of tax $ 352 $ 254 38.3% 28.2% Net income $ 1,934 $ 1,705 13.4% 11.1% Diluted earnings per share $ 2.20 $ 1.89 16.4% 14.0% * Excludes goodwill amortization in 2001. ----------------------------------------------------------------------------2001 2000 2001 vs. 2000 Gross sales $14,973 $14,534 $439 3.0% Net sales $12,912 $12,499 $413 3.3% Operating income $ 2,723 $ 2,495 $228 9.2% Income before income taxes $ 2,378 $ 2,180 $198 9.1% Equity income, net of tax $ 254 $ 246 $ 8 3.4% Net income $ 1,705 $ 1,552 $153 9.9% Diluted earnings per share $ 1.89 $ 1.69 $.20 11.8% ----------------------------------------------------------------------------2000 1999 2000 vs. 1999 Gross sales $14,534 $13,915 $619 4.5% Net sales $12,499 $11,895 $604 5.1% Operating income $ 2,495 $ 2,302 $193 8.4% Income before income taxes $ 2,180 $ 2,008 $172 8.6% Equity income, net of tax $ 246 $ 179 $ 67 37.7% Net income $ 1,552 $ 1,402 $150 10.7% Diluted earnings per share $ 1.69 $ 1.47 $.22 15.0% -----------------------------------------------------------------------------

Beer Sales Volume

Worldwide Anheuser-Busch brands volume is comprised of domestic volume and international volume. Domestic volume represents Anheuser-Busch brands produced and shipped within the United States. International volume represents exports from the company's U.S. breweries to markets around the world, plus Anheuser-Busch brands produced overseas by company breweries in China and the United Kingdom and under various license and contract-brewing agreements. Budweiser and other Anheuser-Busch beer brands are sold in more than 80 countries worldwide. Total brands sales volume combines worldwide Anheuser-Busch brand volume with the company's pro rata share of volume in international equity partners Grupo Modelo and CCU. Total worldwide beer sales volume results for the last three years are summarized on the following page. 27

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
Worldwide Beer Sales Volume Year Ended December 31 (millions of barrels) ----------------------------------------------------------------------------2002 2001 Change ----------------------------------------------------------------------------Domestic 101.8 99.7 2.1% International 8.0 7.5 5.4% --------------------------------Worldwide A-B brands 109.8 107.2 2.3% International equity partner brands 18.1 17.2 5.3% --------------------------------Total brands 127.9 124.4 2.8% ================================= ----------------------------------------------------------------------------2001 2000 Change ----------------------------------------------------------------------------Domestic 99.7 98.5 1.2% International 7.5 7.1 5.6% --------------------------------Worldwide A-B brands 107.2 105.6 1.5% International equity partner brands 17.2 15.7 9.7%(1) --------------------------------Total brands 124.4 121.3 2.6%(1) ================================= (1) Normalized to exclude incremental volume contributed by the 2001 acquisition of CCU, equity partner brands volume increased 4.9%, and total brands volume increased 2.0%, for 2001 vs. 2000. ----------------------------------------------------------------------------2000 1999 Change ----------------------------------------------------------------------------Domestic 98.5 95.8 2.7% International 7.1 7.1 1.1% --------------------------------Worldwide A-B brands 105.6 102.9 2.6% International equity partner brands 15.7 15.1 3.9%(2) --------------------------------Total brands 121.3 118.0 2.8%(2) ================================= (2) Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, equity partner brands volume increased 6.2%, and total brands volume increased 3.1%, for 2000 vs. 1999. The company sold its investment back to Antarctica in July 1999.

Sales Revenue per barrel reflects the net average sales price the company obtains from wholesaler customers for its products. The higher the net revenue per barrel, the greater the company's gross profit dollars and gross profit margin, with revenue per barrel increases having nearly twice the impact on profits as comparable percent increases in beer volume. Anheuser-Busch strives to obtain price increases that approximate, or are slightly less than, increases in the U.S. Consumer Price Index over time.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
Worldwide Beer Sales Volume Year Ended December 31 (millions of barrels) ----------------------------------------------------------------------------2002 2001 Change ----------------------------------------------------------------------------Domestic 101.8 99.7 2.1% International 8.0 7.5 5.4% --------------------------------Worldwide A-B brands 109.8 107.2 2.3% International equity partner brands 18.1 17.2 5.3% --------------------------------Total brands 127.9 124.4 2.8% ================================= ----------------------------------------------------------------------------2001 2000 Change ----------------------------------------------------------------------------Domestic 99.7 98.5 1.2% International 7.5 7.1 5.6% --------------------------------Worldwide A-B brands 107.2 105.6 1.5% International equity partner brands 17.2 15.7 9.7%(1) --------------------------------Total brands 124.4 121.3 2.6%(1) ================================= (1) Normalized to exclude incremental volume contributed by the 2001 acquisition of CCU, equity partner brands volume increased 4.9%, and total brands volume increased 2.0%, for 2001 vs. 2000. ----------------------------------------------------------------------------2000 1999 Change ----------------------------------------------------------------------------Domestic 98.5 95.8 2.7% International 7.1 7.1 1.1% --------------------------------Worldwide A-B brands 105.6 102.9 2.6% International equity partner brands 15.7 15.1 3.9%(2) --------------------------------Total brands 121.3 118.0 2.8%(2) ================================= (2) Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, equity partner brands volume increased 6.2%, and total brands volume increased 3.1%, for 2000 vs. 1999. The company sold its investment back to Antarctica in July 1999.

Sales Revenue per barrel reflects the net average sales price the company obtains from wholesaler customers for its products. The higher the net revenue per barrel, the greater the company's gross profit dollars and gross profit margin, with revenue per barrel increases having nearly twice the impact on profits as comparable percent increases in beer volume. Anheuser-Busch strives to obtain price increases that approximate, or are slightly less than, increases in the U.S. Consumer Price Index over time. The company's reported domestic sales volume is based on beer sales-to-wholesalers volume. Higher beer salesto-wholesalers volume increases gross profit dollars and gross profit margin. Wholesaler sales-to-retailers volume is a leading indicator of demand for the company's products at the consumer level. Higher wholesaler sales-toretailers require increased beer sales-to-wholesalers to meet ongoing demand. In the fourth quarter of 2001, the company changed its presentation of pass-through finished product delivery costs reimbursed by customers. These items were previously offset for zero impact within cost of sales. The company now presents these items separately as sales and cost of sales. This change had a minor impact on revenue and profit margins growth, and had no impact on cash flow, operating income, net income and earnings per share. For comparability, information for 2000 was recast to conform to this presentation.

Sales -- 2002 vs. 2001 [SALES* (1998-2002 -- COMPARES GROSS SALES AND NET SALES -- GRAPH] *The difference between gross sales and net sales represents beer excise taxes. Anheuser-Busch achieved record gross sales of $15.7 billion and record net sales of $13.6 billion in 2002, representing increases of 4.8%, or $714 million, and 5.1%, or $654 million, respectively, compared to 2001. The increases in gross and net sales were principally due to a $570 million, or 5.7% increase in domestic beer segment net sales resulting from higher domestic revenue per barrel and higher domestic beer sales volume. Revenue per barrel generated $354 million in net sales improvement, while higher beer volume contributed $216 million of the increase. International beer net sales increased $43 million, primarily due to volume growth in China. Packaging segment net sales were up $24 million due to higher soft drink can prices and increased volume. Entertainment segment net sales increased $11 million due to higher ticket prices and higher in-park spending, partially offset by slightly lower attendance. The difference between gross and net sales represents beer excise taxes of $2.12 billion. Domestic beer revenue per barrel grew 3.5% for 2002, reflecting the continued favorable domestic pricing environment, and the introductions of Michelob ULTRA and Bacardi Silver. Revenue per barrel has increased by 2% or more for 17 consecutive quarters. Excluding favorable mix, domestic revenue per barrel increased 2.8% for the year. The increases in revenue per barrel have enhanced gross and operating profit margins, which improved 160 basis points and 80 basis points, respectively, in 2002 vs. the prior year. Consistent with its practice of implementing annual price increases in two phases, the company completed the first stage of its pricing actions for 2003 by raising prices in October 2002 in markets representing almost 45% of the company's domestic volume. These actions have been very successful, as reflected in the company's strong fourth quarter revenue per barrel performance. As planned, Anheuser-Busch is implementing the second stage of 28

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT 2003 pricing actions on approximately 20% of its domestic volume. As in the past, these pricing initiatives are tailored to specific markets, brands and packages. Domestic beer sales-to-wholesalers volume increased 2.1% for the full year vs. 2001, to 101.8 million barrels. This increase was led by Bud family sales, as well as the successful 2002 introductions of Bacardi Silver and Michelob ULTRA. Wholesaler inventories at December 31, 2002 were essentially the same as inventory levels at the end of last year. Wholesaler sales-to-retailers volume was up 1.6% for the year. Worldwide Anheuser-Busch beer sales volume increased 2.3% for the year in 2002, to 109.8 million barrels. Total beer sales volume was 127.9 million barrels in 2002, up 2.8% vs. 2001. International Anheuser-Busch brand beer volume for 2002 was 8.0 million barrels, an increase of 5.4% vs. 2001. During 2002, the company's three largest markets outside the United States -- Canada, China and the United Kingdom -- all experienced volume growth. The company's domestic market share for 2002 (excluding exports) was 49.2%, an increase of 0.5 percentage point compared to 2001 market share of 48.7%. Domestic market share is determined based on estimated U.S. beer industry sales using information provided by the Beer Institute and the U.S. Department of Commerce. The company has led the U.S. brewing industry in sales volume and market share since 1957. Sales -- 2001 vs. 2000 Anheuser-Busch reported gross sales of $15.0 billion and net sales of $12.9 billion in 2001, representing increases of 3.0%, or $439 million, and 3.3%, or $413 million, respectively, compared to 2000. The increases in gross and net sales were principally due to a $429 million, or 4.5% increase in domestic beer segment net sales resulting from higher domestic revenue per barrel and a 1.2% increase in domestic beer sales volume. Revenue per barrel generated $298 million in net sales improvement, while higher beer volume contributed $131 million of the increase. Gross and net sales also benefited from sales increases from the international beer and entertainment segments. The difference between gross and net sales represents beer excise taxes of $2.06 billion. Domestic revenue per barrel grew 3.0% for full year 2001, reflecting a favorable pricing environment and Anheuser-Busch's efforts to balance price increases and market share gains. Gross and operating profit margins increased 100 and 110 basis points for the year, respectively, compared to 2000. Domestic beer sales-to-wholesalers volume increased 1.2% for full year 2001, to 99.7 million barrels, compared

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT 2003 pricing actions on approximately 20% of its domestic volume. As in the past, these pricing initiatives are tailored to specific markets, brands and packages. Domestic beer sales-to-wholesalers volume increased 2.1% for the full year vs. 2001, to 101.8 million barrels. This increase was led by Bud family sales, as well as the successful 2002 introductions of Bacardi Silver and Michelob ULTRA. Wholesaler inventories at December 31, 2002 were essentially the same as inventory levels at the end of last year. Wholesaler sales-to-retailers volume was up 1.6% for the year. Worldwide Anheuser-Busch beer sales volume increased 2.3% for the year in 2002, to 109.8 million barrels. Total beer sales volume was 127.9 million barrels in 2002, up 2.8% vs. 2001. International Anheuser-Busch brand beer volume for 2002 was 8.0 million barrels, an increase of 5.4% vs. 2001. During 2002, the company's three largest markets outside the United States -- Canada, China and the United Kingdom -- all experienced volume growth. The company's domestic market share for 2002 (excluding exports) was 49.2%, an increase of 0.5 percentage point compared to 2001 market share of 48.7%. Domestic market share is determined based on estimated U.S. beer industry sales using information provided by the Beer Institute and the U.S. Department of Commerce. The company has led the U.S. brewing industry in sales volume and market share since 1957. Sales -- 2001 vs. 2000 Anheuser-Busch reported gross sales of $15.0 billion and net sales of $12.9 billion in 2001, representing increases of 3.0%, or $439 million, and 3.3%, or $413 million, respectively, compared to 2000. The increases in gross and net sales were principally due to a $429 million, or 4.5% increase in domestic beer segment net sales resulting from higher domestic revenue per barrel and a 1.2% increase in domestic beer sales volume. Revenue per barrel generated $298 million in net sales improvement, while higher beer volume contributed $131 million of the increase. Gross and net sales also benefited from sales increases from the international beer and entertainment segments. The difference between gross and net sales represents beer excise taxes of $2.06 billion. Domestic revenue per barrel grew 3.0% for full year 2001, reflecting a favorable pricing environment and Anheuser-Busch's efforts to balance price increases and market share gains. Gross and operating profit margins increased 100 and 110 basis points for the year, respectively, compared to 2000. Domestic beer sales-to-wholesalers volume increased 1.2% for full year 2001, to 99.7 million barrels, compared to prior year. Wholesaler sales-to-retailers grew 1.8% for the full year 2001. The Bud family led the increases in sales to both wholesalers and to retailers, with Bud Light continuing its strong sales performance. Worldwide Anheuser-Busch brand sales volume for 2001 grew 1.5%, to 107.2 million barrels, compared to full year 2000. Total brands sales volume was 124.4 million barrels for the year, up 2.6%. International beer volume, excluding Modelo and CCU, grew 5.6% for the full year, to 7.5 million barrels, due primarily to solid volume growth in Canada and China. The company's domestic market share (excluding exports) for 2001 was 48.7%, an increase of 0.2 percentage point over 2000 market share of 48.5%. Sales -- 2000 vs. 1999 Anheuser-Busch achieved gross sales of $14.5 billion and net sales of $12.5 billion in 2000, representing increases of 4.5%, or $619 million, and 5.1%, or $604 million, respectively, compared to 1999. The primary factors responsible for these increases were increased domestic revenue per barrel and higher domestic beer sales volume, which generated a $473 million, or 5.2% net sales increase by the domestic beer segment. Increased domestic revenue per barrel and higher domestic beer sales volume contributed $222 million and $251 million, respectively, to the increase in net sales. Gross and net sales growth were adversely impacted by lower international beer sales resulting from the conversion of the company's 90%-owned Japan joint venture into an exclusive licensing arrangement. The difference between gross and net sales in 2000 is beer excise taxes of $2.03 billion. Domestic revenue per barrel grew 2.5% for the full year 2000 compared to 1999. Domestic beer sales-to-wholesalers increased 2.7%, to 98.5 million barrels, for full year 2000. Domestic volume growth was led by the Bud family, with Bud Light registering double-digit growth. Domestic wholesaler sales-toretailers were up 2.5% for 2000 compared to 1999. Worldwide Anheuser-Busch brand sales volume grew to 105.6 million barrels, up 2.6% for 2000 compared to 1999. Total brands sales volume was 121.3 million barrels, up 2.8% for the year. Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, equity partner volume increased 6.2% for the year, and total brands sales volume increased 3.1%. The company's reported domestic market share (excluding exports) for 2000 was 48.5%, an increase of 1.0

share point over 1999 market share of 47.5%. Industry estimates provided by the Beer Institute for market share calculations were not adjusted for the impact of a wholesaler inventory reduction initiated by Miller Brewing Company in the fourth quarter of 2000. International beer volume (excluding foreign equity investment volume) grew 1.1% in 2000, due primarily to growth in Canada and China, partially offset by lower volume in the United Kingdom. 29

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITIONS Cost of Sales The company continuously strives to drive costs out of its system. Brewery modernizations have yielded longterm savings through reduced beer packaging and shipping costs and reduced maintenance and equipment replacement costs. The company's focused production methods and wholesaler support distribution centers concentrate small-volume brand and package production at three breweries to create production efficiencies, reduce costs and enhance responsiveness to changing consumer brand and package preferences. The company also works to reduce distribution costs through better systemwide coordination with its network of independent wholesalers. Cost of sales was $8.13 billion in 2002, an increase of $192 million, or 2.4% vs. 2001. The increase in 2002 is due primarily to higher domestic beer segment costs, driven by costs associated with higher beer volume of $105 million partially offset by lower brewing materials, aluminum and energy costs. Costs also increased in the international beer segment, due to costs associated with increased beer volume, and in the packaging and entertainment businesses. Gross profit as a percentage of sales was 40.1%, an increase of 160 basis points vs. 2001, reflecting higher domestic beer margins generated by improved pricing and favorable costs. Cost of sales for 2001 was $7.95 billion, an increase of 1.5%, or $121 million compared to 2000. The increase in cost of sales is principally due to increased costs in the domestic beer segment, including costs of $44 million associated with higher domestic beer volume, higher energy costs and increased packaging material costs which reflect the impact of start-up costs related to the company's bottle manufacturing operation in Houston, Texas. Gross profit as a percentage of net sales was 38.4% for 2001, an increase of 100 basis points compared to 2000, principally reflecting higher domestic beer margins. Cost of sales was $7.83 billion for 2000, an increase of 5.2%, or $384 million compared to 1999. The increase in cost of sales is primarily due to increased costs in the domestic beer segment, due primarily to costs of $96 million related to higher domestic beer volume, and increased costs at the company's entertainment, can manufacturing and commodity aluminum recycling businesses. Gross profit as a percentage of net sales was 37.4% for 2000, no change vs. 1999. Marketing, Distribution and Administrative Expenses Advertising and promotional activities for its beer brands and theme park operations are important elements of Anheuser-Busch's strategy, and represent significant annual expenditures. The company employs a variety of national, regional and local media outlets in its promotional efforts, including television, radio, print and outdoor advertising and event sponsorships. Marketing, distribution and administrative expenses of $2.46 billion in 2002 represent an increase of $201 million vs. 2001 expenses, or 8.9%. The increase is due to higher domestic beer marketing costs for the Bud and Michelob families, introductory costs and ongoing support for Michelob ULTRA and Bacardi Silver, increased distribution costs due to the acquisition of a beer wholesaler in California, higher litigation costs and a $20 million contribution to the company's charitable foundation. Marketing, distribution and administrative expenses for 2001 were $2.26 billion, an increase of 3.7%, or $81 million vs. 2000. The increase in these expenses in 2001 was principally due to higher domestic beer marketing costs, higher distribution costs related to the acquisition of a wholesaler in California and higher administrative costs. Marketing, distribution and administrative expenses for 2000 were $2.17 billion, an increase of 1.3%, or $28 million vs. 1999. The increase is due to higher marketing expenses for the domestic beer segment, higher onetime marketing costs for the entertainment segment related to the opening of the Discovery Cove park and higher general and administrative costs, significantly offset by lower international beer marketing expenses in Japan due to converting the company's joint venture to an exclusive licensing agreement. Operating Income

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITIONS Cost of Sales The company continuously strives to drive costs out of its system. Brewery modernizations have yielded longterm savings through reduced beer packaging and shipping costs and reduced maintenance and equipment replacement costs. The company's focused production methods and wholesaler support distribution centers concentrate small-volume brand and package production at three breweries to create production efficiencies, reduce costs and enhance responsiveness to changing consumer brand and package preferences. The company also works to reduce distribution costs through better systemwide coordination with its network of independent wholesalers. Cost of sales was $8.13 billion in 2002, an increase of $192 million, or 2.4% vs. 2001. The increase in 2002 is due primarily to higher domestic beer segment costs, driven by costs associated with higher beer volume of $105 million partially offset by lower brewing materials, aluminum and energy costs. Costs also increased in the international beer segment, due to costs associated with increased beer volume, and in the packaging and entertainment businesses. Gross profit as a percentage of sales was 40.1%, an increase of 160 basis points vs. 2001, reflecting higher domestic beer margins generated by improved pricing and favorable costs. Cost of sales for 2001 was $7.95 billion, an increase of 1.5%, or $121 million compared to 2000. The increase in cost of sales is principally due to increased costs in the domestic beer segment, including costs of $44 million associated with higher domestic beer volume, higher energy costs and increased packaging material costs which reflect the impact of start-up costs related to the company's bottle manufacturing operation in Houston, Texas. Gross profit as a percentage of net sales was 38.4% for 2001, an increase of 100 basis points compared to 2000, principally reflecting higher domestic beer margins. Cost of sales was $7.83 billion for 2000, an increase of 5.2%, or $384 million compared to 1999. The increase in cost of sales is primarily due to increased costs in the domestic beer segment, due primarily to costs of $96 million related to higher domestic beer volume, and increased costs at the company's entertainment, can manufacturing and commodity aluminum recycling businesses. Gross profit as a percentage of net sales was 37.4% for 2000, no change vs. 1999. Marketing, Distribution and Administrative Expenses Advertising and promotional activities for its beer brands and theme park operations are important elements of Anheuser-Busch's strategy, and represent significant annual expenditures. The company employs a variety of national, regional and local media outlets in its promotional efforts, including television, radio, print and outdoor advertising and event sponsorships. Marketing, distribution and administrative expenses of $2.46 billion in 2002 represent an increase of $201 million vs. 2001 expenses, or 8.9%. The increase is due to higher domestic beer marketing costs for the Bud and Michelob families, introductory costs and ongoing support for Michelob ULTRA and Bacardi Silver, increased distribution costs due to the acquisition of a beer wholesaler in California, higher litigation costs and a $20 million contribution to the company's charitable foundation. Marketing, distribution and administrative expenses for 2001 were $2.26 billion, an increase of 3.7%, or $81 million vs. 2000. The increase in these expenses in 2001 was principally due to higher domestic beer marketing costs, higher distribution costs related to the acquisition of a wholesaler in California and higher administrative costs. Marketing, distribution and administrative expenses for 2000 were $2.17 billion, an increase of 1.3%, or $28 million vs. 1999. The increase is due to higher marketing expenses for the domestic beer segment, higher onetime marketing costs for the entertainment segment related to the opening of the Discovery Cove park and higher general and administrative costs, significantly offset by lower international beer marketing expenses in Japan due to converting the company's joint venture to an exclusive licensing agreement. Operating Income Operating income represents the measure of the company's financial performance before net interest cost, other nonoperating items and equity income. Operating income was $2.98 billion in 2002, an increase of $244 million, or 8.9%, vs. 2001 operating income. In 2001, the company had operating income of $2.72 billion, representing a 9.2%, or $228 million, increase over 2000 operating income of $2.49 billion. Operating income in 2000 increased $193 million, or 8.4% vs. 1999. Operating margin for 2002 was 22.0%, an increase of 80 basis points vs. 2001. Operating margin in 2001 was 21.1%, a 110 basis point increase over 2000 margin of 20.0%, which increased 60 basis points vs. 1999. Excluding the impact of the $17.8 million gain on the sale of SeaWorld Cleveland recorded in the first quarter

2001, operating margin for 2002 and 2001 increased 90 and 100 basis points, respectively. Net Interest Cost Net interest cost (interest expense less interest income) was $367.4 million for 2002, $360.1 million for 2001 and $347.1 million for 2000, representing increases of 2.0%, 3.7% and 14.4%, respectively, compared to prior years. These increases primarily result from higher 30

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT average outstanding debt balances compared to prior years. The impact of higher debt balances was partially offset by lower interest rates throughout 2002 and 2001. Average interest rates increased in 2000. See the Liquidity and Capital Resources section of this discussion for additional information regarding changes in the company's debt portfolio. Interest Capitalized Interest capitalized was $17.7 million in 2002, $26.9 million in 2001 and $33.3 million in 2000. The amount of interest capitalized fluctuates depending on construction-in-progress balances, which are impacted by the amount and timing of capital spending, the timing of project completion dates and by market interest rates. Capital spending declined in 2002 and interest rates have generally declined throughout 2002 and 2001. Other Income/Expense, Net Other income/expense, net includes earnings from the company's limited partnership investments in beer wholesalers, in addition to other items of a nonoperating nature that do not have a material impact on the company's consolidated results of operations, either individually or in total. The company had net other expense of $6.4 million in 2002, $12.2 million in 2001 and $1.0 million in 2000. Income Before Income Taxes [INCOME BEFORE INCOME TAXES GRAPH (1998-2002)] Income before income taxes was $2.62 billion in 2002, an increase of $231 million, or 9.6%, vs. 2001. Income before income taxes was $2.38 billion in 2001 and $2.18 billion in 2000, representing increases of $198 million, or 9.1%, and $172 million, or 8.6%, respectively, vs. prior years. Excluding the impact of the gain on the SeaWorld Cleveland sale in 2001, which better reflects ongoing operations, pretax income increased 10.4% in 2002 and 8.3% in 2001. 2002 vs. 2001 Income before income taxes improved for all the company's major business segments in 2002. Domestic beer pretax income for the year was up 9.3%, to $2.92 billion, reflecting higher revenue per barrel and increased beer volume. International beer segment pretax income increased 37% for 2002, primarily due to volume and profit growth in China. Packaging segment pretax profits were up 42%, primarily due to higher soft drink can prices and volume, along with a profit contribution from the company's bottle manufacturing operation in 2002 compared to a loss in the 2001 start-up year. Entertainment segment pretax profits for the year were up 8% compared to 2001, excluding the $17.8 million gain on the sale of the company's SeaWorld Cleveland theme park in 2001. 2001 vs. 2000 Domestic beer income before income taxes for 2001 was $2.67 billion, an increase of $185 million, or 7.5% vs. 2000. This increase is due to higher revenue per barrel and increased beer sales volume. Pretax profit for international beer increased 86% for 2001 due to volume gains in China and Canada, along with contributions from the United Kingdom and Ireland. Income before income taxes for the packaging segment was up 6% for the year, reflecting reduced manufacturing costs partially offset by lower soft drink can pricing, and the impact of start-up costs related to the company's bottle manufacturing operation. This comparison excludes an unfavorable adjustment related to the company's label manufacturing business in 2000. Reported pretax results for the packaging segment increased 22% in 2001. Entertainment segment pretax profits for 2001 increased 14% vs. the

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT average outstanding debt balances compared to prior years. The impact of higher debt balances was partially offset by lower interest rates throughout 2002 and 2001. Average interest rates increased in 2000. See the Liquidity and Capital Resources section of this discussion for additional information regarding changes in the company's debt portfolio. Interest Capitalized Interest capitalized was $17.7 million in 2002, $26.9 million in 2001 and $33.3 million in 2000. The amount of interest capitalized fluctuates depending on construction-in-progress balances, which are impacted by the amount and timing of capital spending, the timing of project completion dates and by market interest rates. Capital spending declined in 2002 and interest rates have generally declined throughout 2002 and 2001. Other Income/Expense, Net Other income/expense, net includes earnings from the company's limited partnership investments in beer wholesalers, in addition to other items of a nonoperating nature that do not have a material impact on the company's consolidated results of operations, either individually or in total. The company had net other expense of $6.4 million in 2002, $12.2 million in 2001 and $1.0 million in 2000. Income Before Income Taxes [INCOME BEFORE INCOME TAXES GRAPH (1998-2002)] Income before income taxes was $2.62 billion in 2002, an increase of $231 million, or 9.6%, vs. 2001. Income before income taxes was $2.38 billion in 2001 and $2.18 billion in 2000, representing increases of $198 million, or 9.1%, and $172 million, or 8.6%, respectively, vs. prior years. Excluding the impact of the gain on the SeaWorld Cleveland sale in 2001, which better reflects ongoing operations, pretax income increased 10.4% in 2002 and 8.3% in 2001. 2002 vs. 2001 Income before income taxes improved for all the company's major business segments in 2002. Domestic beer pretax income for the year was up 9.3%, to $2.92 billion, reflecting higher revenue per barrel and increased beer volume. International beer segment pretax income increased 37% for 2002, primarily due to volume and profit growth in China. Packaging segment pretax profits were up 42%, primarily due to higher soft drink can prices and volume, along with a profit contribution from the company's bottle manufacturing operation in 2002 compared to a loss in the 2001 start-up year. Entertainment segment pretax profits for the year were up 8% compared to 2001, excluding the $17.8 million gain on the sale of the company's SeaWorld Cleveland theme park in 2001. 2001 vs. 2000 Domestic beer income before income taxes for 2001 was $2.67 billion, an increase of $185 million, or 7.5% vs. 2000. This increase is due to higher revenue per barrel and increased beer sales volume. Pretax profit for international beer increased 86% for 2001 due to volume gains in China and Canada, along with contributions from the United Kingdom and Ireland. Income before income taxes for the packaging segment was up 6% for the year, reflecting reduced manufacturing costs partially offset by lower soft drink can pricing, and the impact of start-up costs related to the company's bottle manufacturing operation. This comparison excludes an unfavorable adjustment related to the company's label manufacturing business in 2000. Reported pretax results for the packaging segment increased 22% in 2001. Entertainment segment pretax profits for 2001 increased 14% vs. the prior year primarily due to increased attendance, increased in-park spending and a full year of Discovery Cove operations in 2001 vs. a partial year in 2000. These results exclude the impact of SeaWorld Cleveland operating results and related gain on the sale of the park. Including SeaWorld Cleveland, income before income taxes for the segment increased 29%. 2000 vs. 1999 Income before income taxes for domestic beer in 2000 was $2.48 billion, an increase of 9.7%, or $220 million compared to 1999, due to strong revenue per barrel and volume performance. International beer pretax results moved from a loss in 1999 to profit in 2000, and improved $52.6 million due to volume gains in China and the

conversion of a joint venture into a licensing agreement in Japan, which lowered operating costs. Packaging segment pretax income was down 41% for 2000 compared to 1999, reflecting lower conversion pricing on soft drink can sales and an unfavorable $14 million adjustment at the company's label manufacturing business. Excluding the label manufacturing adjustment, packaging segment pretax income was down 32% for the year. Entertainment segment income before income taxes, excluding start-up costs associated with Discovery Cove, which began 31

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION operations in July 2000, was up 7% for 2000 due primarily to attendance growth in Florida. Including Discovery Cove start-up costs, pretax income for the entertainment segment increased 2% for the year. Equity Income, Net of Tax Equity income, net of tax increased 28.2%, to $351.7 million for 2002 vs. 2001. Equity income of $254.4 million in 2001 represents a 3.4% increase compared to 2000 equity income of $246.0 million, which had increased $67.3 million, or 38% vs. 1999. These increases are primarily due to Grupo Modelo's underlying volume and earnings growth. Equity income from Grupo Modelo for 2002 includes a one-time $6.5 million after-tax charge in the third quarter related to the restructuring of Modelo's brewery operations in southeast Mexico. As a result of the restructuring, Modelo should realize improved efficiencies and operating cost savings in the future. Modelo equity income also includes a $17 million one-time deferred income tax benefit due to a gradual 3% reduction in Mexican corporate income tax rates from 35% in 2002 to 32% in 2005. The Mexican government enacted the lower corporate income tax rates in the first quarter of 2002. The Mexican tax rate benefit is largely offset by increased U.S. deferred income taxes, which are included in the company's consolidated income tax provision, resulting in minimal consolidated net income or earnings per share benefit. Excluding the impact of the Modelo tax rate benefit and brewery restructuring charge, equity income on a comparable basis increased 24% in 2002. Net Income The company earned net income of $1.93 billion in 2002, an increase of $193 million, or 11% over 2001. Net income was $1.70 billion in 2001, an increase of 9.9%, vs. 2000 net income of $1.55 billion. Net income for 2000 increased $150 million, or 10.7% compared to 1999. Effective Tax Rate The effective tax rate was 39.7% in 2002, an increase of 100 basis points vs. 2001. The effective tax rate increased in 2002 due to the Modelo deferred tax impact discussed previously and higher foreign taxes, partially offset by the write-off in 2001 of goodwill associated with the sale of SeaWorld Cleveland. The effective tax rates in 2001 and 2000 were 39.0% and 40.1%, respectively. The decrease in 2001 was primarily due to lower foreign taxes partially offset by the write-off of SeaWorld Cleveland goodwill. The effective rate in 2000 was up 100 basis points vs. 1999 due to increased foreign taxes. Diluted Earnings Per Share [DILUTED EARNINGS PER SHARE* GRAPH (1998-2002)] *On a comparable basis, which excludes goodwill amortization, diluted earnings per share for 2001, 2000, 1999 and 1998 would have been $1.93, $1.72, $1.50 and $1.29, respectively. Diluted earnings per share were $2.20 for 2002, an increase of $.27 per share, or 14%, vs. 2001. Diluted earnings per share of $1.89 for 2001 represent an increase of 11.8% over 2000 earnings per share of $1.69, which had increased 15% compared to 1999. Diluted earnings per share benefit from the company's ongoing share repurchase program. The company repurchased 40.7 million common shares in 2002 and 28.2 million shares in both 2001 and 2000. Diluted earnings per share for 2002 include a two-thirds cent negative impact from Modelo's brewery restructuring. Diluted earnings per share for 2001 include a one-half cent benefit from the sale of SeaWorld Cleveland.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION operations in July 2000, was up 7% for 2000 due primarily to attendance growth in Florida. Including Discovery Cove start-up costs, pretax income for the entertainment segment increased 2% for the year. Equity Income, Net of Tax Equity income, net of tax increased 28.2%, to $351.7 million for 2002 vs. 2001. Equity income of $254.4 million in 2001 represents a 3.4% increase compared to 2000 equity income of $246.0 million, which had increased $67.3 million, or 38% vs. 1999. These increases are primarily due to Grupo Modelo's underlying volume and earnings growth. Equity income from Grupo Modelo for 2002 includes a one-time $6.5 million after-tax charge in the third quarter related to the restructuring of Modelo's brewery operations in southeast Mexico. As a result of the restructuring, Modelo should realize improved efficiencies and operating cost savings in the future. Modelo equity income also includes a $17 million one-time deferred income tax benefit due to a gradual 3% reduction in Mexican corporate income tax rates from 35% in 2002 to 32% in 2005. The Mexican government enacted the lower corporate income tax rates in the first quarter of 2002. The Mexican tax rate benefit is largely offset by increased U.S. deferred income taxes, which are included in the company's consolidated income tax provision, resulting in minimal consolidated net income or earnings per share benefit. Excluding the impact of the Modelo tax rate benefit and brewery restructuring charge, equity income on a comparable basis increased 24% in 2002. Net Income The company earned net income of $1.93 billion in 2002, an increase of $193 million, or 11% over 2001. Net income was $1.70 billion in 2001, an increase of 9.9%, vs. 2000 net income of $1.55 billion. Net income for 2000 increased $150 million, or 10.7% compared to 1999. Effective Tax Rate The effective tax rate was 39.7% in 2002, an increase of 100 basis points vs. 2001. The effective tax rate increased in 2002 due to the Modelo deferred tax impact discussed previously and higher foreign taxes, partially offset by the write-off in 2001 of goodwill associated with the sale of SeaWorld Cleveland. The effective tax rates in 2001 and 2000 were 39.0% and 40.1%, respectively. The decrease in 2001 was primarily due to lower foreign taxes partially offset by the write-off of SeaWorld Cleveland goodwill. The effective rate in 2000 was up 100 basis points vs. 1999 due to increased foreign taxes. Diluted Earnings Per Share [DILUTED EARNINGS PER SHARE* GRAPH (1998-2002)] *On a comparable basis, which excludes goodwill amortization, diluted earnings per share for 2001, 2000, 1999 and 1998 would have been $1.93, $1.72, $1.50 and $1.29, respectively. Diluted earnings per share were $2.20 for 2002, an increase of $.27 per share, or 14%, vs. 2001. Diluted earnings per share of $1.89 for 2001 represent an increase of 11.8% over 2000 earnings per share of $1.69, which had increased 15% compared to 1999. Diluted earnings per share benefit from the company's ongoing share repurchase program. The company repurchased 40.7 million common shares in 2002 and 28.2 million shares in both 2001 and 2000. Diluted earnings per share for 2002 include a two-thirds cent negative impact from Modelo's brewery restructuring. Diluted earnings per share for 2001 include a one-half cent benefit from the sale of SeaWorld Cleveland. Employee-Related Costs [EMPLOYEE-RELATED COSTS GRAPH (1998-2002)] Employee-related costs totaled $2.07 billion in 2002, an increase of 4.2% vs. 2001 costs of $1.98 billion. Employee-related costs for 2001 increased 3.6% vs. 2000 costs of $1.92 billion, which increased 2.0% compared to 1999. The changes in employee-related costs primarily reflect normal increases in salaries, wages and benefit levels. Salaries and wages comprise the majority of employee-related costs and totaled $1.63 billion

in 2002, an increase of 1.7% vs. 2001. Salaries and wages totaled $1.61 billion in 2001, an increase of 1.8% compared to 2000 costs of $1.58 billion, which increased 2.6% vs. 1999. The remainder of employee-related costs consists of pension, life insurance, health care benefits and payroll taxes. The company had 23,176 full-time employees at December 31, 2002. Full-time employees numbered 23,432 and 23,725 at the end of 2001 and 2000, respectively. 32

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Taxes In addition to income taxes, the company is significantly impacted by other federal, state and local taxes, including beer excise taxes. Taxes applicable to 2002 operations (not including the many indirect taxes included in materials and services purchased) totaled $3.41 billion, an increase of 5.8% vs. total taxes in 2001 of $3.22 billion, and highlight the burden of taxation on the company and the brewing industry in general. Taxes in 2001 increased 2.8% compared to total taxes in 2000 of $3.13 billion, which increased 3.5% compared to 1999. In the first quarter 2002, the company began presenting U.S. income taxes relating to foreign equity investment dividends in the consolidated income tax provision. The company previously presented these taxes in equity income. This change in presentation has no impact on net income, earnings per share or cash flow. For comparability, prior year information has been recast to conform to the 2002 presentation. Liquidity and Capital Resources Anheuser-Busch's strong financial position allows it to pursue its growth strategies while providing substantial direct returns to shareholders. Accordingly, the company has established well-defined priorities for its available cash: o Reinvest in core businesses to achieve profitable growth. To enhance shareholder value, the company will continue to make investments to improve efficiency and add capacity as needed in its existing operations, and intends to make selected equity investments in leading international brewers in higher-growth markets. o Make substantial cash payments directly to shareholders through consistent dividend growth and the repurchase of common shares. The company has paid cash dividends in each of the last 69 years, and has repurchased approximately 3% of outstanding shares annually for over 10 years. [OPERATING CASH FLOW BEFORE CHANGE IN WORKING CAPITAL GRAPH (1998-2002)] The company considers its ratio of cash flow to total debt to be a key measure of ongoing liquidity, and targets a ratio toward the upper end of the 30% to 40% range in order to maintain its strong credit ratings of A1 and A+, from Moody's and Standard & Poor's, respectively. Based on its specific financial position and risk tolerance, Anheuser-Busch believes a strong Single A rating strikes the best balance between a low cost-of-capital and maintaining adequate financial flexibility. The company's ratio of cash flow to total debt was 39.7% in 2002, 38.8% in 2001 and 41.6% in 2000. Sources and Uses of Cash [RATIO TO CASH FLOW TO TOTAL DEBT GRAPH (1998-2002)] The company's primary source of liquidity is cash provided from operations. Principal uses of cash are capital expenditures, share repurchases, dividends and business investments. The company uses debt financing to lower its overall cost of capital. Information on the company's consolidated cash flows for the years 2002, 2001 and 2000 is presented in the Consolidated Statement of Cash Flows (categorized by operating activities, financing activities and investing activities) and in the business segments information in Note 15. Cash generated by the company's business segments is projected to exceed funding requirements for each segment's anticipated capital expenditures. However, corporate spending on dividend payments and share repurchases, plus possible additional investments in international brewers, will require external financing. The nature, extent and timing of external financing will vary depending upon the company's evaluation of existing market conditions and other economic factors. The company uses its share repurchase program to manage its leverage position and typically operates at a working capital deficit as it manages its cash flows. The company

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Taxes In addition to income taxes, the company is significantly impacted by other federal, state and local taxes, including beer excise taxes. Taxes applicable to 2002 operations (not including the many indirect taxes included in materials and services purchased) totaled $3.41 billion, an increase of 5.8% vs. total taxes in 2001 of $3.22 billion, and highlight the burden of taxation on the company and the brewing industry in general. Taxes in 2001 increased 2.8% compared to total taxes in 2000 of $3.13 billion, which increased 3.5% compared to 1999. In the first quarter 2002, the company began presenting U.S. income taxes relating to foreign equity investment dividends in the consolidated income tax provision. The company previously presented these taxes in equity income. This change in presentation has no impact on net income, earnings per share or cash flow. For comparability, prior year information has been recast to conform to the 2002 presentation. Liquidity and Capital Resources Anheuser-Busch's strong financial position allows it to pursue its growth strategies while providing substantial direct returns to shareholders. Accordingly, the company has established well-defined priorities for its available cash: o Reinvest in core businesses to achieve profitable growth. To enhance shareholder value, the company will continue to make investments to improve efficiency and add capacity as needed in its existing operations, and intends to make selected equity investments in leading international brewers in higher-growth markets. o Make substantial cash payments directly to shareholders through consistent dividend growth and the repurchase of common shares. The company has paid cash dividends in each of the last 69 years, and has repurchased approximately 3% of outstanding shares annually for over 10 years. [OPERATING CASH FLOW BEFORE CHANGE IN WORKING CAPITAL GRAPH (1998-2002)] The company considers its ratio of cash flow to total debt to be a key measure of ongoing liquidity, and targets a ratio toward the upper end of the 30% to 40% range in order to maintain its strong credit ratings of A1 and A+, from Moody's and Standard & Poor's, respectively. Based on its specific financial position and risk tolerance, Anheuser-Busch believes a strong Single A rating strikes the best balance between a low cost-of-capital and maintaining adequate financial flexibility. The company's ratio of cash flow to total debt was 39.7% in 2002, 38.8% in 2001 and 41.6% in 2000. Sources and Uses of Cash [RATIO TO CASH FLOW TO TOTAL DEBT GRAPH (1998-2002)] The company's primary source of liquidity is cash provided from operations. Principal uses of cash are capital expenditures, share repurchases, dividends and business investments. The company uses debt financing to lower its overall cost of capital. Information on the company's consolidated cash flows for the years 2002, 2001 and 2000 is presented in the Consolidated Statement of Cash Flows (categorized by operating activities, financing activities and investing activities) and in the business segments information in Note 15. Cash generated by the company's business segments is projected to exceed funding requirements for each segment's anticipated capital expenditures. However, corporate spending on dividend payments and share repurchases, plus possible additional investments in international brewers, will require external financing. The nature, extent and timing of external financing will vary depending upon the company's evaluation of existing market conditions and other economic factors. The company uses its share repurchase program to manage its leverage position and typically operates at a working capital deficit as it manages its cash flows. The company had working capital deficits of $283.0 million, $186.1 million and $127.8 million at December 31, 2002, 2001 and 2000, respectively. The company made $201 million in accelerated contributions to its pension plans in the fourth quarter 2002. Due to recent stock market declines, projections indicated Anheuser-Busch would have been required to contribute this amount between now and 2005, but chose instead to contribute the entire amount in 2002 in order to enhance the funded status of the plans immediately. Please see Note 8 for additional information. 33

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION The company's fixed charge coverage ratio was 7.6X, 7.0X and 6.7X for the years ended December 31, 2002, 2001 and 2000, respectively. Commitments and Contingencies See Note 12 for details of the company's cash commitments for the next five years. Anheuser-Busch has a long history of paying dividends and expects to continue paying dividends each year. The company has repurchased 2% to 3% of its outstanding common shares for the last several years, and expects to continue to repurchase common shares in the future. However, Anheuser-Busch has no commitments or obligations related to dividends, or for the repurchase or pledging of common shares. The company also has no off-balance-sheet obligations or guarantees and does not use special purpose entities for any transactions. The company's 9% debentures due 2009 and the ESOP debt guarantee that ends in 2004 (both of which are included in debt on the consolidated balance sheet) permit holders to require repayment of the debt prior to its maturity upon a decline in credit rating below investment grade. In the case of the 9% debentures, the credit downgrade must be preceded by a change in control. The total outstanding balance at December 31, 2002 for this debt is $440 million. The company occasionally provides short-term, small-scale loan guarantees for beer wholesalers to assist them in obtaining long-term bank financing. The duration of these guarantees varies. At December 31, 2002, there were no guarantees outstanding. There were $2 million in outstanding guarantees at December 31, 2001. Capital Expenditures [CAPITAL EXPENDITURES/DEPRECIATION & AMORTIZATION GRAPH (1998-2002--compares capital expenditures and depreciation & amortization (in millions))] During the next five years, the company will continue capital expenditure programs designed to take advantage of growth and productivity improvement opportunities for its beer, packaging and entertainment operations. The company has a formal and intensive review procedure for the authorization of capital expenditures. The most important financial measure of acceptability for a discretionary capital project is whether its projected discounted cash flow return on investment exceeds the company's cost of capital. Total capital expenditures amounted to $835 million in 2002, compared to $1.0 billion in 2001. Capital expenditures over the past five years totaled $4.6 billion. The company expects capital expenditures in 2003 in the range of $950 million to $1 billion and is projecting capital spending during the five-year period 2003 - 2007 of approximately $4.5 billion. Share Repurchase The company spent $2.0 billion, $1.2 billion and $987 million to repurchase common shares in 2002, 2001 and 2000, respectively. From an economic perspective, the company's share repurchase program represents an effective cash flow and opportunity cost offset to stock option grants, because the market value increase of repurchased shares directly offsets the increase in the in-the-money value of outstanding options. AnheuserBusch has historically repurchased more shares each year than it has issued under stock option plans, with average net repurchases of 2% to 3% of outstanding shares each year. Additionally, assuming the company borrows each year to repurchase shares, the cash flow benefit the company receives related to exercised stock options and associated tax benefits has historically more than offset the interest cost. See Note 7 for details of common stock activity. Dividends [NET INCOME/DIVIDENDS GRAPH (1998-2002--compares net income and dividends (in millions))] Cash dividends paid to shareholders were $649.5 million in 2002, $614.1 million in 2001 and $571.0 million in 2000. Dividends are paid in the months of March, June, September and December of each year. In the third quarter 2002, effective with the September dividend, the Board of Directors increased the quarterly dividend rate by 8.3%, from $.18 to $.195 per share. This increased annual dividends per share to $.75 in 2002, an 8.7%

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION The company's fixed charge coverage ratio was 7.6X, 7.0X and 6.7X for the years ended December 31, 2002, 2001 and 2000, respectively. Commitments and Contingencies See Note 12 for details of the company's cash commitments for the next five years. Anheuser-Busch has a long history of paying dividends and expects to continue paying dividends each year. The company has repurchased 2% to 3% of its outstanding common shares for the last several years, and expects to continue to repurchase common shares in the future. However, Anheuser-Busch has no commitments or obligations related to dividends, or for the repurchase or pledging of common shares. The company also has no off-balance-sheet obligations or guarantees and does not use special purpose entities for any transactions. The company's 9% debentures due 2009 and the ESOP debt guarantee that ends in 2004 (both of which are included in debt on the consolidated balance sheet) permit holders to require repayment of the debt prior to its maturity upon a decline in credit rating below investment grade. In the case of the 9% debentures, the credit downgrade must be preceded by a change in control. The total outstanding balance at December 31, 2002 for this debt is $440 million. The company occasionally provides short-term, small-scale loan guarantees for beer wholesalers to assist them in obtaining long-term bank financing. The duration of these guarantees varies. At December 31, 2002, there were no guarantees outstanding. There were $2 million in outstanding guarantees at December 31, 2001. Capital Expenditures [CAPITAL EXPENDITURES/DEPRECIATION & AMORTIZATION GRAPH (1998-2002--compares capital expenditures and depreciation & amortization (in millions))] During the next five years, the company will continue capital expenditure programs designed to take advantage of growth and productivity improvement opportunities for its beer, packaging and entertainment operations. The company has a formal and intensive review procedure for the authorization of capital expenditures. The most important financial measure of acceptability for a discretionary capital project is whether its projected discounted cash flow return on investment exceeds the company's cost of capital. Total capital expenditures amounted to $835 million in 2002, compared to $1.0 billion in 2001. Capital expenditures over the past five years totaled $4.6 billion. The company expects capital expenditures in 2003 in the range of $950 million to $1 billion and is projecting capital spending during the five-year period 2003 - 2007 of approximately $4.5 billion. Share Repurchase The company spent $2.0 billion, $1.2 billion and $987 million to repurchase common shares in 2002, 2001 and 2000, respectively. From an economic perspective, the company's share repurchase program represents an effective cash flow and opportunity cost offset to stock option grants, because the market value increase of repurchased shares directly offsets the increase in the in-the-money value of outstanding options. AnheuserBusch has historically repurchased more shares each year than it has issued under stock option plans, with average net repurchases of 2% to 3% of outstanding shares each year. Additionally, assuming the company borrows each year to repurchase shares, the cash flow benefit the company receives related to exercised stock options and associated tax benefits has historically more than offset the interest cost. See Note 7 for details of common stock activity. Dividends [NET INCOME/DIVIDENDS GRAPH (1998-2002--compares net income and dividends (in millions))] Cash dividends paid to shareholders were $649.5 million in 2002, $614.1 million in 2001 and $571.0 million in 2000. Dividends are paid in the months of March, June, September and December of each year. In the third quarter 2002, effective with the September dividend, the Board of Directors increased the quarterly dividend rate by 8.3%, from $.18 to $.195 per share. This increased annual dividends per share to $.75 in 2002, an 8.7%

increase compared with $.69 per share in 2001. In 2001, dividends were $.165 per share for the first two quarters and $.18 per share for the last two quarters, representing an annual increase vs. 2000 of 9.5%. In 2000, dividends were $.15 per share for the first two quarters and $.165 per share for the last two quarters. 34

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Financing Activities The company utilizes Securities and Exchange Commission "shelf" registration statements to provide flexibility and efficiency when obtaining long-term financing. At December 31, 2002, a total of $400 million of debt was available for issuance under an existing registration. The company subsequently issued $200 million in debt in January 2003, leaving it with $200 million available for issuance. The company's net debt balance increased a total of $619.3 million in 2002, compared to a total increase of $621.2 million in 2001. Debt issuances were $1.17 billion and $1.23 billion in 2002 and 2001, respectively, as shown below.
Amount Year Description (millions) Interest Rate (fixed unless noted) ------------------------------------------------------------------------------------2002 Debentures $850.0 $300.0 at 5.95%; $550.0 at 6.5% U.S. Dollar Notes $300.0 4.375% Industrial Revenue Bonds $ 8.8 6.11% weighted average Other, net $ 8.3 Various ------------------------------------------------------------------------------------2001 Debentures $550.0 $250.0 at 6.0%; $300.0 at 6.8% U.S. Dollar Notes $500.0 $250.0 at 6.0%; $200.0 at 5.125%; $50.0 at 5.6% EuroNotes $151.0 $100.0 at 4.51%; $51.0 at 4.6% Industrial Revenue Bonds $ 9.0 6.03% weighted average Other, net $ 24.0 Various -------------------------------------------------------------------------------------

Debt reductions were $547.8 million and $612.8 million in 2002 and 2001, respectively, as shown below.
Amount Year Description (millions) Interest Rate (fixed unless noted) ------------------------------------------------------------------------------------2002 U.S. Dollar Notes $300.0 $200 at 6.75%; $100 at 7.0% Commercial Paper $187.3 1.98% weighted average floating ESOP Note $ 41.9 8.25% Other, net $ 18.6 Various ------------------------------------------------------------------------------------2001 U.S. Dollar Notes $207.5 $200 at 6.9%; $7.5 at 7.44% Commercial Paper $167.0 4.39% weighted average floating Dual-Currency Notes $162.8 4.1% ESOP Note $ 40.0 8.25% Other, net $ 35.5 Various -------------------------------------------------------------------------------------

In addition to long-term debt financing, the company has access to short-term capital markets through the issuance of commercial paper and potential utilization of a $2 billion revolving bank credit agreement that expires June 2005. The credit agreement provides the company with an immediate and continuing source of liquidity. No borrowings have been made under the credit agreement since its inception. See Note 4 for additional information regarding the company's debt portfolio. Common Stock At December 31, 2002, registered common stock shareholders numbered 57,259 compared with 57,347 at the end of 2001. See Note 7 for a summary of common stock activity. The company's common stock is listed on the New York Stock Exchange under the symbol "BUD." The closing price of the company's common stock at December 31, 2002 and 2001 was $48.40 and $45.21, respectively.

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Financing Activities The company utilizes Securities and Exchange Commission "shelf" registration statements to provide flexibility and efficiency when obtaining long-term financing. At December 31, 2002, a total of $400 million of debt was available for issuance under an existing registration. The company subsequently issued $200 million in debt in January 2003, leaving it with $200 million available for issuance. The company's net debt balance increased a total of $619.3 million in 2002, compared to a total increase of $621.2 million in 2001. Debt issuances were $1.17 billion and $1.23 billion in 2002 and 2001, respectively, as shown below.
Amount Year Description (millions) Interest Rate (fixed unless noted) ------------------------------------------------------------------------------------2002 Debentures $850.0 $300.0 at 5.95%; $550.0 at 6.5% U.S. Dollar Notes $300.0 4.375% Industrial Revenue Bonds $ 8.8 6.11% weighted average Other, net $ 8.3 Various ------------------------------------------------------------------------------------2001 Debentures $550.0 $250.0 at 6.0%; $300.0 at 6.8% U.S. Dollar Notes $500.0 $250.0 at 6.0%; $200.0 at 5.125%; $50.0 at 5.6% EuroNotes $151.0 $100.0 at 4.51%; $51.0 at 4.6% Industrial Revenue Bonds $ 9.0 6.03% weighted average Other, net $ 24.0 Various -------------------------------------------------------------------------------------

Debt reductions were $547.8 million and $612.8 million in 2002 and 2001, respectively, as shown below.
Amount Year Description (millions) Interest Rate (fixed unless noted) ------------------------------------------------------------------------------------2002 U.S. Dollar Notes $300.0 $200 at 6.75%; $100 at 7.0% Commercial Paper $187.3 1.98% weighted average floating ESOP Note $ 41.9 8.25% Other, net $ 18.6 Various ------------------------------------------------------------------------------------2001 U.S. Dollar Notes $207.5 $200 at 6.9%; $7.5 at 7.44% Commercial Paper $167.0 4.39% weighted average floating Dual-Currency Notes $162.8 4.1% ESOP Note $ 40.0 8.25% Other, net $ 35.5 Various -------------------------------------------------------------------------------------

In addition to long-term debt financing, the company has access to short-term capital markets through the issuance of commercial paper and potential utilization of a $2 billion revolving bank credit agreement that expires June 2005. The credit agreement provides the company with an immediate and continuing source of liquidity. No borrowings have been made under the credit agreement since its inception. See Note 4 for additional information regarding the company's debt portfolio. Common Stock At December 31, 2002, registered common stock shareholders numbered 57,259 compared with 57,347 at the end of 2001. See Note 7 for a summary of common stock activity. The company's common stock is listed on the New York Stock Exchange under the symbol "BUD." The closing price of the company's common stock at December 31, 2002 and 2001 was $48.40 and $45.21, respectively. Comparative 2002 and 2001 high and low quarterly closing prices for BUD are provided in the following table. Price Range of Anheuser-Busch Common Stock (BUD)
------------------------------------------------------------2002 2001 -------------------------------------------------------------

Quarter High Low High Low First 52.73 45.24 46.46 38.50 Second 53.95 49.10 46.45 38.88 Third 54.08 44.00 44.49 39.75 Fourth 54.97 47.70 46.51 39.70 -------------------------------------------------------------

Critical Accounting Policies The SEC has defined a critical accounting policy as a policy for which there is a choice among alternatives available under U.S. generally accepted accounting principles (GAAP), and for which choosing a legitimate alternative would yield materially different results. Outlined below are accounting polices Anheuser-Busch believes are key to a full understanding of the company's operations and financial results. All the company's accounting policies are in compliance with U.S. GAAP. Revenue Recognition -- The company's revenue recognition policies are simple, straightforward and comply with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." The company recognizes revenue only when title transfers or services have been rendered to unaffiliated customers, based on negotiated arrangements and normal industry practices. As such, alternative recognition and accounting methods are not available to the company. The company does not engage in consignment sales. Equity Method Accounting -- Anheuser-Busch applies the equity method of accounting whenever it can exert significant influence on an investee company, typically 20% to 50% owned investments. Equity accounting involves recognizing the company's pro rata share of the earnings of investee companies in the income statement. Cash is received and recognized only when distributed by the investee company. As an equity investor, Anheuser-Busch does not control the amount or timing of cash distributions by investees. In 2002, AnheuserBusch recognized 35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION equity income of $351.7 million and received cash distributions from investees of $46.7 million. Consolidation of the company's equity investees would not be appropriate because Anheuser-Busch does not have effective control of these entities. Therefore, alternative accounting methods are not available. Derivatives -- The company's use of derivative financial instruments is limited to hedges of either firm commitments or anticipated transactions that expose Anheuser-Busch to cost fluctuations in the ordinary course of business. Company policy expressly prohibits active trading or speculating with derivatives. Accordingly, all the company's derivative holdings are designated as hedges and qualify for hedge accounting under FAS 133, "Accounting for Derivatives and Related Hedging Activity." The only accounting alternative available would be to forego hedge accounting which would ignore the highly effective nature of the company's hedging programs and needlessly introduce volatility into the company's reported earnings. Advertising and Promotional Costs -- Advertising and promotional activities represent significant annual expenditures by the company. Advertising production costs are accumulated and expensed the first time the advertisement is shown, while media and promotional costs are expensed as incurred. Both of these approaches are acceptable under GAAP and the company applies each consistently, based on the nature of the spending. Applying either method exclusively would not materially alter the timing of expense recognition. The company recognized $822 million in advertising and promotional expenses in 2002. Pension Costs -- Anheuser-Busch provides pension plans covering substantially all of its regular employees. The accounting for certain of these plans under FAS 87, "Employer's Accounting for Pensions," requires that the company use three key assumptions when computing estimated annual pension expense. These assumptions are the long-term return on plan assets, the discount rate applied to the projected benefit obligation and the long-term growth rate for salaries. Of the three, only the discount rate is determined by observable market pricing, with the Standard & Poor's or Moody's long-term average corporate bond yield indices being the common benchmarks. The discount rate used to value the company's pension obligation at any year-end is used for expense calculations the next year e.g., the December 31, 2002 rate is used for 2003 expense calculations. For the rates of return on plan assets and salary growth, the company uses estimates based on experience as well as future expectations. Due to the long-term nature of pension liabilities, Anheuser-Busch attempts to choose rates for these assumptions that will have long-term applicability.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION equity income of $351.7 million and received cash distributions from investees of $46.7 million. Consolidation of the company's equity investees would not be appropriate because Anheuser-Busch does not have effective control of these entities. Therefore, alternative accounting methods are not available. Derivatives -- The company's use of derivative financial instruments is limited to hedges of either firm commitments or anticipated transactions that expose Anheuser-Busch to cost fluctuations in the ordinary course of business. Company policy expressly prohibits active trading or speculating with derivatives. Accordingly, all the company's derivative holdings are designated as hedges and qualify for hedge accounting under FAS 133, "Accounting for Derivatives and Related Hedging Activity." The only accounting alternative available would be to forego hedge accounting which would ignore the highly effective nature of the company's hedging programs and needlessly introduce volatility into the company's reported earnings. Advertising and Promotional Costs -- Advertising and promotional activities represent significant annual expenditures by the company. Advertising production costs are accumulated and expensed the first time the advertisement is shown, while media and promotional costs are expensed as incurred. Both of these approaches are acceptable under GAAP and the company applies each consistently, based on the nature of the spending. Applying either method exclusively would not materially alter the timing of expense recognition. The company recognized $822 million in advertising and promotional expenses in 2002. Pension Costs -- Anheuser-Busch provides pension plans covering substantially all of its regular employees. The accounting for certain of these plans under FAS 87, "Employer's Accounting for Pensions," requires that the company use three key assumptions when computing estimated annual pension expense. These assumptions are the long-term return on plan assets, the discount rate applied to the projected benefit obligation and the long-term growth rate for salaries. Of the three, only the discount rate is determined by observable market pricing, with the Standard & Poor's or Moody's long-term average corporate bond yield indices being the common benchmarks. The discount rate used to value the company's pension obligation at any year-end is used for expense calculations the next year e.g., the December 31, 2002 rate is used for 2003 expense calculations. For the rates of return on plan assets and salary growth, the company uses estimates based on experience as well as future expectations. Due to the long-term nature of pension liabilities, Anheuser-Busch attempts to choose rates for these assumptions that will have long-term applicability. Following is a summary of the three key assumptions to be used in determining 2003 annual pension expense, along with the impact on pension expense of a 1% change in each assumed rate. Modification of these assumptions does not impact the company's funding requirements. Please see Note 8 for additional information.
------------------------------------------------------------------------------Assumption 2003 Rate Impact of 1% Change ------------------------------------------------------------------------------Long-term asset return 9.25% +/- $22 million Discount rate 6.75% +/- $14 million Salary growth rate 4.75% +/$9 million -------------------------------------------------------------------------------

Retiree Medical Costs -- Anheuser-Busch provides health care coverage for most of its retirees after achieving certain age and years of service requirements. Under FAS 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," the company is required to estimate the future health care cost inflation rate in order to recognize annual retiree health care cost expense and value the related long-term liabilities on the balance sheet. The company uses health care inflation rates recommended by its actuarial consultants each year. If the assumed rates changed 1% from those used, annual retiree health care expense would change approximately 13%, or $5 million, while the company's retiree health care liability at December 31, 2002 would change approximately 10%, or $48 million. Please see Note 8 for additional information. Risk Management Anheuser-Busch is exposed to foreign currency exchange, interest rate and commodity price risks. These exposures primarily relate to beer sales to foreign customers, purchases from foreign suppliers, royalty receipts from foreign license and contract brewers, acquisition of raw materials from both domestic and foreign suppliers, and changes in interest rates. The company uses derivative financial instruments, including forward exchange

contracts, futures contracts, swaps and purchased options and collars to manage certain of these exposures. Anheuser-Busch has well-established policies and procedures governing the use of derivatives. The company hedges only firm commitments or anticipated transactions in the ordinary course of business and corporate policy prohibits the use of derivatives for speculation, including the sale of freestanding instruments. The company neither holds nor issues financial instruments for trading purposes. Specific hedging strategies used depend on several factors, including the magnitude and volatility of the exposure, cost and availability of appropriate hedging instruments, the anticipated time horizon, commodity basis exposure, opportunity cost and the nature of the underlying hedged item. The company's overall risk management goal is to strike a balance between managing its 36

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT exposure to market volatility while obtaining the most favorable transaction costs possible. Derivatives are either exchange-traded instruments that are highly liquid, or over-the-counter instruments transacted with highly rated financial institutions. No credit loss is anticipated, as the counterparties to over-thecounter instruments generally have long-term credit ratings from Moody's or Standard & Poor's no lower than A1 or A+, respectively. Additionally, counterparty fair value positions favorable to Anheuser-Busch and in excess of certain thresholds are collateralized with cash, U.S. Treasury securities or letters of credit. AnheuserBusch has reciprocal collateralization responsibilities for fair value positions unfavorable to the company and in excess of the same thresholds. At December 31, 2002, the company held $400,000 in counterparty collateral and had none outstanding. The company monitors the effectiveness of its hedging structures, based either on cash offset between changes in the value of the underlying hedged exposure and changes in the fair value of the derivative, or by ongoing correlation between the price of the underlying hedged exposure and the pricing upon which the derivative is based. The fair value of derivatives is the amount the company would pay or receive when terminating any contracts. Following is a sensitivity analysis indicating potential unfavorable changes in the fair value of the company's derivative holdings under certain market movements discussed below. The company uses value-at-risk (VAR) analysis for foreign currency and interest rate derivatives exposures, and sensitivity analysis for long-term debt interest exposure and commodity price exposures. VAR forecasts fair value changes using a statistical model (Monte Carlo simulation method) that incorporates historical correlations among various currencies and interest rates. The VAR model assumes the company could liquidate its currency and interest rate positions in a single day (one-day holding period). The volatility figures provided represent the maximum one-day loss the company could experience on each portfolio for 19 out of every 20 trading days (95% confidence level), based on history. Sensitivity analysis reflects the impact of a hypothetical 10% adverse change in the market price for the company's underlying price exposures.
Estimated Fair Value Volatility at December 31, 2002 (in millions) -----------------------------------------------------------------------------Foreign Currency Risk -- Forwards and Options (VAR) $0.4 Interest Rate Risk -- Interest Rate Swaps (VAR) $0.7

Commodity Price Risk -- Futures, Swaps and Options (Sensitivity) $14.1 ------------------------------------------------------------------------------

The volatility of foreign currencies, interest rates and commodity prices is dependent on many factors that cannot be forecasted with accuracy. Therefore, changes in fair value over time could differ substantially from the illustration. Additionally, the preceding derivatives volatility analysis ignores changes in the value of the underlying hedged transactions. Because the company does not hold or trade derivatives for speculation or profit, it seeks to establish only highly effective hedging relationships and therefore expects offsetting impacts between changes in derivative values and changes in the pricing of the underlying hedged transactions. The company adopted FAS 133, "Accounting for Derivative Instruments and Hedging Activity" on January 1, 2001. FAS 133 requires all derivatives to be reported on the balance sheet at fair value, with changes in fair value recognized either in earnings or equity, depending on the nature of the underlying transaction and how effective the derivative is at offsetting price movements in the underlying exposure. All of the company's existing derivative positions qualified for hedge accounting under FAS 133, and the impact of adoption was not material.

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT exposure to market volatility while obtaining the most favorable transaction costs possible. Derivatives are either exchange-traded instruments that are highly liquid, or over-the-counter instruments transacted with highly rated financial institutions. No credit loss is anticipated, as the counterparties to over-thecounter instruments generally have long-term credit ratings from Moody's or Standard & Poor's no lower than A1 or A+, respectively. Additionally, counterparty fair value positions favorable to Anheuser-Busch and in excess of certain thresholds are collateralized with cash, U.S. Treasury securities or letters of credit. AnheuserBusch has reciprocal collateralization responsibilities for fair value positions unfavorable to the company and in excess of the same thresholds. At December 31, 2002, the company held $400,000 in counterparty collateral and had none outstanding. The company monitors the effectiveness of its hedging structures, based either on cash offset between changes in the value of the underlying hedged exposure and changes in the fair value of the derivative, or by ongoing correlation between the price of the underlying hedged exposure and the pricing upon which the derivative is based. The fair value of derivatives is the amount the company would pay or receive when terminating any contracts. Following is a sensitivity analysis indicating potential unfavorable changes in the fair value of the company's derivative holdings under certain market movements discussed below. The company uses value-at-risk (VAR) analysis for foreign currency and interest rate derivatives exposures, and sensitivity analysis for long-term debt interest exposure and commodity price exposures. VAR forecasts fair value changes using a statistical model (Monte Carlo simulation method) that incorporates historical correlations among various currencies and interest rates. The VAR model assumes the company could liquidate its currency and interest rate positions in a single day (one-day holding period). The volatility figures provided represent the maximum one-day loss the company could experience on each portfolio for 19 out of every 20 trading days (95% confidence level), based on history. Sensitivity analysis reflects the impact of a hypothetical 10% adverse change in the market price for the company's underlying price exposures.
Estimated Fair Value Volatility at December 31, 2002 (in millions) -----------------------------------------------------------------------------Foreign Currency Risk -- Forwards and Options (VAR) $0.4 Interest Rate Risk -- Interest Rate Swaps (VAR) $0.7

Commodity Price Risk -- Futures, Swaps and Options (Sensitivity) $14.1 ------------------------------------------------------------------------------

The volatility of foreign currencies, interest rates and commodity prices is dependent on many factors that cannot be forecasted with accuracy. Therefore, changes in fair value over time could differ substantially from the illustration. Additionally, the preceding derivatives volatility analysis ignores changes in the value of the underlying hedged transactions. Because the company does not hold or trade derivatives for speculation or profit, it seeks to establish only highly effective hedging relationships and therefore expects offsetting impacts between changes in derivative values and changes in the pricing of the underlying hedged transactions. The company adopted FAS 133, "Accounting for Derivative Instruments and Hedging Activity" on January 1, 2001. FAS 133 requires all derivatives to be reported on the balance sheet at fair value, with changes in fair value recognized either in earnings or equity, depending on the nature of the underlying transaction and how effective the derivative is at offsetting price movements in the underlying exposure. All of the company's existing derivative positions qualified for hedge accounting under FAS 133, and the impact of adoption was not material. The company made no substantive changes to its risk management strategy as a result of adopting FAS 133. See Notes 1 and 3 for information regarding derivatives accounting policies and the company's derivatives portfolio. Anheuser-Busch also has interest rate risk related to its debt portfolio, but exposure to interest expense volatility is low because the company predominantly issues fixed-rate debt. At December 31, 2002, fixed-rate debt with an average maturity of 18 years represented 88% of the company's outstanding debt. Assuming the percentage of floating-rate debt at year-end remains constant in 2003, and including the impact of existing fixed-to-floating interest rate swaps, an immediate 100 basis points (1.0 percentage point) increase in interest rates would result in incremental interest expense of approximately $8 million over the course of the full year. Significant Non-U.S. Equity Investments

Grupo Modelo From 1993 to 1998, the company accumulated a 50.2% direct and indirect equity interest in Diblo, S.A. de C.V., the operating subsidiary of Grupo Modelo, S.A. de C.V., Mexico's largest brewer and producer of the Corona brand. Anheuser-Busch's total initial investment in Modelo was $1.6 billion. Anheuser-Busch does not have effective control of either Grupo Modelo or Diblo and, accordingly, the company accounts for its investment on the equity basis. The company has applied the equity method of accounting since its ownership first exceeded 20% in May 1997. 37

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION The economic benefit of the company's Modelo investment can be measured in two ways -- Anheuser-Busch's share in the earnings of Modelo (equity income) and the excess of the fair value of the investment over its cost. The excess of fair value over the company's cost, based on Grupo Modelo's closing stock price on the Mexican stock exchange at December 31, 2002, was $3.6 billion. Although this amount is appropriately not reflected in the company's income statement or balance sheet, it represents economic value to Anheuser-Busch and its shareholders. CCU During the first quarter of 2001, the company purchased a 20% equity interest in Compania Cervecerias Unidas S.A. (CCU), the largest brewer in Chile, for $321 million. Anheuser-Busch had partnered with CCU in Argentina for the six years prior to the CCU investment through the company's equity ownership in CCUArgentina, a CCU subsidiary that is licensed to brew Budweiser for Argentina, Chile, Brazil and other Latin American markets. Tsingtao In October 2002, the company announced the formation of a strategic alliance with Tsingtao Brewery Company, Ltd, the largest brewer in China, and producer of the Tsingtao brand. Anheuser-Busch currently owns a 4.5% equity interest in Tsingtao and under the agreement will invest $182 million in convertible bonds and ultimately increase its economic ownership interest to 27% of Tsingtao over the next seven years. The additional investment is expected to occur in the first half of 2003. Initially, the company will continue to account for its investment on the cost basis as it will own only 9.9% of Tsingtao voting shares and will be unable to exercise significant influence. See Note 2 for additional information on the company's international investments. Other Matters SeaWorld Cleveland In February 2001, the company sold its SeaWorld Cleveland adventure park to Six Flags, Inc. for $110 million in cash, and recognized a pretax gain of $17.8 million in the first quarter 2001. The sale did not include killer whales, dolphins or any rights to the SeaWorld name. The sale had only an insignificant ($.005 per share aftertax) impact on earnings per share growth in 2001. Anheuser-Busch continues to operate and support its remaining U.S. theme parks. Stock Split The company distributed a two-for-one stock split on September 18, 2000. All historical share and per share information in the annual report has been restated to reflect the impact of the stock split. Environmental Issues The company is strongly committed to environmental protection. Its Environmental Management System provides specific guidance for how the environment must be factored into business decisions and mandates special consideration of environmental issues in conjunction with other business issues when any of the company's facilities or business units plan capital projects or changes in processes. Anheuser-Busch also encourages its suppliers to adopt similar environmental management practices and policies. The company is subject to federal, state and local environmental protection laws and regulations and is operating within such laws or is taking action aimed at assuring compliance with such laws and regulations. Compliance with

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION The economic benefit of the company's Modelo investment can be measured in two ways -- Anheuser-Busch's share in the earnings of Modelo (equity income) and the excess of the fair value of the investment over its cost. The excess of fair value over the company's cost, based on Grupo Modelo's closing stock price on the Mexican stock exchange at December 31, 2002, was $3.6 billion. Although this amount is appropriately not reflected in the company's income statement or balance sheet, it represents economic value to Anheuser-Busch and its shareholders. CCU During the first quarter of 2001, the company purchased a 20% equity interest in Compania Cervecerias Unidas S.A. (CCU), the largest brewer in Chile, for $321 million. Anheuser-Busch had partnered with CCU in Argentina for the six years prior to the CCU investment through the company's equity ownership in CCUArgentina, a CCU subsidiary that is licensed to brew Budweiser for Argentina, Chile, Brazil and other Latin American markets. Tsingtao In October 2002, the company announced the formation of a strategic alliance with Tsingtao Brewery Company, Ltd, the largest brewer in China, and producer of the Tsingtao brand. Anheuser-Busch currently owns a 4.5% equity interest in Tsingtao and under the agreement will invest $182 million in convertible bonds and ultimately increase its economic ownership interest to 27% of Tsingtao over the next seven years. The additional investment is expected to occur in the first half of 2003. Initially, the company will continue to account for its investment on the cost basis as it will own only 9.9% of Tsingtao voting shares and will be unable to exercise significant influence. See Note 2 for additional information on the company's international investments. Other Matters SeaWorld Cleveland In February 2001, the company sold its SeaWorld Cleveland adventure park to Six Flags, Inc. for $110 million in cash, and recognized a pretax gain of $17.8 million in the first quarter 2001. The sale did not include killer whales, dolphins or any rights to the SeaWorld name. The sale had only an insignificant ($.005 per share aftertax) impact on earnings per share growth in 2001. Anheuser-Busch continues to operate and support its remaining U.S. theme parks. Stock Split The company distributed a two-for-one stock split on September 18, 2000. All historical share and per share information in the annual report has been restated to reflect the impact of the stock split. Environmental Issues The company is strongly committed to environmental protection. Its Environmental Management System provides specific guidance for how the environment must be factored into business decisions and mandates special consideration of environmental issues in conjunction with other business issues when any of the company's facilities or business units plan capital projects or changes in processes. Anheuser-Busch also encourages its suppliers to adopt similar environmental management practices and policies. The company is subject to federal, state and local environmental protection laws and regulations and is operating within such laws or is taking action aimed at assuring compliance with such laws and regulations. Compliance with these laws and regulations is not expected to materially affect the company's competitive position. It is the opinion of management that potential costs, either individually or in the aggregate, related to any Environmental Protection Agency designated cleanup sites for which Anheuser-Busch has been identified as a Potentially Responsible Party will not materially affect the company's financial position, results of operations or liquidity. Internet Access to Anheuser-Busch Financial Documents The company provides copies of its annual reports on Forms 10-K, quarterly reports on Forms 10-Q, other reports on Forms 8-K, earnings press releases and proxy statements free of charge on its Internet website at www.anheuser-busch.com. 38

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Management's Responsibility for Financial Statements The management of Anheuser-Busch Companies is responsible for the preparation and presentation of the financial statements and other financial information included in this annual report. Management is also responsible for the reasonableness of estimates and judgments inherent in the preparation of the financial statements. These statements are prepared in accordance with accounting principles generally accepted in the United States. It is management's responsibility to ensure the company maintains accounting and reporting systems, supported by a system of internal accounting controls, designed to provide reasonable assurance as to the integrity of the underlying financial records and the protection of assets. These systems include written policies and procedures, selection and training of qualified personnel, organizational segregation of duties and a program of internal reviews and appropriate follow-up. Management believes the company's systems are adequate to provide reasonable assurances that assets are safeguarded against loss from unauthorized use or disposition and financial records are reliable for preparing financial statements. During 2002, the company's internal auditors, in conjunction with PricewaterhouseCoopers LLP, the company's independent accountants, performed a comprehensive review of the adequacy of the company's internal accounting controls system. Based on that comprehensive review, it is management's opinion that the company has an effective system of internal accounting controls. The Board of Directors is responsible for ensuring the independence and qualifications of Audit Committee members under applicable New York Stock Exchange guidelines. The Audit Committee of the Board of Directors, which consists of five nonmanagement directors, oversees the company's financial reporting and internal controls systems and meets with management, the independent accountants and internal auditors periodically to review auditing and financial reporting matters. The Audit Committee is solely responsible for the selection and retention of the company's independent accountants, subject to shareholder approval. The Audit Committee held five meetings during 2002. Its report for 2002 can be found in the company's proxy statement. PricewaterhouseCoopers LLP is responsible for conducting an independent examination of the company's financial statements in accordance with auditing standards generally accepted in the United States, and expressing an opinion as to whether the financial statements fairly present, in all material respects, the company's financial position, operating results, cash flows and changes in shareholders equity. Report of Independent Accountants 800 Market Street St. Louis, MO 63101 [PricewaterhouseCoopers LOGO] February 3, 2003 To the Shareholders and Board of Directors of Anheuser-Busch Companies, Inc. We have audited the accompanying Consolidated Balance Sheet of Anheuser-Busch Companies, Inc. and its subsidiaries as of December 31, 2002 and 2001, and the related Consolidated Statements of Income, Changes in Shareholders Equity and Cash Flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the Consolidated Financial Statements audited by us present fairly, in all material respects, the financial position of Anheuser-Busch Companies, Inc. and its subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 to the Consolidated Financial Statements, in 2002 the company changed its method of accounting for goodwill to conform to Statement of Financial Accounting Standards No. 142, "Accounting for Goodwill and Other Intangible Assets."

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Management's Responsibility for Financial Statements The management of Anheuser-Busch Companies is responsible for the preparation and presentation of the financial statements and other financial information included in this annual report. Management is also responsible for the reasonableness of estimates and judgments inherent in the preparation of the financial statements. These statements are prepared in accordance with accounting principles generally accepted in the United States. It is management's responsibility to ensure the company maintains accounting and reporting systems, supported by a system of internal accounting controls, designed to provide reasonable assurance as to the integrity of the underlying financial records and the protection of assets. These systems include written policies and procedures, selection and training of qualified personnel, organizational segregation of duties and a program of internal reviews and appropriate follow-up. Management believes the company's systems are adequate to provide reasonable assurances that assets are safeguarded against loss from unauthorized use or disposition and financial records are reliable for preparing financial statements. During 2002, the company's internal auditors, in conjunction with PricewaterhouseCoopers LLP, the company's independent accountants, performed a comprehensive review of the adequacy of the company's internal accounting controls system. Based on that comprehensive review, it is management's opinion that the company has an effective system of internal accounting controls. The Board of Directors is responsible for ensuring the independence and qualifications of Audit Committee members under applicable New York Stock Exchange guidelines. The Audit Committee of the Board of Directors, which consists of five nonmanagement directors, oversees the company's financial reporting and internal controls systems and meets with management, the independent accountants and internal auditors periodically to review auditing and financial reporting matters. The Audit Committee is solely responsible for the selection and retention of the company's independent accountants, subject to shareholder approval. The Audit Committee held five meetings during 2002. Its report for 2002 can be found in the company's proxy statement. PricewaterhouseCoopers LLP is responsible for conducting an independent examination of the company's financial statements in accordance with auditing standards generally accepted in the United States, and expressing an opinion as to whether the financial statements fairly present, in all material respects, the company's financial position, operating results, cash flows and changes in shareholders equity. Report of Independent Accountants 800 Market Street St. Louis, MO 63101 [PricewaterhouseCoopers LOGO] February 3, 2003 To the Shareholders and Board of Directors of Anheuser-Busch Companies, Inc. We have audited the accompanying Consolidated Balance Sheet of Anheuser-Busch Companies, Inc. and its subsidiaries as of December 31, 2002 and 2001, and the related Consolidated Statements of Income, Changes in Shareholders Equity and Cash Flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the Consolidated Financial Statements audited by us present fairly, in all material respects, the financial position of Anheuser-Busch Companies, Inc. and its subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 to the Consolidated Financial Statements, in 2002 the company changed its method of accounting for goodwill to conform to Statement of Financial Accounting Standards No. 142, "Accounting for Goodwill and Other Intangible Assets."

39

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Balance Sheet Anheuser-Busch Companies and Subsidiaries -----------------------------------------------------------------------------------------------------Year Ended December 31 (in millions) 2002 2001 -----------------------------------------------------------------------------------------------------Assets Current Assets: Cash Accounts receivable Inventories: Raw materials and supplies Work in process Finished goods Total inventories Other current assets Total current assets Investments in affiliated companies Other assets Plant and equipment, net Total Assets

$

188.9 630.4

$

162.6 620.9

294.1 352.4 82.8 79.8 186.7 159.6 563.6 591.8 121.8 175.1 --------------------------1,504.7 1,550.4 2,827.9 2,855.0 1,423.0 1,149.5 8,363.9 8,390.0 --------------------------$ 14,119.5 $13,944.9 ===========================

Liabilities and Shareholders Equity Current Liabilities: Accounts payable Accrued salaries, wages and benefits Accrued taxes Other current liabilities Total current liabilities Postretirement benefits Debt Deferred income taxes Other long-term liabilities Shareholders Equity: Common stock, $1.00 par value, authorized 1.6 billion shares Capital in excess of par value Retained earnings Treasury stock, at cost Accumulated other comprehensive income/(loss) ESOP debt guarantee Total Shareholders Equity Commitments and contingencies Total Liabilities and Shareholders Equity

986.6 $ 945.0 287.5 255.8 181.0 161.1 332.6 374.6 --------------------------1,787.7 1,736.5 --------------------------474.2 482.9 --------------------------6,603.2 5,983.9 --------------------------1,345.1 1,367.2 --------------------------857.0 312.9 --------------------------1,453.4 1,445.2 1,024.5 810.2 12,544.0 11,258.2 (11,008.6) (8,981.6) (870.7) (338.3) (90.3) (132.2) --------------------------3,052.3 4,061.5 ------------------------------------------------------$ 14,119.5 $13,944.9 ===========================

$

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

40

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Balance Sheet Anheuser-Busch Companies and Subsidiaries -----------------------------------------------------------------------------------------------------Year Ended December 31 (in millions) 2002 2001 -----------------------------------------------------------------------------------------------------Assets Current Assets: Cash Accounts receivable Inventories: Raw materials and supplies Work in process Finished goods Total inventories Other current assets Total current assets Investments in affiliated companies Other assets Plant and equipment, net Total Assets

$

188.9 630.4

$

162.6 620.9

294.1 352.4 82.8 79.8 186.7 159.6 563.6 591.8 121.8 175.1 --------------------------1,504.7 1,550.4 2,827.9 2,855.0 1,423.0 1,149.5 8,363.9 8,390.0 --------------------------$ 14,119.5 $13,944.9 ===========================

Liabilities and Shareholders Equity Current Liabilities: Accounts payable Accrued salaries, wages and benefits Accrued taxes Other current liabilities Total current liabilities Postretirement benefits Debt Deferred income taxes Other long-term liabilities Shareholders Equity: Common stock, $1.00 par value, authorized 1.6 billion shares Capital in excess of par value Retained earnings Treasury stock, at cost Accumulated other comprehensive income/(loss) ESOP debt guarantee Total Shareholders Equity Commitments and contingencies Total Liabilities and Shareholders Equity

986.6 $ 945.0 287.5 255.8 181.0 161.1 332.6 374.6 --------------------------1,787.7 1,736.5 --------------------------474.2 482.9 --------------------------6,603.2 5,983.9 --------------------------1,345.1 1,367.2 --------------------------857.0 312.9 --------------------------1,453.4 1,445.2 1,024.5 810.2 12,544.0 11,258.2 (11,008.6) (8,981.6) (870.7) (338.3) (90.3) (132.2) --------------------------3,052.3 4,061.5 ------------------------------------------------------$ 14,119.5 $13,944.9 ===========================

$

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

40

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Income

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Income Anheuser-Busch Companies and Subsidiaries --------------------------------------------------------------------------------------------------------Year Ended December 31 (in millions) 2002 2001 --------------------------------------------------------------------------------------------------------Gross sales Excise taxes Net sales Cost of sales Gross profit Marketing, distribution and administrative expenses Gain on sale of business Operating income Interest expense Interest capitalized Interest income Other expense, net Income before income taxes Provision for income taxes Equity income, net of tax Net income $15,686.8 $14,973.0 $1 (2,120.4) (2,061.5) ( -----------------------------13,566.4 12,911.5 1 (8,131.3) (7,950.4) ( -----------------------------5,435.1 4,961.1 (2,455.4) (2,255.9) ( -17.8 -----------------------------2,979.7 2,723.0 (368.7) (361.2) 17.7 26.9 1.3 1.1 (6.4) (12.2) -----------------------------2,623.6 2,377.6 (1,041.5) (927.5) 351.7 254.4 -----------------------------$ 1,933.8 $ 1,704.5 $ ==============================

Earnings per share: Basic Diluted

$ 2.23 $ 1.91 $ ============================== $ 2.20 $ 1.89 $ ==============================

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

41

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Change in Shareholders Equity Anheuser-Busch Companies and Subsidiaries --------------------------------------------------------------------------------------------------------Year Ended December 31 (in millions) 2002 2001 --------------------------------------------------------------------------------------------------------Common Stock, $1.00 Par Value Balance, beginning of period Shares issued under stock plans Two-for-one stock split Balance, end of period

1,445.2 $ 1,441.5 $ 8.2 3.7 --------------------------------$ 1,453.4 $ 1,445.2 $ ===============================

$

Capital in Excess of Par Value Balance, beginning of period Shares issued under stock plans Two-for-one stock split Balance, end of period

810.2 $ 725.3 $ 214.3 84.9 --------------------------------$ 1,024.5 $ 810.2 $ ===============================

$

Retained Earnings Balance, beginning of period Net income

$ 11,258.2 1,933.8

$10,164.4 1,704.5

$

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Change in Shareholders Equity Anheuser-Busch Companies and Subsidiaries --------------------------------------------------------------------------------------------------------Year Ended December 31 (in millions) 2002 2001 --------------------------------------------------------------------------------------------------------Common Stock, $1.00 Par Value Balance, beginning of period Shares issued under stock plans Two-for-one stock split Balance, end of period

1,445.2 $ 1,441.5 $ 8.2 3.7 --------------------------------$ 1,453.4 $ 1,445.2 $ ===============================

$

Capital in Excess of Par Value Balance, beginning of period Shares issued under stock plans Two-for-one stock split Balance, end of period

810.2 $ 725.3 $ 214.3 84.9 --------------------------------$ 1,024.5 $ 810.2 $ ===============================

$

Retained Earnings Balance, beginning of period Net income Common dividends paid (per share: 2002 - $.75; 2001 - $.69; 2000 - $.63) Shares issued under stock plans Balance, end of period

$ 11,258.2 1,933.8

$10,164.4 1,704.5

$

(649.5) (614.1) 1.5 3.4 ------------------------------$ 12,544.0 $11,258.2 $1 ===============================

Treasury Stock Balance, beginning of period Treasury stock acquired Balance, end of period

$ (8,981.6) $(7,817.8) $( (2,027.0) (1,163.8) ------------------------------$(11,008.6) $(8,981.6) $( ===============================

ESOP Debt Guarantee Balance, beginning of period Annual debt service Balance, end of period

(132.2) $ (172.2) $ 41.9 40.0 ------------------------------$ (90.3) $ (132.2) $ ===============================

$

Accumulated Other Comprehensive Income/(Loss) Balance, beginning of period Foreign currency translation gains/(losses) Deferred hedging gains/(losses) Deferred securities valuation gains/(losses) Minimum pension obligation Balance, end of period Total Shareholders Equity

(338.3) $ (212.3) $ (271.8) 44.5 33.0 (38.9) 3.0 -(296.6) (131.6) ------------------------------$ (870.7) $ (338.3) $ =============================== $ 3,052.3 $ 4,061.5 $ ===============================

$

Comprehensive Income Net income Foreign currency translation gains/(losses) Deferred hedging gains/(losses) Deferred securities valuation gains/(losses) Minimum pension obligation adjustment Total Comprehensive Income

1,933.8 $ 1,704.5 $ (271.8) 44.5 33.0 (38.9) 3.0 -(296.6) (131.6) ------------------------------$ 1,401.4 $ 1,578.5 $ ===============================

$

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

42

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Cash Flows Anheuser-Busch Companies and Subsidiaries --------------------------------------------------------------------------------------------------------Year Ended December 31 (in millions, except per share) 2002 2001 --------------------------------------------------------------------------------------------------------Cash Flow from Operating Activities: Net income Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization Deferred income taxes Gain on sale of business Undistributed earnings of affiliated companies Other, net Operating cash flow before change in working capital Decrease in working capital Cash provided by operating activities

$ 1,933.8

$ 1,704.5

$

847.3 834.5 160.2 (15.8) -(17.8) (305.0) (227.6) (12.0) 38.2 -----------------------------2,624.3 2,316.0 140.9 44.6 -----------------------------2,765.2 2,360.6 ------------------------------

Cash Flow from Investing Activities: Capital expenditures New business acquisitions Proceeds from sale of business Cash used for investing activities

(834.7) (1,022.0) ( (19.0) (370.4) -110.0 -----------------------------(853.7) (1,282.4) ( ------------------------------

Cash Flow from Financing Activities: Increase in debt Decrease in debt Dividends paid to shareholders Acquisition of treasury stock Shares issued under stock plans Cash used for financing activities Net increase in cash during the year Cash, beginning of year Cash, end of year

1,151.8 1,213.4 (505.9) (572.8) (649.5) (614.1) (2,027.0) (1,163.8) 145.4 61.8 -----------------------------(1,885.2) (1,075.5) ( -----------------------------26.3 2.7 162.6 159.9 -----------------------------$ 188.9 $ 162.6 $ ==============================

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Principles and Policies This summary of the significant accounting principles and policies of Anheuser-Busch Companies, Inc. and its subsidiaries is provided to assist in evaluating the company's consolidated financial statements. These principles and policies conform to U.S. generally accepted accounting principles. The company is required to make certain estimates in preparing the financial statements which impact the reported amounts of some assets and liabilities and the reported amounts of some revenues and expenses. All estimates are based on the company's best information at the time and made in conformity with U.S. generally accepted accounting principles. Actual results could differ from the estimates. Revenue Recognition

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Consolidated Statement of Cash Flows Anheuser-Busch Companies and Subsidiaries --------------------------------------------------------------------------------------------------------Year Ended December 31 (in millions, except per share) 2002 2001 --------------------------------------------------------------------------------------------------------Cash Flow from Operating Activities: Net income Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization Deferred income taxes Gain on sale of business Undistributed earnings of affiliated companies Other, net Operating cash flow before change in working capital Decrease in working capital Cash provided by operating activities

$ 1,933.8

$ 1,704.5

$

847.3 834.5 160.2 (15.8) -(17.8) (305.0) (227.6) (12.0) 38.2 -----------------------------2,624.3 2,316.0 140.9 44.6 -----------------------------2,765.2 2,360.6 ------------------------------

Cash Flow from Investing Activities: Capital expenditures New business acquisitions Proceeds from sale of business Cash used for investing activities

(834.7) (1,022.0) ( (19.0) (370.4) -110.0 -----------------------------(853.7) (1,282.4) ( ------------------------------

Cash Flow from Financing Activities: Increase in debt Decrease in debt Dividends paid to shareholders Acquisition of treasury stock Shares issued under stock plans Cash used for financing activities Net increase in cash during the year Cash, beginning of year Cash, end of year

1,151.8 1,213.4 (505.9) (572.8) (649.5) (614.1) (2,027.0) (1,163.8) 145.4 61.8 -----------------------------(1,885.2) (1,075.5) ( -----------------------------26.3 2.7 162.6 159.9 -----------------------------$ 188.9 $ 162.6 $ ==============================

The footnotes on pages 44-55 of this report are an integral component of the company's consolidated financial statements.

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Principles and Policies This summary of the significant accounting principles and policies of Anheuser-Busch Companies, Inc. and its subsidiaries is provided to assist in evaluating the company's consolidated financial statements. These principles and policies conform to U.S. generally accepted accounting principles. The company is required to make certain estimates in preparing the financial statements which impact the reported amounts of some assets and liabilities and the reported amounts of some revenues and expenses. All estimates are based on the company's best information at the time and made in conformity with U.S. generally accepted accounting principles. Actual results could differ from the estimates. Revenue Recognition The company's revenue recognition practices comply with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements."

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Principles and Policies This summary of the significant accounting principles and policies of Anheuser-Busch Companies, Inc. and its subsidiaries is provided to assist in evaluating the company's consolidated financial statements. These principles and policies conform to U.S. generally accepted accounting principles. The company is required to make certain estimates in preparing the financial statements which impact the reported amounts of some assets and liabilities and the reported amounts of some revenues and expenses. All estimates are based on the company's best information at the time and made in conformity with U.S. generally accepted accounting principles. Actual results could differ from the estimates. Revenue Recognition The company's revenue recognition practices comply with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." The company recognizes revenue only when legal title transfers or services have been rendered to unaffiliated customers. The company does not engage in consignment sales. For malt beverages shipped to independent wholesalers, title transfers on shipment of product from the company's breweries. For company-owned wholesalers, title transfers when products are delivered to retail customers. The company does not recognize any revenue when independent wholesalers sell the company's products to retail customers. For cans and lids, title transfers on customer receipt. Entertainment operations recognize revenue when customers actually visit or make purchases in a park location, rather than when tickets are sold. Principles of Consolidation The consolidated financial statements include the company and all its subsidiaries. The company consolidates all majority-owned and controlled subsidiaries, uses the equity method of accounting for investments in which the company is able to exercise significant influence, and uses the cost method for all other investments. All significant intercompany transactions have been eliminated. Minority interests in the company's China subsidiary are not material. Cash Cash includes cash in banks, demand deposits and investments in short-term marketable securities with maturities of 90 days or less. Goodwill The company recognizes the excess of the cost of acquired businesses over the fair value of net assets as goodwill. In 2001 and 2000, goodwill was amortized to expense over a period of 40 years. Effective January 1, 2002, Anheuser-Busch adopted FAS No. 142, "Goodwill and Other Intangible Assets," and was required to cease the amortization of goodwill. Goodwill from future acquisitions will continue to be recognized as an asset, but will not be amortized. Under FAS 142, goodwill is subject to ongoing annual impairment reviews. See Note 14 for additional information on goodwill balances and the impact of goodwill amortization in prior years. Foreign Currency Financial statements of foreign subsidiaries where the local currency is the functional currency are translated into U.S. dollars using period-end exchange rates for assets and liabilities and weighted-average exchange rates during the period for revenues and expenses. Cumulative translation adjustments associated with net assets are reported as a separate component of other comprehensive income or loss within shareholders equity. Exchange rate gains or losses related to foreign currency transactions are recognized in the income statement as incurred. Inventories Inventories are valued at the lower of cost or market. Cost is determined under the last-in, first-out method (LIFO) for approximately 72% of total inventories at December 31, 2002 and 75% of inventories at December 31, 2001. Average cost valuation is used for the remainder. Had average cost (which approximates replacement cost) been used for all inventories at December 31, 2002 and 2001, total inventories would have been $96.7 million and $83.1 million higher, respectively.

Delivery Costs Pass-through finished goods delivery costs reimbursed by customers are reported in sales, while an offsetting expense is included in cost of sales. Delivery costs incurred by company-owned beer wholesalers are included in marketing, distribution and administrative expenses. Fixed Assets Fixed assets are carried at original cost less accumulated depreciation and include expenditures for new facilities as well as those that increase the useful lives of existing facilities. The cost of routine maintenance, repairs and minor renewals is expensed as incurred. When fixed assets are retired or sold, the net carrying 44

ANHEUSER-BUSCH COMPANIES 2002 ANNUAL REPORT amount is eliminated, with any gain or loss on disposition recognized in the income statement. Depreciation expense is recognized using the straight-line method based on the following weighted-average useful lives: buildings, 25 years; production machinery and equipment, 15 years; furniture and fixtures, 10 years; computer equipment, 3 years. Advertising and Promotional Costs Advertising production costs are accumulated and expensed the first time the advertisement is shown. Advertising media costs and promotional expenses are expensed as incurred. Total advertising and promotional expenses were $821.7 million, $722.3 million and $728.3 million in 2002, 2001 and 2000, respectively. Income Taxes The provision for income taxes is based on the income and expense amounts reported in the consolidated statement of income. The company utilizes existing federal, state and foreign income tax laws and regulations to reduce current cash taxes payable. Deferred income taxes are recognized for the effect of temporary differences between financial reporting and tax filing in accordance with the requirements of FAS No. 109, "Accounting for Income Taxes." See Note 10 for additional information on the company's provision for income taxes, deferred income tax balances and effective tax rate. Derivatives Anheuser-Busch uses derivatives to mitigate the company's exposure to volatility in commodity prices, interest rates and foreign currency exchange rates. The company hedges only exposures in the ordinary course of business and company policy prohibits holding or trading derivatives strictly for profit. All derivatives held by the company are designated as hedges at inception, with an expectation the derivative will be highly effective in offsetting the associated underlying price exposures. The company requires liquidation of derivative positions whenever it is determined that an underlying transaction will not occur, with related gains or losses recognized in the income statement on liquidation. On January 1, 2001, the company adopted FAS No. 133, "Accounting for Derivative Instruments and Hedging Activity." Under FAS 133, all derivatives are carried on the balance sheet at fair value. Changes in fair value are recognized either in the income statement or deferred in equity, depending on the nature of the underlying exposure being hedged and how effective the derivative is at offsetting price movements in the underlying exposure. All of the company's derivative positions qualified for hedge accounting on adoption of FAS 133. The impact of adoption was not material. Foreign currency denominated firm commitments and interest rate hedges are classified as fair value hedges, while commodity price hedges are cash flow hedges. With the exception of interest rate swaps, derivatives generally have initial terms of less than three years, and all hedged transactions, except long-term debt, are expected to occur within the next three years.

ANHEUSER-BUSCH COMPANIES 2002 ANNUAL REPORT amount is eliminated, with any gain or loss on disposition recognized in the income statement. Depreciation expense is recognized using the straight-line method based on the following weighted-average useful lives: buildings, 25 years; production machinery and equipment, 15 years; furniture and fixtures, 10 years; computer equipment, 3 years. Advertising and Promotional Costs Advertising production costs are accumulated and expensed the first time the advertisement is shown. Advertising media costs and promotional expenses are expensed as incurred. Total advertising and promotional expenses were $821.7 million, $722.3 million and $728.3 million in 2002, 2001 and 2000, respectively. Income Taxes The provision for income taxes is based on the income and expense amounts reported in the consolidated statement of income. The company utilizes existing federal, state and foreign income tax laws and regulations to reduce current cash taxes payable. Deferred income taxes are recognized for the effect of temporary differences between financial reporting and tax filing in accordance with the requirements of FAS No. 109, "Accounting for Income Taxes." See Note 10 for additional information on the company's provision for income taxes, deferred income tax balances and effective tax rate. Derivatives Anheuser-Busch uses derivatives to mitigate the company's exposure to volatility in commodity prices, interest rates and foreign currency exchange rates. The company hedges only exposures in the ordinary course of business and company policy prohibits holding or trading derivatives strictly for profit. All derivatives held by the company are designated as hedges at inception, with an expectation the derivative will be highly effective in offsetting the associated underlying price exposures. The company requires liquidation of derivative positions whenever it is determined that an underlying transaction will not occur, with related gains or losses recognized in the income statement on liquidation. On January 1, 2001, the company adopted FAS No. 133, "Accounting for Derivative Instruments and Hedging Activity." Under FAS 133, all derivatives are carried on the balance sheet at fair value. Changes in fair value are recognized either in the income statement or deferred in equity, depending on the nature of the underlying exposure being hedged and how effective the derivative is at offsetting price movements in the underlying exposure. All of the company's derivative positions qualified for hedge accounting on adoption of FAS 133. The impact of adoption was not material. Foreign currency denominated firm commitments and interest rate hedges are classified as fair value hedges, while commodity price hedges are cash flow hedges. With the exception of interest rate swaps, derivatives generally have initial terms of less than three years, and all hedged transactions, except long-term debt, are expected to occur within the next three years. Option premiums paid to counterparties are initially recorded as assets and subsequently adjusted to fair value each period, with the effective portion of changes in fair value deferred in equity until the underlying transaction occurs. Amounts receivable from, or owed to, derivatives counterparties are included in current assets and current liabilities, respectively. See Note 3 for additional information on derivative values, hedge categories and gains and losses from hedging activity. Securities Valuation For investments accounted for under the cost basis, Anheuser-Busch applies FAS 115, "Accounting for Certain Investments in Debt and Equity Securities." Under FAS 115, the company classifies its cost-based investments as "available for sale," and adjusts the fair values of the securities to their market values each period. Market gains or losses are deferred in equity, and not recognized in the income statement until investments are liquidated. Research and Development Costs and Start-Up Costs Research and development costs and plant start-up costs are expensed as incurred, and are not material for any year presented. 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. Systems development costs not meeting the proper criteria for capitalization, including systems reengineering costs, are expensed as incurred.

Common Stock Split All share and per share amounts have been adjusted to reflect the two-for-one stock split distributed September 18, 2000. Stock-Based Compensation The company accounts for employee stock options using the intrinsic value method in accordance with APB 25, "Accounting for Stock Issued to Employees." The company has recognized no compensation expense related to employee stock options for any year shown, since options are always granted at a price equal to the market price on the day of grant. See Note 5 for information regarding the company's stock option plans. Had employee compensation expense been recognized based on the fair value of the stock options on the grant date under the methodology prescribed by FAS 123, "Accounting for Stock-Based Compensation," the 45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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):
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Reported net income $1,933.8 $1,704.5 $1,551.6 Pro forma stock option expense (93.1) (68.6) (42.8) --------------------------------------Adjusted net income $1,840.7 $1,635.9 $1,508.8 ======================================= Reported basic earnings per share $ 2.23 $ 1.91 $ 1.71 Pro forma stock option expense (.11) (.08) (.05) --------------------------------------Adjusted basic earnings per share $ 2.12 $ 1.83 $ 1.66 ======================================= Reported diluted earnings per share $ 2.20 $ 1.89 $ 1.69 Pro forma stock option expense (.11) (.08) (.05) --------------------------------------Adjusted diluted earnings per share $ 2.09 $ 1.81 $ 1.64 =======================================

The fair value of stock options granted, which is hypothetically amortized to compensation expense over the vesting period to determine the earnings impact illustrated above, has been estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Expected life of option 7 yrs. 7 yrs. 5 yrs. Risk-free interest rate 4.1% 4.9% 5.7% Expected volatility of Anheuser-Busch stock 23% 24% 22% Expected dividend yield on Anheuser-Busch stock 1.6% 1.7% 1.4%

The weighted-average fair value of options granted during 2002, 2001 and 2000 determined using the BlackScholes model is as follows (in millions, except per option):
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Fair value of each option granted $13.86 $12.76 $13.14 Total number of options granted 14.2 13.9 13.0 --------------------------------------Total fair value of options granted $196.8 $177.4 $170.8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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):
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Reported net income $1,933.8 $1,704.5 $1,551.6 Pro forma stock option expense (93.1) (68.6) (42.8) --------------------------------------Adjusted net income $1,840.7 $1,635.9 $1,508.8 ======================================= Reported basic earnings per share $ 2.23 $ 1.91 $ 1.71 Pro forma stock option expense (.11) (.08) (.05) --------------------------------------Adjusted basic earnings per share $ 2.12 $ 1.83 $ 1.66 ======================================= Reported diluted earnings per share $ 2.20 $ 1.89 $ 1.69 Pro forma stock option expense (.11) (.08) (.05) --------------------------------------Adjusted diluted earnings per share $ 2.09 $ 1.81 $ 1.64 =======================================

The fair value of stock options granted, which is hypothetically amortized to compensation expense over the vesting period to determine the earnings impact illustrated above, has been estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Expected life of option 7 yrs. 7 yrs. 5 yrs. Risk-free interest rate 4.1% 4.9% 5.7% Expected volatility of Anheuser-Busch stock 23% 24% 22% Expected dividend yield on Anheuser-Busch stock 1.6% 1.7% 1.4%

The weighted-average fair value of options granted during 2002, 2001 and 2000 determined using the BlackScholes model is as follows (in millions, except per option):
---------------------------------------------------------------------------------2002 2001 2000 ---------------------------------------------------------------------------------Fair value of each option granted $13.86 $12.76 $13.14 Total number of options granted 14.2 13.9 13.0 --------------------------------------Total fair value of options granted $196.8 $177.4 $170.8 =======================================

For FAS 123 disclosure purposes, the weighted-average fair value of stock options granted is required to be based on a theoretical option-pricing model. In actuality, because the company's employee stock options are not traded on an exchange, employees can receive no value nor derive any benefit from holding stock options under these plans without an increase in the market price of Anheuser-Busch stock. Such an increase in stock price benefits all shareholders commensurately. 2. International Equity Investments Grupo Modelo From 1993 to 1998, Anheuser-Busch accumulated a 50.2% direct and indirect equity interest in Diblo, S.A. de C.V. (Diblo), the operating subsidiary of Grupo Modelo, S.A. de C.V. (Modelo), Mexico's largest brewer and

producer of the Corona brand, for a total cost of $1.6 billion. The company holds 9 of 19 positions on Modelo's Board of Directors, with the Controlling Shareholders holding the other 10 positions, and also has membership on the Audit Committee. Anheuser-Busch does not have voting or other effective control of either Diblo or Modelo and consequently accounts for its investments using the equity method. The carrying amount of the Modelo investment was $2,410.6 million and $2,354.1 million, respectively, at December 31, 2002 and 2001. Included in the carrying amount of the Modelo investment is goodwill of $565.6 million and $622.4 million, respectively, at December 31, 2002 and 2001. In 2001 and 2000, goodwill was amortized over a period of 40 years. Effective with the adoption of FAS 142 in January 2002, the company ceased amortization of Modelorelated goodwill. Dividends received from Grupo Modelo in 2002 totaled $40.5 million, compared to $13.5 million in 2001 and $23.9 million in 2000. Dividends are paid in accordance with the investment agreement between the companies, based on a free cash flow formula. Summary financial information for Grupo Modelo as of, and for the two years ended December 31, is presented in the following table (in millions). The amounts represent 100% of Grupo Modelo's consolidated operating results and financial position based on U.S. generally accepted accounting principles, and include the impact of Anheuser-Busch's purchase accounting adjustments.
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Cash $1,042.4 $ 865.4 Other current assets 782.4 771.7 Noncurrent assets 3,892.2 4,104.7 Current liabilities 393.1 341.7 Noncurrent liabilities 368.1 485.6 Gross sales 3,911.6 3,571.5 Net sales 3,659.4 3,334.2 Gross profit 1,999.0 1,787.5 Minority interest 17.3 32.0 Net income 692.0 516.4

Other International Equity Investments During 2001, the company purchased a 20% equity interest in Compania Cervecerias Unidas S.A. (CCU), the largest brewer in Chile, for $321 million. CCU imports and distributes Budweiser in Chile. Anheuser-Busch has Board of Directors representation of two of nine directors, and also has membership on the Audit Committee. The company believes it has the ability to exercise significant influence and therefore accounts for the CCU investment using the equity method. The company received dividends of $6.2 million and $12.3 million from CCU in 2002 and 2001, respectively. 46

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT From 1996 to 1999, Anheuser-Busch accumulated a 10.8% direct equity interest in the Argentine subsidiary of CCU, CCU-Argentina, for a total cost of $23.9 million. CCU-Argentina brews Budweiser under license for Argentina, Chile, Brazil and other Latin American markets. The CCU-Argentina investment was accounted for on the cost basis through 2000. The 20% acquisition of CCU in 2001 increased Anheuser-Busch's direct and indirect interest in CCU-Argentina to 28.6%, and the company began using the equity method of accounting at that time. The difference between income recognized on the cost basis for CCU-Argentina and what would have been recognized had equity accounting been applied in prior years is not material. The carrying value of the CCU investments was $229.6 million and $269.8 million, respectively, at December 31, 2002 and 2001. Included in the carrying amount of the CCU investments is goodwill of $111.1 million and $115.8 million at December 31, 2002 and 2001, respectively. The company ceased amortization of CCUrelated goodwill on adoption of FAS 142 in January 2002. The earnings impact resulting from the unpegging in December 2001 of the Argentine peso from its 1:1 exchange position relative to the U.S. dollar was recognized in 2001, and had an immaterial impact on equity income. Due to ongoing weakness in the Argentina economy, the company subsequently performed an impairment analysis of its CCU investments and found no impairment. In October 2002, the company announced the formation of a strategic alliance with Tsingtao Brewery Company,

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT From 1996 to 1999, Anheuser-Busch accumulated a 10.8% direct equity interest in the Argentine subsidiary of CCU, CCU-Argentina, for a total cost of $23.9 million. CCU-Argentina brews Budweiser under license for Argentina, Chile, Brazil and other Latin American markets. The CCU-Argentina investment was accounted for on the cost basis through 2000. The 20% acquisition of CCU in 2001 increased Anheuser-Busch's direct and indirect interest in CCU-Argentina to 28.6%, and the company began using the equity method of accounting at that time. The difference between income recognized on the cost basis for CCU-Argentina and what would have been recognized had equity accounting been applied in prior years is not material. The carrying value of the CCU investments was $229.6 million and $269.8 million, respectively, at December 31, 2002 and 2001. Included in the carrying amount of the CCU investments is goodwill of $111.1 million and $115.8 million at December 31, 2002 and 2001, respectively. The company ceased amortization of CCUrelated goodwill on adoption of FAS 142 in January 2002. The earnings impact resulting from the unpegging in December 2001 of the Argentine peso from its 1:1 exchange position relative to the U.S. dollar was recognized in 2001, and had an immaterial impact on equity income. Due to ongoing weakness in the Argentina economy, the company subsequently performed an impairment analysis of its CCU investments and found no impairment. In October 2002, the company announced the formation of a strategic alliance with Tsingtao Brewery Company, Ltd., the largest brewer in China, and producer of the Tsingtao brand. Anheuser-Busch currently owns a 4.5% equity interest in Tsingtao and accounts for its investment on the cost basis. Under the final agreement, which is expected to close in the first half of 2003, the company will invest $182 million in Tsingtao common stock and convertible bonds, and then convert the bonds into stock over the next seven years to ultimately increase its economic ownership interest to 27% of Tsingtao. Anheuser-Busch will initially own 9.9% of the voting stock and will continue to account for its investment on the cost basis because it cannot exert significant influence over Tsingtao operations or financial policies. The company anticipates switching to the equity method of accounting when its Tsingtao investment reaches the 20% level and it receives additional representation on the Tsingtao Board of Directors and related Board committees. Effective January 2000, the company converted its joint venture operation in Japan into an exclusive license agreement with Kirin Brewing Company, Ltd. for the production and sale of Budweiser in Japan. The pretax cost of converting to the license agreement was $9 million. 3. Derivatives and Other Financial Instruments Derivatives Under FAS 133, Anheuser-Busch appropriately defers the majority of derivatives gains or losses, for recognition in later periods when the related underlying transactions occur. Derivative gains and losses that relate to any portion of a hedge that is not 100% effective at offsetting price movements in the underlying hedged exposure are recognized in the income statement immediately, and totaled losses of $0.4 million and $0.3 million in 2002 and 2001, respectively. During 2002, the company recognized $1.6 million in gains and $12.4 million in losses from effective hedges which had been deferred in equity as of December 31, 2001. In 2001, the company recognized previously deferred effective gains of $12.2 million and losses of $29.2 million. Accumulated deferred gains and losses as of December 31, 2002 were $5.6 million and $11.5 million, respectively. Deferred losses include $9.5 million of unrecognized option premium costs. The majority of these deferred gains and losses will be recognized in cost of sales in 2003. However, the amounts ultimately recognized may differ, favorably or unfavorably, from those as of December 31, 2002 because many of the company's derivative positions are not yet settled, and therefore remain subject to ongoing market price fluctuations. Anheuser-Busch's primary foreign currency exposures are to transactions and investments denominated in British pounds sterling; euros; Mexican, Chilean and Argentine pesos; Canadian dollars; and Chinese renminbi. Principal hedged commodity exposures are aluminum, rice, corn and natural gas. The primary foreign currency exposures are long, meaning the company generates a surplus of these currencies, while the commodity exposures are short, meaning the company must acquire additional quantities to meet its operating needs. The following table summarizes the notional transaction amounts and fair values for the company's outstanding derivatives, by risk category and instrument type, at December 31, 2002 and 2001 (in millions). Because the company hedges only with derivatives that have high correlation with the underlying transaction pricing, changes in derivatives fair values and the underlying prices are expected to essentially offset. Bracketed figures in the following table indicate current settlement of the derivatives contract would result in a net loss to Anheuser-

Busch, but do not reflect the expected offsetting impact of the underlying hedged transaction. 47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------------------------------------------2002 2001 -----------------------------------------------------------------------------------Notional Fair Notional Fair Amount Value Amount Value -------------------------------------------Foreign Currency: Forwards $ 74.1 $ 0.2 $ 66.5 $ 0.2 Options 94.2 1.2 116.5 2.0 -------------------------------------------168.3 1.4 183.0 2.2 -------------------------------------------Interest Rate: Swaps

401.0 32.8 601.0 11.1 --------------------------------------------

Commodity Price: Swaps Futures/forwards Options

248.9 1.6 154.4 (1.5) 65.8 2.6 61.8 (8.4) 217.7 6.3 352.4 12.1 -------------------------------------------532.4 10.5 568.6 2.2 --------------------------------------------

Total outstanding derivatives

$1,101.7 $44.7 $1,352.6 $15.5 ============================================

Concentration of Credit Risk The company does not have a material concentration of credit risk. Nonderivative Financial Instruments Nonderivative financial instruments included in the balance sheet are cash, accounts receivable, accounts payable and long-term debt. Accounts receivable include allowances for doubtful accounts of $5.6 million and $7.7 million, at December 31, 2002 and 2001, respectively. The fair value of long-term debt, estimated based on future cash flows discounted at interest rates currently available to the company for debt with similar maturities and characteristics, was $7.3 billion and $6.3 billion at December 31, 2002 and 2001, respectively. 4. Debt The company uses Securities and Exchange Commission shelf registrations to maintain debt issuance flexibility and currently has $200 million in registered debt available for issuance. Gains or losses on debt redemptions (either individually or in the aggregate) were not material for any year presented. The fixed interest rates on the company's EuroNotes and 5.6% U.S. dollar notes (total notional value of $401.0 million in both 2002 and 2001), were swapped to LIBOR-based floating rates when issued. The weightedaverage effective interest rates for this debt were 1.75% and 4.15% during 2002 and 2001, respectively. Yearend rates were 1.53% and 2.06%, respectively. The weighted-average interest rates for commercial paper borrowings during 2002 and 2001 were 1.98% and 4.39%, respectively. The company has in place a single, committed revolving credit agreement totaling $2 billion, expiring in June 2005, which supports the company's commercial paper program. At December 31, 2002 and 2001, the company had no outstanding borrowings under the agreement. Annual fees under the agreement were $1.2 million in both 2002 and 2001 and $900,000 in 2000. Commercial paper borrowings classified as long-term are supported on a long-term basis by the $2 billion revolving credit agreement. Any commercial paper borrowings in excess of $2 billion are classified as short-term.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------------------------------------------2002 2001 -----------------------------------------------------------------------------------Notional Fair Notional Fair Amount Value Amount Value -------------------------------------------Foreign Currency: Forwards $ 74.1 $ 0.2 $ 66.5 $ 0.2 Options 94.2 1.2 116.5 2.0 -------------------------------------------168.3 1.4 183.0 2.2 -------------------------------------------Interest Rate: Swaps

401.0 32.8 601.0 11.1 --------------------------------------------

Commodity Price: Swaps Futures/forwards Options

248.9 1.6 154.4 (1.5) 65.8 2.6 61.8 (8.4) 217.7 6.3 352.4 12.1 -------------------------------------------532.4 10.5 568.6 2.2 --------------------------------------------

Total outstanding derivatives

$1,101.7 $44.7 $1,352.6 $15.5 ============================================

Concentration of Credit Risk The company does not have a material concentration of credit risk. Nonderivative Financial Instruments Nonderivative financial instruments included in the balance sheet are cash, accounts receivable, accounts payable and long-term debt. Accounts receivable include allowances for doubtful accounts of $5.6 million and $7.7 million, at December 31, 2002 and 2001, respectively. The fair value of long-term debt, estimated based on future cash flows discounted at interest rates currently available to the company for debt with similar maturities and characteristics, was $7.3 billion and $6.3 billion at December 31, 2002 and 2001, respectively. 4. Debt The company uses Securities and Exchange Commission shelf registrations to maintain debt issuance flexibility and currently has $200 million in registered debt available for issuance. Gains or losses on debt redemptions (either individually or in the aggregate) were not material for any year presented. The fixed interest rates on the company's EuroNotes and 5.6% U.S. dollar notes (total notional value of $401.0 million in both 2002 and 2001), were swapped to LIBOR-based floating rates when issued. The weightedaverage effective interest rates for this debt were 1.75% and 4.15% during 2002 and 2001, respectively. Yearend rates were 1.53% and 2.06%, respectively. The weighted-average interest rates for commercial paper borrowings during 2002 and 2001 were 1.98% and 4.39%, respectively. The company has in place a single, committed revolving credit agreement totaling $2 billion, expiring in June 2005, which supports the company's commercial paper program. At December 31, 2002 and 2001, the company had no outstanding borrowings under the agreement. Annual fees under the agreement were $1.2 million in both 2002 and 2001 and $900,000 in 2000. Commercial paper borrowings classified as long-term are supported on a long-term basis by the $2 billion revolving credit agreement. Any commercial paper borrowings in excess of $2 billion are classified as short-term. The scheduled future maturities on long-term debt for the years 2003 through 2007 are $200 million, $251 million, zero, $420 million and $250 million, respectively. These maturities do not include future maturities of the ESOP debt guaranteed by the company or commercial paper. Debt at December 31 consisted of the following (in millions):

Debt at December 31 consisted of the following (in millions):
---------------------------------------------------------------------------------2002 2001 ---------------------------------------------------------------------------------U.S. dollar notes due 2003 to 2013, interest rates from 4.375% to 7.5% $2,100.0 $2,100.0 U.S. dollar debentures due 2009 to 2043, interest rates from 5.95% to 9.0% 3,150.0 2,300.0 EuroNotes due 2004 to 2006, interest rates from 4.51% to 6.5% 351.0 351.0 Medium-term notes due 2010, interest rate 5.625% 200.0 200.0 Commercial paper, interest rates of 1.24% and 2.3%, respectively, at year-end 412.9 600.2 Industrial revenue bonds, weighted average interest rates of 6.11% and 6.03%, respectively 270.1 261.3 ESOP note guarantee due 2004, interest rate 8.25% 90.3 132.2 Miscellaneous items 48.0 53.1 Unamortized debt discounts (19.1) (13.9) ------------------------Total debt $6,603.2 $5,983.9 =========================

5. Stock Option Plans Under terms of the company's stock option plans, officers, certain other employees and nonemployee directors may be granted options to purchase the company's common stock at a price equal to the market price on the date the option is granted. Options generally vest over three years and have a maximum term of 10 years. At December 31, 2002, 2001 and 2000, a total of 89 million, 98 million and 71 million shares, respectively, were designated for future issuance of common stock under existing stock option plans. The company's stock option plans provide for accelerated exercisability on the occurrence of certain events relating to a change in control, merger, sale of substantially all company assets or complete liquidation of the company. 48

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT The income tax benefit related to the exercise of employee stock options (recognized as a reduction of current taxes payable and an increase in paid-in-capital) was $77.1 million, $26.7 million and $74.4 million for the years ended December 31, 2002, 2001 and 2000, respectively. Presented below is a summary of stock option activity and pricing for the years shown:
-------------------------------------------------------------------------------------Options Wtd. Avg. Options Wtd. Avg. Outstanding Exercise Price Exercisable Exercise Price -------------------------------------------------------------------------------------Balance, Dec. 31, 1999 56,570,550 $23.66 36,166,954 $18.69 Granted 13,005,810 48.68 Exercised (10,153,146) 15.99 Cancelled (252,140) 32.32 ---------------Balance, Dec. 31, 2000 59,171,074 $30.44 36,151,446 $22.53 Granted 13,895,238 42.95 Exercised (3,986,476) 18.29 Cancelled (180,803) 44.39 ---------------Balance, Dec. 31, 2001 Granted Exercised

68,899,033 14,181,841 (8,821,350)

$33.63 49.93 20.15

44,100,568

$27.71

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT The income tax benefit related to the exercise of employee stock options (recognized as a reduction of current taxes payable and an increase in paid-in-capital) was $77.1 million, $26.7 million and $74.4 million for the years ended December 31, 2002, 2001 and 2000, respectively. Presented below is a summary of stock option activity and pricing for the years shown:
-------------------------------------------------------------------------------------Options Wtd. Avg. Options Wtd. Avg. Outstanding Exercise Price Exercisable Exercise Price -------------------------------------------------------------------------------------Balance, Dec. 31, 1999 56,570,550 $23.66 36,166,954 $18.69 Granted 13,005,810 48.68 Exercised (10,153,146) 15.99 Cancelled (252,140) 32.32 ---------------Balance, Dec. 31, 2000 59,171,074 $30.44 36,151,446 $22.53 Granted 13,895,238 42.95 Exercised (3,986,476) 18.29 Cancelled (180,803) 44.39 ---------------Balance, Dec. 31, 2001 Granted Exercised Cancelled

68,899,033 14,181,841 (8,821,350) (146,254) ----------------

$33.63 49.93 20.15 43.61

44,100,568

$27.71

Balance, Dec. 31, 2002

74,113,270 ================

$38.33

47,001,757

$33.09

Included in the figures shown above as of December 31, 2002 are 219,663 outstanding options with a weighted average exercise price of $41.68 per share under the company's stock option plan for nonemployee directors. A total of 354,000 options remain available for issuance under the plan. A description of this plan can be found in the company's proxy statement for the 2003 annual meeting of shareholders under "Approval of the Stock Plan for Nonemployee Directors." Also included above as of December 31, 2002 are 108,997 shares related to the global employee stock purchase plan with a weighted average exercise price of $42.39. A total of 869,669 shares remain available for issuance. A description of this plan can be found in the company's proxy statement. Nonemployee directors may elect to receive their annual retainer in shares of Anheuser-Busch common stock, in lieu of cash. If all nonemployee directors eligible to own the company's common stock elected to receive their annual retainer in shares, the total number of shares issued would be 12,758 based on the closing price for the company's common stock at December 31, 2002. The following tables provide additional information regarding options outstanding and options that were exercisable as of December 31, 2002:
Options Outstanding ---------------------------------------------------------------Range of Wtd. Avg. Wtd. Avg. Prices Number Remaining Life Exercise Price --------------------------------------$10-19 4,300,095 2 yrs $14.73 20-29 19,148,953 5 yrs 25.03 30-39 10,034,619 7 yrs 37.82 40-49 40,531,993 9 yrs 47.21 50-59 97,610 9 yrs 52.50 -------------$10-59 74,113,270 7 yrs $38.33 ============== Options Exercisable ---------------------------------------------------------------Range of Wtd. Avg.

Prices -------$10-19 20-29 30-39 40-49 50-59 $10-59

Number -----4,300,095 19,148,953 9,991,886 13,554,213 6,610 -------------47,001,757 ==============

Exercise Price -------------$14.73 25.03 37.84 46.78 50.85 $33.09

6. Employee Stock Ownership Plans In 1989, the company added Employee Stock Ownership Plans (ESOPs) to its existing Deferred Income Stock Purchase and Savings Plans (401(k) plans). Most regular employees are eligible for participation in the ESOPs. The ESOPs initially borrowed $500 million for a term of 15 years at an interest rate of 8.25% and used the proceeds to buy approximately 45.4 million shares of common stock from the company at market price. The ESOP debt is guaranteed by the company and the shares are being allocated to participants over the 15-year period as contributions are made to the plans. The ESOPs purchased an additional 400,000 shares from the company using proceeds from the sale of spin-off-related Earthgrains shares in 1996. Of this 45.8 million total shares purchased, 42.1 million shares have been allocated to plan participants through December 31, 2002. ESOP cash contributions and income or expense recorded during the year are determined by several factors, including the market price of Anheuser-Busch common stock, number of shares allocated to participants, debt service requirements, dividends on unallocated shares and the company's matching contribution. Over the 15year life of the ESOPs, total expense recognized will equal total cash contributions made by the company for ESOP debt service. 49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ESOP income or expense is allocated to operating expense and interest expense based on the ratio of principal and interest payments on the underlying ESOP debt. Total ESOP income or expense for the three years ended December 31 is presented below (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Operating (income)/expense $13.3 $5.2 $(1.2) Interest (income)/expense 2.7 1.0 (.9) ---------------------------Total ESOP (income)/expense $16.0 $6.2 $(2.1) ============================

Cash contributions are made to the ESOPs in March and September to correspond with debt service requirements. A summary of cash contributions and dividends on unallocated ESOP shares for the three years ended December 31 is presented below (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Cash contributions $6.1 $ 1.3 $ -Dividends 3.7 5.2 6.5

7. Preferred and Common Stock Common Stock Activity Common stock activity for the three years ended December 31 is summarized below (in millions of shares):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ESOP income or expense is allocated to operating expense and interest expense based on the ratio of principal and interest payments on the underlying ESOP debt. Total ESOP income or expense for the three years ended December 31 is presented below (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Operating (income)/expense $13.3 $5.2 $(1.2) Interest (income)/expense 2.7 1.0 (.9) ---------------------------Total ESOP (income)/expense $16.0 $6.2 $(2.1) ============================

Cash contributions are made to the ESOPs in March and September to correspond with debt service requirements. A summary of cash contributions and dividends on unallocated ESOP shares for the three years ended December 31 is presented below (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Cash contributions $6.1 $ 1.3 $ -Dividends 3.7 5.2 6.5

7. Preferred and Common Stock Common Stock Activity Common stock activity for the three years ended December 31 is summarized below (in millions of shares):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Common Stock: Beginning common stock 1,445.2 1,441.5 1,432.2 Shares issued under stock plans 8.2 3.7 9.3 ----------------------------------Common stock 1,453.4 1,445.2 1,441.5 ----------------------------------Treasury Stock: Beginning treasury stock (566.1) (537.9) (510.0) Treasury stock acquired (40.7) (28.2) (28.2) Treasury stock issued --0.3 ----------------------------------Cumulative treasury stock (606.8) (566.1) (537.9) ----------------------------------Net common stock outstanding 846.6 879.1 903.6 ===================================

Stock Repurchase Programs The Board of Directors has approved various resolutions authorizing the company to repurchase shares of its common stock in order to return cash to shareholders and to meet the requirements of the company's various stock purchase and incentive plans. At December 31, 2002, approximately 17 million shares remained available for repurchase under a February 2000 Board authorization totaling 100 million shares. The company repurchased 40.7 million common shares in 2002, and 28.2 million common shares in both 2001 and 2000, for $2,027.0 million, $1,163.8 million and $986.5 million, respectively. Stockholder Rights Plan The Board of Directors adopted in 1985, and extended in 1994, a Stockholder Rights Plan that would permit shareholders to purchase common stock at prices substantially below market value under certain change-incontrol scenarios.

control scenarios. Preferred Stock At December 31, 2002 and 2001, 40 million shares of $1.00 par value preferred stock were authorized and unissued. 8. Retirement Benefits Pension Plans The company has pension plans covering substantially all of its regular employees. Total pension expense for the three years ended December 31 is presented below (in millions). Contributions to multi-employer plans in which the company and its subsidiaries participate are determined in accordance with the provisions of negotiated labor contracts, based on employee hours or weeks worked. Pension expense recognized for multi-employer and defined contribution plans equals cash contributions for all years shown.
----------------------------------------------------------------------------2002 2001 2000 ----------------------------------------------------------------------------Single-employer defined benefit plans $43.5 $12.1 $ 7.3 Multi-employer plans 16.9 16.2 15.5 Defined contribution plans 17.8 20.2 18.5 -------------------------------Total pension expense $78.2 $48.5 $41.3 ================================

Net annual pension expense for single-employer defined benefit plans was comprised of the following for the three years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Service cost (benefits earned during the year) $ 66.7 $ 59.8 $ 59.2 Interest cost on projected benefit obligation 143.6 136.7 125.6 Assumed return on plan assets (194.5) (201.6) (185.2) Amortization of prior service cost and net actuarial losses 27.7 17.2 7.7 --------------------------------Net annual pension expense $ 43.5 $ 12.1 $ 7.3 =================================

The key actuarial assumptions used in determining annual pension expense for single-employer defined benefit plans for the three years ended December 31 follow:
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Discount rate 7.25% 7.5% 7.5% Long-term rate of return on plan assets 9.25% 10.0% 10.0% Weighted average rate of compensation increase 4.75% 4.75% 4.75%

50

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT The following table provides a reconciliation between the funded status of single-employer defined benefit plans and the prepaid pension cost asset on the balance sheet for the two years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT The following table provides a reconciliation between the funded status of single-employer defined benefit plans and the prepaid pension cost asset on the balance sheet for the two years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Funded status -- plan assets (less than)/in excess of projected benefit obligation $(591.9) $ (216.9) Unrecognized net actuarial loss/(gain) 881.6 313.4 Unamortized prior service cost 125.6 135.9 ------------------------Prepaid pension cost $ 415.3 $ 232.4 =========================

The following assumptions were used in determining the funded status of the single-employer defined benefit plans as of December 31:
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Discount rate 6.75% 7.25% Weighted average rate of compensation increase 4.75% 4.75%

The following tables summarize changes in the projected benefit obligation and changes in the fair value of plan assets for single-employer defined benefit plans during the two years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Projected benefit obligation, beginning of year $2,051.3 $1,880.0 Service cost 66.7 59.8 Interest cost 143.6 136.7 Plan amendments 6.7 (0.2) Actuarial loss 210.1 101.1 Benefits paid (154.8) (126.1) ------------------------Projected benefit obligation, end of year $2,323.6 $2,051.3 =========================

-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Fair market value of plan assets, beginning of year $1,834.4 $2,277.1 Actual return on plan assets (174.5) (339.9) Employer contributions 226.6 23.3 Benefits paid (154.8) (126.1) ------------------------Fair market value of plan assets, end of year $1,731.7 $1,834.4 =========================

Pension plan assets consist primarily of corporate equity securities and publicly traded bonds. Recognition of a minimum pension liability is necessary whenever the actuarial present value of accumulated pension benefits exceeds available plan assets. Recording a minimum pension liability adjustment has no impact on the results of operations or cash flow. At December 31, 2002 and 2001, the company recognized minimum pension obligations of $770.4 million and $230.7 million, respectively, for its domestic pension plans and $35.5 million and $36.7 million, respectively,

related to its equity subsidiaries. The adjustments include the recording of intangible assets for unrecognized prior service costs in 2002 and 2001 of $60.0 million and $56.9 million, respectively, and charges to equity in those years of $296.6 million and $131.6 million, respectively (net of U.S. and home country deferred income taxes of $181.9 million and $78.9 million, respectively.) The company enhanced the funded status of its defined benefit pension plans through accelerated contributions of $201 million in late 2002. Postretirement Health Care and Insurance Benefits The company provides certain health care and life insurance benefits to eligible retired employees. Participants must have 10 years of continuous service after reaching age 45 to become eligible for partial retiree health care benefits. Employees become eligible for full retiree health care benefits after achieving specific age and total years of service requirements, based on hire date. Net periodic postretirement benefits expense for company health care and life insurance plans was comprised of the following for the three years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Service cost $ 19.8 $ 18.9 $ 16.8 Interest cost on accumulated postretirement benefits obligation 33.0 30.4 27.7 Amortization of prior service benefit (11.6) (11.6) (11.6) Amortization of actuarial (gains) (3.6) (5.4) (8.6) ---------------------------------Net periodic postretirement benefits expense $ 37.6 $ 32.3 $ 24.3

The following tables summarize changes in the accumulated and total postretirement benefit obligations for all company single-employer defined benefit health care and life insurance plans for the two years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Accumulated postretirement benefits obligation, beginning of year $466.5 $400.0 Service cost 19.8 18.9 Interest cost 33.0 30.4 Actuarial loss 0.8 53.3 Benefits paid (41.6) (36.1) ------------------------Accumulated postretirement benefits obligation, end of year $478.5 $466.5 ========================= -------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Accumulated postretirement benefits obligation $478.5 $466.5 Unrecognized prior service benefits 41.3 52.9 Unrecognized net actuarial gains/(losses) (9.5) (5.1) ------------------------Total postretirement benefits liability $510.3 $514.3 =========================

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2002 and 2001, $36.1 million and $31.4 million of the company's total postretirement benefits liability was classified as current and $474.2 million and $482.9 million was classified as long-term, respectively. Postretirement benefit obligations are not prefunded and there are no assets associated with the plans. The key actuarial assumptions used in determining the accumulated postretirement benefit obligation for the three years ended December 31 are provided in the table below. For actuarial purposes, the initial health care inflation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2002 and 2001, $36.1 million and $31.4 million of the company's total postretirement benefits liability was classified as current and $474.2 million and $482.9 million was classified as long-term, respectively. Postretirement benefit obligations are not prefunded and there are no assets associated with the plans. The key actuarial assumptions used in determining the accumulated postretirement benefit obligation for the three years ended December 31 are provided in the table below. For actuarial purposes, the initial health care inflation rate is assumed to decline ratably to the future rate over the next nine years, and then remain stable thereafter. If the assumed health care cost trend rate changed by 1%, the accumulated postretirement benefit obligation as of December 31, 2002 would change by approximately 10%, with a corresponding change of approximately 13% in net periodic postretirement benefits expense.
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Initial health care inflation rate 11.3% 10.6% 9.1% Future health care inflation rate 5.5% 5.3% 5.4% Discount rate 7.25% 7.75% 8.0%

9. Earnings Per Share of Common Stock Earnings per share are computed by dividing net income by weighted-average common shares outstanding during the period. Basic earnings per share are computed using an unadjusted weighted-average number of shares of common stock. Diluted earnings per share are computed using the weighted-average number of shares of common stock, plus an adjustment for the dilutive effect of unexercised in-the-money stock options. A reconciliation between basic and diluted weighted-average common shares outstanding for the three years ended December 31 follows (millions of shares). There were no adjustments to income available to common shareholders for purposes of calculating earnings per share for any year shown.
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Basic weighted average shares outstanding 866.0 890.1 906.1 Stock option shares 12.9 11.5 13.6 ---------------------------Diluted weighted average shares outstanding 878.9 901.6 919.7 ============================

10. Income Taxes In the first quarter 2002, the company began presenting incremental U.S. income taxes relating to foreign equity investment earnings in the consolidated income tax provision. The company previously presented these taxes in equity income. This change in presentation has no impact on net income, earnings per share or cash flow. For comparability, prior year information has been recast to conform to the 2002 presentation. Following are the components of the provision for income taxes for the three years ended December 31 (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Current tax provision: Federal $ 747.5 $816.0 $706.7 State 128.5 124.2 102.0 Foreign 5.3 3.1 1.4 -----------------------------881.3 943.3 810.1 -----------------------------Deferred tax provision: Federal 141.4 (11.0) 60.9 State 19.0 (2.3) 3.2

Foreign

Total tax provision

(0.2) (2.5) 0.1 -----------------------------160.2 (15.8) 64.2 -----------------------------$1,041.5 $927.5 $874.3 ==============================

The deferred tax provision results from temporary differences between financial reporting and income tax filing for the basis of assets and liabilities, and in the timing of recognition of certain income and expense items. The primary temporary differences relate to depreciation on fixed assets and accrued United States taxes on equity income. The deferred tax provision for 2002 includes the tax impact of the $201 million accelerated pension contribution. The 2001 deferred tax provision includes the impact of reversing a deferred tax liability in conjunction with the sale of SeaWorld Cleveland. The company's deferred tax liabilities and deferred tax assets as of December 31, 2002 and 2001 are summarized by category below (in millions). Deferred tax liabilities result primarily from tax deductions being received prior to expense recognition for financial reporting purposes. Deferred tax assets relate primarily to expenses being recognized for financial reporting purposes that are not yet deductible for tax purposes and minimum pension liabilities.
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Deferred tax liabilities: Fixed assets $1,701.3 $1,648.3 Accrued U.S. taxes on equity earnings 111.1 78.6 Other 343.0 264.9 -----------------------------Total deferred tax liabilities 2,155.4 1,991.8 -----------------------------Deferred tax assets: Minimum pension obligation 248.3 66.0 Postretirement benefits 192.8 194.3 Spare parts & production supplies 67.8 64.0 Compensation-related obligations 63.9 56.3 Accrued liabilities and other 237.5 244.0 -----------------------------Total deferred tax assets 810.3 624.6 -----------------------------Net deferred tax liabilities $1,345.1 $1,367.2 ==============================

52

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT A reconciliation between the U.S. federal statutory tax rate and Anheuser-Busch's effective tax rate for the three years ended December 31 is presented below:
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Federal statutory tax rate 35.0% 35.0% 35.0% State taxes, net of federal benefit 3.6 3.3 3.2 Impact of foreign operations 1.5 0.7 2.2 Other items, net (0.4) -(0.3) -----------------------------Effective tax rate 39.7% 39.0% 40.1% ==============================

11. Supplemental Information Accounts payable include $87.4 million and $92.3 million, respectively, of outstanding checks at December 31,

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT A reconciliation between the U.S. federal statutory tax rate and Anheuser-Busch's effective tax rate for the three years ended December 31 is presented below:
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Federal statutory tax rate 35.0% 35.0% 35.0% State taxes, net of federal benefit 3.6 3.3 3.2 Impact of foreign operations 1.5 0.7 2.2 Other items, net (0.4) -(0.3) -----------------------------Effective tax rate 39.7% 39.0% 40.1% ==============================

11. Supplemental Information Accounts payable include $87.4 million and $92.3 million, respectively, of outstanding checks at December 31, 2002 and 2001. Supplemental cash flow information for the three years ended December 31 is presented below (in millions):
-------------------------------------------------------------------------------2002 2001 2000 -------------------------------------------------------------------------------Cash paid during the year ------------------------Interest, net of interest capitalized $ 343.0 $ 313.1 $ 304.7 Income taxes 788.7 889.8 770.8 Excise taxes 2,119.5 2,052.6 2,042.9 Change in working capital ------------------------(Increase)/decrease in current assets: Accounts receivable $ (9.5) $ (20.5) $ 28.6 Inventories 28.2 16.5 15.5 Other current assets 53.3 4.2 16.4 Increase/(decrease) in current liabilities: Accounts payable 41.6 4.2 8.2 Accrued salaries, wages and benefits 31.7 (20.6) 28.0 Accrued taxes 19.9 33.7 (36.8) Other current liabilities (42.0) 43.5 (32.4) Derivatives fair value adjustment 17.7 (16.4) ------------------------------------Net decrease in working capital $ 140.9 $ 44.6 $ 27.5 ====================================

The components of plant and equipment as of December 31 are summarized below (in millions):
-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Land $ 272.8 $ 272.4 Buildings 4,326.0 4,033.9 Machinery and equipment 10,995.9 10,770.9 Construction in progress 373.2 401.1 ---------------------------15,967.9 15,478.3 Accumulated depreciation (7,604.0) (7,088.3) ---------------------------Net plant and equipment $ 8,363.9 $ 8,390.0 ============================

The components of other assets as of December 31 are summarized below (in millions):

-------------------------------------------------------------------------------2002 2001 -------------------------------------------------------------------------------Investment properties $ 117.6 $ 115.0 Goodwill 348.7 411.3 Deferred charges 956.7 623.2 ---------------------------Total other assets $1,423.0 $1,149.5 ============================

12. Commitments and Contingencies At December 31, 2002, the company had the following cash commitments for the next five years (in millions):
---------------------------------------------------------------------------------------------------2003 2004 2005 2006 2007 ---------------------------------------------------------------------------------------------------Capital expenditures $237 $ -$ -$ -$ -Maturities of long-term debt 200 251 -420 250 Operating leases 34 32 28 23 15 Brewing and packaging materials 300 11 4 -----------------------------------------------------------$771 $294 $ 32 $443 $265 ==========================================================

In January 1997, Maris Distributing Company, Inc., a former Anheuser- Busch wholesaler in Florida, initiated litigation against the company alleging breach of contract and 12 other claims. Anheuser-Busch terminated its distribution agreement with Maris Distributing in March 1997. During the course of litigation, nine claims were resolved in favor of Anheuser-Busch. In August 2001, a jury rendered a verdict against the company in the amount of $50 million on two remaining claims. The court subsequently awarded plaintiffs an additional $22.6 million in accumulated prejudgment interest on the jury award which continues to accrue at an 11% interest rate. Anheuser-Busch continues to believe it acted appropriately in terminating the distribution agreement of Maris Distributing. Both Maris and the company have appealed. Anheuser-Busch is vigorously contesting the judgment and the ultimate outcome cannot presently be predicted. The company's results do not include any expense related to the Maris Distributing judgment or interest for any year shown. The company and certain of its subsidiaries are involved in additional claims and legal proceedings in which monetary damages and other relief are sought. The company is vigorously contesting these claims; however resolution is not expected to occur quickly, and their ultimate outcome cannot presently be predicted. It is the opinion of management that the ultimate resolution of these claims, legal proceedings and other contingencies, either individually or in the aggregate, will not materially affect the company's financial position, results of operations or liquidity. 53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Quarterly Financial Data (unaudited)
Year ended December 31, 2002 ---------------------------------------------------------------------------------------------------Net Gross Net Earnings per Share Sales Profit Income Basic Diluted ---------------------------------------------------------------------------------------------------1st Qtr $ 3,136.6 $1,222.0 $ 456.1 $ .52 $ .51 2nd Qtr 3,626.1 1,506.3 586.5 .67 .66 3rd Qtr 3,706.2 1,601.0 622.0 .72 .71 4th Qtr 3,097.5 1,105.8 269.2 .32 .32 --------------------------------------------------------------Annual $13,566.4 $5,435.1 $1,933.8 $2.23 $2.20 =============================================================== Year ended December 31, 2001

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Quarterly Financial Data (unaudited)
Year ended December 31, 2002 ---------------------------------------------------------------------------------------------------Net Gross Net Earnings per Share Sales Profit Income Basic Diluted ---------------------------------------------------------------------------------------------------1st Qtr $ 3,136.6 $1,222.0 $ 456.1 $ .52 $ .51 2nd Qtr 3,626.1 1,506.3 586.5 .67 .66 3rd Qtr 3,706.2 1,601.0 622.0 .72 .71 4th Qtr 3,097.5 1,105.8 269.2 .32 .32 --------------------------------------------------------------Annual $13,566.4 $5,435.1 $1,933.8 $2.23 $2.20 =============================================================== Year ended December 31, 2001 ---------------------------------------------------------------------------------------------------Net Gross Net Earnings per Share Sales Profit Income Basic Diluted ---------------------------------------------------------------------------------------------------1st Qtr $ 3,044.2 $1,117.3 $ 394.4 $ .44 $ .43 2nd Qtr 3,452.0 1,371.4 523.7 .59 .58 3rd Qtr 3,522.2 1,462.0 558.6 .63 .62 4th Qtr 2,893.1 1,010.4 227.8 .26 .26 --------------------------------------------------------------Annual $12,911.5 $4,961.1 $1,704.5 $1.91 $1.89 ===============================================================

14. Goodwill and Other Intangible Assets Effective January 1, 2002, Anheuser-Busch adopted FAS 142, "Goodwill and Other Intangible Assets." Under FAS 142, goodwill existing as of the adoption date is no longer subject to periodic amortization. In lieu of amortization, goodwill and other intangible assets are now reviewed for impairment at least annually, with ongoing recoverability monitored based on applicable operating unit performance and consideration of significant events or changes in the overall business environment. The company completed a required transitional impairment analysis for FAS 142 adoption purposes in late 2001 and found no impairment related to goodwill or other indefinite-lived intangible assets. A current review of goodwill and other indefinite-lived intangible assets was completed in the fourth quarter of 2002. No impairment was found as a result of the 2002 review. The company had total unamortized goodwill of $1.3 billion at January 1, 2002 related to its consolidated and equity subsidiaries. As required by FAS 142, the company subsequently reclassified $158.9 million of purchased product distribution rights from goodwill into separate intangible asset categories, and also recharacterized as goodwill $7.5 million of miscellaneous intangible assets not qualifying for separate recognition under FAS 142. Product distribution rights consist of exclusive domestic beer distribution territories and certain distribution access rights in the United Kingdom. The domestic rights of $139.6 million at December 31, 2002 are held in perpetuity and are therefore not amortized. The international rights continue to be amortized due to having a contractually limited life, with 26 years remaining, and had an unamortized balance of $20.5 million at December 31, 2002. Amortization expense related to these rights was $750,000 in 2002 and is expected to be consistent in future years. Distribution rights comprise the majority of Anheuser-Busch's nongoodwill intangible assets. FAS 142 does not permit restatement of previously issued financial statements. For comparability, the following table sets forth reported net income and earnings per share for 2001 and 2000, and what net income and earnings per share would have been had FAS 142 been applied for those years.
---------------------------------------------------------------------------2001 2000 ---------------------------------------------------------------------------Reported net income $1,704.5 $1,551.6 Add back goodwill amortization 35.8 31.8 --------------------------Adjusted net income $1,740.3 $1,583.4 ===========================

Reported basic earnings per share Add back goodwill amortization Adjusted basic earnings per share

$1.91 $1.71 .04 .03 --------------------------$1.95 $1.74 =========================== $1.89 $1.69 .04 .03 --------------------------$1.93 $1.72 ===========================

Reported diluted earnings per share Add back goodwill amortization Adjusted diluted earnings per share

15. Business Segments The company categorizes its operations into five business segments: domestic beer, international beer, packaging, entertainment and other. The domestic beer segment consists of the company's United States beer manufacturing and wholesale operations, including vertically integrated rice, barley and hops operations. The international beer segment consists of the company's export sales and overseas beer production and marketing operations, which include company-owned operations in China and the United Kingdom, administration of contract and license brewing arrangements and equity investments. The company sells beer in more than 80 countries, with principal markets in Canada, the United Kingdom, Ireland and China. The company attributes foreign sales based on the domicile of the purchaser of the product. The Packaging segment is comprised of the company's aluminum beverage can and lid manufacturing, aluminum recycling, label printing, crown and closure liner material manufacturing and glass manufacturing operations. Cans and lids are produced for both the company's domestic beer operations and U.S. soft drink industry customers. The Entertainment segment consists of the company's SeaWorld, Busch Gardens and other adventure park operations. In the first quarter of 2001, the company sold its SeaWorld Cleveland theme park to Six Flags, Inc. for $110 million, and recognized a $17.8 million pretax gain ($.005 per share, after-tax), which is shown as a separate line item in the consolidated statement of income. The Other segment is comprised of the company's real estate development, transportation and communications businesses. Summarized on the following page is the company's business segment information for 2002, 2001 and 2000 (in millions). Intersegment sales are fully eliminated in consolidation. No single customer accounted for more than 10% of sales. General corporate expenses, including net interest expense, are not allocated to the operating segments. 54

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
--------------------------------------------------------------------------------------------------------Domestic Int'l 2002 Beer Beer Pkg. Enter. Other --------------------------------------------------------------------------------------------------------Income Statement Information: Gross sales $12,562.9 713.6 2,072.0 858.6 92.8 Net sales - intersegment $ --877.3 -18.1 Net sales - external $10,574.1 582.0 1,194.7 858.6 74.7 Depreciation & amortization $ 615.3 22.1 82.5 84.9 5.5 Income before income taxes $ 2,919.2 76.1 154.0 153.0 (3.4) Equity income, net of tax $ -351.7 ---Net income $ 1,809.9 398.9 95.5 94.9 (2.1) Balance Sheet Information: Total assets $ 7,559.1 3,182.3 830.1 1,298.2 210.2 Equity method investments $ -2,640.1 ---Goodwill $ -715.2 21.9 288.3 -Foreign-located fixed assets $ -225.5 ---Capital expenditures $ 670.7 28.2 31.9 72.2 3.4 --------------------------------------------------------------------------------------------------------Domestic Int'l 2001 Beer Beer Pkg. Enter. Other --------------------------------------------------------------------------------------------------------Income Statement Information: Gross sales $11,950.7 654.1 1,999.8 847.6 108.0 Net sales - intersegment $ --829.0 -25.0

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
--------------------------------------------------------------------------------------------------------Domestic Int'l 2002 Beer Beer Pkg. Enter. Other --------------------------------------------------------------------------------------------------------Income Statement Information: Gross sales $12,562.9 713.6 2,072.0 858.6 92.8 Net sales - intersegment $ --877.3 -18.1 Net sales - external $10,574.1 582.0 1,194.7 858.6 74.7 Depreciation & amortization $ 615.3 22.1 82.5 84.9 5.5 Income before income taxes $ 2,919.2 76.1 154.0 153.0 (3.4) Equity income, net of tax $ -351.7 ---Net income $ 1,809.9 398.9 95.5 94.9 (2.1) Balance Sheet Information: Total assets $ 7,559.1 3,182.3 830.1 1,298.2 210.2 Equity method investments $ -2,640.1 ---Goodwill $ -715.2 21.9 288.3 -Foreign-located fixed assets $ -225.5 ---Capital expenditures $ 670.7 28.2 31.9 72.2 3.4 --------------------------------------------------------------------------------------------------------Domestic Int'l 2001 Beer Beer Pkg. Enter. Other --------------------------------------------------------------------------------------------------------Income Statement Information: Gross sales $11,950.7 654.1 1,999.8 847.6 108.0 Net sales - intersegment $ --829.0 -25.0 Net sales - external $10,003.9 539.4 1,170.8 847.6 83.0 Depreciation & amortization $ 585.7 22.2 85.7 93.5 5.4 Income before income taxes $ 2,667.1 54.4 107.5 147.4 7.3 Equity income, net of tax $ -254.4 ---Net income $ 1,648.8 288.0 66.5 85.6 4.5 Balance Sheet Information: Total assets $ 7,607.5 3,109.0 904.6 1,307.3 210.2 Equity method investments $ -2,623.4 ---Goodwill $ 158.6 788.1 21.9 288.3 -Foreign-located fixed assets $ -209.6 ---Capital expenditures $ 710.0 21.5 108.4 88.8 23.2 --------------------------------------------------------------------------------------------------------Domestic Int'l 2000 Beer Beer Pkg. Enter. Other --------------------------------------------------------------------------------------------------------Income Statement Information: Gross sales $11,506.2 632.1 2,012.2 837.9 122.8 Net sales - intersegment $ --788.4 -26.2 Net sales - external $ 9,575.2 528.3 1,223.8 837.9 96.6 Depreciation & amortization $ 555.0 19.7 87.9 94.3 5.6 Income before income taxes $ 2,481.7 29.2 87.8 114.5 15.5 Equity income, net of tax $ -246.0 ---Net income $ 1,538.7 264.1 54.4 71.0 9.6 Balance Sheet Information: Total assets $ 7,474.3 2,567.9 869.2 1,387.3 206.1 Equity method investments $ -2,024.9 ---Goodwill $ 135.6 638.9 22.7 314.3 -Foreign-located fixed assets $ -213.1 ---Capital expenditures $ 744.7 21.2 125.9 128.6 17.1 --------------------------------------------------------------------------------------------------------Note 1: Corporate assets principally include cash, marketable securities, deferred charges and certain fixed assets. Eliminations impact only gross and intersegment sales. External net sales reflects the reporting of pass-through delivery costs reimbursed by customers of $282.3 million, $266.8 million and $237.6 million in 2002, 2001 and 2000, respectively. Segment results have been updated to present beer sales to overseas United States military installations and certain operating expenses in the Domestic Beer segment. These activities were previously presented within International Beer and Corporate.

55

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
Financial Summary -- Operations Anheuser-Busch Companies and Subsidiaries -----------------------------------------------------------------------------------------------------Year ended December 31 (in millions except per share data) 2002 2001 2000 -----------------------------------------------------------------------------------------------------Barrels of Anheuser-Busch beer brands sold worldwide 109.8 107.2 105.6 =========================================== Gross sales $15,686.8 $14,973.0 $14,534.2 Excise taxes (2,120.4) (2,061.5) (2,034.8) ------------------------------------------Net sales 13,566.4 12,911.5 12,499.4 Cost of sales (8,131.3) (7,950.4) (7,829.9) ------------------------------------------Gross profit 5,435.1 4,961.1 4,669.5 Marketing, distribution and administrative expenses (2,455.4) (2,255.9) (2,174.8) Gain on sale of business (1) -17.8 -Shutdown of Tampa brewery ---Restructuring charge ---------------------------------------------Operating income 2,979.7 2,723.0 2,494.7 Interest expense (368.7) (361.2) (348.2) Interest capitalized 17.7 26.9 33.3 Interest income 1.3 1.1 1.1 Other income/(expense), net (6.4) (12.2) (1.0) ------------------------------------------Income before income taxes 2,623.6 2,377.6 2,179.9 Provision for income taxes (current and deferred) (1,041.5) (927.5) (874.3) Revaluation of deferred tax liability under FAS 109 ---Equity income, net of tax 351.7 254.4 246.0 ------------------------------------------Income from continuing operations 1,933.8 1,704.5 1,551.6 Income/(loss) from discontinued operations ---------------------------------------------Income before accounting changes 1,933.8 1,704.5 1,551.6 Cumulative effect of accounting changes ---------------------------------------------Net income $ 1,933.8 $ 1,704.5 $ 1,551.6 =========================================== Basic earnings per share: Income from continuing operations Income/(loss) from discontinued operations Income before accounting changes Cumulative effect of accounting changes Net income

2.23 $ 1.91 $ 1.71 ---------------------------------------------2.23 1.91 1.71 ---------------------------------------------$ 2.23 $ 1.91 $ 1.71 ===========================================

$

Diluted earnings per share: Income from continuing operations Income/(loss) from discontinued operations Income before accounting changes Cumulative effect of accounting changes Net income Cash dividends paid on common stock Per share Weighted average number of common shares: Basic Diluted

2.20 $ 1.89 $ 1.69 ---------------------------------------------2.20 1.89 1.69 ---------------------------------------------$ 2.20 $ 1.89 $ 1.69 =========================================== $ 649.5 $ 614.1 $ 571.0 .75 .69 .63

$

866.0 878.9

890.1 901.6

906.1 919.7

All share and per share information reflects the two-for-one common stock splits distributed September 18, 2000 and September 12, 1996 and the 1997 adoption of FAS 128, "Earnings per Share." Gross sales, net sales and cost of products and services for all years reflects the change made in 2001 for the presentation of pass-through finished product delivery costs reimbursed by customers. This change had a minor impact on revenue and profit margin growth, and had no impact on cash flow, operating income, net income and earnings per share. All information has been restated to recognize the 1995 divestiture of the

food products segment. Note 1: Sale of SeaWorld Cleveland in 2001; Sale of the St. Louis Cardinals in 1996. Note 2: 1997 change in accounting for deferred systems reengineering costs, net of tax benefit of $6.2 million. 1992 change in accounting for income taxes and other postretirement benefits, net of tax benefit of $186.4 million. 56

ANHEUSER-BUSCH COMPANIES, INC.

2002 ANNUAL REPORT

--------------------------------------------------------------------------------------------------------1999 1998 1997 1996 1995 1994 1993 --------------------------------------------------------------------------------------------------------102.9 99.8 96.6 95.1 90.9 91.3 89.7 ========================================================================================================= $13,914.5 $13,342.5 $12,936.0 $12,721.8 $12,100.1 $11,793.9 $11,232.5 (2,019.6) (1,962.1) (1,766.2) (1,737.8) (1,664.0) (1,679.7) (1,679.8 --------------------------------------------------------------------------------------------------------11,894.9 11,380.4 11,169.8 10,984.0 10,436.1 10,114.2 9,552.7 (7,445.6) (7,297.1) (7,200.5) (7,064.9) (6,886.6) (6,581.0) (6,252.8 --------------------------------------------------------------------------------------------------------4,449.3 4,083.3 3,969.3 3,919.1 3,549.5 3,533.2 3,299.9 (2,147.0) (1,958.0) (1,916.3) (1,890.0) (1,756.6) (1,679.9) (1,612.1 ---54.7 -------(160.0) --------(401.3 --------------------------------------------------------------------------------------------------------2,302.3 2,125.3 2,053.0 2,083.8 (3) 1,632.9 (4) 1,853.3 1,286.5 (307.8) (291.5) (261.2) (232.8) (225.9) (219.3) (205.1 18.2 26.0 42.1 35.5 24.3 21.8 35.2 4.3 5.8 7.9 9.4 9.9 2.6 3.4 (9.4) (13.0) (9.3) (3.0) 20.5 17.6 21.0 --------------------------------------------------------------------------------------------------------2,007.6 1,852.6 1,832.5 1,892.9 (3) 1,461.7 (4) 1,676.0 1,141.0 (784.1) (732.2) (715.2) (736.8) (575.1) (661.5) (452.6 ------(31.2 178.7 112.9 61.9 ------------------------------------------------------------------------------------------------------------1,402.2 1,233.3 1,179.2 1,156.1 (3) 886.6 (4) 1,014.5 657.2 ---33.8 (244.3) 17.6 (62.7 --------------------------------------------------------------------------------------------------------1,402.2 1,233.3 1,179.2 1,189.9 642.3 1,032.1 594.5 --(10.0)(2) ------------------------------------------------------------------------------------------------------------$ 1,402.2 $ 1,233.3 $ 1,169.2 $ 1,189.9 $ 642.3 $ 1,032.1 $ 594.5 =========================================================================================================

1.49 $ 1.28 $ 1.19 $ 1.16 $ .86 $ .96 $ .60 ---.03 (.23) .02 (.05 --------------------------------------------------------------------------------------------------------1.49 1.28 1.19 1.19 .63 .98 .55 --(.01)(2) ------------------------------------------------------------------------------------------------------------$ 1.49 $ 1.28 $ 1.18 $ 1.19 $ .63 $ .98 $ .55 =========================================================================================================

$

1.47 $ 1.27 $ 1.18 $ 1.14 (3) $ .85 (4) $ .95 $ .60 ---.03 (.23) .02 (.05 --------------------------------------------------------------------------------------------------------1.47 1.27 1.18 1.17 .62 .97 .55 --(.01)(2) ------------------------------------------------------------------------------------------------------------$ 1.47 $ 1.27 $ 1.17 $ 1.17 $ .62 $ .97 $ .55 ========================================================================================================= $ 544.7 $ 521.0 $ 492.6 $ 458.9 $ 429.5 $ 398.8 $ 370.0 .58 .54 .50 .46 .42 .38 .34 939.0 964.2 985.3 998.2 1,021.7 953.7 975.0 999.4 1,021.2 1,048.8 Note 3: 1996 results include the impact of the gain on the sale of the St. Louis Cardinals. Excluding the Cardinals gain, operating income, pretax income, income from continuing operations and diluted earnings 1,049.2 1,076.1 1,088.7 1,117.2

$

ANHEUSER-BUSCH COMPANIES, INC.

2002 ANNUAL REPORT

--------------------------------------------------------------------------------------------------------1999 1998 1997 1996 1995 1994 1993 --------------------------------------------------------------------------------------------------------102.9 99.8 96.6 95.1 90.9 91.3 89.7 ========================================================================================================= $13,914.5 $13,342.5 $12,936.0 $12,721.8 $12,100.1 $11,793.9 $11,232.5 (2,019.6) (1,962.1) (1,766.2) (1,737.8) (1,664.0) (1,679.7) (1,679.8 --------------------------------------------------------------------------------------------------------11,894.9 11,380.4 11,169.8 10,984.0 10,436.1 10,114.2 9,552.7 (7,445.6) (7,297.1) (7,200.5) (7,064.9) (6,886.6) (6,581.0) (6,252.8 --------------------------------------------------------------------------------------------------------4,449.3 4,083.3 3,969.3 3,919.1 3,549.5 3,533.2 3,299.9 (2,147.0) (1,958.0) (1,916.3) (1,890.0) (1,756.6) (1,679.9) (1,612.1 ---54.7 -------(160.0) --------(401.3 --------------------------------------------------------------------------------------------------------2,302.3 2,125.3 2,053.0 2,083.8 (3) 1,632.9 (4) 1,853.3 1,286.5 (307.8) (291.5) (261.2) (232.8) (225.9) (219.3) (205.1 18.2 26.0 42.1 35.5 24.3 21.8 35.2 4.3 5.8 7.9 9.4 9.9 2.6 3.4 (9.4) (13.0) (9.3) (3.0) 20.5 17.6 21.0 --------------------------------------------------------------------------------------------------------2,007.6 1,852.6 1,832.5 1,892.9 (3) 1,461.7 (4) 1,676.0 1,141.0 (784.1) (732.2) (715.2) (736.8) (575.1) (661.5) (452.6 ------(31.2 178.7 112.9 61.9 ------------------------------------------------------------------------------------------------------------1,402.2 1,233.3 1,179.2 1,156.1 (3) 886.6 (4) 1,014.5 657.2 ---33.8 (244.3) 17.6 (62.7 --------------------------------------------------------------------------------------------------------1,402.2 1,233.3 1,179.2 1,189.9 642.3 1,032.1 594.5 --(10.0)(2) ------------------------------------------------------------------------------------------------------------$ 1,402.2 $ 1,233.3 $ 1,169.2 $ 1,189.9 $ 642.3 $ 1,032.1 $ 594.5 =========================================================================================================

1.49 $ 1.28 $ 1.19 $ 1.16 $ .86 $ .96 $ .60 ---.03 (.23) .02 (.05 --------------------------------------------------------------------------------------------------------1.49 1.28 1.19 1.19 .63 .98 .55 --(.01)(2) ------------------------------------------------------------------------------------------------------------$ 1.49 $ 1.28 $ 1.18 $ 1.19 $ .63 $ .98 $ .55 =========================================================================================================

$

1.47 $ 1.27 $ 1.18 $ 1.14 (3) $ .85 (4) $ .95 $ .60 ---.03 (.23) .02 (.05 --------------------------------------------------------------------------------------------------------1.47 1.27 1.18 1.17 .62 .97 .55 --(.01)(2) ------------------------------------------------------------------------------------------------------------$ 1.47 $ 1.27 $ 1.17 $ 1.17 $ .62 $ .97 $ .55 ========================================================================================================= $ 544.7 $ 521.0 $ 492.6 $ 458.9 $ 429.5 $ 398.8 $ 370.0 .58 .54 .50 .46 .42 .38 .34 939.0 964.2 985.3 998.2 1,021.7 953.7 975.0 999.4 1,021.2 1,048.8 Note 3: 1996 results include the impact of the gain on the sale of the St. Louis Cardinals. Excluding the Cardinals gain, operating income, pretax income, income from continuing operations and diluted earnings per share would have been $2,029.1 million, $1,838.2 million, $1,122.7 million and $1.10, respectively. Note 4: 1995 results include the impact of the one-time pretax charge of $160 million for the closure of the Tampa brewery, and the $74.5 million pretax impact of the beer wholesaler inventory reduction. Excluding these nonrecurring special items, operating income, pretax income, income from continuing operations and diluted earnings per share would have been $1,867.4 million, $1,696.2 million, $1,032.3 million and $.99, respectively. Note 5: 1993 results include the impact of a $401.3 million pretax restructuring charge and a $31.2 million after-tax charge resulting from revaluation of the deferred tax liability due to a 1% increase in U.S. 1,049.2 1,076.1 1,088.7 1,117.2

$

federal income tax rates. Excluding these nonrecurring special charges, operating income, pretax income, income from continuing operations and diluted earnings per share would have been $1,687.8 million, $1,542.3 million, $935.2 million and $.84, respectively.

57

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Financial Summary -- Balance Sheet and Other Information Anheuser-Busch Companies and Subsidiaries
--------------------------------------------------------------------------------------------------------Year ended December 31 (in millions except per share data) 2002 2001 20 --------------------------------------------------------------------------------------------------------Balance Sheet Information: Working capital (deficit) $ (283.0) $ (186.1) $ ( Current ratio 0.8 0.9 Debt 6,603.2 5,983.9 5, Shareholders equity 3,052.3 4,061.5 4, Return on shareholders equity 54.4% 41.6% Debt to total capitalization ratio 68.4% 59.6% Book value per share 3.61 4.62 Total assets 14,119.5 13,944.9 13, Other Information: Operating cash flow before change in working capital Capital expenditures Free cash flow Price/earnings ratio Market price range of common stock (high and low closing)

$

2,624.3 834.7 1,930.5 22.0 54.97-44.00

2,316.0 1,022.0 1,338.6 23.9 46.51-38.50

$

$

2, 1, 1,

49.81-

All share and per share information reflects the two-for-one common stock splits distributed September 18, 2000 and September 12, 1996. All information has been restated to recognize the 1995 divestiture of the food products segment.

58

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
--------------------------------------------------------------------------------------------------------1999 1998 1997 1996 1995 1994 1993 --------------------------------------------------------------------------------------------------------$ (350.4) 0.8 5,122.9 3,921.5 34.5% 56.6% 4.25 12,680.5 $ (89.9) 0.9 4,718.6 4,216.0 29.9% 52.8% 4.42 12,504.5 $ 83.2 $ 1.1 4,365.6 4,041.8 29.2%(1) 51.9% 4.15 11,738.4 34.9 1.0 3,270.9 4,029.1 30.0%(2) 44.8% 4.05 10,463.6 $ 268.6 $ 1.2 3,270.1 4,433.9 25.0%(3) 47.1% 3.61 10,590.9 57.0 1.0 3,066.4 4,415.5 29.9% 47.3% 3.32 10,547.4 $ (41 1 3,019 4,255 18 47 3. 10,267

$

2,141.6 865.3 1,270.6 24.1 40.81-32.59

$

1,977.2 817.5 1,395.9 25.9 34.13-21.72

$

1,839.0 $ 1,751.7 1,199.3 1,084.6 644.4 909.2 18.6 (1) 17.6 (2) 23.94-19.75 21.44-16.25

$ 1,700.5 $ 1,729.6 952.5 662.8 494.5 1,009.8 19.6 (3) 13.1 17-12.69 13.81-11.75

$ 1,535 656 991 22 15-

Note 1: Ratios calculated based on income from continuing operations before the cumulative effect of accounting changes. Note 2: Ratios calculated based on reported income from continuing operations, which includes the $54.7 million pretax gain on the sale of the St. Louis Cardinals. Excluding the Cardinals gain, return on shareholders equity would have been 29.2% and the price/earnings ratio would have been 18.1.

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT Financial Summary -- Balance Sheet and Other Information Anheuser-Busch Companies and Subsidiaries
--------------------------------------------------------------------------------------------------------Year ended December 31 (in millions except per share data) 2002 2001 20 --------------------------------------------------------------------------------------------------------Balance Sheet Information: Working capital (deficit) $ (283.0) $ (186.1) $ ( Current ratio 0.8 0.9 Debt 6,603.2 5,983.9 5, Shareholders equity 3,052.3 4,061.5 4, Return on shareholders equity 54.4% 41.6% Debt to total capitalization ratio 68.4% 59.6% Book value per share 3.61 4.62 Total assets 14,119.5 13,944.9 13, Other Information: Operating cash flow before change in working capital Capital expenditures Free cash flow Price/earnings ratio Market price range of common stock (high and low closing)

$

2,624.3 834.7 1,930.5 22.0 54.97-44.00

2,316.0 1,022.0 1,338.6 23.9 46.51-38.50

$

$

2, 1, 1,

49.81-

All share and per share information reflects the two-for-one common stock splits distributed September 18, 2000 and September 12, 1996. All information has been restated to recognize the 1995 divestiture of the food products segment.

58

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
--------------------------------------------------------------------------------------------------------1999 1998 1997 1996 1995 1994 1993 --------------------------------------------------------------------------------------------------------$ (350.4) 0.8 5,122.9 3,921.5 34.5% 56.6% 4.25 12,680.5 $ (89.9) 0.9 4,718.6 4,216.0 29.9% 52.8% 4.42 12,504.5 $ 83.2 $ 1.1 4,365.6 4,041.8 29.2%(1) 51.9% 4.15 11,738.4 34.9 1.0 3,270.9 4,029.1 30.0%(2) 44.8% 4.05 10,463.6 $ 268.6 $ 1.2 3,270.1 4,433.9 25.0%(3) 47.1% 3.61 10,590.9 57.0 1.0 3,066.4 4,415.5 29.9% 47.3% 3.32 10,547.4 $ (41 1 3,019 4,255 18 47 3. 10,267

$

2,141.6 865.3 1,270.6 24.1 40.81-32.59

$

1,977.2 817.5 1,395.9 25.9 34.13-21.72

$

1,839.0 $ 1,751.7 1,199.3 1,084.6 644.4 909.2 18.6 (1) 17.6 (2) 23.94-19.75 21.44-16.25

$ 1,700.5 $ 1,729.6 952.5 662.8 494.5 1,009.8 19.6 (3) 13.1 17-12.69 13.81-11.75

$ 1,535 656 991 22 15-

Note 1: Ratios calculated based on income from continuing operations before the cumulative effect of accounting changes. Note 2: Ratios calculated based on reported income from continuing operations, which includes the $54.7 million pretax gain on the sale of the St. Louis Cardinals. Excluding the Cardinals gain, return on shareholders equity would have been 29.2% and the price/earnings ratio would have been 18.1. Note 3: Ratios calculated based on reported income from continuing operations. Excluding the two nonrecurring 1995 items ($160 million pretax charge for closure of the Tampa brewery and $74.5 million impact of the beer wholesaler inventory reduction), return on shareholders equity would have been 29.1% and the price/earnings ratio would have been 16.8. Note 4: Ratios calculated based on reported income from continuing operations. Excluding the two nonrecurring 1993 charges ($401.3 million

ANHEUSER-BUSCH COMPANIES, INC. 2002 ANNUAL REPORT
--------------------------------------------------------------------------------------------------------1999 1998 1997 1996 1995 1994 1993 --------------------------------------------------------------------------------------------------------$ (350.4) 0.8 5,122.9 3,921.5 34.5% 56.6% 4.25 12,680.5 $ (89.9) 0.9 4,718.6 4,216.0 29.9% 52.8% 4.42 12,504.5 $ 83.2 $ 1.1 4,365.6 4,041.8 29.2%(1) 51.9% 4.15 11,738.4 34.9 1.0 3,270.9 4,029.1 30.0%(2) 44.8% 4.05 10,463.6 $ 268.6 $ 1.2 3,270.1 4,433.9 25.0%(3) 47.1% 3.61 10,590.9 57.0 1.0 3,066.4 4,415.5 29.9% 47.3% 3.32 10,547.4 $ (41 1 3,019 4,255 18 47 3. 10,267

$

2,141.6 865.3 1,270.6 24.1 40.81-32.59

$

1,977.2 817.5 1,395.9 25.9 34.13-21.72

$

1,839.0 $ 1,751.7 1,199.3 1,084.6 644.4 909.2 18.6 (1) 17.6 (2) 23.94-19.75 21.44-16.25

$ 1,700.5 $ 1,729.6 952.5 662.8 494.5 1,009.8 19.6 (3) 13.1 17-12.69 13.81-11.75

$ 1,535 656 991 22 15-

Note 1: Ratios calculated based on income from continuing operations before the cumulative effect of accounting changes. Note 2: Ratios calculated based on reported income from continuing operations, which includes the $54.7 million pretax gain on the sale of the St. Louis Cardinals. Excluding the Cardinals gain, return on shareholders equity would have been 29.2% and the price/earnings ratio would have been 18.1. Note 3: Ratios calculated based on reported income from continuing operations. Excluding the two nonrecurring 1995 items ($160 million pretax charge for closure of the Tampa brewery and $74.5 million impact of the beer wholesaler inventory reduction), return on shareholders equity would have been 29.1% and the price/earnings ratio would have been 16.8. Note 4: Ratios calculated based on reported income from continuing operations. Excluding the two nonrecurring 1993 charges ($401.3 million pretax restructuring charge and $31.2 million after-tax FAS 109 charge), return on shareholders equity would have been 26.7% and the price/earnings ratio would have been 13.8.

59

Exhibit 21
SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Missouri Delaware Delaware Brazil Delaware Delaware DOING BUSINESS UNDER NAME OF -------------Anheuser-Busch, Incorporated Anheuser-Busch Asia, Inc. Anheuser-Busch Australia Limited Anheuser-Busch Brasil Holdings Ltd Anheuser-Busch Canada, Inc. Anheuser-Busch Sales and Service of New York, Inc. Anheuser-Busch Europe, Inc. Anheuser-Busch Europe Limited Anheuser-Busch Florida Investment Capital Corporation

NAME OF COMPANY --------------Anheuser-Busch, Incorporated Anheuser-Busch Asia, Inc. Anheuser-Busch Australia Limited Anheuser-Busch Brasil Holdings Ltda. Anheuser-Busch Canada, Inc. Anheuser-Busch Distributors of New York, Inc. Anheuser-Busch Europe, Inc. Anheuser-Busch Europe Limited Anheuser-Busch Florida Investment Capital Corporation

Delaware United Kingdom Florida

Exhibit 21
SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Missouri Delaware Delaware Brazil Delaware Delaware DOING BUSINESS UNDER NAME OF -------------Anheuser-Busch, Incorporated Anheuser-Busch Asia, Inc. Anheuser-Busch Australia Limited Anheuser-Busch Brasil Holdings Ltd Anheuser-Busch Canada, Inc. Anheuser-Busch Sales and Service of New York, Inc. Anheuser-Busch Europe, Inc. Anheuser-Busch Europe Limited Anheuser-Busch Florida Investment Capital Corporation Anheuser-Busch Import Investments, Inc. Anheuser-Busch International, Inc. Anheuser-Busch International Holdings, Inc. Anheuser-Busch International Holdings, Inc. Chile I Limitada Anheuser-Busch International Holdings, Inc. Chile II Limitada Anheuser-Busch Investments, S.L. Anheuser-Busch Latin American Development Corporation

NAME OF COMPANY --------------Anheuser-Busch, Incorporated Anheuser-Busch Asia, Inc. Anheuser-Busch Australia Limited Anheuser-Busch Brasil Holdings Ltda. Anheuser-Busch Canada, Inc. Anheuser-Busch Distributors of New York, Inc. Anheuser-Busch Europe, Inc. Anheuser-Busch Europe Limited Anheuser-Busch Florida Investment Capital Corporation Anheuser-Busch Import Investments, Inc. Anheuser-Busch International, Inc. Anheuser-Busch International Holdings, Inc. Anheuser-Busch International Holdings, Inc. Chile I Limitada Anheuser-Busch International Holdings, Inc. Chile II Limitada Anheuser-Busch Investments, S.L. Anheuser-Busch Latin American Development Corporation

Delaware United Kingdom Florida

Delaware

Delaware Delaware

Chile

Chile

Barcelona, Spain Delaware

Page 2 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Delaware Delaware DOING BUSINESS UNDER NAME OF -------------Anheuser-Busch Mexico, Inc. Anheuser-Busch Overseas Holdings, L.L.C. Anheuser-Busch Packaging Group, Inc. Anheuser-Busch Recycling Corporation River North Distributing Company

NAME OF COMPANY --------------Anheuser-Busch Mexico, Inc. Anheuser-Busch Overseas Holdings, L.L.C. Anheuser-Busch Packaging Group, Inc. Anheuser-Busch Recycling Corporation Anheuser-Busch River North Investment Capital Corporation Anheuser-Busch Sales of Hawaii, Inc. Anheuser-Busch San Diego Wholesaler Development Corporation Anheuser-Busch Spanish Holdings,

Delaware

Ohio

Delaware

Delaware Delaware

Anheuser-Busch Sales of Hawaii, In Anheuser-Busch Sales of San Diego

Delaware

Anheuser-Busch Spanish Holdings,

Page 2 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Delaware Delaware DOING BUSINESS UNDER NAME OF -------------Anheuser-Busch Mexico, Inc. Anheuser-Busch Overseas Holdings, L.L.C. Anheuser-Busch Packaging Group, Inc. Anheuser-Busch Recycling Corporation River North Distributing Company

NAME OF COMPANY --------------Anheuser-Busch Mexico, Inc. Anheuser-Busch Overseas Holdings, L.L.C. Anheuser-Busch Packaging Group, Inc. Anheuser-Busch Recycling Corporation Anheuser-Busch River North Investment Capital Corporation Anheuser-Busch Sales of Hawaii, Inc. Anheuser-Busch San Diego Wholesaler Development Corporation Anheuser-Busch Spanish Holdings, Inc. Anheuser-Busch Wholesaler Development Corp. Anheuser-Busch Wholesaler Development Corp. III Anheuser-Busch Wholesaler Development Corp. IV Anheuser-Busch Wisconsin Investment Capital Corporation Anheuser-Busch World Trade Ltd. August A. Busch & Co. of Massachusetts, Inc.

Delaware

Ohio

Delaware

Delaware Delaware

Anheuser-Busch Sales of Hawaii, In Anheuser-Busch Sales of San Diego

Delaware

Anheuser-Busch Spanish Holdings, Inc. Anheuser-Busch Wholesaler Development Corp. Anheuser-Busch Wholesaler Development Corp. III Anheuser-Busch Wholesaler Development Corp. IV Anheuser-Busch Wisconsin Investment Capital Corporation Anheuser-Busch World Trade Ltd. August A. Busch & Co. of Massachusetts, Inc.

Delaware

Delaware

Delaware

Wisconsin

Delaware Massachusetts

Page 3 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------DOING BUSINESS UNDER NAME OF --------------

NAME OF COMPANY ---------------

Bannon Corporation BARI-Canada, Inc. Bevo Music, Inc. Bow Tie Music, Inc. Budweiser Brasil Ltda. Budweiser Philippines, Inc. Budweiser Wuhan International Brewing Company Limited Busch Agricultural Resources, Inc. Busch Agricultural Resources International, Inc. Busch Entertainment Corporation

Delaware Delaware Delaware Delaware Brazil Delaware China

Bannon Corporation BARI-Canada, Inc. Bevo Music, Inc. Bow Tie Music, Inc. Budweiser Brasil Ltda. Budweiser Philippines, Inc. Budweiser Wuhan International Brewing Company Limited Busch Agricultural Resources, Inc. Busch Agricultural Resources International, Inc. Busch Entertainment Corporation

Delaware Delaware

Delaware

Page 3 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------DOING BUSINESS UNDER NAME OF --------------

NAME OF COMPANY ---------------

Bannon Corporation BARI-Canada, Inc. Bevo Music, Inc. Bow Tie Music, Inc. Budweiser Brasil Ltda. Budweiser Philippines, Inc. Budweiser Wuhan International Brewing Company Limited Busch Agricultural Resources, Inc. Busch Agricultural Resources International, Inc. Busch Entertainment Corporation Busch International Sales Corporation Busch Investment Corporation Busch Mechanical Services, Inc. Busch Media Group, Inc. Busch Properties, Inc. Busch Properties of Florida, Inc. Civic Center Corporation Consolidated Farms, Inc.

Delaware Delaware Delaware Delaware Brazil Delaware China

Bannon Corporation BARI-Canada, Inc. Bevo Music, Inc. Bow Tie Music, Inc. Budweiser Brasil Ltda. Budweiser Philippines, Inc. Budweiser Wuhan International Brewing Company Limited Busch Agricultural Resources, Inc. Busch Agricultural Resources International, Inc. Busch Entertainment Corporation Busch International Sales Corporation Busch Investment Corporation Busch Mechanical Services, Inc. Busch Media Group, Inc. Busch Properties, Inc. Busch Properties of Florida, Inc. Civic Center Corporation Elk Mountain Farms, Inc.

Delaware Delaware

Delaware Delaware

Delaware Delaware Delaware Delaware Florida Missouri Delaware

Page 4 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------DOING BUSINESS UNDER NAME OF --------------

NAME OF COMPANY ---------------

Eagle Packaging, Inc. Eagle Snacks, Inc. Glass Container Corporation HSH of Orlando, Inc. ILH Company Kingsmill Realty, Inc. Langhorne Food Services, Inc. Litchfield Development Corporation Manufacturers Cartage Company Manufacturers Railway Company Metal Container Corporation

Delaware Delaware Delaware Florida Florida Virginia Delaware Delaware Missouri Missouri Delaware

Eagle Packaging, Inc. Eagle Snacks, Inc. Longhorn Glass Corporation HSH of Orlando, Inc. ILH Company Kingsmill Realty, Inc. Langhorne Food Services, Inc. Litchfield Development Corporation Manufacturers Cartage Company Manufacturers Railway Company Metal Container Corporation

Page 4 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------DOING BUSINESS UNDER NAME OF --------------

NAME OF COMPANY ---------------

Eagle Packaging, Inc. Eagle Snacks, Inc. Glass Container Corporation HSH of Orlando, Inc. ILH Company Kingsmill Realty, Inc. Langhorne Food Services, Inc. Litchfield Development Corporation Manufacturers Cartage Company Manufacturers Railway Company Metal Container Corporation Metal Container Corporation of California M.R.S. Redevelopment Corporation Nutri-Turf, Inc. PBP, Inc. Pacific International Rice Mills, Inc. Pestalozzi Street Insurance Company, Ltd. Precision Printing and Packaging, Inc.

Delaware Delaware Delaware Florida Florida Virginia Delaware Delaware Missouri Missouri Delaware California

Eagle Packaging, Inc. Eagle Snacks, Inc. Longhorn Glass Corporation HSH of Orlando, Inc. ILH Company Kingsmill Realty, Inc. Langhorne Food Services, Inc. Litchfield Development Corporation Manufacturers Cartage Company Manufacturers Railway Company Metal Container Corporation Metal Container Corporation of California M.R.S. Redevelopment Corporation Nutri-Turf, Inc. PBP, Inc. Pacific International Rice Mills, Pestalozzi Street Insurance Company, Ltd. Precision Printing and Packaging,

Missouri Delaware Delaware Delaware Bermuda

Delaware

Page 5 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Mexico DOING BUSINESS UNDER NAME OF -------------Promoclonesy Desarrollos Mexico de Mexicali, S. de R. L. de C. V. PSB, Inc. Puget Sound Beverages, Inc. SeaWorld, Inc. SeaWorld of Florida, Inc. SeaWorld of Texas, Inc. SFKBPP, Inc. Anheuser-Busch Sales, Beach Cities Budweiser Stag Brewing Company Limited St. Louis Refrigerator Car Company Tune Out Music, Inc.

NAME OF COMPANY --------------Promoclonesy Desarrollos Mexico de Mexicali, S. de R. L. de C. V. PSB, Inc. Puget Sound Beverages, Inc. SeaWorld, Inc. SeaWorld of Florida, Inc. SeaWorld of Texas, Inc. SFKBPP, Inc. Somerset Distributors, L.L.C. Stag Brewing Company Limited

Washington Washington Delaware Florida Delaware Missouri Delaware England

St. Louis Refrigerator Car Company Tune Out Music, Inc.

Delaware Delaware

Page 5 SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF INCORPORATION ------------Mexico DOING BUSINESS UNDER NAME OF -------------Promoclonesy Desarrollos Mexico de Mexicali, S. de R. L. de C. V. PSB, Inc. Puget Sound Beverages, Inc. SeaWorld, Inc. SeaWorld of Florida, Inc. SeaWorld of Texas, Inc. SFKBPP, Inc. Anheuser-Busch Sales, Beach Cities Budweiser Stag Brewing Company Limited St. Louis Refrigerator Car Company Tune Out Music, Inc. Wholesaler Equity Development Corporation Williamsburg Transport, Inc.

NAME OF COMPANY --------------Promoclonesy Desarrollos Mexico de Mexicali, S. de R. L. de C. V. PSB, Inc. Puget Sound Beverages, Inc. SeaWorld, Inc. SeaWorld of Florida, Inc. SeaWorld of Texas, Inc. SFKBPP, Inc. Somerset Distributors, L.L.C. Stag Brewing Company Limited

Washington Washington Delaware Florida Delaware Missouri Delaware England

St. Louis Refrigerator Car Company Tune Out Music, Inc. Wholesaler Equity Development Corporation Williamsburg Transport, Inc.

Delaware Delaware Delaware

Virginia