EX-99.1 2 d882489dex991.htm EX-99.1

Exhibit 99.1

Unaudited Interim Report

for the six-month period ended

30 June 2020

The following is a review of our financial condition and results of operations as of 30 June 2020 and for the six-month periods ended 30 June 2020 and 2019, and of the key factors that have affected or are expected to be likely to affect our ongoing and future operations.

This document includes information from the previously published results announcement and unaudited interim report of Anheuser-Busch InBev SA/NV for the six-month period ended 30 June 2020, as amended to comply with the requirements of Regulation G and Item 10(e) of Regulation S-K promulgated by the U.S. Securities and Exchange Commission (“SEC”). The purpose of this document is to provide such additional disclosure as may be required by Regulation G and Item 10(e) and to delete certain information not in compliance with SEC regulations. This document does not update or otherwise supplement the information contained in the previously published results announcement and unaudited interim report.

Some of the information contained in this discussion, including information with respect to our plans and strategies for our business and our expected sources of financing, contain forward-looking statements that involve risk and uncertainties. You should read “Forward-Looking Statements” below for a discussion of the risks related to those statements. You should also read “Item 3. Key Information—D. Risk Factors” of our Annual Report on Form 20-F for the year ended 31 December 2019 filed with the SEC on 24 March 2020 (“2019 Annual Report”) for a discussion of certain factors that may affect our business, financial condition and results of operations. See “Presentation of Financial and Other Data” in our 2019 Annual Report for further information on our presentation of financial information.

We have prepared our interim unaudited condensed consolidated financial statements as of 30 June 2020 and for the six-month period ended 30 June 2020 and 2019 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and in conformity with International Financial Reporting Standards as adopted by the European Union (“IFRS”). The financial information and related discussion and analysis contained in this report are presented in U.S. dollars except as otherwise specified. Unless otherwise specified the financial information analysis in this Form 6-K is based on interim unaudited condensed financial statements as of 30 June 2020 and for the six-month period ended 30 June 2020 and 2019. The reported numbers as of 30 June 2020 and for the six-month period ended 30 June 2020 and 2019 are unaudited, and in the opinion of management, include all normal adjustments that are necessary to present fairly the results for the interim periods. Due to seasonal fluctuations and other factors, the results of operations for the six-month period ended 30 June 2020 and 2019 are not necessarily indicative of the results to be expected for the full year. Certain monetary amounts and other figures included in this report have been subject to rounding adjustments. Accordingly, any discrepancies in any tables between the totals and the sums of amounts listed are due to rounding.

We are a publicly traded company (Euronext: ABI) based in Leuven, Belgium, with secondary listings on the Mexico (MEXBOL: ANB) and South Africa (JSE: ANH) stock exchanges and with American Depositary Receipts on the New York Stock Exchange (NYSE: BUD). Our Dream is to bring people together for a better world. Beer, the original social network, has been bringing people together for thousands of years. We are committed to building great brands that stand the test of time and to brewing the best beers using the finest natural ingredients. Our diverse portfolio of well over 500 beer brands includes global brands Budweiser®, Corona® and Stella Artois®; multi-country brands Beck’s®, Hoegaarden®, Leffe® and Michelob Ultra®; and local champions such as Aguila®, Antarctica®, Bud Light®, Brahma®, Cass®, Castle®, Castle Lite®, Cristal®, Harbin®, Jupiler®, Modelo Especial®, Quilmes®, Victoria®, Sedrin® and Skol®. Our brewing heritage dates back more than 600 years, spanning continents and generations. From our European roots at the Den Hoorn brewery in Leuven, Belgium. To the pioneering spirit of the Anheuser & Co brewery in St. Louis, US. To the creation of the Castle Brewery in South Africa during the Johannesburg gold rush. To Bohemia, the first brewery in Brazil. Geographically diversified with a balanced exposure to developed and developing markets, we leverage the collective strengths of approximately 170 000 employees based in nearly 50 countries worldwide. For 2019, AB InBev’s reported revenue was 52.3 billion US dollar (excluding joint ventures and associates).

Capitalized terms used herein and not defined have the meanings given to them in the 2019 Annual Report.

Forward-Looking Statements

There are statements in this document, such as statements that include the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “anticipate,” “estimate,” “project,” “may,” “might,” “could,” “believe,” “expect,” “plan,” “potential,” “we aim,” “our goal,” “our vision,” “we intend” or similar expressions that are forward-looking statements. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those suggested by these statements due to, among others, the risks or uncertainties listed below. See also “Item 3. Key Information—D. Risk Factors” of our 2019 Annual Report for further discussion of risks and uncertainties that could impact our business.

These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside our control and are difficult to predict, that may cause actual results or developments to differ materially from any future results or developments expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others:

1

| • |  | local, regional, national and international economic conditions, including the risks of a global recession or a recession in one or more of our key markets, and the impact they may have on us and our customers and our assessment of that impact;

| • |  | the effects of the COVID-19 pandemic and uncertainties about its impact and duration;

| • |  | financial risks, such as interest rate risk, foreign exchange rate risk (in particular as against the U.S. dollar, our reporting currency), commodity risk, asset price risk, equity market risk, counterparty risk, sovereign risk, liquidity risk, inflation or deflation, including inability to achieve our optimal net debt level;

| • |  | continued geopolitical instability, which may result in, among other things, economic and political sanctions and currency exchange rate volatility, and which may have a substantial impact on the economies of one or more of our key markets;

| • |  | changes in government policies and currency controls;

| • |  | continued availability of financing and our ability to achieve our targeted coverage and debt levels and terms, including the risk of constraints on financing in the event of a credit rating downgrade;

| • |  | the monetary and interest rate policies of central banks, in particular the European Central Bank, the Board of Governors of the U.S. Federal Reserve System, the Bank of England, Banco Central do Brasil, Banco Central de la República Argentina, the Central Bank of China, the South African Reserve Bank, Banco de la República in Colombia, the Bank of Mexico and other central banks;

| • |  | changes in applicable laws, regulations and taxes in jurisdictions in which we operate, including the laws and regulations governing our operations and changes to tax benefit programs, as well as actions or decisions of courts and regulators;

| • |  | limitations on our ability to contain costs and expenses;

| • |  | our expectations with respect to expansion plans, premium growth, accretion to reported earnings, working capital improvements and investment income or cash flow projections;

| • |  | our ability to continue to introduce competitive new products and services on a timely, cost-effective basis;

| • |  | the effects of competition and consolidation in the markets in which we operate, which may be influenced by regulation, deregulation or enforcement policies;

| • |  | changes in consumer spending;

| • |  | changes in pricing environments;

| • |  | volatility in the prices of raw materials, commodities and energy;

| • |  | difficulties in maintaining relationships with employees;

| • |  | regional or general changes in asset valuations;

| • |  | greater than expected costs (including taxes) and expenses;

| • |  | the risk of unexpected consequences resulting from acquisitions, joint ventures, strategic alliances, corporate reorganizations or divestiture plans, and our ability to successfully and cost-effectively implement these transactions and integrate the operations of businesses or other assets we have acquired;

| • |  | the outcome of pending and future litigation, investigations and governmental proceedings;

| • |  | natural and other disasters, including widespread health emergencies, cyberattacks and military conflict and political instability;

| • |  | any inability to economically hedge certain risks;

| • |  | inadequate impairment provisions and loss reserves;

| • |  | technological changes, threats to cybersecurity and the risk of loss or misuse of personal data;

| • |  | other statements included in these interim unaudited condensed consolidated financial statements that are not historical; and

| • |  | our success in managing the risks involved in the foregoing.

Many of these risks and uncertainties are, and will be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result. Our statements regarding financial risks, including interest rate risk, foreign exchange rate risk, commodity risk, asset price risk, equity market risk, counterparty risk, sovereign risk, inflation and deflation, are subject to uncertainty. For example, certain market and financial risk disclosures are dependent on choices about key model characteristics and assumptions and are subject to various limitations. By their nature, certain of the market or financial risk disclosures are only estimates and, as a result, actual future gains and losses could differ materially from those that have been estimated.

2

COVID-19 Risk Factors

The following risk factors are provided to supplement the risk factors previously disclosed in periodic reports, including our 2019 Annual Report and our unaudited interim report for the three-month period ended 31 March 2020.

Our business, financial condition, cash flows and operating results have been and may continue to be negatively impacted by the COVID-19 pandemic. The public health crisis caused by the COVID-19 pandemic, as well as measures taken in response to contain or mitigate the pandemic, have had, and we expect will continue to have, certain negative impacts on our business including, without limitation, the following:

| • |  | We have experienced disruptions to our ability to operate our production facilities in some countries, and in the future, we may experience further disruption to its ability to operate its production facilities or distribution operations as a result of regulatory restrictions, safety protocols, social distancing requirements and heightened sanitation measures. In addition, although at this time we have not experienced any material disruption to our supply chain, we may experience delays in deliveries of key supplies or disruptions to our distribution operations. Any sustained interruption in our operations or our business partners’ operations, distribution network or supply chain, or any significant continuous shortage of raw materials or other supplies could impact our ability to make, manufacture, distribute or sell our products or may result in an increase in our costs of production and distribution.

| • |  | Sales of our products in the on-premise channel have been significantly impacted by the implementation of social distancing and lockdown measures in most of our markets, including the closure of bars, clubs and restaurants and restrictions on sporting events, music festivals and similar events. Although sales in the on-premise channel have begun to improve as a result of the easing of social distancing and lockdown measures in many of these markets, such improvements may be impacted by the re-implementation of restrictions in certain markets, such as the restrictions imposed in South Africa in July. Any future outbreak or recurrence of COVID-19 cases in other markets that are currently in the process of easing social distancing and lock down measures may similarly result in the re-implementation of such measures and a further negative impact on our sales. Furthermore, if the COVID-19 pandemic intensifies and expands geographically or in duration, its negative impacts on our sales could be more prolonged and may become more severe. While we have experienced increased sales in the off-premise channel in certain markets since the outbreak, such increased volumes may not continue in the longer term and may not offset the pressure we are experiencing in the on-premise channel.

| • |  | Consumption of beer and other alcohol and non-alcohol beverages in many of the jurisdictions in which we operate is closely linked to general economic conditions, with levels of consumption tending to rise during periods of rising per capita income and fall during periods of declining per capita income. Deteriorating economic and political conditions in many of our major markets affected by the COVID-19 pandemic, such as increased unemployment, decreases in disposable income, declines in consumer confidence, or economic slowdowns or recessions, could cause a further decrease in demand for our products. Furthermore, even as governmental restrictions are lifted and economies gradually reopen in many of our major markets, the ongoing economic impacts and health concerns associated with the COVID-19 pandemic may continue to affect consumer behavior, spending levels and consumption preferences

| • |  | The impact of the COVID-19 pandemic on global economic conditions has impacted and may continue to impact the proper functioning of financial and capital markets, as well as foreign currency exchange rates, commodity and energy prices and interest rates. A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access, or costs of, capital or borrowings, our business, our liquidity, our net debt to EBITDA ratio, credit ratings, results of operations and financial condition.

| • |  | Compliance with governmental measures imposed in response to the COVID-19 pandemic has caused and may continue to cause us to incur additional costs, and any inability to comply with such measures can subject us to restrictions on our business activities, fines, and other penalties, any of which can adversely affect our business. In addition, responses to the COVID-19 pandemic may result in both short-term and long-term changes to fiscal and tax policies in impacted jurisdictions, including increases in tax rates.

Any of the negative impacts of the COVID-19 pandemic, including those described above, alone or in combination with others, may have a material adverse effect on our results of operations, financial condition and cash flows. The full extent to which the COVID-19 pandemic will negatively affect our business, financial condition, cash flows and operating results will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

We caution that the forward-looking statements in this document are further qualified by the risk factors disclosed in “Item 3. Key Information—D. Risk Factors” of our 2019 Annual Report that could cause actual results to differ materially from those in the forward-looking statements. Subject to our obligations under Belgian and U.S. law in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3

Business update in light of the global COVID-19 pandemic

The COVID-19 pandemic continues to present unprecedented challenges for societies, governments and businesses across the world. The health and safety of our colleagues is our first priority, and we are finding new ways to do our part globally to help our communities, support our partners and connect with our consumers.

Our performance in the second quarter was materially impacted by the COVID-19 pandemic, as expected. As the quarter progressed, however, we saw considerable improvement in performance from month to month. We came out of the quarter with reinforced confidence in the resilience of our business and the global beer category.

In April 2020, our volumes declined by 32.4%1, as we faced a shutdown of our beer operations in key markets such as Mexico, South Africa and Peru, and the closure of the on-premise channel in most of our markets.

We saw a sequential improvement in May 2020, with a volume decline of 21.1%1. While we continued to face a shutdown of our beer operations in markets such as Mexico and South Africa, this improvement was driven by a return to positive volume growth in China, a healthy performance from our beer business in Brazil, the gradual reopening of the on-premise channel in certain markets, particularly in Europe, and the strength of the off-premise channel in both developed and developing markets.

In June 2020 we delivered volume growth of 0.7%1, despite cycling a strong performance from the prior year. We saw a significant recovery in June in Mexico and South Africa, where the resumption of operations was met with robust consumer demand. Brazil accelerated its healthy performance with meaningful beer volume growth as we leveraged our best-in-class distribution network, innovations and digital capabilities to reach consumers in new ways. In the US, we delivered top and bottom-line growth through the success of our premium brands, known and trusted mainstream brands and the strength of the off-premise channel. China delivered exceptional results, with its highest ever monthly volume.

In total, our volumes in the second quarter 2020 declined by 17.1%1 with own beer volumes declining 17.2%1. Revenue per hl declined by 0.6%, leading to a total revenue decline of 17.7%2. EBITDA, as defined, before exceptional items3, declined by 34.1%4 to USD 3,414 million, with margin contraction of 825 bps to 33.2%, due to the top-line decline and lower operational leverage, especially in the beginning of the second quarter 2020 when we faced significantly reduced volume. These headwinds were partially offset by successful resource allocation initiatives that drove a meaningful reduction in selling, general and administrative expenses.

The trajectory of the business throughout the second quarter reinforced our confidence in the resilience of the beer category, particularly in the off-premise channel, where we saw healthy growth in both developed and developing markets. The continued reopening of the on-premise channel around the world also contributed to an improved performance, especially in May and June. We are excited about the return of these consumption occasions, while remaining cautious as we are now seeing renewed on-premise restrictions in certain markets. South Africa implemented a second ban on alcohol sales in the middle of July 2020, which will impact our results in the third quarter of 2020.

In view of the economic uncertainties caused by the COVID-19 pandemic, we performed an impairment review considering different scenarios for recovery of sales for our cash generating units: a base case, which we deem to be the most likely case, a best case and a worst case to which we applied different probabilities of occurrence. Based on the information available, we concluded that no impairment was warranted under the base and best case scenarios. However, we were exposed to a risk of impairment for the South Africa and Rest of Africa cash-generating units under the worst case scenario and concluded that it was prudent to recognize a 2.5 billion USD non-cash goodwill impairment charge applying a 30% probability of occurrence of the worst case scenario. This charge is partially offset by a 1.9 billion USD gain on the disposal of the Australian operations.

We have been investing behind capabilities such as B2B platforms, e-commerce channels and digital marketing for several years. These trends have accelerated over the past few months, positioning us well to capture growth.

We have taken significant actions to maintain strong liquidity in a more volatile and uncertain environment, while proactively managing our debt profile. We also implemented several initiatives that drove a meaningful reduction in SG&A, while we continue to invest effectively behind our brands and commercial strategy, preparing for a strong recovery.

The fundamental strengths of our company remain unchanged. We have a clear commercial strategy, diverse geographic footprint, the world’s most valuable portfolio of beer brands, industry-leading profitability, a strong team and an incredibly deep talent pool.

Management Comments

Our purpose at AB InBev is to bring people together for a better world. As the world continues to face an extraordinary and unprecedented crisis, our purpose drives us today as much as ever, even if it means finding new ways to be together. We once again extend our immense gratitude to those on the frontlines, especially healthcare workers around the world, for their commitment to keeping us, our families and our communities safe.

1 | Excluding volume changes attributable to the 2019 and 2020 acquisitions and disposals, see “—Volumes” below.

2 | Excluding the effects of the 2019 and 2020 acquisitions and disposals and currency translation effects, see “—Revenue” below.

3 | For a discussion of how we use EBITDA, as defined, and its limitations, and a table showing the calculation of our EBITDA, as defined, for the periods shown, see “—EBITDA, as defined” below.

4 | Excluding the effects of the 2019 and 2020 acquisitions and disposals, currency translation effects and exceptional items, see “—EBITDA, as defined” and “—Exceptional Items” below.

4

Supporting our People

The health and safety of our people continues to be our top priority. We thank all our colleagues for their resilience, dedication and agility, especially those on the ground to ensure business continuity. As more of our colleagues return to the workplace in markets where restrictions are being lifted, we have implemented stringent safety measures, such as strict sanitation practices, workplace capacity and social distancing guidelines, health tracking and personal protective equipment.

Helping our Communities

Our products are almost entirely sourced and brewed locally, making us deeply connected to the communities in our markets around the world. We have not experienced any material disruption to our supply chain and continue to monitor and adapt our operations to prioritize continuity.

We are working closely with local governments and other stakeholders to leverage our scale, capabilities and resources to support the fight against the pandemic and to do our part in the economic recovery. We have leveraged our facilities to produce and donate millions of units of hand sanitizer, face shields and packaged water. To support and empower the 20,000 direct farmers in our global supply chain, we fulfilled commitments to purchase crops in markets such as Mexico and India, even when our production was shut down. We are also providing farmers with personal protective equipment and critical information on health, hygiene and safe cultivation of their crops.

Our customers also have been severely impacted by the pandemic, particularly our on-premise partners, and we are working closely with them to support business continuity and a healthy recovery. For example, we created voucher programs in several markets to “buy a beer now, enjoy later” and initiatives to ensure the availability of fresh beer, such as Bud Light’s “Certified Fresh” platform in the US.

Leveraging our Global Footprint

When the COVID-19 pandemic began spreading across the globe, we grouped our markets into four clusters, enabling us to facilitate best practice sharing across similar markets. The four clusters were defined as: (1) Recovering Markets, (2) Less Restrictive Developed Markets, (3) Less Restrictive Developing Markets, and (4) More Restrictive Developing Markets.

As the pandemic evolved throughout the second quarter of 2020, we reclassified some of our markets between clusters. For example, many European countries became “Recovering Markets” as restrictions began to ease in May and June, inspiring our colleagues in Europe to replicate best practices from our teams in China and South Korea to support our customers in the on-premise channel for a successful re-opening. “Welcome Kits” were provided with personal protective equipment, such as branded masks and hand sanitizer produced with our surplus alcohol, and manuals with guidelines to help prevent the spread of COVID-19. In addition, we offered digital solutions to our customers that supported increased efficiency while reassuring consumers in the new environment.

Our global footprint is truly an asset as we leveraged learnings from across our business to position our markets for a strong and swift recovery.

Connecting with our Customers and Consumers

Growing trends such as online B2B platforms, e-commerce and digital marketing have accelerated dramatically in recent months. We have been investing in these capabilities that we believe will transform our business into a truly customer- and consumer-centric organization, putting us in an advantaged position to capture growth from these evolving trends.

BEES, our proprietary B2B digital ordering platform, empowers our customers and propels us to be even more customer-centric. It combines our best-in-class logistics and sales systems with new digital capabilities, including artificial intelligence-based algorithms. The ability to maintain a consistent dialogue without the use of in-person interactions has proven exceptionally valuable during this volatile time, further strengthening our relationships with our customers.

We continue to see strong growth in the e-commerce channel, both through our direct-to-consumer platforms and our partnerships with major global online retailers. Consistent investments in owned and third-party e-commerce, including 20+ direct-to-consumer ventures globally, are positioning us to lead online sales. For example, in the second quarter of 2020, our owned e-commerce beer store portfolio in Europe more than doubled compared to the prior year and Zé Delivery has significantly accelerated the growth of the beer e-commerce segment in Brazil.

We have also developed new proprietary platforms in response to the crisis, such as Tienda Cerca, a free online delivery service that is now used by approximately 400,000 neighborhood shops in eight markets in Latin America.

We have also developed innovative ways to connect with consumers at a distance over the past few months. In the UK, Budweiser celebrated the return of the English Premier League by giving fans the opportunity to cheer for their favorite teams from our billboards. In Brazil, we launched “lives,” a series of livestreamed online concerts to support our portfolio of brands, including our recent innovation Brahma Duplo Malte, which generated over 675 million views and considerable earned media.

5

Exercising Financial Discipline

Our commitment to financial discipline is unwavering. We continue to proactively manage the factors that are within our influence to preserve our liquidity while supporting the long-term growth of our business.

Efficiently utilizing our resources remains a core competency. In the second quarter of 2020, we delivered meaningful savings from several initiatives while continuing to invest effectively behind our brands and commercial strategy.

We have taken significant actions to maintain strong liquidity in a more volatile and uncertain environment, while proactively managing our debt profile. Earlier in 2020, we drew down our USD 9 billion revolving credit facility (RCF) in full and successfully completed bond issuances of EUR 4.5 billion and USD 6.0 billion. Subsequently, we received approximately USD 10.8 billion from the sale of the Australian subsidiary. We also had improved cash flow generation from our continuing operations over the course of the second quarter of 2020.

As a result, we repaid our RCF in full in June 2020. In July, we executed a series of tender offers for certain USD and EUR bonds and announced a redemption of certain USD, AUD and CAD bonds, resulting in a gross debt paydown of more than USD 4.7 billion. These proactive measures significantly reduced our upcoming liabilities while maintaining strong liquidity.

Net debt to normalized EBITDA, as defined, before exceptional items, was 4.86x for the 12-month period ending 30 June 2020, impacted by the COVID-19 pandemic on our results and the seasonality of our cash flows, which are typically weighted toward the second half of the year. Deleveraging to around 2x remains our commitment and we will prioritize debt repayment in order to meet this objective.

Positioned for a Strong Recovery

The first half of 2020 has tested all of us in many ways. We are inspired by the resilience of our people, our business and the global beer category.

Our company is well-positioned for a strong recovery. We have a diverse geographic footprint with exposure to high-growth regions. A clear commercial strategy gives us the tools to lead and grow the global beer category and scale best practices across markets. Our portfolio of the world’s most valuable beer brands enables us to reach more consumers on more occasions. Our profitability is industry-leading, allowing us to weather even extreme volatility. Investments in capabilities such as B2B sales, e-commerce and digital marketing put us in an advantaged position to capture growth from these accelerating trends.

Most importantly, we have a culture of ownership and a long-term mindset. Our people are rising to the challenge each day, demonstrating ingenuity, passion and strength to keep us moving forward. We are privileged to lead the global beer category, a category that has existed for centuries through many crises and will continue to thrive long after the current crisis is behind us.

6

Selected Financial Information

The selected historical financial information presented below as of 31 December 2019 and for the five years ended 31 December 2019 has been derived from our audited consolidated financial statements, which were prepared in accordance with IFRS. The selected historical financial information presented below as of 30 June 2020 and for the six-month periods ended 30 June 2020 and 2019 has been derived from our unaudited IFRS condensed consolidated interim financial statements. The interim data include all adjustments, consisting of normally recurring adjustments, necessary for a fair statement of the results for the interim period.

Divestiture of Australia to Asahi

Effective 30 September 2019, following the announcement on 19 July 2019 of the agreement to divest Carlton & United Breweries (“CUB” or “Australian operations”), the Australian subsidiary, to Asahi Group Holdings, Ltd. (“Asahi”), we classified the assets and liabilities associated with the Australian operations as assets held for sale and liabilities associated with assets held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. In addition, since the results of the Australian operations represented a separate major line of business, these were accounted for as discontinued operations as required by IFRS 5 and presented in a separate line in the consolidated income statement (“profit from discontinued operations”) up to 31 May 2020. Consequently, our consolidated results for the six-month period ended 30 June 2019 have been restated as if the classification had been applied as of 1 January 2017 to exclude the results of the Australian operations. The transaction closed on 1 June 2020.

The selected historical financial information presented in the tables below should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements and the accompanying notes. The audited consolidated financial statements and the accompanying notes as of 31 December 2019 and 2018 and for the three years ended 31 December 2018 (prior to the adoption of IFRS 16) are included in our 2019 Annual Report. Similarly, the unaudited consolidated interim financial statements and the accompanying notes as of 30 June 2020 and for the six-month periods ended 30 June 2020 and 2019 are included in this interim report.

|  | Six-month period ended 30 June |  |  | Year ended 31 December |
|  | 2020 |  |  | 2019(9) |  |  | 2019 |  |  | 2018(7)(8) |  |  | 2017(8) |  |  | 2016(6) |  |  | 2015 |
|  | (USD millions) |
|  | (Unaudited) |  |  | (Audited8) |
Income Statement Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue(1) |  |  | 21,298 |  |  |  | 25,823 |  |  |  | 52,329 |  |  |  | 53,041 |  |  |  | 54,859 |  |  |  | 45,517 |  |  |  | 43,604 |
Profit from operations |  |  | 2,306 |  |  |  | 8,077 |  |  |  | 16,098 |  |  |  | 16,414 |  |  |  | 16,460 |  |  |  | 12,882 |  |  |  | 13,904 |
Profit from continuing operations |  |  | (3,744 | ) |  |  | 6,406 |  |  |  | 9,990 |  |  |  | 5,157 |  |  |  | 8,606 |  |  |  | 2,721 |  |  |  | 9,867 |
Profit of the period |  |  | (1,688 | ) |  |  | 6,642 |  |  |  | 10,414 |  |  |  | 5,688 |  |  |  | 9,166 |  |  |  | 2,769 |  |  |  | 9,867 |
Profit attributable to our equity holders |  |  | (1,900 | ) |  |  | 6,055 |  |  |  | 9,171 |  |  |  | 4,370 |  |  |  | 7,990 |  |  |  | 1,241 |  |  |  | 8,273 |
Weighted average number of Ordinary and Restricted Shares (million shares)(2) |  |  | 1,995 |  |  |  | 1,980 |  |  |  | 1,984 |  |  |  | 1,975 |  |  |  | 1,971 |  |  |  | 1,717 |  |  |  | 1,638 |
Diluted weighted average number of Ordinary and Restricted Shares (million shares)(3) |  |  | 2,034 |  |  |  | 2,011 |  |  |  | 2,026 |  |  |  | 2,011 |  |  |  | 2,010 |  |  |  | 1,755 |  |  |  | 1,668 |
Basic earnings per share (USD)(4) |  |  | (0.95 | ) |  |  | 3.06 |  |  |  | 4.62 |  |  |  | 2.21 |  |  |  | 4.05 |  |  |  | 0.72 |  |  |  | 5.05 |
Basic earnings per share from continuing operations (USD)(4) |  |  | (1.98 | ) |  |  | 2.94 |  |  |  | 4.41 |  |  |  | 1.94 |  |  |  | 3.77 |  |  |  | 0.69 |  |  |  | 5.05 |
Diluted earnings per share (USD)(5) |  |  | (0.95 | ) |  |  | 3.01 |  |  |  | 4.53 |  |  |  | 2.17 |  |  |  | 3.98 |  |  |  | 0.71 |  |  |  | 4.96 |
Dividends per share (USD) |  |  | n/a |  |  |  | n/a |  |  |  | 2.02 |  |  |  | 2.05 |  |  |  | 4.33 |  |  |  | 3.85 |  |  |  | 3.95 |
Dividends per share (EUR) |  |  | n/a |  |  |  | n/a |  |  |  | 1.80 |  |  |  | 1.80 |  |  |  | 3.60 |  |  |  | 3.60 |  |  |  | 3.60 |
Other Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Volumes (million hectoliters) |  |  | 240 |  |  |  | 276 |  |  |  | 561 |  |  |  | 560 |  |  |  | 605 |  |  |  | 500 |  |  |  | 457 |

|  | As of 30 June |  |  | As of 31 December |
|  | 2020 |  |  | 2019 |  |  | 2018(7)(8) |  |  | 2017(8) |  |  | 2016(6) |  |  | 2015 |
|  | (USD millions) |
|  | (Unaudited) |  |  | (Audited8) |
Financial Position Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total assets |  |  | 225,448 |  |  |  | 236,648 |  |  |  | 233,868 |  |  |  | 248,208 |  |  |  | 258,381 |  |  |  | 134,635 |
Equity |  |  | 68,347 |  |  |  | 84,553 |  |  |  | 71,889 |  |  |  | 80,200 |  |  |  | 81,425 |  |  |  | 45,719 |
Equity attributable to our equity holders |  |  | 60,065 |  |  |  | 75,722 |  |  |  | 64,485 |  |  |  | 72,576 |  |  |  | 71,339 |  |  |  | 42,137 |
Issued capital |  |  | 1,736 |  |  |  | 1,736 |  |  |  | 1,736 |  |  |  | 1,736 |  |  |  | 1,736 |  |  |  | 1,736 |

7

Notes:

(1) | Turnover less excise taxes and discounts. In many jurisdictions, excise taxes make up a large proportion of the cost of beer charged to our customers (see “Item 5. Operating and Financial Review—A. Key Factors Affecting Results of Operations—Excise Taxes”).

(2) | Weighted average number of Ordinary and Restricted Shares means, for any period, the number of shares outstanding at the beginning of the period, adjusted by the number of shares canceled, repurchased or issued during the period, including deferred share instruments and stock lending, multiplied by a time-weighting factor.

(3) | Diluted weighted average number of Ordinary and Restricted Shares means the weighted average number of Ordinary and Restricted Shares, adjusted by the effect of share options and restricted stock units issued.

(4) | Earnings per share means, for any period, profit attributable to our equity holders for the period divided by the weighted average number of Ordinary and Restricted Shares.

(5) | Diluted earnings per share means, for any period, profit attributable to our equity holders for the period divided by the diluted weighted average number of Ordinary and Restricted Shares.

(6) | Following the combination with SAB, we consolidated SAB and report results and volumes of the retained SAB operations as of the fourth quarter of 2016.

(7) | The financial information for 2018 is presented under IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers, which were adopted by us with effect on 1 January 2018 in accordance with the modified retrospective application.

(8) | The financial information for 2018 and 2017 is presented under IFRS 16 Leases which was adopted by us with effect on 1 January 2017 in accordance with the full retrospective application. In addition, the financial information for 2018 and 2017 reflects the classification of the Australian operations as discontinued operations. The financial information for 2016 and 2015 has not been restated to reflect these changes.

(9) | The financial information for the six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

8

Results of Operations for the Six-month period ended 30 June 2020 Compared to Six-month period ended 30 June 2019

Divestiture of Australia to Asahi

Effective 30 September 2019, following the announcement on 19 July 2019 of the agreement to divest Carlton & United Breweries (“CUB” or “Australian operations”), the Australian subsidiary, to Asahi Group Holdings, Ltd. (“Asahi”), we classified the assets and liabilities associated with the Australian operations as assets held for sale and liabilities associated with assets held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. In addition, since the results of the Australian operations represented a separate major line of business, these were accounted for as discontinued operations as required by IFRS 5 and presented in a separate line in the consolidated income statement (“profit from discontinued operations”) up to 31 May 2020. Consequently, our consolidated results for the six-month period ended 30 June 2019 have been restated as if the classification had been applied as of 1 January 2017 to exclude the results of the Australian operations. The transaction closed on 1 June 2020, resulting in a net gain on disposal of USD 1.9 billion recognized in profit from discontinued operations.

The table below presents our condensed consolidated results of operations for the six-month periods ended 30 June 2020 and 2019.

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (3) |  |  | Change |
|  | (USD million, except volumes) |  |  | (%)(1) |
Volumes (thousand hectoliters) |  |  | 239,577 |  |  |  | 276,031 |  |  |  | (13.2 | )
Revenue |  |  | 21,298 |  |  |  | 25,823 |  |  |  | (17.5 | )
Cost of sales |  |  | (9,097 | ) |  |  | (9,953 | ) |  |  | 8.6 |
Gross profit |  |  | 12,201 |  |  |  | 15,869 |  |  |  | (23.1 | )
Selling, General and Administrative expenses |  |  | (7,257 | ) |  |  | (8,077 | ) |  |  | 10.2 |
Other operating income/(expenses) |  |  | 158 |  |  |  | 388 |  |  |  | (59.3 | )
Exceptional items |  |  | (2,796 | ) |  |  | (103 | ) |  |  | — |
Profit from operations |  |  | 2,306 |  |  |  | 8,077 |  |  |  | (71.4 | )
EBITDA, as defined(2) |  |  | 7,217 |  |  |  | 10,342 |  |  |  | (30.2 | )

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | For a discussion of how we use EBITDA, as defined, and its limitations, and a table showing the calculation of our EBITDA, as defined, for the periods shown, see “—EBITDA, as defined” below.

(3) | Our condensed consolidated results of operations for 2019 have been restated to reflect the classification of the Australian operations as discontinued operations.

Volumes

Our reported volumes include both beer (including near-beer) and non-beer (primarily carbonated soft drinks) volumes. In addition, volumes include not only brands that we own or license, but also third-party brands that we brew or otherwise produce as a subcontractor and third-party products that we sell through our distribution network, particularly in Europe. Volumes sold by the Global Export and Holding Companies businesses are shown separately.

The table below summarizes the volume evolution by business segment.

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (2) |  |  | Change |
|  | (thousand hectoliters) |  |  | (%)(1) |
North America |  |  | 51,977 |  |  |  | 53,635 |  |  |  | (3.1 | )
Middle Americas |  |  | 51,858 |  |  |  | 64,722 |  |  |  | (19.9 | )
South America |  |  | 62,782 |  |  |  | 66,856 |  |  |  | (6.1 | )
EMEA |  |  | 33,551 |  |  |  | 40,214 |  |  |  | (16.6 | )
Asia Pacific |  |  | 39,045 |  |  |  | 50,189 |  |  |  | (22.2 | )
Global Export & Holding Companies |  |  | 364 |  |  |  | 416 |  |  |  | (12.5 | )
Total |  |  | 239,577 |  |  |  | 276,031 |  |  |  | (13.2 | )

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | Effective 30 September 2019, the Australian operations were classified as a disposal group held for sale, and consequently accounted for as discontinued operations. The figures for the period ended 30 June 2019 have been restated to reflect this change.

9

Our consolidated volumes for the six-month period ended 30 June 2020 decreased by 36.5 million hectoliters, or 13.2%, to 239,577 million hectoliters compared to our consolidated volumes for the six-month period ended 30 June 2019. The results for the six-month period ended 30 June 2020 reflect the performance of our business after the completion of certain acquisitions and disposals we undertook in 2019 and 2020.

The 2019 and 2020 acquisitions and disposals include acquisitions which were individually not significant (collectively the “2019 and 2020 acquisitions and disposals”).

The 2019 and 2020 acquisitions and disposals impacted positively our volumes by 615 million hectoliters (net) for the six-month period ended 30 June 2020 compared to the six-month period ended 30 June 2019.

Excluding volume changes attributable to the acquisitions and disposals described above, total volumes decreased 13.4%. Our own beer volumes decreased 14.0% in the six-month period ended 30 June 2020 compared to the six-month period ended 30 June 2019. On the same basis, in the six-month period ended 30 June 2020, our non-beer volumes decreased 7.6% compared to the same period in 2019.

The impact of COVID-19 on our global results increased significantly toward the end of the first quarter of 2020. Consequently, in the first quarter of 2020, our total volume declined by 9.3%.

Our performance in the second quarter of 2020 was materially impacted by the COVID-19 pandemic, as expected. As the quarter progressed, however, we saw considerable improvement. April 2020 volumes declined by 32.4%, May 2020 volumes declined by 21.4% and June 2020 volumes grew by 0.7%, demonstrating the resilience of the global beer category.

North America

In the six-month period ended 30 June 2020, our volumes in North America decreased by 1.7 million hectoliters, or 3.1%, compared to the six-month period ended 30 June 2019.

Excluding volume changes attributable to the acquisitions and disposals, our total volumes decreased by 3.3% in the six-month period ended 30 June 2020 compared to the same period last year.

We estimate that our sales-to-retailers (“STRs”) in the United States declined by 0.4% in an industry that we estimate was flattish, resulting in an estimated market share decline of 20 bps in the six-month period ended 30 June 2020 compared to the same period last year. Our sales-to-wholesalers (“STWs”) declined by 3.7%.

In response to the COVID-19 pandemic, “stay-at-home” orders and other social distancing measures were implemented in the United States beginning in the middle of March 2020, at varying levels across states.

Our US business performed well in the second quarter of 2020 even in the face of continued industry pressure and volatility caused by the COVID-19 pandemic, primarily due to the continued implementation of our commercial strategy. We leveraged the learnings from our global colleagues, as well as data and analytics, to quickly and efficiently adapt our operations to continue supplying the market and effectively address changing consumer needs.

Our estimated market share was stable in the second quarter of 2020, as our STRs were flattish along with the industry. In light of the strong consumer demand, depletions of inventory accelerated while STWs declined by 6.1%. Throughout the second quarter, we observed a gradual reopening of the on-premise channel, though many states have since reinstated restrictions.

Our above core portfolio once again led the way and delivered an estimated market share gain of 90 bps in the second quarter of 2020. This was led by the successful launch of Bud Light Seltzer earlier this year, which remains the top innovation in the category by volume in 2020. Michelob Ultra continued its strong momentum as a top share gainer in the category, finding new ways to connect with consumers digitally to support an active lifestyle.

In the mainstream segment, our core, core light and value brands delivered an estimated loss of 90 bps of market share. This improvement versus recent trends is largely due to the uplift of beer sales in the off-premise channel, which disproportionately benefits established brands and larger packs. Within the mainstream segment, we estimate our portfolio lost approximately 15 bps of market share.

Our business in Canada demonstrated resilience in a challenging environment, delivering a flattish volume performance well ahead of the industry. As government restrictions came into place in the middle of March 2020, the on-premise channel was effectively shut down. We observed an uplift in the off-premise channel as consumers prepared to enjoy our products at home. Our beyond beer business considerably outperformed, led by successful innovation launches and the growth of our seltzer portfolio, driven by Nutrl.

Middle Americas

In the six-month period ended 30 June 2020, our volumes in Middle Americas decreased by 12.9 million hectoliters, or 19.9%, compared to the six-month period ended 30 June 2019.

Excluding volume changes attributable to the acquisitions and disposals, our total volumes decreased by 20.6% in the six-month period ended 30 June 2020 compared to the same period last year.

10

In Mexico, our volumes declined by high teens in the six-month period ended 30 June 2020 compared to the same period last year.

Our beer business was shut down during the nationwide lockdown in the first two months of the second quarter of 2020. We quickly pivoted to produce low-alcohol beer products, Victoria 1.8 and Corona Ligera, which addressed new in-home consumption occasions. We also leveraged our direct-to-consumer and B2B capabilities, which saw significant acceleration throughout the crisis. Additionally, we launched a platform called “#PorNuestroMexico” to support a strong recovery through humanitarian initiatives, such as face mask and hand sanitizer donations, and customer support initiatives, such as providing safety equipment and credit support.

In June 2020, the restrictions on our operations were lifted and we rapidly returned to full operational status with increased safety measures to protect our people. Our beer volumes grew by high teens in June 2020, due to the replenishment of inventory levels in the trade and strong consumer demand. Our above core portfolio saw strong growth in June 2020, with double-digit growth of our global brands, Michelob Ultra and the Modelo Especial family.

Our portfolio became available in an additional 1,600 OXXO stores in July 2020, as we completed the fourth wave of our expansion into the country’s largest convenience store channel.

In Colombia, total volumes declined by high teens, with beer volumes down high teens and non-beer volumes down low teens in the six-month period ended 30 June 2020 compared to the same period last year.

The first quarter 2020 was significantly impacted by social distancing measures put in place in the middle of March 2020 including a national quarantine, to address the COVID-19 pandemic. The on-premise channel, which comprises slightly more than 50% of our volumes, was closed across the country, although sales were permitted for home delivery.

Our performance in the second quarter of 2020 was significantly impacted by the nationwide lockdown of the on-premise channel and stay-at-home restrictions, though these began to ease throughout the quarter. In June, our volume performance improved versus the first two months of the second quarter of 2020, as the gradual re-opening of certain sectors of the economy led to improving consumer confidence and disposable income. Additionally, while on-premise alcohol consumption remains restricted, many on-premise outlets are now offering take-out, supporting improving volume trends. We continued to expand the premium segment in the quarter while further enhancing our smart affordability strategy. We are supporting the recovery of our customers with initiatives such as Tienda Cerca, an online delivery platform, and our recently-launched proprietary B2B online platform, BEES.

In Peru, our volumes declined by high teens in the first quarter of 2020, driven by lockdown measures implemented across the country as of the middle of March 2020 in response to COVID-19. Prior to the lockdown, we saw strong performances from our global brands and our innovations in the first quarter of 2020, including the continued success of Golden, a smart affordability innovation we launched in the fourth quarter of 2019. Our volumes declined significantly in the second quarter of 2020 compared to the same period last year, as a result of government lockdown restrictions implemented in March 2020. At the end of April 2020, we resumed sales and distribution of existing inventory, and in June 2020 we resumed full brewing operations, resulting in improved volume trends throughout the second quarter of 2020. We continue to work to transform our business to better reach consumers through an enhanced portfolio of new brands, such as our smart affordability brand Golden.

In Ecuador, our performance was also significantly impacted by government measures in March 2020 to shut down the on-premise channel across the country, as well as some local measures to shut down full regions, which affected approximately half of our total volumes. In the first quarter of 2020, our volumes declined by double-digits. Prior to March 2020, our volumes were growing by double-digits, driven by the strong performance of our brand portfolio across the price spectrum. Our volumes declined significantly in the second quarter of 2020 compared to the same period last year, due to the COVID-19 pandemic and associated government restrictions. In June 2020, we saw a gradual easing of restrictions, leading to improved volume trends in the month. Despite the challenging environment, our premium and super premium brands gained share in the second quarter of 2020. We also expanded our smart affordability strategy to brew beers with local crops, through a program called Siembra por Contrato, supporting farmers in the country.

South America

In the six-month period ended 30 June 2020, our volumes in South America decreased by 4.1 million hectoliters, or 6.1%, compared to the six-month period ended 30 June 2019, with our beer volumes decreasing 6.1% and soft drinks decreasing 6.7%.

In Brazil, our volumes declined by 6.9%, with beer volumes down 6.9% and non-beer volumes down 6.8% in the six-month period ended 30 June 2020 compared to the same period last year.

In March 2020, restrictive measures were implemented across Brazilian states in response to the COVID-19 pandemic, including the lockdown of the on-premise channel, which represents more than half of our volume. We were committed to staying close to our consumers and customers throughout that time by leveraging technology. We saw an opportunity to grow the in-home consumption occasion, especially through our unique Direct-to-Consumer platform “Zé Delivery”. Through the platform, we connect our customers, bars, restaurants, consumers and drivers to enable cold beer delivery in less than 60 minutes.

11

Our beer business delivered a healthy performance in the context of a volatile external environment in the second quarter of 2020, with a volume decline of 1.3%, outperforming the industry according to our estimates. We saw an improving trend throughout the second quarter of 2020 driven by the success of our innovation strategy, reliability of our supply chain and customer relationships, the strengths of our distribution footprint and a shift in off-premise consumption to traditional outlets, where our portfolio over-indexes. Furthermore, these benefits were amplified by the positive impact of government subsidies on consumer disposable income. Our non-beer business declined by 12.6% in the second quarter of 2020, impacted by COVID-19 restrictions and the consequent change in consumption occasions.

Although the COVID-19 pandemic has created significant challenges for our business, it has also accelerated consumer trends that we have been investing behind, primarily reinforcing the need for an innovative, consumer-centric mindset and advancing our business transformation enabled by technology. We have been enhancing our portfolio across a variety of segments. In the mainstream segment, Skol Puro Malte grew by strong double-digits from a meaningful base. In the core plus segment, Bohemia more than doubled in the second quarter of 2020 supported by its repositioning and new visual brand identity, and we are further elevating our presence in the segment through the successful launch of Brahma Duplo Malte. In the premium segment, our global brands grew by double-digits, led by Budweiser, though our domestic premium brands declined given their over-exposure to the on-premise channel.

Our digital transformation continues to gain traction. Our customers are increasingly relying on our B2B digital solutions, and our direct-to-consumer e-commerce platform, Zé Delivery, has been rapidly increasing geographic coverage, reaching 2.2 million orders in June 2020 versus 1.5 million orders in full year ended 31 December 2019. We continue to connect with consumers in new ways with initiatives such as “lives,” a series of livestreamed online concerts, which reached more than 675 million views in the second quarter of 2020.

In Argentina, our business was impacted by the ongoing challenging environment. We delivered high single digit volume growth in the first quarter of 2020, ahead of the industry and supported by a favorable comparable. In response to the COVID-19 pandemic, a full national lockdown was implemented as of the middle of March 2020. The on-premise channel was effectively shut and there were restrictions on hours of operation in the off-premise channel, which represents approximately 90% of our volume. Volumes declined by low teens in the second quarter of 2020. Our above core portfolio remained resilient and performed well, led by the growth of our global and local brands. Corona and our local champion in the core plus segment, Andes Origen, delivered high double-digit growth in the second quarter of 2020. We continue to focus on the digital transformation of our business and have observed strong results from our direct-to-consumer initiatives and our e-retail platforms, aimed at supporting local businesses.

EMEA

In EMEA, our volumes, including subcontracted volumes, for the six-month period ended 30 June 2020 decreased by 6.7 million hectoliters, or 16.6%, compared to the six-month period ended 30 June 2019.

Excluding volume changes attributable to the acquisitions and disposals, our beer volumes for the six-month period ended 30 June 2020 decreased 16.4% compared to the same period last year.

In Europe, our volumes declined by low single-digits in the first quarter of 2020 as a result of COVID-19 restrictive measures. We observed a full shut down of the on-premise channel throughout March 2020, which represented approximately 30% of our business in the region. Europe volumes declined by mid-teens in the second quarter of 2020. We have seen an uplift in the off-premise channel since the outbreak of the COVID-19 pandemic, with accelerated growth of premium brands and larger packs. In June 2020, we saw the gradual re-opening of the on-premise channel in most of our markets, resulting in improved volume trends. We continued to gain market share across the majority of our markets in the first six months of 2020, supported by the strong growth of Budweiser following its successful launch in France and the Netherlands last year.

Our business in South Africa was significantly impacted by the nationwide lockdown that began in late March 2020 and lasted until the end of May 2020, which included a complete ban on the sale of alcohol beverages. Our brewery and distribution operations were severely restricted by government mandates. Our volumes in South Africa declined by double-digits in the six-month period ended 30 June 2020 compared to the same period last year. We fully resumed our operations at the beginning of June 2020, and we saw a strong recovery in the month with volume growth of high single digits. However, a second ban on the sale of alcohol beverages was implemented in the middle of July 2020. Our priority is and continues to be the safety and well-being of our people and our communities. We remain focused on working with the South African government on measures that will meaningfully combat the public health crisis, while supporting the country’s much-needed economic recovery.

In Africa excluding South Africa, measures taken to combat the COVID-19 pandemic varied by country, but implementation generally began in late March and early April 2020 to shut down the on-premise channel in most markets. Our breweries mostly remained operational and we were servicing the market, primarily the off-premise channel, in compliance with government regulations. Our breweries remained operational throughout the second quarter of 2020 in most of our key markets. In Nigeria, we saw a rapid recovery following the easing of restrictions in May 2020, leading to volume growth in June 2020. We saw a similar trajectory in the rest of our markets in Africa, with April the most impacted month of the second quarter of 2020, followed by improving volume trends in May and growth in many markets in June 2020.

12

Asia Pacific

For the six-month period ended 30 June 2020, our volumes decreased by 11.1 million hectoliters, or 22.2%, compared to the six-month period ended 30 June 2019.

Excluding volume changes attributable to the acquisitions and disposals, our total volumes decreased by 22.2% in the six-month period ended 30 June 2020 compared to the same period last year.

In China, our volumes declined by 20.6% in the six-month period ended 30 June 2020 compared to the same period last year. COVID-19 struck China in late January 2020, just before the start of the Chinese New Year celebrations, one of the largest consumption occasions of the year. Most provinces implemented significant lockdown measures to combat the virus, lasting from late January through at least the end of February 2020. During this period, we observed virtually no activity in the nightlife channel, very limited activity in the restaurant channel and a meaningful decline in the in-home channel. However, we saw a significant acceleration of the e-commerce channel, where we are the market leader. We grew volumes by strong double-digits in this channel in the first quarter of 2020. We re-allocated our resources to take advantage of these trends, particularly in the in-home and e-commerce channels.

In March 2020, we observed a steady recovery in the in-home and restaurant channels, though the nightlife channel recovered at a slower pace due to social distancing measures. By the end of March 2020, almost all our wholesalers had resumed operations though operating at lower demand levels in light of the situation and we had re-opened all our breweries in China.

Our business in China continued its recovery throughout the second quarter of 2020, delivering a slight volume decline of 0.4%. While we faced a 17% decline in April 2020, we achieved mid-single digit growth in May and June 2020. Our June 2020 performance represented our highest ever monthly volumes in China, while still maintaining healthy levels of inventory in the trade.

In the second quarter of 2020, our Super Premium portfolio continued its momentum with volume growth. Additionally, our mainstream brands outperformed in the second quarter of 2020, especially our local brands. We believe that the long-term premiumization trend in China remains intact, given the continued healthy performance of the Super Premium segment, strong indications of economic recovery and encouraging stimulus policies.

We launched several new brands across a variety of price segments and styles ahead of the summer season. Leveraging our global portfolio of brands and the category expansion framework, we have launched Bud Light as a premium lager and Beck’s as an international pure malt offering. Additionally, we expanded Sedrin Lychee nationally in the flavored beer segment.

Throughout the second quarter of 2020, we saw improving trends across channels. The in-home channel is effectively fully open, and our business performed very well, with volume growth of high single digits. In the on-premise channel, more than 90% of restaurants were open by the end of June 2020 with comparable rates of sale to last year. The nightlife channel improved significantly month-over-month with more than 80% of venues open at the end of June 2020. The e-commerce channel, where we have grown our market share to more than twice that of the next brewer, continued to accelerate its growth.

In South Korea, our volumes experienced a meaningful decline in the first quarter of 2020 driven by COVID-19 as well as a challenging comparable. South Korea faced a significant outbreak of the virus in late February 2020, though businesses largely remained open across most of the country. Consumers actively practiced social distancing, which led to a meaningful decline in the on-premise channel in the first quarter of 2020. However, since the middle of March 2020, we observed a consistent improvement in consumer sentiment. Our volumes declined in the second quarter of 2020 driven by a softer industry resulting from the COVID-19 pandemic. We continue to leverage our full portfolio of brands to connect with consumers across price segments and channels. In the premium segment, our strong portfolio of established brands and recent innovations outperformed the industry. In total, we estimate that our market share grew quarter-over-quarter once again. We are encouraged by our full portfolio’s momentum in the market.

Global Export & Holding Companies

For the six-month period ended 30 June 2020, Global Export and Holding Companies volumes decreased by 0.1 million hectoliters. Excluding the volume changes attributable to the acquisitions and disposals, our total volumes in the six-month period ended 30 June 2020 decreased 10.3% compared to the same period last year.

13

Revenue

The following table reflects changes in revenue across our business segments for the six-month period ended 30 June 2020 as compared to our revenue for the six-month period ended 30 June 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (2) |  |  | Change |
|  | (USD million) |  |  | (%) (1) |
North America |  |  | 7,536 |  |  |  | 7,701 |  |  |  | (2.1 | )
Middle Americas |  |  | 4,246 |  |  |  | 5,735 |  |  |  | (26.0 | )
South America |  |  | 3,613 |  |  |  | 4,769 |  |  |  | (24.2 | )
EMEA |  |  | 3,007 |  |  |  | 3,784 |  |  |  | (20.5 | )
Asia Pacific |  |  | 2,609 |  |  |  | 3,514 |  |  |  | (25.8 | )
Global Export & Holding Companies |  |  | 287 |  |  |  | 319 |  |  |  | (10.0 | )
Total |  |  | 21,298 |  |  |  | 25,823 |  |  |  | (17.5 | )

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | Effective 30 September 2019, the Australian operations were classified as a disposal group held for sale, and consequently accounted for as discontinued operations. The figures for the period ended 30 June 2019 have been restated to reflect this change.

Our consolidated revenue was USD 21,298 million for the six-month period ended 30 June 2020. This represented a decrease of USD 4,525 million, or 17.5%, as compared to our consolidated revenue for the six-month period ended 30 June 2019 of USD 25,823 million. The results for the six-month period ended 30 June 2020 reflect (i) the performance of our business after the completion of certain acquisitions and disposals we undertook in 2018 and 2019 and (ii) currency translation effects.

| • |  | The 2019 and 2020 acquisitions and disposals positively impacted our consolidated revenue by USD 53 million for the six-month period ended 30 June 2020 compared to the six-month period ended 30 June 2019.

| • |  | Our consolidated revenue for the six-month period ended 30 June 2020 also reflects a negative currency translation impact of USD 1,470 million mainly arising from currency translation effects in South America.

Excluding the effects of the 2019 and 2020 acquisitions and disposals and currency translation effects, our revenue decreased 12.0% in total and increased by 1.6% on a per hectoliter basis in the six-month period ended 30 June 2020 compared to the same period in 2019, and declined by 0.6% on a per hectoliter basis in the second quarter of 2020, driven by restrictions related to the COVID-19 pandemic. Our consolidated revenue for the six-month period ended 30 June 2020 was partially impacted by the decrease in volumes discussed above. On the same basis, our revenue per hectoliter for the six-month period ended 30 June 2020 increased compared to the same period last year. This increase was most significant in South America, where revenue per hectoliter increased by mid-single digits, primarily driven by double-digit revenue per hectoliter growth in Argentina in line with inflation, and in North America, as a result of the price increase in the second half of 2019. During the second quarter, our revenue on a per hectoliter basis declined by 0.6% compared to the same period in 2019. The COVID-19 pandemic resulted in a shift from the on-premise channel to the off-premise channel in different markets, impacting our top-line.

Combined revenues of our global brands, Budweiser, Stella Artois and Corona, declined by 14.1% globally and 14.9% outside their respective home markets in the six-month period ended 30 June 2020.

Cost of Sales

The following table reflects changes in cost of sales across our business segments for the six-month period ended 30 June 2020 as compared to the six-month period ended 30 June 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (2) |  |  | Change |
|  | (USD million) |  |  | (%)(1) |
North America |  |  | (2,842 | ) |  |  | (2,868 | ) |  |  | 0.9 |
Middle Americas |  |  | (1,454 | ) |  |  | (1,711 | ) |  |  | 15.0 |
South America |  |  | (1,727 | ) |  |  | (1,928 | ) |  |  | 10.4 |
EMEA |  |  | (1,555 | ) |  |  | (1,636 | ) |  |  | 5.0 |
Asia Pacific |  |  | (1,217 | ) |  |  | (1,535 | ) |  |  | 20.7 |
Global Export & Holding Companies |  |  | (302 | ) |  |  | (274 | ) |  |  | (10.2 | )
Total |  |  | (9,097 | ) |  |  | (9,953 | ) |  |  | 8.6 |

14

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Our consolidated cost of sales was USD 9,097 million for the six-month period ended 30 June 2020. This represented a decrease of USD 856 million, or 8.6%, compared to our consolidated cost of sales for the six-month period ended 30 June 2019. The results for the six-month period ended 30 June 2020 reflect (i) the performance of our business after the completion of certain acquisitions and disposals we undertook in 2019 and 2020 and (ii) currency translation effects.

| • |  | The 2019 and 2020 acquisitions and disposals described above negatively impacted our consolidated cost of sales by USD 68 million for the six-month period ended 30 June 2020 compared to the six-month period ended 30 June 2019.

| • |  | Our consolidated cost of sales for the six-month period ended 30 June 2020 also reflects a positive currency translation impact of USD 676 million mainly arising from currency translation effects in South America.

Excluding the effects of the business acquisitions and disposals and currency translation effects, our cost of sales decreased USD 249 million or 2.5%. On the same basis, our consolidated cost of sales per hectoliter increased by 12.9%. This was driven primarily by operational deleverage resulting from the impact of COVID-19 on our volumes, particularly in markets where our beer operations were shut down within the second quarter of 2020. Our consolidated cost of sales for the six-month period ended 30 June 2020 was partially impacted by decrease in volumes discussed above. The increase in cost of sales per hectoliter was most significant in Middle Americas, South America and EMEA.

Operating Expenses

The discussion below relates to our operating expenses, which equal the sum of our distribution, sales and marketing expenses, administrative expenses and other operating income and expenses (net), for the six-month period ended 30 June 2020 as compared to the six-month period ended 30 June 2019. Our operating expenses do not include exceptional charges, which are reported separately.

Our operating expenses for the six-month period ended 30 June 2020 were USD 7,099 million, representing a decrease of USD 590 million, or 7.7%, compared to our operating expenses for the same period in 2019.

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (2) |  |  | Change |
|  | (USD million) |  |  | (%)(1) |
Selling, General and Administrative expenses |  |  | (7,257 | ) |  |  | (8,077 | ) |  |  | 10.2 |
Other Operating Income/(Expenses) |  |  | 158 |  |  |  | 388 |  |  |  | (59.3 | )
Total Operating Expenses |  |  | (7,099 | ) |  |  | (7,689 | ) |  |  | 7.7 |

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Selling, General and Administrative Expenses

The following table reflects changes in our distribution expenses, sales and marketing expenses and administrative expenses (our “selling, general and administrative expenses”) across our business segments for the six-month period ended 30 June 2020 as compared to the six-month period ended 30 June 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (2) |  |  | Change |
|  | (USD million) |  |  | (%)(1) |
North America |  |  | (2,104 | ) |  |  | (2,197 | ) |  |  | 4.2 |
Middle Americas |  |  | (1,258 | ) |  |  | (1,483 | ) |  |  | 15.2 |
South America |  |  | (1,205 | ) |  |  | (1,427 | ) |  |  | 15.6 |
EMEA |  |  | (1,263 | ) |  |  | (1,358 | ) |  |  | 7.0 |
Asia Pacific |  |  | (961 | ) |  |  | (1,048 | ) |  |  | 8.3 |
Global Export & Holding Companies |  |  | (466 | ) |  |  | (564 | ) |  |  | 17.4 |
Total |  |  | (7,257 | ) |  |  | (8,077 | ) |  |  | 10.2 |

15

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Our consolidated selling, general and administrative expenses were USD 7,257 million for the six-month period ended 30 June 2020. This represented a decrease of USD 820 million, or 10.2%, as compared to the six-month period ended 30 June 2019. The results for the six-month period ended 30 June 2020 reflect (i) the performance of our business after the completion of certain acquisitions and disposals we undertook in 2019 and 2020 and (ii) currency translation effects.

| • |  | The 2019 acquisitions and disposals described above positively impacted our consolidated selling, general and administrative expenses by USD 4 million for the six-month period ended 30 June 2020 compared to the six-month period ended 30 June 2019.

| • |  | Our consolidated selling, general and administrative expenses for the six-month period ended 30 June 2020 also reflects a positive currency translation impact of USD 498 million mainly arising from currency translation effects in South America.

Excluding the effects of the business acquisitions and disposals and currency translation effects, our consolidated selling, general and administrative expenses decreased by 4.0% driven by successful resource allocation initiatives.

Other operating income/(expense)

The following table reflects changes in other operating income and expenses across our business segments for the six-month period ended 30 June 2020 as compared to the six-month period ended 30 June 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (2) |  |  | Change |
|  | (USD million) |  |  | (%)(1) |
North America |  |  | (10 | ) |  |  | 20 |  |  |  | — |
Middle Americas |  |  | — |  |  |  | 55 |  |  |  | — |
South America |  |  | 54 |  |  |  | 100 |  |  |  | (46.0 | )
EMEA |  |  | 55 |  |  |  | 98 |  |  |  | (43.9 | )
Asia Pacific |  |  | 40 |  |  |  | 86 |  |  |  | (53.5 | )
Global Export & Holding Companies |  |  | 19 |  |  |  | 29 |  |  |  | (34.5 | )
Total |  |  | 158 |  |  |  | 388 |  |  |  | (59.3 | )

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

The net positive effect of our consolidated other operating income and expenses was USD 158 million for the six-month period ended 30 June 2020. This represented a decrease of USD 230 million, or 59.3%, as compared to the six-month period ended 30 June 2019. The results for the six-month period ended 30 June 2020 reflect (i) the performance of our business after the completion of certain acquisitions and disposals we undertook in 2019 and 2020, and (ii) currency translation effects.

| • |  | The 2019 acquisitions and disposals negatively impacted our net consolidated other operating income and expenses by USD 2 million for the six-month period ended 30 June 2020 compared to the six-month period ended 30 June 2019.

| • |  | Our net consolidated other operating income and expenses for the six-month period ended 30 June 2020 also reflect a negative currency translation impact of USD 11 million.

Excluding the effects of the business acquisitions and disposals and currency translation effects, our net consolidated other operating income and expenses decreased by 56.3%, primarily driven by a decrease in government grants in Brazil and China and sale of non-core assets in Europe and Africa.

Exceptional Items

Exceptional items are items which, in our management’s judgment, need to be disclosed separately by virtue of their size and incidence in order to obtain a proper understanding of our financial information. We consider these items to be significant in nature, and accordingly, our management has excluded these items from their segment measure of performance.

16

For the six-month period ended 30 June 2020, exceptional items consisted of impairment of goodwill, COVID-19 costs, restructuring charges, business and asset disposals (including impairment losses), acquisition costs of business combinations and gain on divestiture of Australia. Exceptional items were as follows for the six-month period ended 30 June 2020 and 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (1) |
|  | (USD million) |
Goodwill impairment |  |  | (2,500 | ) |  |  | — |
COVID-19 costs |  |  | (78 | ) |  |  | — |
Restructuring |  |  | (60 | ) |  |  | (58 | )
Business and asset disposal (including impairment) |  |  | (154 | ) |  |  | (24 | )
Acquisition costs of business combinations |  |  | (4 | ) |  |  | (21 | )
Gain on divestiture of Australia (in discontinued operations) |  |  | 1,919 |  |  |  | — |
Total |  |  | (877 | ) |  |  | (103 | )

Note:

(1) | The financial information for 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Goodwill impairment

During the second quarter of 2020, we reported a USD 2.5 billion non-cash goodwill impairment charge. The COVID-19 pandemic resulted in a sharp contraction of sales during the second quarter of 2020 in many countries in which we operate. We concluded that a triggering event occurred which required us to perform an impairment test. The impairment test considered three scenarios for recovery of sales for the tested cash-generating units: a base case, which we deem to be the most likely case, a best case and a worst case. Based on the results of the impairment test, we concluded that no impairment was warranted under the base and best case scenarios.

Nevertheless, under the worst case scenario ran with higher discounts rates to factor the heightened business risk, we concluded that the estimated recoverable amounts of the South Africa and Rest of Africa cash-generating units were below their carrying value. Accordingly, we determined that it was prudent, in view of the uncertainties to record an impairment charge of USD 2.5 billion applying a 30% probability of occurrence of the worst case scenario.

COVID-19 costs

Cost associated with COVID-19 amounted to USD 78 million for the six-month period ended 30 June 2020. These expenses mainly comprise costs related to personal protection equipment for our colleagues, charitable donations and other costs incurred as a direct consequence of the COVID-19 pandemic.

Restructuring

Exceptional restructuring charges amounted to a net cost of USD 60 million for the six-month period ended 30 June 2020 as compared to a net cost of USD 58 million for the six-month period ended 30 June 2019. These charges primarily relate to organizational alignments. These changes aim to eliminate overlapping organizations or duplicated processes, taking into account the right match of employee profiles with the new organizational requirements. These expenses provide us with a lower cost base in addition to a stronger focus on our core activities, quicker decision-making and improvements to efficiency, service and quality.

Business and asset disposal

Business and asset disposals amounted to a net cost of USD 154 million for the six-month period ended 30 June 2020 mainly comprising of a USD 150 million impairment of intangible assets classified as assets held for sale as of 30 June 2020 and other intangibles. Business and asset disposals amounted to a net cost of USD 24 million for the six-month period ended 30 June 2019 mainly comprising costs incurred in relation to the completion of 2018 disposals.

Acquisitions costs of business combinations

The acquisition costs of business combinations amounted to a net cost of USD 4 million for the six-month period ended 30 June 2020 as compared to a net cost of USD 21 million for the six-month period ended 30 June 2019.

Gain on divestiture of Australia

On 1 June 2020, we completed the previously announced sale of CUB to Asahi resulting in a net exceptional gain of USD 1,919 million reported in discontinued operations.

17

Profit from Operations

The following table reflects changes in profit from operations across our business segments for the six-month period ended 30 June 2020 as compared to the six-month period ended 30 June 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (2) |  |  | Change |
|  | (USD million) |  |  | (%)(1) |
North America |  |  | 2,496 |  |  |  | 2,655 |  |  |  | (6.0 | )
Middle Americas |  |  | 1,484 |  |  |  | 2,569 |  |  |  | (42.3 | )
South America |  |  | 719 |  |  |  | 1,501 |  |  |  | (52.1 | )
EMEA |  |  | (2,344 | ) |  |  | 870 |  |  |  | — |
Asia Pacific |  |  | 462 |  |  |  | 1,013 |  |  |  | (54.4 | )
Global Export & Holding Companies |  |  | (509 | ) |  |  | (533 | ) |  |  | 4.5 |
Total |  |  | 2,306 |  |  |  | 8,077 |  |  |  | (71.4 | )

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Our profit from operations was USD 2,306 million for the six-month period ended 30 June 2020. This represented a decrease of USD 5,771 million, or 71.4%, as compared to our profit from operations for the six-month period ended 30 June 2019. The results for the six-month period ended 30 June 2020 reflect (i) the performance of our business after the completion of certain acquisitions and disposals we undertook in 2019 and 2020, (ii) currency translation effects and (iii) the effects of certain exceptional items as described above.

| • |  | The 2019 acquisitions and disposals described above negatively impacted our consolidated profit from operations by USD 12 million for the six-month period ended 30 June 2020 compared to the six-month period ended 30 June 2019.

| • |  | Our consolidated profit from operations for the six-month period ended 30 June 2020 also reflects a negative currency translation impact of USD 285 million.

| • |  | Our profit from operations for the six-month period ended 30 June 2020 was negatively impacted by USD 2,796 million of certain exceptional items, as compared to a negative impact of USD 103 million for the six-month period ended 30 June 2019. See “Exceptional Items” above for a description of the exceptional items during the six-month period ended 30 June 2020 and 2019.

Excluding the effects of the business acquisitions and disposals described above and currency translation effects, our profit from operations decreased by 67.6%. This decrease was most significant in Middle Americas, South America, EMEA and Asia Pacific as a result of the COVID-19 pandemic.

EBITDA, as defined

The following table reflects changes in our EBITDA, as defined, for the six-month period ended 30 June 2020 as compared to six-month period ended 30 June 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (3) |  |  | Change |
|  | (USD million) |  |  | (%)(1) |
Profit attributable to equity holders of AB InBev |  |  | (1,900 | ) |  |  | 6,055 |  |  |  | — |
Profit attributable to non-controlling interests |  |  | 211 |  |  |  | 587 |  |  |  | (64.1 | )
Profit of the period |  |  | (1,688 | ) |  |  | 6,642 |  |  |  | — |
Profit from discontinued operations |  |  | (2,055 | ) |  |  | (236 | ) |  |  | — |
Profit from continuing operations |  |  | (3,744 | ) |  |  | 6,406 |  |  |  | — |
Net finance cost |  |  | 5,592 |  |  |  | 169 |  |  |  | — |
Income tax expense |  |  | 492 |  |  |  | 1,565 |  |  |  | 68.6 |
Share of result of associates and joint ventures |  |  | (33 | ) |  |  | (62 | ) |  |  | (46.8 | )
Profit from operations |  |  | 2,306 |  |  |  | 8,077 |  |  |  | (71.4 | )
Depreciation, amortization and impairment |  |  | 2,261 |  |  |  | 2,265 |  |  |  | 0.2 |
Exceptional impairment |  |  | 2,650 |  |  |  | — |  |  |  | — |
EBITDA, as defined(2) |  |  | 7,217 |  |  |  | 10,342 |  |  |  | (30.2 | )

18

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | See “Item 5. Operating and Financial Review and Results of Operations—Results of Operations—Year Ended 31 December 2019 Compared to Year Ended 31 December 2018—EBITDA, as defined” of our 2019 Annual Report for additional information on our definition and use of EBITDA, as defined.

(3) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Our EBITDA, as defined, was USD 7,217 million for the six-month period ended 30 June 2020. This represented a decrease of USD 3,125 million, or 30.2%, as compared to our EBITDA, as defined, for the six-month period ended 30 June 2019. The results for the six-month period ended 30 June 2020 reflect (i) the performance of our business after the completion of the acquisitions and disposals we undertook in 2019 and 2020 and (ii) currency translation effects. Furthermore, our EBITDA, as defined, was negatively impacted by certain exceptional items by USD 146 million (excluding impairment losses) in the six-month period ended 30 June 2020, as compared to a negative impact of USD 103 million (excluding impairment losses) during the six-month period ended 30 June 2019. See “Exceptional Items” above for a description of the exceptional items during the six-month period ended 30 June 2020 and 2019.

Net Finance Income/(Cost)

Our net finance income/(cost) items were as follows for the three-month periods ended 30 June 2020 and 30 June 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 (2) |  |  | Change |
|  | (USD million) |  |  | (%)(1) |
Net interest expense |  |  | (1,898 | ) |  |  | (1,946 | ) |  |  | 2.5 |
Net interest on net defined benefit liabilities |  |  | (41 | ) |  |  | (48 | ) |  |  | 14.6 |
Accretion expense |  |  | (291 | ) |  |  | (287 | ) |  |  | (1.4 | )
Mark-to-market (hedging of our share-based payment programs) |  |  | (1,724 | ) |  |  | 1,124 |  |  |  | — |
Other financial results |  |  | (250 | ) |  |  | (213 | ) |  |  | (17.4 | )
Net finance cost before exceptional finance results |  |  | (4,204 | ) |  |  | (1,370 | ) |  |  | — |
Mark-to-market |  |  | (1,438 | ) |  |  | 1,098 |  |  |  | — |
Other |  |  | 50 |  |  |  | 103 |  |  |  | (51.5 | )
Exceptional net finance income/(cost) |  |  | (1,388 | ) |  |  | 1,201 |  |  |  | — |
Net finance income/(cost) |  |  | (5,592 | ) |  |  | (169 | ) |  |  | — |

Note:

(1) | The percentage change reflects the improvement (or worsening) of results for the period as a result of the change in each item.

(2) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Our net finance cost for the six-month period ended 30 June 2020 was USD 5,592 million, as compared to a net finance cost of USD 169 million for the six-month period ended 30 June 2019, representing a cost increase of USD 5,423 million.

The increase in net finance costs before exceptional financial items from USD 1,370 million for the six-month period ended 30 June 2019 to USD 4,204 million for the six-month period ended 30 June 2020 is driven primarily by a negative mark-to-market adjustment of USD 1,724 million in the six-month period ended 2020, linked to the hedging of our share-based payment program, compared to a positive mark-to-market adjustment of USD 1,124 million in the six-month period ended 30 June 2019.

The number of shares covered by the hedging of our share-based payment programs, together with the opening and closing share prices, are shown below:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 |
Share price at the start of the six-month period (in euro) |  |  | 72.71 |  |  |  | 57.70 |
Share price at the end of the six-month period (in euro) |  |  | 43.87 |  |  |  | 77.84 |
Number of derivative equity instruments at the end of the period (in millions) |  |  | 55.0 |  |  |  | 46.9 |

19

Exceptional net finance income/(cost) includes a negative mark-to-market adjustment of USD 1,438 million on derivative instruments entered into to hedge the shares issued in relation to the combination with Grupo Modelo and SAB, compared to a positive mark-to-market adjustment of USD 1,098 million for the six-month period ended 30 June 2019. The number of shares covered by the hedging of the deferred share instrument and the restricted shares, together with the opening and closing share prices, are shown below:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 |
Share price at the start of the six-month period (in euro) |  |  | 72.71 |  |  |  | 57.70 |
Share price at the end of the six-month period (in euro) |  |  | 43.87 |  |  |  | 77.84 |
Number of derivative equity instruments at the end of the period (in millions) |  |  | 45.5 |  |  |  | 45.5 |

Other exceptional finance income for the six-month period ended 30 June 2020 includes USD 50 million gain related to remeasurement of deferred considerations on prior year acquisitions.

Other exceptional net finance income/(cost) for the six-month period ended 30 June 2019 includes USD (46) million of foreign exchange translation losses on intragroup loans that were historically reported in equity and were recycled to profit and loss account, upon the reimbursement of these loans and cost related to incremental accruals of deferred considerations on prior year acquisitions, and USD 149 million gain resulting from the early termination of certain bonds.

Share of Results of Associates and Joint Ventures

Our share of results of associates and joint ventures for the six-month period ended 30 June 2020 was USD 33 million as compared to USD 62 million for the six-month period ended 30 June 2019. The decrease in share of results of associates and joint ventures is mainly resulting from the COVID-19 pandemic and currency devaluation.

Income Tax Expense

Our total income tax expense for the six-month period ended 30 June 2020 was USD 492 million, with an effective tax rate of (15.0)%, as compared to an income tax expense of USD 1,565 million and an effective tax rate of 19.8% for the six-month period ended 30 June 2019. The effective tax rate for the six-month period ended 30 June 2020 was negatively impacted by the non-deductible, non-cash goodwill impairment charge and by non-deductible mark-to-market losses from derivatives related to the hedging of our share-based payment programs and the hedging of the shares issued in a transaction related to the combination with Grupo Modelo and SAB. The effective tax rate for the six-month period ended 30 June 2019 was positively impacted by non-taxable gains from these derivatives.

Profit Attributable to Non-Controlling Interests

Profit attributable to non-controlling interests was USD 211 million for the six-month period ended 30 June 2020, a decrease of USD 376 million from USD 587 million for the six-month period ended 30 June 2019.

Profit Attributable to Our Equity Holders

Profit/(loss) attributable to our equity holders for the six-month period ended 30 June 2020 was USD (1,900) million compared to USD 6,055 million for the same period in 2019. Basic earnings per share of USD (0.95) is based on 1,995 million shares outstanding, representing the weighted average number of ordinary and restricted shares outstanding during the six-month period ended 30 June 2020.

Excluding the after-tax impact of exceptional items discussed above, profit attributable to our equity holders from continuing operations for the six-month period ended 30 June 2020 would have been a gain of USD 76 million, and basic earnings per share would have been USD 0.04.

Underlying EPS for the six-month period ended 30 June 2020 was USD 0.90. Underlying EPS is basic earnings per share excluding the after-tax exceptional items discussed above, the mark-to-market of the hedging of our share-based payment programs, the impact of hyperinflation accounting and the impact of discontinued operations.

The decrease in profit attributable to our equity holders for the six-month period ended 30 June 2020 was primarily due to a negative mark-to-market adjustment linked to the hedging of our share-based payment programs and losses on the hedging of the shares issued in transactions related to the combination with Grupo Modelo and SAB, compared to a positive mark-to-market adjustment linked to these hedges for the six-month period ended 30 June 2019, and due to a USD 2.5 billion non-cash goodwill impairment charge that was partially offset by a USD 1.9 billion gain on the disposal of the Australian operations.

20

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019(1) |
|  | (USD per share) |
Profit from continuing operations excluding exceptional items and hyperinflation |  |  | 2.58 |  |  |  | 4.15 |
Hyperinflation accounting impacts |  |  | (0.02 | ) |  |  | (0.02 | )
Profit from continuing operations excluding exceptional items |  |  | 2.56 |  |  |  | 4.13 |
Mark-to-market (hedging of our share-based payment programs) |  |  | (0.86 | ) |  |  | 0.57 |
Net finance cost (excluding mark-to-market related to the hedging of our share-based payment programs) |  |  | (1.24 | ) |  |  | (1.26 | )
Income tax expense |  |  | (0.30 | ) |  |  | (0.79 | )
Associates & non-controlling interest |  |  | (0.11 | ) |  |  | (0.27 | )
Earnings per share excluding exceptional items and discontinued operations |  |  | 0.04 |  |  |  | 2.38 |
Mark-to-market (hedging of our share-based payment programs) |  |  | 0.86 |  |  |  | (0.57 | )
Underlying EPS |  |  | 0.90 |  |  |  | 1.81 |
Earnings per share excluding exceptional items and discontinued operations |  |  | 0.04 |  |  |  | 2.38 |
Exceptional items, before taxes, attributable to equity holders of AB InBev |  |  | (1.40 | ) |  |  | (0.05 | )
Exceptional net finance cost, before taxes, attributable to equity holders of AB InBev |  |  | (0.70 | ) |  |  | 0.61 |
Exceptional taxes attributable to equity holders of AB InBev |  |  | 0.05 |  |  |  | — |
Exceptional non-controlling interest |  |  | 0.02 |  |  |  | 0.01 |
Profit from discontinued operations attributable to equity holders of AB InBev |  |  | 1.03 |  |  |  | 0.12 |
Basic earnings per share |  |  | (0.95 | ) |  |  | 3.06 |

Note:

(1) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Impact of Changes in Foreign Exchange Rates

Foreign exchange rates have a significant impact on our consolidated financial statements. The following table sets forth the percentage of our revenue realized by currency for the six-month period ended 30 June 2020 and 2019:

|  | Six-month period ended |
|  | 30 June 2020 |  |  | 30 June 2019(2) |
U.S. dollar |  |  | 34.7 | % |  |  | 30.4 | %
Brazilian real |  |  | 12.6 | % |  |  | 13.8 | %
Chinese yuan |  |  | 9.0 | % |  |  | 9.9 | %
Mexican peso |  |  | 8.6 | % |  |  | 8.8 | %
Euro |  |  | 6.0 | % |  |  | 6.2 | %
Canadian dollar |  |  | 4.0 | % |  |  | 3.4 | %
Colombian peso |  |  | 3.4 | % |  |  | 4.0 | %
South African rand |  |  | 2.8 | % |  |  | 3.7 | %
Pound sterling |  |  | 2.7 | % |  |  | 2.2 | %
South Korean won |  |  | 2.5 | % |  |  | 2.8 | %
Argentinean peso(1) |  |  | 2.4 | % |  |  | 2.4 | %
Peruvian peso |  |  | 2.3 | % |  |  | 3.2 | %
Dominican peso |  |  | 1.7 | % |  |  | 1.8 | %
Other |  |  | 7.2 | % |  |  | 7.6 | %

Note:

(1) | Hyperinflation accounting was adopted starting from the September year-to-date 2018 results.

(2) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

21

Liquidity and Capital Resources

The following table sets forth our consolidated cash flows for the six-month period ended 30 June 2020 and 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019 |
|  | (USD million) |
Cash flow from operating activities |  |  | 1,119 |  |  |  | 4,897 |
Cash flow from/(used in) investing activities |  |  | 9,067 |  |  |  | (1,755 | )
Cash flow from/(used in) financing activities |  |  | 8,231 |  |  |  | (1,998 | )
Net increase/(decrease) in cash and cash equivalents |  |  | 18,416 |  |  |  | 1,144 |

Cash flow from operating activities

The following table sets forth our cash flow from operating activities for the six-month period ended 30 June 2020 and 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019(1) |
|  | (USD million) |
Profit from continuing operations |  |  | (3,744 | ) |  |  | 6,406 |
Interest, taxes and non-cash items included in profit |  |  | 11,164 |  |  |  | 3,979 |
Cash flow from operating activities before changes in working capital and provisions |  |  | 7,420 |  |  |  | 10,385 |
Change in working capital |  |  | (2,700 | ) |  |  | (1,531 | )
Pension contributions and use of provisions |  |  | (327 | ) |  |  | (279 | )
Interest and taxes (paid)/received |  |  | (3,388 | ) |  |  | (4,129 | )
Dividends received |  |  | 30 |  |  |  | 137 |
Cash flow from operating activities on Australia discontinued operations |  |  | 84 |  |  |  | 314 |
Cash flow from operating activities |  |  | 1,119 |  |  |  | 4,897 |

Note:

(1) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Cash flow from operating activities was USD 1,119 million for the six-month period ended 30 June 2020 compared to USD 4,897 million for the six-month period ended 30 June 2019. The decrease mainly results from the negative impact on our results and reduced payable levels by the end of June 2020 compared to prior year, as a result of the COVID-19 pandemic.

Cash flow from investing activities

The following table sets forth our cash flow from investing activities for the six-month period ended 30 June 2020 and 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019(1) |
|  | (USD million) |
Net capital expenditure |  |  | (1,524 | ) |  |  | (1,488 | )
Acquisition and sale of subsidiaries, net of cash acquired/disposed of |  |  | (204 | ) |  |  | (245 | )
Net proceeds from the sale/(acquisition) of other assets |  |  | (30 | ) |  |  | (6 | )
Proceeds from Australia divestiture (discontinued operations) |  |  | 10,838 |  |  |  | — |
Cash flow from investing activities on Australia discontinued operations |  |  | (13 | ) |  |  | (16 | )
Cash flow from investing activities |  |  | 9,067 |  |  |  | (1,755 | )

Note:

(1) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Cash flow from investing activities was a net cash inflow of USD 9,067 million for the six-month period ended 30 June 2020 as compared to a net cash outflow of USD 1,755 million for the six-month period ended 30 June 2019. The increase in the cash flow from investing activities was mainly driven by USD 10,838 million proceeds from the divestiture of the Australian business.

22

Net capital expenditures were USD 1,524 million for the six-month period ended 30 June 2020 and USD 1,488 million for the six-month period ended 30 June 2019. Out of the total half-year 2020 capital expenditures approximately 41% was used to improve our production facilities, 44% was used for logistics and commercial investments and 15% was used for improving administrative capabilities and the purchase of hardware and software.

Cash flow from financing activities

The following table sets forth our cash flow from financing activities for the six-month period ended 30 June 2020 and 2019:

|  | Six-month period ended 30 June 2020 |  |  | Six-month period ended 30 June 2019(1) |
|  | (USD million) |
Dividends paid |  |  | (1,219 | ) |  |  | (2,389 | )
Net (payments on)/proceeds from borrowings |  |  | 10,194 |  |  |  | 1,410 |
Payments of lease liabilities |  |  | (280 | ) |  |  | (225 | )
Other (including purchase of non-controlling interests) |  |  | (457 | ) |  |  | (781 | )
Cash flow from financing activities on Australia discontinued operations |  |  | (6 | ) |  |  | (13 | )
Cash flow from financing activities |  |  | 8,231 |  |  |  | (1,998 | )

Note:

(1) | The financial information for six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

Cash inflow from financing activities was USD 8,231 million for the six-month period ended 30 June 2020, as compared to a cash outflow of USD 1,998 million for the six-month period ended 30 June 2019. The cash flow from financing activities was primarily driven by dividend payments, net proceeds from borrowings and proceeds from bond issuance. See also note 19 to our unaudited interim report as of 30 June 2020 and for the six-month periods ended 30 June 2020 and 2019.

In March 2020, we drew the full USD 9.0 billion commitment under the 2010 Senior Facilities Agreement and as of 30 June 2020, the amount has been repaid in full. In addition, on 2 April 2020 and 3 April 2020, Anheuser-Busch InBev NV/SA and Anheuser-Busch InBev Worldwide Inc. completed the issuance of a series of EUR and USD bonds for a total amount of approximately USD 11.0 billion.

As of 30 June 2020, we had total liquidity of USD 34.1 billion, which consisted of USD 9 billion available under committed long-term credit facilities and USD 25.1 million of cash, cash equivalents and short-term investments in debt securities less bank overdrafts. Although we may borrow such amounts to meet our liquidity needs, we principally rely on cash flows from operating activities to fund the company’s continuing operations.

Capital Resources and Equity

Our net debt was USD 87.4 billion as of 30 June 2020 as compared to USD 95.5 billion as of 31 December 2019. When adjusted for the proceeds received from the divestment of the Australian operations, our net debt would be USD 84.6 billion as of 31 December 2019.

Apart from operating results net of capital expenditures, our net debt was primarily impacted by the payment of interests and taxes (USD 3.4 billion increase of net debt), foreign exchange impact on net debt (USD 0.1 billion decrease of net debt), settlement of derivatives (USD 0.5 billion increase of net debt), dividend payments to shareholders of AB InBev and Ambev (USD 1.2 billion) and the proceeds from the divestiture of the Australian business (10.8 billion US dollar decrease of net debt).

Consolidated equity attributable to equity holders as of 30 June 2020 was USD 60,065 million, compared to USD 75,722 million as of 31 December 2019. The decrease in equity is primarily related to the combined effect of the weakening of the closing rates of the Mexican pesos, the South African rand, the Colombian pesos and the Brazilian real, which resulted in a foreign exchange translation adjustment of USD 12,293 million as of 30 June 2020.

23

The chart below shows the bond repayment schedule1 as of 30 June 2020 (figures in USD million):

Note:

(1) | Pro forma for announced bond redemption transactions that settle after 30 June 2020.

Further details on interest bearing loans and borrowings, repayment schedules and liquidity risk are disclosed in notes 19 and 22 to our unaudited interim report as of 30 June 2020 and for the six-month periods ended 30 June 2020 and 2019.

Adoption of hyperinflation accounting in Argentina

In May 2018, the Argentinean peso underwent a severe devaluation resulting in the three-year cumulative inflation of Argentina exceeding 100% in 2018, thereby triggering the requirement to transition to hyperinflation accounting as prescribed by IAS 29 Financial Reporting in Hyperinflationary Economies as of 1 January 2018.

Consequently, we have applied hyperinflation accounting for our Argentinean subsidiaries for the first time in the year to date September 2018 unaudited interim report, with effect as of 1 January 2018.

The results for the six-month period ended 30 June 2020 were translated at the June 2020 closing rate of 70.454990 Argentinean pesos per US dollar. The results for the six-month period ended 30 June 2019, were translated at the June 2019 closing rate of 42.448916 Argentinean pesos per US dollar.

The impact of hyperinflation accounting for the period ended 30 June 2020 amounted to USD (53) million decrease in revenue, USD 30 million positive monetary adjustment reported in the finance line and no impact in earnings per share excluding exceptional items and discontinued operations.

Recent events

On 7 July 2020, we completed the tender offers of seven series of notes issued by Anheuser-Busch InBev NV/SA (“ABISA”), and Anheuser-Busch InBev Finance Inc. (“ABIFI”) and repurchased approximately USD 3.0 billion aggregate principal amount of these notes. The total principal amount accepted in the tender offers is set out in the table below.

Date of redemption |  | Issuer (abbreviated) |  | Title of series of notes issued exchanged |  | Currency |  | Original principal amount outstanding (in millions) |  | Principal amount tendered, accepted and cancelled (in millions)
7 July 2020 |  | ABISA |  | 4.000% Notes due 2021 |  | EUR |  | 750 |  | 231
7 July 2020 |  | ABISA |  | 1.950% Notes due 2021 |  | EUR |  | 650 |  | 123
7 July 2020 |  | ABISA |  | 0.875% Notes due 2022 |  | EUR |  | 2,000 |  | 356
7 July 2020 |  | ABISA |  | 0.800% Notes due 2023 |  | EUR |  | 1,000 |  | 356
7 July 2020 |  | ABIFI |  | Floating Rate Notes due 2021 |  | USD |  | 311 |  | 129
7 July 2020 |  | ABIFI |  | 2.625% Notes due 2023 |  | USD |  | 643 |  | 167
7 July 2020 |  | ABIFI |  | 3.300% Notes due 2023 |  | USD |  | 2,799 |  | 1,467

24

On 13 July 2020, we announced that our wholly-owned subsidiaries Anheuser-Busch InBev Worldwide Inc (“ABIWW”), Anheuser-Busch InBev Finance Inc. (“ABIFI”) and Anheuser-Busch North American Holding Corporation (“ABNA”) were exercising their options to redeem the outstanding principal amount indicated in the table below of the following series of notes.

Date of redemption |  | Issuer (abbreviated) |  | Title of series of notes issued exchanged |  | Currency |  | Original principal amount outstanding (in millions) |  | Principal amount to be redeemed (in millions)
12 August 2020 |  | ABIWW |  | 2.500% Notes due 2022 |  | USD |  | 454 |  | 454
12 August 2020 |  | ABIWW |  | 4.375% Notes due 2021 |  | USD |  | 285 |  | 285
29 July 2020 |  | ABIWW |  | 3.250% Notes due 2022 |  | AUD |  | 550 |  | 550
12 August 2020 |  | ABIFI |  | 3.375% Notes due 2023 |  | CAD |  | 600 |  | 600
12 August 2020 |  | ABNA |  | 3.750% Notes due 2022 |  | USD |  | 150 |  | 150

25

Unaudited Interim Report

for the six-month period ended

30 June 2020

1

Index

Unaudited condensed consolidated interim financial statements |  |  | 3 |
Unaudited condensed consolidated interim income statement |  |  | 3 |
Unaudited condensed consolidated interim statement of comprehensive income |  |  | 4 |
Unaudited condensed consolidated interim statement of financial position |  |  | 5 |
Unaudited condensed consolidated interim statement of changes in equity |  |  | 6 |
Unaudited condensed consolidated interim statement of cash flows |  |  | 7 |
Notes to the unaudited condensed consolidated interim financial statements |  |  | 8 |

2

Unaudited condensed consolidated interim financial statements

Unaudited condensed consolidated interim income statement

For the six-month period ended 30 June Million US dollar, except earnings per shares in US dollar |  | Notes |  | 2020 |  |  | 2019 restated1 |
Revenue |  |  |  |  | 21 298 |  |  |  | 25 823 |
Cost of sales |  |  |  |  | (9 097 | ) |  |  | (9 953 | )
Gross profit |  |  |  |  | 12 201 |  |  |  | 15 869 |
Distribution expenses |  |  |  |  | (2 401 | ) |  |  | (2 709 | )
Sales and marketing expenses |  |  |  |  | (3 278 | ) |  |  | (3 531 | )
Administrative expenses |  |  |  |  | (1 578 | ) |  |  | (1 837 | )
Other operating income/(expenses) |  |  |  |  | 158 |  |  |  | 388 |
Impairment of goodwill |  | 7/11 |  |  | (2 500 | ) |  |  | — |
COVID-19 costs |  | 7 |  |  | (78 | ) |  |  | — |
Restructuring |  | 7 |  |  | (60 | ) |  |  | (58 | )
Business and asset disposal (including impairment losses) |  | 7 |  |  | (154 | ) |  |  | (24 | )
Acquisition costs business combinations |  | 7 |  |  | (4 | ) |  |  | (21 | )
Profit from operations |  |  |  |  | 2 306 |  |  |  | 8 077 |
Finance cost |  | 8 |  |  | (5 835 | ) |  |  | (2 754 | )
Finance income |  | 8 |  |  | 243 |  |  |  | 2 586 |
Net finance income/(cost) |  |  |  |  | (5 592 | ) |  |  | (169 | )
Share of result of associates and joint ventures |  | 16 |  |  | 33 |  |  |  | 62 |
Profit before tax |  |  |  |  | (3 253 | ) |  |  | 7 970 |
Income tax expense |  | 9 |  |  | (492 | ) |  |  | (1 565 | )
Profit from continuing operations |  |  |  |  | (3 744 | ) |  |  | 6 406 |
Profit from discontinued operations |  | 15 |  |  | 2 055 |  |  |  | 236 |
Profit of the period |  |  |  |  | (1 688 | ) |  |  | 6 642 |
Profit from continuing operations attributable to: |  |  |  |  |  |  |  |  | — |
Equity holders of AB InBev |  |  |  |  | (3 955 | ) |  |  | 5 819 |
Non-controlling interest |  |  |  |  | 211 |  |  |  | 587 |
Profit of the period attributable to: |  |  |  |  |  |  |  |  |  |
Equity holders of AB InBev |  |  |  |  | (1 900 | ) |  |  | 6 055 |
Non-controlling interest |  |  |  |  | 211 |  |  |  | 587 |
Basic earnings per share |  | 18 |  |  | (0.95 | ) |  |  | 3.06 |
Diluted earnings per share |  | 18 |  |  | (0.95 | ) |  |  | 3.01 |
Basic earnings per share from continuing operations |  | 18 |  |  | (1.98 | ) |  |  | 2.94 |
Diluted earnings per share from continuing operations |  | 18 |  |  | (1.98 | ) |  |  | 2.89 |
Basic earnings per share before exceptional items and discontinued operations2 |  | 18 |  |  | 0.04 |  |  |  | 2.38 |
Diluted earnings per share before exceptional items and discontinued operations2 |  | 18 |  |  | 0.04 |  |  |  | 2.34 |
Underlying earnings per share2 |  | 18 |  |  | 0.90 |  |  |  | 1.81 |

The accompanying notes are an integral part of these consolidated financial statements.

1 | The unaudited condensed consolidated interim income statement for the six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

2 | Basic earnings per share and diluted earnings per share before exceptional items and discontinued operations and Underlying earnings per share are not defined metrics in IFRS. Refer to Note 18 Changes in equity and earnings per share for more details.

3

Unaudited condensed consolidated interim statement of comprehensive income

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 |
Profit of the period |  |  | (1 688 | ) |  |  | 6 642 |
Other comprehensive income: items that will not be reclassified to profit or loss: |  |  |  |  |  |  |  |
Re-measurements of post-employment benefits |  |  | (1 | ) |  |  | (35 | )
|  |  | (1 | ) |  |  | (35 | )
Other comprehensive income: items that may be reclassified subsequently to profit or loss: |  |  |  |  |  |  |  |
Exchange differences on translation of foreign operations |  |  | (13 712 | ) |  |  | 1 741 |
Effective portion of changes in fair value of net investment hedges |  |  | 687 |  |  |  | (27 | )
Cash flow hedges recognized in equity |  |  | 70 |  |  |  | 64 |
Cash flow hedges and cumulative translation adjustments reclassified from equity to profit or loss in relation to Australia divestiture |  |  | (426 | ) |  |  | — |
Cash flow hedges reclassified from equity to profit or loss |  |  | (169 | ) |  |  | (231 | )
|  |  | (13 550 | ) |  |  | 1 547 |
Other comprehensive income, net of tax |  |  | (13 551 | ) |  |  | 1 512 |
Total comprehensive income |  |  | (15 239 | ) |  |  | 8 154 |
Attributable to: |  |  |  |  |  |  |  |
Equity holders of AB InBev |  |  | (14 758 | ) |  |  | 7 603 |
Non-controlling interest |  |  | (481 | ) |  |  | 551 |

The accompanying notes are an integral part of these consolidated financial statements.

4

Unaudited condensed consolidated interim statement of financial position

As at Million US dollar |  | Notes |  |  | 30 June 2020 |  |  | 31 December 2019 |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 10 |  |  |  | 24 718 |  |  |  | 27 544 |
Goodwill |  |  | 11 |  |  |  | 115 080 |  |  |  | 128 114 |
Intangible assets |  |  | 12 |  |  |  | 40 049 |  |  |  | 42 452 |
Investments in associates and joint ventures |  |  | 16 |  |  |  | 5 788 |  |  |  | 5 861 |
Investment securities |  |  | 14 |  |  |  | 113 |  |  |  | 110 |
Deferred tax assets |  |  |  |  |  |  | 1 958 |  |  |  | 1 719 |
Employee benefits |  |  |  |  |  |  | 14 |  |  |  | 14 |
Income tax receivables |  |  |  |  |  |  | 566 |  |  |  | 1 081 |
Derivatives |  |  | 22 |  |  |  | 297 |  |  |  | 132 |
Trade and other receivables |  |  | 13 |  |  |  | 650 |  |  |  | 807 |
Total non-current assets |  |  |  |  |  |  | 189 233 |  |  |  | 207 834 |
Current assets |  |  |  |  |  |  |  |  |  |  |  |
Investment securities |  |  | 14 |  |  |  | 102 |  |  |  | 92 |
Inventories |  |  | 17 |  |  |  | 4 339 |  |  |  | 4 427 |
Income tax receivables |  |  |  |  |  |  | 805 |  |  |  | 627 |
Derivatives |  |  | 22 |  |  |  | 545 |  |  |  | 230 |
Trade and other receivables |  |  | 13 |  |  |  | 5 276 |  |  |  | 6 187 |
Cash and cash equivalents |  |  | 14 |  |  |  | 25 018 |  |  |  | 7 238 |
Assets classified as held for sale |  |  | 15 |  |  |  | 128 |  |  |  | 10 013 |
Total current assets |  |  |  |  |  |  | 36 215 |  |  |  | 28 814 |
Total assets |  |  |  |  |  |  | 225 448 |  |  |  | 236 648 |
EQUITY AND LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |
Equity |  |  |  |  |  |  |  |  |  |  |  |
Issued capital |  |  | 18 |  |  |  | 1 736 |  |  |  | 1 736 |
Share premium |  |  |  |  |  |  | 17 620 |  |  |  | 17 620 |
Reserves |  |  |  |  |  |  | 13 104 |  |  |  | 24 882 |
Retained earnings |  |  |  |  |  |  | 27 605 |  |  |  | 31 484 |
Equity attributable to equity holders of AB InBev |  |  |  |  |  |  | 60 065 |  |  |  | 75 722 |
Non-controlling interests |  |  |  |  |  |  | 8 282 |  |  |  | 8 831 |
Total equity |  |  |  |  |  |  | 68 347 |  |  |  | 84 553 |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings |  |  | 19 |  |  |  | 106 034 |  |  |  | 97 564 |
Employee benefits |  |  |  |  |  |  | 2 610 |  |  |  | 2 848 |
Deferred tax liabilities |  |  |  |  |  |  | 12 060 |  |  |  | 12 824 |
Income tax payables |  |  |  |  |  |  | 739 |  |  |  | 1 022 |
Derivatives |  |  | 22 |  |  |  | 2 460 |  |  |  | 352 |
Trade and other payables |  |  | 21 |  |  |  | 1 619 |  |  |  | 1 943 |
Provisions |  |  |  |  |  |  | 559 |  |  |  | 701 |
Total non-current liabilities |  |  |  |  |  |  | 126 081 |  |  |  | 117 254 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Bank overdrafts |  |  | 14 |  |  |  | 153 |  |  |  | 68 |
Interest-bearing loans and borrowings |  |  | 19 |  |  |  | 6 484 |  |  |  | 5 410 |
Income tax payables |  |  |  |  |  |  | 909 |  |  |  | 1 346 |
Derivatives |  |  | 22 |  |  |  | 4 403 |  |  |  | 3 799 |
Trade and other payables |  |  | 21 |  |  |  | 18 857 |  |  |  | 22 864 |
Provisions |  |  |  |  |  |  | 214 |  |  |  | 210 |
Liabilities associated with assets held for sale |  |  | 15 |  |  |  | — |  |  |  | 1 145 |
Total current liabilities |  |  |  |  |  |  | 31 020 |  |  |  | 34 841 |
Total equity and liabilities |  |  |  |  |  |  | 225 448 |  |  |  | 236 648 |

The accompanying notes are an integral part of these consolidated financial statements.

5

Unaudited condensed consolidated interim statement of changes in equity

|  | Attributable to equity holders of AB InBev |  |  |  |  |  |  |
Million US dollar |  | Issued Capital |  |  | Share premium |  |  | Treasury shares |  |  | Reserves |  |  | Share- based payment reserves |  |  | Other comprehensive income reserves1 |  |  | Retained earnings |  |  | Total |  |  | Non- controlling interest |  |  | Total Equity |
As per 1 January 2019 |  |  | 1 736 |  |  |  | 17 620 |  |  |  | (6 549 | ) |  |  | 45 726 |  |  |  | 2 037 |  |  |  | (22 152 | ) |  |  | 26 068 |  |  |  | 64 485 |  |  |  | 7 404 |  |  |  | 71 889 |
Profit of the period |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 055 |  |  |  | 6 055 |  |  |  | 587 |  |  |  | 6 642 |
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exchange differences on translation of foreign operations (gains/(losses)) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 719 |  |  |  | — |  |  |  | 1 719 |  |  |  | (3 | ) |  |  | 1 714 |
Cash flow hedges |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (134 | ) |  |  | — |  |  |  | (134 | ) |  |  | (34 | ) |  |  | (168 | )
Re-measurements of post-employment benefits |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (37 | ) |  |  | — |  |  |  | (37 | ) |  |  | 2 |  |  |  | (35 | )
Total comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 548 |  |  |  | 6 055 |  |  |  | 7 603 |  |  |  | 551 |  |  |  | 8 154 |
Dividends |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2 339 | ) |  |  | (2 339 | ) |  |  | (214 | ) |  |  | (2 553 | )
Treasury shares |  |  | — |  |  |  | — |  |  |  | 279 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (281 | ) |  |  | (2 | ) |  |  | (2 | ) |  |  | (4 | )
Share-based payments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 157 |  |  |  | — |  |  |  | — |  |  |  | 157 |  |  |  | 3 |  |  |  | 161 |
Hyperinflation monetary adjustments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 127 |  |  |  | 127 |  |  |  | 79 |  |  |  | 206 |
Scope and other changes |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 202 |  |  |  | 202 |  |  |  | 77 |  |  |  | 279 |
As per 30 June 2019 |  |  | 1 736 |  |  |  | 17 620 |  |  |  | (6 270 | ) |  |  | 45 726 |  |  |  | 2 194 |  |  |  | (20 604 | ) |  |  | 29 831 |  |  |  | 70 233 |  |  |  | 7 898 |  |  |  | 78 131 |
|  | Attributable to equity holders of AB InBev |  |  |  |  |  |  |
Million US dollar |  | Issued Capital |  |  | Share premium |  |  | Treasury shares |  |  | Reserves |  |  | Share- based payment reserves |  |  | Other comprehensive income reserves¹ |  |  | Retained earnings |  |  | Total |  |  | Non- controlling interest |  |  | Total Equity |
As per 1 January 2020 |  |  | 1 736 |  |  |  | 17 620 |  |  |  | (6 270 | ) |  |  | 50 104 |  |  |  | 2 327 |  |  |  | (21 279 | ) |  |  | 31 484 |  |  |  | 75 722 |  |  |  | 8 831 |  |  |  | 84 553 |
Profit of the period |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 900 | ) |  |  | (1 900 | ) |  |  | 211 |  |  |  | (1 688 | )
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exchange differences on translation of foreign operations (gains/(losses)) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (12 293 | ) |  |  | — |  |  |  | (12 293 | ) |  |  | (732 | ) |  |  | (13 025 | )
Cash flow hedges |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (138 | ) |  |  | — |  |  |  | (138 | ) |  |  | 39 |  |  |  | (99 | )
Cash flow hedges and cumulative translation adjustments reclassified from equity to profit or loss in relation to Australia divestiture |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (426 | ) |  |  | — |  |  |  | (426 | ) |  |  | — |  |  |  | (426 | )
Re-measurements of post-employment benefits |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (1 | )
Total comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (12 858 | ) |  |  | (1 900 | ) |  |  | (14 758 | ) |  |  | (481 | ) |  |  | (15 239 | )
Dividends |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 118 | ) |  |  | (1 118 | ) |  |  | (144 | ) |  |  | (1 262 | )
Treasury shares |  |  | — |  |  |  | — |  |  |  | 1 236 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (897 | ) |  |  | 340 |  |  |  | — |  |  |  | 340 |
Share-based payments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (156 | ) |  |  | — |  |  |  | — |  |  |  | (156 | ) |  |  | 8 |  |  |  | (148 | )
Hyperinflation monetary adjustments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 68 |  |  |  | 68 |  |  |  | 42 |  |  |  | 110 |
Scope and other changes |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (32 | ) |  |  | (32 | ) |  |  | 30 |  |  |  | (2 | )
As per 30 June 2020 |  |  | 1 736 |  |  |  | 17 620 |  |  |  | (5 034 | ) |  |  | 50 104 |  |  |  | 2 171 |  |  |  | (34 137 | ) |  |  | 27 605 |  |  |  | 60 065 |  |  |  | 8 282 |  |  |  | 68 347 |

The accompanying notes are an integral part of these consolidated financial statements.

1 | See Note 18 Changes in equity and earning per share.

6

Unaudited condensed consolidated interim statement of cash flows

For the six-month period ended 30 June Million US dollar |  | Notes |  |  | 2020 |  |  | 2019 restated12 |
OPERATING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |
Profit from continuing operations |  |  |  |  |  |  | (3 744 | ) |  |  | 6 406 |
Depreciation, amortization and impairment |  |  |  |  |  |  | 2 402 |  |  |  | 2 265 |
Impairment losses on goodwill |  |  |  |  |  |  | 2 500 |  |  |  | — |
Impairment losses on receivables, inventories and other assets |  |  |  |  |  |  | 237 |  |  |  | 54 |
Additions/(reversals) in provisions and employee benefits |  |  |  |  |  |  | 186 |  |  |  | 87 |
Net finance cost/(income) |  |  | 8 |  |  |  | 5 592 |  |  |  | 169 |
Loss/(gain) on sale of property, plant and equipment and intangible assets |  |  |  |  |  |  | (4 | ) |  |  | (29 | )
Loss/(gain) on sale of subsidiaries, associates and assets held for sale |  |  |  |  |  |  | 4 |  |  |  | — |
Equity-settled share-based payment expense |  |  | 20 |  |  |  | (18 | ) |  |  | 180 |
Income tax expense |  |  | 9 |  |  |  | 492 |  |  |  | 1 565 |
Other non-cash items included in profit |  |  |  |  |  |  | (194 | ) |  |  | (250 | )
Share of result of associates and joint ventures |  |  | 16 |  |  |  | (33 | ) |  |  | (62 | )
Cash flow from operating activities before changes in working capital and use of provisions |  |  |  |  |  |  | 7 420 |  |  |  | 10 385 |
Decrease/(increase) in trade and other receivables |  |  |  |  |  |  | 15 |  |  |  | (237 | )
Decrease/(increase) in inventories |  |  |  |  |  |  | (487 | ) |  |  | (409 | )
Increase/(decrease) in trade and other payables |  |  |  |  |  |  | (2 228 | ) |  |  | (885 | )
Pension contributions and use of provisions |  |  |  |  |  |  | (327 | ) |  |  | (279 | )
Cash generated from operations |  |  |  |  |  |  | 4 393 |  |  |  | 8 575 |
Interest paid |  |  |  |  |  |  | (2 203 | ) |  |  | (2 406 | )
Interest received |  |  |  |  |  |  | 172 |  |  |  | 244 |
Dividends received |  |  |  |  |  |  | 30 |  |  |  | 137 |
Income tax paid |  |  |  |  |  |  | (1 357 | ) |  |  | (1 967 | )
Cash flow from operating activities on Australia discontinued operations |  |  | 15 |  |  |  | 84 |  |  |  | 314 |
Cash flow from operating activities |  |  |  |  |  |  | 1 119 |  |  |  | 4 897 |
INVESTING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |
Acquisition of property, plant and equipment and of intangible assets |  |  | 10/12 |  |  |  | (1 580 | ) |  |  | (1 710 | )
Proceeds from sale of property, plant and equipment and of intangible assets |  |  |  |  |  |  | 56 |  |  |  | 222 |
Acquisition of subsidiaries, net of cash acquired |  |  | 6 |  |  |  | (204 | ) |  |  | (337 | )
Sale of other subsidiaries, net of cash disposed of |  |  | 6 |  |  |  | — |  |  |  | 92 |
Net proceeds from sale/(acquisition) of other assets |  |  |  |  |  |  | (30 | ) |  |  | (6 | )
Proceeds from Australia divestiture (discontinued operations) |  |  | 15 |  |  |  | 10 838 |  |  |  | — |
Cash flow from investing activities on Australia discontinued operations |  |  | 15 |  |  |  | (13 | ) |  |  | (16 | )
Cash flow from investing activities |  |  |  |  |  |  | 9 067 |  |  |  | (1 755 | )
FINANCING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |
(Purchase)/sale of non-controlling interest |  |  | 18 |  |  |  | — |  |  |  | — |
Proceeds from borrowings |  |  | 19 |  |  |  | 14 522 |  |  |  | 22 012 |
Payments on borrowings |  |  | 19 |  |  |  | (4 328 | ) |  |  | (20 602 | )
Cash net finance (cost)/income other than interests |  |  |  |  |  |  | (457 | ) |  |  | (781 | )
Payment of lease liabilities |  |  |  |  |  |  | (280 | ) |  |  | (225 | )
Dividends paid |  |  |  |  |  |  | (1 219 | ) |  |  | (2 389 | )
Cash flow from financing activities on Australia discontinued operations |  |  | 15 |  |  |  | (6 | ) |  |  | (13 | )
Cash flow from financing activities |  |  |  |  |  |  | 8 231 |  |  |  | (1 998 | )
Net increase/(decrease) in cash and cash equivalents |  |  |  |  |  |  | 18 416 |  |  |  | 1 144 |
Cash and cash equivalents less bank overdrafts at beginning of year |  |  |  |  |  |  | 7 169 |  |  |  | 6 960 |
Effect of exchange rate fluctuations |  |  |  |  |  |  | (720 | ) |  |  | (29 | )
Cash and cash equivalents less bank overdrafts at end of period |  |  | 14 |  |  |  | 24 865 |  |  |  | 8 075 |

The accompanying notes are an integral part of these consolidated financial statements.

1 | The unaudited condensed consolidated interim statement of cash flows for the six-month period ended 30 June 2019 has been restated to reflect the classification of the Australian operations as discontinued operations.

2 | The unaudited condensed consolidated interim statement of cash flows for the six-month period ended 30 June 2020 has been presented to include operating, investing and financing activities from discontinued operations separately in the cashflow statement. The unaudited condensed consolidated interim statement of cash flows for the six-month period ended 30 June 2019 has been restated to reflect this change in presentation.

7

Notes to the consolidated financial statements

|  | Note |
Corporate information |  |  | 1 |
Statement of compliance |  |  | 2 |
Summary of significant accounting policies |  |  | 3 |
Use of estimates and judgments |  |  | 4 |
Segment reporting |  |  | 5 |
Acquisitions and disposals of subsidiaries |  |  | 6 |
Exceptional items |  |  | 7 |
Finance cost and income |  |  | 8 |
Income taxes |  |  | 9 |
Property, plant and equipment |  |  | 10 |
Goodwill |  |  | 11 |
Intangible assets |  |  | 12 |
Trade and other receivables |  |  | 13 |
Cash and cash equivalents and investment securities |  |  | 14 |
Assets classified as held for sale, liabilities associated with assets held for sale and discontinued operations |  |  | 15 |
Investments in associates |  |  | 16 |
Inventories |  |  | 17 |
Changes in equity and earnings per share |  |  | 18 |
Interest-bearing loans and borrowings |  |  | 19 |
Share-based payments |  |  | 20 |
Trade and other payables |  |  | 21 |
Risks arising from financial instruments |  |  | 22 |
Collateral and contractual commitments for the acquisition of property, plant and equipment, loans to customers and other |  |  | 23 |
Contingencies |  |  | 24 |
Related parties |  |  | 25 |
Supplemental guarantor financial information |  |  | 26 |
Events after the balance sheet date |  |  | 27 |

8

1. Corporate information

Anheuser-Busch InBev is a publicly traded company (Euronext: ABI) based in Leuven, Belgium, with secondary listings on the Mexico (MEXBOL: ANB) and South Africa (JSE: ANH) stock exchanges and with American Depositary Receipts on the New York Stock Exchange (NYSE: BUD). Our Dream is to bring people together for a better world. Beer, the original social network, has been bringing people together for thousands of years. We are committed to building great brands that stand the test of time and to brewing the best beers using the finest natural ingredients. Our diverse portfolio of well over 500 beer brands includes global brands Budweiser®, Corona® and Stella Artois®; multi-country brands Beck’s®, Hoegaarden®, Leffe® and Michelob Ultra®; and local champions such as Aguila®, Antarctica®, Bud Light®, Brahma®, Cass®, Castle®, Castle Lite®, Cristal®, Harbin®, Jupiler®, Modelo Especial®, Quilmes®, Victoria®, Sedrin® and Skol®. Our brewing heritage dates back more than 600 years, spanning continents and generations. From our European roots at the Den Hoorn brewery in Leuven, Belgium. To the pioneering spirit of the Anheuser & Co brewery in St. Louis, US. To the creation of the Castle Brewery in South Africa during the Johannesburg gold rush. To Bohemia, the first brewery in Brazil. Geographically diversified with a balanced exposure to developed and developing markets, we leverage the collective strengths of approximately 170 000 employees based in nearly 50 countries worldwide. For 2019, AB InBev’s reported revenue was 52.3 billion US dollar (excluding joint ventures and associates).

The unaudited condensed consolidated interim financial statements of the company for the six-month period ended 30 June 2020 comprise the company and its subsidiaries (together referred to as “AB InBev” or the “company”) and the company’s interest in associates, joint ventures and operations. The condensed consolidated interim financial statements for the six-month periods ended 30 June 2020 and 2019 are unaudited; however, in the opinion of the company, the interim data include all adjustments, consisting of only normally recurring adjustments, necessary for a fair statement of the results for the interim period.

The unaudited condensed interim financial statements were authorized for issue by the Board of Directors on 29 July 2020.

2. Statement of compliance

The unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting as issued by the International Accounting Standard Board (IASB) and as adopted by the European Union. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the company as at and for the year ended 31 December 2019. AB InBev did not early apply any new IFRS requirements that were not yet effective in 2020 and did not apply any European carve-outs from IFRS.

3. Summary of significant accounting policies

The accounting policies applied are consistent with those applied in the annual consolidated financial statements ended 31 December 2019.

(A) SUMMARY OF CHANGES IN ACCOUNTING POLICIES

A number of new standards, amendment to standards and new interpretations became mandatory for the first time for the financial year beginning on 1 January 2020 and have not been listed in these unaudited condensed consolidated interim financial statements as they either do not apply or are immaterial to AB InBev’s consolidated financial statements.

(B) FOREIGN CURRENCIES

Foreign currency transactions

Foreign currency transactions are accounted for at exchange rates prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates prevailing on the date of the balance sheet. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Non-monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to US dollar at foreign exchange rates prevailing at the dates the fair value was determined.

Translation of the results and financial position of foreign operations

Assets and liabilities of foreign operations are translated to US dollar at foreign exchange rates prevailing at the balance sheet date. Income statements of foreign operations, excluding foreign entities in hyperinflationary economies, are translated to US dollar at exchange rates for the year approximating the foreign exchange rates prevailing at the dates of the transactions. The components of shareholders’ equity are translated at historical rates. Exchange differences arising from the translation of shareholders’ equity to US dollar at period-end exchange rates are taken to other comprehensive income (translation reserves).

Financial Reporting in hyperinflationary economies

In May 2018, the Argentinean peso underwent a severe devaluation, causing Argentina’s three-year cumulative inflation to exceed 100% and thus, triggering the requirement to transition to hyperinflation accounting as prescribed by IAS 29 Financial Reporting in Hyperinflationary Economies. IAS 29 requires that the results of the company’s Argentinian operations be reported as if these were highly inflationary as of 1 January 2018.

Under IAS 29, non-monetary assets and liabilities stated at historical cost, equity and income statements of subsidiaries operating in hyperinflationary economies are restated for changes in the general purchasing power of the local currency, applying a general price index. These re-measured accounts are used for conversion into US dollar at the period closing exchange rate. As a result, the balance sheet and net results of subsidiaries operating in hyperinflation economies are stated in terms of the measuring unit current at the end of the reporting period.

9

Consequently, the company applied hyperinflation accounting for its Argentinean subsidiaries for the first time in the year-to-date September 2018 unaudited condensed interim financial statements, with effect as of 1 January 2018. The IAS 29 rules are applied as follows:

| • |  | Non-monetary assets and liabilities stated at historical cost (e.g. property plant and equipment, intangible assets, goodwill, etc.) and equity of Argentina were restated using an inflation index. The hyperinflation accounting impacts resulting from changes in the general purchasing power from 1 January 2018 are reported in the income statement in a dedicated account for hyperinflation monetary adjustments in the finance line (see also Note 8 Finance cost and income);

| • |  | The income statement is adjusted at the end of each reporting period using the change in the general price index. It is converted at the closing exchange rate of each period (rather than the year-to-date average rate which is used for non-hyperinflationary economies), thereby restating the year-to-date income statement account for both inflation index and currency conversion.

The results for the six-month period ended 30 June 2020, restated for purchasing power, were translated at the June 2020 closing rate of 70.454990 Argentinean pesos per US dollar (30 June 2019 results—at 42.448916 Argentinean pesos per US dollar).

Exchange rates

The most important exchange rates that have been used in preparing the financial statements are:

|  | Closing rate |  |  | Average rate |
1 US dollar equals: |  | 30 June 2020 |  |  | 31 December 2019 |  |  | 30 June 2020 |  |  | 30 June 2019 |
Argentinean peso |  |  | 70.454990 |  |  |  | 59.890668 |  |  |  | — |  |  |  | — |
Brazilian real |  |  | 5.476011 |  |  |  | 4.030696 |  |  |  | 4.683731 |  |  |  | 3.834084 |
Canadian dollar |  |  | 1.368460 |  |  |  | 1.299449 |  |  |  | 1.362592 |  |  |  | 1.339411 |
Colombian peso |  |  | 3 752.17 |  |  |  | 3 272.63 |  |  |  | 3 581.62 |  |  |  | 3 217.98 |
Chinese yuan |  |  | 7.074411 |  |  |  | 6.961461 |  |  |  | 7.052919 |  |  |  | 6.786388 |
Euro |  |  | 0.893017 |  |  |  | 0.890155 |  |  |  | 0.906152 |  |  |  | 0.884945 |
Mexican peso |  |  | 22.971498 |  |  |  | 18.845242 |  |  |  | 20.397344 |  |  |  | 19.218716 |
Pound sterling |  |  | 0.814816 |  |  |  | 0.757344 |  |  |  | 0.791317 |  |  |  | 0.771278 |
Peruvian nuevo sol |  |  | 3.544000 |  |  |  | 3.317006 |  |  |  | 3.377006 |  |  |  | 3.337727 |
South Korean won |  |  | 1 201.90 |  |  |  | 1 154.54 |  |  |  | 1 204.98 |  |  |  | 1 143.34 |
South African rand |  |  | 17.362387 |  |  |  | 14.044287 |  |  |  | 16.230856 |  |  |  | 14.176131 |

(C) RECENTLY ISSUED IFRS

There are no new IFRS requirements that are not yet effective which have been early applied in preparing these unaudited condensed consolidated interim financial statements.

4. Use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or, if the revision affects both current and future periods, in the period of the revision and future periods.

Although each of its significant accounting policies reflects judgments, assessments or estimates, AB InBev believes that the following accounting policies reflect the most critical judgments, estimates and assumptions that are important to its business operations and understanding results: business combinations, intangible assets, goodwill, impairment, provisions, share-based payments, employee benefits and accounting for current and deferred tax.

The fair values of acquired identifiable intangibles are based on an assessment of future cash flows. Impairment analyses of goodwill and indefinite-lived intangible assets are performed annually and whenever a triggering event has occurred, in order to determine whether the carrying value exceeds the recoverable amount. These calculations are based on estimates of future cash flows.

The company uses its judgment to select a variety of methods including the discounted cash flow method and option valuation models and makes assumptions about the fair value of financial instruments that are mainly based on market conditions existing at each balance sheet date.

Actuarial assumptions are established to anticipate future events and are used in calculating pension and other long-term employee benefit expenses and liabilities. These factors include assumptions with respect to interest rates, rates of increase in health care costs, rates of future compensation increases, turnover rates, and life expectancy.

The company is subject to income tax in numerous jurisdictions. Significant judgment is required to determine the worldwide provision for income tax. There are some transactions and calculations for which the ultimate tax determination is uncertain. Some subsidiaries within the group are involved in tax audits and local enquiries usually in relation to prior years. Investigations and negotiations with local tax authorities are ongoing in various jurisdictions at the balance sheet date and, by their nature, these can take considerable time to conclude. In assessing the amount of any income tax provisions to be recognized in the financial statements, estimates are made of the expected successful settlement of these matters. Estimates of interest and penalties on tax liabilities are also recorded. Where the final outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period that such determination is made.

Judgments made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the following year are further discussed in the relevant notes hereafter.

10

In preparing these unaudited condensed consolidated interim financial statements, the significant judgments made by management in applying the company’s accounting policies and the key sources of uncertainty relate mainly to the following: accounting for the COVID-19 pandemic impact on the company’s results and the divestiture of the Australian operations as discussed below.

(A) COVID-19 pandemic impact

The company’s business, financial condition, cash flows and operating results have been and may continue to be negatively impacted by the COVID-19 pandemic. The public health crisis caused by the COVID-19 pandemic, as well as measures taken in response to contain or mitigate the pandemic, have had, and are expected to continue to have, certain negative impacts on the company’s results including, without limitation : a negative impact on volume sold and revenue, a negative impact on cost of sales per hectoliter driven by non-variable cost and the loss of operational efficiencies due to volume declines, impairment losses on inventories, impairment losses on trade and other receivables, a series of cost incurred exclusively as a result of the COVID-19 pandemic and goodwill impairment charges referred to below and reported in non-recurring items – see also Note 7 Non-recurring items, Note 11 Goodwill, Note 13 Trade and other receivables and Note 17 Inventories.

Management considered the impact of COVID-19 and the current economic environment on the basis of preparation of these interim condensed consolidated financial statements. Although the company has noticed an adverse impact on its financial position, results of operations, and cash flows during the first six month of 2020, it continues to adequately manage its liquidity and capital resources (refer to Note 14 Cash and cash equivalents and investment securities, Note 19 Interest-bearing loans and borrowings and Note 22 Risks arising from financial instruments). As such, management concluded the company is able to continue as a going concern.

Goodwill impairment

The COVID-19 pandemic resulted in a sharp contraction of sales during the second quarter of 2020 in many countries in which the company operates. The decline in performance resulting from the COVID-19 pandemic is viewed as a triggering event for impairment testing in accordance with IAS 36 Impairment of Assets. Consequently, the company conducted an impairment test during the second quarter of 2020 for the cash-generating units showing the highest invested capital to EBITDA multiples: Colombia, Rest of Middle Americas, South Africa, Rest of Africa and Rest of Asia Pacific.

During its interim goodwill impairment testing, the company considered several scenarios of the recovery of sales for the different cash-generating units being tested and ran sensitivity analysis for key assumptions including the weighted average cost of capital and the terminal growth rate. These scenarios are based on management’s assumptions on the recovery in a base case (which the company deemed to be the most likely case at the time of the impairment test), a best case and a worst case scenario per cash generating unit following the common recovery shapes: L, U and V where the letters describe the trajectory of key assumptions tracking economic conditions. In view of the uncertainties, management assumed a 15 to 30% probability for the worst case scenario, dependent on the cash generating units in this interim impairment testing.

Based upon the results of the impairment test and considering the assumptions described in Note 11 Goodwill, the company concluded that no goodwill impairment was warranted under the base and best case scenarios. Neverhteless, under the worst case scenario ran with higher discount rates to factor the heightened business risk, the company concluded that the recoverable amounts were below the carrying value for the South Africa and Rest of Africa cash-generating units. As a consequence, management concluded, based on the valuations performed, that it was prudent in view of the uncertainties to record an impairment of goodwill of (1.5) billion US dollar for the South Africa cash generating unit and (1.0) billion US dollar for the Rest of Africa cash generating unit applying a 30% probability of occurrence. Refer to Note 11 Goodwill.

COVID-19 costs

As required by IAS 1 Presentation of financial statements, the company has assessed the impact of the COVID-19 outbreak on its performance for the six-month period ended 30 June 2020, and reported (78)m US dollar of costs in exceptional items as a result of the pandemic. These expenses mainly comprise costs related to personal protection equipment for the company’s employees, charitable donations and other costs incurred as a direct consequence of the COVID-19 pandemic. Refer to Note 7 Exceptional items.

(B) DIVESTITURE OF AUSTRALIA BUSINESS TO ASAHI

On 19 July 2019, AB InBev announced an agreement to divest its Australia business (Carlton & United Breweries) to Asahi at 16 billion AUD in enterprise value. As part of this transaction, the company granted Asahi rights to commercialize its portfolio of global and international brands in Australia. The transaction closed on 1 June 2020.

As of 31 December 2019, AB InBev classified the assets and liabilities associated with the Australian operations as assets held for sale and liabilities associated with assets held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. In addition, since the results of the Australian operations represented a separate major line of business, these were accounted for as discontinued operations, as required by IFRS 5 and presented in a separate line in the consolidated income statement (“profit from discontinued operations”), up to 31 May 2020. Refer to Note 15 Assets classified as held for sale, liabilities associated with assets held for sale and discontinued operations. On 1 June 2020, following the closing of the transaction, the company recognized a net gain on disposal of 1.9 billion US dollar in discontinued operations. Refer to Note 15 Assets classified as held for sale, liabilities associated with assets held for sale and discontinued operations.

11

5. Segment reporting

Segment information is presented by geographical segments, consistent with the information available to and regularly evaluated by the chief operating decision maker. AB InBev operates its business through six business segments. Regional and operating company management is responsible for managing performance, underlying risks, and the effectiveness of operations. Internally, AB InBev’s management uses performance indicators such as normalized profit from operations (normalized EBIT) and normalized EBITDA as measures of segment performance and to make decisions regarding the allocation of resources. The organizational structure effective as of 1 January 2019 comprises five regions: North America, Middle Americas, South America, EMEA and Asia Pacific. In addition to these five geographic regions, the company uses a sixth segment, Global Export and Holding Companies, for all financial reporting purposes.

On 19 July 2019, AB InBev announced the agreement to divest CUB, its Australian subsidiary, to Asahi. Consequently, as at 31 December 2019, the company classified the assets and liabilities associated with the Australian operations as assets held for sale and liabilities associated with assets held for sale, respectively. In addition, since the results of the Australian operations represented a separate major line of business, these were accounted for as discontinued operations (“profit from discontinued operations”) up to 31 May 2020. The transaction closed on 1 June 2020. Accordingly, the 2019 results (referred to as “2019 restated”) have been restated to exclude the results of the Australian operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. See Note 15 Assets classified as held for sale, liabilities associated with assets held for sale and discontinued operations for more details.

All figures in the tables below are stated in million US dollar, except volume (million hls) and Normalized EBITDA margin (in %). The information presented is for the six-month period ended 30 June 2020 and 2019, except for segment assets (non-current) with comparatives at 31 December 2019.

|  | North America |  |  | Middle Americas |  |  | South America |  |  | EMEA |  |  | Asia Pacific |  |  | Global Export and Holding Companies |  |  | Consolidated |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 restated |  |  | 2020 |  |  | 2019 restated |  |  | 2020 |  |  | 2019 restated |  |  | 2020 |  |  | 2019 restated |
Volume |  |  | 52 |  |  |  | 54 |  |  |  | 52 |  |  |  | 65 |  |  |  | 63 |  |  |  | 67 |  |  |  | 34 |  |  |  | 40 |  |  |  | 39 |  |  |  | 50 |  |  |  | — |  |  |  | — |  |  |  | 240 |  |  |  | 276 |
Revenue |  |  | 7 536 |  |  |  | 7 701 |  |  |  | 4 246 |  |  |  | 5 735 |  |  |  | 3 613 |  |  |  | 4 769 |  |  |  | 3 007 |  |  |  | 3 784 |  |  |  | 2 609 |  |  |  | 3 514 |  |  |  | 287 |  |  |  | 319 |  |  |  | 21 298 |  |  |  | 25 823 |
Normalized EBITDA |  |  | 2 986 |  |  |  | 3 045 |  |  |  | 2 021 |  |  |  | 3 036 |  |  |  | 1 146 |  |  |  | 1 976 |  |  |  | 713 |  |  |  | 1 372 |  |  |  | 783 |  |  |  | 1 352 |  |  |  | (287 | ) |  |  | (335 | ) |  |  | 7 363 |  |  |  | 10 446 |
Normalized EBITDA margin % |  |  | 39.6 | % |  |  | 39.5 | % |  |  | 47.6 | % |  |  | 52.9 | % |  |  | 31.7 | % |  |  | 41.4 | % |  |  | 23.7 | % |  |  | 36.2 | % |  |  | 30.0 | % |  |  | 38.5 | % |  |  | — |  |  |  | — |  |  |  | 34.6 | % |  |  | 40.5 | %
Depreciation, amortization and impairment |  |  | (407 | ) |  |  | (389 | ) |  |  | (486 | ) |  |  | (441 | ) |  |  | (410 | ) |  |  | (462 | ) |  |  | (470 | ) |  |  | (485 | ) |  |  | (311 | ) |  |  | (335 | ) |  |  | (175 | ) |  |  | (155 | ) |  |  | (2 261 | ) |  |  | (2 265 | )
Normalized profit from operations (EBIT) |  |  | 2 579 |  |  |  | 2 656 |  |  |  | 1 535 |  |  |  | 2 595 |  |  |  | 736 |  |  |  | 1 514 |  |  |  | 243 |  |  |  | 887 |  |  |  | 472 |  |  |  | 1 017 |  |  |  | (462 | ) |  |  | (490 | ) |  |  | 5 102 |  |  |  | 8 180 |
Exceptional items (see Note 7) |  |  | (83 | ) |  |  | (1 | ) |  |  | (51 | ) |  |  | (26 | ) |  |  | (17 | ) |  |  | (13 | ) |  |  | (2 587 | ) |  |  | (17 | ) |  |  | (10 | ) |  |  | (4 | ) |  |  | (47 | ) |  |  | (43 | ) |  |  | (2 796 | ) |  |  | (103 | )
Profit from operations (EBIT) |  |  | 2 496 |  |  |  | 2 655 |  |  |  | 1 484 |  |  |  | 2 569 |  |  |  | 719 |  |  |  | 1 501 |  |  |  | (2 344 | ) |  |  | 870 |  |  |  | 462 |  |  |  | 1 013 |  |  |  | (509 | ) |  |  | (533 | ) |  |  | 2 306 |  |  |  | 8 077 |
Net finance income/(cost) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (5 592 | ) |  |  | (169 | )
Share of results of associates and joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 33 |  |  |  | 62 |
Income tax expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (492 | ) |  |  | (1 565 | )
Profit from continuing operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3 744 | ) |  |  | 6 406 |
Discontinued operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2 055 |  |  |  | 236 |
Profit/(loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1 688 | ) |  |  | 6 642 |
Segment assets (non-current) |  |  | 63 322 |  |  |  | 63 725 |  |  |  | 67 989 |  |  |  | 76 168 |  |  |  | 10 807 |  |  |  | 13 452 |  |  |  | 32 477 |  |  |  | 39 447 |  |  |  | 12 751 |  |  |  | 13 450 |  |  |  | 1 886 |  |  |  | 1 592 |  |  |  | 189 233 |  |  |  | 207 834 |
Gross capex |  |  | (225 | ) |  |  | (182 | ) |  |  | (350 | ) |  |  | (471 | ) |  |  | (387 | ) |  |  | (288 | ) |  |  | (301 | ) |  |  | (425 | ) |  |  | (191 | ) |  |  | (236 | ) |  |  | (126 | ) |  |  | (107 | ) |  |  | (1 580 | ) |  |  | (1 709 | )

For the six-month period ended 30 June 2020, net revenue from the beer business amounted to 19 510m US dollar (30 June 2019: 23 673m US dollar) while the net revenue from the non-beer business (soft drinks and other business) accounted for 1 807m US dollar (30 June 2019: 2 150m US dollar). Additionally, for the six-month period ended 30 June 2020, net revenue from the company’s business in the United States amounted to 6 675m US dollar (30 June 2019: 6 833m US dollar) and net revenue from the company’s business in Brazil amounted to 2 641m US dollar (30 June 2019: 3 516m US dollar).

12

6. Acquisitions and disposals of subsidiaries

The table below summarizes the impact of acquisitions and disposals on the statement of financial position and cash flows of AB InBev for the six-month periods ended 30 June 2020 and 30 June 2019:

Million US dollar |  | 2020 Acquisitions |  |  | 2019 Acquisitions |  |  | 2020 Disposals |  |  | 2019 Disposals |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 3 |  |  |  | 26 |  |  |  | — |  |  |  | — |
Intangible assets |  |  | 14 |  |  |  | 307 |  |  |  | — |  |  |  | (15 | )
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Inventories |  |  | 5 |  |  |  | 39 |  |  |  | — |  |  |  | — |
Trade and other receivables |  |  | 3 |  |  |  | 12 |  |  |  | — |  |  |  | — |
Cash and cash equivalents |  |  | — |  |  |  | 40 |  |  |  | — |  |  |  | — |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings |  |  | (1 | ) |  |  | (4 | ) |  |  | — |  |  |  | — |
Trade and other payables |  |  | (24 | ) |  |  | — |  |  |  | — |  |  |  |  |
Deferred tax liabilities |  |  | — |  |  |  | (49 | ) |  |  | — |  |  |  | 4 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings |  |  | (1 | ) |  |  | (2 | ) |  |  | — |  |  |  | — |
Trade and other payables |  |  | (5 | ) |  |  | (47 | ) |  |  | — |  |  |  | — |
Net identifiable assets and liabilities |  |  | (6 | ) |  |  | 322 |  |  |  | — |  |  |  | (11 | )
Non-controlling interest |  |  | — |  |  |  | (62 | ) |  |  | — |  |  |  | — |
Goodwill on acquisitions and goodwill disposed of |  |  | 73 |  |  |  | 389 |  |  |  | — |  |  |  | (15 | )
Loss/(gain) on disposal |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (13 | )
Consideration to be (paid)/received |  |  | (8 | ) |  |  | (348 | ) |  |  | — |  |  |  | — |
Net cash paid on prior years acquisitions/(disposals) |  |  | 145 |  |  |  | 81 |  |  |  | — |  |  |  | (53 | )
Consideration paid/(received) |  |  | 204 |  |  |  | 382 |  |  |  | — |  |  |  | (92 | )
Cash (acquired)/disposed of |  |  | — |  |  |  | (40 | ) |  |  | — |  |  |  | — |
Net cash outflow / (inflow) |  |  | 204 |  |  |  | 342 |  |  |  | — |  |  |  | (92 | )
Net cash outflow / (inflow) on continuing operations |  |  | 204 |  |  |  | 337 |  |  |  | — |  |  |  | (92 | )
Net cash outflow / (inflow) on discontinued operations |  |  | — |  |  |  | 5 |  |  |  | — |  |  |  | — |

On 1 June 2020, AB InBev completed the divestiture of CUB to Asahi – see Note 15 Assets classified as held for sale, liabilities associated with assets held for sale and discontinued operations.

The company undertook a series of additional acquisitions and disposals during 2020 and 2019, with no significant impact in the company’s consolidated financial statements.

13

7. Exceptional items

IAS 1 Presentation of financial statements requires that material items of income and expense be disclosed separately. Exceptional items are items that in management’s judgment need to be disclosed by virtue of their size or incidence so that a user can obtain a proper understanding of the company’s financial information. The company considers these items to be significant and accordingly, management has excluded them from their segment measure of performance as noted in Note 5 Segment Reporting.

The exceptional items included in the income statement are as follows:

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 restated |
Impairment of goodwill |  |  | (2 500 | ) |  |  | — |
COVID-19 costs |  |  | (78 | ) |  |  | — |
Restructuring |  |  | (60 | ) |  |  | (58 | )
Business and asset disposal (including exceptional impairment losses) |  |  | (154 | ) |  |  | (24 | )
Acquisition costs business combinations |  |  | (4 | ) |  |  | (21 | )
Impact on profit from operations |  |  | (2 796 | ) |  |  | (103 | )

In the second quarter of 2020, the company recognized (2 500)m US dollar of goodwill impairment for its South Africa and Rest of Africa cash-generating units (see Note 4 Use of estimates and judgments and Note 11 Goodwill for further details).

COVID-19 costs amount to (78)m US dollar for the six-month period ended 30 June 2020. These expenses mainly comprise costs related to personal protection equipment for the company’s employees, charitable donations and other costs incurred as a direct consequence of the COVID-19 pandemic.

The exceptional restructuring charges for the six-month period ended 30 June 2020 total (60)m US dollar (30 June 2019: (58)m US dollar). These charges primarily relate to organizational alignments. These changes aim to eliminate overlapping organizations or duplicated processes, taking into account the matching of employee profiles with new organizational requirements. These one-time expenses provide the company with a lower cost base and bring a stronger focus to AB InBev’s core activities, quicker decision-making and improvements to efficiency, service and quality.

Business and asset disposals amount to (154)m US dollar for the six-month period ended 30 June 2020 mainly comprising impairment of intangible assets classified as assets held for sale as of 30 June 2020 and other intangibles. Business and asset disposals amounted to (24)m US dollar for the six-month period ended 30 June 2019, mainly comprising of costs incurred in relation to the completion of 2018 disposals.

The acquisition costs of business combinations amount to (4)m US dollar for the six-month period ended 30 June 2020 (30 June 2019: (21)m US dollar).

On 1 June 2020, the company completed the previously announced sale of CUB to Asahi resulting in a net exceptional gain of 1 919m US dollar reported in discontinued operations. For more details, refer to Note 15 Assets classified as held for sale, liabilities associated with assets held for sale and discontinued operations.

The company incurred a exceptional net finance cost of (1 388)m US dollar for the six-month period ended 30 June 2020 (30 June 2019: 1 201m US dollar income) – see Note 8 Finance cost and income.

All the amounts referenced above are before income taxes. The exceptional items for the six-month period ended 30 June 2020 decreased income taxes by 107m US dollar (30 June 2019: increase of income taxes by 5m US dollar).

Non-controlling interest on the exceptional items amounts to 46m US dollar for the six-month period ended 30 June 2020 (30 June 2019: 12m US dollar).

14

8. Finance cost and income

The finance costs included in the income statement are as follows:

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 restated |
Interest expense |  |  | (2 002 | ) |  |  | (2 110 | )
Capitalization of borrowing costs |  |  | 5 |  |  |  | 12 |
Net interest on net defined benefit liabilities |  |  | (41 | ) |  |  | (48 | )
Accretion expense |  |  | (291 | ) |  |  | (287 | )
Net losses on hedging instruments that are not part of a hedge accounting relationship |  |  | (219 | ) |  |  | (106 | )
Net foreign exchange results (net of the effect of foreign exchange derivative instruments) |  |  | — |  |  |  | (54 | )
Tax on financial transactions |  |  | (48 | ) |  |  | (33 | )
Net mark-to-market results on derivatives related to the hedging of share-based payment programs |  |  | (1 724 | ) |  |  | — |
Other financial costs, including bank fees |  |  | (77 | ) |  |  | (82 | )
|  |  | (4 397 | ) |  |  | (2 708 | )
Exceptional finance cost |  |  | (1 438 | ) |  |  | (46 | )
Finance costs |  |  | (5 835 | ) |  |  | (2 754 | )

Finance income included in the income statement is as follows:

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 restated |
Interest income |  |  | 98 |  |  |  | 152 |
Hyperinflation monetary adjustments |  |  | 30 |  |  |  | 48 |
Market-to-market gains on derivatives related to the hedging of share-based payment programs |  |  | — |  |  |  | 1 124 |
Net foreign exchange results (net of the effect of foreign exchange derivative instruments) |  |  | 61 |  |  |  | — |
Other financial income |  |  | 4 |  |  |  | 15 |
|  |  | 193 |  |  |  | 1 339 |
Exceptional finance income |  |  | 50 |  |  |  | 1 247 |
Finance income |  |  | 243 |  |  |  | 2 586 |

Net finance costs, excluding exceptional items, were 4 202 m US dollar for the six month period ended 30 June 2020 compared to 1 369m US dollar for the six month period ended 30 June 2019. The increase was predominantly due to a mark-to-market loss of 1 724m US dollar in the six-month period ended 30 June 2020, compared to a gain of 1 124m US dollar in the six-month period ended 30 June 2019, resulting in a swing of 2 848m US dollar.

Borrowing costs capitalized relate to the capitalization of interest expenses directly attributable to the acquisition and construction of qualifying assets mainly in China. Interest is capitalized at a borrowing rate ranging from 3% to 4%.

In the six-month period ended 30 June 2020, accretion expense includes interest on lease liabilities of 54m US dollar (30 June 2019: 55m US dollar).

Interest expenses is presented net of the effect of interest rate derivative instruments hedging AB InBev’s interest rate risk – see also Note 22 Risks arising from financial instruments.

Exceptional finance cost for the six-month period ended 30 June 2020 includes (1 438)m US dollar resulting from mark-to-market adjustments on derivative instruments entered into to hedge the shares issued in relation to the combination with Grupo Modelo and the restricted shares issued in connection with the combination with SAB (30 June 2019: 1 098m US dollar gain).

Exceptional finance cost for the six-month period ended 30 June 2019 includes (46)m US dollar foreign exchange translation losses on intragroup loans that were historically reported in equity and were recycled to profit and loss account, upon the reimbursement of these loans and cost related to incremental accruals of deferred considerations on prior year acquisitions.

Exceptional finance income for the six-month period ended 30 June 2020 includes 50m US dollar gain related to remeasurement of deferred considerations on prior year acquisitions. Exceptional finance income for the six-month period ended 30 June 2019 includes 1 098m US dollar mark-to-market gain and 149m US dollar gain resulting from the early termination of certain bonds.

No interest income was recognized on impaired financial assets.

15

9. Income taxes

Income taxes recognized in the income statement can be detailed as follows:

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 restated |
Current tax expense |  |  |  |  |  |  |  |
Current year |  |  | (807 | ) |  |  | (1 735 | )
Deferred tax (expense)/income |  |  | 315 |  |  |  | 170 |
Total income tax expense in the income statement |  |  | (492 | ) |  |  | (1 565 | )

The reconciliation of the effective tax rate with the aggregated weighted nominal tax rate can be summarized as follows:

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 restated |
Profit before tax |  |  | (3 253 | ) |  |  | 7 970 |
Deduct share of result of associates and joint ventures |  |  | 33 |  |  |  | 62 |
Profit before tax and before share of result of associates and joint ventures |  |  | (3 286 | ) |  |  | 7 908 |
Adjustments on taxable basis |  |  |  |  |  |  |  |
Government incentives |  |  | (194 | ) |  |  | (379 | )
Non-deductible/(non-taxable) marked to market on derivatives |  |  | 3 162 |  |  |  | (2 222 | )
Non-deductible impairment of goodwill |  |  | 2 500 |  |  |  | — |
Other expenses not deductible for tax purposes |  |  | 1 208 |  |  |  | 1 098 |
Other non-taxable income |  |  | (607 | ) |  |  | (549 | )
|  |  | 2 783 |  |  |  | 5 856 |
Aggregated weighted nominal tax rate |  |  | 27.0 | % |  |  | 27.1 | %
Tax at aggregated weighted nominal tax rate |  |  | (751 | ) |  |  | (1 614 | )
Adjustments on tax expense |  |  |  |  |  |  |  |
Utilization of tax losses not previously recognized |  |  | 117 |  |  |  | 38 |
Recognition of deferred taxes assets on previous years’ tax losses |  |  | 6 |  |  |  | 3 |
Write-down of deferred tax assets on tax losses and current year losses for which no deferred tax asset is recognized |  |  | (61 | ) |  |  | (126 | )
(Underprovided)/overprovided in prior years |  |  | 34 |  |  |  | 13 |
Deductions from interest on equity |  |  | 144 |  |  |  | 197 |
Deductions from goodwill |  |  | 8 |  |  |  | 11 |
Other tax deductions |  |  | 125 |  |  |  | 108 |
Change in tax rate |  |  | 71 |  |  |  | (9 | )
Withholding taxes |  |  | (195 | ) |  |  | (257 | )
Other tax adjustments |  |  | 10 |  |  |  | 71 |
|  |  | (492 | ) |  |  | (1 565 | )
Effective tax rate |  |  | (15.0 | %) |  |  | 19.8 | %

The total income tax expense for the six-month period ended 30 June 2020 amounts to 492m US dollar compared to 1 565m US dollar for the six-month period ended 30 June 2019. The effective tax rate for the six-month period ended 30 June 2020 is (15.0)% compared to 19.8% for the six-month period ended 30 June 2019. The 2020 effective tax rate is impacted by the non-deductible, non-cash goodwill impairment loss and the non-deductible losses from derivatives related to the hedging of share-based payment programs and the hedging of the shares issued in a transaction related to the combination with Grupo Modelo and SAB. The 2019 effective tax rate was positively impacted by non-taxable gains from these derivatives.

The company benefits from tax exempted income and tax credits which are expected to continue in the future. The company does not have significant benefits coming from low tax rates in any particular jurisdiction.

16

10. Property, plant and equipment

Property, plant and equipment comprises owned and leased assets, as follows:

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Property, plant and equipment owned |  |  | 22 669 |  |  |  | 25 515 |
Property, plant and equipment leased (right-of-use assets) |  |  | 2 049 |  |  |  | 2 029 |
Total property, plant and equipment |  |  | 24 718 |  |  |  | 27 544 |

|  | 30 June 2020 |  |  | 31 December 2019 |
Million US dollar |  | Land and buildings |  |  | Plant and equipment, fixtures and fittings |  |  | Under construction |  |  | Total |  |  | Total |
Acquisition cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at end of previous year |  |  | 12 216 |  |  |  | 34 381 |  |  |  | 2 160 |  |  |  | 48 757 |  |  |  | 47 969 |
Effect of movements in foreign exchange |  |  | (1 043 | ) |  |  | (2 908 | ) |  |  | (239 | ) |  |  | (4 190 | ) |  |  | (485 | )
Acquisitions |  |  | 6 |  |  |  | 382 |  |  |  | 871 |  |  |  | 1 259 |  |  |  | 4 451 |
Acquisitions through business combinations |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 3 |  |  |  | 24 |
Disposals |  |  | (16 | ) |  |  | (394 | ) |  |  | — |  |  |  | (409 | ) |  |  | (1 987 | )
Disposals through the sale of subsidiaries |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4 | )
Transfer (to)/from other asset categories and other movements1 |  |  | 211 |  |  |  | 623 |  |  |  | (1 014 | ) |  |  | (180 | ) |  |  | (1 211 | )
Balance at end of the period |  |  | 11 374 |  |  |  | 32 087 |  |  |  | 1 778 |  |  |  | 45 239 |  |  |  | 48 757 |
Depreciation and impairment losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at end of previous year |  |  | (3 604 | ) |  |  | (19 638 | ) |  |  | — |  |  |  | (23 242 | ) |  |  | (22 331 | )
Effect of movements in foreign exchange |  |  | 237 |  |  |  | 1 551 |  |  |  | — |  |  |  | 1 788 |  |  |  | 310 |
Depreciation |  |  | (194 | ) |  |  | (1 419 | ) |  |  | — |  |  |  | (1 613 | ) |  |  | (3 370 | )
Disposals |  |  | 4 |  |  |  | 365 |  |  |  | — |  |  |  | 369 |  |  |  | 1 734 |
Disposals through the sale of subsidiaries |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |
Impairment losses |  |  | — |  |  |  | (26 | ) |  |  | — |  |  |  | (26 | ) |  |  | (87 | )
Transfer to/(from) other asset categories and other movements1 |  |  | (24 | ) |  |  | 177 |  |  |  | — |  |  |  | 153 |  |  |  | 499 |
Balance at end of the period |  |  | (3 581 | ) |  |  | (18 990 | ) |  |  | — |  |  |  | (22 571 | ) |  |  | (23 242 | )
Carrying amount |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
at 31 December 2019 |  |  | 8 612 |  |  |  | 14 743 |  |  |  | 2 160 |  |  |  | 25 515 |  |  |  | 25 515 |
at 30 June 2020 |  |  | 7 794 |  |  |  | 13 097 |  |  |  | 1 778 |  |  |  | 22 669 |  |  |  | — |

As at 30 June 2020, the carrying amount of property, plant and equipment subject to restrictions on title amounted to 2m US dollar (31 December 2019: 4m US dollar).

Contractual commitments to purchase property, plant and equipment amounted to 596m US dollar as at 30 June 2020 compared to 457m US dollar as at 31 December 2019.

AB InBev’s net capital expenditures in the statement of cash flow amounted to 1 524m US dollar in the first six months of 2020 compared to 1 488m US dollar for the same period last year. Out of the total 2020 capital expenditures approximately 41% was used to improve the company’s production facilities while 44% was used for logistics and commercial investments and 15% for improving administrative capabilities and for the purchase of hardware and software.

1 | The transfer (to)/from other asset categories and other movements relates mainly to transfers from assets under construction to their respective asset categories, to contributions of assets to pension plans, to the separate presentation in the balance sheet of property, plant and equipment held for sale in accordance with IFRS 5 Non-current assets held for sale and discontinued operations and to the restatement of non-monetary assets under hyperinflation accounting in line with IAS 29 Financial reporting in hyperinflationary economies. Accordingly, the transfers include the balances of Australian operations reclassified to assets held for sale as at 31 December 2019 and disposed of upon the completion of the sale on 1 June 2020.

17

Property, plant and equipment leased by the company (right-of-use assets) is detailed as follows:

|  | 2020 |
Million US dollar |  | Land and buildings |  |  | Machinery, equipment and other |  |  | Total |
Net carrying amount at 30 June |  |  | 1 765 |  |  |  | 284 |  |  |  | 2 049 |
Depreciation for the six-month period ended 30 June |  |  | (169 | ) |  |  | (75 | ) |  |  | (244 | )

|  | 2019 |
Million US dollar |  | Land and buildings |  |  | Machinery, equipment and other |  |  | Total |
Net carrying amount at 31 December |  |  | 1 723 |  |  |  | 306 |  |  |  | 2 029 |
Depreciation for the six-month period ended 30 June (restated) |  |  | (173 | ) |  |  | (77 | ) |  |  | (250 | )

Additions to right-of-use assets for the six-month period ended 30 June 2020 were 393m US dollar (30 June 2019: 293m US dollar). Following the sale of Dutch and Belgian pub real estate to Cofinimmo in October 2007, AB InBev entered into lease agreements with a term of 27 years. Furthermore, the company leases a number of warehouses, trucks, factory facilities and other commercial buildings, which typically run for a period of five to ten years. Lease payments are increased annually to reflect market rentals, if applicable. None of the leases include contingent rentals.

The company leases out pub real estate for an average outstanding period of 6 to 8 years and part of its own property under operating leases.

The expense related to short-term and low-value leases and variable lease payments that are not included in the measurement of the lease liabilities is not significant.

11. Goodwill

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Acquisition cost |  |  |  |  |  |  |  |
Balance at end of previous year |  |  | 128 119 |  |  |  | 133 316 |
Effect of movements in foreign exchange |  |  | (10 658 | ) |  |  | 53 |
Acquisitions through business combinations |  |  | 73 |  |  |  | 682 |
Disposals through the sale of subsidiaries |  |  | — |  |  |  | (22 | )
Hyperinflation monetary adjustments |  |  | 51 |  |  |  | 171 |
Reclassified as held for sale |  |  | — |  |  |  | (6 081 | )
Balance at end of the period |  |  | 117 585 |  |  |  | 128 119 |
Impairment losses |  |  |  |  |  |  |  |
Balance at end of previous year |  |  | (5 | ) |  |  | (5 | )
Impairment losses |  |  | (2 500 | ) |  |  | — |
Balance at end of the period |  |  | (2 505 | ) |  |  | (5 | )
Carrying amount |  |  |  |  |  |  |  |
at 31 December 2019 |  |  | 128 114 |  |  |  | 128 114 |
at 30 June 2020 |  |  | 115 080 |  |  |  | — |

During the six-month period ended 30 June 2020, AB InBev recognized goodwill on acquisitions of subsidiaries of 73m US dollar (30 June 2019: 389m US dollar) – see also Note 6 Acquisitions and disposals of subsidiaries.

The COVID-19 pandemic resulted in a sharp contraction of sales during the second quarter of 2020 in many countries in which the company operates. The decline in performance resulting from the COVID-19 pandemic is viewed as a triggering event for impairment testing in accordance with IAS 36 Impairment of Assets. Consequently, the company conducted an impairment test during the second quarter of 2020 for the cash-generating units showing the highest invested capital to EBITDA multiples: Colombia, Rest of Middle Americas, South Africa, Rest of Africa and Rest of Asia Pacific.

The uncertain course of the pandemic, in the absence thus far of effective vaccines or treatments, has caused extraordinary economic uncertainty, including how different countries will be affected, the speed of their recovery, the financial and fiscal measures these countries could implement and the longer term impact on the weighted average cost of capital and terminal growth rate of these countries.

During its interim goodwill impairment testing, the company considered several scenarios of the recovery of sales for the different cash-generating units being tested and ran sensitivity analysis for key assumptions including the weighted average cost of capital and the terminal growth rate. These scenarios are based on management’s assumptions on the recovery in a base case (which the company

18

deemed to be the most likely case at the time of the impairment test), a best case and a worst case scenario per cash generating unit following the common recovery shapes: L, U and V where the letters describe the trajectory of key assumptions tracking economic conditions. In view of the uncertainties, management assumed a 15 to 30% probability for the worst case scenario, dependent on the cash generating units in this interim impairment testing.

Based upon the results of the impairment test and considering the assumptions described below, the company concluded that no goodwill impairment was warranted under the base and best case scenarios. Nevertheless, under the worst case scenario ran with higher discount rates to factor the heightened business risk, the company concluded that the recoverable amounts were below the carrying value for the South Africa and Rest of Africa cash-generating units. As a consequence, management concluded, based on the valuations performed, that it was prudent in view of the uncertainties to record an impairment of goodwill of (1.5) billion US dollar for the South Africa cash generating unit and (1.0) billion US dollar for the Rest of Africa cash generating unit applying a 30% probability of occurrence. The impairment charge was allocated to the company’s EMEA reportable segment.

For the interim goodwill impairment testing the company performed the test at cash generating unit level, which is the lowest level at which goodwill is monitored for internal management purposes.

AB InBev’s impairment testing methodology is in accordance with IAS 36 Impairment of Assets, in which fair-value-less-cost-to-sell and value in use approaches are taken into consideration. This consists in applying a discounted free cash flow approach based on acquisition valuation models for the cash-generating units showing an invested capital to EBITDA multiple above 9x and valuation multiples for the other cash-generating units.

The key judgments, estimates and assumptions used in the discounted free cash flow calculations are generally as follows:

| • |  | In the first three years of the model, free cash flows are based on AB InBev’s strategic plan as approved by key management. AB InBev’s strategic plan is prepared per cash-generating unit and is based on external sources in respect of macro-economic assumptions, industry, inflation and foreign exchange rates, past experience and identified initiatives in terms of market share, revenue, variable and fixed cost, capital expenditure and working capital assumptions. For this interim goodwill impairment testing, the company assumed a base case, best case and worst case scenario for reach cash-generating unit being tested and ran sensitivities;

| • |  | For the subsequent seven years of the model, data from each scenario was extrapolated generally using simplified assumptions such as macro-economic and industry assumptions, variable cost per hectoliter and fixed cost linked to inflation, as obtained from external sources;

| • |  | Cash flows after the first ten-year period are extrapolated generally using expected annual long-term GDP growth rates, based on external sources, in order to calculate the terminal value, considering sensitivities on this metric;

| • |  | Projections are discounted at the unit’s weighted average cost of capital (WACC), considering sensitivities on this metric with more conservative assumptions in the worst case scenario to factor the heightened business risk;

| • |  | Cost to sell is assumed to reach 2% of the entity value based on historical precedents.

For the main cash generating units, the terminal growth rate applied generally ranged between 2% and 5%.

The WACC applied in US dollar nominal terms were as follow, with the higher WACC applied in the worst case scenario:

Cash-generating unit |  | 30 June 2020 |  | 31 December 2019 |
Colombia |  | 6% - 7% |  |  | 6 | %
Rest of Middle Americas |  | 10% - 11% |  |  | 9 | %
South Africa |  | 7% - 8% |  |  | 7 | %
Rest of Africa |  | 10% - 12% |  |  | 10 | %
Rest of Asia Pacific |  | 8% |  |  | — |

While a change in the weighted average cost of capital and the terminal growth rate used in impairment testing could have a material impact on the calculation of the fair values and trigger an impairment charge, based on the sensitivity analysis performed for the base and best case discounted free cash flow calculations, the company is not aware of any reasonably possible change in the key assumptions that would cause the cash-generating units’ carrying amount to exceed its recoverable amount.

In the sensitivity analyses carried out based on the worst case discounted free cash flow calculations, an adverse change of 1% in the WACC applied would lead to a reduction of the recoverable amount below the carrying amount for the South Africa, Rest of Africa, Columbia and Rest of Middle Americas cash generating units and would give rise to an additional impairment of 0.6 billion US dollar for the South Africa and Rest of Africa cash generating units, applying a 30% probability of ocurrence. The company would therefore be faced with a risk of future impairment under the worst case scenario at these higher WACC assumptions.

A 5% increase/(decrease) in probability applied for the worst case scenario (holding all other assumptions constant) would lead to an additional/(reduced) impairment of 0.4 billion US dollar for the South Africa and Rest of Africa cash-generating units in aggregate.

These calculations are based on management’s assessment of reasonably possible adverse changes in key assumptions, yet they are hypothetical and should not be viewed as an indication that these factors are likely to change. The sensitivity analyses should therefore be interpreted with caution.

AB InBev will re-perform an impairment test for goodwill during the fourth quarter of 2020 when it will have more clarity on the economic recovery of certain countries. Goodwill impairment testing relies on a number of critical judgments, estimates and assumptions. AB InBev believes that all of its estimates are reasonable: they are consistent with the company’s internal reporting and reflect management’s current best estimates. However, inherent uncertainties exist, including the rate of recovery of the countries following the COVID-19 pandemic, and other factors that management may not be able to control. If the company’s current assumptions and estimates, including projected revenues growth rates, competitive and consumer trends, weighted average cost of capital, terminal growth rates, and other market factors, are not met, or if valuation factors outside of the company’s control change unfavorably, the estimated fair value of goodwill could be adversely affected, leading to a potential further impairment in the future.

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Although AB InBev believes that its judgments, assumptions and estimates are appropriate, actual results may differ from these estimates under different assumptions or market or macro-economic conditions.

The carrying amount of goodwill was allocated to the different cash-generating units as follows:

Million US dollar Cash-generating unit |  | 30 June 2020 |  |  | 31 December 2019 |
United States |  |  | 33 452 |  |  |  | 33 451 |
Rest of North America |  |  | 1 956 |  |  |  | 1 984 |
Mexico |  |  | 10 808 |  |  |  | 13 175 |
Colombia |  |  | 16 264 |  |  |  | 18 647 |
Rest of Middle Americas |  |  | 24 211 |  |  |  | 25 257 |
Brazil |  |  | 3 341 |  |  |  | 4 539 |
Rest of South America |  |  | 1 062 |  |  |  | 1 101 |
Europe |  |  | 2 220 |  |  |  | 2 277 |
South Africa |  |  | 9 420 |  |  |  | 13 500 |
Rest of Africa |  |  | 5 079 |  |  |  | 6 691 |
China |  |  | 3 046 |  |  |  | 3 095 |
Rest of Asia Pacific |  |  | 3 675 |  |  |  | 4 397 |
Global Export |  |  | 545 |  |  |  | — |
Total carrying amount of goodwill |  |  | 115 080 |  |  |  | 128 114 |

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12. Intangible assets

|  | 30 June 2020 |  |  | 31 December 2019 |
Million US dollar |  | Brands |  |  | Commercial intangibles |  |  | Software |  |  | Other |  |  | Total |  |  | Total |
Acquisition cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at end of previous year |  |  | 40 074 |  |  |  | 2 774 |  |  |  | 2 594 |  |  |  | 666 |  |  |  | 46 108 |  |  |  | 48 465 |
Effect of movements in foreign exchange |  |  | (2 107 | ) |  |  | (132 | ) |  |  | (194 | ) |  |  | (37 | ) |  |  | (2 470 | ) |  |  | (79 | )
Acquisitions through business combinations |  |  | 14 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | 99 |
Acquisitions and expenditures |  |  | — |  |  |  | 174 |  |  |  | 19 |  |  |  | 94 |  |  |  | 287 |  |  |  | 631 |
Disposals |  |  | — |  |  |  | (5 | ) |  |  | (1 | ) |  |  | — |  |  |  | (6 | ) |  |  | (259 | )
Disposals through the sale of subsidiaries |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (29 | )
Transfer (to)/from other asset categories and other movements1 |  |  | — |  |  |  | 130 |  |  |  | 115 |  |  |  | (308 | ) |  |  | (63 | ) |  |  | (2 720 | )
Balance at end of period |  |  | 37 981 |  |  |  | 2 941 |  |  |  | 2 533 |  |  |  | 415 |  |  |  | 43 870 |  |  |  | 46 108 |
Amortization and impairment losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at end of previous year |  |  | (32 | ) |  |  | (1 595 | ) |  |  | (1 851 | ) |  |  | (178 | ) |  |  | (3 656 | ) |  |  | (3 634 | )
Effect of movements in foreign exchange |  |  | — |  |  |  | 85 |  |  |  | 126 |  |  |  | 14 |  |  |  | 225 |  |  |  | 41 |
Amortization |  |  | — |  |  |  | (148 | ) |  |  | (177 | ) |  |  | (27 | ) |  |  | (352 | ) |  |  | (622 | )
Impairment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (150 | ) |  |  | (150 | ) |  |  | — |
Disposals |  |  | — |  |  |  | 4 |  |  |  | 1 |  |  |  | — |  |  |  | 5 |  |  |  | 254 |
Disposals through the sale of subsidiaries |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transfer to/(from) other asset categories and other movements1 |  |  | — |  |  |  | (9 | ) |  |  | 17 |  |  |  | 99 |  |  |  | 107 |  |  |  | 305 |
Balance at end of period |  |  | (32 | ) |  |  | (1 663 | ) |  |  | (1 884 | ) |  |  | (241 | ) |  |  | (3 821 | ) |  |  | (3 656 | )
Carrying value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
at 31 December 2019 |  |  | 40 042 |  |  |  | 1 179 |  |  |  | 743 |  |  |  | 488 |  |  |  | 42 452 |  |  |  | 42 452 |
at 30 June 2020 |  |  | 37 949 |  |  |  | 1 278 |  |  |  | 649 |  |  |  | 173 |  |  |  | 40 049 |  |  |  |  |

During the six-month period ended 30 June 2020, AB InBev recognized intangible assets on acquisitions of subsidiaries of 14m US dollar (30 June 2019: 307m US dollar)—see also Note 6 Acquisitions and disposals. In addition, the company recognized (150)m US dollar impairment on intangible assets classified as assets held for sale as of 30 June 2020 and other intangibles (30 June 2019: nil) – see also Note 7 Exceptional items.

AB InBev is the owner of some of the world’s most valuable brands in the beer industry. As a result, brands and certain distribution rights are expected to generate positive cash flows for as long as the company owns the brands and distribution rights. Given AB InBev’s more than 600-year history, brands and certain distribution rights have been assigned indefinite lives.

Acquisitions and expenditures of commercial intangibles mainly represent supply and distribution rights, exclusive multi-year sponsorship rights and other commercial intangibles.

Intangible assets with indefinite useful lives are comprised primarily of brands and certain distribution rights that AB InBev purchases for its own products, and were tested for impairment during the second quarter of 2020. Based on the impairment testing results, no impairment loss was allocated to intangible assets with indefinite useful lives – refer to Note 11 Goodwill.

1 | The transfer (to)/from other asset categories and other movements mainly relates to transfers from assets under construction to their respective asset categories, to contributions of assets to pension plans, to the separate presentation in the balance sheet of intangible assets held for sale in accordance with IFRS 5 Non-current assets held for sale and discontinued operations and to the restatement of non-monetary assets under hyperinflation accounting in line with IAS 29 Financial reporting in hyperinflationary economies. Accordingly, the 2019 transfers include the balances of Australian operations reclassified to assets held for sale as at at 31 December 2019 and disposed of upon the completion of the sale on 1 June 2020.

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13. Trade and other receivables

Non-current trade and other receivables

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Cash deposits for guarantees |  |  | 170 |  |  |  | 219 |
Loans to customers |  |  | 30 |  |  |  | 58 |
Tax receivable, other than income tax |  |  | 147 |  |  |  | 166 |
Trade and other receivables |  |  | 303 |  |  |  | 363 |
|  |  | 650 |  |  |  | 807 |

Current trade and other receivables

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Trade receivables and accrued income |  |  | 3 465 |  |  |  | 4 046 |
Interest receivable |  |  | 6 |  |  |  | 21 |
Tax receivable, other than income tax |  |  | 618 |  |  |  | 821 |
Loans to customers |  |  | 105 |  |  |  | 119 |
Prepaid expenses |  |  | 420 |  |  |  | 563 |
Other receivables |  |  | 663 |  |  |  | 616 |
|  |  | 5 276 |  |  |  | 6 187 |

The carrying amount of trade and other receivables is a good approximation of their fair value as the impact of discounting is not significant.

The ageing of the current trade receivables and accrued income, interest receivable, other receivables and current and non-current loans to customers can be detailed as follows for 2020 and 2019 respectively:

|  | Net carrying amount as of 30 June 2020 |  |  | Of which: neither impaired nor past due on the reporting date |  |  | Of which not impaired as of the reporting date and past due |
|  | Less than 30 days |  |  | Between 30 and 59 days |  |  | Between 60 and 89 days |  |  | More than 90 days |
Trade receivables and accrued income |  |  | 3 465 |  |  |  | 3 156 |  |  |  | 93 |  |  |  | 64 |  |  |  | 75 |  |  |  | 77 |
Loans to customers |  |  | 135 |  |  |  | 133 |  |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | — |
Interest receivable |  |  | 6 |  |  |  | 6 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other receivables |  |  | 966 |  |  |  | 938 |  |  |  | 1 |  |  |  | 18 |  |  |  | 3 |  |  |  | 6 |
|  |  | 4 572 |  |  |  | 4 232 |  |  |  | 94 |  |  |  | 83 |  |  |  | 80 |  |  |  | 83 |

|  | Net carrying amount as of 31 December 2019 |  |  | Of which: neither impaired nor past due on the reporting date |  |  | Of which not impaired as of the reporting date and past due |
|  | Less than 30 days |  |  | Between 30 and 59 days |  |  | Between 60 and 89 days |  |  | More than 90 days |
Trade receivables and accrued income |  |  | 4 046 |  |  |  | 3 690 |  |  |  | 261 |  |  |  | 44 |  |  |  | 44 |  |  |  | 7 |
Loans to customers |  |  | 177 |  |  |  | 172 |  |  |  | 1 |  |  |  | 2 |  |  |  | 2 |  |  |  | — |
Interest receivable |  |  | 21 |  |  |  | 21 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other receivables |  |  | 979 |  |  |  | 945 |  |  |  | 9 |  |  |  | 16 |  |  |  | 5 |  |  |  | 4 |
|  |  | 5 223 |  |  |  | 4 828 |  |  |  | 271 |  |  |  | 62 |  |  |  | 51 |  |  |  | 11 |

The above analysis of the age of financial assets that are past due as at the reporting date but not impaired also includes non-current loans to customers. Past due amounts were not impaired when collection is still considered likely, for instance because the amounts can be recovered from the tax authorities, AB InBev has sufficient collateral or the customer entered into a payment plan. Impairment losses on trade and other receivables recognized in the first six months of 2020 amount to 122m US dollar (30 June 2019: 25m US dollar). The impairment loss recognized in the first six months of 2020 includes AB InBev’s estimate of overdue receivables the company will not be able to collect from defaulting customers as a result of the COVID-19 pandemic before year end 2020.

AB InBev’s exposure to credit, currency and interest rate risks is disclosed in Note 22 Risks arising from financial instruments.

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14. Cash and cash equivalents and investment securities

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Short-term bank deposits |  |  | 2 977 |  |  |  | 2 236 |
Treasury Bills |  |  | 17 155 |  |  |  | — |
Cash and bank accounts |  |  | 4 886 |  |  |  | 5 002 |
Cash and cash equivalents |  |  | 25 018 |  |  |  | 7 238 |
Bank overdrafts |  |  | (153 | ) |  |  | (68 | )
|  |  | 24 865 |  |  |  | 7 169 |

The company’s investment in Treasury Bills is to facilitate liquidity and for capital preservation.

The cash outstanding as at 30 June 2020 includes restricted cash for an amount of 77m US dollar (31 December 2019: 78m US dollar). This restricted cash relates to an outstanding consideration payable to former Anheuser-Busch shareholders that have not yet claimed the proceeds from the 2008 combination (1m US dollar) and amounts deposited on a blocked account in respect to the state aid investigation into the Belgian excess profit ruling system (76m US dollar) – see also Note 24 Contingencies.

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Investment in unquoted companies |  |  | 92 |  |  |  | 85 |
Investment in debt securities |  |  | 21 |  |  |  | 25 |
Non-current investments |  |  | 113 |  |  |  | 110 |
Investment in debt securities |  |  | 102 |  |  |  | 92 |
Current investments |  |  | 102 |  |  |  | 92 |

As at 30 June 2020, current debt securities of 102m US dollar mainly represented investments in government bonds (31 December 2019: 92m US dollar). The company’s investments in such short-term debt securities are primarily to facilitate liquidity and for capital preservation.

15. Assets classified as held for sale, liabilities associated with assets held for sale and discontinued operations

ASSETS CLASSIFIED AS HELD FOR SALE

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Balance at the end of previous year |  |  | 10 013 |  |  |  | 39 |
Reclassified to assets held for sale in the period |  |  | 145 |  |  |  | 9 692 |
Disposals |  |  | (9 540 | ) |  |  | (59 | )
Effect of movements in foreign exchange |  |  | (490 | ) |  |  | 341 |
Balance at the end of year |  |  | 128 |  |  |  | 10 013 |

LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Balance at the end of previous year |  |  | 1 145 |  |  |  | — |
Reclassified to liabilities associated with assets held for sale |  |  | (46 | ) |  |  | 1 106 |
Disposals |  |  | (1 044 | ) |  |  | — |
Effect of movements in foreign exchange |  |  | (55 | ) |  |  | 39 |
Balance at the end of year |  |  | — |  |  |  | 1 145 |

On 19 July 2019, AB InBev announced the agreement to divest CUB, its Australian subsidiary, to Asahi for 16.0 billion AUD on a cash free, debt free basis. Consequently, in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, as at 31 December 2019, assets and liabilities associated with the Australian operations were reclassified to assets held for sale and liabilities associated with assets held for sale. Furthermore, the results of the Australian operations were accounted for as discontinued operations and presented in a separate line in the condensed consolidated interim income statement (“profit from discontinued operations”) up to 31 May 2020. As required by IFRS 5, the 2019 consolidated income statement and statement of cash flows have been restated in these condensed consolidated interim financial statements.

Upon the closing of the transaction on 1 June 2020, the company received 10.8 billion US dollar proceeds net of disposal costs, derecognized (8.5) billion US dollar of net assets in relation to its former Australian operations, recycled (0.4) billion US dollar of the cumulative foreign exchange differences on its former Australian operations and cashflow hedges from equity to profit or loss, resulting in a net gain on disposal of 1.9 billion US dollar recognized in discontinued operations.

23

ASSETS AND LIABILITIES HELD FOR SALE

Assets and liabilities relating to the Australian operations were classified as held for sale on the consolidated statement of financial position as at 31 December 2019 and disposed of upon the completion of the sale on 1 June 2020. The relevant assets and liabilities are detailed in the table below:

Million US dollar |  | 1 June 2020 |  |  | 31 December 2019 |
Assets |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 581 |  |  |  | 625 |
Goodwill and intangible assets |  |  | 8 584 |  |  |  | 9 030 |
Other assets |  |  | 371 |  |  |  | 310 |
Assets classified as held for sale |  |  | 9 537 |  |  |  | 9 965 |
Liabilities |  |  |  |  |  |  |  |
Trade and other payables |  |  | (581 | ) |  |  | (659 | )
Deferred tax liabilities |  |  | (363 | ) |  |  | (380 | )
Other liabilities |  |  | (101 | ) |  |  | (106 | )
Liabilities associated with assets held for sale |  |  | (1 044 | ) |  |  | (1 145 | )
Net assets disposed of |  |  | 8 493 |  |  |  | — |
Gain on divestiture of Australia (discontinued operations – exceptional) |  |  | 1 919 |  |  |  | — |
Recycling of CTA and cashflow hedges |  |  | 426 |  |  |  | — |
Consideration received |  |  | 10 838 |  |  |  | — |

RESULTS FROM DISCONTINUED OPERATIONS

The following table summarizes the results of the Australian operations included in the condensed consolidated interim income statements and presented as discontinued operations:

For the period ended Million US dollar |  | 31 May 2020 |  |  | 30 June 2019 (restated) |
Revenue |  |  | 477 |  |  |  | 730 |
Profit from operations |  |  | 178 |  |  |  | 367 |
Profit from discontinued operations |  |  | 136 |  |  |  | 236 |

CASH FLOW FROM DISCONTINUED OPERATIONS

Cash flows attributable to the operating, investing and financing activities of the Australian operations are summarized as follows:

For the period ended Million US dollar |  | 31 May 2020 |  |  | 30 June 2019 (restated) |
Cash flow from operating activities |  |  | 84 |  |  |  | 314 |
Cash flow from investing activities – proceeds from Australia divestiture |  |  | 10 838 |  |  |  | — |
Cash flow from investing activities – other |  |  | (13 | ) |  |  | (16 | )
Cash flow from financing activities |  |  | (6 | ) |  |  | (13 | )
Net increase in cash and cash equivalents |  |  | 10 903 |  |  |  | 285 |

16. Investments in associates

A reconciliation of the summarized financial information to the carrying amount of the company’s interests in material associates is as follows:

|  | 2020 |  |  | 2019 |
Million US dollar |  | AB InBev Efes |  |  | Castel |  |  | Efes |  |  | AB InBev Efes |  |  | Castel |  |  | Efes |
Balance at 1 January |  |  | 1 132 |  |  |  | 3 239 |  |  |  | 451 |  |  |  | 1 159 |  |  |  | 3 279 |  |  |  | 479 |
Effect of movements in foreign exchange |  |  | — |  |  |  | (10 | ) |  |  | (60 | ) |  |  | — |  |  |  | (18 | ) |  |  | (39 | )
Acquisitions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Dividends received |  |  | — |  |  |  | (19 | ) |  |  | — |  |  |  | (14 | ) |  |  | (88 | ) |  |  | (15 | )
Share of results of associates |  |  | (19 | ) |  |  | 38 |  |  |  | 4 |  |  |  | (10 | ) |  |  | 56 |  |  |  | (5 | )
Balance at 30 June |  |  | 1 113 |  |  |  | 3 248 |  |  |  | 395 |  |  |  | 1 135 |  |  |  | 3 229 |  |  |  | 420 |

For the six-month period ended 30 June 2020, associates that are not individually material contributed 10m US dollar to the results of investment in associates (30 June 2019: 21m US dollar).

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17. Inventories

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Prepayments |  |  | 75 |  |  |  | 105 |
Raw materials and consumables |  |  | 2 356 |  |  |  | 2 478 |
Work in progress |  |  | 418 |  |  |  | 405 |
Finished goods |  |  | 1 306 |  |  |  | 1 257 |
Goods purchased for resale |  |  | 185 |  |  |  | 182 |
Inventories |  |  | 4 339 |  |  |  | 4 427 |
Inventories other than work in progress |  |  |  |  |  |  |  |
Inventories stated at net realizable value |  |  | 287 |  |  |  | 171 |

The cost of inventories recognized as an expense in 30 June 2020 amounts to 9 097m US dollar, included in cost of sales (31 December 2019: 20 362m US dollar).

Impairment losses on inventories recognized during the first six months of 2020 amount to 92m US dollar. The impairment loss includes the write off of obsolete work in progress and finished goods as a result of the COVID-19 pandemic (30 June 2019: 27m US dollar).

18. Changes in equity and earnings per share

STATEMENT OF CAPITAL

The tables below summarize the changes in issued capital and treasury shares during the first six months of 2020:

|  | Issued capital |
Issued capital |  | Million shares |  |  | Million US dollar |
At the end of the previous year |  |  | 2 019 |  |  |  | 1 736 |
Changes during the period |  |  | — |  |  |  | — |
|  |  | 2 019 |  |  |  | 1 736 |
Of which: |  |  |  |  |  |  |  |
Ordinary shares |  |  | 1 693 |  |  |  |  |
Restricted shares |  |  | 326 |  |  |  |  |

Treasury shares |  | Treasury shares |  |  | Result on the use of treasury shares |
| Million shares |  |  | Million US dollar |  |  | Million US dollar |
At the end of the previous year |  |  | 59.9 |  |  |  | (6 270 | ) |  |  | (2 556 | )
Changes during the period |  |  | (11.8 | ) |  |  | 1 236 |  |  |  | (897 | )
|  |  | 48.1 |  |  |  | (5 034 | ) |  |  | (3 453 | )

As at 30 June 2020, the share capital of AB InBev amounts to 1 238 608 344.12 euro (1 736 million US dollar). It is represented by 2 019 241 973 shares without nominal value, of which 48 085 315 are held in treasury by AB InBev and its subsidiaries. All shares are ordinary shares, except for 325 999 817 restricted shares. As at 30 June 2020, the total of authorized, un-issued capital amounts to 37m euro.

The treasury shares held by the company are reported in equity in Treasury shares.

The holders of ordinary and restricted shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. In respect of the company’s shares that are held by AB InBev, rights are suspended.

The restricted shares are unlisted, not admitted to trading on any stock exchange, and are subject to, among other things, restrictions on transfer until converted into new ordinary shares. The restricted shares will be convertible at the election of the holder into new ordinary shares on a one-for-one basis with effect from the fifth anniversary of completion of the SAB combination. From completion of the SAB combination, such restricted shares will rank equally with the ordinary shares with respect to dividends and voting rights.

The shareholders’ structure is based on the notifications made to the company pursuant to the Belgian Law of 02 May 2007, which governs the disclosure of significant shareholdings in listed companies. It is included in the Corporate Governance section of AB InBev’s annual report.

CHANGES IN OWNERSHIP INTERESTS

In compliance with IFRS 10, the acquisition or disposal of additional shares in a subsidiary is accounted for as an equity transaction with owners.

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During the first six months of 2020, there were no significant purchases of non-controlling interests in subsidiaries. As the related subsidiaries were already fully consolidated, the purchases did not impact AB InBev’s profit, but reduced the non-controlling interests and thus impacted the profit attributable to equity holders of AB InBev.

BORROWED SHARES

In order to fulfill AB InBev’s commitments under various outstanding stock option plans, during the course of 2020, the company had stock lending arrangements in place for up to 30 million shares, which were fully used to fulfil stock option plan commitments. The company shall pay any dividend equivalent after tax in respect of such borrowed shares. This payment will be reported through equity as dividend.

DIVIDENDS

On 24 October 2019, an interim dividend of 0.80 euro per share or approximately 1 588m euro was approved by the Board of Directors. This interim dividend was paid out on 21 November 2019. On 3 June 2020, in addition to the interim dividend paid on 21 November 2019, a dividend of 0.50 euro per share or 1 002m euro was approved at the shareholder’ meeting, reflecting a total dividend payment for the 2019 fiscal year of 1.30 euro per share or 2 590m euro. The dividend was paid out as of 11 June 2020.

On 24 October 2018, an interim dividend of 0.80 euro per share or approximately 1 565m euro was approved by the Board of Directors. This interim dividend was paid out on 29 November 2018. On 24 April 2019, in addition to the interim dividend paid on 29 November 2018, a dividend of 1.00 euro per share or 1 978m euro was approved at the shareholder’ meeting, reflecting a total dividend payment for the 2018 fiscal year of 1.80 euro per share or 3 557m euro. The dividend was paid out on 9 May 2019.

TRANSLATION RESERVES

The translation reserves comprise all foreign currency exchange differences arising from the translation of the financial statements of foreign operations. The translation reserves also comprise the portion of the gain or loss on the foreign currency liabilities and on the derivative financial instruments determined to be effective net investment.

HEDGING RESERVES

The hedging reserves comprise the effective portion of the cumulative net change in the fair value of cash flow hedges to the extent that the hedged risk has not yet impacted profit or loss. For the six-month period ended 30 June 2020, the company recycled 370m US dollar of cash flow hedges in relation to the Australia divestiture from equity to profit or loss.

TRANSFERS FROM SUBSIDIARIES

The amount of dividends payable to AB InBev by its operating subsidiaries is subject to, among other restrictions, general limitations imposed by the corporate laws, capital transfer restrictions and exchange control restrictions of the respective jurisdictions where those subsidiaries are organized and operate. Capital transfer restrictions are also common in certain emerging market countries, and may affect AB InBev’s flexibility in implementing a capital structure it believes to be efficient. As at 30 June 2020, the restrictions above mentioned were not deemed significant on the company’s ability to access or use the assets or settle the liabilities of its operating subsidiaries.

Dividends paid to AB InBev by certain of its subsidiaries are also subject to withholding taxes. Withholding taxes, if applicable, generally do not exceed 15%.

OTHER COMPREHENSIVE INCOME RESERVES

The changes in the other comprehensive income reserves are as follows:

Million US dollar |  | Translation Reserves |  |  | Hedging reserves |  |  | Post- employment benefits |  |  | Total OCI Reserves |
As per 1 January 2020 |  |  | (19 936 | ) |  |  | 397 |  |  |  | (1 740 | ) |  |  | (21 279 | )
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exchange differences on translation of foreign operations (gains/(losses)) |  |  | (12 293 | ) |  |  | — |  |  |  | — |  |  |  | (12 293 | )
Cash flow hedges |  |  | — |  |  |  | (138 | ) |  |  | — |  |  |  | (138 | )
Cash flow hedges and cumulative translation adjustments in relation to Australia divestiture reclassified to profit ot loss |  |  | (645 | ) |  |  | 219 |  |  |  | — |  |  |  | (426 | )
Re-measurements of post-employment benefits |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | (1 | )
Total comprehensive income |  |  | (12 938 | ) |  |  | 81 |  |  |  | (1 | ) |  |  | (12 858 | )
As per 30 June 2020 |  |  | (32 874 | ) |  |  | 478 |  |  |  | (1 741 | ) |  |  | (34 137 | )

The increase in translation reserves is primarily related to the combined effect of the weakening of the closing rates of the Mexican pesos, the South African rand, the Colombian pesos and the Brazilian real, which resulted in a foreign exchange translation adjustment of 12 293m US dollar as of 30 June 2020 (decrease of equity).

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Million US dollar |  | Translation Reserves |  |  | Hedging reserves |  |  | Post- employment benefits |  |  | Total OCI Reserves |
As per 1 January 2019 |  |  | (21 079 | ) |  |  | 494 |  |  |  | (1 567 | ) |  |  | (22 152 | )
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exchange differences on translation of foreign operations (gains/(losses)) |  |  | 1 719 |  |  |  | — |  |  |  | — |  |  |  | 1 719 |
Cash flow hedges |  |  | — |  |  |  | (134 | ) |  |  | — |  |  |  | (134 | )
Re-measurements of post-employment benefits |  |  | — |  |  |  | — |  |  |  | (37 | ) |  |  | (37 | )
Total comprehensive income |  |  | 1 719 |  |  |  | (134 | ) |  |  | (37 | ) |  |  | 1 548 |
As per 30 June 2019 |  |  | (19 360 | ) |  |  | 360 |  |  |  | (1 604 | ) |  |  | (20 604 | )

EARNINGS PER SHARE

The calculation of basic earnings per share for the six-month period ended 30 June 2020 is based on the profit attributable to equity holders of AB InBev of (1 900)m US dollar (30 June 2019: 6 055m US dollar) and a weighted average number of ordinary and restricted shares outstanding (including deferred share instruments and stock lending) per end of the period, calculated as follows:

Million shares |  | 2020 |  |  | 2019 |
Issued ordinary and restricted shares at 1 January, net of treasury shares |  |  | 1 959 |  |  |  | 1 957 |
Effect of stock lending |  |  | 30 |  |  |  | 22 |
Effect of delivery of treasury shares |  |  | 6 |  |  |  | 1 |
Weighted average number of ordinary and restricted shares at 30 June |  |  | 1 995 |  |  |  | 1 980 |

The calculation of diluted earnings per share for the year ended 30 June 2020 is based on the profit attributable to equity holders of AB InBev of (1 900)m US dollar (30 June 2019: 6 055m US dollar) and the weighted average number of ordinary and restricted shares (diluted) outstanding (including deferred share instruments and stock lending) at the end of the period, calculated as follows:

Million shares |  | 2020 |  |  | 2019 |
Weighted average number of ordinary and restricted shares at 30 June |  |  | 1 995 |  |  |  | 1 980 |
Effect of share options, warrants and restricted stock units1 |  |  | 39 |  |  |  | 31 |
Weighted average number of ordinary and restricted shares (diluted) at 30 June |  |  | 2 034 |  |  |  | 2 011 |

The calculation of earnings per share before exceptional items and discontinued operations is based on the profit from continuing operations attributable to equity holders of AB InBev. A reconciliation of the profit before exceptional items and discontinued operations, attributable to equity holders of AB InBev to the profit attributable to equity holders of AB InBev is calculated as follows:

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 restated |
Profit before exceptional items and discontinued operations, attributable to equity holders of AB InBev |  |  | 76 |  |  |  | 4 714 |
Exceptional items, before taxes (refer to Note 7) |  |  | (2 796 | ) |  |  | (103 | )
Exceptional finance income/(cost), before taxes (refer to Note 8) |  |  | (1 388 | ) |  |  | 1 201 |
Exceptional taxes (refer to Note 7) |  |  | 107 |  |  |  | (5 | )
Exceptional non-controlling interest (refer to Note 7) |  |  | 46 |  |  |  | 12 |
Profit from discontinued operations |  |  | 2 055 |  |  |  | 236 |
Profit attributable to equity holders of AB InBev |  |  | (1 900 | ) |  |  | 6 055 |

The calculation of the Underlying EPS is based on the profit before exceptional items, discontinued operations, mark-to-market gains/losses and hyperinflation impacts attributable to equity holders of AB InBev. A reconciliation of the profit before exceptional items, discontinued operations, mark-to-market gains/losses and hyperinflation impacts, attributable to equity holders of AB InBev to the profit before exceptional items and discontinued operations, attributable to equity holders of AB InBev, is calculated as follows:

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 restated |
Profit before exceptional items, discontinued operations, mark-to-market gains/losses and hyperinflation impacts, attributable to equity holders of AB InBev |  |  | 1 805 |  |  |  | 3 593 |
Mark-to-market (losses)/gains on certain derivatives related to the hedging of share-based payment programs (refer to Note 8) |  |  | (1 724 | ) |  |  | 1 124 |
Hyperinflation impacts |  |  | (5 | ) |  |  | (3 | )
Profit before exceptional items and discontinued operations, attributable to equity holders of AB InBev |  |  | 76 |  |  |  | 4 714 |

1 | In accordance with the guidance provided by IAS 33 Earnings per Share, for the 2020 calculation of Diluted EPS from continuing and discontinued operations and Diluted EPS from continuing operations these share options are anti-dilutive and have been disregarded.

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The table below sets out the EPS calculation:

For the six-month period ended 30 June Million US dollar |  | 2020 |  |  | 2019 restated |
Profit attributable to equity holders of AB InBev |  |  | (1 900 | ) |  |  | 6 055 |
Weighted average number of ordinary and restricted shares |  |  | 1 995 |  |  |  | 1 980 |
Basic EPS from continuing and discontinued operations |  |  | (0.95 | ) |  |  | 3.06 |
Profit from continuing operations attributable to equity holders of AB InBev |  |  | (3 955 | ) |  |  | 5 819 |
Weighted average number of ordinary and restricted shares |  |  | 1 995 |  |  |  | 1 980 |
Basic EPS from continuing operations |  |  | (1.98 | ) |  |  | 2.94 |
Profit from continuing operations before exceptional items and discontinued operations, attributable to equity holders of AB InBev |  |  | 76 |  |  |  | 4 714 |
Weighted average number of ordinary and restricted shares |  |  | 1 995 |  |  |  | 1 980 |
Basic EPS from continuing operations before exceptional items |  |  | 0.04 |  |  |  | 2.38 |
Profit before exceptional items, discontinued operations, mark-to-market gains/losses and hyperinflation impacts, attributable to equity holders of AB InBev |  |  | 1 805 |  |  |  | 3 593 |
Weighted average number of ordinary and restricted shares |  |  | 1 995 |  |  |  | 1 980 |
Underlying EPS |  |  | 0.90 |  |  |  | 1.81 |
Profit attributable to equity holders of AB InBev |  |  | (1 900 | ) |  |  | 6 055 |
Weighted average number of ordinary and restricted shares (diluted)1 |  |  | 1 995 |  |  |  | 2 011 |
Diluted EPS from continuing and discontinued operations |  |  | (0.95 | ) |  |  | 3.01 |
Profit from continuing operations attributable to equity holders of AB InBev |  |  | (3 955 | ) |  |  | 5 819 |
Weighted average number of ordinary and restricted shares (diluted)1 |  |  | 1 995 |  |  |  | 2 011 |
Diluted EPS from continuing operations |  |  | (1.98 | ) |  |  | 2.89 |
Profit from continuing operations before exceptional items and discontinued operations, attributable to equity holders of AB InBev |  |  | 76 |  |  |  | 4 714 |
Weighted average number of ordinary and restricted shares (diluted) |  |  | 2 034 |  |  |  | 2 011 |
Diluted EPS from continuing operations before exceptional items |  |  | 0.04 |  |  |  | 2.34 |

The average market value of the company’s shares for purposes of calculating the dilutive effect of share options and restricted stock units was based on quoted market prices for the period that the options and restricted stock units were outstanding. For the calculation of Diluted EPS from continuing operations before exceptional items, 72m share options were anti-dilutive and not included in the calculation of the dilutive effect as at 30 June 2020 (30 June 2019: 64m share options).

1 | In accordance with the guidance provided by IAS 33 Earnings per Share, for the 2020 calculation of Diluted EPS from continuing and discontinued operations and Diluted EPS from continuing operations these share options are anti-dilutive and have been disregarded.

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19. Interest-bearing loans and borrowings

This note provides information about the company’s interest-bearing loans and borrowings. For more information about the company’s exposure to interest rate and foreign exposure currency risk - refer to Note 22 Risks arising from financial instruments.

Non-current liabilities Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Secured bank loans |  |  | 48 |  |  |  | 71 |
Unsecured bank loans |  |  | 55 |  |  |  | 50 |
Unsecured bond issues |  |  | 104 162 |  |  |  | 95 674 |
Unsecured other loans |  |  | 81 |  |  |  | 77 |
Lease liabilities |  |  | 1 688 |  |  |  | 1 692 |
Non-current interest-bearing loans and borrowings |  |  | 106 034 |  |  |  | 97 564 |

Current liabilities Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Secured bank loans |  |  | 995 |  |  |  | 790 |
Commercial papers |  |  | 3 072 |  |  |  | 1 599 |
Unsecured bank loans |  |  | 133 |  |  |  | 135 |
Unsecured bond issues |  |  | 1 916 |  |  |  | 2 532 |
Unsecured other loans |  |  | 16 |  |  |  | 20 |
Lease liabilities |  |  | 352 |  |  |  | 333 |
Current interest-bearing loans and borrowings |  |  | 6 484 |  |  |  | 5 410 |

The current and non-current interest-bearing loans and borrowings amount to 112.5 billion US dollar as at 30 June 2020, compared to 103.0 billion US dollar as at 31 December 2019.

In March 2020, the company drew the full 9.0 billion US dollar commitment under the 2010 Senior Facilities Agreement, in order to proactively safeguard its liquidity position by holding cash on its balance sheet through the period of significant financial market volatility and uncertainty as a result of the COVID-19 virus pandemic. As at 30 June 2020, the revolving credit facilities have been repaid in full.

Commercial papers amount to 3.1 billion US dollar as at 30 June 2020 (31 December 2019: 1.6 billion US dollar) and include programs in US dollar and euro with a total authorized issuance up to 5.0 billion US dollar and 3.0 billion euro, respectively.

On 2 April 2020 and 3 April 2020, Anheuser-Busch InBev NV/SA (ABISA) and Anheuser-Busch InBev Worldwide Inc. (ABIWW) respectively, completed the issuance of the following series of bonds:

Issue date |  |  | Issuer (abbreviated) |  | Maturity date |  | Currency |  | Aggregate principal amount (in millions) |  | Interest rate
| 2 April 2020 |  |  | ABISA |  | 2 December 2027 |  | EUR |  | 1 000 |  | 2.125%
| 2 April 2020 |  |  | ABISA |  | 2 April 2032 |  | EUR |  | 1 750 |  | 2.875%
| 2 April 2020 |  |  | ABISA |  | 2 April 2040 |  | EUR |  | 1 750 |  | 3.700%
| 3 April 2020 |  |  | ABIWW |  | 1 June 2030 |  | USD |  | 1 750 |  | 3.500%
| 3 April 2020 |  |  | ABIWW |  | 1 June 2040 |  | USD |  | 1 000 |  | 4.350%
| 3 April 2020 |  |  | ABIWW |  | 1 June 2050 |  | USD |  | 2 250 |  | 4.500%
| 3 April 2020 |  |  | ABIWW |  | 1 June 2060 |  | USD |  | 1 000 |  | 4.600%

Net debt is defined as non-current and current interest-bearing loans and borrowings and bank overdrafts minus debt securities and cash and cash equivalents. Net debt is a financial performance indicator that is used by AB InBev’s management to highlight changes in the company’s overall liquidity position. The company believes that net debt is meaningful for investors because it is one of the primary measures that AB InBev’s management uses when evaluating its progress towards deleveraging toward its optimal net debt to normalized EBITDA ratio of around 2x.

AB InBev’s net debt decreased to 87.4 billion US dollar as at 30 June 2020, from 95.5 billion US dollar as at 31 December 2019. Aside from operating results that are net of capital expenditures, the net debt is impacted mainly by the payment of interests and taxes (3.4 billion US dollar increase of net debt), foreign exchange impact on net debt (0.1 billion US dollar decrease of net debt), settlement of derivatives (0.5 billion US dollar increase of net debt), dividend payments to shareholders of AB InBev and Ambev (1.2 billion US dollar) and the proceeds from the divestiture of the Australian business (10.8 billion US dollar decrease of net debt).

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The following table provides a reconciliation of AB InBev’s net debt as at the dates indicated:

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Non-current interest-bearing loans and borrowings |  |  | 106 034 |  |  |  | 97 564 |
Current interest-bearing loans and borrowings |  |  | 6 484 |  |  |  | 5 410 |
Interest-bearing loans and borrowings |  |  | 112 518 |  |  |  | 102 974 |
Bank overdrafts |  |  | 153 |  |  |  | 68 |
Cash and cash equivalents |  |  | (25 018 | ) |  |  | (7 238 | )
Interest bearing loans granted and other deposits (included within Trade and other receivables) |  |  | (142 | ) |  |  | (146 | )
Debt securities (included within Investment securities) |  |  | (123 | ) |  |  | (117 | )
Net debt |  |  | 87 388 |  |  |  | 95 542 |

Reconciliation of liabilities arising from financing activities

The table below details changes in the company’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be classified in the company’s consolidated cash flow statement from financing activities.

Million US dollar |  | Long-term debt, net of current portion |  |  | Short-term debt and current portion of long-term debt |
Balance at 1 January 2020 |  |  | 97 564 |  |  |  | 5 410 |
Proceeds from borrowings |  |  | 10 915 |  |  |  | 3 607 |
Payments on borrowings |  |  | — |  |  |  | (4 328 | )
Capitalization / (payment) of lease liabilities |  |  | 290 |  |  |  | (184 | )
Amortized cost (including interest on leases) |  |  | 36 |  |  |  | 59 |
Unrealized foreign exchange effects |  |  | (680 | ) |  |  | (147 | )
Current portion of long-term debt |  |  | (2 076 | ) |  |  | 2 076 |
Other movements |  |  | (15 | ) |  |  | (9 | )
Balance at 30 June 2020 |  |  | 106 034 |  |  |  | 6 484 |

Million US dollar |  | Long-term debt, net of current portion |  |  | Short-term debt and current portion of long- term debt |
Balance at 1 January 2019 |  |  | 106 997 |  |  |  | 4 584 |
Proceeds from borrowings |  |  | 18 087 |  |  |  | 3 924 |
Payments on borrowings |  |  | (18 716 | ) |  |  | (1 884 | )
Capitalization / (payment) of lease liabilities |  |  | 321 |  |  |  | (235 | )
Amortized cost (including interest on leases) |  |  | 44 |  |  |  | 58 |
Unrealized foreign exchange effects |  |  | (363 | ) |  |  | 35 |
Current portion of long-term debt |  |  | (4 565 | ) |  |  | 4 565 |
Other movements |  |  | (133 | ) |  |  | (83 | )
Balance at 30 June 2019 |  |  | 101 672 |  |  |  | 10 964 |

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20. Share-based payments1

Different share and share option programs allow company senior management and members of the board of directors to receive or acquire shares of AB InBev, Ambev or Budweiser APAC. For all option plans, the fair value of share-based payment compensation is estimated at grant date, using a binomial Hull model, modified to reflect the IFRS 2 Share-based Payment requirement that assumptions about forfeiture before the end of the vesting period cannot impact the fair value of the option. All the company share-based payment plans are equity-settled.

Share-based payment transactions resulted in a total income of 18m US dollar for the six-month period ended 30 June 2020 following the reversal of accrued cost for performance-related LTIs for which the conditions will not be met as a result of the COVID-19 pandemic. Share-based payments transactions resulted in a cost of 185m US dollar for the six-month period ended 30 June 2019.

AB INBEV SHARE-BASED COMPENSATION PROGRAMS

Restricted Stock Units Plan for Directors

During the six-month period ended 30 June 2020 0.1m restricted stock units with an estimated fair value of 4m US dollar were granted to directors (30 June 2019: 0.1m with an estimated fair value of 4m US dollar).

Share-Based Compensation Plan for Executives

During the six-month period ended 30 June 2020, AB InBev issued 0.1m of matching restricted stock units in relation to bonuses granted to company employees and management (30 June 2019: 0.6m of matching restricted stock units). These matching restricted stock units are valued at the share price as of the grant date, represent a fair value of approximately 2m US dollar and cliff vest after five years (30 June 2019: 52m US dollar).

LTI Stock Option Plans for Executives

During the six-month period ended 30 June 2020, AB InBev issued 34.3m LTI stock options with an estimated fair value of 241m US dollar (30 June 2019: 1.0m LTI stock options with an estimated fair value of 11m US dollar). Out of these stock options, 3.6m stock options were granted to members of the Executive Committee (30 June 2019: 0.3m stock options).

LTI Restricted Stock Units Plans for Executives

AB InBev has specific long-term incentive programs in place, including:

| • |  | Programs allowing for the offer of restricted stock units to certain employees in certain specific circumstances, e.g. as a special retention incentive or to compensate for assignments of expatriates in countries with difficult living conditions. The restricted stock units vest after five years and in the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. In the six-month period ended 30 June 2020, 6.9m restricted stock units with an estimated fair value of 301m US dollar were granted under these programs (30 June 2019: nil). Out of these, 0.8m restricted stock units were granted to members of the Executive Committee (30 June 2019: nil).

| • |  | A program allowing for the exceptional offer of restricted stock units to certain employees in order to provide a long-term retention incentive for key employees of the company. Employees eligible to receive a grant under this program receive two series of restricted stock units, with the first series of the restricted stock units vesting after five years, and the second series vesting after ten years. Alternatively, under this program, the restricted stock units may be granted with a shorter vesting period of 2.5 to 3 years for the first series and 5 years for the second series of the restricted stock units. In the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. As at 2017, instead of restricted stock units, stock options may be granted under the program with similar vesting and forfeiture rules. Each option gives the grantee the right to purchase one existing AB InBev share. During the six-month period ended 30 June 2020, no restricted stock units nor stock options were granted (30 June 2019: 0.1m stock options with an estimated fair value of 2m US dollar).

| • |  | A program allowing for certain employees to purchase company shares at a discount and that is aimed at providing a long-term retention incentive for (i) high-potential employees of the company, who are at a mid-manager level (“People bet share purchase program”) or (ii) newly hired employees. The voluntary investment in company shares leads to the grant of an amount of matching restricted stock units or stock options which vest after 5 years. In the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. During the six-month period ended 30 June 2020, employees purchased 0.1m shares under this program for the equivalent of 1m US dollar (30 June 2019: 0.1m shares for the equivalent of 1m US dollar).

Performance related incentive plan for Disruptive Growth Function (ZX Ventures)

During the six-month period ended 30 June 2020, no performance units were granted to senior management of the Disruptive Growth Function (30 June 2019: 0.3m performance units). The value of the performance units will depend on the return of the Disruptive Growth business area.

These units vest after 5 years provided that a performance test is met. Specific forfeiture rules apply in the event that the executive leaves the company.

1 | Amounts have been converted to US dollar at the average rate of the period, unless otherwise indicated.

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Other programs

In order to maintain the consistency of benefits granted to executives and to encourage the international mobility of executives, an option exchange program can be executed whereby unvested options are exchanged for restricted shares that remain locked-up until 5 years after the end of the initial vesting period. The shares that result from the exercise of the options must in principle remain locked-up until 31 December 2023. During the six-month period ended 30 June 2020, no options were exchanged for ordinary blocked shares (30 June 2019: nil).

The Board has also approved the early release of vesting conditions of unvested stock options or restricted stock units that are vesting within 6 months of the executives’ relocation. The shares that result from the early exercise of the options or the early vesting of the restricted stock units must remain blocked until the end of the initial vesting period. During the six-month period ended 30 June 2020, there was no vesting acceleration of stock options nor restricted stock units under this program for members of the senior management (30 June 2019: 0.1m stock options and restricted stock units).

AMBEV SHARE-BASED COMPENSATION PROGRAMS

Since 2018, Ambev has had in place a plan which is substantially similar to the Share-based compensation plan under which bonuses granted to company employees and management are partially settled in shares. Under the Share-based compensation plan, Ambev issued 1.6m restricted stock units in the six-month period ended 30 June 2020 with an estimated fair value of 6m US dollar (30 June 2019: 3.8m restricted stock units with an estimated fair value of 15m US dollar).

As at 2010, senior employees are eligible for an annual long-term incentive to be paid out in Ambev LTI stock options (or, in the future, similar share-based instruments), depending on management’s assessment of the employee’s performance and future potential. In the six-month period ended 30 June 2020, no LTI stock options were granted (30 June 2019: 1.4m LTI stock options with an estimated fair value of 2m US dollar).

BUDWEISER APAC SHARE-BASED COMPENSATION PROGRAM

LTI Stock Option Plans for Executives

In December 2019, Budweiser APAC set up a new long-term incentive plan in which certain employees are eligible for an annual grant to be paid out in Budweiser APAC stock options (or, in the future, similar share-based instruments), depending on management’s assessment of the employee’s performance and future potential. In the six-month period ended 30 June 2020, Budweiser APAC granted 69.7m stock options with an estimated fair value of 52m US dollar.

Discretionary Restricted Stock Units Plan

In December 2019, Budweiser APAC set up a new discretionary restricted stock units plan which allows for the offer of restricted stock units to certain employees in certain specific circumstances, at the discretion of the Board, e.g. as a special retention incentive. The restricted stock units vest after three to five years and in the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. In the six-month period ended 30 June 2020, 29.7m restricted stock units with an estimated fair value of 84m US dollar were granted under this program to a selected number of employees.

Share-Based Compensation Plan

In March 2020, Budweiser APAC set up a program allowing for certain employees to invest some or all of their variable compensation in Budweiser APAC shares (Voluntary Shares). As an additional reward, employees who invest in Voluntary Shares also receive a company shares match of three matching shares for each Voluntary Share invested up to a limited total percentage of each employee’s variable compensation. During the six-month period ended 30 June 2020, Budweiser APAC issued 0.2 million matching restricted stock units in relation to bonuses granted to Budweiser APAC employees. These matching restricted stock units are valued at the share price at the day of grant representing a fair value of approximately 1m US dollar and cliff vest after five years.

People Bet Plan

In March 2020, Budweiser APAC set up a program allowing for certain employees to purchase Budweiser APAC shares at a discount which is aimed at providing a long-term retention incentive for high-potential employees of the company, who are at a mid-manager level (“People bet share purchase program”). The voluntary investment in company shares leads to the grant of an amount of matching restricted stock units which vest after 5 years. In the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. During the six-month period ended 30 June 2020, 0.6 million restricted stock units with an estimated fair value of 2m US dollar were granted under this program to a selected number of Budweiser APAC employees.

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21. Trade and other payables

NON-CURRENT TRADE AND OTHER PAYABLES

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Indirect taxes payable |  |  | 118 |  |  |  | 174 |
Trade payables |  |  | 167 |  |  |  | 237 |
Deferred consideration on acquisitions |  |  | 1 194 |  |  |  | 1 418 |
Other payables |  |  | 139 |  |  |  | 113 |
Non-current trade and other payables |  |  | 1 619 |  |  |  | 1 943 |

CURRENT TRADE AND OTHER PAYABLES

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Trade payables and accrued expenses |  |  | 12 207 |  |  |  | 15 876 |
Payroll and social security payables |  |  | 646 |  |  |  | 736 |
Indirect taxes payable |  |  | 2 627 |  |  |  | 2 708 |
Interest payable |  |  | 1 560 |  |  |  | 1 679 |
Consigned packaging |  |  | 1 014 |  |  |  | 1 106 |
Dividends payable |  |  | 342 |  |  |  | 338 |
Deferred income |  |  | 19 |  |  |  | 21 |
Deferred consideration on acquisitions |  |  | 229 |  |  |  | 221 |
Other payables |  |  | 213 |  |  |  | 179 |
Current trade and other payables |  |  | 18 857 |  |  |  | 22 864 |

As at 30 June 2020, deferred consideration on acquisitions is mainly comprised of 0.7 billion US dollar for the put option included in the 2012 shareholders’ agreement between Ambev and ELJ, which may result in Ambev acquiring additional shares in Cervecería Nacional Dominicana S.A. (“CND”) (31 December 2019: 0.7 billion US dollar).

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22. Risks arising from financial instruments

FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Set out below is an overview of financial assets1 held by the company as at the dates indicated:

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Debt instruments at amortized cost |  |  |  |  |  |  |  |
Trade and other receivables |  |  | 4 741 |  |  |  | 5 444 |
Debt instruments at fair value through OCI |  |  |  |  |  |  |  |
Unquoted debt |  |  | 21 |  |  |  | 25 |
Debt instruments at fair value through profit or loss |  |  |  |  |  |  |  |
Quoted debt |  |  | 102 |  |  |  | 91 |
Equity instruments at fair value through OCI |  |  |  |  |  |  |  |
Unquoted companies |  |  | 92 |  |  |  | 85 |
Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |
Derivatives not designated in hedge accounting relationships: |  |  |  |  |  |  |  |
Equity swaps |  |  | 5 |  |  |  | 17 |
Interest rate swaps |  |  | 101 |  |  |  | 18 |
Cross currency interest rate swaps |  |  | 275 |  |  |  | 157 |
Derivatives designated in hedge accounting relationships: |  |  |  |  |  |  |  |
Foreign exchange forward contracts |  |  | 437 |  |  |  | 112 |
Foreign currency futures |  |  | 1 |  |  |  | 7 |
Commodities |  |  | 24 |  |  |  | 52 |
|  |  | 5 799 |  |  |  | 6 009 |
Of which: |  |  |  |  |  |  |  |
Non-current |  |  | 914 |  |  |  | 883 |
Current |  |  | 4 885 |  |  |  | 5 126 |

1 | Cash and short-term deposits are not included in this overview.

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Set out below is an overview of financial liabilities held by the company as at the dates indicated:

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |  |
Derivatives not designated in hedge accounting relationships: |  |  |  |  |  |  |  |
Equity swaps |  |  | 6 350 |  |  |  | 3 146 |
Cross currency interest rate swaps |  |  | 47 |  |  |  | 140 |
Other derivatives |  |  | 9 |  |  |  | 156 |
Derivatives designated in hedge accounting relationships: |  |  |  |  |  |  |  |
Foreign exchange forward contracts |  |  | 84 |  |  |  | 435 |
Cross currency interest rate swaps |  |  | 69 |  |  |  | 35 |
Interest rate swaps |  |  | — |  |  |  | 4 |
Commodities |  |  | 250 |  |  |  | 97 |
Equity swaps |  |  | 54 |  |  |  | 31 |
Other derivatives |  |  | 2 |  |  |  | 107 |
Financial liabilities at amortized cost |  |  |  |  |  |  |  |
Trade and other payables |  |  | 17 085 |  |  |  | 21 189 |
Non-current interest-bearing loans and borrowings: |  |  |  |  |  |  |  |
Secured bank loans |  |  | 48 |  |  |  | 71 |
Unsecured bank loans |  |  | 55 |  |  |  | 50 |
Unsecured bond issues |  |  | 104 162 |  |  |  | 95 674 |
Unsecured other loans |  |  | 81 |  |  |  | 77 |
Lease liabilities |  |  | 1 688 |  |  |  | 1 692 |
Current interest-bearing loans and borrowings: |  |  |  |  |  |  |  |
Secured bank loans |  |  | 995 |  |  |  | 790 |
Unsecured bank loans |  |  | 133 |  |  |  | 135 |
Unsecured bond issues |  |  | 1 916 |  |  |  | 2 532 |
Unsecured other loans |  |  | 16 |  |  |  | 20 |
Commercial paper |  |  | 3 072 |  |  |  | 1 599 |
Bank overdrafts |  |  | 153 |  |  |  | 68 |
Lease liabilities |  |  | 352 |  |  |  | 333 |
|  |  | 136 620 |  |  |  | 128 381 |
Of which: |  |  |  |  |  |  |  |
Non-current |  |  | 109 995 |  |  |  | 99 684 |
Current |  |  | 26 625 |  |  |  | 28 696 |

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DERIVATIVES

AB InBev’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest risk, commodity risk and equity risk), credit risk and liquidity risk. The company analyses each of these risks individually as well as on a combined basis and defines strategies to manage the economic impact on the company’s performance in line with its financial risk management policy.

AB InBev’s primarily uses the following derivative instruments: foreign currency rate agreements, exchange traded foreign currency futures and options, interest rate swaps and forwards, cross currency interest rate swaps (“CCIRS”), exchange traded interest rate futures, commodity swaps, exchange traded commodity futures and equity swaps.

The table below provides an overview of the notional amounts of derivatives outstanding as at the dates indicated by maturity bucket.

|  | 30 June 2020 |  |  | 31 December 2019 |
Million US dollar |  | < 1 year |  |  | 1-2 years |  |  | 2-3 years |  |  | 3-5 years |  |  | > 5 years |  |  | < 1 year |  |  | 1-2 years |  |  | 2-3 years |  |  | 3-5 years |  |  | > 5 years |
Foreign currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  |  | 9 713 |  |  |  | 752 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 21 216 |  |  |  | 36 |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign currency futures |  |  | 1 306 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 359 |  |  |  | 723 |  |  |  | — |  |  |  | — |  |  |  | — |
Interest rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  |  | — |  |  |  | 1 500 |  |  |  | 1 000 |  |  |  | — |  |  |  | — |  |  |  | 750 |  |  |  | — |  |  |  | 1 500 |  |  |  | 1 000 |  |  |  | — |
Cross currency interest rate swaps |  |  | 20 |  |  |  | 4 342 |  |  |  | 2 100 |  |  |  | — |  |  |  | 666 |  |  |  | 15 |  |  |  | 513 |  |  |  | 5 445 |  |  |  | 500 |  |  |  | 668 |
Other interest rate derivatives |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 565 |
Commodities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Aluminum swaps |  |  | 1 337 |  |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 411 |  |  |  | 22 |  |  |  | — |  |  |  | — |  |  |  | — |
Other commodity derivatives |  |  | 622 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 771 |  |  |  | 20 |  |  |  | — |  |  |  | — |  |  |  | — |
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity derivatives |  |  | 7 904 |  |  |  | 3 610 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 638 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |

The decrease in the forward exchange contracts is primarily driven by the maturity of the hedges related to the disposal of the Australian operations.

FOREIGN CURRENCY RISK

AB InBev is subject to foreign currency risk when contracts are denominated in a currency other than the functional currency of the entity. This includes borrowings, investments, (forecasted) sales, (forecasted) purchases, royalties, dividends, licenses, management fees and interest expense/income. To manage foreign currency risk the company uses mainly foreign currency rate agreements, exchange traded foreign currency futures and cross currency interest rate swaps.

36

FOREIGN EXCHANGE RISK ON OPERATING ACTIVITIES

AB InBev’s policy is to hedge operating transactions which are reasonably expected to occur (e.g. cost of goods sold and selling, general & administrative expenses) within the forecast period determined in the financial risk management policy. Operating transactions that are considered certain to occur are hedged without any time limits. Non-operating transactions (such as acquisitions and disposals of subsidiaries) are hedged as soon as they are highly probable.

The table below shows the company’s main net foreign currency positions for firm commitments and forecasted transactions for the most important currency pairs. The open positions are the result of the application of AB InBev’s risk management policy. Positive amounts indicate that the company is long (net future cash inflows) in the first currency of the currency pair while negative amounts indicate that the company is short (net future cash outflows) in the first currency of the currency pair. The second currency of the currency pairs listed is the functional currency of the related subsidiary.

|  | 30 June 2020 |  |  | 31 December 2019 |
|  | Total |  |  | Total |  |  | Open |  |  | Total |  |  | Total |  |  | Open |
Million US dollar |  | exposure |  |  | hedges |  |  | position |  |  | exposure |  |  | hedges |  |  | position |
Euro/Canadian dollar |  |  | (44 | ) |  |  | 35 |  |  |  | (9 | ) |  |  | (52 | ) |  |  | 39 |  |  |  | (13 | )
Euro/Mexican peso |  |  | (119 | ) |  |  | 85 |  |  |  | (34 | ) |  |  | (151 | ) |  |  | 156 |  |  |  | 5 |
Euro/Pound sterling |  |  | (135 | ) |  |  | 101 |  |  |  | (34 | ) |  |  | (126 | ) |  |  | 124 |  |  |  | (2 | )
Euro/South African rand |  |  | (83 | ) |  |  | 66 |  |  |  | (17 | ) |  |  | (99 | ) |  |  | 95 |  |  |  | (4 | )
Euro/South Korean won |  |  | (31 | ) |  |  | 40 |  |  |  | 9 |  |  |  | (49 | ) |  |  | 46 |  |  |  | (3 | )
Euro/US dollar |  |  | (340 | ) |  |  | 299 |  |  |  | (41 | ) |  |  | (409 | ) |  |  | 337 |  |  |  | (72 | )
Mexican peso/Euro |  |  | (145 | ) |  |  | 133 |  |  |  | (12 | ) |  |  | (178 | ) |  |  | 161 |  |  |  | (17 | )
Pound sterling/Euro |  |  | (40 | ) |  |  | 37 |  |  |  | (3 | ) |  |  | (39 | ) |  |  | 40 |  |  |  | 1 |
US dollar/Argentinian peso |  |  | (539 | ) |  |  | 494 |  |  |  | (45 | ) |  |  | (531 | ) |  |  | 510 |  |  |  | (21 | )
US dollar/Australian dollar |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (216 | ) |  |  | 204 |  |  |  | (12 | )
US dollar/Bolivian boliviano |  |  | (59 | ) |  |  | 66 |  |  |  | 7 |  |  |  | (69 | ) |  |  | 70 |  |  |  | 1 |
US dollar/Brazilian real |  |  | (1 410 | ) |  |  | 1 258 |  |  |  | (152 | ) |  |  | (1 443 | ) |  |  | 1 447 |  |  |  | 4 |
US dollar/Canadian dollar |  |  | (340 | ) |  |  | 268 |  |  |  | (72 | ) |  |  | (287 | ) |  |  | 295 |  |  |  | 8 |
US dollar/Chilean peso |  |  | (109 | ) |  |  | 103 |  |  |  | (6 | ) |  |  | (109 | ) |  |  | 102 |  |  |  | (7 | )
US dollar/Chinese yuan |  |  | (198 | ) |  |  | 194 |  |  |  | (4 | ) |  |  | (230 | ) |  |  | 191 |  |  |  | (39 | )
US dollar/Colombian peso |  |  | (306 | ) |  |  | 272 |  |  |  | (34 | ) |  |  | (278 | ) |  |  | 272 |  |  |  | (6 | )
US dollar/Euro |  |  | (81 | ) |  |  | 104 |  |  |  | 23 |  |  |  | (108 | ) |  |  | 113 |  |  |  | 5 |
US dollar/Mexican peso |  |  | (986 | ) |  |  | 852 |  |  |  | (134 | ) |  |  | (1 105 | ) |  |  | 903 |  |  |  | (202 | )
US dollar/Paraguayan guarani |  |  | (120 | ) |  |  | 119 |  |  |  | (1 | ) |  |  | (124 | ) |  |  | 130 |  |  |  | 6 |
US dollar/Peruvian nuevo sol |  |  | (249 | ) |  |  | 189 |  |  |  | (60 | ) |  |  | (243 | ) |  |  | 205 |  |  |  | (38 | )
US dollar/South African rand |  |  | (108 | ) |  |  | 48 |  |  |  | (60 | ) |  |  | (28 | ) |  |  | 31 |  |  |  | 3 |
US dollar/South Korean won |  |  | (65 | ) |  |  | 84 |  |  |  | 19 |  |  |  | (88 | ) |  |  | 99 |  |  |  | 11 |
US dollar/Uruguayan peso |  |  | (41 | ) |  |  | 39 |  |  |  | (2 | ) |  |  | (41 | ) |  |  | 41 |  |  |  | — |
Others |  |  | (188 | ) |  |  | 171 |  |  |  | (17 | ) |  |  | (317 | ) |  |  | 250 |  |  |  | (67 | )

Further analysis on the impact of open currency exposures is performed in the currency sensitivity analysis below.

Hedges of firm commitments and highly probable forecasted transactions denominated in foreign currency are designated as cash flow hedges.

Foreign exchange risk on foreign currency denominated debt

It is AB InBev’s policy to have the debt in the subsidiaries as much as possible linked to the functional currency of the subsidiary. To the extent this is not the case, foreign exchange risk is managed through the use of derivatives unless the cost to hedge outweighs the benefits. Interest rate decisions and currency mix of debt and cash are decided on a global basis and take into consideration the holistic risk management approach.

A description of the foreign currency risk hedging of debt instruments issued in a currency other than the functional currency of the subsidiary is further detailed in the Interest Rate Risk section below.

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Currency sensitivity analysis

Currency transactional risk

Most of AB InBev’s non-derivative financial instruments are either denominated in the functional currency of the subsidiary or are converted into the functional currency through the use of derivatives. Where illiquidity in the local market prevents hedging at a reasonable cost, the company can have open positions. The transactional foreign currency risk mainly arises from open positions in Brazilian real, Mexican peso, Canadian dollar, Peruvian nuevo sol and South African rand against the US dollar and the euro. AB InBev estimated the reasonably possible change of exchange rate, on the basis of the average volatility on the open currency pairs, as follows:

|  | 2020 |
|  | Closing rate 30 June 2020 |  |  | Possible closing rate1 |  |  | Volatility of rates in % |
Euro/Mexican peso |  |  | 25.72 |  |  |  | 21.30 – 30.14 |  |  |  | 17.18 | %
Euro/Pound sterling |  |  | 0.91 |  |  |  | 0.83 – 0.99 |  |  |  | 9.04 | %
Euro/South Korean won |  |  | 1 345.90 |  |  |  | 1 199.03 – 1 492.76 |  |  |  | 10.91 | %
Euro/US dollar |  |  | 1.12 |  |  |  | 1.04 – 1.20 |  |  |  | 6.97 | %
Pound sterling/US dollar |  |  | 1.23 |  |  |  | 1.09 – 1.36 |  |  |  | 10.94 | %
US dollar/Brazilian real |  |  | 5.48 |  |  |  | 4.44 – 6.51 |  |  |  | 18.93 | %
US dollar/Chinese yuan |  |  | 7.07 |  |  |  | 6.64 – 7.51 |  |  |  | 6.10 | %
US dollar/Colombian peso |  |  | 3 752.17 |  |  |  | 3 177.73 – 4 326.62 |  |  |  | 15.31 | %
US dollar/Euro |  |  | 0.89 |  |  |  | 0.83 – 0.96 |  |  |  | 6.97 | %
US dollar/Mexican peso |  |  | 22.97 |  |  |  | 19.05 – 26.89 |  |  |  | 17.06 | %
US dollar/Nigerian naira |  |  | 387.09 |  |  |  | 347.85 – 426.33 |  |  |  | 10.14 | %
US dollar/Peruvian nuevo sol |  |  | 3.51 |  |  |  | 3.28 – 3.75 |  |  |  | 6.72 | %
US dollar/South African rand |  |  | 17.36 |  |  |  | 14.59 – 20.14 |  |  |  | 15.97 | %
US dollar/South Korean won |  |  | 1 201.91 |  |  |  | 1 043.87 – 1 359.95 |  |  |  | 13.15 | %
US dollar/Tanzanian shilling |  |  | 2 313.52 |  |  |  | 2 228.23 – 2 398.80 |  |  |  | 3.69 | %
US dollar/Zambian kwacha |  |  | 18.14 |  |  |  | 14.26 – 22.02 |  |  |  | 21.38 | %

|  | 2019 |
|  | Closing rate 31 December 2019 |  |  | Possible closing rate2 |  |  | Volatility of rates in % |
Euro/Mexican peso |  |  | 21.17 |  |  |  | 19.28 – 23.06 |  |  |  | 8.92 | %
Euro/Pound sterling |  |  | 0.85 |  |  |  | 0.79 – 0.91 |  |  |  | 7.35 | %
Euro/South Korean won |  |  | 1 297.02 |  |  |  | 1 216.94 – 1 377.10 |  |  |  | 6.17 | %
Euro/US dollar |  |  | 1.12 |  |  |  | 1.07 – 1.18 |  |  |  | 4.69 | %
Pound sterling/US dollar |  |  | 1.32 |  |  |  | 1.21 – 1.43 |  |  |  | 8.08 | %
US dollar/Australian dollar |  |  | 1.42 |  |  |  | 1.33 – 1.52 |  |  |  | 6.70 | %
US dollar/Chinese yuan |  |  | 6.96 |  |  |  | 6.62 – 7.30 |  |  |  | 4.86 | %
US dollar/Colombian peso |  |  | 3 272.63 |  |  |  | 2 935.33 – 3 609.92 |  |  |  | 10.31 | %
US dollar/Euro |  |  | 0.89 |  |  |  | 0.85 – 0.93 |  |  |  | 4.69 | %
US dollar/Mexican peso |  |  | 18.85 |  |  |  | 17.25 – 20.44 |  |  |  | 8.48 | %
US dollar/Nigerian naira |  |  | 362.59 |  |  |  | 350.58 – 374.60 |  |  |  | 3.31 | %
US dollar/Peruvian nuevo sol |  |  | 3.32 |  |  |  | 3.17 – 3.47 |  |  |  | 4.50 | %
US dollar/South African rand |  |  | 14.04 |  |  |  | 12.26 – 15.83 |  |  |  | 12.74 | %
US dollar/South Korean won |  |  | 1 154.55 |  |  |  | 1 064.67 – 1 244.42 |  |  |  | 7.78 | %
US dollar/Tanzanian shilling |  |  | 2 300.14 |  |  |  | 2 186.57 – 2 413.71 |  |  |  | 4.94 | %
US dollar/Zambian kwacha |  |  | 14.02 |  |  |  | 11.24 – 16.81 |  |  |  | 19.85 | %

In case the open positions in Brazilian real, Mexican peso, Canadian dollar, Peruvian nuevo sol and South African rand as of 30 June 2020 remain unchanged, considering the volatility mentioned above and all other variables held constant, these currencies could lead to an increase/decrease on the consolidated profit before tax from continuing operations of approximately 80m US dollar over the next 12 months (31 December 2019: 35m US dollar).

Additionally, the AB InBev sensitivity analysis1 to the foreign exchange rates on its total derivatives positions as of 30 June 2020, shows a positive/negative pre-tax impact on equity reserves of 727m US dollar (548m US dollar in 2019).

Foreign exchange risk on net investments in foreign operations

AB InBev mitigates exposures of its investments in foreign operations using both derivative and non-derivative financial instruments as hedging instruments.

1 | Sensitivity analysis is assessed based on the yearly volatility using daily observable market data during 250 days at 30 June 2020.

2 | Sensitivity analysis is assessed based on the yearly volatility using daily observable market data during 250 days at 31 December 2019.

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As of 30 June 2020, designated derivative and non-derivative financial instruments in net investment hedges amount to 14 694m US dollar equivalent (31 December 2019: 15 522m US dollar) in Holding companies and approximately 814m US dollar equivalent at Ambev level (31 December 2019: 732m US dollar). These instruments hedge foreign operations with Canadian dollar, Chinese yuan, Dominican peso, euro, Mexican peso, pound sterling, South African rand, South Korean won and US dollar functional currencies.

INTEREST RATE RISK

The company applies a dynamic interest rate hedging approach whereby the target mix between fixed and floating rate debt is reviewed periodically. The purpose of AB InBev’s policy is to achieve an optimal balance between the cost of funding and the volatility of financial results, while taking into account market conditions as well as AB InBev’s overall business strategy.

Fair value hedges

US dollar fixed rate bond hedges (interest rate risk on borrowings in US dollar)

The company manages and reduces the impact of changes in the US dollar interest rates on the fair value of certain fixed rate bonds with an aggregate principal amount of 1.0 billion US dollar through fixed/floating interest rate swaps. These derivative instruments have been designated in a fair value hedge accounting relationship.

Cash flow hedges

Pound sterling bond hedges (foreign currency risk + interest rate risk on borrowings in pound sterling)

In September 2013, the company issued a pound sterling bond for 500m pound sterling at a rate of 4.00% per year and maturing in September 2025. The impact of changes in the pound sterling exchange rate and interest rate on this bond is managed and reduced through pound sterling fixed/euro fixed cross currency interest rate swaps. These derivative instruments have been designated in a cash flow hedge accounting.

39

Interest rate sensitivity analysis

The table below reflects the effective interest rates of interest-bearing financial liabilities at balance sheet date as well as the currency in which the debt is denominated.

30 June 2020 Interest-bearing financial liabilities Million US dollar |  | Before hedging |  |  | After hedging |
| Effective interest rate |  |  | Amount |  |  | Effective interest rate |  |  | Amount |
Floating rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Australian dollar |  |  | 1.07 | % |  |  | 205 |  |  |  | — |  |  |  | — |
Brazilian real |  |  | 4.86 | % |  |  | 276 |  |  |  | 4.86 | % |  |  | 276 |
Canadian dollar |  |  | 3.21 | % |  |  | 145 |  |  |  | 3.21 | % |  |  | 145 |
Euro |  |  | 0.09 | % |  |  | 4 648 |  |  |  | 0.09 | % |  |  | 4 648 |
US dollar |  |  | 1.67 | % |  |  | 1 066 |  |  |  | 2.03 | % |  |  | 3 491 |
Other |  |  | 15.47 | % |  |  | 309 |  |  |  | 12.57 | % |  |  | 589 |
|  |  |  |  |  |  | 6 649 |  |  |  |  |  |  |  | 9 149 |
Fixed rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Australian dollar |  |  | 3.71 | % |  |  | 1 606 |  |  |  | — |  |  |  | — |
Brazilian real |  |  | 8.07 | % |  |  | 560 |  |  |  | 8.07 | % |  |  | 560 |
Canadian dollar |  |  | 3.15 | % |  |  | 1 958 |  |  |  | 3.15 | % |  |  | 1 958 |
Euro |  |  | 2.02 | % |  |  | 29 335 |  |  |  | 1.73 | % |  |  | 31 549 |
Pound sterling |  |  | 3.82 | % |  |  | 4 063 |  |  |  | 3.79 | % |  |  | 3 449 |
South Korean won |  |  | — |  |  |  | — |  |  |  | 2.46 | % |  |  | 1 016 |
US dollar |  |  | 4.78 | % |  |  | 68 146 |  |  |  | 4.90 | % |  |  | 64 593 |
Other |  |  | 13.76 | % |  |  | 354 |  |  |  | 12.84 | % |  |  | 398 |
|  |  |  |  |  |  | 106 022 |  |  |  |  |  |  |  | 103 522 |

31 December 2019 Interest-bearing financial liabilities Million US dollar |  | Before hedging |  |  | After hedging |
| Effective interest rate |  |  | Amount |  |  | Effective interest rate |  |  | Amount |
Floating rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Australian dollar |  |  | 1.87 | % |  |  | 210 |  |  |  | 1.87 | % |  |  | 210 |
Brazilian real |  |  | 9.33 | % |  |  | 43 |  |  |  | 9.33 | % |  |  | 43 |
Euro |  |  | 0.08 | % |  |  | 4 214 |  |  |  | 0.08 | % |  |  | 4 214 |
US dollar |  |  | 2.36 | % |  |  | 1 749 |  |  |  | 2.85 | % |  |  | 4 269 |
Other |  |  | 9.82 | % |  |  | 225 |  |  |  | 4.46 | % |  |  | 954 |
|  |  |  |  |  |  | 6 441 |  |  |  |  |  |  |  | 9 690 |
Fixed rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Australian dollar |  |  | 3.71 | % |  |  | 1 647 |  |  |  | 3.71 | % |  |  | 1 647 |
Brazilian real |  |  | 9.00 | % |  |  | 544 |  |  |  | 9.00 | % |  |  | 544 |
Canadian dollar |  |  | 3.16 | % |  |  | 2 055 |  |  |  | 3.16 | % |  |  | 2 055 |
Euro |  |  | 1.82 | % |  |  | 25 346 |  |  |  | 1.82 | % |  |  | 29 338 |
Pound sterling |  |  | 3.82 | % |  |  | 4 373 |  |  |  | 3.79 | % |  |  | 3 713 |
South Korean won |  |  | 3.37 | % |  |  | 15 |  |  |  | 2.46 | % |  |  | 1 015 |
US dollar |  |  | 4.83 | % |  |  | 62 205 |  |  |  | 5.02 | % |  |  | 54 551 |
Other |  |  | 7.31 | % |  |  | 416 |  |  |  | 6.95 | % |  |  | 489 |
|  |  |  |  |  |  | 96 601 |  |  |  |  |  |  |  | 93 352 |

At 30 June 2020, the total carrying amount of the floating and fixed rate interest-bearing financial liabilities before hedging as listed above includes bank overdrafts of 153m US dollar (31 December 2019: 68m US dollar).

40

As disclosed in the above table, 6 649m US dollar or 5.9% of the company’s interest-bearing financial liabilities bears interest at a variable rate. The company estimated that the reasonably possible change of the market interest rates applicable to its floating rate debt after hedging is as follows:

|  | 2020 |
|  | Interest rate 30 June 20201 |  |  | Possible interest rate2 |  |  | Volatility of rates in % |
Brazilian real |  |  | 2.35 | % |  |  | 1.95% - 2.74 | % |  |  | 16.99 | %
Euro |  |  | — |  |  |  | — |  |  |  | 17.24 | %
US dollar |  |  | 0.30 | % |  |  | 0.12% - 0.47 | % |  |  | 59.52 | %

|  | 2019 |
|  | Interest rate 31 December 20191 |  |  | Possible interest rate2 |  |  | Volatility of rates in % |
Brazilian real |  |  | 4.42 | % |  |  | 3.32% - 5.52 | % |  |  | 24.88 | %
Euro |  |  | — |  |  |  | — |  |  |  | 6.43 | %
US dollar |  |  | 1.91 | % |  |  | 1.51% - 2.30 | % |  |  | 20.66 | %

When AB InBev applies the reasonably possible increase/decrease in the market interest rates mentioned above on its floating rate debt at 30 June 2020, with all other variables held constant, 2020 interest expense would have been 5m US dollar higher/lower (2019: 16m US dollar). This effect would be more than offset by 72m US dollar higher/lower interest income on AB InBev’s interest-bearing financial assets (2019: 22m US dollar).

COMMODITY PRICE RISK

The commodity markets have experienced and are expected to continue to experience price fluctuations. AB InBev therefore uses both fixed price purchasing contracts and commodity derivatives to manage the exposure to the price volatility. The most significant commodity exposures as of 30 June 2020 are included in the table below (expressed in outstanding notional amounts):

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Aluminum swaps |  |  | 1 342 |  |  |  | 1 449 |
Exchange traded sugar futures |  |  | 57 |  |  |  | 54 |
Natural gas and energy derivatives |  |  | 150 |  |  |  | 256 |
Corn swaps |  |  | 202 |  |  |  | 195 |
Exchange traded wheat futures |  |  | 7 |  |  |  | 20 |
Rice swaps |  |  | 168 |  |  |  | 328 |
Plastic derivatives |  |  | 38 |  |  |  | 59 |
|  |  | 1 964 |  |  |  | 2 360 |

Commodity price sensitivity analysis

The impact of changes in the commodity prices would have an immaterial impact on AB InBev’s profit in 2020 profits as most of the company’s exposure is hedged using derivative contracts and designated in hedge accounting in accordance with IFRS 9 rules.

The tables below show the estimated impact that changes in the price of the commodities, for which AB InBev held material derivative exposures at 30 June 2020 and 31 December 2019, would have on the equity reserves.

|  | 2020 |
|  | Volatility of prices in %3 |  |  | Pre-tax impact on equity |
Million US dollar |  | Prices increase |  |  | Prices decrease |
Aluminum |  |  | 13.45 | % |  |  | 181 |  |  |  | (181 | )
Sugar |  |  | 29.15 | % |  |  | 17 |  |  |  | (17 | )
Energy |  |  | 46.26 | % |  |  | 69 |  |  |  | (69 | )
Corn |  |  | 28.23 | % |  |  | 57 |  |  |  | (57 | )
Wheat |  |  | 24.27 | % |  |  | 2 |  |  |  | (2 | )
Rice |  |  | 35.60 | % |  |  | 60 |  |  |  | (60 | )
Plastic |  |  | 28.63 | % |  |  | 11 |  |  |  | (11 | )

1 | Applicable 3-month InterBank Offered Rates as of 30 June 2020 and as of 31 December 2019.

2 | Sensitivity analysis is assessed based on the yearly volatility using daily observable market data during 250 days at 30 June 2020 and at December 2019. For the Brazilian real floating rate debt, the estimated market interest rate is composed of the InterBank Deposit Certificate (‘CDI’) and the Long-Term Interest Rate (‘TJLP’). With regard to other market interest rates, the company’s analysis is based on the 3-month InterBank Offered Rates applicable for the currencies concerned (e.g. EURIBOR 3M, LIBOR 3M).

3 | Sensitivity analysis is assessed based on the yearly volatility using daily observable market data during 250 days at 30 June 2020.

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|  | 2019 |
|  | Volatility |  |  | Pre-tax impact on equity |
Million US dollar |  | of prices in %1 |  |  | Prices increase |  |  | Prices decrease |
Aluminum |  |  | 21.78 | % |  |  | 312 |  |  |  | (312 | )
Sugar |  |  | 29.73 | % |  |  | 16 |  |  |  | (16 | )
Energy |  |  | 25.86 | % |  |  | 66 |  |  |  | (66 | )
Corn |  |  | 21.74 | % |  |  | 42 |  |  |  | (42 | )
Wheat |  |  | 30.30 | % |  |  | 6 |  |  |  | (6 | )
Rice |  |  | 22.64 | % |  |  | 47 |  |  |  | (47 | )
Plastic |  |  | 24.03 | % |  |  | 14 |  |  |  | (14 | )

EQUITY PRICE RISK

AB InBev enters into derivatives to hedge the price risk on its shares when such risk could negatively impact future cash flows related to the share-based payments programs. AB InBev also hedges its exposure arising from shares issued in connection with the Modelo and SAB combination (see also Note 8 Finance cost and income). These derivatives do not qualify for hedge accounting and the changes in fair value are recorded in the profit or loss.

As at 30 June 2020, an exposure for an equivalent of 100.5m of AB InBev shares was hedged, resulting in a total loss of 3.2 billion US dollar recognized in the profit or loss account for the period, of which (1 724)m US dollar related to the company’s share-based payment programs, (729)m US dollar and (709)m US dollar related to the Modelo and SAB transactions, respectively.

Between 2012 and 2018, AB InBev reset certain equity derivatives to market price with counterparties. This resulted in a net cash inflow of 2.9 billion US dollar between 2012 and 2018 and, accordingly, a decrease of counterparty risk.

Equity price sensitivity analysis

The sensitivity analysis on the share-based payments hedging program, calculated based on a 51.04% (2019: 25.20%) reasonably possible volatility of the AB InBev share price, with all the other variables held constant, would show 2 521m US dollar positive/negative impact on the 2020 profit before tax (2019: 2 066m US dollar).

CREDIT RISK

Credit risk encompasses all forms of counterparty exposure, i.e. where counterparties may default on their obligations to AB InBev in relation to lending, hedging, settlement and other financial activities. The company has a credit policy in place and the exposure to counterparty credit risk is monitored.

AB InBev mitigates its exposure through a variety of mechanisms. It has established minimum counterparty credit ratings and enters into transactions only with financial institutions of investment grade rating. The company monitors counterparty credit exposures closely and reviews any external downgrade in credit rating immediately. To mitigate pre-settlement risk, counterparty minimum credit standards become more stringent with increases in the duration of the derivatives. To minimize the concentration of counterparty credit risk, the company enters into derivative transactions with different financial institutions.

The company also has master netting agreements with all of the financial institutions that are counterparties to over the counter (OTC) derivatives. These agreements allow for the net settlement of assets and liabilities arising from different transactions with the same counterparty. Based on these factors, AB InBev considers the impact of the risk of counterparty default as at 30 June 2020 to be limited.

The impairment loss recognized in the first six months of 2020 includes AB InBev’s estimate of overdue receivables the company will not be able to collect from defaulting customers as a result of the COVID-19 pandemic before year end 2020.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure of the company. The carrying amount is presented net of the impairment losses recognized. The maximum exposure to credit risk at the reporting date was:

|  | 2020 |  |  | 2019 |
Million US dollar |  | Gross |  |  | Impairment |  |  | Net carrying amount |  |  | Gross |  |  | Impairment |  |  | Net carrying amount |
Investment in unquoted companies |  |  | 99 |  |  |  | (7 | ) |  |  | 92 |  |  |  | 92 |  |  |  | (7 | ) |  |  | 85 |
Investment in debt securities |  |  | 123 |  |  |  | — |  |  |  | 123 |  |  |  | 117 |  |  |  | — |  |  |  | 117 |
Trade receivables |  |  | 3 730 |  |  |  | (265 | ) |  |  | 3 465 |  |  |  | 4 219 |  |  |  | (173 | ) |  |  | 4 046 |
Cash deposits for guarantees |  |  | 170 |  |  |  | — |  |  |  | 170 |  |  |  | 219 |  |  |  | — |  |  |  | 219 |
Loans to customers |  |  | 135 |  |  |  | — |  |  |  | 135 |  |  |  | 177 |  |  |  | — |  |  |  | 177 |
Other receivables |  |  | 1 484 |  |  |  | (93 | ) |  |  | 1 391 |  |  |  | 1 666 |  |  |  | (103 | ) |  |  | 1 563 |
Derivatives |  |  | 842 |  |  |  | — |  |  |  | 842 |  |  |  | 362 |  |  |  | — |  |  |  | 362 |
Cash and cash equivalents |  |  | 25 018 |  |  |  | — |  |  |  | 25 018 |  |  |  | 7 238 |  |  |  | — |  |  |  | 7 238 |
|  |  | 31 601 |  |  |  | (365 | ) |  |  | 31 236 |  |  |  | 14 090 |  |  |  | (283 | ) |  |  | 13 807 |

1 | Sensitivity analysis is assessed based on the yearly volatility using daily observable market data during 250 days at 30 June 2020.

42

There was no significant concentration of credit risks with any single counterparty per 30 June 2020 and no single customer represented more than 10% of the total revenue of the group in 2020.

Impairment losses

The allowance for impairment recognized during the period per classes of financial assets was as follows:

|  | 2020 |
Million US dollar |  | Trade receivables |  |  | FVOCI |  |  | Other receivables |  |  | Total |
Balance at 1 January |  |  | (173 | ) |  |  | (7 | ) |  |  | (103 | ) |  |  | (283 | )
Impairment losses |  |  | (115 | ) |  |  | — |  |  |  | (7 | ) |  |  | (122 | )
Derecognition |  |  | 3 |  |  |  | — |  |  |  | 6 |  |  |  | 9 |
Currency translation and other |  |  | 20 |  |  |  | — |  |  |  | 11 |  |  |  | 31 |
Balance at 30 June |  |  | (265 | ) |  |  | (7 | ) |  |  | (93 | ) |  |  | (365 | )

|  | 2019 |
Million US dollar |  | Trade receivables |  |  | FVOCI |  |  | Other receivables |  |  | Total |
Balance at 1 January |  |  | (160 | ) |  |  | (7 | ) |  |  | (106 | ) |  |  | (273 | )
Impairment losses |  |  | (51 | ) |  |  | — |  |  |  | (30 | ) |  |  | (81 | )
Derecognition |  |  | 26 |  |  |  | — |  |  |  | 31 |  |  |  | 57 |
Currency translation and other |  |  | 12 |  |  |  | — |  |  |  | 2 |  |  |  | 14 |
Balance at 31 December |  |  | (173 | ) |  |  | (7 | ) |  |  | (103 | ) |  |  | (283 | )

LIQUIDITY RISK

Historically, AB InBev’s primary sources of cash flow have been cash flows from operating activities, the issuance of debt, bank borrowings and equity securities. AB InBev’s material cash requirements have included the following:

| • |  | Debt servicing;

| • |  | Capital expenditures;

| • |  | Investments in companies;

| • |  | Increases in ownership of AB InBev’s subsidiaries or companies in which it holds equity investments;

| • |  | Share buyback programs; and

| • |  | Payments of dividends and interest on shareholders’ equity.

The company believes that cash flows from operating activities, available cash and cash equivalents as well as short term investments, along with related derivatives and access to borrowing facilities, will be sufficient to fund capital expenditures, financial instrument liabilities and dividend payments going forward. It is the intention of the company to continue to reduce its financial indebtedness through a combination of strong operating cash flow generation and continued refinancing.

43

The following are the nominal contractual maturities of non-derivative financial liabilities including interest payments and derivative liabilities:

|  | 30 June 2020 |
Million US dollar |  | Carrying amount1 |  |  | Contractual cash flows |  |  | Less than 1 year |  |  | 1-2 years |  |  | 2-3 years |  |  | 3-5 years |  |  | More than 5 years |
Non-derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Secured bank loans |  |  | (1 043 | ) |  |  | (1 080 | ) |  |  | (1 017 | ) |  |  | (16 | ) |  |  | (12 | ) |  |  | (12 | ) |  |  | (23 | )
Commercial papers |  |  | (3 072 | ) |  |  | (3 072 | ) |  |  | (3 072 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Unsecured bank loans |  |  | (188 | ) |  |  | (196 | ) |  |  | (138 | ) |  |  | (58 | ) |  |  | — |  |  |  | — |  |  |  | — |
Unsecured bond issues |  |  | (106 078 | ) |  |  | (180 259 | ) |  |  | (5 647 | ) |  |  | (7 201 | ) |  |  | (10 042 | ) |  |  | (20 065 | ) |  |  | (137 304 | )
Unsecured other loans |  |  | ( 97 | ) |  |  | (129 | ) |  |  | (21 | ) |  |  | (14 | ) |  |  | (8 | ) |  |  | (5 | ) |  |  | (81 | )
Lease liabilities |  |  | (2 040 | ) |  |  | (2 304 | ) |  |  | (419 | ) |  |  | (393 | ) |  |  | (278 | ) |  |  | (401 | ) |  |  | (813 | )
Bank overdraft |  |  | (153 | ) |  |  | (153 | ) |  |  | (153 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Trade and other payables |  |  | (20 476 | ) |  |  | (20 697 | ) |  |  | (18 845 | ) |  |  | (1 182 | ) |  |  | (178 | ) |  |  | (183 | ) |  |  | (309 | )
|  |  | (133 147 | ) |  |  | (207 890 | ) |  |  | (29 312 | ) |  |  | (8 864 | ) |  |  | (10 518 | ) |  |  | (20 666 | ) |  |  | (138 530 | )
Derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign exchange derivatives |  |  | (95 | ) |  |  | (95 | ) |  |  | (95 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Cross currency interest rate swaps |  |  | (116 | ) |  |  | (182 | ) |  |  | — |  |  |  | (108 | ) |  |  | — |  |  |  | — |  |  |  | (74 | )
Commodity derivatives |  |  | (250 | ) |  |  | (250 | ) |  |  | (250 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Equity derivatives |  |  | (6 404 | ) |  |  | (6 440 | ) |  |  | (4 372 | ) |  |  | (2 068 | ) |  |  | — |  |  |  | — |  |  |  | — |
|  |  | (6 864 | ) |  |  | (6 967 | ) |  |  | (4 717 | ) |  |  | (2 176 | ) |  |  | — |  |  |  | — |  |  |  | (74 | )
Of which: related to cash flow hedges |  |  | (498 | ) |  |  | (498 | ) |  |  | (424 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (74 | )

|  | 31 December 2019 |
Million US dollar |  | Carrying amount1 |  |  | Contractual cash flows |  |  | Less than 1 year |  |  | 1-2 years |  |  | 2-3 years |  |  | 3-5 years |  |  | More than 5 years |
Non-derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Secured bank loans |  |  | (861 | ) |  |  | (890 | ) |  |  | (795 | ) |  |  | (18 | ) |  |  | (18 | ) |  |  | (22 | ) |  |  | (37 | )
Commercial papers |  |  | (1 599 | ) |  |  | (1 599 | ) |  |  | (1 599 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Unsecured bank loans |  |  | (185 | ) |  |  | (188 | ) |  |  | (140 | ) |  |  | (47 | ) |  |  | (1 | ) |  |  | — |  |  |  | — |
Unsecured bond issues |  |  | (98 206 | ) |  |  | (165 424 | ) |  |  | (5 513 | ) |  |  | (6 415 | ) |  |  | (6 518 | ) |  |  | (18 605 | ) |  |  | (128 373 | )
Unsecured other loans |  |  | (98 | ) |  |  | (131 | ) |  |  | (27 | ) |  |  | (17 | ) |  |  | (9 | ) |  |  | (5 | ) |  |  | (73 | )
Lease liabilities |  |  | (2 025 | ) |  |  | (2 338 | ) |  |  | (404 | ) |  |  | (350 | ) |  |  | (243 | ) |  |  | (285 | ) |  |  | (1 056 | )
Bank overdraft |  |  | (68 | ) |  |  | (68 | ) |  |  | (68 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Trade and other payables |  |  | (24 806 | ) |  |  | (25 152 | ) |  |  | (22 861 | ) |  |  | (1 227 | ) |  |  | (472 | ) |  |  | (165 | ) |  |  | (427 | )
|  |  | (127 848 | ) |  |  | (195 790 | ) |  |  | (31 407 | ) |  |  | (8 074 | ) |  |  | (7 261 | ) |  |  | (19 082 | ) |  |  | (129 966 | )
Derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives |  |  | (102 | ) |  |  | (103 | ) |  |  | (7 | ) |  |  | (1 | ) |  |  | (1 | ) |  |  | 3 |  |  |  | (97 | )
Foreign exchange derivatives |  |  | (600 | ) |  |  | (600 | ) |  |  | (600 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Cross currency interest rate swaps |  |  | (175 | ) |  |  | (187 | ) |  |  | 75 |  |  |  | (285 | ) |  |  | 6 |  |  |  | 75 |  |  |  | (58 | )
Commodity derivatives |  |  | (97 | ) |  |  | (97 | ) |  |  | (97 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Equity derivatives |  |  | (3 177 | ) |  |  | (3 177 | ) |  |  | (3 177 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  |
|  |  | (4 151 | ) |  |  | (4 164 | ) |  |  | (3 806 | ) |  |  | (286 | ) |  |  | 5 |  |  |  | 78 |  |  |  | (155 | )
Of which: related to cash flow hedges |  |  | (448 | ) |  |  | (448 | ) |  |  | (408 | ) |  |  | 5 |  |  |  | 3 |  |  |  | 5 |  |  |  | (53 | )

1 | “Carrying amount” refers to net book value as recognized in the balance sheet at each reporting date.

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CAPITAL MANAGEMENT

AB InBev continuously optimizes its capital structure to maximize shareholder value while keeping the financial flexibility to execute strategic projects. AB InBev’s capital structure policy and framework aims to optimize shareholder value through cash flow distribution to the company from its subsidiaries, while maintaining an investment-grade rating and minimizing investments with returns below AB InBev’s weighted average cost of capital. Besides the statutory minimum equity funding requirements that apply to the company’s subsidiaries in the different countries, AB InBev is not subject to any externally imposed capital requirements. Management uses the same debt/equity classifications as applied in the company’s IFRS reporting to analyze the capital structure.

FAIR VALUE

The following table summarizes for each type of derivative the fair values recognized as assets or liabilities in the balance sheet:

|  | Assets |  |  | Liabilities |  |  | Net |
Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |  |  | 30 June 2020 |  |  | 31 December 2019 |  |  | 30 June 2020 |  |  | 31 December 2019 |
Foreign currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  |  | 437 |  |  |  | 112 |  |  |  | (93 | ) |  |  | (590 | ) |  |  | 344 |  |  |  | (478 | )
Foreign currency futures |  |  | 1 |  |  |  | 7 |  |  |  | (2 | ) |  |  | (9 | ) |  |  | (1 | ) |  |  | (2 | )
Interest rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  |  | 101 |  |  |  | 18 |  |  |  | — |  |  |  | (6 | ) |  |  | 101 |  |  |  | 12 |
Cross currency interest rate swaps |  |  | 275 |  |  |  | 157 |  |  |  | (115 | ) |  |  | (175 | ) |  |  | 160 |  |  |  | (18 | )
Other interest rate derivatives |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (97 | ) |  |  | — |  |  |  | (97 | )
Commodities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Aluminum swaps |  |  | 7 |  |  |  | 15 |  |  |  | (169 | ) |  |  | (61 | ) |  |  | (162 | ) |  |  | (46 | )
Sugar futures |  |  | 1 |  |  |  | 2 |  |  |  | (3 | ) |  |  | (2 | ) |  |  | (2 | ) |  |  | — |
Wheat futures |  |  | 1 |  |  |  | 14 |  |  |  | (1 | ) |  |  | (9 | ) |  |  | — |  |  |  | 5 |
Energy |  |  | 5 |  |  |  | 8 |  |  |  | (40 | ) |  |  | (11 | ) |  |  | (35 | ) |  |  | (3 | )
Other commodity derivatives |  |  | 10 |  |  |  | 13 |  |  |  | (37 | ) |  |  | (14 | ) |  |  | (27 | ) |  |  | (1 | )
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity derivatives |  |  | 5 |  |  |  | 17 |  |  |  | (6 404 | ) |  |  | (3 177 | ) |  |  | (6 399 | ) |  |  | (3 160 | )
|  |  | 842 |  |  |  | 362 |  |  |  | (6 864 | ) |  |  | (4 151 | ) |  |  | (6 022 | ) |  |  | (3 789 | )
Of which: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current |  |  | 297 |  |  |  | 132 |  |  |  | (2 460 | ) |  |  | (352 | ) |  |  | (2 163 | ) |  |  | (220 | )
Current |  |  | 545 |  |  |  | 230 |  |  |  | (4 404 | ) |  |  | (3 799 | ) |  |  | (3 859 | ) |  |  | (3 569 | )

The following table summarizes the carrying amount and the fair value of the fixed rate interest-bearing financial liabilities as recognized at the balance sheet. Floating rate interest-bearing financial liabilities, trade and other receivables and trade and other payables, including derivatives financial instruments, have been excluded from the analysis as their carrying amount is a reasonable approximation of their fair value:

Interest-bearing financial liabilities Million US dollar |  | 2020 Carrying amount1 |  |  | 2020 Fair value |  |  | 2019 Carrying amount1 |  |  | 2019 Fair value |
Fixed rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Australian dollar |  |  | (1 606 | ) |  |  | (1 697 | ) |  |  | (1 647 | ) |  |  | (1 748 | )
Brazilian real |  |  | (560 | ) |  |  | (560 | ) |  |  | (544 | ) |  |  | (542 | )
Canadian dollar |  |  | (1 958 | ) |  |  | (1 985 | ) |  |  | (2 055 | ) |  |  | (2 046 | )
Euro |  |  | (29 335 | ) |  |  | (30 868 | ) |  |  | (25 346 | ) |  |  | (30 365 | )
Pound sterling |  |  | (4 063 | ) |  |  | (4 507 | ) |  |  | (4 373 | ) |  |  | (4 816 | )
US dollar |  |  | (68 146 | ) |  |  | (83 644 | ) |  |  | (62 205 | ) |  |  | (74 035 | )
Other |  |  | (354 | ) |  |  | (354 | ) |  |  | (431 | ) |  |  | (431 | )
|  |  | (106 022 | ) |  |  | (123 615 | ) |  |  | (96 601 | ) |  |  | (113 983 | )

1 | “Carrying amount” refers to net book value as recognized in the balance sheet at each reporting date.

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The table sets out the fair value hierarchy based on the degree to which significant market inputs are observable:

Fair value hierarchy 30 June 2020 Million US dollar |  | Quoted (unadjusted) prices - level 1 |  |  | Observable market inputs - level 2 |  |  | Unobservable market inputs - level 3 |
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |
Held for trading (non-derivatives) |  |  | — |  |  |  | 9 |  |  |  | — |
Derivatives at fair value through profit and loss |  |  | — |  |  |  | 312 |  |  |  | — |
Derivatives in a cash flow hedge relationship |  |  | 85 |  |  |  | 227 |  |  |  | — |
Derivatives in a fair value hedge relationship |  |  | — |  |  |  | 91 |  |  |  | — |
Derivatives in a net investment hedge relationship |  |  | — |  |  |  | 127 |  |  |  | — |
|  |  | 85 |  |  |  | 766 |  |  |  | — |
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Deferred consideration on acquisitions at fair value |  |  | — |  |  |  | — |  |  |  | 1 423 |
Derivatives at fair value through profit and loss |  |  | — |  |  |  | 6 406 |  |  |  | — |
Derivatives in a cash flow hedge relationship |  |  | 20 |  |  |  | 438 |  |  |  | — |
|  |  | 20 |  |  |  | 6 844 |  |  |  | 1 423 |

Fair value hierarchy 31 December 2019 Million US dollar |  | Quoted (unadjusted) prices - level 1 |  |  | Observable market inputs - level 2 |  |  | Unobservable market inputs - level 3 |
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |
Held for trading (non-derivatives) |  |  | 2 |  |  |  | 9 |  |  |  | — |
Derivatives at fair value through profit and loss |  |  | — |  |  |  | 119 |  |  |  | — |
Derivatives in a cash flow hedge relationship |  |  | 17 |  |  |  | 153 |  |  |  | — |
Derivatives in a fair value hedge relationship |  |  | — |  |  |  | 19 |  |  |  | — |
Derivatives in a net investment hedge relationship |  |  | — |  |  |  | 54 |  |  |  | — |
|  |  | 19 |  |  |  | 354 |  |  |  |  |
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Deferred consideration on acquisitions at fair value |  |  | — |  |  |  | — |  |  |  | 1 639 |
Derivatives at fair value through profit and loss |  |  | — |  |  |  | 3 441 |  |  |  | — |
Derivatives in a cash flow hedge relationship |  |  | 21 |  |  |  | 586 |  |  |  | — |
Derivatives in a fair value hedge relationship |  |  | — |  |  |  | 103 |  |  |  | — |
|  |  | 21 |  |  |  | 4 130 |  |  |  | 1 639 |

Non-derivative financial liabilities

As part of the 2012 shareholders agreement between Ambev and ELJ, following the acquisition of Cervecería Nacional Dominicana S.A. (“CND”), a forward-purchase contract (i.e. combination of a written put option and purchased call option) was put in place which may result in Ambev acquiring additional shares in CND. As at 30 June 2020, the put option on the remaining shares held by ELJ was valued at 0.7 billion US dollar (31 December 2019: 0.7 billion US dollar) and recognized as a deferred consideration on acquisitions at fair value in the “level 3” category above. The fair value of such deferred consideration is calculated using present value techniques, namely by discounting futures cash flows at the appropriate rate.

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OFFSETTING FINANCIAL ASSETS AND LIABILITIES

The following financial assets and liabilities are subject to offsetting, enforceable master netting agreements and similar agreements:

|  | 30 June 2020 |
Million US dollar |  | Gross amount |  |  | Net amount recognized in the statement of financial position1 |  |  | Other offsetting agreements2 |  |  | Total net amount |
Derivative assets |  |  | 842 |  |  |  | 842 |  |  |  | (837 | ) |  |  | 5 |
Derivative liabilities |  |  | (6 864 | ) |  |  | (6 864 | ) |  |  | 837 |  |  |  | (6 027 | )

|  | 31 December 2019 |
Million US dollar |  | Gross amount |  |  | Net amount recognized in the statement of financial position1 |  |  | Other offsetting agreements2 |  |  | Total net amount |
Derivative assets |  |  | 362 |  |  |  | 362 |  |  |  | (352 | ) |  |  | 10 |
Derivative liabilities |  |  | (4 151 | ) |  |  | (4 151 | ) |  |  | 352 |  |  |  | (3 799 | )

1 | Net amount recognized in the statement of financial position after taking into account offsetting agreements that meet the offsetting criteria as per IFRS rules.

2 | Other offsetting agreements include collateral and other guarantee instruments, as well as offsetting agreements that do not meet the offsetting criteria as per IFRS rules.

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23. Collateral and contractual commitments for the acquisition of property, plant and equipment, loans to customers and other

In the six-month period ended 30 June 2020, there were no significant changes in collateral and contractual commitments to purchase property, plant and equipment and other, besides those described below, as compared to 31 December 2019.

Following the combination with SAB in 2016, AB InBev decided to maintain the SAB Zenzele share-scheme (Zenzele Scheme), the broad-based black economic empowerment (B-BBEE) scheme which provided opportunities for black South Africans, including employees (through The SAB Zenzele Employee Trust), SAB retailers (through SAB Zenzele Holdings Limited) and The SAB Foundation, to participate as shareholders of AB InBev’s indirect subsidiary, The South African Breweries Pty Ltd (SAB). The Zenzele Scheme, originally implemented by SAB in 2010 as a 10-year scheme, was amended at the time of the combination with SAB and matured on 31 March 2020.

Obligations to the SAB Foundation and the employees as beneficiaries of The SAB Zenzele Employee Share Trust were settled in full on 15 April 2020. The obligations to SAB retailers, who participate in the Zenzele Scheme through SAB Zenzele Holdings, were partially settled (77.4%) on 15 April 2020. As a direct consequence of the COVID-19 outbreak the remaining settlement was postponed, and it is now intended that the SAB retailers will receive the balance of their entitlement (22.6%) on or before 31 March 2021, at which time AB InBev and SAB will implement the new scheme as described below.

In total, 10.8 million AB InBev Treasury shares with a total value of 8.6 billion ZAR (491m US dollar) were used to settle the obligations to the participants of the Zenzele Scheme.

As part of the combination, AB InBev made a commitment to the South African Government and Competition Authorities to create a new B-BBEE scheme upon maturity of the Zenzele Scheme in 2020. In order to create the new B-BBEE scheme, the following steps will be undertaken:

| • |  | The new scheme will be implemented through the listing of a special purpose company, which will be called SAB Zenzele Kabili Holdings Limited (Zenzele Kabili) on the segment of the Johannesburg Stock Exchange’s Main Board on which an issuer may list its B-BBEE shares;

| • |  | Zenzele Kabili will hold unencumbered AB InBev shares;

| • |  | Existing Zenzele participants (employees, SAB retailers and The SAB Foundation) will be given an option to reinvest a portion of their Zenzele payout into Zenzele Kabili;

| • |  | A new Employee Share Plan, funded by AB InBev, will subscribe for shares in Zenzele Kabili.

The settlement of the balance of the SAB Retailers entitlement and the new B-BBEE scheme is estimated to require approximately 5.5 billion ZAR (0.3 billion US dollar1) in facilitation and notional vendor funding. The settlement would be equivalent to 6.5 million AB InBev shares based on the AB InBev share price and the ZAR Euro exchange rate as at 30 June 20202. It is the intention that AB InBev Treasury shares will be used for the settlement of the new B-BBEE scheme. This scheme arrangement meets the criteria under IFRS 2 to be classified as equity settled.

24. Contingencies3

The company has contingencies for which, in the opinion of management and its legal counsel, the risk of loss is possible but not probable and therefore no provisions have been recorded. Due to their nature, such legal proceedings and tax matters involve inherent uncertainties including, but not limited to, court rulings, negotiations between affected parties and governmental actions, and as a consequence AB InBev’s management cannot at this stage estimate the likely timing of resolution of these matters. The most significant contingencies are discussed below.

AMBEV TAX MATTERS

As of 30 June 2020, AB InBev’s material tax proceedings are related to Ambev and its subsidiaries. Estimates of amounts of possible loss are as follows:

Million US dollar |  | 30 June 2020 |  |  | 31 December 2019 |
Income tax and social contribution |  |  | 8 366 |  |  |  | 10 781 |
Value-added and excise taxes |  |  | 4 179 |  |  |  | 5 514 |
Other taxes |  |  | 867 |  |  |  | 1 018 |
|  |  | 13 412 |  |  |  | 17 313 |

The most significant tax proceedings of Ambev are discussed below.

INCOME TAX AND SOCIAL CONTRIBUTION

Foreign Earnings

Since 2005, Ambev and certain of its subsidiaries have been receiving assessments from the Brazilian Federal Tax Authorities relating to the profits of its foreign subsidiaries. The cases are being challenged at both the administrative and judicial levels of the courts in Brazil.

1 | Converted at the June 2020 closing rate.

2 | Assuming the June 2020 closing share price of 43.87 euro per share and 30 June 2020 ZAR per Euro exchange rate of 19.442392.

3 | Amounts have been converted to US dollar at the closing rate of the respective period.

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The administrative proceedings have resulted in partially favorable decisions, which are still subject to review by the administrative court. In the judicial proceedings, Ambev has received favorable injunctions that suspend the enforceability of the tax credit, as well as favorable first level decisions, which remain subject to review by the second-level judicial court.

The amount related to this uncertain tax position as of 30 June 2020 is approximately 7.3 billion Brazilian real (1.3 billion US dollar) and Ambev has not recorded any provisions in connection therewith as it considers the chance of loss to be possible. For proceedings where it considers the chance of loss to be probable, Ambev has recorded a provision in the total amount of 53 million Brazilian real (10 million US dollar).

Goodwill InBev Holding

In December 2011, Ambev received a tax assessment related to the goodwill amortization resulting from the InBev Holding Brasil S.A. merger with Ambev. The decision rendered by the Lower Administrative Court was partially favorable to Ambev. Ambev filed a judicial proceeding to discuss the unfavorable portion of the decision and requested an injunction to suspend enforceability of the tax credit which was granted to Ambev. Regarding the portion of the decision subject to review at the administrative level, in August 2019 the Upper Administrative House rendered a partially favorable decision to Ambev. Ambev was notified of the decision and filed a judicial proceeding to discuss the unfavorable portion of the decision. Ambev also requested an injunction, which was granted in order to suspend the enforceability of the remaining tax credit.

In June 2016, Ambev received a new tax assessment charging the remaining value of the goodwill amortization and filed a defense. In March 2017, Ambev was notified of a partially favorable first level administrative decision and filed an appeal to the Lower Administrative Court. In May 2018, Ambev received a partially favorable decision at the Lower Administrative Court. In May 2019, Ambev filed a Special Appeal for analysis of the case by the Upper Administrative House. In November 2019, the Special Appeal was partially admitted by the Upper Administrative House and Ambev filed an appeal related to the portion that was not admitted. Ambev was notified of the decision and filed a judicial proceeding to discuss the unfavorable portion of the decision. Ambev also requested an injunction to suspend the enforceability of the tax credit, which was granted to Ambev. The admitted part of the Special Appeal will be examined by the Upper Administrative House.

The amount related to this uncertain tax position as of 30 June 2020 is aproximately 10.2 billion Brazilian real (1.9 billion US dollar). Ambev has not recorded any provisions for this matter as it considers the chance of loss to be possible. In the event Ambev is required to pay these amounts, AB InBev will reimburse the amount proportional to the benefit received by AB InBev pursuant to the merger protocol as well as the related costs.

Goodwill Beverage Associate Holding (BAH)

In October 2013, Ambev received a tax assessment related to the goodwill amortization resulting from the merger of Beverage Associates Holding Limited (“BAH”) into Ambev. The decision from the first level administrative court was unfavorable to Ambev. Ambev filed an appeal to the Lower Administrative Court against the decision. In November 2018, Ambev received a partially favorable decision at the Lower Administrative Court. Ambev submitted counterarguments responding to the special appeal filed by the tax authorities and, regarding the unfavorable part of the decision, filed a special appeal to the Administrative Upper House. In December 2019, the Special Appeal was partially admitted by the Administrative Upper House and Ambev filed an appeal related to the portion that was not admitted. In June 2020, Ambev received a decision from the Administrative Upper House dismissing the appeal related to the portion that was not admitted. Currently, Ambev is awaiting the judgment of the Administrative Upper House in relation to the portion of the Special Appeal that was admitted.

In April and August 2018, Ambev received new tax assessments charging the remaining value of the goodwill amortization and filed defenses. In April 2019, the First Administrative Court rendered unfavorable decisions to Ambev. As a result thereof, Ambev appealed to the Lower Administrative Court. In November and December 2019, Ambev received partially favorable decisions at the Lower Administrative Court. Ambev is awaiting the results of the remaining decisions in order to file the applicable appeals.

The amount related to this uncertain tax position as of 30 June 2020 is approximately 2.2 billion Brazilian real (0.4 billion US dollar). Ambev has not recorded any provisions for this matter as it considers the chance of loss to be possible.

Goodwill CND Holdings

In November 2017, Ambev received a tax assessment related to the goodwill amortization resulting from the merger of CND Holdings into Ambev. The decision from the first-level administrative court was unfavorable to Ambev. Ambev filed an appeal to the Lower Administrative Court. In February 2020, the Lower Administrative Court rendered a partially favorable decision. In June 2020, Ambev was notified of the decision and filed a motion for clarification of the decision. In addition, Ambev submitted counterarguments responding to the special appeal filed by the tax authorities regarding the portion that was favorable to Ambev.

The amount related to this uncertain tax position as of 30 June 2020 is approximately 1.0 billion Brazilian real (0.2 billion US dollar). Ambev has not recorded any provisions for this matter as it considers the chance of loss to be possible.

Tax Loss Offset

Ambev and certain of its subsidiaries received a number of assessments from the Brazilian Federal Tax Authorities relating to the offset of tax losses carry forward in the context of business combinations.

In February 2016, the Administrative Upper House ruled unfavorably to Ambev in two cases. Ambev filed judicial proceedings to discuss the matter. In September 2016, Ambev received a favorable first level decision in one of the judicial claims, and in March 2017, an unfavorable first-level decision in the other case. Both cases are now awaiting analysis by the second-level judicial court. The other cases are being challenged at the administrative level and are still awaiting final decisions.

The amount related to this uncertain tax position as of 30 June 2020 is approximately 0.6 billion Brazilian real (0.1 billion US dollar). Ambev has not recorded any provisions for this matter as it considers the chance of loss to be possible.

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Disallowance of financial expenses

In 2015 and 2016, Ambev received tax assessments related to the disallowance of alleged non-deductible expenses and the deduction of certain losses mainly associated to financial investments and loans. Ambev presented defenses and, in November 2019, received a favorable decision at the first-level administrative court regarding the 2016 case. The 2015 case is still pending decision by the first-level administrative court.

The amount related to this uncertain tax position as of 30 June 2020 is approximately 4.9 billion Brazilian real (0.9 billion US dollar). Ambev has not recorded any provisions for this matter as it considers the chance of loss to be possible.

Disallowance of tax paid abroad

Since 2014, Ambev has been receiving tax assessments from the Brazilian Federal Tax Authorities related to the disallowance of deductions associated with alleged unproven taxes paid abroad by its subsidiaries and has been filing defenses. The cases are being challenged at both the administrative and judicial levels. In November 2019, the Lower Administrative Court rendered a favorable decision to Ambev in one of the cases, which became definitive. In January 2020, the Lower Administrative Court rendered unfavorable decisions regarding four of these assessments (from 2015 and 2016). Ambev management estimates the total amount of possible losses in relation to these four assessments to be approximately 3.6 billion Brazilian real (0.7 billion US dollar) as of 30 June 2020. Regarding the 2015 assessments, Ambev was notified of the decisions and filed a motion for clarification. Ambev is still awaiting the formal notification of the 2016 decisions to file the applicable appeals. The other cases are still waiting final decisions. In September 2017, Ambev decided to include part of these tax assessments in the Brazilian Federal Tax Regularization Program of the Provisional Measure No 783.

The amount related to this uncertain tax position as of 30 June 2020 is approximately 10.3 billion Brazilian real (1.9 billion US dollar). Ambev has not recorded any provisions for this matter as it considers the chance of loss to be possible.

Presumed Profit

In April 2016, Arosuco (a subsidiary of Ambev) received a tax assessment regarding the use of the “presumed profit” method for the calculation of income tax and the social contribution on net profits instead of the “real profit” method. In September 2017, Arosuco received an unfavorable first level administrative decision and filed an appeal. In January 2019, the Lower Administrative Court rendered a favorable decision to Arosuco, which became definitive.

In March 2019, Ambev received a new tax assessment regarding the same subject and filed a defense. In October 2019, Arosuco received an unfavorable first level administrative decision and filed an appeal. The amount related to this uncertain tax position as of 30 June 2020 is approximately 0.5 billion Brazilian real (0.1 billion US dollar). Arosuco has not recorded any provisions for this matter as it considers the chance of loss to be possible.

Deductibility of IOC expenses

In November 2019, Ambev received a tax assessment from the Brazilian Federal Tax Authorities related to the interest on capital (“IOC”) deduction in 2014. The assessment refers primarily to the accounting and corporate effects of the restructuring carried out by Ambev in 2013 and the impact on the increase in the deductibility of IOC expenses. Ambev filed an administrative defense and is awaiting a decision by the first-level administrative court.

The company distributed IOC in the years following the assessed period. Accordingly, if the IOC deductibility is also questioned in the future on the same basis as the aforementioned tax assessment, Ambev estimates that the conclusion of these discussions would be similar to the present case, therefore maintaining the effects of the deductibility of IOC expenses in the effective income tax rate.

The amount related to this uncertain tax position as of 30 June 2020 is approximately 4.0 billion Brazilian real (0.7 billion US dollar). Ambev has not recorded any provisions for this matter as it considers the chance of loss to be possible.

Disallowance on Income Tax deduction

In January 2020, Arosuco, a subsidiary of Ambev, received a tax assessment from the Brazilian Federal Tax Authorities regarding the disallowance of the income tax reduction benefit provided for in Provisional Measure No. 2199-14 / 2001. Arosuco filed an administrative defense and is awaiting a decision by the first-level administrative court.

The amount related to this uncertain tax position as of 30 June 2020 is approximately 2.0 billion Brazilian real (0.4 billion US dollar). Ambev has not recorded any provisions for this matter as it considers the chance of loss to be possible.

ICMS VALUE ADDED TAX, EXCISE TAX (“IPI”) AND TAXES ON NET SALES

Manaus Free Trade Zone – IPI / Social contributions

In Brazil, goods manufactured within the Manaus Free Trade Zone intended for remittance elsewhere in Brazil are exempt and/ or zero-rated from excise tax (“IPI”) and social contributions (“PIS/COFINS”). With respect to IPI, Ambev’s subsidiaries have been registering IPI presumed tax credits upon the acquisition of exempted goods manufactured therein. Since 2009, Ambev has been receiving a number of tax assessments from the Brazilian Federal Tax Authorities relating to the disallowance of such credits.

Ambev has also been receiving charges from the Brazilian Federal Tax Authorities in relation to (i) federal taxes allegedly unduly offset with the disallowed presumed IPI excise tax credits that are under discussion in these proceedings and (ii) PIS/COFINS amounts allegedly due on Arosuco’s remittance to Ambev subsidiaries.

In April 2019, the Federal Supreme Court (“STF”) announced its judgment on Extraordinary Appeal No. 592.891/SP and 596.614/SP, with binding effects, deciding on the rights of taxpayers registering IPI excise tax presumed credits on acquisitions of raw materials and exempted inputs originating from the Manaus Free Trade Zone. As a result of this decision, Ambev reclassified part of the amounts related to the IPI cases as remote losses maintaining as possible losses only issues related to other additional discussions that were not included in the analysis of the STF. The cases are being challenged at both the administrative and judicial levels.

Ambev management estimates the possible loss related to these assessments to be approximately 4.6 billion Brazilian real (0.8 billion US dollar) as of 30 June 2020. Ambev has not recorded any provision in connection therewith.

IPI Suspension

In 2014 and 2015, Ambev received tax assessments from the Brazilian Federal Tax Authorities relating to IPI allegedly due over remittances of manufactured goods to other related factories. The cases are being challenged at both the administrative and judicial levels.

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Ambev management estimates the possible loss related to these assessments to be approximately 1.7 billion Brazilian real (0.3 billion US dollar) as of 30 June 2020. Ambev has not recorded any provision in connection therewith.

ICMS tax credits

Ambev is currently challenging tax assessments issued by the states of São Paulo, Rio de Janeiro, Minas Gerais, among others, questioning the legality of ICMS tax credits arising from transactions with companies that have tax incentives granted by other states. The cases are being challenged at both the administrative and judicial level of the courts.

Ambev management estimates the possible losses related to these assessments to be approximately 2.0 billion Brazilian real (0.4 billion US dollar) as of 30 June 2020. Ambev has not recorded any provision in connection therewith.

ICMS-ST Trigger

Over the years, Ambev has received tax assessments to charge supposed ICMS differences considered due when the price of the products sold by Ambev is above the fixed price table basis established by the relevant states, cases in which the state tax authorities understand that the calculation basis should be based on a value-added percentage over the actual prices and not the fixed table price. Ambev is currently challenging those charges before the courts. The cases are being challenged at both the administrative and judicial levels.

Ambev management estimates the total possible loss related to this issue to be approximately 8.2 billion Brazilian real (1.6 billion US dollar) as of 30 June 2020. Ambev has recorded provisions in the total amount of of 8 million Brazilian real (2 million US dollar) in relation to certain proceedings for which it considers the chances of loss to be probable due to specific procedural issues.

ICMS – PRODEPE

In 2015, Ambev received a tax assessment issued by the State of Pernambuco to charge ICMS differences due to an alleged non-compliance with the state tax incentive agreement (“PRODEPE”) as a result of the rectification of its monthly reports. The state tax authorities understood that Ambev was not able to use the incentive due to this rectification. In 2017, Ambev had a final favorable decision in the sense that such assessment was null due to formal mistakes of the tax auditor. However, in September 2018, Ambev received a new tax assessment to discuss the same matter. There are other assessments related to PRODEPE. Ambev management estimates the possible losses related to this issue to be approximately 0.6 billion Brazilian real (0.1 billion US dollar) as of 30 June 2020. Ambev has recorded a provision in the total amount of 5 million Brazilian real (1 million US dollar) in relation to one proceeding it considers the chances of loss to be partially probable.

SOCIAL CONTRIBUTIONS

Since 2015, Ambev has received tax assessments issued by the Brazilian Federal Tax Authorities relating to PIS/COFINS amounts allegedly due over bonus products granted to its customers. The cases are being challenged at both the administrative and judicial levels of the courts. In 2019, Ambev received final favorable decisions at the administrative level in some of these cases and favorable decisions in other cases that are still subject to review. At the judicial level, the case is still in the initial stage.

Ambev management estimates the possible loss related to these assessments to be approximately 2.1 billion Brazilian real (0.4 billion US dollar) as of 30 June 2020. No related provision has been made.

AB INBEV’S AUSTRALIAN BUSINESS TAX MATTERS

SAB Australia Pty Limited (“SAB Australia”), a subsidiary of AB InBev, received a tax assessment for the 2012 to 2014 income tax years for 0.3 billion Australian dollar (0.3 billion US dollar) related to the interest deductions of SAB’s acquisition of the Foster’s group (the “Foster’s acquisition”). SAB Australia is disputing the 2012 to 2014 assessment and remains confident of the positions it has adopted. SAB Australia paid 47 million US dollar related to the tax assessment pending conclusion of the matter and recorded a provision of 0.1 billion US dollar in connection therewith as of 30 June 2020.

The Australian tax authorities have also notified SAB Australia that it has commenced an audit of the 2015 to 2020 income tax years. The focus of the audit is the tax treatment of the ongoing funding arrangements associated with the Foster’s acquisition.

OTHER TAX MATTERS

In February 2015, the European Commission opened an in-depth state aid investigation into the Belgian excess profit ruling system. On 11 January 2016, the European Commission adopted a negative decision finding that the Belgian excess profit ruling system constitutes an aid scheme incompatible with the internal market and ordering Belgium to recover the incompatible aid from a number of aid beneficiaries. The Belgian authorities have contacted the companies that have benefitted from the system and have advised each company of the amount of incompatible aid that is potentially subject to recovery. The European Commission decision was appealed to the European Union’s General Court by Belgium on 22 March 2016 and by AB InBev on 12 July 2016. On 14 February 2019, the European General Court concluded that the Belgian excess profit ruling system does not constitute illegal state aid. The European Commission has appealed the judgment to the European Court of Justice. Pending the outcome of that appeal, the European Commission opened new state aid investigations into the individual Belgian tax rulings, including the one issued to AB InBev in September 2019, to remedy the concerns that led to annulment of its earlier decision by the General Court. These investigations relate to the same rulings that were subject to the European Commission decision issued on 11 January 2016. AB InBev cannot at this stage estimate the final outcome of such legal proceedings. Based on the estimated exposure related to the excess profit ruling applicable to AB InBev, the different elements referred to above, as well as the possibility that taxes paid abroad and non-recognized tax loss carryforwards could eventually partly or fully offset amounts subject to recovery, if any, AB InBev has not recorded any provisions in connection therewith as of 30 June 2020.

In addition, the Belgian tax authorities have also questioned the validity and the actual application of the excess profit ruling that was issued in favor of AB InBev and have refused the actual tax exemption which it confers. Against such decision AB InBev has filed a court claim before the Brussels court of first instance which ruled in favor of AB InBev on 21 June 2019. The Belgian tax authorities appealed this judgment. Also, in respect of this aspect of the excess profit ruling matter, considering the company’s and its counsel assessment, as well as the position taken by the tax authorities’ mediation services, in respect of the merits of the case, AB InBev has not recorded any provisions as 30 June 2020.

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In January 2019, AB InBev deposited 68 million euro (76 million US dollar) on a blocked account. Depending on the final outcome of the European Court procedures on the Belgian excess profit ruling system, as well as the pending Belgian court case, this amount will either be slightly modified, or released back to the company or paid over to the Belgian State.

WARRANTS

Certain holders of warrants issued by Ambev in 1996 for exercise in 2003 proposed lawsuits to subscribe correspondent shares for an amount lower than Ambev considers as established upon the warrant issuance. In case Ambev loses the totality of these lawsuits, the issuance of 172,831,574 shares would be necessary. Ambev would receive in consideration funds that are materially lower than the current market value. This could result in a dilution of about 1% to all Ambev shareholders. Furthermore, the holders of these warrants are claiming that they should receive the dividends relative to these shares since 2003, approximately 1.0 billion Brazilian real (0.2 billion US dollar) in addition to legal fees. Ambev disputes these claims and intends to continue to vigorously defend its case. All six lawsuits were ruled favorable to Ambev by the Superior Court of Justice (“STJ”). Three cases were dismissed by the STJ’s Special Court and may still be subjected to further appeals. One case was ruled favorable to Ambev by the STJ’s Special Court and appealed while another case was remitted to the STJ’s lower court for a new judgment. The sixth case was ruled favorable to Ambev and may still be subject to an appeal. Considering all of these facts, Ambev and its external counsels strongly believe that the chance of loss in these cases is remote.

UNITED STATES CLASS ACTION SUIT

On 21 June 2019, a proposed class action was filed in the United States District Court for the Southern District of New York against AB InBev and three of its officers. The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder on behalf of a proposed class of purchasers of AB InBev American Depositary Shares between 1 March 2018 and 24 October 2018. The plaintiff alleges that defendants misstated or omitted material facts regarding, among other things, the company’s financial condition, its dividend policy and the effectiveness of its disclosure controls and procedures. The complaint seeks unspecified compensatory damages and reimbursement for litigation expenses. An amended complaint filed on 12 December 2019 contained substantially the same allegations, but reduced the number of defendant officers to two. The company has moved to dismiss the case and is currently awaiting a hearing on its motion to dismiss. The company has not recorded any provision.

25. Related parties

There are no material changes to the company’s related party transactions during the first six months of 2020 as compared to 2019.

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26. Supplemental guarantor financial information

The following guarantor financial information is presented to comply with U.S. SEC disclosure requirements of Rule 3-10 of Regulation S-X.

The issuances or exchanges of securities described below are related to securities issued by Anheuser-Busch InBev Worldwide Inc. or Anheuser-Busch InBev Finance Inc. or Anheuser Busch Companies, LLC, and in each case fully and unconditionally guaranteed by Anheuser-Busch InBev SA/NV (the “Parent Guarantor”). Each such security is also jointly and severally guaranteed by Anheuser Busch Companies, LLC, Brandbrew S.A., Brandbev S.à r.l. and Cobrew NV (the “Other Subsidiary Guarantors”), and by Anheuser-Busch InBev Worldwide Inc. (in respect of debt issued by Anheuser-Busch InBev Finance Inc.) and by Anheuser-Busch InBev Finance Inc. (in respect of debt issued by Anheuser-Busch InBev Worldwide Inc.). The following notes issued by Anheuser-Busch Worldwide Inc., Anheuser-Busch Finance Inc. and Anheuser Busch Companies, LLC and registered with the SEC were outstanding as of 30 June 2020:

| • |  | On 6 January 2010, Anheuser-Busch InBev Worldwide Inc. issued 0.5 billion US dollar aggregate principal amount of fixed rate notes due 2040. The notes bear interest at an annual rate of 6.375% and will mature on 15 January 2040. The issuance closed on 5 February 2010. In connection with bond exchange on 6 April and 19 April 2017, 51.12% of the principal of the 2040 note was exchanged. The remaining principal of the note amounts to 0.24 billion US dollar.

| • |  | On 24 January 2011, Anheuser-Busch InBev Worldwide Inc. issued 0.5 billion US dollar aggregate principal amount of fixed rate notes due 2021. The notes bear interest at an annual rate of 4.375% and will mature on 15 February 20211. The issuance closed on 27 January 2011.

| • |  | On 14 March 2011, Anheuser-Busch InBev Worldwide Inc. completed an exchange offer for the unregistered notes with aggregate principal amount of 1.25 billion US dollar, due 2039 and bearing interest at an annual rate of 8.2%. In connection with the exchange offer, Anheuser-Busch InBev Worldwide Inc. issued freely tradable, SEC-registered notes with otherwise substantially the same terms and conditions.

| • |  | On 16 July 2012, Anheuser-Busch InBev Worldwide Inc. issued 3.0 billion US dollar aggregate principal amount of fixed rate notes due 20222 and 1.0 billion US dollar aggregate principal amount of fixed rate notes due 2042. The notes bear interest at an annual rate of 2.500% for the 2022 notes and 3.750% for the 2042 notes.

| • |  | On 17 January 2013, Anheuser-Busch InBev Finance Inc. issued 600m US dollar aggregate principal amount of fixed rate notes due 2023 and 0.75 billion US dollar aggregate principal amount of fixed rate notes due 2043. The notes bear interest at an annual rate of 2.625% for the 20233 notes and 4.000% for the 2043 notes.

| • |  | On 27 January 2014, Anheuser-Busch InBev Finance Inc. issued 2.3 billion US dollar aggregate principal amount of bonds, consisting of 865m US dollar aggregate principal amount of fixed rate notes due 2024; and 850m US dollar aggregate principal amount of fixed rate notes due 2044. The fixed rate notes bear interest at an annual rate of 3.700% for the 2024 notes; and 4.625% for the 2044 notes.

| • |  | On 25 January 2016, Anheuser-Busch InBev Finance Inc. issued 34.5 billion US dollar aggregate principal amount of bonds, consisting of 6.0 billion US dollar aggregate principal amount of fixed rate notes due 20234; 11.0 billion US dollar aggregate principal amount of fixed rate notes due 20265; 6.0 billion US dollar aggregate principal amount of fixed rate notes due 20366; 11.0 billion US dollar aggregate principal amount of fixed rate notes due 20467; and 500m US dollar aggregate principal amount of floating rate notes due 20218. The fixed rate notes bear interest at an annual rate of 3.300% for the 2023 notes9; 3.650% for the 2026 notes; 4.700% for the 2036 notes and 4.900% for the 2046 notes. The 2021 floating rate notes bear interest at an annual rate of 126.00 basis points above three-month LIBOR.

| • |  | On 16 December 2016, Anheuser-Busch InBev Worldwide Inc. completed an exchange offer for up to 2.1 billion US dollar aggregate principal amount of certain SAB Group notes, in connection with which Anheuser-Busch InBev Worldwide Inc. issued (i) 298 million US dollar aggregate principal amount of 6.625% fixed rate notes due 2033; (ii) 300 million US dollar aggregate principal amount of 5.875% fixed rate notes due 2035; and (iii) 1.49 billion US dollar aggregate principal amount of 4.950% fixed rate notes due 2042.

1 | On 11 February 2019, Anheuser-Busch InBev Finance Inc. completed tender offers for the 4.375% fixed rate note due 2021 for the total aggregate principal amount of 215 million US dollar. On 13 July 2020, Anheuser-Busch InBev Finance Inc announced that it is exercising its option to redeem in full the outstanding aggregate principal amount of 285 million US dollar of the same note on 12 August 2020.

2 | On 11 February 2019, Anheuser-Busch InBev Worldwide Inc. completed tender offers for the 2.500% fixed rate note due 2022 for the total aggregate principal amount of 1.3 billion US dollar. Furthermore on 29 October 2019 and 12 November 2019, Anheuser-Busch InBev Finance Inc. redeemed 525 million US dollar and 725 million US dollar respectively of the same note. On 13 July 2020, Anheuser-Busch InBev Finance Inc announced that it is exercising its option to redeem in full the outstanding aggregate principal amount of 454 million US dollar of the 2.500% fixed rate note due 2022 on 12 August 2020.

3 | On 7 July 2020, Anheuser-Busch InBev Finance Inc. completed tender offers for the 2.625% fixed rate note due 2023 for the total aggregate principal amount of 167 million US dollar.

4 | On 11 February 2019, Anheuser-Busch InBev Finance Inc. completed tender offers for the 3.300% fixed rate note due 2023 for the total aggregate principal amount of 2.9 billion. On 25 April 2019, Anheuser-Busch InBev Finance Inc. completed the redemption of 315 million US dollar of the same note.

5 | An aggregate principal amount of $8.5 billion US dollar of these notes were exchanged on 13 November 2018 for notes co-issued by Anheuser-Busch InBev Worldwide Inc. and Anheuser-Busch Companies, LLC. On 11 February 2019, Anheuser-Busch InBev Finance Inc. completed tender offers for these notes for the total aggregate principal amount of 812 million US dollar. On the same date Anheuser-Busch InBev Worldwide Inc. and Anheuser-Busch Companies, LLC completed tender offers for its notes for the total aggregate principal amount of 5.1 billion US dollar.

6 | An aggregate principal amount of $5.4 billion US dollar of these notes were exchanged on 13 November 2018 by notes co-issued by Anheuser-Busch InBev Worldwide Inc. and Anheuser-Busch Companies, LLC.

7 | An aggregate principal amount of $9.5 billion US dollar of these notes were exchanged on 13 November 2018 by notes co-issued by Anheuser-Busch InBev Worldwide Inc. and Anheuser-Busch Companies, LLC.

8 | On 11 February 2019, Anheuser-Busch InBev Finance Inc. completed tender offers for the floating rate note due 2021 for the total aggregate principal amount of 189 million. Additionally, on 7 July 2020, Anheuser-Busch InBev Finance Inc. completed tender offers for the same note for the total aggregate principal amount of 129 million US dollar.

9 | On 7 July 2020, Anheuser-Busch InBev Finance Inc. completed tender offers for the 3.300% fixed rate note due 2023 for the total aggregate principal amount of 1.5 billion US dollar.

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| • |  | On 21 August 2017, Anheuser-Busch InBev Worldwide Inc. completed an exchange offer for the unregistered 1.7 billion US dollar principal amount of 4.439% notes due 2048. In connection with the exchange offer, Anheuser-Busch InBev Worldwide Inc. issued freely tradable, SEC-registered notes with otherwise substantially the same terms and conditions.

| • |  | On 4 April 2018, Anheuser-Busch InBev Worldwide Inc. completed an exchange offer for up to 10.0 billion US dollar aggregate principal amount of certain bonds and issued (i) 1.5 billion US dollar aggregate principal amount of 3.500% fixed rate notes due 202410; (ii) 2.5 billion US dollar aggregate principal amount of 4.000% fixed rate notes due 2028; (iii) 1.5 billion US dollar aggregate principal amount of 4.375% fixed rates due 2038; (iv) 2.5 billion US dollar aggregate principal amount of 4.600% fixed rate notes due 2048; (v) 1.5 billion US dollar aggregate principal amount of 4.750% fixed rate notes due 2058; and (vi) 500 million US dollar aggregate principal of floating rate notes due 202411. The floating rate notes bear interest at an annual rate of 74.00 basis points above three-month LIBOR.

| • |  | On 23 January 2019, Anheuser-Busch InBev Worldwide Inc. completed the issuance of 15.5 billion US dollar aggregate principal amount of certain bonds (i) 4.3 billion US dollar aggregate principal amount of 4.750% fixed rate notes due 2029; (ii) 4.0 billion US dollar aggregate principal amount of 5.550% fixed rate notes due 2049; (iii) 2.5 billion US dollar aggregate principal amount of 4.150% fixed rates due 2025; (iv) 2.0 billion US dollar aggregate principal amount of 5.450% fixed rate notes due 2039; (v) 2.0 billion US dollar aggregate principal amount of 5.800% fixed rate notes due 2059; and (vi) 750 million US dollar aggregate principal amount of 4.900% fixed rate notes due 2031.

| • |  | On 15 May 2019, Anheuser-Busch InBev Worldwide Inc. and Anheuser-Busch Companies, LLC completed an exchange offer for certain unregistered notes originally issued by Anheuser-Busch InBev Worldwide Inc. and Anheuser-Busch Companies, LLC on 13 November 2018. The aggregate principal amount accepted for offer were (i) 9.5 billion US dollar of 4.900% fixed rate notes due 2046; 5.3 billion US dollar of 4.700% fixed rate notes due 2036; and 3.3 billion US dollar of 3.650% fixed rate notes due 2026. In connection with the exchange offer, Anheuser-Busch InBev Worldwide Inc. and Anheuser-Busch Companies, LLC issued freely tradable, SEC-registered notes with otherwise substantially the same terms and conditions.

| • |  | On 3 April 2020, Anheuser-Busch InBev Worldwide Inc. completed the issuance of 6 billion US dollar aggregate principal amount of bonds, consisting of (i) 1.75 billion US dollar aggregate principal amount of 3.500% fixed rate notes due 2030, (ii) 1 billion US dollar aggregate principal amount of 4.350% fixed rate notes due 2040, (iii) 2.25 billion US dollar aggregate principal amount of 4.500% fixed rate notes due 2050 and (iv) 1 billion US dollar aggregate principal amount of 4.600% fixed rate notes due 2060.

10 | On 11 February 2019, Anheuser-Busch InBev Finance Inc. completed tender offers for the 3.500% fixed rate note due 2024 for the total aggregate principal amount of 846 million.

11 | On 11 February 2019, Anheuser-Busch InBev Finance Inc. completed tender offers for the floating rate note due 2024 for the total aggregate principal amount of 271 million US dollar

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CONDENSED CONSOLIDATING INCOME STATEMENT

For the six month period ended 30 June 2020 Million US dollar |  | Anheuser- Busch InBev SA/ NV |  |  | Anheuser- Busch InBev Worldwide Inc. |  |  | Anheuser- Busch InBev Finance Inc. |  |  | Anheuser- Busch Companies, LLC |  |  | Subsidiary Guarantors |  |  | Non-Guarantors |  |  | Eliminations |  |  | Total |
Revenue |  |  | 236 |  |  |  | — |  |  |  | — |  |  |  | 6 904 |  |  |  | — |  |  |  | 14 727 |  |  |  | (569 | ) |  |  | 21 298 |
Cost of sales |  |  | (166 | ) |  |  | — |  |  |  | — |  |  |  | (2 890 | ) |  |  | — |  |  |  | (6 610 | ) |  |  | 569 |  |  |  | (9 097 | )
Gross profit |  |  | 70 |  |  |  | — |  |  |  | — |  |  |  | 4 014 |  |  |  | — |  |  |  | 8 117 |  |  |  | — |  |  |  | 12 201 |
Distribution expenses |  |  | (13 | ) |  |  | — |  |  |  | — |  |  |  | (524 | ) |  |  | — |  |  |  | (1 864 | ) |  |  | — |  |  |  | (2 401 | )
Sales and marketing expenses |  |  | (57 | ) |  |  | — |  |  |  | — |  |  |  | (991 | ) |  |  | — |  |  |  | (2 230 | ) |  |  | — |  |  |  | (3 278 | )
Administrative expenses |  |  | (73 | ) |  |  | — |  |  |  | — |  |  |  | (254 | ) |  |  | (13 | ) |  |  | (1 238 | ) |  |  | — |  |  |  | (1 578 | )
Other operating income/(expenses) |  |  | 209 |  |  |  | 600 |  |  |  | — |  |  |  | (892 | ) |  |  | 367 |  |  |  | (2 922 | ) |  |  | — |  |  |  | (2 638 | )
Profit from operations |  |  | 136 |  |  |  | 600 |  |  |  | — |  |  |  | 1 353 |  |  |  | 354 |  |  |  | (137 | ) |  |  | — |  |  |  | 2 306 |
Net finance income/(cost) |  |  | (189 | ) |  |  | (860 | ) |  |  | 6 |  |  |  | 532 |  |  |  | (258 | ) |  |  | (4 822 | ) |  |  | — |  |  |  | (5 592 | )
Share of result of associates and joint ventures |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | 34 |  |  |  | — |  |  |  | 33 |
Profit before tax |  |  | (53 | ) |  |  | (260 | ) |  |  | 6 |  |  |  | 1 884 |  |  |  | 96 |  |  |  | (4 925 | ) |  |  | — |  |  |  | (3 253 | )
Income tax expense |  |  | — |  |  |  | 199 |  |  |  | (1 | ) |  |  | (288 | ) |  |  | — |  |  |  | (402 | ) |  |  | — |  |  |  | (492 | )
Profit |  |  | (53 | ) |  |  | (60 | ) |  |  | 5 |  |  |  | 1 596 |  |  |  | 96 |  |  |  | (5 327 | ) |  |  | — |  |  |  | (3 744 | )
Income from subsidiaries |  |  | (1 847 | ) |  |  | 1 390 |  |  |  | — |  |  |  | (10 | ) |  |  | (570 | ) |  |  | 1 330 |  |  |  | (294 | ) |  |  | 0 |
Profit from continuing operations |  |  | (1 900 | ) |  |  | 1 330 |  |  |  | 5 |  |  |  | 1 586 |  |  |  | (474 | ) |  |  | (3 997 | ) |  |  | (294 | ) |  |  | (3 744 | )
Profit from discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 055 |  |  |  | — |  |  |  | 2 055 |
Profit of the year |  |  | (1 900 | ) |  |  | 1 330 |  |  |  | 5 |  |  |  | 1 586 |  |  |  | (474 | ) |  |  | (1 942 | ) |  |  | (294 | ) |  |  | (1 688 | )
Profit from continuing operations attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of AB InBev |  |  | (1 900 | ) |  |  | 1 330 |  |  |  | 5 |  |  |  | 1 586 |  |  |  | (474 | ) |  |  | (4 208 | ) |  |  | (294 | ) |  |  | (3 955 | )
Non-controlling interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 211 |  |  |  | — |  |  |  | 211 |
Profit of the period attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of AB InBev |  |  | (1 900 | ) |  |  | 1 330 |  |  |  | 5 |  |  |  | 1 586 |  |  |  | (474 | ) |  |  | (2 153 | ) |  |  | (294 | ) |  |  | (1 900 | )
Non-controlling interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 211 |  |  |  | — |  |  |  | 211 |

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For the six month period ended 30 June 2019 Million US dollar Restated |  | Anheuser- Busch InBev SA/ NV |  |  | Anheuser- Busch InBev Worldwide Inc. |  |  | Anheuser- Busch InBev Finance Inc. |  |  | Anheuser- Busch Companies, LLC |  |  | Subsidiary Guarantors |  |  | Non-Guarantors |  |  | Eliminations |  |  | Total |
Revenue |  |  | 304 |  |  |  | — |  |  |  | — |  |  |  | 7 823 |  |  |  | — |  |  |  | 19 005 |  |  |  | (1 310 | ) |  |  | 25 823 |
Cost of sales |  |  | (207 | ) |  |  | — |  |  |  | — |  |  |  | (3 685 | ) |  |  | — |  |  |  | (7 371 | ) |  |  | 1 310 |  |  |  | (9 953 | )
Gross profit |  |  | 97 |  |  |  | — |  |  |  | — |  |  |  | 4 138 |  |  |  | — |  |  |  | 11 634 |  |  |  | — |  |  |  | 15 869 |
Distribution expenses |  |  | (15 | ) |  |  | — |  |  |  | — |  |  |  | (557 | ) |  |  | — |  |  |  | (2 137 | ) |  |  | — |  |  |  | (2 709 | )
Sales and marketing expenses |  |  | (77 | ) |  |  | — |  |  |  | — |  |  |  | (1 005 | ) |  |  | — |  |  |  | (2 449 | ) |  |  | — |  |  |  | (3 531 | )
Administrative expenses |  |  | (153 | ) |  |  | — |  |  |  | — |  |  |  | (334 | ) |  |  | 12 |  |  |  | (1 361 | ) |  |  | — |  |  |  | (1 837 | )
Other operating income/(expenses) |  |  | 125 |  |  |  | 538 |  |  |  | — |  |  |  | (583 | ) |  |  | (1 | ) |  |  | 206 |  |  |  | — |  |  |  | 285 |
Profit from operations |  |  | (23 | ) |  |  | 538 |  |  |  | — |  |  |  | 1 659 |  |  |  | 11 |  |  |  | 5 893 |  |  |  | — |  |  |  | 8 077 |
Net finance income/(cost) |  |  | (264 | ) |  |  | (1 033 | ) |  |  | 84 |  |  |  | (484 | ) |  |  | 103 |  |  |  | 1 425 |  |  |  | — |  |  |  | (169 | )
Share of result of associates and joint ventures |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3 | ) |  |  | — |  |  |  | 65 |  |  |  | — |  |  |  | 62 |
Profit before tax |  |  | (287 | ) |  |  | (495 | ) |  |  | 84 |  |  |  | 1 172 |  |  |  | 114 |  |  |  | 7 383 |  |  |  | — |  |  |  | 7 970 |
Income tax expense |  |  | — |  |  |  | 102 |  |  |  | (6 | ) |  |  | (373 | ) |  |  | (2 | ) |  |  | (1 286 | ) |  |  | — |  |  |  | (1 565 | )
Profit |  |  | (287 | ) |  |  | (393 | ) |  |  | 78 |  |  |  | 799 |  |  |  | 112 |  |  |  | 6 097 |  |  |  | — |  |  |  | 6 406 |
Income from subsidiaries |  |  | 6 342 |  |  |  | 418 |  |  |  | — |  |  |  | 216 |  |  |  | 528 |  |  |  | 4 017 |  |  |  | (11 519 | ) |  |  | — |
Profit from continuing operations |  |  | 6 055 |  |  |  | 25 |  |  |  | 78 |  |  |  | 1 015 |  |  |  | 640 |  |  |  | 10 114 |  |  |  | (11 519 | ) |  |  | 6 406 |
Profit from discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 236 |  |  |  | — |  |  |  | 236 |
Profit of the year |  |  | 6 055 |  |  |  | 25 |  |  |  | 78 |  |  |  | 1 015 |  |  |  | 640 |  |  |  | 10 350 |  |  |  | (11 519 | ) |  |  | 6 642 |
Profit from continuing operations attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of AB InBev |  |  | 6 055 |  |  |  | 25 |  |  |  | 78 |  |  |  | 1 015 |  |  |  | 640 |  |  |  | 9 527 |  |  |  | (11 519 | ) |  |  | 5 819 |
Non-controlling interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 587 |  |  |  | — |  |  |  | 587 |
Profit of the period attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of AB InBev |  |  | 6 055 |  |  |  | 25 |  |  |  | 78 |  |  |  | 1 015 |  |  |  | 640 |  |  |  | 9 763 |  |  |  | (11 519 | ) |  |  | 6 055 |
Non-controlling interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 587 |  |  |  | — |  |  |  | 587 |

56

CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION

As at 30 June 2020 Million US dollar |  | Anheuser- Busch InBev SA/ NV |  |  | Anheuser- Busch InBev Worldwide Inc. |  |  | Anheuser- Busch InBev Finance Inc. |  |  | Anheuser- Busch Companies, LLC |  |  | Subsidiary Guarantors |  |  | Non- Guarantors |  |  | Eliminations |  |  | Total |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 41 |  |  |  | — |  |  |  | — |  |  |  | 4 915 |  |  |  | — |  |  |  | 19 762 |  |  |  | — |  |  |  | 24 718 |
Goodwill |  |  | 545 |  |  |  | — |  |  |  | — |  |  |  | 33 134 |  |  |  | — |  |  |  | 81 401 |  |  |  | — |  |  |  | 115 080 |
Intangible assets |  |  | 382 |  |  |  | — |  |  |  | — |  |  |  | 22 202 |  |  |  | 97 |  |  |  | 17 368 |  |  |  | — |  |  |  | 40 049 |
Investments in subsidiaries |  |  | 113 184 |  |  |  | 73 435 |  |  |  | — |  |  |  | 66 085 |  |  |  | 17 698 |  |  |  | 208 343 |  |  |  | (478 746 | ) |  |  | — |
Investments in associates and joint ventures |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22 |  |  |  | — |  |  |  | 5 766 |  |  |  | — |  |  |  | 5 788 |
Deferred tax assets |  |  | — |  |  |  | 161 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 797 |  |  |  | — |  |  |  | 1 958 |
Derivatives |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 264 |  |  |  | 33 |  |  |  | — |  |  |  | 297 |
Other non-current assets |  |  | 13 391 |  |  |  | 11 681 |  |  |  | 13 442 |  |  |  | 3 925 |  |  |  | 9 065 |  |  |  | 56 262 |  |  |  | (106 423 | ) |  |  | 1 343 |
|  |  | 127 543 |  |  |  | 85 277 |  |  |  | 13 442 |  |  |  | 130 283 |  |  |  | 27 124 |  |  |  | 390 732 |  |  |  | (585 169 | ) |  |  | 189 233 |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 102 |  |  |  | — |  |  |  | 102 |
Inventories |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 903 |  |  |  | — |  |  |  | 3 436 |  |  |  | — |  |  |  | 4 339 |
Derivatives |  |  | 349 |  |  |  | 72 |  |  |  | — |  |  |  | 2 232 |  |  |  | 6 947 |  |  |  | 269 |  |  |  | (9 324 | ) |  |  | 545 |
Trade and other receivables |  |  | 2 916 |  |  |  | 4 490 |  |  |  | 1 176 |  |  |  | 2 339 |  |  |  | 5 133 |  |  |  | 28 978 |  |  |  | (39 754 | ) |  |  | 5 276 |
Cash and cash equivalents |  |  | 17 236 |  |  |  | 6 194 |  |  |  | 6 |  |  |  | 234 |  |  |  | 7 716 |  |  |  | 7 304 |  |  |  | (13 672 | ) |  |  | 25 018 |
Assets classified as held for sale |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 128 |  |  |  | — |  |  |  | 128 |
Other current assets |  |  | 11 |  |  |  | 203 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 588 |  |  |  | — |  |  |  | 805 |
|  |  | 20 512 |  |  |  | 10 959 |  |  |  | 1 182 |  |  |  | 5 708 |  |  |  | 19 799 |  |  |  | 40 805 |  |  |  | (62 750 | ) |  |  | 36 215 |
Total assets |  |  | 148 055 |  |  |  | 96 236 |  |  |  | 14 624 |  |  |  | 135 991 |  |  |  | 46 923 |  |  |  | 431 537 |  |  |  | (647 919 | ) |  |  | 225 448 |
EQUITY AND LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity attributable to equity holders of AB InBev |  |  | 60 065 |  |  |  | 47 434 |  |  |  | 628 |  |  |  | 72 408 |  |  |  | 25 324 |  |  |  | 332 953 |  |  |  | (478 746 | ) |  |  | 60 065 |
Minority interests |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8 282 |  |  |  | — |  |  |  | 8 282 |
|  |  | 60 065 |  |  |  | 47 434 |  |  |  | 628 |  |  |  | 72 408 |  |  |  | 25 324 |  |  |  | 341 235 |  |  |  | (478 746 | ) |  |  | 68 347 |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings |  |  | 62 929 |  |  |  | 43 036 |  |  |  | 13 466 |  |  |  | 42 248 |  |  |  | 3 094 |  |  |  | 47 806 |  |  |  | (106 545 | ) |  |  | 106 034 |
Employee benefits |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 1 056 |  |  |  | — |  |  |  | 1 551 |  |  |  | — |  |  |  | 2 610 |
Deferred tax liabilities |  |  | — |  |  |  | — |  |  |  | 8 |  |  |  | 6 751 |  |  |  | — |  |  |  | 5 301 |  |  |  | — |  |  |  | 12 060 |
Derivatives |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 460 |  |  |  | — |  |  |  | — |  |  |  | 2 460 |
Other non-current liabilities |  |  | 58 |  |  |  | — |  |  |  | — |  |  |  | 389 |  |  |  | — |  |  |  | 2 471 |  |  |  | — |  |  |  | 2 917 |
|  |  | 62 989 |  |  |  | 43 036 |  |  |  | 13 475 |  |  |  | 50 444 |  |  |  | 5 554 |  |  |  | 57 128 |  |  |  | (106 545 | ) |  |  | 126 081 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings |  |  | 16 155 |  |  |  | 5 032 |  |  |  | 311 |  |  |  | 8 050 |  |  |  | 6 165 |  |  |  | 7 974 |  |  |  | (37 203 | ) |  |  | 6 484 |
Income tax payables |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 353 |  |  |  | — |  |  |  | 556 |  |  |  | — |  |  |  | 909 |
Derivatives |  |  | 48 |  |  |  | — |  |  |  | — |  |  |  | 116 |  |  |  | 4 625 |  |  |  | 8 938 |  |  |  | (9 324 | ) |  |  | 4 403 |
Trade and other payables |  |  | 865 |  |  |  | 733 |  |  |  | 211 |  |  |  | 4 554 |  |  |  | 172 |  |  |  | 14 748 |  |  |  | (2 428 | ) |  |  | 18 857 |
Other current liabilities |  |  | 7 932 |  |  |  | — |  |  |  | — |  |  |  | 65 |  |  |  | 5 084 |  |  |  | 958 |  |  |  | (13 672 | ) |  |  | 367 |
|  |  | 25 000 |  |  |  | 5 766 |  |  |  | 522 |  |  |  | 13 139 |  |  |  | 16 044 |  |  |  | 33 175 |  |  |  | (62 627 | ) |  |  | 31 020 |
Total equity and liabilities |  |  | 148 055 |  |  |  | 96 236 |  |  |  | 14 624 |  |  |  | 135 991 |  |  |  | 46 923 |  |  |  | 431 537 |  |  |  | (647 919 | ) |  |  | 225 448 |

57

As at 31 December 2019 Million US dollar |  | Anheuser- Busch InBev SA/ NV |  |  | Anheuser- Busch InBev Worldwide Inc. |  |  | Anheuser- Busch InBev Finance Inc. |  |  | Anheuser- Busch Companies, LLC |  |  | Subsidiary Guarantors |  |  | Non- Guarantors |  |  | Eliminations |  |  | Total |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 36 |  |  |  | — |  |  |  | — |  |  |  | 5 063 |  |  |  | — |  |  |  | 22 445 |  |  |  | — |  |  |  | 27 544 |
Goodwill |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 33 157 |  |  |  | — |  |  |  | 94 957 |  |  |  | — |  |  |  | 128 114 |
Intangible assets |  |  | 409 |  |  |  | — |  |  |  | — |  |  |  | 22 195 |  |  |  | 97 |  |  |  | 19 751 |  |  |  | — |  |  |  | 42 452 |
Investments in subsidiaries |  |  | 128 860 |  |  |  | 77 492 |  |  |  | — |  |  |  | 42 557 |  |  |  | 17 955 |  |  |  | 183 831 |  |  |  | (450 696 | ) |  |  | — |
Investments in associates and joint ventures |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22 |  |  |  | — |  |  |  | 5 839 |  |  |  | — |  |  |  | 5 861 |
Deferred tax assets |  |  | — |  |  |  | 163 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 556 |  |  |  | — |  |  |  | 1 719 |
Derivatives |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 113 |  |  |  | 19 |  |  |  | — |  |  |  | 132 |
Other non-current assets |  |  | 13 930 |  |  |  | 11 681 |  |  |  | 13 853 |  |  |  | 14 495 |  |  |  | 13 483 |  |  |  | 43 495 |  |  |  | (108 925 | ) |  |  | 2 012 |
|  |  | 143 235 |  |  |  | 89 336 |  |  |  | 13 853 |  |  |  | 117 489 |  |  |  | 31 648 |  |  |  | 371 893 |  |  |  | (559 621 | ) |  |  | 207 834 |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 92 |  |  |  | — |  |  |  | 92 |
Inventories |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 822 |  |  |  | — |  |  |  | 3 605 |  |  |  | — |  |  |  | 4 427 |
Derivatives |  |  | 188 |  |  |  | — |  |  |  | — |  |  |  | 22 |  |  |  | 3 909 |  |  |  | 105 |  |  |  | (3 994 | ) |  |  | 230 |
Trade and other receivables |  |  | 4 152 |  |  |  | 10 163 |  |  |  | 846 |  |  |  | 7 331 |  |  |  | 113 |  |  |  | 13 139 |  |  |  | (29 557 | ) |  |  | 6 187 |
Cash and cash equivalents |  |  | 79 |  |  |  | 22 |  |  |  | 18 |  |  |  | 348 |  |  |  | 12 697 |  |  |  | 7 825 |  |  |  | (13 751 | ) |  |  | 7 238 |
Assets classified as held for sale |  |  | 236 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9 777 |  |  |  | — |  |  |  | 10 013 |
Other current assets |  |  | 8 |  |  |  | 198 |  |  |  | 2 |  |  |  | — |  |  |  | 5 |  |  |  | 414 |  |  |  | — |  |  |  | 627 |
|  |  | 4 663 |  |  |  | 10 383 |  |  |  | 866 |  |  |  | 8 523 |  |  |  | 16 724 |  |  |  | 34 957 |  |  |  | (47 302 | ) |  |  | 28 814 |
Total assets |  |  | 147 898 |  |  |  | 99 719 |  |  |  | 14 719 |  |  |  | 126 012 |  |  |  | 48 372 |  |  |  | 406 850 |  |  |  | (606 922 | ) |  |  | 236 648 |
EQUITY AND LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity attributable to equity holders of AB InBev |  |  | 75 722 |  |  |  | 46 188 |  |  |  | 622 |  |  |  | 77 567 |  |  |  | 25 359 |  |  |  | 300 959 |  |  |  | (450 696 | ) |  |  | 75 722 |
Minority interests |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8 831 |  |  |  | — |  |  |  | 8 831 |
|  |  | 75 722 |  |  |  | 46 188 |  |  |  | 622 |  |  |  | 77 567 |  |  |  | 25 359 |  |  |  | 309 790 |  |  |  | (450 696 | ) |  |  | 84 553 |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings |  |  | 59 605 |  |  |  | 49 310 |  |  |  | 13 874 |  |  |  | 28 313 |  |  |  | 3 586 |  |  |  | 51 690 |  |  |  | (108 814 | ) |  |  | 97 564 |
Employee benefits |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 1 067 |  |  |  | — |  |  |  | 1 776 |  |  |  | — |  |  |  | 2 848 |
Deferred tax liabilities |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 6 772 |  |  |  | — |  |  |  | 6 043 |  |  |  | — |  |  |  | 12 824 |
Derivatives |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 352 |  |  |  | — |  |  |  | — |  |  |  | 352 |
Other non-current liabilities |  |  | 60 |  |  |  | — |  |  |  | — |  |  |  | 543 |  |  |  | — |  |  |  | 3 063 |  |  |  | — |  |  |  | 3 666 |
|  |  | 59 670 |  |  |  | 49 310 |  |  |  | 13 883 |  |  |  | 36 695 |  |  |  | 3 938 |  |  |  | 62 572 |  |  |  | (108 814 | ) |  |  | 117 254 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings |  |  | 3 651 |  |  |  | 3 633 |  |  |  | — |  |  |  | 7 302 |  |  |  | 9 775 |  |  |  | 8 701 |  |  |  | (27 652 | ) |  |  | 5 410 |
Income tax payables |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 237 |  |  |  | — |  |  |  | 1 109 |  |  |  | — |  |  |  | 1 346 |
Derivatives |  |  | 198 |  |  |  | — |  |  |  | — |  |  |  | 49 |  |  |  | 3 875 |  |  |  | 3 671 |  |  |  | (3 994 | ) |  |  | 3 799 |
Trade and other payables |  |  | 1 071 |  |  |  | 588 |  |  |  | 214 |  |  |  | 4 153 |  |  |  | 75 |  |  |  | 18 778 |  |  |  | (2 015 | ) |  |  | 22 864 |
Liabilities associated with assets held for sale |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 145 |  |  |  | — |  |  |  | 1 145 |
Other current liabilities |  |  | 7 586 |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 5 350 |  |  |  | 1 084 |  |  |  | (13 752 | ) |  |  | 277 |
|  |  | 12 506 |  |  |  | 4 221 |  |  |  | 214 |  |  |  | 11 750 |  |  |  | 19 075 |  |  |  | 34 488 |  |  |  | (47 413 | ) |  |  | 34 841 |
Total equity and liabilities |  |  | 147 898 |  |  |  | 99 719 |  |  |  | 14 719 |  |  |  | 126 012 |  |  |  | 48 372 |  |  |  | 406 850 |  |  |  | (606 922 | ) |  |  | 236 648 |

58

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six-month period ended 30 June 2020 Million US dollar |  | Anheuser- Busch InBev SA/NV |  |  | Anheuser- Busch InBev Worldwide Inc. |  |  | Anheuser- Busch InBev Finance Inc. |  |  | Anheuser- Busch Companies, LLC |  |  | Subsidiary Guarantors |  |  | Non- Guarantors |  |  | Eliminations |  |  | Total |
OPERATING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profit from continuing operations |  |  | (1 900 | ) |  |  | 1 330 |  |  |  | 5 |  |  |  | 1 586 |  |  |  | (474 | ) |  |  | (3 997 | ) |  |  | (294 | ) |  |  | (3 744 | )
Depreciation, amortization and impairment |  |  | 95 |  |  |  | — |  |  |  | — |  |  |  | 394 |  |  |  | — |  |  |  | 1 913 |  |  |  | — |  |  |  | 2 402 |
Impairment losses on goodwill |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 500 |  |  |  | — |  |  |  | 2 500 |
Net finance cost/(income) |  |  | 189 |  |  |  | 860 |  |  |  | (6 | ) |  |  | (533 | ) |  |  | 259 |  |  |  | 4 823 |  |  |  | — |  |  |  | 5 592 |
Income tax expense |  |  | — |  |  |  | (199 | ) |  |  | 1 |  |  |  | 288 |  |  |  | — |  |  |  | 402 |  |  |  | — |  |  |  | 492 |
Investment income |  |  | 1 846 |  |  |  | (1 390 | ) |  |  | — |  |  |  | 10 |  |  |  | 570 |  |  |  | (1 330 | ) |  |  | 294 |  |  |  | — |
Other items |  |  | 99 |  |  |  | — |  |  |  | — |  |  |  | 130 |  |  |  | (368 | ) |  |  | 317 |  |  |  | — |  |  |  | 178 |
Cash flow from operating activities before changes in working capital and use of provisions |  |  | 329 |  |  |  | 601 |  |  |  | — |  |  |  | 1 875 |  |  |  | (13 | ) |  |  | 4 628 |  |  |  | — |  |  |  | 7 420 |
Working capital and provisions |  |  | 10 |  |  |  | 296 |  |  |  | — |  |  |  | (228 | ) |  |  | 12 |  |  |  | (3 117 | ) |  |  | — |  |  |  | (3 027 | )
Cash generated from operations |  |  | 339 |  |  |  | 897 |  |  |  | — |  |  |  | 1 647 |  |  |  | (1 | ) |  |  | 1 511 |  |  |  | — |  |  |  | 4 393 |
Interest paid, net |  |  | (506 | ) |  |  | (1 234 | ) |  |  | 10 |  |  |  | 1 443 |  |  |  | 122 |  |  |  | (1 866 | ) |  |  | — |  |  |  | (2 031 | )
Dividends received |  |  | — |  |  |  | 5 292 |  |  |  | — |  |  |  | 1 339 |  |  |  | — |  |  |  | 352 |  |  |  | (6 953 | ) |  |  | 30 |
Income tax paid |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (45 | ) |  |  | 3 |  |  |  | (1 315 | ) |  |  | — |  |  |  | (1 357 | )
Cash flow from operating activities on Australia discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 84 |  |  |  | — |  |  |  | 84 |
CASH FLOW FROM OPERATING ACTIVITIES |  |  | (167 | ) |  |  | 4 955 |  |  |  | 10 |  |  |  | 4 384 |  |  |  | 124 |  |  |  | (1 234 | ) |  |  | (6 953 | ) |  |  | 1 119 |
INVESTING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acquisition of property, plant and equipment and of intangible assets |  |  | (97 | ) |  |  | — |  |  |  | — |  |  |  | (185 | ) |  |  | — |  |  |  | (1 298 | ) |  |  | — |  |  |  | (1 580 | )
Proceeds from sale of property, plant and equipment and of intangible assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 56 |  |  |  | — |  |  |  | 56 |
Acquisition of subsidiaries, net of cash |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4 | ) |  |  | — |  |  |  | (200 | ) |  |  | — |  |  |  | (204 | )
Proceeds from Australia divestiture |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 149 |  |  |  | 10 689 |  |  |  | — |  |  |  | 10 838 |
Net proceeds from sale/(acquisition) of other assets |  |  | 13 797 |  |  |  | 8 981 |  |  |  | (22 | ) |  |  | 13 875 |  |  |  | (3 036 | ) |  |  | (30 791 | ) |  |  | (2 834 | ) |  |  | (30 | )
Cash flow from investing activities on Australia discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (13 | ) |  |  | — |  |  |  | (13 | )
CASH FLOW FROM INVESTING ACTIVITIES |  |  | 13 700 |  |  |  | 8 981 |  |  |  | (22 | ) |  |  | 13 686 |  |  |  | (2 887 | ) |  |  | (21 557 | ) |  |  | (2 834 | ) |  |  | 9 067 |
FINANCING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intra-group capital reimbursements |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (25 449 | ) |  |  | — |  |  |  | 25 449 |  |  |  | — |  |  |  | — |
Proceeds from borrowings |  |  | 7 471 |  |  |  | 6 226 |  |  |  | — |  |  |  | 14 504 |  |  |  | 1 256 |  |  |  | 14 518 |  |  |  | (29 453 | ) |  |  | 14 522 |
Payments on borrowings |  |  | (3 278 | ) |  |  | (13 992 | ) |  |  | — |  |  |  | (8 | ) |  |  | (2 365 | ) |  |  | (16 972 | ) |  |  | 32 287 |  |  |  | (4 328 | )
Cash net finance (cost)/income other than interests |  |  | 383 |  |  |  | — |  |  |  | — |  |  |  | (2 031 | ) |  |  | (1 052 | ) |  |  | 2 243 |  |  |  | — |  |  |  | (457 | )
Payment of lease liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (26 | ) |  |  | — |  |  |  | (254 | ) |  |  | — |  |  |  | (280 | )
Dividends paid |  |  | (1 129 | ) |  |  | — |  |  |  | — |  |  |  | (5 275 | ) |  |  | — |  |  |  | (1 768 | ) |  |  | 6 953 |  |  |  | (1 219 | )
Cash flow from financing activities on Australia discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (6 | ) |  |  | — |  |  |  | (6 | )
CASH FLOW FROM FINANCING ACTIVITIES |  |  | 3 447 |  |  |  | (7 766 | ) |  |  | — |  |  |  | (18 285 | ) |  |  | (2 161 | ) |  |  | 23 209 |  |  |  | 9 787 |  |  |  | 8 231 |
Net increase/(decrease) in cash and cash equivalents on continuing operations |  |  | 16 980 |  |  |  | 6 170 |  |  |  | (12 | ) |  |  | (215 | ) |  |  | (4 924 | ) |  |  | 417 |  |  |  | — |  |  |  | 18 416 |
Cash and cash equivalents less bank overdrafts at beginning of year |  |  | (7 503 | ) |  |  | 24 |  |  |  | 18 |  |  |  | 345 |  |  |  | 7 348 |  |  |  | 6 937 |  |  |  | — |  |  |  | 7 169 |
Effect of exchange rate fluctuations |  |  | (170 | ) |  |  | — |  |  |  | — |  |  |  | 39 |  |  |  | 209 |  |  |  | (798 | ) |  |  | — |  |  |  | (720 | )
Cash and cash equivalents less bank overdrafts at end of year |  |  | 9 307 |  |  |  | 6 194 |  |  |  | 6 |  |  |  | 169 |  |  |  | 2 633 |  |  |  | 6 556 |  |  |  | — |  |  |  | 24 865 |

59

For the six-month period ended 30 June 2019 Million US dollar Restated |  | Anheuser- Busch InBev SA/ NV |  |  | Anheuser- Busch InBev Worldwide Inc. |  |  | Anheuser- Busch InBev Finance Inc. |  |  | Anheuser- Busch Companies, LLC |  |  | Subsidiary Guarantors |  |  | Non-Guarantors |  |  | Eliminations |  |  | Total |
OPERATING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profit from continuing operations |  |  | 6 055 |  |  |  | 25 |  |  |  | 78 |  |  |  | 1 015 |  |  |  | 640 |  |  |  | 10 114 |  |  |  | (11 519 | ) |  |  | 6 406 |
Depreciation, amortization and impairment |  |  | 84 |  |  |  | — |  |  |  | — |  |  |  | 395 |  |  |  | — |  |  |  | 1 786 |  |  |  | — |  |  |  | 2 265 |
Net finance cost/(income) |  |  | 264 |  |  |  | 1 033 |  |  |  | (84 | ) |  |  | 484 |  |  |  | (103 | ) |  |  | (1 425 | ) |  |  | — |  |  |  | 169 |
Income tax expense |  |  | — |  |  |  | (102 | ) |  |  | 6 |  |  |  | 373 |  |  |  | 2 |  |  |  | 1 286 |  |  |  | — |  |  |  | 1 565 |
Investment income |  |  | (6 342 | ) |  |  | (418 | ) |  |  | — |  |  |  | (216 | ) |  |  | (528 | ) |  |  | (4 017 | ) |  |  | 11 519 |  |  |  | — |
Other items |  |  | 70 |  |  |  | — |  |  |  | — |  |  |  | 62 |  |  |  | 1 |  |  |  | (153 | ) |  |  | — |  |  |  | (20 | )
Cash flow from operating activities before changes in working capital and use of provisions |  |  | 131 |  |  |  | 538 |  |  |  | — |  |  |  | 2 113 |  |  |  | 12 |  |  |  | 7 591 |  |  |  | — |  |  |  | 10 385 |
Working capital and provisions |  |  | 7 |  |  |  | 809 |  |  |  | — |  |  |  | (705 | ) |  |  | (13 | ) |  |  | (1 822 | ) |  |  | (86 | ) |  |  | (1 810 | )
Cash generated from operations |  |  | 138 |  |  |  | 1 347 |  |  |  | — |  |  |  | 1 408 |  |  |  | (1 | ) |  |  | 5 769 |  |  |  | (86 | ) |  |  | 8 575 |
Interest paid, net |  |  | (385 | ) |  |  | (1 314 | ) |  |  | 13 |  |  |  | (174 | ) |  |  | (88 | ) |  |  | (251 | ) |  |  | 37 |  |  |  | (2 162 | )
Dividends received |  |  | 5 049 |  |  |  | — |  |  |  | — |  |  |  | 280 |  |  |  | — |  |  |  | 425 |  |  |  | (5 617 | ) |  |  | 137 |
Income tax paid |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | (294 | ) |  |  | (4 | ) |  |  | (1 668 | ) |  |  | — |  |  |  | (1 967 | )
Cash flow from operating activities on Australia discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 314 |  |  |  | — |  |  |  | 314 |
CASH FLOW FROM OPERATING ACTIVITIES |  |  | 4 802 |  |  |  | 33 |  |  |  | 12 |  |  |  | 1 220 |  |  |  | (93 | ) |  |  | 4 589 |  |  |  | (5 666 | ) |  |  | 4 897 |
INVESTING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acquisition of property, plant and equipment and of intangible assets |  |  | (88 | ) |  |  | — |  |  |  | — |  |  |  | (161 | ) |  |  | — |  |  |  | (1 461 | ) |  |  | — |  |  |  | (1 710 | )
Proceeds from sale of property, plant and equipment and of intangible assets |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 33 |  |  |  | — |  |  |  | 187 |  |  |  | — |  |  |  | 222 |
Acquisition of subsidiaries, net of cash |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | (340 | ) |  |  | — |  |  |  | (337 | )
Sale of subsidiaries, net of cash disposed of |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | — |  |  |  | 86 |  |  |  | — |  |  |  | 92 |
Net proceeds from sale/(acquisition) of other assets |  |  | 1 652 |  |  |  | (5 252 | ) |  |  | 8 079 |  |  |  | 6 092 |  |  |  | 8 487 |  |  |  | 19 845 |  |  |  | (38 909 | ) |  |  | (6 | )
Cash flow from investing activities on Australia discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (16 | ) |  |  | — |  |  |  | (16 | )
CASH FLOW FROM INVESTING ACTIVITIES |  |  | 1 566 |  |  |  | (5 252 | ) |  |  | 8 079 |  |  |  | 5 970 |  |  |  | 8 490 |  |  |  | 18 301 |  |  |  | (38 909 | ) |  |  | (1 755 | )
FINANCING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intra-group capital reimbursements |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (267 | ) |  |  | — |  |  |  | 267 |  |  |  | — |  |  |  | — |
Proceeds from borrowings |  |  | 3 237 |  |  |  | 17 820 |  |  |  | — |  |  |  | 5 184 |  |  |  | 2 179 |  |  |  | 916 |  |  |  | (7 324 | ) |  |  | 22 012 |
Payments on borrowings |  |  | (9 119 | ) |  |  | (12 569 | ) |  |  | (8 028 | ) |  |  | (11 977 | ) |  |  | (2 235 | ) |  |  | (22 996 | ) |  |  | 46 322 |  |  |  | (20 602 | )
Cash net finance (cost)/income other than interests |  |  | (274 | ) |  |  | (36 | ) |  |  | — |  |  |  | 66 |  |  |  | (34 | ) |  |  | (458 | ) |  |  | (45 | ) |  |  | (781 | )
Payment of lease liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (39 | ) |  |  | — |  |  |  | (186 | ) |  |  | — |  |  |  | (225 | )
Dividends paid |  |  | (2 266 | ) |  |  | — |  |  |  | — |  |  |  | (286 | ) |  |  | (5 049 | ) |  |  | (405 | ) |  |  | 5 617 |  |  |  | (2 389 | )
Cash flow from financing activities on Australia discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (13 | ) |  |  | — |  |  |  | (13 | )
CASH FLOW FROM FINANCING ACTIVITIES |  |  | (8 422 | ) |  |  | 5 215 |  |  |  | (8 028 | ) |  |  | (7 319 | ) |  |  | (5 139 | ) |  |  | (22 875 | ) |  |  | 44 570 |  |  |  | (1 998 | )
Net increase/(decrease) in cash and cash equivalents on continuing operations |  |  | (2 054 | ) |  |  | (4 | ) |  |  | 63 |  |  |  | (129 | ) |  |  | 3 258 |  |  |  | 15 |  |  |  | (5 | ) |  |  | 1 144 |
Cash and cash equivalents less bank overdrafts at beginning of year |  |  | (5 445 | ) |  |  | 4 |  |  |  | 29 |  |  |  | 583 |  |  |  | 3 486 |  |  |  | 8 303 |  |  |  | — |  |  |  | 6 960 |
Effect of exchange rate fluctuations |  |  | (121 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 126 |  |  |  | (40 | ) |  |  | 8 |  |  |  | (29 | )
Cash and cash equivalents less bank overdrafts at end of year |  |  | (7 620 | ) |  |  | 1 |  |  |  | 92 |  |  |  | 455 |  |  |  | 6 870 |  |  |  | 8 278 |  |  |  | 3 |  |  |  | 8 075 |

60

27. Events after the balance sheet date

On 7 July 2020, the company completed the tender offers of seven series of notes issued by Anheuser-Busch InBev NV/SA (ABISA), and Anheuser-Busch InBev Finance Inc. (ABIFI) and repurchased 3.0 billion US dollar aggregate principal amount of these notes. The total principal amount accepted in the tender offers is set out in the table below.

Date of redemption |  | Issuer (abbreviated) |  | Title of series of notes issued exchanged |  | Currency |  | Original principal amount outstanding (in million) |  |  | Principal amount redeemed (in million) |  |  | Principal amount not redeemed (in million) |
7 July 2020 |  | ABISA |  | 4.000% Notes due 2021 |  | EUR |  |  | 750 |  |  |  | 231 |  |  |  | 519 |
7 July 2020 |  | ABISA |  | 1.950% Notes due 2021 |  | EUR |  |  | 650 |  |  |  | 123 |  |  |  | 527 |
7 July 2020 |  | ABISA |  | 0.875% Notes due 2022 |  | EUR |  |  | 2 000 |  |  |  | 356 |  |  |  | 1 644 |
7 July 2020 |  | ABISA |  | 0.800% Notes due 2023 |  | EUR |  |  | 1 000 |  |  |  | 356 |  |  |  | 644 |
7 July 2020 |  | ABIFI |  | Floating Rate Notes due 2021 |  | USD |  |  | 311 |  |  |  | 129 |  |  |  | 182 |
7 July 2020 |  | ABIFI |  | 2.625% Notes due 2023 |  | USD |  |  | 643 |  |  |  | 167 |  |  |  | 476 |
7 July 2020 |  | ABIFI |  | 3.300% Notes due 2023 |  | USD |  |  | 2 799 |  |  |  | 1 467 |  |  |  | 1 332 |

On 13 July 2020, the company announced that its wholly-owned subsidiaries Anheuser-Busch InBev Worldwide Inc (ABIWW), Anheuser-Busch InBev Finance Inc. (ABIFI) and Anheuser-Busch North American Holding Corporation (“ABNA”) were exercising their options to redeem the outstanding principal amount indicated in the table below of the following series of notes.

Date of redemption |  | Issuer (abbreviated) |  | Title of series of notes issued exchanged |  | Currency |  | Original principal amount outstanding (in million) |  |  | Principal amount redeemed (in million) |
12 August 2020 |  | ABIWW |  | 2.500% Notes due 2022 |  | USD |  |  | 454 |  |  |  | 454 |
12 August 2020 |  | ABIWW |  | 4.375% Notes due 2021 |  | USD |  |  | 285 |  |  |  | 285 |
29 July 2020 |  | ABIWW |  | 3.250% Notes due 2022 |  | AUD |  |  | 550 |  |  |  | 550 |
12 August 2020 |  | ABIFI |  | 3.375% Notes due 2023 |  | CAD |  |  | 600 |  |  |  | 600 |
12 August 2020 |  | ABNA |  | 3.750% Notes due 2022 |  | USD |  |  | 150 |  |  |  | 150 |

61