Carlos Alves de Brito - Chief Executive Officer Luis Felipe Pedreira Dutra Leite - Chief Financial & Technology Officer.

Nik Oliver - UBS Ltd. (Broker) Sanjeet S. Aujla - Credit Suisse Securities (Europe) Ltd. Trevor Stirling - Sanford C. Bernstein Ltd. Brett Cooper - Consumer Edge Research LLC Chris M. Pitcher - Redburn (Europe) Ltd. Anthony Bucalo - HSBC Bank Plc (Broker) Caroline S. Levy - CLSA Americas LLC Edward B.

Mundy - Nomura International Plc Mark Swartzberg - Stifel, Nicolaus & Co., Inc. Raoul-Tristan van Strien - Deutsche Bank AG (Broker UK).

Welcome to the Anheuser-Busch InBev Full Year 2015 Earnings Conference Call and Webcast. Hosting the call today from AB InBev is Mr. Carlos Brito, Chief Executive Officer. To access the slides accompanying today's call, please visit AB InBev's website now at www.ab-inbev.com, and click on the Investors tab.

Today's webcast will be available for on-demand playback later today. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation.

Some of the information provided during the conference call may contain statements of future expectations and other forward-looking statements. These expectations are based on the management's current views and assumptions and involve known and unknown risks and uncertainty.

It is possible that the company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.

For a discussion of some of the risks and important factors that could affect the firm's future results, see Risk Factors in the company's latest Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 24, 2015.

AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information. It is now my pleasure to turn the floor over to Mr. Carlos Brito. Sir, you may begin..

Thank you, Jackie, and good morning, good afternoon, everyone, and welcome to our full year 2015 earnings call. As usual, let me start with the highlights. 2015 was a year of strong organic top line growth with particularly strong performance from our three global brands.

We continued to invest behind our brands in 2015 to drive long-term growth while still delivering solid EBITDA growth and margin enhancement. In late 2015, we also announced the proposed combination with SABMiller and so let me recap where we are with the transaction before continuing with the review of our results.

The proposed combination was announced on November 11 and included an agreement with Molson Coors on the disposal of SAB's Miller stake in MillerCoors, conditional on the closing of the main transaction.

In addition, in January we received a biding offer from Asahi for the purchase of certain SAB's European premium brands and their related businesses. We have also pre-funded approximately $47 billion off the purchase price through U.S.

dollar bond issuances which allowed us to partially cancel $42.5 billion of the $75 billion committed senior facilities. Integration planning is well underway but our focus is on obtaining the necessary regulatory clearances so that we can close the transaction in the second half of the year. Let's now look at the full year results in more detail.

Total revenue grew by 6.3% in 2015 with revenues from our global brands growing by 12.6%. Revenue per hectoliter grew by 7.7% on a constant geographic basis driven by our revenue management initiatives and strong growth from our premium brands. Total volumes were down 0.6% in the year with own beer marginally down and non-beer down 4.7%.

Volumes of Focus Brands grew by 0.4% while volumes of our global brands grew by 7.3%. EBITDA grew by 7.8% driven by the strong top line result with EBITDA margin expanding by 55 basis points to 38.6%.

Normalizing earnings per share decreased to $5.20 from $5.43 with good organic growth in EBITDA and lower net finance costs being offset by unfavorable currency translation. Finally, the board has proposed a final dividend of €2 per share for fiscal year 2015 bringing the total dividend for the year to €3.60, an increase of 20% over 2014.

We believe we have the strongest portfolio of brands in the industry with 19 brands each generating over $1 billion in retail sales per year.

Last year, our Focus Brands accounted for approximately two-thirds of our total volume and revenue including our global brands which accounted for around 18% of our volume, 22% of our revenue and well over a third of our revenue growth.

Our global brands are very complementary providing us with the opportunity to connect with a broad range of consumers across multiple geographies and consumption occasions. Last year, revenues of our global brands grew by 12.6% with volumes up 7.3%, well ahead of the growth of our total portfolio.

Budweiser revenues grew by 7.6% led by Brazil, China and Russia. Stella Artois revenues grew by 12.5% with great performances in the U.S., Argentina, Canada and Brazil.

And Corona delivered revenue growth of 23% driven by good results in Canada, Chile and the U.K., as well as the benefit of bringing the brand back into our own distribution network in a number of our markets. These are great results and show the benefit of consistent global messaging and marketing activation.

In order to continue to accelerate top line growth, we have developed a deep understanding of consumer's needs and occasions. These insights have enabled us to identify four commercial priorities, which are relevant across the whole of our business.

First, growing our global brands involves leveraging the potential of Budweiser, Stella Artois and Corona. Second, premiumizing and invigorating beer is all about creating excitement and aspiration in beer, especially with millennials by bringing new energy and variety to the beer experience.

Third, elevating the core is about raising the perception and relevance of our major core brands through differentiated messaging and large scale activations. And finally, developing the near beer segment gives us an opportunity to compete for a greater share of total alcohol.

These four commercial priorities are applicable in all of our markets, although depending on the attributes of each market, some of the priorities may be more relevant than others. You'll get a better understanding of this point when I take you through the results in our four top markets. So let's start with the U.S. U.S.

industry volume continued to improve. In 2015 we estimate industry sales to retailers, STRs, were marginally up in the fourth quarter and down only 30 bps in the full year. We expect industry volumes to continue to improve in 2016.

Our own STRs were down 1.7% in the year with our market share down approximately 65 basis points based on our estimates after an improvement in the trend in the last quarter. This is obviously not where we want to be. Growing the industry and stabilizing our market share remain our top priorities in the U.S.

Revenue per hectoliter grew by 1.6% in 2015, helped by a positive brand mix contribution from our Above Premium brands. EBITDA for the U.S. was down 4.3% in the year with EBITDA margin declining to 39.6% primarily driven by a high single-digit increase in sales and marketing investments during the year as we continue to invest for the long term.

We are also working more closely than ever with our wholesalers in an initiative which we're calling Winning Together. This was one of our major priorities last year and included collaborating with our wholesaler panel and on our three-year plan. We'll continue to build on the success to drive our relationship to a new level.

Given the sophistication of the market, it's not surprising that all four of the commercial priorities are relevant to our U.S. business. Growing our global brands means a deep focus on Stella Artois and Budweiser. Our craft portfolio as well as Stella Artois play key roles in premiumizing and invigorating beer.

Elevating our core brands of Bud Light, Budweiser and Michelob Ultra is our top priority in the U.S. while developing the near beer segment is important in growing our share of total alcohol. I now want to dig a little deeper into a couple of these topics starting with elevating the core.

Bud Light had a challenging year in terms of market share, in part due to a tough 2014 comparable when the brand benefited from the Whatever USA campaign, the FIFA World Cup and the rollout of the aluminum bottle.

In 2015 Bud Light STRs were down low single digits, leading to an estimated loss of total market share of approximately 40 basis points and some share loss in the Premium Light segment. Looking forward, we expect Bud Light to benefit from a refreshed visual brand identity in our Raise One to Right Now campaign, which debuted at the 2016 Super Bowl.

On the other hand, 2015 was a great year for Budweiser, with the brand delivering its best STR trend in more than a decade, driven by successful campaigns emphasizing the brand's quality and heritage credentials, supported by refreshed packaging. STRs declined by low single digits with total market share down approximately 20 bps during the year.

The Brewed the Hard Way campaign has struck a chord with many beer drinkers, and we continue that message through the Bud & Burgers summer campaign and more recently the 2016 Not Backing Down Super Bowl campaign. Last but not least, Michelob Ultra is on fire.

Ultra grew more than 15% in 2015 and gained more share than any other beer brand in the market, according to IRI. Ultra is a lifestyle brand, with powerful differentiators from the rest of the beer category.

Increased media pressure is paying off, and for the first time in five years we advertised Michelob Ultra at the Super Bowl with the brand's new 2016 platform, Brewed for Those Who Go the Extra Mile. Turning to premiumization and invigorating beer.

Stella Artois had another strong year delivering double-digit volume growth, while Goose Island IPA grew more than 150%. Shock Top had a more difficult year, but we have exciting plans in place for 2016.

All of our new craft partnerships are showing good growth trends and collectively grew double-digits in 2015, making an important contribution to our wholesalers' portfolios.

Moving on to Mexico, revenues grew by 11.1% in 2015 with beer revenue per hectoliter growing by 3.5% driven by our revenue management initiatives and the positive impact from our brand mix. Our team in Mexico delivered a strong finish to the year.

We had volumes up over 11% in the fourth quarter and more than 7% in the year, driven by a favorable macroeconomic environment and good performances by Corona, Bud Light and Victoria.

Market share was marginally up in the year, reaching a level of just over 58% driven by the strong performance of our Focus Brands, which now represent 90% of our total volumes. EBITDA grew by 18.2% with an EBITDA margin enhancement of over 300 basis points, reaching 50.8%.

By the end of 2015 we have delivered $940 million of cost synergies or 94% of our $1 billion synergy commitment. We expect to deliver the remaining $60 million to reach our commitment primarily during the first half of 2016. Growing our global brands in Mexico entails focus on Stella Artois, which is showing good growth from a small base.

Of course, Corona plays a very important role in Mexico, but just like Budweiser in the U.S., Corona is a core brand in its home market. Premiumizing and invigorating beer involves driving the Modelo brand's family and enhancing our premium portfolio with international and craft brands.

Elevating our core brands is key for Mexico with Corona and Victoria as well as Bud Light in the Core+ segment leading the way, while the Ritas are our primary focus for developing the near beer segment.

Looking at elevating the core in more detail, the Corona family had a great year as we continue to drive the brand's undisputed leadership in the core segment. Victoria volumes are also very strong in part due to the brand's new visual identity in the celebration of 150 years of Mexican heritage.

Finally, Bud Light had another amazing year on the back of a great activation particularly around NFL and Sensations, an electronic dance music platform. While elevating the core is our thought priority in Mexico, it is important that we also drive prioritization and aspiration in the beer category.

Michelob Ultra is playing an important role in this respect. It was introduced in 2014 and has been well received becoming our second largest premium brand by volume in 2015.

Craft in Mexico is growing rapidly and we have been supporting the development of this segment through our e-commerce platform as well as select acquisitions of craft brewers including Mexicali and Tijuana. We have also seen some great results from Beerhouse by Modelo and online retail sites carrying imported and domestic specialty beers.

Turning to Brazil, 2015 was a challenging year for Brazil but we are pleased with how we quickly adapted to the new market reality. Brazil revenue grew by 8% in the year with beer revenue per hectoliter up 11.7% benefiting from our revenue management initiatives increased own distribution and premium brand mix.

Our total volumes in Brazil decreased by 2.7% with beer volumes down 1.8% and soft drinks volumes down 5.2%. Our premium and near beer brands delivered good growth led by Budweiser, Stella Artois, Corona, Original, and Skol Beats Senses. EBITDA grew by 10.6% driven by solid top line growth with the margin increase of 128 bps leading to 53.6%.

We expect the macroeconomic environment in Brazil will remain challenging in 2016. We expect our own net revenues to grow organically by mid to high single digits after an expected weak first quarter due to a tough comparable.

In Brazil, all three of our global brands have an important role to play in accelerating the growth of premium and driving positive brand mix. We also play a critical role in premiumizing and invigorating beer in Brazil supported by our portfolio of domestic premium brands in our recently acquired craft brands, Wäls and Colorado.

Elevating the core is critically important in Brazil and it requires maintaining and improving the health of Skol, Brahma and Antarctica. Finally, we're very excited about the potential to shape the near beer segment in Brazil. One year after the launch of Skol Beats Senses in its iconic blue bottle, we added Skol Beats Spirit in a green bottle.

Skol Beats has become one of the strongest brands in our portfolio with very high preference among young adults. The near beer segment now represents 1% of our beer volumes in Brazil and is helping to increase our share of throat while driving incremental volume, revenue per hectoliter and margins.

Looking at a couple of these pillars in more detail, premium is growing quickly in Brazil and already represents 10% of our volume, with our global brands playing a key role. Budweiser leads the premium segment based on Nielsen data, while Stella Artois is positioned as the most aspirational beer in Brazil.

Corona is off to a good and terrific start let us say after its launch, and is generating huge consumer interests. Turning to elevating the core.

In 2015 Skol's Summer On campaign delivered great consumer experiences, including Carnival and other major summer events, helping the brand to finish 2015 as the most valuable Latin American brand across all categories based on The BrandZ annual report, an amazing achievement.

During the second half of 2015 we also launched Skol Ultra, a low calorie, light extension, further enhancing the Skol brand equity. Antarctica and Brahma also had campaigns around major events, including Antarctica's Samba event in Rio de Janeiro and Brahma Country Music Festivals in Sao Paulo.

Skol, Brahma, and Antarctica play a central role in Brazilian culture and will continue to deliver great experiences for consumers through summer festivals, carnival, music and sports, including the 2016 Rio Olympic Games. Moving onto China.

Continuing economic headwinds led to declining industry volumes of approximately 6% in 2015 with most of the impact being felt in the value and core segments.

However, our owned business, which is more focused on the Core+ and premium segments, performed much better than the industry with total volumes up 0.4% in the year and the combined volumes of our Core+, premium, and super premium brands growing by double digits.

We estimate that we gained approximately 100 basis points of market share on an organic basis, reaching a level of 18.6%. Our revenue grew by almost 10%, with revenue per hectoliter growing by 9.4%, driven mainly by brand mix. China EBITDA grew by 33.7% with margin expansion of over 400 basis points, leading to 22.6% margin.

Growing our global brands, premiumizing and invigorating beer and elevating the core are the most relevant of our commercial priorities in China. As we highlighted during Investor Seminar in Guangzhou in September, future growth in China is expected to come from the Core+, premium and super premium segments.

These segments now account for more than 50% of our total China volumes, and includes such strong brands as Harbin Ice, Budweiser, Stella Artois, Hoegaarden, and Corona. We also have strong core brands including Harbin in the northeast and Sedrin in the southeast, and protecting these strongholds is a priority.

In terms of growing our global brands, Budweiser is the leading brand in premium, delivering double-digit volume growth in 2015 in a challenging market environment and from an already large base.

We also see significant opportunity to develop the super premium segment, given the growth of urban centers and consumer interest in brands with authenticity. Our global brands, Corona and Stella Artois and our international brand Hoegaarden, are well positioned in this space.

In the core segments, Harbin, Sedrin and our other regional brands provide choice for our consumers, enabling us to compete in multiple channels, especially the traditional on trade. Harbin Ice is our flagship brand in the Core+ segment and now accounts for more than 30% of Harbin's volume.

Harbin Ice is the cool beer brand in China, bringing fun, young and energetic programs to our consumers. I'd now like to highlight a couple of important initiatives in our Better World agenda starting with our Smart Drinking Goals.

For more than 30 years we have invested in the promotion of responsible drinking, discouraging binge drinking, under-age drinking and drunk driving. With the launch of our New Global Smart Drinking Goals in 2015, we have deepened our commitment to reducing the harmful use of alcohol.

Our new goals aim to encourage consumers to make smart drinking choices and modify their behaviors with the introduction of no alcohol and lower alcohol beer products. One of our commitments, therefore, is to make 20% of our beer volume no alcohol or low alcohol by 2025.

Our order strategy focuses on stakeholder engagement to manage our water risks, invest in effective partnerships and ensure long-term sustainability of water supplies for our operations and for the communities in which we live and work. At 3.2 hectoliters of water per hectoliter produced, we became the most water efficient global brewer in 2015.

We're now ramping up our water stewardship efforts through initiatives such as the scaling up of our SmartBarley program and the improvement of the health of high-stress watersheds. We're also building awareness of the importance of clean water through the Stella Artois Buy a Lady a Drink campaign in partnership with Water.org.

With that, I'll hand it over to Felipe to talk about earnings, cash flow, and capital allocation.

Felipe?.

Hi, Brito. Hello, everyone. I will start with a summary of our normalized earnings per share performance in 2015 and then drill down into some of the more important line items. Normalized EPS declined by 4.2% to $5.20 per share in 2015.

As you can see from slide 30, the strong organic growth in EBITDA from our underlying business and lower net finance results were offset by unfavorable currency translation. Drilling down into some of the other line items and starting with EBITDA.

Brito has already covered our EBITDA performance in detail but slide 31 shows the contribution of each of our zones to the revenue and EBITDA performance in 2015. Each of our six geographic zones generated over $1 billion of EBITDA last year with a healthy balance between developed and developing markets.

In 2016, more than half of our revenues and EBITDA was generated in faster growing developing markets. Our total company EBITDA grew organically by 7.8% last year, with the majority of the growth coming from our developing markets, Brazil, Mexico, China and Latin America.

The North American zone remains our largest zone in terms of revenue EBITDA and cash flow generation, delivering almost $6.2 billion of EBITDA last year. The decrease in net finance costs to $1.2 billion included the reduction in net interest expenses of $168 million, mainly due to a lower average rate of interest.

In 2016 we expect the average rate of interest to be in the range to 3.5% to 4%, excluding the impact of the portfolio combination with SABMiller. In 2016 the net cost of the pre-funding of the SAB purchase price will be accounted in net interest expense as a recurring item and is expected to amount to approximately $400 million in the full quarter.

Other financial results included the net finance costs includes an $824 million of net gains linked to the hedging of our share based payment program compared to $711 million in 2014, as well as net foreign exchange gains of U.S. dollar cash balances held in Mexico. Moving to tax.

The normalized effective tax rate for the year was 19.1%, an increase from 18.8% in 2014. This increase is mainly due to changes in country profit mix partially offset by the favorable impact of the gain linked to the hedging of our share-based payment programs.

Our normalized effective tax rate is expected to be in the range of 22% to 24% in 2016 between 23% and 25% from the 2017 and 2018, and in the range of 25% to 27% thereafter.

This increase in the effective tax rate over time is driven by lower deductibility of goodwill amortization in Brazil, country profit mix, and the assumption of zero future gains or losses on the hedging of our share-based payment programs.

For the avoidance of doubt, our guidance on normalized effective rate excludes the impact of the proposed combination with SABMiller and the impact of the pre-funding of the purchase price for which no tax reduction is expected to be reported at this point.

Normalized EPS was impacted by unfavorable currency translation of $0.65 per share driven mainly by the Brazilian real, the Mexican peso and the euro. We take a long-term view of our markets and our focus on the organic growth of our business, accepting that currency volatility is part of doing business in a global company.

Our FX risk management policy includes the hedging strategy focused on our transactional exposures, principally cost of sales and we also continuously monitor our debt currency mix in light of ongoing developments in our core business and financial markets.

2015 was another year of robust cash flow generation despite significant currency headwinds with cash flow from operating activities of $14.1 billion and free cash flow as defined of $11.4 billion. Changes in working capital had a positive impact of $1 billion, of which more than 50% was driven by improvements in core working capital.

Core working capital consists of those elements of working capital which we consider are fundamental to the operation of the business.

It excludes certain items which management has little or no ability to influence, for example, payroll-related payables and accruals, and in 2016 we continue to drive improvements in core working capital, reaching an average level of negative 12.5% of net revenues. Moving to dividends.

The board is proposing subject to shareholder approval a final dividend of €2 per share, which combined with the interim dividend of €1.6 per share paid in November last year would lead to a total dividend payment for fiscal year 2015 of €3.6 per share.

Finally, before closing, I would like to confirm that our capital allocation objectives remain unchanged, and will not change following the closing of the proposed combination with SAB. Our first priority will always be to invest behind our brands and to take full advantage of the organic growth opportunities in our business.

M&A remains a core competency, and we will always be ready to look at opportunities when and if they arise, provided that the target, deal structure, and price make sense.

We recognize the value of growing dividends over time consistent with the low volatility of a non-cyclical business, and our goal is to reach a dividend yield of between 3% to 4%, in line with other consumer goods companies.

Our optimal capital structure remains at a net debt to EBITDA ratio of around 2 times, and at this level the return of cash to shareholders is expected to consist of both dividends and share buybacks. And with that I will hand over back to Jackie to begin the Q&A session. Thank you..

The floor is now open to questions. Our first question comes from the line of Nik Oliver with UBS..

Thanks for the questions. Can I please start with you craft strategy in the U.S.? You highlighted the continued double-digit growth. I'm just interested in one, how many craft brands you think you can support on the portfolio? What percentage of U.S. volumes craft actually can become over time? And whether you see any of those U.S.

brands having potential to travel internationally?.

Hi, Nik. Brito here. Craft is a growing segment in the U.S. That goes without saying. It's also very profitable. That's why we felt we had to reinforce our portfolio with a couple of craft brands from different regions. I think it's only fair to offer to our wholesalers and to our consumers an option in that segment as well.

The segment is growing, and it's profitable. So for sure some of those have a global potential, but even before global potential let's talk about the national potential. Craft is in itself a very local or regional play. But many crafts have become national crafts. And in our portfolio Goose IPA that grew 150% in 2015.

It's showing that there are consumers out there that, yes, will consider a national craft. So now the next question is what about consumers, the global consumers, will they consider a national or international or global craft? We think the answer is yes, and we have thoughts around this..

Great. Thanks a lot. And just as a quick follow-up, I see in the guidance you mentioned that you expect the U.S. market to improve overall.

Do you expect ABI to do a better performance in volume terms overall as well, either in terms of a lower volume decline or just sequential improvement?.

Yeah, I mean our guidance comes from the fact that the trends in the U.S. industry development every year has been getting better and better. So last year, if I'm not mistaken, was 0.6%. This year was 0.3% negative. But last quarter was 0.15% positive. Of course, the weather helped 0.15% positive percentage points.

So we think the economy continues to create jobs, that's important. Gas prices are down, so, and the trend is positive. So there's momentum there and we think that's the outlook we have for the industry.

We will continue to try to not only help the industry grow or come back to growth, but also balance our market share, but doing it in a way that makes sense for the long term, and that's why we're investing ahead of the curve and investing ahead of top line growth in the U.S.

Because we believe that there is lots of great opportunities to build an even better business for the future..

Okay. Thanks very much..

Thanks, Nik..

Our next question comes from the line of Sanjeet Aujla with Credit Suisse..

Hi. A couple questions, please. Firstly, on your outlook for China, one of your competitors has given a bit more positive outlook expected, and stabilization.

Can you just talk about the current dynamics and why you seem to differ in your view? Secondly, just on your outlook for sales and marketing investments, particularly with regard to the U.S., can you just give us a sense of where the priorities are, what are the big activations, and do you commit to improving your market share performance in 2016 there? Thanks..

Hi, Sanjeet. In terms of China what we said in our outlook is that we expect industry volumes to remain under pressure in 2016. But we expect our volumes to perform better than the industry, as we've had the last few years, driven by the fact that we're heavily skewed towards premium and super premium brands.

So industry in China was 6% down in the year, in last year. But as we said in our Investor Meeting in China, China is not about averages. Averages can be misleading. And if you look at 2015, the segments, super premium grew by 18%. That's our own – that's the (36:47). Premium grew by 9%. Core+ grew by 3.8%. Core and value declined by 10.8%.

And that gives the 5.8% or 6% down from the industry in the fiscal year.

And because more than half of our volume today and growing very different from the market is in Core+, premium, super premium, that's why we've been able to gain share and increase the profitability, grow EBITDA by 33%, top line by double digits, even in an industry where volumes are down by 6%.

So we think that the blue collar consumer is under pressure, not the service sector type consumer, that's why in our opinion value and core segments are down. But Core+, premium, super premium are up, and we're very happy to see that our business is more skewed towards those segments that are growing. So let's go where the growth is. So that's China.

In terms of the U.S., sorry, could you repeat? Did you ask about market share?.

Yeah. It was just really what are your priorities on sales and marketing investments in the U.S.? And whether you can commit to a better market share performance in that market? Or when do you expect to get close to stabilization in market share in the U.S.? Thanks..

Well, what we know about the U.S. is that some things are working, very important things. Some others are also very important are not yet there. So for example, Budweiser is negative yet – but it's still negative, but had its best year in decades.

Michelob Ultra, the biggest brand in terms of share gain in the U.S., a big brand, Stella Artois double-digits growth, Goose Island and (38:39) gaining, craft gaining. Bud Light has performed better. The Rita family has performed better.

But what we do in the U.S., because we're in this business for the long run, is that because now we have a portfolio that we feel that we have some winners, we're not only trying to fix the gaps we have, but we're also trying to feed the winners. And I think one of the things that gave me comfort on the direction we're proceeding in the U.S.

is the number that's not public to you, which is U.S. gross profit. But I can give you the deltas. Since 2012 we have increased our gross profit margin by 1 percentage point from 2012 to 2013, another percentage point from 2013 to 2014, and by 0.8 percentage point last year. So for me, that tells me that the mix is going in the right direction.

The EBITDA is not having the same dynamic because we are investing ahead of the curve because there's a mix shift in the U.S. and as a market leader, we would like to continue to support the current segments in which we're strong but also build our participation on the new emerging segments.

So we have a little bit of an overlap there in terms of marketing investment but that's for a better future in which we have a more balanced portfolio. So gross profit gives me the perception or the idea or the certainty that we're moving in the right direction..

Thanks. And just a quick follow-up on dividends.

The payout ratio moving up to 76%, are you able to or do you feel confident in being able to maintain that payout ratio going forward?.

Our dividend policy has never changed and it was never based on payout ratio. It's much more based on yields between 3% and 4% in growing dividends. And I think that's where we are right now. We are between 3% and 4% depending on the share price you get.

And I think we're doing that because if you look at our cash flow from operating activities, despite global currencies and despite everything, despite as we invest more in (40:51) marketing and all that, we generated the same $14.1 billion that we've generated last year, 2014.

So in 2014 we generated cash flow from operating activities $4.144 (sic) [14.144] (41:02) billion and in 2015 we generated $14.121 billion, so $14.1 billion. So we're able with our discipline and focus on financial metrics and execution to generate the same cash flow despite investing more in market and continue to grow dividends..

Great. Thanks..

Thanks, Sanjeet..

Our next question comes from the line of Trevor Stirling with Bernstein..

Good morning, Brito and Felipe.

First question from my side in terms of Bud Light, can you give us a bit more color on what the plans are on Bud Light? And what gives you the confidence that the Wieden & Kennedy work is going to succeed where the previous agencies didn't really deliver what you wanted?.

Yeah. That's a very good point. I mean Bud Light is the one that really we need to get to a better place because we have lots of things working in the U.S. Bud Light if it can stabilize the brand before it even grows it could be a big plus.

So Bud Light, for example, now let me talk about Super Bowl because if I had some questions around that today during media interview and all. So on the Super Bowl, we kicked off our new campaign and we have very positive consumer feedback.

Not only have we had millions of impressions and earned media, social mentions and all that, but more importantly in several brand measures like purchase intents helps me make a good impression, brings people together. I like the direction the brand is moving. There were significantly – statistically significant increases.

And in terms of the Ace Score, which is a score that lots of companies to measure effectiveness of media, it was the highest score we've achieved for total Anheuser-Busch in the past three years, where beer drinkers age is 21 to 35, even more than the last from Budweiser from last year's Super Bowl. So again, this is only a piece of the puzzle.

I think the other exciting thing about Bud Light, the whole thing about the visual identity that we're going to change beginning now in April.

I think it will bring back some of the things that made Bud Light an 18%, 19% share brand in the U.S., like quality and heritage cues and things that we're missing in the last, back, that has been there for eight years now. I think it was time for a refresh. Wieden & Kennedy is an amazing creative agency.

They are one of the few ones that are truly independent and they have really people that challenge you, that bring new ideas. And that's what we think for a brand like Budweiser that has always been creating culture in terms of being funny but smart funny and we want to go back to that. It really made the brand big, and they get that.

They understand that. Of course, the campaign is not going to turn the brand on a dime or overnight, but Wieden & Kennedy is an agency that we have been looking at and trying to get on our side for a long time and finally they are – again, they are not going to make any miracles but we're very happy in working together with them with Bud Light.

So we're very hopeful that this is a beginning of a new future with Bud Light..

Thank you, Brito. And my follow-up question is concerning Brazil.

Can you tell us what the outlook is for excise taxes in Brazil with a government budget balances that must be under a lot of pressure?.

Well, yeah, I mean, Brazil is having a tough time, I mean they had a tough time in 2015. We're saying it's going to be a tough year in 2016. In terms of excise for beer, there was a new model that was approved last year, and there's already a tax increase scheduled for 2016, 2017 and 2018.

So we already had a change so we continue to think that in terms of federal excise because the model has just changed, we would like to think and we're talking to the government all the time, that it makes sense to keep it this way.

Because again, we're continuing to invest in the Brazil economy, continue to create jobs and consumers are already under pressure and we already gave our fair share to look at the taxation for Brazilian beer. That's one of the highest in the world. So I think we already paid of our fair share.

And the different thing in Brazil of course is that each state of the 27 states have their own excise, not excise but value added tax as well and some states like Sao Paulo have already increased. That's an important state.

Some others increased but much less than they had previously announced so that was good and so but that's going to be -you have to be vigilant and talking to them and trying to demonstrate that if it's all about tax collection, not about tax rate, they should look at the overall picture, not just about – not only about the tax rate.

And I think the governments in Brazil understand that, but again, it's going to be a tough year in Brazil. We're not predicting. We're not trying to predict anything. We're just saying we're very active in that front..

Thank you very much, Brito..

Thank you, Trevor..

Our next question comes from the line of Brett Cooper with Consumer Edge Research..

Good morning, guys. A quick question on the U.S. We've seen in the past some of your efforts whether it's Budweiser, Bud Light, the near beer or craft. Some succeed, some fail in any given year.

What gives you the confidence that this year you can sort of manage all of those so that we can continue to see improvement in Budweiser while you improve the trend of Bud Light as an example? Thanks..

Brett your voice is a bit muffled. I don't know exactly. Can you repeat the question? Maybe you're too close to the mic. I don't know what's going on..

Sure. My question is with respect to all the efforts in the U.S. and we've seen in the past when you succeed in certain areas, say the improvement in Budweiser, you seem to fall off in places like Bud Light.

So what changes in 2016 or what gives you confidence that you can get all parts of the portfolio moving in the right direction?.

I think one thing that's different about 2016 is that we have more clarity in our priorities and we have – we're working more closely with the wholesalers. I think that makes a big difference. So João, our new zone president there, has put a lot of emphasis in working with our partners, our wholesalers.

The wholesalers, they're an amazing asset in the marketplace. They have an amazing penetration in the market and João has been doing a lot of the planning including parts of the three-year plan in terms of route to market with the wholesaler panel. So I think that's a big difference as well.

And in terms of Budweiser, we'll continue with the voice of the brand. And then the brand struck a chord with consumers in terms of the Brewed the Hard Way.

Interestingly enough, on the Super Bowl, last Super Bowl, Super Bowl 50, the drunk-drive message or the Simply Put ads of Budweiser was the highest scoring ad from all the ads we had in Super Bowl. And again, we'll scale on successful programs like Bud & Burgers that proved to be very effective during the summer.

And Bud Light, again, I just answered the prior question, you have new visual identity, new campaign, new agency, and so we're very excited about it. And the debut of this new container was during the Super Bowl. So these two brands are of course our bread and butter, but the high end is growing very fast.

And Michelob Ultra is a Core+, but also Stella, Goose Island and the other craft. So these are the things we need to get working at the same time. There's a lot of things working together now. We just need to add Bud Light to that group..

Great. Thank you..

Thank you, Brett..

Our next question comes from the line of Chris Pitcher with Redburn..

Yeah. Good afternoon. It was a question on your field sales and marketing outlook for this year, Brito. You're talking about a high-single, low double-digit increase, which is $600 million to $800 million, that sort of range.

Should we expect a disproportionate amount of that to be going into the United States? And can you give us a feel for how you're monitoring the effectiveness at that? If in two years the market share gains haven't improved, do you feel like you're over-investing, or do you think this rate of investment now in the U.S.

is the new normal for competing as people become more brand focused and portfolios become more fragmented?.

I think, Chris, you've known us for a long time. I mean, you know we're about metrics and we measure everything in the business. So we gave the guidance of high single- to low double-digits in terms of sales and marketing. We're doing that because we believe that there are opportunities that we should not pass.

And in terms of crisis in some countries, that's when we feel even more excited about investing, because that's when competition normally takes the foot off the pedal.

And in our history we've seen many times when we've either penetrated or acquired businesses during tough times in some countries where everybody was exiting, or whether – or when we press the pedal harder when everybody was taking their foot off the accelerator.

And in terms of the U.S., again, as I was saying a couple questions before, what gives me the certainty that we are in the right direction is that when I look at the U.S. gross profit, a number that you don't have access to unless you go to the AmBev, you take Canada you can get there. But U.S.

gross profit has been expanding by 1 percentage point every year since 2012. And so for me that tells me that the fourth quarter is getting more premium, that consumers are paying more for beers. It also tell us that we're in that point where I'm not taking money from the base.

I'm adding money to get the momentum going on some new emerging segments that of course will not be there forever to get some critical mass and some momentum. Interesting also to say, it's in our press release, that the guidance for sales and marketing, high single to low single digits, is weighted more towards the first half of the year.

So that's important, just not to forget. But again, we're very excited about the opportunities we see. We're in a kind of business, Chris, that it's still in many respects, in many brands, many countries still far away from saturation point. Therefore, the more we invest, the more we get on top line.

And sometimes, yes, we invest a little bit ahead of the curve, because we look at long term as well. So I mean we're trying to do the long term as well as managing the short term. So the U.S. is no different.

It is our main market in terms of dollar cash flow, very important, and we'll continue to invest behind it as well as other markets in our global brands..

Thank you. I've got a slightly tangential follow-up question. Obviously, you're helping fund all these investments through some excellent working capital improvements. If you look at the AmBev level, there was a significant improvement on payables.

Could you give us a bit of a feel for what's going on there, Felipe? And then when you're in China, you said that China was at 45% of sales working capital. Is it still around that sort of level and the rest of the business is starting to catch up? I'm just trying to get a bit more of a feel there. Thank you..

Well....

(53:00) ....

Okay. Go ahead, Felipe. Sorry..

Chris, China continues to lead the way, which is a good source of inspiration and benchmark for the other zones. Other zones are catching really fast, Europe, so on and so forth. Americas, it's – are more on the bottom of the pack but also progressing quickly, and Brazil is in that pace as well. So we continue to see room for overall progress.

Last year we reached the negative 12.1%. As you know, we are always raising the bar and aiming for higher, and we believe there's still room for growth..

Thank you..

Our next question comes from the line of Anthony Bucalo with HSBC..

Brito, on U.S.

wholesaling, where are we in terms of the evolution on wholesaler consolidation, or branch strategy, or exclusivity strategy? Have there been any sort of major changes in strategy or in approach over the last year or so?.

Hi, Tony. No. What we said is that WOD is something that we like to have some. Today our volumes are around 8% done through WODs. We think it serves the purpose of getting our people closer to the marketplace and also being able to train our people closer to the retailers and the trade in general.

I think that's good not only because it gets us to get to know the market better, our competition better but also in the dialogue with the wholesalers, makes it more effective a dialogue because we know the reality they face every day. We've been operating WODs for more than 15 years and we feel totally – we feel that's part of our business.

We also feel that it's totally in line with our support of the three-tier system. What João Castro Neves is doing in the U.S.

now is trying to work much closer with the wholesalers in terms of planning of our road to market and activities in terms of the next year, the next three years and the Winning Together program that he put in place or mindset we think is working very well. So I think that's a change if you will. Other than that, I mean, it's business as usual.

So we expect that we provide them a great portfolio of brands. We expect them to build brands with us and then we compete effectively in the marketplace. So no change there..

Okay.

What about exclusivity, Brito? Anything there? Anything changing there at all?.

No. I mean we've had about this program VAIP, Voluntary Alignment Incentive Program that has been in place for 15 years. We just came with the new version. Like any program from time to time, you revamp it, you renew it but it's the basic program that has been there for 15 years. And it's just – and then the name says it's a voluntary program..

Okay. Just one quick follow-up, Brito. On Bud Light sort of following up to Trevor's question, I think the positives of Bud Light are pretty obvious but when you're talking to your consumer, I mean Bud Light market share slippage has now been going on for a few years.

I mean what is the challenge for consumers? Why is the brand losing market share and what key do you need to unlock to sort of get that back on track?.

Well, first, I think in a market as fragmented as the U.S. to have a brand with 18%, 19% market share is already an amazing thing in itself. On the other hand, I mean people want to grow. Of course they all target the big guy with the most of the shares. So that's one thing.

I think the second thing is that for a number of years, the past few years, we have not afforded the brand. We have not given the brand to support an 18%, 19% share brand in the U.S. market, fragmented U.S. and competitive fragmented U.S. market deserves and I think now we're beginning to rebuild that.

So for example, Budweiser has always been very connected to culture and fun in a smart way. At some point it becomes fun, but maybe in a more not so smart way.

So we're trying to recover that because when we go back and see what made the brand what it is today, we're trying to recover not only the packaging and cues and communication, trying to recover a little bit of the, let's say, the founders' spirit of the brand of 20-plus years ago. So I think that's what's happening.

And we're very hopeful now in April we're going to have a new visual identity, new campaign. It's just the first step, it was introduced in the Super Bowl. We had some very interesting comments from consumers, I just said, it was the highest ranking ad we've had in many years for total AB Company. So again, – and we're working with a great agency.

So I think it's all good. And now we need to make it happen..

Okay. Thank you..

Thanks, Tony..

Our next question comes from the line of Caroline Levy with CLSA..

Hello?.

Caroline, your line is open..

Hi.

Can you hear me?.

Yes. Yes. Go ahead, Caroline.

Hello?.

Her question has been....

Jackie , maybe....

Her question has been withdrawn. Our next question comes from Edward Mundy with Nomura..

Edward. Okay..

Good morning, everyone. Hi. Good morning, everyone. Since the announcement of the proposed combination with SAB, you've had three months to work on integration planning.

Given the increasingly touch macro in many of SAB's core markets, are you more or less excited about the combination and the opportunity for value creation?.

I'm more excited, because first the results organically have been better. Second, I've had chance through the integration planning to get to know a bit more of their markets, of course within the rules of what's allowed to be shared. I've met some of their people through the integration planning.

And I'm more excited, because first, the results are better. Second, they are in very interesting markets, growth markets. They have some very strong brands, some great people that are in that. And currency is something that will be happening with the deal or without the deal.

Of course it bothers you in the short term, but in the long term currency is the same way – they go, they come. And we come from Brazil, many of us Latin America, and we are in a way used to it.

And again, if you look at last year cash flow from operating activity, even with all currencies and everything, more CapEx investment, more marketing investments, we delivered the same cash flow from operating activity of $14.1 billion. So we try to be disciplined. We try to find money in non-working ways or non-working monies to put to work.

And so I'm more excited now than I was before..

And as you look at the synergy opportunity of $1.4 billion, I mean, that's on a subsidiary revenue base of $16 billion. You just delivered $1 billion on a revenue base of $4 billion from Modelo.

Are you still confident that $1.4 billion is the right number?.

Yeah. $1.4 billion is the number that we have up here, the number we committed, and that's the number we have. Yes..

Thanks.

And as a follow-up, just coming back to the dividend question again, could you comment on how you plan to balance deleveraging post-the combination of SAB and your aspiration for a dividend yield of 3% to 4%?.

Well, we said from when we announced the transaction that the dividend policy would be kept, and that was one of targeting yield between 3% and 4%, growing dividend, and we're very disciplined in terms of our messages, and that's what we intend to do..

Great. Thank you..

Thank you..

Our next question comes from the line of Mark Swartzberg from Stifel Nicolaus..

Yes. Thanks. Good morning, Brito. Hi, Felipe..

Morning, Mark..

First question on n Brazil, Brito, is, I think your market share is down, approaching 100 bps, calendar 2015 on calendar 2014. And I know 2015 was a year focused on profitability. But even sequentially you had an improvement in the third quarter and I think that reversed in the fourth quarter.

So, could you just speak a little bit about how enduring this share erosion is, what brand you think it is particularly an issue for? And then, this is very secondhand, I don't know that it is worth much of a response from you, but it seems that there may be an issue with ingredients in corn, that is an issue among some consumers of some of your brands down there more recently.

So, if that is relevant to the larger topic? That would be great..

No. Our market share in the year was 67.5% according to Nielsen. That's within our 67% to 69%. And as you said, last year was a year of margins and profitabilities. So nothing strange in having the share more towards the bottom of the range. We've had this range now for, I don't know, over 15 years, and it's always the same story.

I mean we bounce back when we get to say 67.5%. We go to 69% and come back, and that's pretty much how we operate, always trying to balance market share, profitability, tax increases, also inflation. All the things that we have to balance in Brazil, especially when the inflation's up and the country is going through a tough economic situation.

So I don't see any issues there. I don't think this thing of corn or anything has anything to do with it. I think this is chatter. If you look at the health of our brands in Brazil, they're doing very well. If you look at Skol, our number one brand there had an amazing year.

If you look at our premium brands they had also an amazing year, including the global brands. So I don't see anything in terms of the health of the brands that would say anything other than we are very strong, and this market share is based not only on the execution but also on consumers pooling and electing our brands.

But having said that, market share does come up and down depending on the year, depending on the quarter, yes..

Okay, great. Felipe, you mentioned understandably that your tax rate guidance doesn't have any effect for the SAB transaction. But you also mentioned this topic of deductibility of a portion of the purchase price.

If that is something you are ultimately going to get – and I realize you are evaluating that – is it reasonable to expect you'd communicate on that simultaneous with closing on the transaction? A quarter or so after closing on the transition? I'm just trying to get a sense of when we might get clarity on your expectations on that topic..

Yeah, I believe when we get closer to the closing of that transaction we should have a much better view and then moving to some sort of guidance that is taking into account the combined company. For now we conservatively prefer not to assume any deductibility on this pre-funding $400 million cost.

But we continue to work on it and continue to work with our SAB colleagues while planning for the integration for when and if we have – and we will get the regulatory approval. So closing is expected for the second half of the year so at that point, yes, we hope to be able to share with the market more colors on this front..

Fair enough. Great. Thank you, gentlemen..

You're welcome..

You're welcome..

We have time for one additional question. Our final question comes from Tristan van Strien with Deutsche Bank..

Hi, good morning, Felipe. Good afternoon, Brito. First, as a follow-up on Chris's cash flow question earlier, your working capital had a nice $1 billion swing in your favor, which seems to be related to the timings of your capital expenditures, the tables of those.

So, since this is a timing issue, is that something you expect to reverse next year, or is that something you keep hold on when we look at your working capital next year? And then, actually, my question was more on Mexico.

When I back out your synergies this year and the last quarter, I can see contraction of both your margin as well as your EBITDA despite a very strong organic revenue line.

So, when we think about next year, the higher sales and marketing costs you had this year, as well as the transactional FX impact you had this year, should we expect the same next year when we don't have these synergies anymore? Thanks..

So in terms of the working capital, we've been on this journey, as Felipe always says, since – I don't know – 10 years now or 9 years. And in the last few years we've been capturing $1 billion, $1 billion-plus per year in terms of change in working capital. So I think that continues to trend.

As Felipe has said, we're getting closer to that 15% that we have as target. So I don't think there's anything there that's – it was a better year of course we had to get more disciplined because we wanted to continue with our activities despite the currency so maybe we look for more opportunities in a more intense way.

In Mexico what's happening that you have also think about, and your second question, is that Bud Light is on fire and a lot of it because of lack of capacity in Mexico. Remember, we're building a new brewery in the Yucatan Peninsula for 5 million hectoliters. So we're bringing Bud Light from the U.S., a lot of it. That's impacted our costs.

There is also still some marketing to fuel the brand growth. And the EBITDA growth from the numbers I have here was 368 bps, stages was 210 bps (68:17).

So there was a EBITDA growth of 158 bps despite the logistics costs of Bud Light and despite some capacity constraints in Mexico that is forcing us to transport product from different breweries far away to make up for the fact that we don't have the capacity we need in Mexico and the fact that it's not always possible to predict 100% of what the market demand will be for different packs.

So I think in next quarters we get that capacity in line, the profitability should take care of that..

Just a follow-up on Bud Light in Mexico then.

Once you start getting more into local production, you'll be looking more returnables? Or just Bud Light remain a one-way pack in that market?.

So you have both. You have both..

Both..

It started as a one-way pack. Now in the north of the country, you already have the returnable..

Thank you very much..

Thank you..

Thank you..

Well, Jackie, I think that's it. Let me just say a couple words here. So, once again, thank you for joining the call today. 2015 was a strong year in terms of top line and EBITDA growth despite the challenging macroeconomic environment in a number of our markets, particularly Brazil and China.

Currencies also posed a challenge but discipline and attention to detail helped us to deliver another robust cash flow result. Our number priority will always be the organic growth of the business and especially top line growth.

But we're also very excited about the proposed combination with SAB and are working hard to close the transaction in the second half this year. So I look forward to talking to you again in early May when we report first quarter results. Thank you and have a great rest of the day. Thank you. Bye..

Thank you. This does conclude today's teleconference and webcast. Please disconnect your lines at this time and have a wonderful day..