OPERATOR: URGENT — READ THE COMMENT NOW!!! And don’t mess with the Delay Codes! UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F/A (Amendment No. 1) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 1999 Commission file number 1-14630 COMPANHIA CERVEJARIA BRAHMA (Exact name of Registrant as specified in its charter) BRAHMA BREWING COMPANY (Translation of registrant’s name into English) Federative Republic of Brazil (Jurisdiction of incorporation or organization) Avenida Maria Coelho Aguiar, 215, Bloco F, 6/ andar 05804-900 São Paulo, SP, Brazil Telephone (55-11) 3741-7000 (Address of principal executive offices) Securities registered or to b e registered p ursuant to Section 12(b ) of the Act. Name of each exchange Title of each class on which registered Preferred shares, no par value per share, each New York Stock Exchange represented by American Depositary Shares Common shares, no par value per share, each New York Stock Exchange represented by American Depositary Shares Securities registered or to b e registered p ursuant to Section 12(g) of the Act. None (Title of Class) Securities for which there is a rep orting obligation pursuant to Section 15(d) of the A ct. None (Title of Class) Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. 4,287,944,559 Preferred shares, no par value per share 2,635,679,468 Common shares, no par value per share Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X Indicate by check mark which financial statement item the Registrant has elected to follow. Item 17 Item 18 X [NYCorp;109717 7.2:4739A:07/05/00–4:48p] TABLE OF CONTENTS Page Introduction ................................................. 1 PART I Item 1 Description of Business ........................................ 4 Item 2 Description of Property ........................................ 55 Item 3 Legal Proceedings ............................................ 58 Item 4 Control of Registrant .......................................... 62 Item 5 Nature of Trading Market ...................................... 64 Item 6 Exchange Controls and Other Limitations Affecting Security Holders ... 69 Item 7 Taxation .................................................... 70 Item 8 Selected Financial Data ........................................ 77 Item 9 Management’s Discussion and Analysis of Financial Condition and Results of Operations ...................................... 83 Item 9A Quantitative and Qualitative Disclosures About Market Risk .......... 135 Item 10 Directors and Officers of Registrant .............................. 140 Item 11 Compensation of Directors and Officers ........................... 142 Item 12 Options to Purchase Securities from Registrant or Subsidiaries ......... 143 Item 13 Interest of Management in Certain Transactions ..................... 144 PART II Item 14 Description of Securities to be Registered .......................... 144 PART III Item 15 Defaults upon Senior Securities .................................. 144 Item 16 Changes in Securities and Changes in Security for Registered Securities ................................................ 144 PART IV Item 17 Financial Statements .......................................... 144 Item 18 Financial Statements .......................................... 145 Item 19 Financial Statements and Exhibits ................................ 145 [NYCorp;109717 7.2:4739A:07/05/00–4:48p] INTRODUCTION All references in this annual report to “Registrant”, “Brahma” or “we” are references to Companhia Cervejaria Brahma and its consolidated subsidiaries. Presentation of Brahma’s Form 20-F On July 1, 1999, the Registrant, Companhia Cervejaria Brahma (Brahma), announced a proposed business combination with Companhia Antarctica Paulista Indústria Brasileira de Bebidas e Conexos (Antarctica). The proposed combination involves the formation of Companhia de Bebidas das Américas - AmBev (AmBev), a holding company that would have Brahma and Antarctica as wholly owned subsidiaries. As a result of the proposed combination of Brahma and Antarctica and the formation of AmBev, Brahma’s annual report on Form 20-F contains information about Antarctica. See the description of the combination in “Item 1.—Description of Business—Brahma—Combination of Brahma and Antarctica and the Formation of AmBev”. Currency Presentation and Exchange Rates In this annual report, references to “U.S. dollar”, “U.S. dollars” or “US$” are to United States dollars and references to “real” (singular), “reais” (plural) or “R$” are to the Brazilian legal currency. Unless otherwise stated, or unless the context otherwise requires or implies, all information presented in U.S. dollars in this annual report has been translated at a rate of R$1.7473 to US$1.00, which was the commercial market rate for the purchase of U.S. dollars in effect on March 31, 2000, as disclosed by the Central Bank of Brazil (Central Bank). The commercial market rate on May 31, 2000 was R$1.8266 to US$1.00. The U.S. dollar equivalent information presented in this annual report is provided solely for the convenience of the readers of this annual report and should not be construed as implying that the Brazilian currency amounts represent, or could have been or could be converted into, U.S. dollars at such rates or at any rate. There are two principal legal foreign exchange markets in Brazil: the commercial market and the floating market. The commercial market is reserved primarily for foreign trade transactions and transactions that generally require prior approval from the Central Bank, such as payments of and with respect to debt instruments, the purchase and sale of registered investments by foreign persons and related remittances of funds abroad. Exchanges of foreign currency in the commercial market may be carried out only through Brazilian banks authorized by the Central Bank to buy and sell currency in that market. The floating market applies to specified transactions that do not require Central Bank’s express prior approval. Prior to the implementation of the Real Plan in 1994, the commercial market rate and the floating market rate differed significantly at times. Since the introduction of the real, the two rates have not differed significantly, and effective as of February 1, 1999, the Central Bank has unified the two legal exchange rates, while maintaining the regulation for each of the commercial and floating markets. There can be no assurance that there will not be further changes in the applicable regulations, which may result in future significant differences between the two rates. Both the commercial market and floating market rates are freely negotiated but may be influenced by the Central Bank. On July 1, 1994, the real replaced the cruzeiro real as the unit of Brazilian currency, with each real being equal to 2,750 cruzeiros reais. The issuance of reais was initially subject to quantitative limits backed by a corresponding amount of U.S. dollars in reserves, but the Brazilian federal government subsequently expanded those quantitative limits and allowed the real to float, with parity between the [NYCorp;109717 7.2:4739A:07/05/00–4:48p] real and the U.S. dollar (R$1.00 to US$1.00) as a ceiling. On March 6, 1995, the Central Bank announced that it would intervene in the market and buy or sell U.S. dollars, and establish a band within which the real/U.S. dollar exchange rate could fluctuate. The Central Bank initially set the band with a floor of R$0.86 per US$1.00 and a ceiling of R$0.90 per US$1.00 and has reset the band on several occasions. In 1998, for example, the prevailing Central Bank trading band was between R$1.12 and R$1.22 per US$1.00. On January 13, 1999, the Brazilian government expanded the trading band for the real against the U.S. dollar. The trading band was set between R$1.20 and R$1.32 per US$1.00. The real immediately depreciated approximately 8% against the U.S. dollar. On January 15, 1999, the Central Bank temporarily let the exchange rate float freely, a policy Brazilian financial authorities adopted on January 18, 1999. Between late January and mid-March 1999, the real exchange rates were very volatile, reaching the rate of R$2.16 per US$1.00 on March 3, 1999. Since then, the real first appreciated and then gradually depreciated against the U.S. dollar and, as of December 31, 1999, the real exchange rate was R$1.79 per US$1.00, representing a devaluation of 32.4% since January 1, 1999. For further information on the devaluation of the real in 1999, see “Item 9.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Brahma—Devaluation of the Real in 1999”. We cannot assure you that the real will not devaluate substantially in the near future. The following table sets forth the commercial market rate for the purchase of U.S. dollars for the periods indicated: Exchange Rate of Reais per US$1.00 1999 1998 1997 1996 1995 Low .......... R$1.2075 R$1.1165 R$1.0395 R$0.9726 R$0.8340 High .......... 2.2000 1.2087 1.1164 1.0407 0.9728 Average(1) ...... 1.8566 1.1611 1.0787 1.0080 0.9186 Period End ..... 1.7890 1.2087 1.1164 1.0394 0.9725 Source: Central Bank of Brazil (1) Represents the average of the month-end exchange rates during the relevant period. Brazilian law provides that, whenever there is a serious imbalance in Brazil’s balance of payments or serious reasons to expect such an imbalance, temporary restrictions may be imposed on remittances of foreign capital abroad. There can be no assurance that temporary restrictions will not be imposed by the Brazilian government in the future.