C O V E R S H E E T P W- 2 7 7 S. E. C. Registration Number S A N M I G U E L C O R P O R A T I O N (Company’s Full Name) N o. 4 0 S a n M i g u e l A v e. M a n d a l u y o n g C i t Y (Business Address: No. Street City/Town/Province) (632) 632-3000 Contact Person Company Telephone Number SEC FORM 1 2 3 1 1 7 - A Month Day FORM TYPE Month Day Annual Meeting Secondary License Type, If Applicable Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings Total No. of Stockholders Domestic Foreign ------------------------------------------------------------------------------------------------------------ To be accomplished by SEC Personnel concerned ____________________________ File Number LCU ____________________________ Document I. D. Cashier - - - - - - - - - - - - - - - - - - S T A M P S - - - - - - - - - - - - - - - - - - Remarks = pls. Use black ink for scanning purposes SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141 OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended December 31, 2009 2. SEC Identification Number PW 000277 3. BIR Tax Identification No. 041-000-060-741-V 4. Exact name of issuer as specified in its charter SAN MIGUEL CORPORATION 5. Philippines 6. Province, Country or other jurisdiction of Industry Classification Code: incorporation or organization 7. No. 40 San Miguel Avenue, Mandaluyong City 1550 Address of principal office Postal Code 8. (02) 632-3000 Issuer's telephone number, including area code 9. N/A Former name, former address, and former fiscal year, if changed since last report. 10. Securities registered pursuant to Sections 8 and 12 of the SRC Title of Each Class Number of Shares of Common and Preferred Stock Outstanding and approximate Debt Outstanding (as of December 31, 2009) Class “A” Common Shares 1,449,633,643 Class “B” Common Shares 841,662,575 Series 1 Preferred Shares 970,506,353 Total 3,261,802,571 Total Debt P 197,553,000,000.00 11. Are any or all of these securities listed on a Stock Exchange? Yes [√ ] No [ ] If yes, state the name of such stock exchange and the classes of securities listed therein: Philippine Stock Exchange Class “A” and Class “B” Common 12. Check whether the issuer: (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 thereunder, and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports) Yes [√ ] No [ ] (b) has been subject to such filing requirements for the past ninety (90) days. Yes [ √ ] No [ ] 13. The aggregate market value of the voting stock held by non-affiliates of the Company as of December 31, 2009 and March 31, 2010 is P 21,655,960,068.00 and P 24,189,592,916.00, respectively. DOCUMENTS INCORPORATED BY REFERENCE 14. The following documents are attached and incorporated by reference: None. 2 PART I – BUSINESS AND GENERAL INFORMATION Item 1. Business San Miguel Corporation (SMC or the Parent Company), together with its subsidiaries (collectively referred to as the Group), is the largest publicly listed food, beverage and packaging company in Southeast Asia. Established in 1890 as a single-product brewery, the Group today has over 100 facilities in the Philippines, Southeast Asia and China. In 2009, the Group accounts for about 2.00% of the country’s gross national product and 2.27% of the country’s gross domestic product. The Group’s extensive product portfolio includes beer, hard liquor and non-carbonated non-alcoholic beverages, processed and packaged food products, meat, poultry, flour, dairy products and a number of packaging products. The Group’s flagship product, San Miguel Beer, is among the world's largest selling beers and among the top brands in Southeast Asia. From its original cerveza, the Group now owns a wide range of popular beverage brands and products that extends from beer to hard liquor, bottled water, powdered juice and juice drinks. The Group's food operations includes the production and marketing of fresh, ready-to- cook and processed chicken, fresh pork and beef and processed meats, milk, butter, cheese, margarine, ice cream, flour products, coffee, cooking oil and animal and aquatic feeds. Through the partnerships it has forged with major international companies, the Group has gained access to the latest technologies and expertise, thereby enhancing the Group’s status as a world-class organization. The Parent Company has strategic partnerships with international companies, among them Nihon Yamamura Glass Company, Ltd. (NYG), Hormel Foods International Corporation (HFIC) of the United States, Super Coffee Corporation Pte Ltd (SCCPL) of Singapore and Kirin Holdings Company, Limited (Kirin), one of the largest beer manufacturing company in Japan. Following the shareholders’ approval it has obtained in 2007, SMC has since diversified into such industries as power, energy, banking, telecommunications, mining and infrastructure. The Group is one of the nation’s biggest private employers with an estimated 14,600 employees in 2009. In addition, the Group contributes to the growth of downstream industries and sustains a network of hundreds of third party suppliers. Major developments in the Group are discussed in Management’s Discussion and Analyses of Financial Conditions and Results of Operations, attached herein as Annex “F”, and in Notes 6, 10, 37 and 38 of the Audited Consolidated Financial statements, attached herein as Annex “D”. CORE BUSINESSES Beverages The Beverages Group of SMC is divided into alcoholic and non-alcoholic beverages. For the alcoholic beverages, the operations of the Beverages Group are further classified into beer and hard liquor. 3 a. Beer - Domestic The beer and malt-based beverages operations of SMC in the Philippines are now carried out by San Miguel Brewery Inc. (SMB), a subsidiary. In May 2009, SMC completed the sale of its approximately 43.2499% stake in SMB to Kirin. Prior to the creation of SMB, all of SMC’s beer operations were under the San Miguel Beer Division, a business unit of SMC. Pursuant to the authority given by shareholders in 2007, SMC transferred its domestic Philippine beer business’ assets to SMB in exchange for additional shares in SMB, then a wholly-owned subsidiary of SMC effective October 1, 2007. SMB undertook an initial public offering of its shares (IPO) in May 2008. In the same IPO, common shares owned by SMC amounting to approximately 5% of the outstanding capital stock of SMB, were offered by way of secondary offering. SMC likewise transferred to SMB certain Philippine beer and malt-based beverage trademarks, know-how and other intellectual rights through its sale of all its interests in Iconic Beverages, Inc. (IBI). The sale was completed in April 2009. SMC’s BOD also approved the transfer to SMB of certain parcels of land on which the production and selling facilities of SMB are located, through the sale of its interests in Brewery Properties, Inc. (BPI). The sale of SMC’s shares in BPI has yet to be implemented pending certain regulatory requirements. SMB offered and issued fixed-rate Peso denominated bonds to the public in early April 2009 to finance the acquisition of SMC’s interests. SMB has five breweries in the Philippines strategically located in Luzon, Visayas and Mindanao. Today, SMB offers a portfolio of ten strong and popular brands: Pale Pilsen, Red Horse, San Mig Light, Super Dry, Cerveza Negra, San Mig Strong Ice, Gold Eagle, San Miguel Premium All-Malt, Oktoberfest Brew and Cali. b. Beer – International The international beer group operations are supervised by San Miguel Brewing International Limited (SMBIL), a company incorporated in the British Virgin Islands. In late January 2010, SMB completed the purchase of all the shares of San Miguel Holdings Limited, a wholly owned subsidiary of SMC, in SMBIL, comprising 100% of the issued and outstanding capital of SMBIL. With the purchase, SMBIL became a direct wholly-owned subsidiary of SMB. The international beer group operates 1 brewery each in Indonesia, Vietnam, Thailand and Hong Kong and 2 breweries in China (Shunde and Baoding). Joint-venture operations, licensing and distributorship agreements have been forged with respected establishments and major global brewers offshore through SMBIL’s subsidiaries, particularly in China, Hong Kong and Indonesia through the years. These alliances have produced brands such as Guang’s Pineapple Beer, Dragon, Valor, Blue Star and Double Happiness in China; and Anker Bir, Anker Stout, and Carlsberg in Indonesia and enabled the distribution of InBev brands in Hong Kong. SMBIL exports beer to more than 40 markets (including Taiwan, United Arab Emirates, Saudi Arabia, Singapore, Malaysia, and the United States of America). c. Hard Liquor Apart from beer, the Group also produces hard liquor through its majority-owned subsidiary, Ginebra San Miguel, Inc. (GSMI). GSMI is not only the leader in the domestic hard liquor market, with products such as Ginebra San Miguel, Vino Kulafu, Añejo Rum, Gran Matador Brandy and Erg Alcotonic, but also the world’s largest gin producer by volume. 4 GSMI was formed on July 10, 1987 as the legal entity for the acquisition by SMC of the production assets of La Tondeña Distillers, Inc. that had been in operation since 1902. Today, GSMI operates three liquor bottling plants, which are located in the following areas: (1) Mandaue City, Cebu; (2) Sta. Barbara, Pangasinan; and (3) Cabuyao, Laguna. GSMI also utilizes external toll-manufacturers to produce liquor products in Pampanga, Laguna and Lucena, Quezon.