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Hop on Top Launching Space Dust in Pursuit of the Uptown

Individual

FAM Initiative Consumer Target States Strategy Risks

Why reinvent the wheel?

Hop on Top Launching Space Dust in Pursuit of the Uptown

Individual


Replicate Space Dust’s home market success

Leverage unique packaging to a1ract target consumers

Promote the taste to capitalize on the high conversion rate

Communicate Elysian’s strong sense of community

New Markets

IRR: 26% NPV: $1.2 million

FAM Initiative


Continue success with target consumer

+ 326% Growth YOY

-‐

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Number of US Breweries

US Breweries have grown dramaTcally

Consumer Consumer


Meet the target Elysian consumer

Consumer

Hi! I’m Jonah

Consumer

FAM Initiative Consumer Target States Strategy Risks Consumer

Meet the target Elysian consumer

Hi! I’m Jonah Hi! I’m Jonah

Consumer


Space Dust resonates with Seattle consumer

Consumer

98101 98104

61% Uptown Individual




Tangletown Capitol Hill

Elysian Bar

98122 98103

Elysian Fields

Consumer


Consumer

Uptown Individual drives Space Dust growth

Hi! I’m Jonah

The Uptown Individual

3.6% of US

Households

~12MM In US

PopulaTon

Consumer


Criteria used to determine expansion

Target States

1. Education 2. Income

3. Apartment dwelling 4. Entertainment 5. City growth

Target States


Where is the Uptown Individual?

Target States

Current distribution states

1

2 3

4

7

5

6

9

Target States

8 10


Criteria used to narrow down top 6 states

Target States

Market SaturaTon Elysian distribuTon presence

CraX beer market growth

1 2 3

Target States


Increase availability to FAM states

Target States

Top 6 ranked states

FAM Initiative

Target States


Top 5 Cities in FAM

Riverview

Miami

Miami Beach

Doral

Orlando

Lawrence Somerville

Cambridge

Newton

Brookline

Goodyear

Casa Grande

Gilbert Surprise

Tucson

Target States Target States


Expansion Strategy in FAM States

Vendor Allowances

Redesigned Tap Handle

Tap Takeovers

Barside Chats

1 2 3

Strategy Strategy


Vendor allowances influence Uptown Individuals at point of sale

•  82% of purchase decisions are made in store

•  Appeals to adventurous consumers

Strategy Strategy


Upgrade tap handle to attract Uptown Individuals in bars

Strategy Strategy


Tap Takeovers capitalize on conversion rate

Strategy

•  Helps build an Elysian community

•  Brings visibility to other Elysian brands

•  Takes advantage of 60% conversion rate

Strategy


Reach Uptown Individuals via social media

Strategy Strategy


Elysian must communicate its unique culture

Strategy Strategy


Build the Elysian community through Barside Chats

Strategy Strategy

FAM Initiative Consumer Target States Strategy Risks Strategy

QR Code facilitates access to Barside Chats

Strategy


New markets present new competition

Risks

Florida Arizona Massachusetts

Risks


Higher purchase point may alienate other consumers

Risks

•  A1racts non-‐uptown individual consumers

•  Eliminates iniTal purchase hesitaTon

Risks


The FAM Initiative will recreate home market success

Florida Arizona Massachuse1s


Q&A

AusTn CurTs

Maria Reyes-‐Chian

Chad Metzger Sarika Pawar

Pak Hin Luu


Appendix

• Scoring System Top 30 • Scoring System to arrive at FAM States • Overall FAM Model • Packaging Model Component • Tap Takeover Model Component • Barside Chats Model Component • Uptown Individual Breakdown



Initial Scoring System Top 30 States State Total Score Percentile %Uptown

CA 4,465 100% 23.5% TX 2,755 98% 22.4% FL 2,448 96% 21.3% NJ 1,436 94% 20.3% AZ 1,036 92% 19.4% MA 987 90% 18.4% WA 958 88% 17.9% UT 880 86% 16.4% MD 836 84% 15.6% IN 815 82% 15.2% NY 785 80% 14.7% VA 734 78% 13.7% NC 640 76% 12.0% NV 584 73% 10.9% CO 554 71% 10.4% GA 502 69% 9.4% IL 485 67% 9.1%

MN 410 65% 7.7% IA 341 63% 6.4% CT 300 61% 5.6% MI 267 59% 5.0% MO 232 57% 4.3% OR 231 55% 4.3% LA 226 53% 4.2% KS 215 51% 4.0% OK 198 49% 3.7% ID 182 47% 3.5% KY 157 45% 3.4% SC 154 43% 3.2% MS 142 41% 3.1%

States with Elysian Distribution

FAM Initiative States


Breweries per Craft Brew Number ofState 100,000 people Market Growth Elysian Distributors True ScoreMassachusetts 1.2 28% 0 INFFlorida 0.8 1119% 13 1.08Arizona 1.1 68% 1 0.62New Jersey 0.5 80% 10 0.16Texas 0.6 38% 5 0.13California 1.6 40% 32 0.01

Scoring System to identify FAM States

FAM Initiative States


FAM Initiative presents positive returns

Investment in Cross Brewing Initial OutlaysInitial Price $1,500 Year 0Depreciable Life 10 FAM Initiative $1,939Terminal Book Value - Barside Chats 83 Terminal Scrap Value - Year 0 Total Outlay $2,021Terminal Tax Effect 30.00%

Year 1Tap Takeovers $300

Year 1 Total Outlay $300

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5Depreciation Year 0 Year 1 Year 2 Year 3 Year 4 Year 5Cross Brewing Depreciation $150 $150 $150 $150 $150Total Depreciation $150 $150 $150 $150 $150

Incremental Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5

RevenuesExpansion to New Markets $3,664 $3,847 $4,039 $4,241 $4,453Barside Chats 294 309 324 340 357Tap Takeover - 1,973 1,993 2,013 2,033

Total Revenue $3,958 $6,129 $6,356 $6,594 $6,843

Operating ExpensesExpansion to New Markets ($2,606) ($2,737) ($2,874) ($3,017) ($3,168)Barside Chats (176) (185) (194) (204) (214)Tap Takeover - (1,784) (1,796) (1,808) (1,820)

Total Operating Expenses ($2,783) ($4,706) ($4,864) ($5,029) ($5,202)

EBITDA $1,175 $1,423 $1,492 $1,565 $1,641Less: Depreciation (150) (150) (150) (150) (150)EBIT $1,025 $1,273 $1,342 $1,415 $1,491Less: Taxes (359) (445) (470) (495) (522)After-Tax EBIT $666 $827 $873 $920 $969Add: Depreciation 150 150 150 150 150Less: Capital Expenditures (105) (105) (105) (105) (105)Operating Cash Flow $711 $872 $918 $965 $1,014

Initial Outlay ($2,021) (300) - - - -

Terminal Value

Free Cash Flow ($2,021) $411 $872 $918 $965 $1,014

PV of FCF $380 $746 $725 $705 $685

Discount Rate 8.15%

NPV $1,220IRR 26.3%


FAM Initiative Initial Outlay Investment in Cross Brewing Initial OutlaysInitial Price $1,500 Year 0Depreciable Life 10 FAM Initiative $1,939Terminal Book Value - Barside Chats 83 Terminal Scrap Value - Year 0 Total Outlay $2,021Terminal Tax Effect 30.00%






Total Revenue $3,958 $6,129 $6,356 $6,594 $6,843




Initial Outlay ($2,021) (300) - - - -

Terminal Value

Free Cash Flow ($2,021) $411 $872 $918 $965 $1,014

PV of FCF $380 $746 $725 $705 $685

Discount Rate 8.15%

NPV $1,220IRR 26.3%

Investment in Cross Brewing Initial OutlaysInitial Price $1,500 Year 0Depreciable Life 10 FAM Initiative $1,939Terminal Book Value - Barside Chats 83 Terminal Scrap Value - Year 0 Total Outlay $2,021Terminal Tax Effect 30.00%






Total Revenue $3,958 $6,129 $6,356 $6,594 $6,843




Initial Outlay ($2,021) (300) - - - -

Terminal Value

Free Cash Flow ($2,021) $411 $872 $918 $965 $1,014

PV of FCF $380 $746 $725 $705 $685

Discount Rate 8.15%

NPV $1,220IRR 26.3%


Leveraged Packaging Model Output Depreciation Year 0 Year 1 Year 2 Year 3 Year 4 Year 5Cross Brewing Depreciation $150 $150 $150 $150 $150Total Depreciation $150 $150 $150 $150 $150


No. of Customers 590 619 650 683 717

RevenuesStore Revenue $4,956 $5,203 $5,464 $5,737 $6,024Bar Revenue 3,186 3,345 3,512 3,688 3,872Retail Discount (4,478) (4,702) (4,937) (5,184) (5,443)

Revenue to ABI $3,664 $3,847 $4,039 $4,241 $4,453

Operating Expenses (2,198) (2,308) (2,424) (2,545) (2,672)Vendor Allowance (408) (429) (450) (473) (496)

EBITDA $1,057 $1,110 $1,166 $1,224 $1,285Less: Depreciation (150) (150) (150) (150) (150)EBIT $907 $960 $1,016 $1,074 $1,135Less: Taxes (318) (336) (355) (376) (397)After-Tax EBIT $590 $624 $660 $698 $738Add: Depreciation 150 150 150 150 150Less: Capital Expenditures (105) (105) (105) (105) (105)Operating Cash Flow $635 $669 $705 $743 $783

Initial Outlay ($1,939) - - - - -

Free Cash Flow ($1,939) 635 669 705 743 783

Discount Rate 8.13%

NPV $851IRR 23.0%


Leveraged Packaging Model Assumptions

Investment in Cross BrewingInitial Price $1,500Depreciable Life 10 Terminal Book Value - Terminal Scrap Value - Terminal Tax Effect 30.00%

Operating Assumptions: FAM InitiativeAnnualized Growth Assumption (%) 5%Retail Discount (% of Sales) 55%Operating Expenses (% of Sales) 60%Vendor Allowance Growth Assumption (%) 5%Average Tax Rate 35%Capital Expenditures (% of Depreciation) 70%

In-Store Purchase Assumptions (on an Average basis)Beer Purchases in Grocery Store (%) 60%Grocery Store Purchases per Year 10Units Purchased per Visit 1Purchase Price $14Yearly Purchases of Space Dust (%) 10%

Bar Purchase Assumptions (on an Average basis)Beer Purchases in Bar (%) 40%Bar Trips per Year 15Units Purchased per Visit 2Purchase Price $4.5Yearly Purchases of Space Dust (%) 10%

Initial OutlayCross Brewing Production Expansion $1,500Manufacturing New Tap Handles 50Year 1 Vendor Allowance 389Total Outlay $1,939


Tap Takeover Model Output Incremental Cash Flows Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Number of Converted Customers 1,008 1,018 1,028 1,039 1,049Consumer Growth - 1.0% 1.0% 1.0% 1.0%

RevenuesStore Revenue $2,752 $2,779 $2,807 $2,835 $2,864Bar Revenue 1,633 1,649 1,666 1,682 1,699Retail Discount (2,412) (2,436) (2,460) (2,485) (2,510)

Revenue to ABI $1,973 $1,993 $2,013 $2,033 $2,053Operating Expenses-Regular (1,184) (1,196) (1,208) (1,220) (1,232)Operating Expenses-Tap Takeover (600) (600) (600) (600) (600)EBITDA $189 $197 $205 $213 $221Depreciation - - - - - EBIT $189 $197 $205 $213 $221Less: Taxes (66) (69) (72) (75) (77)After-Tax EBIT $123 $128 $133 $139 $144Add: Depreciation - - - - - Less: Capital Expenditures - - - - - Operating Cash Flow $123 $128 $133 $139 $144

Initial Outlay ($300) - - - - -

Free Cash Flow ($300) $123 $128 $133 $139 $144

Discount Rate 8.13%

NPV $227.56IRR 33.1%


Tap Takeover Model Assumptions Initial OutlayMarketing Materials $300

Total Outlay $300

Operating Assumptions: Tap TakeoverAnnualized Growth Assumption (%) 1%Retail Discount (% of Sales) 55%Operating Expenses (% of Sales) 60%Vendor Allowance Growth Assumption (%) 5%Average Tax Rate 35%

In-Store Purchase Assumptions (on an Average basis)Beer Purchases in Grocery Store (%) 60%Grocery Store Purchases per Year 6.5Units Purchased per Visit 1Purchase Price $14Yearly Purchases of Space Dust (%) 5%


Tap Takeover Event AssumptionsNumber of events per year 6Number of Customers per event 280Conversion of Attending Customers 60%Cost per Event $100


Barside Chats Model Output Incremental Cash Flows Year 0 Year 1 Year 2 Year 3 Year 4 Year 5No. of Customers 590 619 650 683 717No. of Customers to watch Barside Chats 177 186 195 205 215No. of Customers to purchase Elysian products 53 56 59 61 65

RevenuesStore Revenue $223 $234 $246 $258 $271Bar Revenue 430 452 474 498 523Retail Discount (359) (377) (396) (416) (437)

Revenue to ABI $294 $309 $324 $340 $357

Operating Expenses (176) (185) (194) (204) (214)Video Expense (83) (83) (83) (83) (83)EBITDA $35 $41 $47 $53 $60Less: Depreciation - - - - - EBIT 35 41 47 53 60Less: Taxes (12) (14) (16) (19) (21)After-Tax EBIT $23 $27 $31 $35 $39Add: Depreciation - - - - - Less: Capital Expenditures - - - - - Operating Cash Flow $23 $27 $31 $35 $39

Initial Outlay ($83) - - - - -

Free Cash Flow ($83) $23 $27 $31 $35 $39

Discount Rate 8.13%

NPV $37IRR 22.4%


Barside Chats Initial Outlay

Barside Chats Cost BreakdownCost per Hour Amt. of Human Capital Amt. of Hours Total Costs

Corporate Video Production Expertise $250 2 people 10 hours $5,000Concept/Script/Storyboard 150 1 person 2 hours 300 Editing/Graphics 175 2 people 3 hours 1,050 Camera 1000 1 person 1 hour 1,000 Equipment 500 3 people 1 hour 1,500 Crew 125 2 people 10 hours 2,500 Studio Shooting 400 1 person 1 hour 400 Audio Files 50 1 person 2 hours 100 Teleprompter 400 1 person 3 hours 1,200 Digitizing, Transfers, Rendering, and Uploading 75 1 person 3 hours 225 Other Costs 500 1 person 1 hour 500 TOTAL COST PER VIDEO $13,775

Initial OutlayYear 1 Video Costs $83

Total Outlay $83


Barside Chats Model Assumptions

Operating Assumptions: Barside ChatsAnnualized Growth Assumption (%) 5%Retail Discount (% of Sales) 55%Operating Expenses (% of Sales) 60%Average Tax Rate 35%

In-Store Purchase Assumptions (on an Average basis)Beer Purchases in Grocery Store (%) 60%Grocery Store Purchases per Year 10Units Purchased per Visit 1Purchase Price $14Yearly Purchases of Space Dust (%) 5%


Video Market Penetration Assumptions% of Customers Watching Barside Chats 30%% of Barside Chats Watchers Purchasing Elysian 30%


FAM Initiative – Discount Rate Calculation Anheuser-Busch InBevWeighted Average Cost of Capital Calculation($ in millions, except per share amounts)

Cost of Equity Assumptions1 Risk Free Rate 2.23% 10-year Treasury Bill yield as of 11/15/16 market close per www.treasury.gov 2 Equity Risk Premium 6.25% United States Equity Risk Premium according to Aswath Damodaran of NYU3 AB InBev Beta 1.04 Beta for AB InBev as of 11/15/16 according to Reuters

4 Cost of Equity 8.73% Cost of Equity = Risk Free Rate + Beta(Market Risk Premium)

5 Number of Shares Outstanding 1,608,242 Thousands of Common Shares oustanding according to AB InBev's Fom 20F 7 Price per Share $101.88 AB InBev (NYSE: BUD) price per common share as of market close 11/18/16

8 Amount of Equity $163,848 Market Value of Equity = Number of Shares Outstanding(Price per Share)

Cost of Debt Assumptions9 Pre-Tax Cost of Debt 2.52% Weighted average yield to maturity of AB InBev's oustanding debt

10 Tax Rate 20.8% AB InBev's effective tax rate according to its Form 20F

11 Cost of Debt 1.99% Cost of Debt = Pre-Tax Cost of Debt(1 - Tax Rate)

12 Amount of Debt $103,196 Amount of debt outstanding according to Bloomberg as of 11/18/16

Weighted Average Cost of Capital Assumptions13 Total Capital $267,044 Total Capital = Amount of Equity + Amount of Debt

14 Weighted Average Cost of Capital 6.13% WACC = Cost of Equity(Amount of Equity/Total Capital) + Cost of Debt(Amount of Debt/Total Capital)

15 Project Risk Premium 2.00%Since Elysian is a smaller, fast growing company we determined the discount rate for this project should have a premium above the WACC of AB InBev - a much more mature company

16 Discount Rate 8.13% Discount Rate = WACC + Project Risk Premium


ESRI provides label for consumer segment

Consumer

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