Exhibit 99.1
[Anheuser Busch Companies logo] News
For more information, contact:
Carlos Ramirez, (314) 577-9629
FOR IMMEDIATE RELEASE
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ANHEUSER-BUSCH COS. REPORTS
RECORD SALES, EARNINGS FOR FIRST QUARTER 2003
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18TH CONSECUTIVE QUARTER OF SOLID DOUBLE-DIGIT EPS GROWTH
ST. LOUIS, April 23, 2003 - Led by continued strong growth in its
domestic beer operations, Anheuser-Busch Cos., Inc., achieved record
first-quarter sales and earnings, it was announced today by Patrick Stokes,
president and chief executive officer of the company. Stokes made the
announcement at the company's annual meeting of shareholders in Orlando,
Florida. Consolidated net sales increased 4.6 percent in the first quarter,
while earnings per share increased 11.8 percent.
"Anheuser-Busch had another very good quarter and continued its
track record of delivering consistent and dependable earnings growth. The
company has now achieved 18 consecutive quarters of solid double-digit
earnings per share growth," said Stokes.
Strong growth in domestic revenue per barrel drove significantly
enhanced profit margins in the quarter. Both gross profit margin and
operating profit margin improved 80 basis points compared to the first
quarter 2002. Return on capital employed increased 160 basis points over the
past twelve months.
Domestic revenue per barrel grew 2.8 percent in the first quarter
2003 vs. the first quarter 2002. This growth reflects the continued
favorable pricing environment and the company's successful implementation of
pricing actions on approximately two-thirds of its domestic volume in two
phases - October 2002 and February 2003.
- more -
First Quarter Earnings
Anheuser-Busch
Add One
Domestic beer sales-to-wholesalers increased 1.3 percent for the
first quarter of 2003 vs. the first quarter 2002. Wholesaler
sales-to-retailers were up 0.3 percent in the first quarter vs. 2002,
dampened somewhat by the impact of severe winter weather in key markets this
year and the later Easter holiday period in 2003. In 2003, the Easter
holiday occurred in the second quarter. Last year, the Easter holiday fell in
the first quarter.
The company's reported beer volume is summarized in the following
table:
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Beer Volume (millions of barrels)
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First Quarter 2003 vs. 2002
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2003 2002 Barrels %
-------------- -------------- -------------- --------------
Domestic 24.9 24.6 Up 0.3 Up 1.3%
International 1.8 1.7 Up 0.1 Up 7.9%
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Worldwide A-B Brands 26.7 26.3 Up 0.4 Up 1.7%
Int'l Equity Partner Brands 4.2 4.4 Dn 0.2 Dn 5.0%
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Total Brands 30.9 30.7 Up 0.2 Up 0.7%
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Worldwide Anheuser-Busch beer sales volume for the first quarter
2003 rose 1.7 percent, to 26.7 million barrels, vs. first quarter 2002.
Worldwide beer volume is comprised of domestic volume and international
volume. Domestic volume, consisting of Anheuser-Busch beer produced and
shipped within the United States, increased 1.3 percent in the first
quarter. International volume, consisting of exports from the company's U.S.
breweries to markets around the world, plus Anheuser-Busch brands produced
overseas by company-owned breweries and under license and contract brewing
agreements, increased 7.9 percent for the first quarter.
International Equity Partner brands volume, representing the
company's share of its foreign equity partners' volume, declined 5.0 percent
for the first quarter of 2003 vs. 2002. The decline primarily reflects lower
Modelo beer sales volume due to the weak economic environment in Mexico.
First Quarter Earnings
Anheuser-Busch
Add Two
"Anheuser-Busch's continuing success reflects our ability to
capitalize on favorable domestic beer industry fundamentals," said Stokes.
"We remain confident in our ability to achieve our 12 percent earnings per
share growth objective for 2003."
FIRST QUARTER 2003 FINANCIAL RESULTS
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Key operating results for the first quarter 2003 vs. 2002 are
summarized below:
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($ in millions, except per share)
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First Quarter 2003 vs. 2002
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2003 2002 $ %
---------------- ---------------- ---------------- ----------------
Gross Sales $3,795 $3,637 Up $158 Up 4.3%
Net Sales $3,281 $3,137 Up $144 Up 4.6%
Income Before Income Taxes $670 $619 Up $51 Up 8.2%
Equity Income $74 $97 Dn $23 1/ Dn 23.4% 1/
Net Income $485 $456 Up $29 Up 6.3%
Diluted Earnings per Share $.57 $.51 Up $.06 Up 11.8%
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<FN>
1/ Excluding the one-time $17 million favorable impact in 2002 due to the
reduction in Mexican income tax rates, equity income decreased $6
million or 7 percent due to lower volume.
A discussion of financial highlights for the first quarter 2003
follows:
o Net sales increased 4.6 percent compared to the first quarter 2002,
driven primarily by a 4.0 percent increase in domestic beer segment net
sales along with higher international beer sales and packaging segment
sales.
o Income before income taxes increased 8.2 percent vs. the first quarter
2002, reflecting increased domestic beer segment pretax income, along
with improved results for international beer operations (excluding
equity income) and packaging segment operations.
Pretax income for the domestic beer segment was up 8.6 percent for the
quarter, reflecting higher revenue per barrel and beer sales volume.
First Quarter Earnings
Anheuser-Busch
Add Three
International beer segment pretax income improved 21 percent in the
first quarter vs. 2002 primarily due to volume and profit growth in
China.
Packaging segment pretax profits were up 10 percent in the first
quarter 2003. This increase is primarily due to higher soft drink can
volume and prices along with increased volume and lower costs at the
company's bottle manufacturing operation.
Entertainment segment pretax results declined $6 million compared to
the first quarter 2002, principally due to the later Easter holiday
period in 2003 compared to 2002.
o Equity income declined $23 million in the first quarter 2003 vs. 2002,
primarily due to a $17 million one-time income tax benefit included in
2002 Modelo equity income. The tax benefit resulted from lower Mexican
income tax rates enacted in the first quarter of 2002. The Mexican tax
benefit included in Modelo equity income was largely offset by higher
U.S. taxes included in the 2002 consolidated income tax provision.
Normalized to exclude the 2002 tax benefit, equity income decreased $6
million in the first quarter 2003 vs. 2002. The decline reflects lower
Modelo earnings primarily due to lower beer sales volume in Mexico.
o Anheuser-Busch's effective tax rate declined to 38.7 percent in the
first quarter 2003 vs. 42.0 percent in the first quarter 2002. The
effective tax rate in 2002 was unusually high due to the U.S. deferred
income tax offset to the Mexican income tax rate benefit included in
equity income.
First Quarter Earnings
Anheuser-Busch
Add Four
o Net income increased 6.3 percent over first quarter 2002. Diluted
earnings per share were $.57, an increase of 11.8 percent, compared to
the first quarter 2002. Earnings per share continue to benefit from the
company's ongoing share repurchase program.
BEER SALES RESULTS
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Worldwide Beer Volume
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Worldwide Anheuser-Busch beer sales volume for the first quarter
2003 rose 1.7 percent, to 26.7 million barrels, vs. first quarter 2002.
Total volume, which combines worldwide Anheuser-Busch brand volume with
equity volume (representing the company's share of its foreign equity
partners' volume) was 30.9 million barrels in the first quarter 2003, up 0.2
million barrels, or 0.7 percent over first quarter 2002.
Domestic Beer Volume
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Anheuser-Busch reported domestic beer sales-to-wholesalers of 24.9
million barrels, an increase of 1.3 percent for the first quarter 2003
compared to the first quarter 2002. The increase was led by Bud Light and
Michelob ULTRA sales.
The company's domestic market share (excluding exports) for the
first quarter 2003 was 52.1 percent compared to 2002 market share of 49.5
percent. Domestic market share is determined based on estimated U.S. beer
industry sales using information provided by the Beer Institute and the U.S.
Department of Commerce.
International Beer Volume
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International Anheuser-Busch brand beer volume for the first
quarter 2003 was 1.8 million barrels, an increase of 7.9 percent, compared
to the first quarter 2002, primarily due to increases in China.
First Quarter Earnings
Anheuser-Busch
Add Five
Tsingtao
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Earlier this month, the company and Tsingtao Brewery Co., Ltd.,
closed on their previously announced investment agreement. The agreement
calls for Tsingtao to issue three convertible bonds valued at approximately
$182 million to Anheuser-Busch. As the debt converts to equity over seven
years, Anheuser-Busch's economic interest in Tsingtao will increase from its
existing 4.5 percent to 27 percent.
At the closing, Anheuser-Busch paid $116.4 million for the first
two bonds. The company will pay an additional $65.2 million within 12
months. The first bond will convert to shares in 90 days, which will
increase Anheuser-Busch's equity interest to 9.9 percent.
Other Matters
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Anheuser-Busch will conduct a conference call with investors to
discuss first quarter earnings results at 4:00 p.m. EST today. The company
will broadcast the conference call live via the Internet. For details visit
the company's site on the Internet at www.anheuser-busch.com.
# # #
This release contains forward-looking statements regarding the
company's expectations concerning its future operations, earnings and
prospects. On the date the statements are made, the statements represent the
company's expectations, but the company's expectations concerning its future
operations, earnings and prospects may change. The company disclaims any
obligation to update any of these statements. If the company determines to
update any forward-looking statement, it will do so publicly. No private
statements by the company or its personnel should be interpreted as updating
forward-looking statements. The company's expectations involve significant
risks and uncertainties and are based upon many assumptions that the company
believes to be reasonable, but such assumptions may ultimately prove to be
inaccurate or incomplete, in whole or in part. Accordingly, there can be no
assurances that the company's expectations and the forward-looking
statements will be correct. Further information on factors that could affect
the company's future operations, earnings and prospects is included in the
company's Forms 10-Q and 10-K.
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COMPARATIVE STATEMENT OF EARNINGS
FIRST QUARTER ENDED MARCH 31, 2003
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(IN MILLIONS, EXCEPT PER SHARE)
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Change 2003 vs. 2002
Fav./(Unfav.)
--------------------------------
2003 2002 $ %
-------------- -------------- -------------- --------------
Gross Sales $3,794.9 $3,637.4 $157.5 4.3
Excise Taxes (514.3) (500.8) (13.5) (2.7)
-------------- -------------- -------------- --------------
Net Sales 3,280.6 3,136.6 144.0 4.6
Cost of Sales (1,974.4) (1,914.6) (59.8) (3.1)
Marketing, Distribution and
Administrative Expenses (542.1) (517.0) (25.1) (4.8)
-------------- -------------- -------------- --------------
Operating Income 764.1 705.0 59.1 8.4
Interest Expense (98.7) (89.6) (9.1) (10.2)
Interest Capitalized 4.4 4.3 0.1 3.2
Interest Income 0.1 0.1 -- --
Other Expense, Net (0.2) (0.9) 0.7 73.1
-------------- -------------- -------------- --------------
Income Before Income Taxes 669.7 618.9 50.8 8.2
Provision for Income Taxes (259.3) (259.9) 0.6 0.2
Equity Income, Net of Tax 74.4 97.1 (22.7) (23.4)
-------------- -------------- -------------- --------------
Net Income $484.8 $456.1 $28.7 6.3
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Basic Earnings Per Share $.58 $.52 $.06 11.5
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Diluted Earnings Per Share $.57 $.51 $.06 11.8
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Increase/(Decrease)
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Amount %
-------------- --------------
Capital Expenditures $222.2 $181.7 $40.5 22.3
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Depreciation and Amortization $214.5 $207.1 $7.4 3.6
============== ============== ============== ==============
Weighted Average Shares:
Basic 840.7 878.5 (37.8) (4.3)
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Diluted 850.5 891.4 (40.9) (4.6)
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BUSINESS SEGMENTS
FIRST QUARTER ENDED MARCH 31, 2003
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($ IN MILLIONS)
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Domestic Corporate &
Beer Int'l Beer Packaging Entertain. Other Elims. Consol.
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2003
Gross Sales $3,138.8 166.2 497.0 125.8 12.1 (145.0) $3,794.9
Net Sales:
- - Intersegment -- -- $214.5 -- 1.1 (215.6) $ --
- - External $2,650.7 140.0 282.5 125.8 11.0 70.6 $3,280.6
Income Before
Income Taxes $799.6 20.2 33.8 (20.5) (2.6) (160.8) $669.7
Equity Income -- $74.4 -- -- -- -- $74.4
Net Income $495.8 86.9 21.0 (12.7) (1.6) (104.6) $484.8
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2002
Gross Sales $3,027.6 144.0 469.6 125.8 17.4 (147.0) $3,637.4
Net Sales:
- - Intersegment -- -- $209.3 -- 4.3 (213.6) $ --
- - External $2,548.2 122.6 260.3 125.8 13.1 66.6 $3,136.6
Income Before
Income Taxes $736.0 16.7 30.7 (14.5) (1.4) (148.6) $618.9
Equity Income -- $97.1 -- -- -- -- $97.1
Net Income $456.3 107.5 19.0 (9.0) (0.9) (116.8) $456.1
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CONSOLIDATED BALANCE SHEET
ANHEUSER-BUSCH COMPANIES, INC. (UNAUDITED)
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(IN MILLIONS)
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March 31, December 31,
2003 2002
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Assets
Current Assets:
Cash $114.9 $188.9
Accounts receivable 837.7 630.4
Inventories:
Raw materials and supplies 273.4 294.1
Work in progress 85.1 82.8
Finished goods 251.9 186.7
Total inventories 610.4 563.6
Other current assets 115.5 121.8
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Total current assets 1,678.5 1,504.7
Investments in affiliated companies 2,634.2 2,827.9
Other assets 1,408.6 1,423.0
Plant and equipment, net 8,366.0 8,363.9
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Total Assets $14,087.3 $14,119.5
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Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $928.7 $986.6
Accrued salaries, wages and benefits 224.8 287.5
Accrued taxes 445.1 181.0
Other current liabilities 306.5 332.6
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Total current liabilities 1,905.1 1,787.7
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Postretirement benefits 470.5 474.2
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Debt 6,866.3 6,603.2
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Deferred income taxes 1,361.6 1,345.1
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Other long-term liabilities 862.7 857.0
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Shareholders Equity:
Common stock 1,454.0 1,453.4
Capital in excess of par value 1,039.7 1,024.5
Retained earnings 12,864.7 12,544.0
Treasury stock, at cost (11,618.1) (11,008.6)
Accumulated other comprehensive loss (1,072.9) (870.7)
ESOP debt guarantee (46.3) (90.3)
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Total Shareholders Equity 2,621.1 3,052.3
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Commitments and contingencies -- --
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Total Liabilities and Shareholders Equity $14,087.3 $14,119.5
================ =================
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CONSOLIDATED STATEMENT OF CASH FLOWS
ANHEUSER-BUSCH COMPANIES, INC. (UNAUDITED)
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(IN MILLIONS)
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Three Months Ended March 31,
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2003 2002
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Cash flow from operating activities:
Net Income $484.8 $456.1
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 214.5 207.1
Deferred income taxes 16.5 22.5
Undistributed earnings of affiliated companies (57.4) (94.1)
Other, net 42.9 67.2
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Operating cash flow before change in working capital 701.3 658.8
Increase in working capital (103.5) (97.2)
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Cash provided by operating activities 597.8 561.6
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Cash flow from investing activities:
Capital expenditures (222.2) (181.7)
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Cash used for investing activities (222.2) (181.7)
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Cash flow from financing activities:
Increase in long-term debt 396.9 72.6
Decrease in long-term debt (84.0) (0.8)
Dividends paid to shareholders (164.1) (158.1)
Acquisition of treasury stock (609.5) (355.7)
Issuance of shares under stock plans 11.1 77.2
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Cash used for financing activities (449.6) (364.8)
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Net (decrease) / increase in cash during the period (74.0) 15.1
Cash, beginning of period 188.9 162.6
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Cash, end of period $114.9 $177.7
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