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., INC. REPORTS RECORD SALES
AND EARNINGS FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF 2003
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ACHIEVES 19TH CONSECUTIVE QUARTER OF DOUBLE-DIGIT EPS GROWTH
WITH 13.6 PERCENT INCREASE IN THE SECOND QUARTER 2003
ST. LOUIS, July 23, 2003 - Led by continued strong growth in its
domestic beer business, Anheuser-Busch Cos., Inc. achieved record sales and
earnings for the second quarter and first six months of 2003, it was
announced today by Patrick Stokes, president and chief executive officer.
Second quarter and first six months earnings per share increased
13.6 percent and 12.8 percent, respectively, vs. the same 2002 periods.
"Anheuser-Busch has once again delivered strong, dependable growth
in earnings per share and return on capital," said Stokes. "The second
quarter represents the company's 19th consecutive quarter of solid
double-digit earnings per share growth."
Domestic revenue per barrel grew 3.5 percent and 3.1 percent in the
second quarter and first six months of 2003, respectively, vs. the same
periods in 2002, reflecting the continued favorable beer industry pricing
environment.
Domestic revenue per barrel growth drove continued improvements in
profit margins, with gross profit margin improving 40 basis points to
41.9 percent and operating profit margin increasing 70 basis points to
25.4 percent in the second quarter 2003. For the first six months of 2003,
gross margin increased 60 basis points to 40.9 percent, while operating margin
increased 70 basis points to 24.4 percent. Return on capital employed
improved to 17.9 percent, an increase of 130 basis points over the past
12 months.
- more -
Second Quarter Earnings
Anheuser-Busch
Add One
Domestic beer sales-to-wholesalers volume increased 0.7 percent for
the second quarter of 2003 vs. the second quarter 2002 and 1.0 percent for
the first six months of 2003.
Wholesaler sales-to-retailers volume for both the second quarter
and first six months of 2003 was up 0.3 percent vs. similar 2002 periods.
Second quarter and year-to-date volume has been impacted by unfavorable
weather over much of the country. Sales improved over the July 4th holiday,
which experienced more normal weather.
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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Second Quarter Six Months Ended June 30
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vs. 2002 vs. 2002
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2003 Barrels % 2003 Barrels %
-------- -------- -------- ------- -------- --------
Domestic 26.8 Up 0.2 Up 0.7% 51.8 Up 0.5 Up 1.0%
International 2.1 Dn 0.1 Dn 4.7% 3.9 Up 0.03 Up 0.7%
-------- -------- -------- ------- -------- --------
Worldwide A-B Brands 28.9 Up 0.1 Up 0.3% 55.7 Up 0.5 Up 1.0%
Int'l Equity Partner Brands 5.1 Up 0.2 Up 4.5% 9.4 Up 0.1 Up 1.1%
-------- -------- -------- ------- -------- --------
Total Brands 34.0 Up 0.3 Up 0.9% 65.1 Up 0.6 Up 1.0%
======== ======== ======== ======= ======== ========
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Consistent with the company's practice of implementing moderate
annual price increases in two phases, Anheuser-Busch plans to initiate
selected pricing actions in the fourth quarter 2003. The revenue enhancement
initiatives will again be tailored to specific markets, brands and packages.
"During the first six months of this year Anheuser-Busch has
significantly increased revenue per barrel, margins, and earnings per share
while also increasing market share," said Stokes. "We are confident of
achieving full year 2003 earnings per share growth in the 12 percent to 13
percent range. In addition, we remain confident in our ability to
consistently achieve our double-digit earnings per share growth objective
over the long-term, targeting 12 percent growth in 2004."
Second Quarter Earnings
Anheuser-Busch
Add Two
SECOND QUARTER 2003 FINANCIAL RESULTS
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Key operating results for the second quarter 2003 vs. 2002 are
summarized below:
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Second Quarter Ended June 30
($ in millions, except per share)
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2003 vs. 2002
----------------------------
2003 2002 $ %
---------- --------- ----------- ---------
Gross Sales $4,339 $4,182 Up $157 Up 3.8%
Net Sales $3,770 $3,626 Up $144 Up 4.0%
Income Before Income Taxes $862 $811 Up $51 Up 6.2%
Equity Income $106 $98 Up $8 Up 8.1%
Net Income $633 $587 Up $46 Up 7.8%
Diluted Earnings per Share $.75 $.66 Up $.09 Up 13.6%
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A discussion of financial highlights for the second quarter 2003
follows:
o Net sales increased 4.0 percent compared to the second quarter 2002,
driven primarily by a 4 percent increase in domestic beer segment net
sales and higher sales for the packaging and entertainment segments,
partially offset by lower revenue from international beer.
International beer sales volume was down 4.7 percent in the second
quarter due primarily to the impact of the SARS outbreak in China. In
recent weeks Anheuser-Busch sales in China have rebounded and are now
back on a growth trend.
o Income before income taxes increased 6.2 percent vs. the second quarter
2002, due to increased domestic beer segment pretax income, along with
improved profit contribution for the packaging segment.
Pretax income for the domestic beer segment was up 7.3 percent for the
quarter, reflecting higher revenue per barrel and beer sales volume.
Second Quarter Earnings
Anheuser-Busch
Add Three
International beer segment pretax income decreased 9 percent primarily
due to lower volume in China and the United Kingdom.
Packaging segment pretax profits were up 5 percent in the second
quarter 2003, due to improved operating profits from the company's can,
bottle and label manufacturing operations.
Entertainment segment pretax results were down 7 percent compared to
the second quarter 2002, principally due to lower attendance and higher
park operating costs, partially offset by higher admissions pricing and
in-park spending. These results include the cost of Operation Salute
through June 30th. Operation Salute is Anheuser-Busch's theme park
military appreciation program, providing free single-day admission to
SeaWorld, Busch Gardens and Sesame Place parks to active duty military,
active reservists, U.S. Coast Guard, National Guardsmen and as many as
four of their direct dependents.
o Equity income increased 8.1 percent vs. the second quarter 2002, due to
higher Modelo and CCU earnings. Modelo's domestic sales volume improved
during the second quarter, but Anheuser-Busch's equity income gross
from Modelo was dampened by difficult export volume comparisons to 2002
and a weaker peso. Anheuser-Busch's equity share of CCU earnings
benefited by a $5.5 million after-tax gain from the sale of a brewery
in Croatia.
o Net income increased 7.8 percent vs. second quarter 2002. Diluted
earnings per share were $.75, an increase of 13.6 percent, compared to
the second quarter 2002. Earnings per share continue to benefit from
the company's ongoing share repurchase program.
Second Quarter Earnings
Anheuser-Busch
Add Four
FIRST SIX MONTHS OF 2003 FINANCIAL HIGHLIGHTS
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Key operating results for the first six months of 2003 compared to
2002 are summarized below:
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Six Months Ended June 30 ($ in millions, except per share)
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2003 vs. 2002
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2003 2002 $ %
-------- -------- -------- ---------
Gross Sales $8,134 $7,820 Up $314 Up 4.0%
Net Sales $7,051 $6,763 Up $288 Up 4.3%
Income Before Income Taxes $1,531 $1,430 Up $101 Up 7.1%
Equity Income $180 $195 Dn $15 Dn 7.6%
Net Income $1,117 $1,043 Up $74 Up 7.2%
Diluted Earnings per Share $1.32 $1.17 Up $.15 Up 12.8%
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A discussion of financial highlights for the first six months of
2003 follows:
o Net sales increased 4.3 percent compared to the first six months of
2002. This increase was led by a 4 percent increase in domestic beer
segment net sales and higher sales for all the company's major business
segments.
o Income before income taxes increased 7.1 percent vs. the first six
months of 2002, due to the improved performance from the domestic and
international beer segments and the packaging segment.
Domestic beer segment pretax income was up 8 percent, reflecting higher
revenue per barrel and increased beer volume.
International beer segment pretax income increased 2 percent, primarily
due to volume and profit growth in China.
Second Quarter Earnings
Anheuser-Busch
Add Five
Packaging segment pretax profits were up 7 percent for the first six
months of 2003, primarily due to improved profits in the company's can,
bottle and label manufacturing operations.
Entertainment segment operating profits for the first six months
declined $11 million, or 19 percent compared to last year, primarily
due to lower attendance and higher park operating costs, partially
offset by higher admissions pricing and in-park spending. These results
include the cost of the Operation Salute program.
o Equity income decreased $15 million vs. the first six months of 2002,
due to the $17 million one-time deferred 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
deferred tax benefit included in Modelo equity income was largely
offset by higher U.S. deferred taxes included in the 2002 consolidated
income tax provision.
o Anheuser-Busch's effective tax rate declined to 38.8 percent for the
first six months of 2003 vs. 40.7 percent for the first six months of
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. In addition, the effective tax rate in 2003
reflects a more favorable foreign tax credit position.
Second Quarter Earnings
Anheuser-Busch
Add Six
BEER SALES RESULTS
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Worldwide Beer Volume
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Worldwide Anheuser-Busch beer sales volume increased 0.3 percent
and 1.0 percent, respectively, for the second quarter and first six months
of 2003 to 28.9 million and 55.7 million barrels. Worldwide beer volume is
comprised of domestic volume and international volume. Domestic volume
represents Anheuser-Busch beer produced and shipped within the United
States. International volume represents 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.
Total volume, which combines worldwide Anheuser-Busch brand volume
with equity volume (representing the company's share of its foreign equity
partners' volume), was 34.0 million barrels in the second quarter 2003, up
300,000 barrels, or 0.9 percent vs. second quarter 2002. Total volume for
the first six months increased 1.0 percent, to 65.1 million barrels.
Domestic Beer Volume
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Anheuser-Busch reported domestic beer sales-to-wholesalers of
26.8 million barrels in the second quarter 2003 and 51.8 million barrels in
the first six months. This represents increases of 0.7 percent for the second
quarter and 1.0 percent for the first six months, compared to 2002. These
increases were led by Bud Light and Michelob ULTRA sales.
The company's domestic market share (excluding exports) for the
first six months of 2003 was 50.0 percent, compared to 2002 market share of
48.4 percent. Domestic market share is determined based on estimated beer
industry sales using information provided by the Beer Institute and the U.S.
Department of Commerce.
Second Quarter Earnings
Anheuser-Busch
Add Seven
International Beer Volume
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International Anheuser-Busch brand beer volume for the second
quarter was 2.1 million barrels representing a decrease of 4.7 percent vs.
the second quarter 2002. This decrease is primarily attributable to lower
beer sales volume in China due to SARS, and the United Kingdom. For the
first six months of 2003, international Anheuser-Busch brand beer volume was
3.9 million barrels, up 0.7 percent vs. the comparable 2002 period.
Return on Capital Employed
- --------------------------
Return on capital employed(1) for the 12 months ended June 30,
2003, was 17.9 percent, an increase of 130 basis points over
the twelve-month period ended June 30, 2002.
Other Matters
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Anheuser-Busch will conduct a conference call with investors to
discuss second quarter and first half of 2003 earnings results at 3 p.m. CDT
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.
----------------------
<FN>
(1) Return on capital employed is computed as 12 months of net income
before after-tax net interest (interest expense less interest
capitalized) divided by average net investment. Net investment is
defined as total assets less non-debt current liabilities. For 2003,
after-tax net interest expense was $229 million, calculated as pretax
net interest expense of $369 million less income taxes applied using a
38 percent tax rate. For 2002, after-tax net interest expense was $209
million, calculated as pretax net interest expense of $337 less income
taxes applied using a 38 percent tax rate.
# # #
This release contains forward-looking statements regarding the
company's expectations concerning its future operations, earnings and
prospects. On the date the statements are made, the statements represent the
company's expectations, but the company's expectations concerning its future
operations, earnings and prospects may change.
Second Quarter Earnings
Anheuser-Busch
Add Eight
The company disclaims any obligation to update any of these statements. If
the company determines to update any forward-looking statement, it will do
so publicly. No private statements by the company or its personnel should be
interpreted as updating forward-looking statements. The company's
expectations involve significant risks and uncertainties and are based upon
many assumptions that the company believes to be reasonable, but such
assumptions may ultimately prove to be inaccurate or incomplete, in whole or
in part. Accordingly, there can be no assurances that the company's
expectations and the forward-looking statements will be correct. Further
information on factors that could affect the company's future operations,
earnings and prospects is included in the company's Forms 10-Q and 10-K.
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COMPARATIVE STATEMENT OF EARNINGS
ANHEUSER-BUSCH COMPANIES, INC. (UNAUDITED)
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
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($ IN MILLIONS, EXCEPT PER SHARE)
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- ------------------------------------------------------------------------------------------------------------------------------
Second Quarter Year-to-Date
-------------------------------- -----------------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Gross Sales $4,339.3 $4,182.4 $8,134.2 $7,819.8
Excise Taxes (569.1) (556.3) (1,083.4) (1,057.1)
---------- ---------- ---------- ----------
Net Sales 3,770.2 3,626.1 7,050.8 6,762.7
Cost of Sales (2,189.9) (2,119.8) (4,164.3) (4,034.4)
Marketing, Distribution and
Administrative Expenses (622.3) (609.6) (1,164.4) (1,126.6)
---------- ---------- ---------- ----------
Operating Income 958.0 896.7 1,722.1 1,601.7
Interest Expense (102.3) (91.3) (201.0) (180.9)
Interest Capitalized 6.4 4.7 10.8 9.0
Interest Income 0.2 0.5 0.3 0.6
Other Income/(Expense), Net (0.8) 0.6 (1.0) (0.3)
---------- ---------- ---------- ----------
Income Before Income Taxes 861.5 811.2 1,531.2 1,430.1
Provision for Income Taxes (334.9) (322.8) (594.2) (582.7)
Equity Income, Net of Tax 106.0 98.1 180.4 195.2
---------- ---------- ---------- ----------
Net Income $632.6 $586.5 $1,117.4 $1,042.6
========== ========== ========== ==========
Basic Earnings Per Share $.76 $.67 $1.34 $1.19
========== ========== ========== ==========
Diluted Earnings Per Share $.75 $.66 $1.32 $1.17
========== ========== ========== ==========
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Capital Expenditures $267.9 $210.9 $490.1 $392.6
========== ========== ========== ==========
Depreciation and Amortization $214.5 $210.4 $429.0 $417.5
========== ========== ========== ==========
Weighted Average Shares:
Basic 831.2 872.3 836.0 875.4
========== ========== ========== ==========
Diluted 842.0 885.3 846.5 888.5
========== ========== ========== ==========
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ANHEUSER-BUSCH COMPANIES, INC. (UNAUDITED)
BUSINESS SEGMENTS
SECOND QUARTER ENDED JUNE 30, 2003
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($ IN MILLIONS)
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Domestic Corporate
Beer Int'l Beer Packaging Entertain. Other & Elims. Consol.
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2003
Gross Sales $3,397.5 201.0 589.9 280.3 21.2 (150.6) $4,339.3
Net Sales:
- - Intersegment --- --- $232.9 --- 1.2 (234.1) $---
- - External $2,870.8 158.6 357.0 280.3 20.0 83.5 $3,770.2
Income Before $875.7 25.9 50.5 66.0 2.5 (159.1) $861.5
Income Taxes
Equity Income --- $106.0 --- --- --- --- $106.0
Net Income $542.9 122.1 31.3 40.9 1.5 (106.1) $632.6
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2002
Gross Sales $3,279.3 199.7 576.7 265.0 32.3 (170.6) $4,182.4
Net Sales:
- - Intersegment --- --- $235.8 --- 8.9 (244.7) $---
- - External $2,759.1 163.6 340.9 265.0 23.4 74.1 $3,626.1
Income Before
Income Taxes $815.8 28.5 47.9 70.9 4.7 (156.6) $811.2
Equity Income --- $98.1 --- --- --- --- $98.1
Net Income $505.8 115.7 29.7 44.0 2.9 (111.6) $586.5
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ANHEUSER-BUSCH COMPANIES, INC. (UNAUDITED)
BUSINESS SEGMENTS
SIX MONTHS ENDED JUNE 30, 2003
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($ IN MILLIONS)
-----------------------------------------------------------------------------------------------------------
Domestic Corporate
Beer Int'l Beer Packaging Entertain. Other & Elims. Consol.
- ----------------------------------------------------------------------------------------------------------------------------------
2003
Gross Sales $6,536.3 367.2 1,086.9 406.1 33.3 (295.6) $8,134.2
Net Sales:
- - Intersegment --- --- $447.4 --- 2.3 (449.7) $---
- - External $5,521.5 298.6 639.5 406.1 31.0 154.1 $7,050.8
Income Before $1,675.3 46.1 84.3 45.5 (0.1) (319.9) $1,531.2
Income Taxes
Equity Income --- $180.4 --- --- --- --- $180.4
Net Income $1,038.7 209.0 52.3 28.2 (0.1) (210.7) $1,117.4
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2002
Gross Sales $6,306.9 343.7 1,046.3 390.8 49.7 (317.6) $7,819.8
Net Sales:
- - Intersegment --- --- $445.1 --- 13.2 (458.3) $---
- - External $5,307.3 286.2 601.2 390.8 36.5 140.7 $6,762.7
Income Before
Income Taxes $1,551.8 45.2 78.6 56.4 3.3 (305.2) $1,430.1
Equity Income --- $195.2 --- --- --- --- $195.2
Net Income $962.1 223.2 48.7 35.0 2.0 (228.4) $1,042.6
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CONSOLIDATED BALANCE SHEET
ANHEUSER-BUSCH COMPANIES, INC. (UNAUDITED)
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($ IN MILLIONS)
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June 30, December 31,
2003 2002
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Assets
Current Assets:
Cash $143.0 $188.9
Accounts receivable 912.6 630.4
Inventories:
Raw materials and supplies 218.8 294.1
Work in progress 88.1 82.8
Finished goods 224.5 186.7
Total inventories 531.4 563.6
Other current assets 177.3 121.8
------------------ -----------------
Total current assets 1,764.3 1,504.7
Investments in affiliated companies 2,940.4 2,827.9
Other assets 1,401.2 1,423.0
Plant and equipment, net 8,428.9 8,363.9
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Total Assets $14,534.8 $14,119.5
================== =================
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $1,000.9 $986.6
Accrued salaries, wages and benefits 253.1 287.5
Accrued taxes 313.8 181.0
Other current liabilities 343.4 332.6
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Total current liabilities 1,911.2 1,787.7
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Postretirement benefits 470.4 474.2
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Debt 7,055.6 6,603.2
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Deferred income taxes 1,373.8 1,345.1
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Other long-term liabilities 865.4 857.0
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Shareholders Equity:
Common stock 1,456.0 1,453.4
Capital in excess of par value 1,095.6 1,024.5
Retained earnings 13,335.2 12,544.0
Treasury stock, at cost (12,102.3) (11,008.6)
Accumulated other comprehensive loss (879.8) (870.7)
ESOP debt guarantee (46.3) (90.3)
------------------ -----------------
Total Shareholders Equity 2,858.4 3,052.3
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Commitments and contingencies -- --
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Total Liabilities and Shareholders Equity $14,534.8 $14,119.5
================== =================
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CONSOLIDATED STATEMENT OF CASH FLOWS
ANHEUSER-BUSCH COMPANIES, INC. (UNAUDITED)
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($ IN MILLIONS)
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Six Months Ended June 30,
-------------------------------------------
2003 2002
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Cash flow from operating activities:
Net Income $1,117.4 $1,042.6
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 429.0 417.5
Deferred income taxes 28.7 50.0
Undistributed earnings of affiliated companies (50.7) (148.4)
Other, net 59.3 89.6
---------------- ----------------
Operating cash flow before change in working capital 1,583.7 1,451.3
Increase in working capital (119.3) (30.0)
---------------- ----------------
Cash provided by operating activities 1,464.4 1,421.3
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Cash flow from investing activities:
Capital expenditures (490.1) (392.6)
Business acquisitions (116.4) --
---------------- ----------------
Cash used for investing activities (606.5) (392.6)
---------------- ----------------
Cash flow from financing activities:
Increase in long-term debt 576.9 554.9
Decrease in long-term debt (77.2) (435.7)
Dividends paid to shareholders (326.2) (315.5)
Acquisition of treasury stock (1,126.6) (801.5)
Issuance of shares under stock plans 49.3 95.3
---------------- ----------------
Cash used for financing activities (903.8) (902.5)
---------------- ----------------
Net (decrease) / increase in cash during the period (45.9) 126.2
Cash, beginning of period 188.9 162.6
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Cash, end of period $143.0 $288.8
================ ================
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