Exhibit 99
[ANHEUSER BUSCH 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 THIRD QUARTER AND NINE MONTHS OF 2003
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ACHIEVES 20TH CONSECUTIVE QUARTER OF DOUBLE-DIGIT EPS GROWTH
WITH 12.7 PERCENT INCREASE IN THE THIRD QUARTER 2003
ST. LOUIS, October 22, 2003 - With strong profit growth from all of
its operating segments in the third quarter, Anheuser-Busch Cos., Inc.,
achieved record sales and earnings for the third quarter and nine months of
2003, it was announced today by Patrick Stokes, president and chief
executive officer. Third quarter and nine months earnings per share
increased 12.7 percent and 12.8 percent, respectively, vs. the same 2002
periods.
"Anheuser-Busch achieved its 20th consecutive quarter of solid
double-digit earnings per share growth. The beer pricing environment remains
favorable and our market share performance has been strong," said Stokes.
Domestic revenue per barrel grew 3.5 percent and 3.3 percent in the
third quarter and nine months of 2003, respectively, vs. the same periods in
2002. These significant increases in revenue per barrel were enhanced by
consumers trading up to our super premium Michelob family.
Domestic revenue per barrel growth has driven improvements in
profit margins and return on capital employed. For the nine months of 2003,
gross margin increased 30 basis points to 41.7 percent, while operating
margin increased 60 basis points to 25.2 percent. Return on capital employed
improved to 18.6 percent, an increase of 100 basis points over the past 12
months.
- more -
Third Quarter Earnings
Anheuser-Busch
Page Two
Domestic beer sales-to-wholesalers volume increased 0.7 percent for
the third quarter of 2003 vs. the third quarter 2002 and 0.9 percent for the
nine months of 2003. The company anticipates full-year beer shipments volume
to be up just under 1 percent.
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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Third Quarter Nine months Ended September 30
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vs. 2002 vs. 2002
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2003 Barrels Percent 2003 Barrels Percent
------------- ------------- -------------- ------------ ------------ -------------
Domestic 27.5 Up 0.2 Up 0.7% 79.3 Up 0.7 Up 0.9%
International 2.3 Up 0.2 Up 11.0% 6.2 Up 0.3 Up 4.3%
------------- ------------- -------------- ------------ ------------ -------------
Worldwide A-B Brands 29.8 Up 0.4 Up 1.5% 85.5 Up 1.0 Up 1.1%
Int'l Equity Partner Brands 4.9 Up 0.3 Up 6.4% 14.3 Up 0.4 Up 2.8%
------------- ------------- -------------- ------------ ------------ -------------
Total Brands 34.7 Up 0.7 Up 2.1% 99.8 Up 1.4 Up 1.4%
============= ============= ============== ============ ============ =============
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Wholesaler sales-to-retailers volume rebounded in the third
quarter. In July, wholesaler sales-to-retailers exceeded 10 million barrels
- - the first time this benchmark has been achieved for a single month.
Overall, sales-to-retailers were up 1.3 percent for the third quarter 2003
and were up 0.7 percent for the nine months vs. similar 2002 periods.
Consistent with the company's practice of implementing moderate
annual price increases in two phases, Anheuser-Busch initiated pricing
actions in October 2003. Selected price increases and discount reductions
have been put into effect in markets representing almost 40 percent of the
company's domestic volume. These revenue enhancement initiatives are again
being tailored to specific markets, brands and packages and early results
are encouraging.
"During the nine months of this year Anheuser-Busch increased
revenue per barrel and margins while also increasing market share, which in
turn has generated strong, dependable growth in earnings per share and
return on capital," said Stokes. "We continue to expect full year 2003
earnings per share growth in the 12 percent to 13 percent range, consistent
with year-to-date results.
Third Quarter Earnings
Anheuser-Busch
Page Three
In addition, we remain confident in our ability to consistently achieve our
minimum double-digit earnings per share growth objective over the long-term,
and have established a 12 percent earnings per share growth target in 2004."
THIRD QUARTER 2003 FINANCIAL RESULTS
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Key operating results for the third quarter 2003 vs. 2002 are
summarized below:
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Third Quarter Ended September 30
($ in millions, except per share)
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2003 vs. 2002
-----------------------------------
2003 2002 $ %
----------------- ----------------- ----------------- -----------------
Gross Sales $4,466 $4,273 Up $193 Up 4.5%
Net Sales $3,881 $3,706 Up $175 Up 4.7%
Income Before Income Taxes $939 $882 Up $57 Up 6.4%
Equity Income $87 $82 Up $5 Up 6.6%
Net Income $664 $622 Up $42 Up 6.8%
Diluted Earnings per Share $.80 $.71 Up $.09 Up 12.7%
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A discussion of financial highlights for the third quarter 2003
follows:
o Net sales increased 4.7 percent compared to the third quarter 2002,
with a 4 percent increase in domestic beer segment net sales plus
higher international beer, packaging and entertainment segment sales.
o Income before income taxes increased 6.4 percent vs. the third quarter
2002, with good growth for all the company's business segments.
Pretax income for the domestic beer segment was up 6 percent for the
quarter, reflecting higher revenue per barrel and increased beer sales
volume.
Third Quarter Earnings
Anheuser-Busch
Page Four
International beer segment pretax income increased 18 percent primarily
due to higher volume and profits in China.
Packaging segment pretax profits were up 11 percent in the third
quarter 2003, primarily due to improved operating profits from the
company's can manufacturing operations.
Entertainment segment pretax results were up almost 8 percent compared
to the third quarter 2002, due to improved attendance, higher
admissions pricing and increased in-park spending.
o Equity income increased 6.6 percent vs. the third quarter 2002, due to
higher Modelo earnings and improved CCU results. Third quarter 2002
Modelo equity income includes a one-time $6.5 million after tax charge
resulting from the restructuring of its brewery operations.
o Net income increased 6.8 percent vs. third quarter 2002 and diluted
earnings per share were $.80, an increase of 12.7 percent compared to
the third quarter 2002. Earnings per share continue to benefit from the
company's ongoing share repurchase program. The company repurchased
over 12 million shares in the third quarter and 35 million shares
through the first nine months of 2003.
Third Quarter Earnings
Anheuser-Busch
Page Five
NINE MONTHS OF 2003 FINANCIAL HIGHLIGHTS
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Key operating results for the nine months of 2003 compared to 2002
are summarized below:
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Nine Months Ended September 30 ($ in millions, except per share)
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2003 vs. 2002
-----------------------------------
2003 2002 $ %
----------------- ----------------- ----------------- -----------------
Gross Sales $12,600 $12,092 Up $508 Up 4.2%
Net Sales $10,931 $10,469 Up $462 Up 4.4%
Income Before Income Taxes $2,470 $2,312 Up $158 Up 6.8%
Equity Income $268 $277 Dn $9 Dn 3.4%
Net Income $1,782 $1,665 Up $117 Up 7.0%
Diluted Earnings per Share $2.12 $1.88 Up $.24 Up 12.8%
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A discussion of financial highlights for the nine months of 2003
follows:
o Net sales increased 4.4 percent compared to the nine months of 2002.
This increase reflects a 4 percent increase in domestic beer segment
net sales and increased sales for the international beer, packaging and
entertainment segments.
o Income before income taxes increased 6.8 percent vs. the nine months of
2002, due to increased domestic beer segment pretax income, along with
improved profit contribution from the international beer and packaging
segments.
Domestic beer segment pretax income was up 7 percent, reflecting higher
revenue per barrel and increased beer volume.
International beer segment pretax income increased 8 percent, primarily
due to volume and profit growth in China and the United Kingdom.
Third Quarter Earnings
Anheuser-Busch
Page Six
Packaging segment pretax profits were up 9 percent for the nine months
of 2003, primarily due to improved profits in the company's can
manufacturing operations, plus improved results from bottle and label
operations.
Entertainment segment operating profits for the nine months declined 1
percent compared to last year, primarily due to lower attendance and
higher park operating costs partially offset by higher admissions
pricing and increased in-park spending.
o Equity income decreased $9 million vs. the nine months of 2002,
primarily due to the $17 million one-time deferred income tax benefit
included in 2002 Modelo equity income, partially offset by a $6.5
million charge in 2002 related to the brewery operation restructuring.
The tax benefit, which resulted from lower Mexican income tax rates
enacted in the first quarter of 2002, was largely offset by higher U.S.
deferred taxes included in the 2002 consolidated income tax provision.
Equity income growth from Modelo for 2003 was also dampened by lower
export volume growth and a weaker peso. Anheuser-Busch's equity share
of CCU earnings for the nine months benefited by a $5.5 million after
tax gain from the sale of a brewery in Croatia.
o Anheuser-Busch's effective tax rate declined to 38.7 percent for the
nine months of 2003 vs. 40.0 percent for the nine 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.
Third Quarter Earnings
Anheuser-Busch
Page Seven
o Net income increased 7 percent vs. the nine months of 2002. Diluted
earnings per share were $2.12, an increase of 12.8 percent compared to
2002.
BEER SALES RESULTS
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Worldwide Beer Volume
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Worldwide Anheuser-Busch beer sales volume increased 1.5 percent
and 1.1 percent, respectively, for the third quarter and nine months of 2003
to 29.8 million and 85.5 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 34.7 million barrels in the third quarter 2003, up
700,000 barrels, or 2.1 percent vs. third quarter 2002. Total volume for the
nine months increased 1.4 percent, to 99.8 million barrels.
Domestic Beer Volume
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Anheuser-Busch reported domestic beer sales-to-wholesalers of 27.5
million barrels in the third quarter 2003 and 79.3 million barrels in the
nine months. This represents increases of 0.7 percent for the third quarter
and 0.9 percent for the nine months, compared to 2002.
The company's domestic market share (excluding exports) for the
nine months of 2003 was 50.1 percent, compared to 48.9 percent for the same
period in 2002. 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.
Third Quarter Earnings
Anheuser-Busch
Page Eight
International Beer Volume
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International Anheuser-Busch brand beer volume for the third
quarter was 2.3 million barrels representing an increase of 11 percent vs.
the third quarter 2002. This increase is primarily attributable to higher
beer sales volume in China. For the nine months of 2003, international
Anheuser-Busch brand beer volume was 6.2 million barrels, up 4.3 percent vs.
the comparable 2002 period.
Return on Capital Employed
- --------------------------
Return on capital employed(1/) for the 12 months ended September 30,
2003, was 18.6 percent, an increase of 100 basis points over the
twelve-month period ended September 30, 2002.
Other Matters
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Anheuser-Busch will conduct a conference call with investors to
discuss earnings results for the third quarter and nine months of 2003 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 $231 million, calculated as pretax
net interest expense of $372 million less income taxes applied using a
38 percent tax rate. For 2002, after-tax net interest expense was $214
million, calculated as pretax net interest expense of $345 less income
taxes applied using a 38 percent tax rate.
# # #
Third Quarter Earnings
Anheuser-Busch
Page Nine
This release contains forward-looking statements regarding the
company's expectations concerning its future operations, earnings and
prospects. On the date the statements are made, the statements represent the
company's expectations, but the company's expectations concerning its future
operations, earnings and prospects may change. The company disclaims any
obligation to update any of these statements. The company's expectations
involve significant risks and uncertainties and are based upon many
assumptions that the company believes to be reasonable, but such assumptions
may ultimately prove to be inaccurate or incomplete, in whole or in part.
Accordingly, there can be no assurances that the company's expectations and
the forward-looking statements will be correct. Further information on
factors that could affect the company's future operations, earnings and
prospects is included in the company's Forms 10-Q and 10-K.
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ANHEUSER-BUSCH COMPANIES, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
($ IN MILLIONS, EXCEPT PER SHARE)
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- -----------------------------------------------------------------------------------------------------------------------------
Third Quarter Year-to-Date
-------------------------------- ----------------------------------
2003 2002 2003 2002
---------------- --------------- ---------------- -----------------
Gross Sales $4,465.8 $4,272.6 $12,600.0 $12,092.4
Excise Taxes (585.3) (566.4) (1,668.7) (1,623.5)
---------------- --------------- ---------------- -----------------
Net Sales 3,880.5 3,706.2 10,931.3 10,468.9
Cost of Sales (2,204.1) (2,105.2) (6,368.4) (6,139.6)
Marketing, Distribution and
Administrative Expenses (648.5) (630.7) (1,812.9) (1,757.3)
---------------- --------------- ---------------- -----------------
Operating Income 1,027.9 970.3 2,750.0 2,572.0
Interest Expense (98.7) (92.7) (299.7) (273.6)
Interest Capitalized 6.9 3.9 17.7 12.9
Interest Income 0.3 0.3 0.6 0.9
Other Income/(Expense), Net 2.1 (0.2) 1.1 (0.5)
---------------- --------------- ---------------- -----------------
Income Before Income Taxes 938.5 881.6 2,469.7 2,311.7
Provision for Income Taxes (361.5) (341.5) (955.7) (924.2)
Equity Income, Net of Tax 87.3 81.9 267.7 277.1
---------------- --------------- ---------------- -----------------
Net Income $664.3 $622.0 $1,781.7 $1,664.6
================ =============== ================ =================
Basic Earnings Per Share $.81 $.72 $2.15 $1.91
================ =============== ================ =================
Diluted Earnings Per Share $.80 $.71 $2.12 $1.88
================ =============== ================ =================
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Capital Expenditures $229.4 $204.7 $719.5 $597.3
================ =============== ================ =================
Depreciation and Amortization $220.9 $212.4 $649.9 $629.9
================ =============== ================ =================
Weighted Average Shares:
Basic 819.7 860.4 830.6 870.4
================ =============== ================ =================
Diluted 830.3 872.6 841.2 883.4
================ =============== ================ =================
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ANHEUSER-BUSCH COMPANIES, INC.
BUSINESS SEGMENTS (UNAUDITED)
THIRD QUARTER ENDED SEPTEMBER 30
($ IN MILLIONS)
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Domestic Corporate
Beer Int'l Beer Packaging Entertain. Other & Elims. Consol.
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2003
Gross Sales $3,483.1 216.3 541.9 356.0 20.0 (151.5) $4,465.8
Net Sales:
- - Intersegment -- -- $231.4 -- 1.0 (232.4) $--
- - External $2,942.0 172.1 310.5 356.0 19.0 80.9 $3,880.5
Income Before
Income Taxes $901.0 29.7 47.2 121.9 (0.1) (161.2) $938.5
Equity Income -- $87.3 -- -- -- -- $87.3
Net Income $558.6 105.7 29.2 75.6 -- (104.8) $664.3
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- -----------------------------------------------------------------------------------------------------------------------------------
2002
Gross Sales $3,361.5 183.5 541.6 325.9 25.3 (165.2) $4,272.6
Net Sales:
- - Intersegment -- -- $237.4 -- 3.6 (241.0) $--
- - External $2,825.6 153.0 304.2 325.9 21.7 75.8 $3,706.2
Income Before
Income Taxes $850.7 25.1 42.4 113.2 1.5 (151.3) $881.6
Equity Income -- $81.9 -- -- -- -- $81.9
Net Income $527.5 97.5 26.3 70.2 1.0 (100.5) $622.0
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ANHEUSER-BUSCH COMPANIES, INC.
BUSINESS SEGMENTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30
($ IN MILLIONS)
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- -----------------------------------------------------------------------------------------------------------------------------------
Domestic Corporate
Beer Int'l Beer Packaging Entertain. Other & Elims. Consol.
- -----------------------------------------------------------------------------------------------------------------------------------
2003
Gross Sales $10,019.4 583.5 1,628.8 762.1 53.3 (447.1) $12,600.0
Net Sales:
- - Intersegment -- -- $678.8 -- 3.3 (682.1) $--
- - External 8,463.5 470.7 950.0 762.1 50.0 235.0 $10,931.3
Income Before
Income Taxes $2,576.3 75.8 131.5 167.4 (0.2) (481.1) $2,469.7
Equity Income -- $267.7 -- -- -- -- $267.7
Net Income $1,597.3 314.7 81.5 103.8 (0.1) (315.5) $1,781.7
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- -----------------------------------------------------------------------------------------------------------------------------------
2002
Gross Sales $9,668.4 527.2 1,587.9 716.7 75.0 (482.8) $12,092.4
Net Sales:
- - Intersegment -- -- $682.5 -- 16.8 (699.3) $--
- - External $8,132.9 439.2 905.4 716.7 58.2 216.5 $10,468.9
Income Before
Income Taxes $2,402.5 70.3 121.0 169.6 4.8 (456.5) $2,311.7
Equity Income -- $277.1 -- -- -- -- $277.1
Net Income $1,489.6 320.7 75.0 105.2 3.0 (328.9) $1,664.6
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ANHEUSER-BUSCH COMPANIES, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
($ IN MILLIONS)
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- -----------------------------------------------------------------------------------------------------------
September 30, December 31,
2003 2002
------------------ -------------------
Assets
Current Assets:
Cash $136.4 $188.9
Accounts receivable 843.0 630.4
Inventories:
Raw materials and supplies 270.1 294.1
Work in progress 75.5 82.8
Finished goods 204.9 186.7
Total inventories 550.5 563.6
Other current assets 171.8 121.8
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Total current assets 1,701.7 1,504.7
Investments in affiliated companies 2,893.3 2,827.9
Other assets 1,381.0 1,423.0
Plant and equipment, net 8,442.3 8,363.9
------------------ -------------------
Total Assets $14,418.3 $14,119.5
================== ===================
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $1,054.5 $986.6
Accrued salaries, wages and benefits 255.9 287.5
Accrued taxes 363.2 181.0
Other current liabilities 320.7 332.6
------------------ -------------------
Total current liabilities 1,994.3 1,787.7
------------------ -------------------
Postretirement benefits 474.5 474.2
------------------ -------------------
Debt 7,075.2 6,603.2
------------------ -------------------
Deferred income taxes 1,408.4 1,345.1
------------------ -------------------
Other long-term liabilities 858.4 857.0
------------------ -------------------
Shareholders Equity:
Common stock 1,456.5 1,453.4
Capital in excess of par value 1,111.1 1,024.5
Retained earnings 13,819.0 12,544.0
Treasury stock, at cost (12,746.3) (11,008.6)
Accumulated other comprehensive loss (986.5) (870.7)
ESOP debt guarantee (46.3) (90.3)
------------------ -------------------
Total Shareholders Equity 2,607.5 3,052.3
------------------ -------------------
Commitments and contingencies -- --
------------------ -------------------
Total Liabilities and Shareholders Equity $14,418.3 $14,119.5
================== ===================
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ANHEUSER-BUSCH COMPANIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
($ IN MILLIONS)
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Nine Months Ended September 30,
-------------------------------------------
2003 2002
---------------- ----------------
Cash flow from operating activities:
Net Income $1,781.7 $1,664.6
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 649.9 629.9
Deferred income taxes 63.3 69.9
Undistributed earnings of affiliated companies (107.1) (230.3)
Other, net 68.5 118.2
---------------- ----------------
Operating cash flow before change in working capital 2,456.3 2,252.3
(Increase)/decrease in working capital (7.2) 63.0
---------------- ----------------
Cash provided by operating activities 2,449.1 2,315.3
---------------- ----------------
Cash flow from investing activities:
Capital expenditures (719.5) (597.3)
Business acquisitions (116.4) (12.7)
---------------- ----------------
Cash used for investing activities (835.9) (610.0)
---------------- ----------------
Cash flow from financing activities:
Increase in long-term debt 929.3 554.9
Decrease in long-term debt (401.9) (467.9)
Dividends paid to shareholders (506.7) (482.9)
Acquisition of treasury stock (1,747.8) (1,487.2)
Issuance of shares under stock plans 61.4 120.8
---------------- ----------------
Cash used for financing activities (1,665.7) (1,762.3)
---------------- ----------------
Net decrease in cash during the period (52.5) (57.0)
Cash, beginning of period 188.9 162.6
---------------- ----------------
Cash, end of period $136.4 $105.6
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