Exhibit 99
[Anheuser-Busch Companies logo]
News
For more information, contact:
Carlos Ramirez, (314) 577-9629
FOR IMMEDIATE RELEASE
- ---------------------
ANHEUSER-BUSCH COS. REPORTS IMPROVED SALES AND
EARNINGS FOR THE THIRD QUARTER AND NINE MONTHS OF 2004
------------------------------------------------------
EARNINGS PER SHARE INCREASES 10.8 PERCENT FOR THE NINE MONTHS
ST. LOUIS, October 27, 2004 - Anheuser-Busch Cos., Inc. achieved
improved sales and earnings for the third quarter and nine months of 2004,
it was announced today by Patrick Stokes, president and chief executive
officer of the company. Consolidated net sales increased 5.1 percent in the
third quarter, while earnings per share increased 6.3 percent. Net sales and
earnings per share increased 5.8 percent and 10.8 percent, respectively, for
the nine months.
Results for the nine months of 2004 benefited from a $19.5 million
pretax gain ($.015 per share) in the first quarter 2004 from the sale of
commodity hedges. This gain is reported in other income/(expense) on the
consolidated income statement and does not impact gross profit or operating
income. Excluding this gain, earnings per share for the nine months
increased 10.1 percent (1) vs. 2003.
"Anheuser-Busch is achieving another year of solid growth in
earnings per share, despite the general slowdown in spending for consumer
products this summer. We anticipate earnings per share growth of 10 percent
to 11 percent (2) for 2004, excluding the benefit of the commodity hedge gain
and including the dilution related to the Harbin acquisition," said Stokes.
"Additionally, we currently expect earnings per share growth in the 7
percent to 10 percent range for 2005 compared with 2004 (on a reported
basis, including the commodity hedge gain). We remain confident in our
ability to achieve our double-digit earnings per share growth objective over
the longer-term."
-more-
Third Quarter Earnings
Anheuser-Busch
Add One
During the third quarter Anheuser-Busch completed its acquisition
of the Harbin Brewery Group. The Harbin investment is consolidated within
the company's financial statements. The company reports Harbin's results on
a one-month lag basis.
Domestic revenue per barrel (3) increased 2.1 percent in the third
quarter. Domestic revenue per barrel for the nine months of 2004 grew 2.5
percent vs. the same periods in 2003, reflecting the continuing favorable
pricing environment.
Gross profit margin declined 110 basis points in the third quarter,
to 42.1 percent and operating margin declined 90 basis points to 25.6
percent. The decrease in third quarter margins is primarily due to higher
sales from the company's commodity-based aluminum recycling operations and
the impact of Florida hurricanes on the entertainment business segment. For
the nine months of 2004, gross and operating margins were both down 20 basis
points, to 41.5 percent and 25.0 percent, respectively. These declines are
also primarily due to the impact of higher sales from the company's
commodity-based aluminum recycling operation, which offset a 30 basis point
increase in domestic beer gross margin.
Consistent with the company's practice of implementing moderate
annual price increases in two phases, Anheuser-Busch initiated selected
pricing actions beginning in early October 2004. As in the past, the revenue
enhancement initiatives have been tailored to specific markets, brands and
packages and preliminary results are encouraging. The second phase of the
pricing initiatives is planned for the first quarter of 2005.
Third Quarter Earnings
Anheuser-Busch
Add Two
BEER SALES RESULTS
- ------------------
The company's reported beer volume is summarized in the following
table:
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Reported Beer Volume (millions of barrels)
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Third Quarter Nine Months Ended September 30
----------------------------------- ----------------------------------
vs. 2003 vs. 2003
---------------------- ---------------------
2004 Barrels % 2004 Barrels %
------ --------- -------- ------- --------- -------
Domestic 27.6 0.03 0.1% 80.0 0.8 0.9%
International 4.9 2.6 112.1% 9.1 2.8 45.7%
------ --------- -------- ------- --------- -------
Worldwide A-B Brands 32.5 2.6 8.8% 89.1 3.6 4.2%
Int'l Equity Partner Brands 5.2 0.3 6.5% 14.8 0.5 3.6%
------ --------- -------- ------- --------- -------
Total Brands 37.7 2.9 8.5% 103.9 4.1 4.1%
====== ========= ======== ======= ========= =======
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Domestic beer sales-to-wholesalers were up 0.1 percent for the
third quarter of 2004 vs. the third quarter 2003, and were up 0.9 percent
for the nine months of 2004. The company now expects full year
sales-to-wholesalers to be up about 0.5 percent.
Wholesaler sales-to-retailers were down 1.3 percent in the third
quarter and up 0.7 percent for the nine months, vs. 2003 levels. Both
sales-to-wholesalers and sales-to-retailers have been adversely impacted by
the abnormally cool and wet weather in many key markets, especially in the
Southeastern United States, and the general slowdown in consumer spending
during the third quarter.
The company's domestic market share (excluding exports) for the
nine months of 2004 and 2003 was 50 percent. Domestic market share is based
on estimated U.S. beer industry sales using information provided by the Beer
Institute and the U.S. Department of Commerce.
Third Quarter Earnings
Anheuser-Busch
Add Three
International volume, consisting of Anheuser-Busch brands produced
overseas by company-owned breweries and under license and contract-brewing
agreements, plus exports from the company's U.S. breweries to markets around
the world, increased 112.1 percent for the third quarter and 45.7 percent
for the nine months of 2004. International beer volume for the third quarter
2004 includes 2.6 million barrels for Harbin. Excluding Harbin,
international volume decreased 1.8 percent in the third quarter. The
decrease is due to lower volume in Europe, reflecting a difficult comparison
to volume in 2003 that benefited from unusually hot summer weather. For the
nine months of 2004, international volume excluding Harbin increased 3.3
percent, due primarily to higher sales volume in China. Worldwide
Anheuser-Busch beer sales volume for the third quarter and nine months of
2004 rose 8.8 percent and 4.2 percent, to 32.5 million and 89.1 million
barrels respectively, vs. 2003.
Worldwide Anheuser-Busch beer brand volume is comprised of domestic
volume and international volume. International equity partner brands volume,
representing the company's share of its foreign equity partners' volume
reported on a one-month lag, increased 6.5 percent for the third quarter and
3.6 percent for the nine months of 2004 vs. 2003, contributing to the
company's 8.5 percent and 4.1 percent increase in total brands volume for
the same periods.
THIRD QUARTER 2004 FINANCIAL RESULTS
- ------------------------------------
Key operating results for the third quarter 2004 vs. 2003 are
summarized below:
- ----------------------------------------------------------------------------------------------------------------------
($ in millions, except per share)
--------------------------------------------------------------
Third Quarter 2004 vs. 2003
-------------------------- ---------------------------
2004 2003 $ %
-------- -------- --------- ----------
Gross Sales $4,680 $4,466 Up $214 Up 4.8%
Net Sales $4,080 $3,881 Up $199 Up 5.1%
Income Before Income Taxes $948 $939 Up $9 Up 1.0%
Equity Income $104 $87 Up $17 Up 18.9%
Net Income $684 $664 Up $20 Up 3.0%
Diluted Earnings per Share $.85 $.80 Up $.05 Up 6.3%
- ----------------------------------------------------------------------------------------------------------------------
Third Quarter Earnings
Anheuser-Busch
Add Four
A discussion of financial highlights for the third quarter 2004
follows:
o Net sales increased 5.1 percent compared with the third quarter 2003,
driven primarily by a 2.6 percent increase in domestic beer segment net
sales (due to higher revenue per barrel), the inclusion of Harbin sales
in 2004 and increased sales from the company's commodity-based aluminum
recycling operation. Sales growth for the entertainment segment was
adversely impacted by hurricanes in Florida.
o Income before income taxes for the third quarter increased 1 percent
vs. 2003, reflecting improved results for domestic and international
beer and packaging operations, mostly offset by a lower entertainment
profit contribution and higher corporate expenses.
Pretax income for the domestic beer segment was up 3.6 percent for the
quarter, primarily reflecting higher revenue per barrel due to the
favorable pricing environment.
International beer segment pretax income improved $7 million or 23
percent in the third quarter vs. 2003, primarily due to the inclusion
of Harbin results and profit growth in Canada.
Packaging segment pretax profits were up 4 percent in the third quarter
2004, primarily due to improved profits from the company's aluminum
recycling operation.
Entertainment segment pretax profits decreased 7 percent compared with
the third quarter 2003, primarily due to lower attendance resulting
from the impact of hurricanes in Florida.
Third Quarter Earnings
Anheuser-Busch
Add Five
Corporate expenses increased $21 million vs. the third quarter 2003.
This increase is primarily due to higher employee benefits expense and
higher interest expense.
o Equity income was up 19 percent in the third quarter 2004 vs. 2003,
primarily reflecting the benefit of price increases implemented by
Grupo Modelo, combined with strong volume growth.
o Net income increased 3 percent compared with third quarter 2003.
Diluted earnings per share were $.85, an increase of 6.3 percent,
compared with 2003. Earnings per share continue to benefit from the
company's ongoing share repurchase program.
NINE MONTHS OF 2004 FINANCIAL RESULTS
- -------------------------------------
Key operating results for the nine months of 2004 vs. 2003 are
summarized below:
- ----------------------------------------------------------------------------------------------------------------------
($ in millions, except per share)
---------------------------------------------------------------
Nine Months 2004 vs. 2003
--------------------------- ---------------------------
2004 2003 $ %
--------- --------- --------- ----------
Gross Sales $13,280 $12,600 Up $680 Up 5.4%
Net Sales $11,567 $10,931 Up $636 Up 5.8%
Income Before Income Taxes $2,629 $2,470 Up $159 Up 6.4%
Equity Income $299 $268 Up $31 Up 11.7%
Net Income $1,908 $1,782 Up $126 Up 7.1%
Diluted Earnings per Share $2.35 $2.12 Up $.23 Up 10.8%
- ----------------------------------------------------------------------------------------------------------------------
A discussion of financial highlights for the nine months of 2004
follows:
o Net sales increased 5.8 percent compared with the nine months of 2003,
driven primarily by a 4 percent increase in domestic beer segment net
sales (due to higher revenue per barrel and higher volume) along with
increased sales for the international beer, packaging and entertainment
operating segments.
Third Quarter Earnings
Anheuser-Busch
Add Six
o Income before income taxes increased 6.4 percent vs. the nine months of
2003, reflecting improved results for all of the company's operating
segments.
Income before income taxes for the nine months of 2004 includes a $19.5
million pretax gain ($.015 per share) from the first quarter sale of
commodity hedges that had been in place for future years. These hedges
were originally placed using estimates for costs to be contained in the
renewal of a supply contract. During the first quarter, the company
lowered its cost estimates, resulting in significant hedge
ineffectiveness in compliance with FAS 133. Due to the hedge
ineffectiveness, the company sold the hedges and realized the $19.5
million pretax gain, which is included as a corporate item for business
segment reporting purposes.
Pretax income for the domestic beer segment was up 6.6 percent for the
nine months, reflecting higher revenue per barrel and higher beer sales
volume.
International beer segment pretax income improved 19 percent for the
nine months vs. 2003, primarily due to volume and profit growth in
China and Canada and the impact of Harbin beginning in the third
quarter.
Packaging segment pretax profits were up 5 percent for the nine months
2004 vs. 2003. This increase is primarily due to higher soft drink can
volume and pricing and improved results from the company's aluminum
recycling operation.
Third Quarter Earnings
Anheuser-Busch
Add Seven
Entertainment segment pretax income increased 10 percent compared with
the nine months of 2003, primarily due to higher admissions pricing and
increased in-park spending. Year-to-date entertainment results include
the impact of hurricanes in Florida during the third quarter.
o Equity income increased $31 million, or 12 percent, for the nine months
2004 vs. 2003, primarily reflecting the benefit of price increases
implemented by Grupo Modelo and volume growth. Results in 2003 included
a $5.5 million after-tax gain representing Anheuser-Busch's equity
share of CCU earnings from the sale of a brewery in Croatia. Excluding
this gain, equity income for the nine months 2004 increased 14 percent
(4) vs. 2003.
o Net income increased 7.1 percent over the nine months of 2003. Diluted
earnings per share were $2.35, an increase of 10.8 percent, compared
with the prior year. Earnings per share excluding the gain on commodity
hedges increased 10.1 percent. The company repurchased nearly 12
million common shares in the third quarter 2004 and over 27 million
through the nine months of 2004.
Other Matters
- -------------
Anheuser-Busch will conduct a conference call with investors to
discuss earnings results for the third quarter and nine months of 2004 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.
# # #
Third Quarter Earnings
Anheuser-Busch
Add Eight
<FN>
Notes
- -----
(1) Reconciliation of Nine Months Earnings per Share Growth
-------------------------------------------------------
Earnings Per Share Increase
------------------ --------
2004 2003
---- ----
Reported $ 2.35 $2.12 10.8%
=========
Commodity Hedge Gain (.015) --
--------- --------
Excluding Hedge Gain $2.335 $2.12 10.1%
========= ======== =========
(2) Reconciliation of Projected 2004 Earnings per Share Growth
----------------------------------------------------------
Earnings Per Share Increase
------------------ --------
Including Hedge Gain $2.745 to $2.765 10.7% to 11.5%
===================
Commodity Hedge Gain (.015)
---------------------
Excluding Hedge Gain $2.73 to $2.75 10.1% to 10.9%
===================== ===================
(3) Domestic Revenue per Barrel
---------------------------
Domestic revenue per barrel is calculated as net sales generated by the
company's domestic beer operations on barrels of beer sold, determined
on a U.S. GAAP basis, divided by the volume of beer shipped from the
company's breweries to U.S. wholesalers.
(4) Reconciliation of Nine Months Equity Income Growth
--------------------------------------------------
Equity Income Increase
------------- --------
2004 2003
---- ----
Reported $299.1 $267.7 11.7%
==========
Gain on Brewery Sale -- (5.5)
--------- ---------
Excluding Gain $299.1 $262.2 14.1%
========= ========= ==========
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.
--------------------------------------------------------
ANHEUSER-BUSCH COMPANIES, INC.
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30
(IN MILLIONS, EXCEPT PER SHARE)
--------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Third Quarter Year-to-Date
----------------------------- -------------------------------
2004 2003 2004 2003
------------ ------------ ------------- -------------
Gross Sales $4,679.6 $4,465.8 $13,279.8 $12,600.0
Excise Taxes (599.5) (585.3) (1,712.7) (1,668.7)
------------ ------------ ------------- -------------
Net Sales 4,080.1 3,880.5 11,567.1 10,931.3
Cost of Sales (2,361.3) (2,204.1) (6,765.8) (6,368.4)
Marketing, Distribution and
Administrative Expenses (672.5) (648.5) (1,909.1) (1,812.9)
------------ ------------ ------------- -------------
Operating Income 1,046.3 1,027.9 2,892.2 2,750.0
Interest Expense (107.2) (98.7) (314.8) (299.7)
Interest Capitalized 4.7 6.9 15.7 17.7
Interest Income 1.9 0.3 3.4 0.6
Other Income, Net 2.5 2.1 32.5 1.1
------------ ------------ ------------- -------------
Income Before Income Taxes 948.2 938.5 2,629.0 2,469.7
Provision for Income Taxes (367.7) (361.5) (1,020.3) (955.7)
Equity Income, Net of Tax 103.9 87.3 299.1 267.7
------------ ------------ ------------- -------------
Net Income $684.4 $664.3 $1,907.8 $1,781.7
============ ============ ============= =============
Basic Earnings Per Share $.86 $.81 $2.38 $2.15
============ ============ ============= =============
Diluted Earnings Per Share $.85 $.80 $2.35 $2.12
============ ============ ============= =============
- ------------------------------------------------------------------------------------------------------------------------------
Capital Expenditures $284.8 $229.4 $726.5 $719.5
============ ============ ============= =============
Depreciation and Amortization $234.9 $220.9 $692.0 $649.9
============ ============ ============= =============
Weighted Average Shares:
Basic 797.4 819.7 802.9 830.6
============ ============ ============= =============
Diluted 806.6 830.3 812.8 841.2
============ ============ ============= =============
- ------------------------------------------------------------------------------------------------------------------------------
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ANHEUSER-BUSCH COMPANIES, INC.
BUSINESS SEGMENTS
THIRD QUARTER ENDED SEPTEMBER 30
(IN MILLIONS)
--------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Corporate &
Domestic Beer Int'l Beer Packaging Entertain. Other Elims. Consol.
- -------------------------------------------------------------------------------------------------------------------------------
2004
Gross Sales $3,561.3 284.6 611.6 360.6 18.8 (157.3) $4,679.6
Net Sales:
- - Intersegment -- -- $240.1 -- 0.9 (241.0) $ --
- - External $3,018.4 228.0 371.5 360.6 17.9 83.7 $4,080.1
Income Before
Income Taxes $933.3 36.5 48.9 112.9 (1.0) (182.4) $948.2
Equity Income -- $103.9 -- -- -- -- $103.9
Net Income $578.7 126.5 30.3 70.0 (0.6) (120.5) $684.4
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------
ANHEUSER-BUSCH COMPANIES, INC.
BUSINESS SEGMENTS
NINE MONTHS ENDED SEPTEMBER 30
(IN MILLIONS)
--------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Corporate &
Domestic Beer Int'l Beer Packaging Entertain. Other Elims. Consol.
- -------------------------------------------------------------------------------------------------------------------------------
2004
Gross Sales $10,373.3 715.2 1,758.8 827.2 53.1 (447.8) $13,279.8
Net Sales:
- - Intersegment -- -- $688.1 -- 3.0 (691.1) $ --
- - External $8,801.5 574.3 1,070.7 827.2 50.1 243.3 $11,567.1
Income Before
Income Taxes $2,747.5 90.5 138.2 183.7 (3.3) (527.6) $2,629.0
Equity Income -- $299.1 -- -- -- -- $299.1
Net Income $1,703.5 355.2 85.7 113.9 (2.0) (348.5) $1,907.8
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------
ANHEUSER-BUSCH COMPANIES, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(IN MILLIONS)
----------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
September 30, December 31,
2004 2003
------------------ -----------------
Assets
Current Assets:
Cash $196.0 $191.1
Accounts receivable 938.4 669.4
Inventories:
Raw materials and supplies 322.9 320.3
Work in progress 82.6 81.9
Finished goods 261.4 185.3
Total inventories 666.9 587.5
Other current assets 198.3 182.3
------------------ -----------------
Total current assets 1,999.6 1,630.3
Investments in affiliated companies 3,208.0 3,052.0
Plant and equipment, net 8,726.2 8,498.9
Intangible assets, including goodwill of $960.3
million and $349.0 million, respectively 1,167.5 486.6
Other assets 1,097.9 1,021.7
------------------ -----------------
Total Assets $16,199.2 $14,689.5
================== =================
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $1,170.3 $1,093.7
Accrued salaries, wages and benefits 267.1 288.9
Accrued taxes 322.4 163.1
Accrued interest 111.7 110.4
Other current liabilities 218.0 201.1
------------------ -----------------
Total current liabilities 2,089.5 1,857.2
------------------ -----------------
Postretirement benefits 458.4 470.4
------------------ -----------------
Debt 8,272.4 7,285.4
------------------ -----------------
Deferred income taxes 1,695.9 1,462.1
------------------ -----------------
Other long-term liabilities 918.3 902.7
------------------ -----------------
Shareholders Equity:
Common stock 1,462.0 1,457.9
Capital in excess of par value 1,397.0 1,194.0
Retained earnings 15,267.3 13,935.4
Treasury stock, at cost (14,330.8) (12,939.0)
Accumulated non-owner changes in equity (1,030.8) (890.3)
ESOP debt guarantee -- (46.3)
------------------ -----------------
Total Shareholders Equity 2,764.7 2,711.7
------------------ -----------------
Commitments and contingencies -- --
------------------ -----------------
Total Liabilities and Shareholders Equity $16,199.2 $14,689.5
================== =================
- ----------------------------------------------------------------------------------------------------------------
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ANHEUSER-BUSCH COMPANIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
--------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Nine Months Ended September 30,
-------------------------------------------
2004 2003
---------------- ----------------
Cash flow from operating activities:
Net Income $1,907.8 $1,781.7
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 692.0 649.9
Deferred income taxes 134.9 63.3
Undistributed earnings of affiliated companies (120.1) (107.1)
Other, net (17.9) 68.5
---------------- ----------------
Operating cash flow before change in working capital 2,596.7 2,456.3
Increase in working capital (205.3) (7.2)
---------------- ----------------
Cash provided by operating activities 2,391.4 2,449.1
---------------- ----------------
Cash flow from investing activities:
Capital expenditures (726.5) (719.5)
Acquisitions (726.0) (116.4)
---------------- ----------------
Cash used for investing activities (1,452.5) (835.9)
---------------- ----------------
Cash flow from financing activities:
Increase in long-term debt 1,435.1 929.3
Decrease in long-term debt (508.4) (401.9)
Dividends paid to shareholders (549.9) (506.7)
Acquisition of treasury stock (1,410.3) (1,747.8)
Issuance of shares under stock plans 99.5 61.4
---------------- ----------------
Cash used for financing activities (934.0) (1,665.7)
---------------- ----------------
Net increase/(decrease) in cash during the period 4.9 (52.5)
Cash, beginning of period 191.1 188.9
---------------- ----------------
Cash, end of period $196.0 $136.4
================ ================
- ---------------------------------------------------------------------------------------------------------------------------