EX-99 2 exh99.txt 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:
---------------------------------------------------------------------------------------------------------------------- Reported Beer Volume (millions of barrels) ---------------------------------------------------------------------------------------------------------------------- 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% ====== ========= ======== ======= ========= ======= ----------------------------------------------------------------------------------------------------------------------
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 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 ============ ============ ============= ============= ------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------- 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 ================== ================= ----------------------------------------------------------------------------------------------------------------
-------------------------------------------------------- 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 ================ ================ ---------------------------------------------------------------------------------------------------------------------------