EX-99 2 ex99.htm ex99.htm
Exhibit 99
 
 
News
 




For more information, contact:
Brenda Williams (203) 846-6636


ANHEUSER-BUSCH COS. REPORTS IMPROVED SALES AND EARNINGS
PER SHARE FOR THE FIRST QUARTER 2008

ST. LOUIS, April 23, 2008 – Anheuser-Busch Cos., Inc. reported improved sales and earnings for the first quarter 2008 today at its annual meeting of shareholders held in Orlando, Fla. Consolidated net sales increased 6.2 percent in the first quarter 2008 and earnings per share increased 6.0 percent.
 
“Our operations achieved solid results in the quarter, growing sales and operating income six percent over the first quarter last year,” said August A. Busch IV, president and chief executive officer of the company. “We have successfully implemented U.S. beer price increases and expect good revenue per barrel performance in 2008. Our cost reduction efforts are significantly mitigating the impact of industry-wide cost pressures. We are increasing marketing and sales support for our core beer brands, and, although U.S. beer sales-to-retailers results were below expectations, we are optimistic concerning the outlook for beer sales during the key summer selling season.”

- more -



 
 
 

First Quarter Earnings
Anheuser-Busch
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BEER SALES RESULTS
 
The company’s reported beer volume is summarized in the following table:
 
Beer Volume (millions of barrels)
  
 
First Quarter
    
2008 vs. 2007
  
 
 
2008
  
 
2007
    
 
Barrels
    
 
%
  
U.S.
25.8
  
25.7
    
Up 0.1
    
Up 0.4%
  
International
5.4
  
5.2
    
Up 0.2
    
Up 3.1%
  
Worldwide A-B Brands
31.2
  
30.9
    
Up 0.3
    
Up 0.8%
  
Equity Partner Brands
7.3
  
6.7
    
Up 0.6
    
Up 9.3%
  
Total Brands
38.5
  
37.6
    
Up 0.9
    
Up 2.3%
  
                     

U.S. beer shipments-to-wholesalers increased 0.4 percent for the first quarter 2008, with import brands contributing 60 basis points to overall growth. First quarter 2008 sales-to-retailers were down 0.7 percent, and sales-to-retailers for Anheuser-Busch produced brands, excluding imports, declined 1.4 percent. Sales-to-retailers trends have improved in April and for the first three weeks of the month are up 2 percent for Anheuser-Busch produced brands. Wholesaler inventories for Anheuser-Busch produced brands at the end of the first quarter were approximately the same as a year ago.
 
The company’s estimated U.S. market share for the first quarter 2008 was 50.9 percent, compared to first quarter 2007 market share of 50.6 percent. Market share is based on estimated U.S. beer industry shipment volume using information provided by the Beer Institute and the U.S. Department of Commerce.
 
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, increased 3.1 percent for the first quarter 2008, driven primarily by sales in Canada, Mexico, Argentina and China.


 
 
 

First Quarter Earnings
Anheuser-Busch
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Worldwide Anheuser-Busch beer sales volume for the first quarter 2008 increased 0.8 percent, to 31.2 million barrels. Worldwide beer volume is comprised of domestic volume plus international volume.
 
Equity partner brands volume, representing the company’s share of its equity partners’ volume reported on a one-month lag, increased 9.3 percent for the first quarter of 2008 due to increased volume for Modelo and Tsingtao.
 
Total brands volume increased 2.3 percent for the first quarter 2008.
 
FIRST QUARTER 2008 FINANCIAL RESULTS
 
Key operating results and a discussion of financial highlights for the first quarter 2008 compared to the first quarter 2007 follow.
 
 
In millions, except per share
First Quarter
    
2008 vs. 2007
  
   
2008
  
2007
    
$
    
%
  
 
Gross Sales
$4,655
  
$4,406
    
Up $249
    
Up 5.7%
  
 
Net Sales
$4,099
  
$3,858
    
Up $241
    
Up 6.2%
  
 
Operating Income
$763
  
$718
    
Up $45
    
Up 6.2%
  
 
Income Before Income Taxes
$635
  
$596
    
Up $39
    
Up 6.5%
  
 
Equity Income
$126
  
$159
    
Dn $33
    
Dn 21.0%
  
 
Net Income
$511
  
$518
    
Dn $7
    
Dn 1.3%
  
 
Diluted Earnings per Share
$.71
  
$.67
    
Up $.04
    
Up 6.0%
  

·
Net sales increased 6.2 percent on increased sales from all business segments.  U.S. beer sales were up due to increased volume and pricing, international beer net sales increased 20 percent from higher volume, packaging segment sales were up 8 percent due primarily to higher volume and entertainment sales increased 20 percent primarily from higher attendance.
 
 
U.S. beer segment sales increased 4 percent on improved revenue per barrel and increased sales volume. Revenue per barrel1/ was up 2.3 percent primarily due to the implementation of price increases on a majority of the company’s U.S. volume late last year and in the first quarter of 2008.

 
 
 

First Quarter Earnings
Anheuser-Busch
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·
Operating income increased 6.2 percent due primarily to higher profits for U.S. beer and international beer operations and improved results from entertainment operations, partially offset by lower packaging segment results.
 
 
Income before income taxes for U.S. beer was up $18 million, reflecting higher volume and pricing, partially offset by increased marketing expense for trademark brands.

 
International beer pretax income was up $18 million, primarily due to increased profits in China, Canada and improved results in the United Kingdom.

 
Packaging segment pretax income decreased $5 million primarily due to lower earnings from recycling operations.

 
Entertainment segment pretax results improved $12 million primarily from increased attendance due to the Easter holiday occurring in the first quarter in 2008 versus the second quarter last year.
 
·
Equity income decreased $33 million in the first quarter 2008, primarily due to a combination of higher materials and operating costs for Grupo Modelo partially offset by higher beer volume. Additionally, equity income for the first quarter 2007 included a $17 million benefit from the return of an advertising fund that was part of Modelo’s former beer import contract.


 
 
 

First Quarter Earnings
Anheuser-Busch
Add Four


·
Net income in the first quarter 2008 decreased 1.3 percent and diluted earnings per share were up 6.0 percent versus prior year. Earnings per share continue to benefit from the company’s ongoing share repurchase program. The company repurchased over 9 million shares in the first quarter.
 
Other Matters
 
Anheuser-Busch will conduct a conference call with investors to discuss first quarter 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.
 
# # #
 
Note
1.
Domestic revenue per barrel is calculated as net sales generated by the company’s U.S. beer operations on barrels of beer sold, determined on a U.S. GAAP basis, divided by the volume of beer shipped to U.S. wholesalers.




 
 
 

First Quarter Earnings
Anheuser-Busch
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This release contains forward-looking statements regarding the company’s expectations concerning its future operations, earnings and prospects. On the date the forward-looking 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’s expectations involve risks and uncertainties (both favorable and unfavorable) and are based on 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. Important factors that could cause actual results to differ (favorably or unfavorably) from the expectations stated in this release include, among others, changes in the pricing environment for the company’s products; changes in U.S. demand for malt beverage products, including changes in U.S. demand for other alcohol beverages; changes in consumer preference for the company’s malt beverage products; changes in the distribution for the company’s malt beverage products; changes in the cost of marketing the company’s malt beverage products; regulatory or legislative changes, including changes in beer excise taxes at either the federal or state level and changes in income taxes; changes in the litigation to which the company is a party; changes in raw materials prices; changes in packaging materials costs; changes in energy costs; changes in the financial condition of the company's suppliers; changes in interest rates; changes in foreign currency exchange rates; unusual weather conditions that could impact beer consumption in the U.S.; changes in attendance and consumer spending patterns for the company’s theme park operations; changes in demand for aluminum beverage containers; changes in the company’s international beer business or in the beer business of the company’s international equity partners; changes in the economies of the countries in which the company, its international beer business or its international equity partners operate; future acquisitions or divestitures by the company, including effects on its credit rating; changes resulting from transactions among the company’s global or domestic competitors; and the effect of stock market conditions on the company’s share repurchase program.  Anheuser-Busch disclaims any obligation to update or revise any of these forward-looking statements.  Additional risk factors concerning the company can be found in the company’s most recent Form 10-K.
 




 
 
 
Anheuser-Busch Companies, Inc.
Comparative Consolidated Statement of Earnings (Unaudited)

(In Millions, Except Per Share)

 

     
First Quarter
Ended March 31,
      
Change 2008 vs. 2007
Fav./(Unfav.)
    
     
2008
    
2007
      
$
      
%
    
 
Gross sales
     $4,654.7       $4,405.6         $249.1       5.7 %  
 
Excise taxes
     (555.5 )     (547.2 )       (8.3 )     (1.5 )%  
 
Net Sales
     4,099.2       3,858.4         240.8       6.2 %  
 
Cost of sales
     (2,630.1 )     (2,474.7 )       (155.4 )     (6.3 )%  
 
Marketing, distribution and
administrative expenses
     (706.3 )     (665.7 )       (40.6 )     (6.1 )%  
 
Operating income
     762.8       718.0         44.8       6.2 %  
 
Interest expense
     (129.1 )     (119.9 )       (9.2 )     (7.7 )%  
 
Interest capitalized
     4.9       3.5         1.4       40.0 %  
 
Interest income
     1.1       0.5         0.6       N/M    
 
Other expense, net
     (4.9 )     (5.9 )       1.0       16.9 %  
 
Income before income taxes
     634.8       596.2         38.6       6.5 %  
 
Provision for income taxes
     (249.9 )     (238.1 )       (11.8 )     (5.0 )%  
 
Equity income, net of tax
     126.0       159.4         (33.4 )     (21.0 )%  
 
Net income
     $510.9       $517.5         $(6.6 )     (1.3 )%  
                                       
 
Basic earnings per share
     $.71       $.68         $.03       4.4 %  
 
Diluted earnings per share
     $.71       $.67         $.04       6.0 %  
                                       
                                       
                       
Decrease
  
 
Weighted Average Shares Outstanding
                    
Shares
    
%
  
 
Basic
     716.7       763.5         (46.8 )     (6.1 )%  
 
Diluted
     721.6       773.3         (51.7 )     (6.7 )%  
                                       




 
 
 
Anheuser-Busch Companies, Inc.
Business Segments (Unaudited)
First Quarter Ended March 31

(In Millions)

 

   
 
 
U.S. Beer
  
International
Beer
  
 
 
Packaging
  
 
 
Entertainment
  
 
Corporate
& Elims
  
 
 
Consolidated
  
 
2008
                        
 
Gross Sales
$3,574.7
  
337.8
  
644.5
  
221.6
  
(123.9)
  
$4,654.7
  
 
Net Sales:
                        
 
 - Intersegment
$0.8
  
0.1
  
242.0
  
--
  
(242.9)
  
--
  
 
 - External
$3,065.9
  
290.2
  
402.5
  
221.6
  
119.0
  
$4,099.2
  
 
Income Before
 Income Taxes
 
$775.5
  
 
37.5
  
 
39.9
  
 
(6.1)
  
 
(212.0)
  
 
$634.8
  
 
Equity Income
$(0.4)
  
126.4
  
--
  
--
  
--
  
$126.0
  
 
Net Income
$480.4
  
149.7
  
24.7
  
(3.8)
  
(140.1)
  
$510.9
  
                           
 
2007
                        
 
Gross Sales
$3,457.4
  
285.6
  
604.5
  
185.0
  
(126.9)
  
$4,405.6
  
 
Net Sales:
                        
 
 - Intersegment
$0.8
  
0.3
  
232.0
  
--
  
(233.1)
  
--
  
 
 - External
$2,953.3
  
241.4
  
372.5
  
185.0
  
106.2
  
$3,858.4
  
 
Income Before
 Income Taxes
 
$758.0
  
 
19.1
  
 
44.5
  
 
(18.5)
  
 
(206.9)
  
 
$596.2
  
 
Equity Income
$0.1
  
159.3
  
--
  
--
  
--
  
$159.4
  
 
Net Income
$470.1
  
171.1
  
27.6
  
(11.5)
  
(139.8)
  
$517.5
  

 
In 2008, the company changed reporting responsibility for beer sales in the Caribbean region from U.S. Beer to International Beer and also reassigned certain administrative and technology support costs between Corporate and U.S. Beer. Segment results for 2007 have been updated to conform to the revised reporting conventions.
 


 

 

 
 
 
Anheuser-Busch Companies, Inc.
Consolidated Balance Sheet (Unaudited)

(In Millions)
 


     
March 31,
    
December 31,
    
     
2008
    
2007
    
 
Assets
              
 
Current Assets:
              
 
Cash
     $217.8       $283.2    
 
Accounts receivable
     1,001.6       805.2    
 
Inventories
     818.3       723.5    
 
Other current assets
     222.0       212.6    
 
Total current assets
     2,259.7       2,024.5    
 
Investments in affiliated companies
     4,231.4       4,019.5    
 
Plant and equipment, net
     8,765.1       8,833.5    
 
Intangible assets, including goodwill of $1,160.3 and $1,134.6
     1,556.0       1,547.9    
 
Other assets
     739.0       729.6    
 
Total Assets
     $17,551.2       $17,155.0    
                     
                     
 
Liabilities and Shareholders Equity
                  
 
Current Liabilities:
                  
 
Accounts payable
     $1,405.6       $1,464.5    
 
Accrued salaries, wages and benefits
     313.3       374.3    
 
Accrued taxes
     387.9       106.2    
 
Accrued interest
     125.6       136.4    
 
Other current liabilities
     309.6       222.4    
 
Total current liabilities
     2,542.0       2,303.8    
 
Retirement benefits
     1,015.4       1,002.5    
 
Debt
     9,281.0       9,140.3    
 
Deferred income taxes
     1,323.1       1,314.6    
 
Other long-term liabilities
     241.1       242.2    
 
Shareholders Equity:
                  
 
Common stock
     1,483.4       1,482.5    
 
Capital in excess of par value
     3,423.6       3,382.1    
 
Retained earnings
     18,198.5       17,923.9    
 
Treasury stock, at cost
     (19,165.3 )     (18,714.7 )  
 
Accumulated non-owner changes in equity
     (791.6 )     (922.2 )  
 
Total Shareholders Equity
     3,148.6       3,151.6    
 
Commitments and contingencies
     --       --    
 
Total Liabilities and Shareholders Equity
     $17,551.2       $17,155.0    
                     


 
 
 
Anheuser-Busch Companies, Inc.
 Consolidated Statement of Cash Flows (Unaudited)

(In Millions)

 

     
Three Months
Ended March 31,
    
     
2008
    
2007
    
 
Cash flow from operating activities:
              
 
Net income
     $510.9       $517.5    
 
Adjustments to reconcile net income to cash provided by
operating activities:
                  
 
Depreciation and amortization
     253.3       246.0    
 
Decrease in deferred income taxes
     (9.6 )     (21.9 )  
 
Stock-based compensation expense
     14.4       15.1    
 
Undistributed earnings of affiliated companies
     (126.0 )     (159.4 )  
 
Other, net
     12.6       (40.9 )  
 
Operating cash flow before the change in working capital
     655.6       556.4    
 
Increase in working capital
     (44.9 )     (240.4 )  
 
Cash provided by operating activities
     610.7       316.0    
                     
 
Cash flow from investing activities:
                  
 
Capital expenditures
     (150.3 )     (154.4 )  
 
Acquisitions
     (1.5 )     (83.5 )  
 
Cash used for investing activities
     (151.8 )     (237.9 )  
                     
 
Cash flow from financing activities:
                  
 
Increase in debt
     353.3       585.1    
 
Decrease in debt
     (218.9 )     (0.7 )  
 
Dividends paid to shareholders
     (236.3 )     (225.5 )  
 
Acquisition of treasury stock
     (458.7 )     (477.4 )  
 
Shares issued under stock plans
     36.3       95.3    
 
Cash used for financing activities
     (524.3 )     (23.2 )  
 
Net increase / (decrease) in cash during the period
     (65.4 )     54.9    
 
Cash, beginning of period
     283.2       219.2    
 
Cash, end of period
     $217.8       $274.1