Anheuser-Busch Announces Higher Sales and Earnings for the Second Quarter and First Six Months of 1999.

ST. LOUIS--(BUSINESS WIRE)--July 28, 1999--

Led by the continued strong performance of its domestic beer business, Anheuser-Busch Companies, Inc. (NYSE:BUD) achieved higher sales and earnings for the second quarter and first six months of 1999, it was announced today by August A. Busch III, Chairman of the Board and President.

Second quarter and first six months earnings per share were up 12.5 percent and 16.4 percent, respectively, compared to last year.

"We have achieved our third consecutive quarter of solid double- digit earnings per share growth since implementing our revenue enhancement strategy of selective, market-by-market price increases or discount reductions," stated Mr. Busch. "Halfway through the key summer selling season, we have achieved significant sales volume growth and revenue per barrel increases. Domestic sales-to-retailer volume was up 3.7 percent for the second quarter and approximately 4 percent for the first six months of 1999. This volume performance was led by the Bud Family and included contributions from the Busch and Natural brand families, as well as new products. Domestic revenue per barrel grew over 2 percent for both the second quarter and first six months of 1999, compared to the same periods last year."

First six month domestic beer shipments were up 4.9 percent vs. the comparable period last year. The company's second quarter domestic shipments grew 2.3 percent to 24.7 million barrels. First six months results are more indicative of the company's sales and financial performance in 1999 than individual first and second quarter results due to the first quarter wholesaler inventory build and second quarter wholesaler inventory drawdown.

The company's beer volume is summarized in the following table: -0-

              Reported Beer Volume (millions of barrels)
                        Second Quarter       Six Months Ended June 30
                     1999        vs. 1998      1999       vs. 1998
                            Barrels     %              Barrels     %
Domestic             24.7   Up 0.5   Up 2.3%   47.9   Up 2.2   Up 4.9%
International         2.0   Dn .02   Dn 1.2%    3.3   Up .01   Up 0.4%
 Worldwide
  - A-B Brands       26.7   Up 0.5   Up 2.0%   51.2   Up 2.3   Up 4.6%
Int'l Equity Partner
 Brands               4.2   Up 1.6  Up 60.9%    7.6   Up 2.6  Up 52.5%
 Total Brands        30.9   Up 2.1   Up 7.4%   58.8   Up 4.9   Up 9.0%

Earnings per share for the second quarter 1999 were $.90, an increase of 12.5 percent vs. second quarter 1998. Earnings per share for the first six months of 1999 were $1.56, an increase of 16.4 percent vs. the same period last year. Earnings growth is primarily due to increased domestic beer sales volume, higher domestic revenue per barrel and increased earnings from the company's equity investment in Grupo Modelo.

The company is currently evaluating opportunities for additional discount reductions and selected price increases in the fourth quarter 1999. The scope of these actions will again be based on a market-by- market assessment of competitive conditions.

"Given the favorable volume and pricing momentum, Anheuser-Busch is confident of achieving its double-digit earnings per share growth objective, with growth in the mid-teens expected for 1999," stated Mr. Busch.

SECOND QUARTER 1999 FINANCIAL RESULTS

Key operating results for the second quarter of 1999 compared to 1998 are summarized below. Second quarter financial results are impacted by beer shipments below underlying sales-to-retailers trends due to the first quarter wholesaler inventory build.

                       Second Quarter (in millions, except per share)
                           1999      1998         1999  vs.  1998
                                                    $         %
Gross Sales               $3,601    $3,522       Up $79     Up 2.2%
Net Sales                 $3,081    $3,006       Up $75     Up 2.5%
Operating Income            $695      $659       Up $36     Up 5.4%
Equity Income, Net of Tax    $48       $20       Up $28   Up 142.0%
Net Income                  $431      $391       Up $40    Up 10.2%
Diluted Earnings per Share  $.90      $.80      Up $.10    Up 12.5%

A discussion of financial highlights for the second quarter 1999 follows:

 -- Gross sales increased $79 million, or 2.2 percent, and net sales
    increased $75 million, or 2.5 percent, compared to the same period
    in 1998.  These increases are due to higher domestic beer sales
    volume and higher domestic revenue per barrel, partially offset by
    lower international sales and lower sales from the company's
    commodity-based aluminum recycling operations.

 -- Operating income increased $36 million, or 5.4 percent, over the
    comparable period last year.  The increase in operating income was
    primarily due to domestic beer growth of 8.9 percent attributable
    to increased beer sales volume and higher revenue per barrel,
    partially offset by higher marketing expense.  Performance of the
    company's packaging operations improved during the second quarter,
    while operating results from theme parks and international beer
    declined.

 -- Equity income, net of tax, increased $28 million for the second
    quarter 1999.  The increase in equity income reflects Modelo's
    strong underlying operating results as well as Anheuser-Busch's
    50.2 percent ownership of Modelo in 1999 vs. 37 percent ownership
    in the second quarter 1998.

 -- Net income increased $40 million, or 10.2 percent, over the
    comparable period in 1998.

 -- Diluted earnings per share were $.90, an increase of $.10, or 12.5
    percent, compared to the second quarter 1998.  Earnings per share
    growth continues to benefit from fewer shares outstanding due to
    the company's ongoing share repurchase program.

FIRST SIX MONTHS OF 1999 FINANCIAL HIGHLIGHTS

Key operating results for the first six months of 1999 compared to 1998 are summarized below:

                                  Six Months Ended June 30
                               (in millions, except per share)
                             1999     1998        1999  vs.  1998
                                                    $          %
Gross Sales                 $6,758   $6,473     Up $285     Up 4.4%
Net Sales                   $5,766   $5,514     Up $252     Up 4.6%
Operating Income            $1,231   $1,127     Up $104     Up 9.2%
Equity Income, Net of Tax      $80      $39      Up $41   Up 103.3%
Net Income                    $750     $656      Up $94    Up 14.3%
Diluted Earnings per Share   $1.56    $1.34     Up $.22    Up 16.4%

A discussion of financial highlights for the first six months of 1999 follows:

 -- Gross sales increased $285 million, or 4.4 percent, and net sales
    increased $252 million, or 4.6 percent.  The primary factors
    responsible for these increases were higher domestic beer sales
    volume and increased domestic revenue per barrel, partially offset
    by lower international beer sales and lower sales by the company's
    commodity-based aluminum recycling operations.

 -- Operating income grew $104 million, or 9.2 percent, vs. the
    comparable period in 1998.  This increase is primarily due to
    strong domestic beer performance driven by higher beer volume and
    increased revenue per barrel, partially offset by higher beer
    marketing expense.  Performance of the company's packaging
    operations improved for the first six months, while operating
    results from theme parks and international beer operations
    declined.

 -- Equity income, net of tax, increased $41 million compared to the
    first six months of 1998.  The increase is due to Modelo's strong
    underlying operating performance and the company's larger equity
    stake in Modelo.

 -- Net income increased $94 million, or 14.3 percent, for the first
    six months of 1999.

 -- Diluted earnings per share increased $.22, or 16.4 percent.
    Earnings per share for the first six months benefited from the
    company's ongoing share repurchase program.  The company has
    repurchased over 10 million shares through the first six months of
    1999.

BEER SALES RESULTS

Worldwide Beer Volume

Worldwide Anheuser-Busch beer brand shipments grew 2.0 percent to 26.7 million barrels in the second quarter and were 51.2 million barrels, up 4.6 percent for the first six months of 1999, compared to similar periods last year. 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 beer volume, which combines equity volume (representing the company's share of its foreign equity partners' volume) with worldwide Anheuser-Busch brand volume, was 30.9 million barrels, up 2.1 million barrels, or 7.4 percent, in the second quarter and 58.8 million barrels, up 4.9 million barrels, or 9.0 percent, for the first six months.

Domestic Beer Volume

Anheuser-Busch domestic beer shipments were 47.9 million barrels, up 4.9 percent for the first six months of 1999. Sales-to-retailers grew approximately 4 percent for the first six months of 1999, with Bud Family sales-to-retailers up 3.4 percent during this period.

Beer Market Share

The company's domestic market share (excluding exports) for the first six months of 1999 was 46.1 percent, an increase of 0.8 percentage points over 1998 market share of 45.3 percent. Including exports, the company's share of U.S. shipments was 45.8 percent vs. 45.1 percent for the first six months onstitute.

International Beer

Iolume growth in Canada, Latin America and Continental Europe offset by continued weakness in Asia and a slowdown in the United Kingdom. Overall, international beer profits, excluding Modelo, declined vs. last year in both the second quarter and first six months of 1999.

OTHER MATTERS

Labor Negotiations

On June 24, 1999, the company and national Teamsters union officials announced an agreement on a new labor contract, subject to ratification by Teamsters-represented employees. The agreement, which has been endorsed by the Director of the Teamsters Brewery and Soft Drink Workers Conference, includes an additional year and will expire February 28, 2004. The results of the ratification vote are expected in August.

The agreement includes wage and benefit increases, as well as provisions to support productivity improvement, promote workplace flexibility, reduce absenteeism, improve the grievance procedure and institute a more effective drug-testing program. Additionally, Anheuser-Busch has reaffirmed its commitment to keep all 12 of its U.S. breweries open during the life of the contract, barring an unforeseen event, providing its Teamsters-represented employees with unprecedented job security.

Antarctica Investment

On July 2, 1999, Anheuser-Busch and Antarctica announced the end of their equity partnership in Brazil. A fixed dollar option was scheduled to expire within 90 days and was no longer economically attractive for Anheuser-Busch. In accordance with the partnership agreement Antarctica will return to Anheuser-Busch its original U.S. dollar investment. Despite the end of the equity partnership, the company is still committed to exploring long-term investment opportunities in Brazil.

This release contains statements regarding the company's expectations concerning its future operations, earnings and prospects. These statements are forward-looking and involve significant risks and uncertainties, and accordingly, no assurances can be given that such expectations will be correct. These expectations 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. Further information on factors that could affect the company's future operations and earnings is included in the company's Forms 10-Q and 10-K.

                    Comparative Statement of Earnings
       Second Quarter and Six Months Ended June 30, 1999 and 1998
                     (In Millions, Except Per Share)

                                 Second Quarter         Year-to-Date
                                 1999      1998        1999      1998

Gross Sales                  $3,600.8  $3,521.6    $6,758.0  $6,472.8
 Excise Taxes                  (520.1)   (515.3)     (992.1)   (959.0)
Net Sales                     3,080.7   3,006.3     5,765.9   5,513.8
 Cost of Products &
  Services                   (1,864.5) (1,863.4)   (3,576.6) (3,502.2)
 Marketing, Distribution
  and Administrative
   Expenses                    (521.6)   (483.7)     (958.1)   (884.1)
Operating Income                694.6     659.2     1,231.2   1,127.5
 Interest Expense               (79.2)    (72.2)     (155.0)   (147.7)
 Interest Capitalized             4.2       8.4         7.5      17.1
 Interest Income                  0.9       1.6         1.8       3.1
 Other Income/(Expense), Net     (3.1)      2.0        (4.3)     (4.1)
Income Before Income Taxes      617.4     599.0     1,081.2     995.9
 Income Taxes                  (234.5)   (227.7)     (410.8)   (378.7)
Equity Income, Net of Tax        48.1      19.9        79.7      39.2
Net Income                     $431.0    $391.2      $750.1    $656.4
Basic Earnings Per Share         $.92      $.81       $1.58     $1.35
Diluted Earnings Per Share       $.90      $.80       $1.56     $1.34

Capital Expenditures           $216.4    $206.7      $400.8    $444.1
Depreciation and Amortization  $190.7    $182.6      $378.5    $360.1
Weighted Average Shares:
 Basic                          470.9     484.1       473.5     485.4
 Diluted                        478.0     488.5       480.8     489.9

                          Business Segments
                   Second Quarter Ended June 30, 1999
                             ($ In Millions)

        Domestic  Int'l                              Corporate
          Beer    Beer  Packaging  Entertain.  Other  & Elims. Consol.

1999

Gross Sales
      $2,827.9   212.9    514.3      225.7      36.1  (216.1) $3,600.8

Net Sales:
 Intersegment
             -       -   $207.0          -       9.1  (216.1)        -
 External
      $2,343.4   177.3    307.3      225.7      27.0       -  $3,080.7

Income Before Income Taxes
        $634.0    12.1     46.1       47.6       5.7  (128.1)   $617.4

Equity Income, Net of Tax
             -   $48.1        -          -         -       -     $48.1

Net Income
        $393.0    55.6     28.6       29.5       3.5   (79.2)   $431.0


1998

Gross Sales
      $2,708.9   242.3    499.1      230.5      36.4  (195.6) $3,521.6

Net Sales:
 Intersegment
             -       -   $187.2          -       8.4  (195.6)        -
 External
      $2,236.7   199.2    311.9      230.5      28.0       -  $3,006.3

Income Before Income Taxes
        $582.1    15.2     42.0       54.6       3.1   (98.0)   $599.0

Equity Income, Net of Tax
             -   $19.9        -          -         -       -     $19.9

Net Income
        $360.9    29.3     26.1       33.9       2.0   (61.0)   $391.2


                          Business Segments
                     Six Months Ended June 30, 1999
                             ($ In Millions)

        Domestic  Int'l                              Corporate
          Beer    Beer  Packaging  Entertain.  Other  & Elims. Consol.

1999

Gross Sales
      $5,480.6   341.4    950.0      339.6      58.1  (411.7) $6,758.0

Net Sales:
- Intersegment
             -       -   $396.9          -      14.8  (411.7)        -
- External
      $4,543.4   286.5    553.1      339.6      43.3       -  $5,765.9

Income Before Income Taxes
      $1,206.2     4.4     72.7       34.0       5.3  (241.4) $1,081.2

Equity Income, Net of Tax
             -   $79.7        -          -         -       -     $79.7

Net Income
        $747.8    82.4     45.1       21.1       3.3  (149.6)   $750.1


1998

Gross Sales
      $5,127.2   378.2    927.7      341.8      66.6  (368.7) $6,472.8

Net Sales:
 Intersegment
             -       -   $354.2          -      14.5  (368.7)        -
 External
      $4,231.6   314.8    573.5      341.8      52.1       -  $5,513.8

Income Before Income Taxes
      $1,068.4     8.9     66.1       40.0       3.0  (190.5)   $995.9

Equity Income, Net of Tax
             -   $39.2        -          -         -       -     $39.2

Net Income
        $662.4    44.7     41.0       24.8       1.9  (118.4)   $656.4