Anheuser-Busch Announces Increased Sales and Earnings for the Third Quarter and Nine Months of 2001; Company Achieves 12th Consecutive Quarter of Double-Digit EPS Growth.Business Editors ST. LOUIS--(BUSINESS WIRE)--Oct. 24, 2001 Led by strong growth in both the company's domestic and international beer segments, Anheuser-Busch Companies, Inc. (NYSE NYSE See: New York Stock Exchange :BUD) achieved higher sales and earnings for the third quarter and nine months ended September September: see month. 30, 2001, it was announced today by August A. Busch Busch , Adolf Georg Wilhelm 1891-1952. German-born Swiss violinist and conductor best known for his work as leader of the Busch Quartet, an internationally acclaimed chamber group formed in 1919. III, Chairman of the Board and President. Earnings per share for the third quarter and nine months increased 10.7 percent and 11.6 percent, respectively, compared to last year. "Our third quarter performance represents the company's twelfth consecutive quarter of double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. earnings per share growth. Anheuser-Busch is continuing to realize consistent, dependable double-digit earnings per share growth despite the more difficult economic environment," said Mr. Busch. "We anticipate continued double-digit earnings per share growth in the fourth quarter and achieving our 12 percent earnings per share growth target for 2001. We expect to again accomplish our double-digit earnings per share growth objective in 2002, and have set an initial target of 10 percent growth." Revenue per barrel barrel: see English units of measurement. grew 3 percent in both the third quarter and nine months of 2001, compared to respective periods last year. Domestic revenue per barrel growth has exceeded expectations throughout 2001, reflecting Anheuser-Busch's successful strategy to reduce discounting while continuing to gain market share. Revenue per barrel has now increased by 2 percent or more for twelve consecutive quarters. "Our consistent increases in revenue per barrel reflect the company's sharp focus on beer profit margin growth," said Mr. Busch. "Anheuser-Busch's gross profit and operating profit margins Operating profit margin The ratio of operating profit to net sales. increased 150 basis points during the third quarter vs. last year, and return on capital employed Return on capital employed (ROCE) Indicator of profitability of the firm's capital investments. Determined by dividing Earnings Before Interest and Taxes by (capital employed plus short-term loans minus intangible assets). has increased significantly over the past twelve months vs. the similar prior period." Domestic beer sales-to-wholesalers volume increased 1.2 percent for the third quarter of 2001 and 1.5 percent for the nine months of 2001. Wholesaler sales-to-retailers volume for the third quarter grew 1.2 percent, and increased 0.8 percent year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , compared to the prior year. Company planned shipments to wholesalers will increase approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1.2 percent for the year. The company's reported beer volume is summarized in the following table:
Reported Beer Volume (millions of barrels)
Third Quarter Nine Months Ended Sept. 30
vs. 2000 vs. 2000
2001 Barrels % 2001 Barrels %
Domestic 26.6 Up 0.3 Up 1.2% 76.9 Up 1.1 Up 1.5%
International 2.1 Up 0.1 Up 4.1% 5.8 Up 0.4 Up 6.9%
Worldwide
A-B Brands 28.7 Up 0.4 Up 1.4% 82.7 Up 1.5 Up 1.8%
Int'l Equity
Partner Brands 4.6 Up 0.3 Up 6.3% 13.2 Up 1.3 Up 10.9%
Total Brands 33.3 Up 0.7 Up 2.0% 95.9 Up 2.8 Up 3.0%
Consistent with the company's practice of implementing annual revenue enhancement revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. initiatives in two phases, the company implemented the first stage of price increases and discount reductions at the beginning of October October: see month. . Similar to last year, the company initiated pricing actions in markets representing approximately 40 percent of the company's domestic volume. These revenue initiatives are tailored to specific markets, brands and packages, and initial results are encouraging. The second stage of revenue enhancement initiatives is planned for the first quarter 2002. OPERATING RESULTS As previously announced, Anheuser-Busch sold its SeaWorld
SeaWorld is a chain of marine mammal parks in the United States, with operations in Orlando, Florida, San Diego, California, San Antonio, Texas, and previously Aurora, Cleveland Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and theme park in January January: see month. 2001. On an annual basis, the SeaWorld Cleveland park Cleveland Park is a residential neighborhood in the Northwest quadrant of Washington, D.C.. It is located at and bounded approximately by Rock Creek Park to the east, Wisconsin and Idaho Avenues to the west, Klingle and Woodley Roads to was essentially earnings breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations . However, the park generated approximately $15 million of operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. in the third quarter of last year, which was offset in the other quarters of the year. To provide a more complete understanding of the company's performance, key operating results are presented on both a reported basis and normalized basis (representing the company's continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the ) - which excludes SeaWorld Cleveland operating results in the third quarter 2000.
Third Quarter
Third Quarter Results (in millions, except per share)
2001 2000 2001 vs. 2000
$ % % Excl.
SeaWorld-
Cleveland
Gross Sales $4,005 $3,942 Up $63 Up 1.6% Up 2.5%
Net Sales $3,451 $3,398 Up $53 Up 1.6% Up 2.6%
Operating Income $876 $813 Up $63 Up 7.7% Up 9.7%
Equity Income,
Net of Tax $68 $56 Up $12 Up 20.3% Up 20.3%
Net Income $559 $515 Up $44 Up 8.6% Up 10.5%
Diluted Earnings
per Share $.62 $.56 Up $.06 Up 10.7% Up 12.7%
The following discussion excludes the impact of SeaWorld Cleveland operating results in 2000. -- Gross sales increased 3.3 percent, and net sales increased 3.6 percent. The domestic beer, international beer and entertainment business segments contributed to the sales increase. -- Operating income increased 9.1 percent, vs. the comparable period in 2000, reflecting higher revenue per barrel and domestic beer sales volume, along with improved results for international beer and entertainment operations. Packaging segment operating profits were down 21.4 percent in the third quarter 2001, primarily due to lower pricing for soft drink can sales and the impact of start-up Start-up The earliest stage of a new business venture. costs related to the company's bottle manufacturing operation in Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; , Texas. Entertainment segment operating results for the third quarter 2001 increased 10.4 percent vs. the prior year primarily due to increased attendance and greater in-park spending by guests prior to the September 11 terrorist attacks. The company anticipates reduced revenue and profits for its Entertainment segment in the fourth quarter due to the decline in tourism in the wake of the terrorist attacks. The company is taking actions to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. the impact of near-term near-term adj. Of, for, or involving a short period of time in the near future. attendance declines on park profits. -- Equity income, net of tax, increased $12 million, or 20.3 percent, for the third quarter 2001 due to strong underlying volume and earnings growth by Grupo Modelo Grupo Modelo is a large brewery in Mexico. It maintains a large part of the Mexican beer export market and produces top-selling imported beer in the United Kingdom, United States and Canada. , offset by a small equity loss from CCU CCU abbr. 1. coronary care unit 2. critical care unit CCU critical care unit. CCU Critical care unit, see there . -- Net income increased 10.5 percent, over the comparable period in 2000. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter increased 12.7 percent, compared to the third quarter 2000. Earnings per share benefited from the company's ongoing share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. Nine Months Key operating results for the nine months of 2001 compared to 2000 are summarized below. The sale of SeaWorld Cleveland in the first quarter 2001 has an insignificant impact on earnings per share growth for the nine months of 2001 compared to 2000.
Nine Months Ended September 30 (in millions, except per share)
2001 2000 2001 vs. 2000
$ %
Gross Sales $11,402 $11,041 Up $361 Up 3.3%
Net Sales $9,813 $9,475 Up $338 Up 3.6%
Operating Income $2,339 $2,144 Up $195 Up 9.1%
Equity Income,
Net of Tax $194 $158 Up $36 Up 22.7%
Net Income $1,477 $1,343 Up $134 Up 10.0%
Diluted Earnings
per Share $1.63 $1.46 Up $.17 Up 11.6%
A discussion of financial highlights for the nine months of 2001 follows: -- Gross sales increased 3.3 percent, and net sales increased 3.6 percent. The domestic beer, international beer and entertainment business segments contributed to the sales increase. -- Operating income increased 9.1 percent, vs. the comparable period in 2000, reflecting higher revenue per barrel and domestic beer sales volume, along with improved results for international beer and entertainment operations. Operating profit for international beer increased 63 percent in the nine months of 2001 compared to 2000 due to continued strong volume gains in China and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Packaging segment operating profits increased 14.2 percent. Excluding the adjustment related to the label manufacturing business in 2000, operating profits were down 3.3 percent for the nine months of 2001, reflecting lower soft drink can pricing partially offset by reduced manufacturing costs, and the impact of start-up costs related to the company's bottle manufacturing operation in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the . Entertainment segment operating profits for the nine months of 2001 increased 25.6 percent. Excluding the impact of SeaWorld Cleveland operating results and related gain on sale of the park, operating profits were up 18.6 percent vs. the prior year primarily due to increased attendance and increased in-park spending. -- Equity income, net of tax, increased $36 million, or 22.7 percent, for the nine months of 2001 due to strong underlying volume and earnings growth by Grupo Modelo. -- Net income increased 10.0 percent, for the nine months of 2001. Diluted earnings per share increased 11.6 percent, to $1.63. Earnings per share for the nine months benefited from the company's ongoing share repurchase program. The company repurchased over 21 million shares through the nine months of 2001. BEER SALES RESULTS Worldwide Beer Volume Worldwide Anheuser-Busch beer sales volume grew 1.4 percent to 28.7 million barrels in the third quarter and was 82.7 million barrels, up 1.8 percent for the nine months of 2001, compared to the same 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . International volume represents exports from the company's U.S. breweries See for an up to date listing of all the breweries detailed on Wikipedia, sorted into regions. Africa
Asia
Total volume, which combines worldwide Anheuser-Busch brand volume with equity volume (representing the company's share of its foreign equity partners' volume), was 33.3 million barrels, up 2.0 percent in the third quarter and 95.9 million barrels, up 3.0 percent for the nine months. Domestic Beer Volume Domestic beer sales-to-wholesalers volume was 76.9 million barrels, an increase of 1.5 percent for the nine months of 2001. This increase was led by the continued strong performance by Bud Light. Beer Market Share The company's domestic market share (excluding exports) for the nine months of 2001 was 48.6 percent, an increase of 0.5 percentage points over 2000 market share of 48.1 percent. Domestic market share is determined based on industry sales estimates provided by the Beer Institute. International Beer International beer volume excluding Modelo and CCU, was up 4.1 percent in the third quarter 2001 compared to prior year, and grew 6.9 percent for the nine months of 2001, due primarily to solid volume growth in Canada and China. Other Matters Later today, Anheuser-Busch will conduct a conference call with investors to discuss these results at 3:00 p.m. Central Time. The company will also broadcast the conference call live via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . For details visit the company's site on the Internet at www.anheuser-busch.com. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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. If the company determines to update any forward-looking statement, it will do so publicly. No private statements by the company or its personnel should be interpreted Translated from source code into machine code one line at a time. See interpreted language and interpreter. interpreted - interpreter as updating forward-looking 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.
Comparative Statement of Earnings
Third Quarter and Nine Months Ended September 30, 2001 and 2000
(In Millions, Except Per Share)
Third Quarter Year-to-Date
2001 2000 2001 2000
Gross Sales $4,005.1 $3,942.2 $11,401.9 $11,040.7
Excise Taxes (553.7) (544.4) (1,588.6) (1,565.5)
Net Sales 3,451.4 3,397.8 9,813.3 9,475.2
Cost of Products &
Services (1,989.4) (2,009.7) (5,862.6) (5,763.3)
Marketing, Distribution
and Administrative
Expenses (586.1) (574.8) (1,629.7) (1,568.2)
Gain on Sale of Business -- -- 17.8 --
Operating Income 875.9 813.3 2,338.8 2,143.7
Interest Expense (87.0) (85.5) (270.3) (262.9)
Interest Capitalized 6.2 9.0 20.8 24.2
Interest Income 0.5 0.4 1.0 0.8
Other Income/(Expense),
Net (1.6) 1.8 (5.8) 4.9
Income Before Income
Taxes 794.0 739.0 2,084.5 1,910.7
Income Taxes (303.2) (280.9) (801.4) (726.1)
Equity Income, Net of Tax 67.8 56.4 193.6 157.9
Net Income $558.6 $514.5 $1,476.7 $1,342.5
Basic Earnings Per Share $.63 $.57 $1.65 $1.48
Diluted Earnings Per Share $.62 $.56 $1.63 $1.46
Capital Expenditures $216.4 $252.9 $795.1 $794.5
Depreciation and
Amortization $207.2 $203.2 $616.2 $591.1
Weighted Average Shares:
Basic 888.0 904.5 893.0 907.0
Diluted 899.0 917.5 904.4 919.5
Business Segments
Third Quarter Ended September 30, 2001
($ in Millions)
Domestic Int'l Pack- Enter- Corporate
Beer Beer aging tain. Other & Elims. Consol.
2001
Gross Sales $3,186.7 180.9 521.2 320.8 23.4 (227.9) $4,005.1
Net Sales:
- Intersegment --- --- $224.2 --- 3.7 (227.9) $---
- External $2,665.2 148.7 297.0 320.8 19.7 --- $3,451.4
Income Before
Income Taxes $778.6 23.8 30.5 101.5 0.8 (141.2) $794.0
Equity Income,
Net of Tax --- $67.8 --- --- --- --- $67.8
Net Income $481.3 82.5 18.9 62.7 0.5 (87.3) $558.6
2000
Gross Sales $3,069.5 173.7 545.2 336.8 37.2 (220.2) $3,942.2
Net Sales:
- Intersegment --- --- $216.2 --- 4.0 (220.2) $---
- External $2,552.6 146.2 329.0 336.8 33.2 --- $3,397.8
Income Before
Income Taxes $702.9 14.7 38.8 106.4 8.5 (132.3) $739.0
Equity Income,
Net of Tax --- $56.4 --- --- --- --- $56.4
Net Income $435.8 65.6 24.1 66.0 5.2 (82.2) $514.5
Business Segments
Nine Months Ended September 30, 2001
($ in Millions)
Domestic Int'l Pack- Enter- Corporate
Beer Beer aging tain. Other & Elims. Consol.
2001
Gross Sales $9,208.4 506.4 1,550.8 717.4 78.6 (659.7)$11,401.9
Net Sales:
- Intersegment --- --- $641.1 --- 18.6 (659.7) $---
- External $7,703.8 422.4 909.7 717.4 60.0 --- $9,813.3
Income Before
Income Taxes
$2,199.1 58.6 88.4 164.7 4.7 (431.0) $2,084.5
Equity Income,
Net of Tax --- $193.6 --- --- --- --- $193.6
Net Income $1,359.5 229.8 54.7 96.3 2.9 (266.5) $1,476.7
2000
Gross Sales $8,836.8 484.9 1,559.8 700.0 94.5 (635.3)$11,040.7
Net Sales:
- Intersegment --- --- $614.7 --- 20.6 (635.3) $---
- External $7,346.8 409.4 945.1 700.0 73.9 --- $9,475.2
Income Before
Income Taxes
$2,052.6 35.9 77.4 131.1 13.6 (399.9) $1,910.7
Equity Income,
Net of Tax --- $157.9 --- --- --- --- $157.9
Net Income $1,272.6 180.2 48.0 81.3 8.4 (248.0) $1,342.5
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