Anheuser-Busch Announces Record Sales and Earnings For The Third Quarter and Nine Months of 2000; Company Achieves 8th Consecutive Quarter of Double-Digit EPS Growth.Business Editors ST. LOUIS--(BUSINESS WIRE)--Oct. 25, 2000 Driven by accelerated growth in revenue per barrel barrel: see English units of measurement. and continued strong unit volume growth in domestic beer operations, Anheuser-Busch Companies, Inc. (NYSE NYSE See: New York Stock Exchange :BUD) achieved record sales and earnings for the third quarter and nine months ended September September: see month. 30, 2000, 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 14.3 percent and 15.0 percent, respectively, compared to last year. "This is the eighth consecutive quarter of solid double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. earnings per share growth for the company," said Mr. Busch. "The leading brand portfolio in the industry along with our marketing, sales and distribution strengths allow us to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the significantly improved domestic industry fundamentals." Domestic revenue per barrel grew over 3 percent in the third quarter 2000 and is up 2.5 percent for the nine months, compared to the same periods last year. Strong revenue per barrel growth in the third quarter reflects the improved industry fundamentals and the company's strategy to focus on beer profit margin growth. "Domestic beer sales-to-wholesalers increased 2.7 percent for the third quarter and 3.1 percent for the nine months of 2000," Mr. Busch said. Domestic sales-to-retailers volume was up 1.7 percent for the third quarter and 3.1 percent for the nine months of 2000, compared to the same periods last year. As previously communicated, third quarter 2000 sales-to-retailer results were negatively impacted by the timing of the 4th of July July: see month. holiday which shifted volume from July to June June: see month. . Normalized for this timing impact, third quarter sales-to-retailer volume increased 2.7 percent vs. the third quarter last year. The company's reported beer volume is summarized in the following table:
Reported Beer Volume (millions of barrels)
Nine Months Ended
Third Quarter September 30
----------- -----------
vs. 1999 vs. 1999
-------- --------
2000 Barrels % 2000 Barrels %
Domestic 26.3 Up 0.7 Up 2.7% 75.8 Up 2.3 Up 3.1%
International 2.0 Up .05 Up 2.7% 5.4 Up 0.2 Up 3.2%
Worldwide -
A-B Brands 28.3 Up 0.8 Up 2.7% 81.2 Up 2.5 Up 3.1%
Int'l Equity
Partner Brands 4.3 Up 0.3 Up 7.8% 11.9 Up 0.3 Up 2.4%(1)
Total Brands 32.6 Up 1.1 Up 3.4% 93.1 Up 2.8 Up 3.0%(1)
(1) Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica Antarctica (ăntärk`tĭkə, –är`tĭkə), the fifth largest continent, c.5,500,000 sq mi (14,245,000 sq km), asymmetrically centered on the South Pole and almost entirely within the Antarctic Circle. , Equity Partner volume increased 5.4 percent for the nine months of 2000. Normalized Total Brands volume increased 3.4 percent for the nine months of 2000 vs. the same period last year. Earnings per share were $.56 for the third quarter 2000, an increase of 14.3 percent vs. third quarter 1999 earnings per share of $.49 restated for the two-for-one stock split in September 2000. Earnings per share for the nine months of 2000 were $1.46, an increase of 15.0 percent vs. the same period last year. Earnings per share growth is due primarily to higher domestic revenue per barrel, increased domestic beer sales volume and the strong performance from the company's International Beer segment, including the 50 percent ownership in 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. , Mexico's leading brewer. The strong domestic beer industry environment continues to support select price increases and additional discount reductions. Further discount reductions were realized in the third quarter and the company implemented the first stage of its planned revenue enhancement revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. strategy for 2001 at the beginning of October October: see month. . Selected price increases and discount reductions have been put into effect in markets representing 40 percent of the company's domestic volume. These revenue enhancement initiatives are being tailored to specific markets, brands and packages. Although in the early stages, preliminary results are once again encouraging. The second stage of revenue enhancement initiatives is expected to occur in the first quarter 2001. "For 2000, the company expects earnings per share growth of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 15 percent consistent with year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. results. Longer term, we are confident in our ability to consistently achieve our double-digit earnings per share growth objective with a 12 percent target for 2001," said Mr. Busch.
THIRD QUARTER 2000 FINANCIAL RESULTS
Key operating results for the third quarter of 2000 compared to
1999 are summarized below.
Third Quarter (in millions, except per share)
2000 1999 2000 vs. 1999
$ %
Gross Sales $3,942 $3,765 Up $177 Up 4.7%
Net Sales $3,398 $3,222 Up $176 Up 5.4%
Operating Income $813 $742 Up $71 Up 9.7%
Equity Income, Net of Tax $56 $45 Up $11 Up 24.2%
Net Income $515 $462 Up $53 Up 11.5%
Diluted Earnings per Share $.56 $.49 Up $.07 Up 14.3%(1)
(1) Third quarter 1999 earnings per share is reported as $.49 vs. $.485, after adjusting for the two-for-one stock split in September 2000. A discussion of financial highlights for the third quarter 2000 follows:
-- Gross sales increased $518 million, or 4.9 percent, and net sales increased
$487 million, or 5.4 percent. The primary factors responsible for these
increases were increased domestic revenue per barrel and higher domestic beer
sales volume.
-- Operating income grew $171 million, or 8.7 percent, vs. the comparable
period in 1999. This increase is primarily due to the domestic beer company's
strong performance.
NINE MONTHS OF 2000 FINANCIAL HIGHLIGHTS
Key operating results for the nine months of 2000 compared to 1999
are summarized below:
Nine Months Ended September 30
(in millions, except per share)
2000 1999 2000 vs. 1999
$ %
Gross Sales $11,041 $10,523 Up $518 Up 4.9%
Net Sales $9,475 $8,988 Up $487 Up 5.4%
Operating Income $2,144 $1,973 Up $171 Up 8.7%
Equity Income, Net of Tax $158 $125 Up $33 Up 26.2%
Net Income $1,343 $1,212 Up $131 Up 10.8%
Diluted Earnings per Share $1.46 $1.27 Up $.19 Up 15.0%
A discussion of financial highlights for the nine months of 2000 follows: -- Gross sales increased $518 million, or 4.9 percent, and net sales increased $487 million, or 5.4 percent. The primary factors responsible for these increases were increased domestic revenue per barrel and higher domestic beer sales volume. -- Operating income grew $171 million, or 8.7 percent, vs. the comparable period in 1999. This increase is primarily due to the domestic beer company's strong performance. The international beer segment's net income increased 44 percent, due to the strong performance by Grupo Modelo and improved international operating results. International beer operating profits, excluding Modelo, improved on volume gains in China and lower costs in Japan due to the conversion of the company's joint venture into an exclusive licensing agreement. Packaging segment operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. were down $43 million, or 36 percent for the nine months compared to the nine months of 1999, reflecting lower pricing on Metal Container's beer and soft drink can sales. Entertainment segment operating results, excluding start-up Start-up The earliest stage of a new business venture. costs associated with the new Discovery Cove Discovery Cove is an Orlando, Florida theme park where guests can interact with a variety of marine animals, most notably bottlenose dolphins. The park, which is operated by the Busch Entertainment Corporation (the theme park division of Anheuser-Busch) is adjacent to SeaWorld park, improved for the nine months due primarily to strong attendance in the Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and market. Discovery Cove began initial operations in July. Results to date have been positive. -- Equity income, net of tax, increased 26.2 percent, to $158 million based on Grupo Modelo's strong pricing and volume performance. -- Net income increased $131 million, or 10.8 percent, for the nine months of 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 increased $.19, or 15.0 percent, to $1.46. Earnings per share for the nine months 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. The company has repurchased over 26 million shares through the nine months of 2000. BEER SALES RESULTS Worldwide Beer Volume Worldwide Anheuser-Busch beer sales volume grew 2.7 percent to 28.3 million barrels in the third quarter and was 81.2 million barrels, up 3.1 percent for the nine months of 2000, 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 equity volume (representing the company's share of its foreign equity partner's volume) with worldwide Anheuser-Busch brand volume, was 32.6 million barrels, up 3.4 percent in the third quarter and 93.1 million barrels, up 3.0 percent for the nine months. Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, equity partner volume increased 5.4 percent for the nine months of 2000, and total volume increased 3.4 percent for the nine months of 2000. Domestic Beer Volume Domestic beer sales to wholesalers were 75.8 million barrels, an increase of 3.1 percent for the nine months of 2000, reflecting strong underlying retail demand led by Bud Light, which continues to grow at a double-digit pace. Beer Market Share The company's domestic market share (excluding exports) for the nine months of 2000 was 47.9 percent, an increase of 0.7 percentage points over 1999 market share of 47.2 percent. Including exports, the company's share of U.S. shipments was 47.7 percent vs. 47.0 percent for the nine months of 1999. Domestic market share and share of U.S. shipments are determined based on industry sales estimates provided by the Beer Institute. International Beer International beer volume (excluding Modelo) was up 2.7 percent in the third quarter 2000 compared to prior year, and grew 3.2 percent for the nine months of 2000, due primarily to solid volume growth in 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 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 Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time). The company will also broadcast the conference call live via the internet. For details visit the company's site on the internet at www.anheuser-busch.com. This release contains statements regarding the company's expectations concerning its future operations, earnings and prospects. These statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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
Third Quarter and Nine Months Ended September 30, 2000 and 1999
(In Millions, Except Per Share)
Third Quarter Year-to-Date
2000 1999 2000 1999
Gross Sales $3,942.2 $3,765.2 $11,040.7 $10,523.2
Excise Taxes (544.4) (542.9) (1,565.5) (1,535.0)
Net Sales 3,397.8 3,222.3 9,475.2 8,988.2
Cost of Products &
Services (2,009.7) (1,905.5) (5,763.3) (5,482.1)
Marketing, Distribution and
Administrative Expenses (574.8) (575.2) (1,568.2) (1,533.3)
Operating Income 813.3 741.6 2,143.7 1,972.8
Interest Expense (85.5) (76.3) (262.9) (231.3)
Interest Capitalized 9.0 4.2 24.2 11.7
Interest Income 0.4 1.7 0.8 3.5
Other Income/(Expense), Net 1.8 0.2 4.9 (4.1)
Income Before Income Taxes 739.0 671.4 1,910.7 1,752.6
Income Taxes (280.9) (255.2) (726.1) (666.0)
Equity Income, Net of Tax 56.4 45.3 157.9 125.0
Net Income $514.5 $461.5 $1,342.5 $1,211.6
Basic Earnings Per Share $.57 $.49 $1.48 $1.29
Diluted Earnings Per Share $.56 $.49 $1.46 $1.27
Capital Expenditures $252.9 $209.6 $794.5 $610.4
Depreciation and
Amortization $203.2 $193.1 $591.1 $571.6
Weighted Average Shares:
Basic 904.5 934.4 907.0 942.8
Diluted 917.5 948.9 919.5 957.8
Business Segments
Third Quarter Ended September 30, 2000
($ in Millions)
Domestic Int'l Pack- Enter- Corp.
Beer Beer aging tain. Other & Elmin. Consol.
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
1999
Gross Sales $2,914.3 209.1 523.7 306.5 33.5 (221.9) $3,765.2
Net Sales:
- Intersegment - - $216.1 - 5.8 (221.9) $ -
- External $2,410.8 169.7 307.6 306.5 27.7 - $3,222.3
Income Before
Income Taxes $639.3 (4.3) 47.5 105.1 5.8 (122.0) $671.4
Equity Income,
Net of Tax - $45.3 - - - - $45.3
Net Income $396.4 42.6 29.4 65.2 3.6 (75.7) $461.5
Note: 1999 segment results have been updated to reflect a change
in allocation method for certain Corporate support costs.
Business Segments
Nine Months Ended September 30, 2000
($ in Millions)
Domestic Int'l Pack- Enter- Corp.
Beer Beer aging tain. Other & Elmin. Consol.
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
1999
Gross Sales $8,394.9 550.5 1,473.7 646.1 91.6 (633.6) $10,523.2
Net Sales:
- Intersegment - - $613.0 - 20.6 (633.6) $ -
- External $6,954.2 456.2 860.7 646.1 71.0 - $8,988.2
Income Before
Income Taxes
$1,854.5 0.3 120.4 139.3 11.2 (373.1) $1,752.6
Equity Income,
Net of Tax - $125.0 - - - - $125.0
Net Income $1,149.8 125.2 74.6 86.4 6.9 (231.3) $1,211.6
Note: 1999 segment results have been updated to reflect a change
in allocation method for certain Corporate support costs.
SOURCE: Anheuser-Busch Companies, Inc. |
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