Anheuser-Busch Announces Record Sales and Earnings for the Second Quarter and First Six Months of 2000.Business Editors ST. LOUIS--(BUSINESS WIRE)--July 26, 2000 Led by the combination of higher beer volume and increased revenue per barrel barrel: see English units of measurement. , Anheuser-Busch Companies, Inc. (NYSE NYSE See: New York Stock Exchange :BUD) achieved record sales and earnings for the second quarter and first six months of 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. Second quarter and first six months earnings per share were up 15.6 percent and 15.4 percent, respectively, compared to last year. "This is the seventh consecutive quarter of 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. "With the strongest brand portfolio in the domestic beer industry, we are uniquely positioned to take advantage of continuing strong industry fundamentals. As a result, we continue to achieve significant increases in sales volume and revenue per barrel, resulting in accelerated earnings per share growth. For 2000, the company expects earnings per share growth in the 14 percent to 15 percent range. Longer term, we are confident in our ability to consistently achieve our double-digit earnings per share growth objective," said Mr. Busch. As a result of this positive earnings growth outlook and Anheuser- Busch's strong stock price performance, the company also announced today a two-for-one common stock split and a 10 percent increase in the quarterly dividend to 33 cents from 30 cents, payable in September September: see month. . Domestic beer shipments increased 4.2 percent for the second quarter and 3.3 percent for the first six months of 2000, Mr. Busch said. Domestic sales to retailer volume was up 3.6 percent for the second quarter and 3.9 percent for the first six months of 2000. Volume growth was led by the Bud Family along with increased Michelob Michelob is the trade name of a family of beers produced by the Anheuser-Busch brewery. It takes its name from a speciality beer developed by Adolphus Busch in 1896 as a "draught beer for connoisseurs". brand family sales. Domestic revenue per barrel grew 2.2 percent for the second quarter and first six months of 2000, compared to the same periods last year. The company's beer volume is summarized in the following table:
Reported Beer Volume (millions of barrels)
Second Quarter Six Months Ended June 30
vs. 1999 vs. 1999
2000 Barrels % 2000 Barrels %
Domestic 25.8 Up 1.0 Up 4.2% 49.5 Up 1.6 Up 3.3%
International 1.9 Dn .02 Dn 0.9% 3.4 Up 0.1 Up 3.6%
Worldwide -
A-B Brands 27.7 Up 1.0 Up 3.8% 52.9 Up 1.7 Up 3.3%
Int'l Equity
Partner
Brands(1) 4.2 Dn .04 Dn 0.9% 7.6 Dn .03 Dn 0.4%
Total Brands(1) 31.9 Up 1.0 Up 3.2% 60.5 Up 1.7 Up 2.9%
(1) Normalized to exclude 1999 volume related to Anheuser-Busch's
previously held equity stake in Antarctica, equity partner
volume increased 2.3 percent in the second quarter and 4.1
percent for the first six months of 2000. Normalized total
volume increased 3.6 percent in the second quarter and 3.4
percent for the first six months of 2000 vs. comparable
periods last year.
Earnings per share for the second quarter 2000 were $1.04, an increase of 15.6 percent vs. second quarter 1999. Earnings per share for the first six months of 2000 were $1.80, an increase of 15.4 percent vs. the same period last year. Earnings per share growth is due primarily to increased domestic beer sales volume, higher domestic revenue per barrel and the strong performance from the company's 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 company is currently evaluating opportunities for selected price increases and additional discount reductions in the fourth quarter 2000. These 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 will again be tailored to specific markets, brands and packages, but the total scope is anticipated to be somewhat less than in the fourth quarter last year.
SECOND QUARTER 2000 FINANCIAL RESULTS
Key operating results for the second quarter of 2000 compared to
1999 are summarized below.
Second Quarter (in millions, except per share)
2000 1999 2000 vs. 1999
$ %
Gross Sales $3,799 $3,601 Up $198 Up 5.5%
Net Sales $3,266 $3,081 Up $185 Up 6.0%
Operating Income $748 $695 Up $53 Up 7.7%
Equity Income, Net of Tax $63 $48 Up $15 Up 29.7%
Net Income $478 $431 Up $47 Up 10.8%
Diluted Earnings per Share $1.04 $.90 Up $.14 Up 15.6%
A discussion of financial highlights for the second quarter 2000 follows: -- Gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. increased $198 million, or 5.5 percent, and net sales increased $185 million, or 6.0 percent, compared to the same period in 1999. These increases are due to higher domestic beer sales volume and higher domestic revenue per barrel. -- Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased $53 million, or 7.7 percent, over the comparable period last year. The increase in operating income was primarily due to increased domestic beer sales volume and higher revenue per barrel along with improved international beer performance and theme park operating results. Performance of the company's packaging operations declined during the second quarter due to the continuing competitive pricing environment for cans. -- Equity income, net of tax, increased $15 million or 29.7 percent for the second quarter 2000 due to strong underlying pricing, volume and operating results of Grupo Modelo. -- Net income increased $47 million, or 10.8 percent, over the comparable period in 1999. -- 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 were $1.04, an increase of $.14, or 15.6 percent, compared to the second quarter 1999.
FIRST SIX MONTHS OF 2000 FINANCIAL HIGHLIGHTS
Key operating results for the first six months of 2000 compared to
1999 are summarized below:
Six Months Ended June 30
(in millions, except per share)
2000 1999 2000 vs. 1999
$ %
Gross Sales $7,099 $6,758 Up $341 Up 5.0%
Net Sales $6,077 $5,766 Up $311 Up 5.4%
Operating Income $1,330 $1,231 Up $99 Up 8.1%
Equity Income, Net of Tax $102 $80 Up $22 Up 27.3%
Net Income $828 $750 Up $78 Up 10.4%
Diluted Earnings per Share $1.80 $1.56 Up $.24 Up 15.4%
A discussion of financial highlights for the first six months of 2000 follows: -- Gross sales increased $341 million, or 5.0 percent, and net sales increased $311 million, or 5.4 percent. The primary factors responsible for these increases were higher domestic beer sales volume and increased domestic revenue per barrel. -- Operating income grew $99 million, or 8.1 percent, vs. the comparable period in 1999. This increase is primarily due to the domestic beer company's strong performance. International beer segment net income increased 38.7 percent, due to a strong performance by Grupo Modelo and improved international operating results. International beer operating profits, excluding Modelo, improved, reflecting volume gains 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 and lower costs in Japan due to the conversion of the company's joint venture into an exclusive licensing agreement, effective January January: see month. 1, 2000. 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 $34.3 million, or 47.1 percent for the first six months compared to the first six months of 1999, reflecting lower pricing on Metal Container's beer and soft drink can sales and the first quarter adjustment to correct accounting errors at the company's label manufacturing business in Clarksville Clarksville, city (1990 pop. 75,494), seat of Montgomery co., NW Tenn., on the Cumberland and Red rivers, in a farm, livestock, and tobacco region; platted 1784, inc. as a city 1855. It is a market and processing center for dark and burley tobacco. , Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. . 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 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. -- Net income increased $78 million, or 10.4 percent, for the first six months of 2000. -- Diluted earnings per share increased $.24, or 15.4 percent. Earnings per share for the first six 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 10 million shares through the first six months of 2000. BEER SALES RESULTS Worldwide Beer Volume Worldwide Anheuser-Busch beer sales volume grew 3.8 percent to 27.7 million barrels in the second quarter and were 52.9 million barrels, up 3.3 percent for the first six months of 2000, compared to similar periods last year. Worldwide beer volume is comprised of domestic volume and international volume. Domestic volume represents Anheuser- Busch beer Busch Beer (originally known as Busch Bavarian Beer) was introduced in 1955 by St. Louis, Missouri-based Anheuser-Busch, and was distributed mainly in the Midwestern and Southeastern parts of the United States during its early years. 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 31.9 million barrels, up 3.2 percent in the second quarter and 60.5 million barrels, up 2.9 percent for the first six months. 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 2.3 percent in the second quarter and 4.1 percent for the first six months of 2000. Normalized total volume increased 3.6 percent in the second quarter and 3.4 percent for the first six months of 2000 vs. comparable periods last year. Domestic Beer Volume Anheuser-Busch domestic beer sales to wholesalers were 49.5 million barrels, up 3.3 percent for the first six months of 2000. The increase reflects strong underlying sales-to-retailer trends, 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 first six months of 2000 was 47.6 percent, an increase of one percentage point over 1999 market share of 46.6 percent. Including exports, the company's share of U.S. shipments was 47.3 percent vs. 46.3 percent for the first six 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 essentially even in the second quarter compared to prior year, and grew 3.6 percent for the first six months of 2000. International beer operations experienced solid volume growth in Canada and China. 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
Second Quarter and Six Months Ended June 30, 2000 and 1999
(In Millions, Except Per Share)
Second Quarter Year-to-Date
2000 1999 2000 1999
Gross Sales $3,798.9 $3,600.8 $7,098.5 $6,758.0
Excise Taxes (533.4) (520.1) (1,021.1) (992.1)
Net Sales 3,265.5 3,080.7 6,077.4 5,765.9
Cost of Products & Services (1,973.9) (1,864.5) (3,753.6) (3,576.6)
Marketing, Distribution and
Administrative Expenses (543.4) (521.6) (993.4) (958.1)
Operating Income 748.2 694.6 1,330.4 1,231.2
Interest Expense (90.7) (79.2) (177.4) (155.0)
Interest Capitalized 8.3 4.2 15.2 7.5
Interest Income 0.1 0.9 0.4 1.8
Other Income/(Expense), Net 3.8 (3.1) 3.1 (4.3)
Income Before Income Taxes 669.7 617.4 1,171.7 1,081.2
Income Taxes (254.5) (234.5) (445.2) (410.8)
Equity Income, Net of Tax 62.5 48.1 101.5 79.7
Net Income $477.7 $431.0 $828.0 $750.1
Basic Earnings Per Share $1.06 $.92 $1.82 $1.58
Diluted Earnings Per Share $1.04 $.90 $1.80 $1.56
Capital Expenditures $262.1 $216.4 $541.6 $400.8
Depreciation and Amortization $195.1 $190.7 $387.9 $378.5
Weighted Average Shares:
Basic 452.4 470.9 454.1 473.5
Diluted 458.5 478.0 460.0 480.8
Business Segments
Second Quarter Ended June 30, 2000
($ in Millions)
Domestic Int'l Pack- Enter- Corp.
Beer Beer aging tain. Other & Elmin. Consol.
2000
Gross Sales $3,002.4 182.8 546.3 252.5 37.0 (222.1) $3,798.9
Net Sales:
- Intersegment - - $212.1 - 10.0 (222.1) -
- External $2,494.9 156.9 334.2 252.5 27.0 - $3,265.5
Income Before
Income Taxes $707.5 16.8 30.5 52.2 5.9 (143.2) $669.7
Equity Income,
Net of Tax - $62.5 - - - - $62.5
Net Income $438.6 72.9 18.9 32.4 3.7 (88.8) $477.7
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 $638.5 12.2 46.2 47.7 5.8 (133.0) $617.4
Equity Income,
Net of Tax - $48.1 - - - - $48.1
Net Income $395.8 55.7 28.6 29.6 3.5 (82.2) $431.0
Note: 1999 segment results have been updated to reflect a change
in allocation method for certain Corporate support costs.
Business Segments
Six Months Ended June 30, 2000
($ in Millions)
Domestic Int'l Pack- Enter- Corp.
Beer Beer aging tain. Other & Elmin. Consol.
2000
Gross Sales $5,767.3 311.2 1,014.6 363.2 57.3 (415.1) $7,098.5
Net Sales:
- Intersegment - - $398.5 - 16.6 (415.1) -
- External $4,794.2 263.2 616.1 363.2 40.7 - $6,077.4
Income Before
Income Taxes $1,349.7 21.2 38.6 24.7 5.1 (267.6) $1,171.7
Equity Income,
Net of Tax - $101.5 - - - - $101.5
Net Income $836.8 114.6 23.9 15.3 3.2 (165.8) $828.0
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 $1,215.2 4.6 72.9 34.2 5.4 (251.1) $1,081.2
Equity Income,
Net of Tax - $79.7 - - - - $79.7
Net Income $753.4 82.6 45.2 21.2 3.3 (155.6) $750.1
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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