Anheuser-Busch Cos., Inc. Reports Record Sales And Earnings For The Second Quarter And First Six Months Of 2003.Business Editors ST. LOUIS--(BUSINESS WIRE)--July 23, 2003 Achieves 19th Consecutive Quarter of Double-Digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Growth with 13.6 Percent Increase in the Second Quarter 2003 Led by continued strong growth in its domestic beer business, Anheuser-Busch Cos., Inc. (NYSE NYSE See: New York Stock Exchange :BUD) achieved record sales and earnings for the second quarter and first six months of 2003, it was announced today by Patrick Stokes Patrick T Stokes is the former president and CEO of Anheuser-Busch Companies, Inc. He is now chairman of the Board of Directors of the Anheuser-Busch Companies, Inc. Leadership at Anheuser-Busch In 1990, Stokes became president of Anheuser-Busch, Inc. , president and chief executive officer. Second quarter and first six months earnings per share increased 13.6 percent and 12.8 percent, respectively, vs. the same 2002 periods. "Anheuser-Busch has once again delivered strong, dependable growth in earnings per share and return on capital," said Stokes Stokes , William 1804-1878. British physician. Known especially for his studies of diseases of the chest and heart, he expanded on the observations of John Cheyne in describing the breathing irregularity now known as Cheyne-Stokes respiration. . "The second quarter represents the company's 19th consecutive quarter of solid double-digit earnings per share growth." Domestic revenue per barrel barrel: see English units of measurement. grew 3.5 percent and 3.1 percent in the second quarter and first six months of 2003, respectively, vs. the same periods in 2002, reflecting the continued favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. beer industry pricing environment. Domestic revenue per barrel growth drove continued improvements in profit margins, with gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. improving 40 basis points to 41.9 percent and operating profit margin Operating profit margin The ratio of operating profit to net sales. increasing 70 basis points to 25.4 percent in the second quarter 2003. For the first six months of 2003, gross margin increased 60 basis points to 40.9 percent, while operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased 70 basis points to 24.4 percent. 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). improved to 17.9 percent, an increase of 130 basis points over the past 12 months. Domestic beer sales-to-wholesalers volume increased 0.7 percent for the second quarter of 2003 vs. the second quarter 2002 and 1.0 percent for the first six months of 2003. Wholesaler sales-to-retailers volume for both the second quarter and first six months of 2003 was up 0.3 percent vs. similar 2002 periods. Second quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. volume has been impacted by unfavorable weather over much of the country. Sales improved over the July July: see month. 4th holiday, which experienced more normal weather. The company's reported beer volume is summarized in the following table:
Beer Volume (millions of barrels)
Second Quarter Six Months Ended June 30
vs. 2002 vs. 2002
2003 Barrels % 2003 Barrels %
Domestic 26.8 Up 0.2 Up 0.7% 51.8 Up 0.5 Up 1.0%
International 2.1 Dn 0.1 Dn 4.7% 3.9 Up 0.03 Up 0.7%
Worldwide A-B Brands 28.9 Up 0.1 Up 0.3% 55.7 Up 0.5 Up 1.0%
Int'l Equity
Partner Brands 5.1 Up 0.2 Up 4.5% 9.4 Up 0.1 Up 1.1%
Total Brands 34.0 Up 0.3 Up 0.9% 65.1 Up 0.6 Up 1.0%
Consistent with the company's practice of implementing moderate annual price increases in two phases, Anheuser-Busch plans to initiate INITIATE. A right which is incomplete. By the birth of a child, the husband becomes tenant by the curtesy initiate, but his estate is not consummate until the death of the wife. 2 Bouv. Inst. n. 1725. selected pricing actions in the fourth quarter 2003. The 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. "During the first six months of this year Anheuser-Busch has significantly increased revenue per barrel, margins, and earnings per share while also increasing market share," said Stokes. "We are confident of achieving full year 2003 earnings per share growth in the 12 percent to 13 percent range. In addition, we remain confident in our ability to consistently achieve our double-digit earnings per share growth objective over the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , targeting 12 percent growth in 2004." SECOND QUARTER 2003 FINANCIAL RESULTS Key operating results for the second quarter 2003 vs. 2002 are summarized below:
Second Quarter Ended June 30
($ in millions, except per share)
2003 vs. 2002
2003 2002 $ %
Gross Sales $4,339 $4,182 Up $157 Up 3.8%
Net Sales $3,770 $3,626 Up $144 Up 4.0%
Income Before Income Taxes $862 $811 Up $51 Up 6.2%
Equity Income $106 $98 Up $8 Up 8.1%
Net Income $633 $587 Up $46 Up 7.8%
Diluted Earnings per Share $.75 $.66 Up $.09 Up 13.6%
A discussion of financial highlights for the second quarter 2003
follows:
-- Net sales increased 4.0 percent compared to the second quarter
2002, driven primarily by a 4 percent increase in domestic
beer segment net sales and higher sales for the packaging and
entertainment segments, partially offset by lower revenue from
international beer. International beer sales volume was down
4.7 percent in the second quarter due primarily to the impact
of the SARS outbreak in China. In recent weeks Anheuser-Busch
sales in China have rebounded and are now back on a growth
trend.
-- Income before income taxes increased 6.2 percent vs. the
second quarter 2002, due to increased domestic beer segment
pretax income, along with improved profit contribution for the
packaging segment.
Pretax income for the domestic beer segment was up 7.3 percent
for the quarter, reflecting higher revenue per barrel and beer
sales volume.
International beer segment pretax income decreased 9 percent
primarily due to lower volume in China and the United Kingdom.
Packaging segment pretax profits were up 5 percent in the
second quarter 2003, due to improved operating profits from
the company's can, bottle and label manufacturing operations.
Entertainment segment pretax results were down 7 percent
compared to the second quarter 2002, principally due to lower
attendance and higher park operating costs, partially offset
by higher admissions pricing and in-park spending. These
results include the cost of Operation Salute through June
30th. Operation Salute is Anheuser-Busch's theme park military
appreciation program, providing free single-day admission to
SeaWorld, Busch Gardens and Sesame Place parks to active duty
military, active reservists, U.S. Coast Guard, National
Guardsmen and as many as four of their direct dependents.
-- Equity income increased 8.1 percent vs. the second quarter
2002, due to higher Modelo and CCU earnings. Modelo's domestic
sales volume improved during the second quarter, but
Anheuser-Busch's equity income growth from Modelo was dampened
by difficult export volume comparisons to 2002 and a weaker
peso. Anheuser-Busch's equity share of CCU earnings benefited
by a $5.5 million after- tax gain from the sale of a brewery
in Croatia.
-- Net income increased 7.8 percent vs. second quarter 2002.
Diluted earnings per share were $.75, an increase of 13.6
percent, compared to the second quarter 2002. Earnings per
share continue to benefit from the company's ongoing share
repurchase program.
FIRST SIX MONTHS OF 2003 FINANCIAL HIGHLIGHTS
Key operating results for the first six months of 2003 compared to
2002 are summarized below:
Six Months Ended June 30
($ in millions, except per share)
2003 vs. 2002
2003 2002 $ %
Gross Sales $8,134 $7,820 Up $314 Up 4.0%
Net Sales $7,051 $6,763 Up $288 Up 4.3%
Income Before Income Taxes $1,531 $1,430 Up $101 Up 7.1%
Equity Income $180 $195 Dn $15 Dn 7.6%
Net Income $1,117 $1,043 Up $74 Up 7.2%
Diluted Earnings per Share $1.32 $1.17 Up $.15 Up 12.8%
A discussion of financial highlights for the first six months of
2003 follows:
-- Net sales increased 4.3 percent compared to the first six
months of 2002. This increase was led by a 4 percent increase
in domestic beer segment net sales and higher sales for all
the company's major business segments.
-- Income before income taxes increased 7.1 percent vs. the first
six months of 2002, due to the improved performance from the
domestic and international beer segments and the packaging
segment.
Domestic beer segment pretax income was up 8 percent,
reflecting higher revenue per barrel and increased beer
volume.
International beer segment pretax income increased 2 percent,
primarily due to volume and profit growth in China.
Packaging segment pretax profits were up 7 percent for the
first six months of 2003, primarily due to improved profits in
the company's can, bottle and label manufacturing operations.
Entertainment segment operating profits for the first six
months declined $11 million, or 19 percent compared to last
year, primarily due to lower attendance and higher park
operating costs, partially offset by higher admissions pricing
and in-park spending. These results include the cost of the
Operation Salute program.
-- Equity income decreased $15 million vs. the first six months
of 2002, due to the $17 million one-time deferred income tax
benefit included in 2002 Modelo equity income. The tax benefit
resulted from lower Mexican income tax rates enacted in the
first quarter of 2002. The Mexican deferred tax benefit
included in Modelo equity income was largely offset by higher
U.S. deferred taxes included in the 2002 consolidated income
tax provision.
-- Anheuser-Busch's effective tax rate declined to 38.8 percent
for the first six months of 2003 vs. 40.7 percent for the
first six months of 2002. The effective tax rate in 2002 was
unusually high due to the U.S. deferred income tax offset to
the Mexican income tax rate benefit included in equity income.
In addition, the effective tax rate in 2003 reflects a more
favorable foreign tax credit position.
BEER SALES RESULTS Worldwide Beer Volume Worldwide Anheuser-Busch beer sales volume increased 0.3 percent and 1.0 percent, respectively, for the second quarter and first six months of 2003 to 28.9 million and 55.7 million barrels. 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 34.0 million barrels in the second quarter 2003, up 300,000 barrels, or 0.9 percent vs. second quarter 2002. Total volume for the first six months increased 1.0 percent, to 65.1 million barrels. Domestic Beer Volume Anheuser-Busch reported domestic beer sales-to-wholesalers of 26.8 million barrels in the second quarter 2003 and 51.8 million barrels in the first six months. This represents increases of 0.7 percent for the second quarter and 1.0 percent for the first six months, compared to 2002. These increases were led by Bud Light and 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". ULTRA sales. The company's domestic market share (excluding exports) for the first six months of 2003 was 50.0 percent, compared to 2002 market share of 48.4 percent. Domestic market share is determined based on estimated beer industry sales using information provided by the Beer Institute and the U.S. Department of Commerce. International Beer Volume International Anheuser-Busch brand beer volume for the second quarter was 2.1 million barrels representing a decrease of 4.7 percent vs. the second quarter 2002. This decrease is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to lower beer sales volume in China due to SARS, and the United Kingdom. For the first six months of 2003, international Anheuser- 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. brand beer volume was 3.9 million barrels, up 0.7 percent vs. the comparable 2002 period. Return on Capital Employed Return on capital employed (1) for the 12 months ended June June: see month. 30, 2003, was 17.9 percent, an increase of 130 basis points over the twelve-month period ended June 30, 2002. Other Matters Anheuser-Busch will conduct a conference call with investors to discuss second quarter and first half of 2003 earnings results at 3 p.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT today. The company will 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. (1) Return on capital employed is computed as 12 months of net income before after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. net interest (interest expense less interest capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. ) divided by average net investment. Net investment is defined as total assets less non-debt current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. . For 2003, after-tax net interest expense was $229 million, calculated as pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern net interest expense of $369 million less income taxes applied using a 38 percent tax rate. For 2002, after-tax net interest expense was $209 million, calculated as pretax net interest expense of $337 less income taxes applied using a 38 percent tax rate. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding the company's expectations concerning its future operations, earnings and prospects. On the date the statements are made, the statements represent the company's expectations, but the company's expectations concerning its future operations, earnings and prospects may change. The company disclaims any obligation to update any of these statements. If the company determines to update any forward-looking statement, it will do so publicly. No private statements by the company or its personnel should be interpreted Translated from source code into machine code one line at a time. See interpreted language and interpreter. interpreted - interpreter as updating forward- looking statements. The company's expectations involve significant risks and uncertainties and are based upon many assumptions that the company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the company's expectations and the forward-looking statements will be correct. Further information on factors that could affect the company's future operations, earnings and prospects is included in the company's Forms 10-Q and 10-K.
Comparative Statement of Earnings
Anheuser-Busch Companies, Inc. (Unaudited)
Second Quarter and Six Months Ended June 30, 2003 and 2002
($ In Millions, Except Per Share)
Second Quarter Year-to-Date
2003 2002 2003 2002
Gross Sales $4,339.3 $4,182.4 $8,134.2 $7,819.8
Excise Taxes (569.1) (556.3) (1,083.4) (1,057.1)
Net Sales 3,770.2 3,626.1 7,050.8 6,762.7
Cost of Sales (2,189.9) (2,119.8) (4,164.3) (4,034.4)
Marketing, Distribution and
Administrative Expenses (622.3) (609.6) (1,164.4) (1,126.6)
Operating Income 958.0 896.7 1,722.1 1,601.7
Interest Expense (102.3) (91.3) (201.0) (180.9)
Interest Capitalized 6.4 4.7 10.8 9.0
Interest Income 0.2 0.5 0.3 0.6
Other Income/(Expense), Net (0.8) 0.6 (1.0) (0.3)
Income Before Income Taxes 861.5 811.2 1,531.2 1,430.1
Provision for Income Taxes (334.9) (322.8) (594.2) (582.7)
Equity Income, Net of Tax 106.0 98.1 180.4 195.2
Net Income $632.6 $586.5 $1,117.4 $1,042.6
Basic Earnings Per Share $.76 $.67 $1.34 $1.19
Diluted Earnings Per Share $.75 $.66 $1.32 $1.17
Capital Expenditures $267.9 $210.9 $490.1 $392.6
Depreciation and Amortization $214.5 $210.4 $429.0 $417.5
Weighted Average Shares:
Basic 831.2 872.3 836.0 875.4
Diluted 842.0 885.3 846.5 888.5
Anheuser-Busch Companies, Inc. (Unaudited)
Business Segments
Second Quarter Ended June 30, 2003
($ in Millions)
Domestic Int'l Pack- Enter- Other Corporate Consol.
Beer Beer aging tain. & Elims.
2003
Gross Sales $3,397.5 201.0 589.9 280.3 21.2 (150.6) $4,339.3
Net Sales:
- Intersegment --- --- $232.9 --- 1.2 (234.1) $---
- External $2,870.8 158.6 357.0 280.3 20.0 83.5 $3,770.2
Income Before
Income Taxes $875.7 25.9 50.5 66.0 2.5 (159.1) $861.5
Equity Income --- $106.0 --- --- --- --- $106.0
Net Income $542.9 122.1 31.3 40.9 1.5 (106.1) $632.6
2002
Gross Sales $3,279.3 199.7 576.7 265.0 32.3 (170.6) $4,182.4
Net Sales:
- Intersegment --- --- $235.8 --- 8.9 (244.7) $---
- External $2,759.1 163.6 340.9 265.0 23.4 74.1 $3,626.1
Income Before
Income Taxes $815.8 28.5 47.9 70.9 4.7 (156.6) $811.2
Equity Income --- $98.1 --- --- --- --- $98.1
Net Income $505.8 115.7 29.7 44.0 2.9 (111.6) $586.5
Anheuser-Busch Companies, Inc. (Unaudited)
Business Segments
Six Months Ended June 30, 2003
($ in Millions)
Domestic Int'l Pack- Enter- Other Corporate Consol.
Beer Beer aging tain. & Elims.
2003
Gross Sales $6,536.3 367.2 1,086.9 406.1 33.3 (295.6) $8,134.2
Net Sales:
- Intersegment --- --- $447.4 --- 2.3 (449.7) $---
- External $5,521.5 298.6 639.5 406.1 31.0 154.1 $7,050.8
Income Before
Income
Taxes $1,675.3 46.1 84.3 45.5 (0.1) (319.9) $1,531.2
Equity Income --- $180.4 --- --- --- --- $180.4
Net Income $1,038.7 209.0 52.3 28.2 (0.1) (210.7) $1,117.4
2002
Gross Sales $6,306.9 343.7 1,046.3 390.8 49.7 (317.6) $7,819.8
Net Sales:
- Intersegment --- --- $445.1 --- 13.2 (458.3) $---
- External $5,307.3 286.2 601.2 390.8 36.5 140.7 $6,762.7
Income Before
Income
Taxes $1,551.8 45.2 78.6 56.4 3.3 (305.2) $1,430.1
Equity Income --- $195.2 --- --- --- --- $195.2
Net Income $962.1 223.2 48.7 35.0 2.0 (228.4) $1,042.6
Consolidated Balance Sheet
Anheuser-Busch Companies, Inc. (Unaudited)
($ In Millions)
June 30, December 31,
2003 2002
Assets
Current Assets:
Cash $143.0 $188.9
Accounts receivable 912.6 630.4
Inventories:
Raw materials and supplies 218.8 294.1
Work in progress 88.1 82.8
Finished goods 224.5 186.7
Total inventories 531.4 563.6
Other current assets 177.3 121.8
Total current assets 1,764.3 1,504.7
Investments in affiliated companies 2,940.4 2,827.9
Other assets 1,401.2 1,423.0
Plant and equipment, net 8,428.9 8,363.9
Total Assets $14,534.8 $14,119.5
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $1,000.9 $986.6
Accrued salaries, wages and benefits 253.1 287.5
Accrued taxes 313.8 181.0
Other current liabilities 343.4 332.6
Total current liabilities 1,911.2 1,787.7
Postretirement benefits 470.4 474.2
Debt 7,055.6 6,603.2
Deferred income taxes 1,373.8 1,345.1
Other long-term liabilities 865.4 857.0
Shareholders Equity:
Common stock 1,456.0 1,453.4
Capital in excess of par value 1,095.6 1,024.5
Retained earnings 13,335.2 12,544.0
Treasury stock, at cost (12,102.3) (11,008.6)
Accumulated other comprehensive loss (879.8) (870.7)
ESOP debt guarantee (46.3) (90.3)
Total Shareholders Equity 2,858.4 3,052.3
Commitments and contingencies -- --
Total Liabilities and Shareholders Equity $14,534.8 $14,119.5
Consolidated Statement of Cash Flows
Anheuser-Busch Companies, Inc. (Unaudited)
($ In Millions)
Six Months Ended June 30,
2003 2002
Cash flow from operating activities:
Net Income $1,117.4 $1,042.6
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 429.0 417.5
Deferred income taxes 28.7 50.0
Undistributed earnings of
affiliated companies (50.7) (148.4)
Other, net 59.3 89.6
Operating cash flow before change
in working capital 1,583.7 1,451.3
Increase in working capital (119.3) (30.0)
Cash provided by operating activities 1,464.4 1,421.3
Cash flow from investing activities:
Capital expenditures (490.1) (392.6)
Business acquisitions (116.4) --
Cash used for investing activities (606.5) (392.6)
Cash flow from financing activities:
Increase in long-term debt 576.9 554.9
Decrease in long-term debt (77.2) (435.7)
Dividends paid to shareholders (326.2) (315.5)
Acquisition of treasury stock (1,126.6) (801.5)
Issuance of shares under stock plans 49.3 95.3
Cash used for financing activities (903.8) (902.5)
Net (decrease) / increase in cash
during the period (45.9) 126.2
Cash, beginning of period 188.9 162.6
Cash, end of period $143.0 $288.8
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