Anheuser-Busch Cos. Reports Record Sales, Earnings for First Quarter 2004; 22nd Consecutive Quarter of Solid Double-Digit EPS Growth.Business Editors ST. LOUIS--(BUSINESS WIRE)--April 28, 2004 With strong growth from all of its major operating segments, Anheuser-Busch Cos., Inc. (NYSE NYSE See: New York Stock Exchange :BUD) achieved record first-quarter sales and earnings results, 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 of the company. 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. made the announcement at the company's annual meeting of shareholders in Orlando Orlando, city, United States Orlando (ôrlăn`dō), city (1990 pop. 164,693), seat of Orange co., central Fla., in a lake region; inc. 1875. In a citrus fruit and farm area, it is one of the world's most visited vacation spots. , Fla. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased 6.0 percent in the first quarter, while earnings per share increased 17.5 percent. First-quarter results benefited from a $19.5 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern gain ($.015 per share) from the sale of commodity hedges. This gain is reported in other income/(expense) on the consolidated income statement consolidated income statement An income statement that combines the income statements of two or more organizations. As with other consolidated statements, a consolidated income statement eliminates any funds owed to or due from firms within the same group. and as such does not impact gross profit or 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. . Earnings per share excluding this gain increased 14.9 percent vs. first quarter 2003. "Anheuser-Busch had another excellent quarter and continued its track record of delivering consistent and dependable earnings growth. The company has now achieved 22 consecutive quarters of solid double- digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. earnings per share growth. We remain confident in our ability to consistently achieve our double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. 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. and our 12 percent earnings per share growth target for 2004, excluding the benefit of the commodity hedge gain," said Stokes. Strong growth in domestic revenue per barrel barrel: see English units of measurement. drove a continued enhancement in profit margins in the quarter. 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. improved 60 basis points to 40.4 percent compared to the first quarter 2003, while operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased 30 basis points to 23.6 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). increased 100 basis points over the past 12 months to 18.8 percent. Domestic revenue per barrel grew 3.1 percent in the first quarter 2004 vs. the first quarter 2003. This growth reflects the company's successful implementation of pricing actions on approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two- thirds of its domestic volume in two phases - October October: see month. 2003 and February February: see month. 2004, and continued consumer trading up to the super premium 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". family.
BEER SALES RESULTS
The company's reported beer volume is summarized in the following
table:
Beer Volume (millions of barrels)
First Quarter 2004 vs. 2003
2004 2003 Barrels %
Domestic 25.1 24.9 Up 0.2 Up 0.8%
International 1.9 1.8 Up 0.1 Up 6.1%
Worldwide A-B Brands 27.0 26.7 Up 0.3 Up 1.2%
Int'l Equity Partner Brands 4.4 4.3 Up 0.1 Up 1.9%
Total Brands 31.4 31.0 Up 0.4 Up 1.3%
Domestic beer sales-to-wholesalers increased 0.8 percent for the first quarter of 2004 vs. the first quarter 2003. Wholesaler sales-to- retailers were up 2.5 percent in the first quarter vs. 2003, including the benefit of leap day, led by the growth of the company's Michelob ULTRA and Bud Light brands. The company's domestic market share (excluding exports) for the first quarter 2004 was 51.7 percent, compared to first quarter 2003 market share of 52.0 percent. The slight decline in market share is due to the timing of 2004 beer shipments. Market share is based on company sales-to-wholesalers. During the quarter, wholesaler sales-to-retailers significantly exceeded the company's shipments to wholesalers, further reducing wholesaler inventory levels. The company expects full-year market share to increase. Domestic market share is based on estimated U.S. beer industry sales using information provided by the Beer Institute and the U.S. Department of Commerce. International volume, consisting of Anheuser-Busch brands produced overseas by company-owned breweries See for an up to date listing of all the breweries detailed on Wikipedia, sorted into regions. Africa
Asia
FIRST QUARTER 2004 FINANCIAL RESULTS
Key operating results for the first quarter 2004 vs. 2003 are
summarized below:
($ in millions, except per share)
First Quarter 2004 vs. 2003
2004 2003 $ %
Gross Sales $4,003 $3,795 Up $208 Up 5.5%
Net Sales $3,477 $3,281 Up $196 Up 6.0%
Income Before Income Taxes $754 $670 Up $84 Up 12.5%
Equity Income $89 $74 Up $15 Up 19.4%
Net Income $550 $485 Up $65 Up 13.4%
Diluted Earnings per Share $.67 $.57 Up $.10 Up 17.5%
A discussion of financial highlights for the first quarter 2004
follows:
- Net sales increased 6.0 percent compared to the first quarter
2003, driven primarily by a 4.4 percent increase in domestic beer
segment net sales (due to higher revenue per barrel and higher
volume) along with higher sales in all major operating segments.
- Income before income taxes increased 12.5 percent vs. the first
quarter 2003, reflecting improved results for all of the
company's operating segments.
During the first quarter 2004, the company recognized a $19.5
million pretax gain ($.015 per share) from the sale of commodity
hedges in place for future years. These hedges were originally
placed using estimates for costs to be contained in the renewal
of a supply contract. During the quarter, the company lowered its
cost estimates, resulting in significant hedge ineffectiveness in
compliance with FAS 133. Due to the hedge ineffectiveness, the
company sold the hedges and realized the $19.5 million pretax
gain. For business segment reporting purposes, the gain is
reported as a corporate item.
Pretax income for the domestic beer segment was up 7.9 percent
for the quarter, reflecting higher revenue per barrel and higher
beer sales volume. Domestic beer pretax income for the quarter
includes a $19.1 million pretax gain ($.014 per share) related to
the sale of two beer wholesaler partnerships. For consolidation
reporting purposes, the gain is reported in other
income/(expense), net.
International beer segment pretax income improved 13 percent in
the first quarter vs. 2003 primarily due to volume and profit
growth in China and Canada.
Packaging segment pretax profits were up 9 percent in the first
quarter 2004. This increase is primarily due to higher soft drink
can volume and improved plant operations.
Entertainment segment pretax results improved by $9.5 million, up
46 percent compared to the first quarter 2003, primarily due to
increased attendance and pricing.
- Equity income increased $15 million in the first quarter 2004 vs.
2003, primarily reflecting the benefit of price increases
implemented by Grupo Modelo coupled with volume growth.
- Net income increased 13.4 percent over first quarter 2003.
Diluted earnings per share were $.67, an increase of 17.5
percent, compared to the first quarter 2003. Earnings per share
excluding the gain on commodity hedges increased 14.9 percent(1).
Earnings per share continue to benefit from the company's ongoing
share repurchase program. The company repurchased nearly 11
million shares in the quarter.
(1) Earnings Per Share Increase
2004 2003
Reported $.670 $.570 17.5%
Commodity Hedge Gain (.015) --
Excluding Hedge Gain $.655 $.570 14.9%
Other Matters Anheuser-Busch will conduct a conference call with investors to discuss first-quarter 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. Notes 1. Domestic revenue per barrel is calculated as net sales generated by the company's domestic beer operations on barrels of beer sold, determined on a U.S. GAAP basis, divided by the volume of beer shipped from the company's breweries to U.S. wholesalers. 2. Return on capital employed is computed as 12 months of net income before after-tax net interest (interest expense less interest capitalized) divided by average net investment. Net investment is defined as total assets less non-debt current liabilities. For 2004, after-tax net interest expense was $235 million, calculated as pretax net interest expense of $379 million less income taxes applied using a 38 percent tax rate. For 2003, after-tax net interest expense was $223 million, calculated as pretax net interest expense of $360 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. 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.
Anheuser-Busch Companies, Inc.
Comparative Consolidated Statement of Earnings (Unaudited)
(In Millions, Except Per Share)
Change
First Quarter 2004 vs. 2003
Ended March 31, Fav./(Unfav.)
2004 2003 $ %
Gross Sales $4,003.0 $3,794.9 $208.1 5.5
Excise Taxes (526.0) (514.3) (11.7) (2.3)
Net Sales 3,477.0 3,280.6 196.4 6.0
Cost of Sales (2,073.3) (1,974.4) (98.9) (5.0)
Marketing, Distribution and
Administrative Expenses (582.3) (542.1) (40.2) (7.4)
Operating Income 821.4 764.1 57.3 7.5
Interest Expense (101.7) (98.7) (3.0) (3.0)
Interest Capitalized 5.2 4.4 0.8 19.1
Interest Income 1.1 0.1 1.0 N/M
Other Income/(Expense), Net 27.6 (0.2) 27.8 N/M
Income Before Income Taxes 753.6 669.7 83.9 12.5
Provision for Income Taxes (292.6) (259.3) (33.3) (12.9)
Equity Income, Net of Tax 88.9 74.4 14.5 19.4
Net Income $549.9 $484.8 $65.1 13.4
Basic Earnings Per Share $.68 $.58 $.10 17.2
Diluted Earnings Per Share $.67 $.57 $.10 17.5
Increase/(Decrease)
Amount %
Capital Expenditures $199.0 $222.2 $(23.2) (10.4)
Depreciation and Amortization $224.0 $214.5 $9.5 4.4
Weighted Average Shares:
Basic 810.6 840.7 (30.1) (3.6)
Diluted 820.6 850.5 (29.9) (3.5)
N/M --- Not Meaningful
Anheuser-Busch Companies, Inc.
Business Segments
First Quarter Ended March 31
(In Millions)
Domestic Int'l Pack- Enter- Corporate
Beer Beer aging tain. Other & Elim. Consol.
2004
Gross Sales $3,258.1 193.1 521.4 154.1 10.8 (134.5) $4,003.0
Net Sales:
- Intersegment -- -- $210.1 -- 1.0 (211.1) $ --
- External $2,766.4 158.8 311.3 154.1 9.8 76.6 $3,477.0
Income Before
Income Taxes $862.7 22.9 36.8 (11.0) (4.5) (153.3) $753.6
Equity Income -- $88.9 -- -- -- -- $88.9
Net Income $534.9 103.1 22.8 (6.8) (2.8) (101.3) $549.9
2003
Gross Sales $3,138.8 166.2 497.0 125.8 12.1 (145.0) $3,794.9
Net Sales:
- Intersegment -- -- $214.5 -- 1.1 (215.6) $ --
- External $2,650.7 140.0 282.5 125.8 11.0 70.6 $3,280.6
Income Before
Income Taxes $799.6 20.2 33.8 (20.5) (2.6) (160.8) $669.7
Equity Income -- $74.4 -- -- -- -- $74.4
Net Income $495.8 86.9 21.0 (12.7) (1.6) (104.6) $484.8
Anheuser-Busch Companies, Inc.
Consolidated Balance Sheet (Unaudited)
(In Millions)
March 31, December 31,
2004 2003
Assets
Current Assets:
Cash $138.4 $191.1
Accounts receivable 898.1 669.4
Inventories:
Raw materials and supplies 367.8 320.3
Work in progress 99.5 81.9
Finished goods 239.3 185.3
Total inventories 706.6 587.5
Other current assets 176.1 182.3
Total current assets 1,919.2 1,630.3
Investments in affiliated companies 3,213.9 3,052.0
Plant and equipment, net 8,483.9 8,498.9
Intangible assets, including goodwill
of $349.0 million in both periods 497.8 486.6
Other assets 996.9 1,021.7
Total Assets $15,111.7 $14,689.5
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $979.1 $1,093.7
Accrued salaries, wages and benefits 237.0 288.9
Accrued taxes 419.1 163.1
Other current liabilities 363.6 311.5
Total current liabilities 1,998.8 1,857.2
Postretirement benefits 464.7 470.4
Debt 7,532.3 7,285.4
Deferred income taxes 1,501.9 1,462.1
Other long-term liabilities 894.2 902.7
Shareholders Equity:
Common stock 1,459.9 1,457.9
Capital in excess of par value 1,251.9 1,194.0
Retained earnings 14,307.0 13,935.4
Treasury stock, at cost (13,492.7) (12,939.0)
Accumulated other comprehensive loss (806.3) (890.3)
ESOP debt guarantee -- (46.3)
Total Shareholders Equity 2,719.8 2,711.7
Commitments and contingencies -- --
Total Liabilities and
Shareholders Equity $15,111.7 $14,689.5
Anheuser-Busch Companies, Inc.
Consolidated Statement of Cash Flows (Unaudited)
(In Millions)
Three Months
Ended March 31,
2004 2003
Cash flow from operating activities:
Net Income $549.9 $484.8
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 224.0 214.5
Deferred income taxes 39.8 16.5
Undistributed earnings of affiliated companies (85.4) (57.4)
Other, net 64.3 42.9
Operating cash flow before change
in working capital 792.6 701.3
Increase in working capital (199.4) (103.5)
Cash provided by operating activities 593.2 597.8
Cash flow from investing activities:
Capital expenditures (199.0) (222.2)
Acquisitions (32.9) --
Cash used for investing activities (231.9) (222.2)
Cash flow from financing activities:
Increase in long-term debt 500.3 396.9
Decrease in long-term debt (200.8) (84.0)
Dividends paid to shareholders (178.3) (164.1)
Acquisition of treasury stock (578.6) (609.5)
Issuance of shares under stock plans 43.4 11.1
Cash used for financing activities (414.0) (449.6)
Net decrease in cash during the period (52.7) (74.0)
Cash, beginning of period 191.1 188.9
Cash, end of period $138.4 $114.9
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