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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Anheuser-Busch | LSE:AHB | London | Ordinary Share | COM STK $1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 47.30 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Anheuser-Busch Cos. Reports Increased Sales and Earnings for the Third Quarter
and Nine Months of 2007
Earnings Per Share Growth Increased to 15.9%
ST. LOUIS, Oct. 24 -- Anheuser-Busch Cos. Inc. (NYSE: BUD) today reported
that third quarter 2007 net sales increased 7.9 percent and diluted earnings
per share (excluding normalization items in 2007) increased 15.9 percent (1).
For the nine months of 2007, net sales increased 5.7 percent and diluted
earnings per share (excluding normalization items in both years) improved 9.3
percent (1).
"We are pleased with our earnings performance this quarter, with all of
our operating segments reporting higher sales and profits," said August A.
Busch IV, president and chief executive officer of the company. "Sales volume
and revenue growth in our U.S. beer business benefited from our broadened beer
portfolio, with greater participation in the high end segment. The wholesaler
transition and supply issues we encountered earlier this year regarding the
InBev European brands have been resolved. Earnings contribution from our
international segment accelerated, led by Grupo Modelo. And we continue to
expect the company's 2007 earnings per share increase to exceed our long term
growth target of 7 to 10 percent."
Consistent with the pattern in recent years, Anheuser-Busch plans to
implement price increases on the majority of its U.S. beer volume in early
2008, with increases in several states in the fourth quarter 2007. As in the
past, pricing initiatives will be tailored to selected markets, brands and
packages.
BEER SALES RESULTS
The company's reported beer volume for the third quarter and nine months
of 2007 is summarized in the following table:
Reported Beer Volume (millions of barrels) for Periods Ended September 30
Third Quarter Nine Months
Versus 2006 Versus 2006
2007 Barrels % 2007 Barrels %
U.S. 28.0 Up 0.6 Up 2.0% 81.3 Up 1.3 Up 1.7%
International 7.1 Up 0.5 Up 8.2% 18.2 Up 1.1 Up 6.1%
Worldwide A-B
Brands 35.1 Up 1.1 Up 3.2% 99.5 Up 2.4 Up 2.4%
Equity Partner Brands 9.9 Up 0.7 Up 7.6% 25.6 Up 1.5 Up 6.4%
Total Brands 45.0 Up 1.8 Up 4.1% 125.1 Up 3.9 Up 3.2%
U.S. beer shipments-to-wholesalers increased 2 percent for the third
quarter, while sales-to-retailers increased 2.2 percent. Import brands
contributed 160 basis points of growth to shipments and 170 points to
sales-to-retailers.
For the nine months of 2007, shipments-to-wholesalers increased
1.7 percent, and sales-to-retailers increased 0.9 percent with acquired and
import brands contributing 170 basis points of growth to shipments and
sales-to-retailers. Wholesaler inventories for Anheuser-Busch produced brands
at the end of the third quarter were approximately half a day higher than at
the end of the third quarter 2006.
The company's estimated U.S. beer market share for the nine months of 2007
was 48.8 percent compared to prior year market share of 48.7 percent. Market
share is based on estimated U.S. beer industry shipment volume 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 and under license and contract brewing
agreements, plus exports from the company's U.S. breweries, increased
8.2 percent for the third quarter and 6.1 percent for the nine months of 2007.
These increases are primarily due to increased volume in China, Mexico and
Canada in both periods, partially offset by lower volume in the United Kingdom
year-to-date.
Worldwide Anheuser-Busch brands volume, comprised of domestic volume and
international volume, increased 3.2 percent for the third quarter and
2.4 percent for the nine months of 2007 to 35.1 million and 99.5 million
barrels, respectively.
Equity partner brands volume grew 7.6 percent and 6.4 percent,
respectively, for the third quarter and nine months of 2007 due to Modelo and
Tsingtao volume growth.
Total brands volume, which combines worldwide Anheuser-Busch brand volume
with equity partner volume (representing the company's share of its equity
partners' volume on a one-month lag basis) was 45.0 million barrels in the
third quarter 2007, up 1.8 million barrels, or 4.1 percent. Total brands
volume was up 3.2 percent, to 125.1 million barrels for the nine months of
2007.
THIRD QUARTER 2007 FINANCIAL RESULTS
Key operating results and a discussion of financial highlights for the
third quarter 2007 versus 2006 follow.
($ in millions, except per share)
Third Quarter 2007 vs. 2006
2007 2006 $ %
Gross Sales $5,237 $4,877 Up $360 Up 7.4%
Net Sales $4,618 $4,281 Up $337 Up 7.9%
Income Before Income Taxes $872 $793 Up $79 Up 10.0%
Equity Income $185 $157 Up $28 Up 18.4%
Net Income $707 $638 Up $69 Up 10.9%
Diluted Earnings per Share $.95 $.82 Up $.13 Up 15.9%
-- Net sales increased 7.9 percent driven by sales increases from all
operating segments. U.S. beer segment sales increased 6.7 percent due
primarily to 2 percent higher beer sales volume, and a 3.1 percent
increase in revenue per barrel (2) resulting from price increases
earlier in the year and favorable brand mix. International beer sales
were up 16 percent primarily due to increases in China, Mexico and
Canada, packaging segment sales grew 10 percent due to increases in
can and recycling revenues and entertainment revenues increased
8 percent primarily due to higher attendance and increased ticket
pricing and in-park spending.
-- In the third quarter 2007, the company sold certain beer distribution
rights in southern California and recognized a pretax gain of
$26.5 million, which is reported as a separate line item in the
company's income statement. For business segment reporting, the gain
is included in U.S. beer operations. Excluding the disposition gain to
better portray underlying operating results, income before income
taxes increased 6.6 percent (1) due to higher profits in each of the
company's operating segments. Reported third quarter pretax income
grew $79 million, or 10 percent versus prior year.
Pretax profits for U.S. beer, excluding the distribution rights gain,
(3) increased 1.5 percent due to increased revenue per barrel and
higher beer sales volume, partially offset by higher production costs
and increased marketing spending.
International beer pretax income was up $6.4 million compared with
prior year. Increased earnings from Canada, Ireland and Mexico were
partially offset by lower results in China, driven by higher selling
costs associated with the rollout of Budweiser and Harbin premium
brands into new markets.
Packaging segment pretax profits were up $12 million primarily from
increased volume and pricing in our can manufacturing and recycling
operations.
Entertainment segment pretax income improved $18 million, primarily
due to higher attendance and increased pricing and in-park spending.
-- Equity income increased $28 million, or 18.4 percent reflecting Grupo
Modelo volume growth and benefits from Modelo's Crown import joint
venture. Equity income includes a $16 million charge by Modelo for
restructuring related to its domestic distribution system and C-store
closings. Excluding the restructuring charge, equity income would have
increased $45 million, or 28.6 percent, (1) versus 2006.
-- Excluding the gain on the beer distribution rights sale and the Modelo
restructuring charge, underlying net income and diluted earnings per
share for the third quarter 2007 increased 10.8 percent and
15.9 percent, respectively(1). On a reported basis, net income
increased 10.9 percent and diluted earnings per share increased
15.9 percent, to $.95.
NINE MONTHS OF 2007 FINANCIAL RESULTS
Key operating results and a discussion of financial highlights for the
nine months of 2007 vs. 2006 follow.
($ in millions, except per share)
Nine Months 2007 vs. 2006
2007 2006 $ %
Gross Sales $14,769 $14,027 Up $742 Up 5.3%
Net Sales $12,992 $12,292 Up $700 Up 5.7%
Income Before Income Taxes $2,265 $2,172 Up $93 Up 4.3%
Equity Income $539 $449 Up $90 Up 20.0%
Net Income $1,901 $1,775 Up $126 Up 7.1%
Diluted Earnings per Share $2.49 $2.28 Up $.21 Up 9.2%
-- Net sales increased 5.7 percent due to contributions from all of the
company's operating segments. U.S. beer net sales increased
5.7 percent due primarily to 2.8 percent higher revenue per barrel and
1.7 percent higher shipment volume. International beer segment net
sales grew 10 percent primarily due to sales volume increases, and
entertainment sales increased 8 percent from increased attendance,
ticket pricing and in-park spending. Packaging segment sales increased
3 percent on higher can manufacturing and recycling revenues.
-- In addition to the one-time third quarter items discussed previously,
reported income before income taxes for the nine months of 2007 also
includes a $16 million pretax gain related to the second quarter sale
of the company's remaining interest in its Spanish theme park
investment. This gain is reported as a corporate item for segment
reporting purposes. Excluding all normalization items to better
portray underlying results, income before income taxes increased
2.3 percent (1) due to higher profits in each of the company's
operating segments, partially offset by higher interest expense.
Reported pretax income grew $93 million, or 4.3 percent versus prior
year.
Income before income taxes for U.S. beer, excluding the distribution
rights gain, (3) was up 0.5 percent versus prior year due to increased
beer volume and 2.8 percent higher revenue per barrel, partially
offset by higher production costs and increased marketing spending.
International beer pretax income increased $4.5 million due to
increased profits in China, Canada, Mexico and Ireland, partially
offset by lower results in the United Kingdom.
Packaging segment pretax income increased $27 million on improved
performance for all packaging businesses, led by increased profits for
can manufacturing and aluminum recycling operations.
Entertainment segment pretax results improved $22 million due
primarily to increased attendance and higher ticket pricing and
in-park spending.
-- Equity income increased $90 million, or 20 percent due to Grupo Modelo
volume increases, benefits from Modelo's Crown import joint venture
and from the return of advertising funds that were part of prior
import contracts. Equity income also includes the $16 million Modelo
restructuring charge. Excluding the restructuring charge, equity
income for the nine months would have increased $106 million, or
23.6 percent (1) versus 2006.
-- Year-to-date, comparisons of net income and diluted earnings per share
are impacted by the normalization items discussed previously, as well
as the $7.8 million deferred income tax provision benefit recognized
in 2006 due to tax reform legislation in Texas. Excluding all
normalization items from both years, net income and diluted earnings
per share increased 7.0 percent and 9.3 percent, respectively(1). On a
reported basis, net income increased 7.1 percent and diluted earnings
per share were up 9.2 percent, to $2.49. Diluted earnings per share
benefited from the company's repurchase of over 38 million shares
during the nine months of 2007.
Other Matters
Anheuser-Busch will conduct a conference call with investors to discuss
results for the third quarter and nine months at 3 p.m. CDT today. The
company will broadcast the conference call live via the Internet. For details
visit the company's site on the Internet at http://www.anheuser-busch.com.
Notes
(1) Reconciliation of Comparative Third Quarter and Nine Months Results
($ in millions,
except per share)
Income Provision Diluted
Before for Earnings Effective
Income Income Equity Net Per Tax
Taxes Taxes Income Income Share Rate
Third Quarter
2007
Reported $871.5 $(350.0) $185.2 $706.7 $.95 40.2%
Gain on Sale of
Distribution Rights (26.5) 10.2 -- (16.3) (.02)
Modelo Restructuring -- -- 16.0 16.0 .02
Excluding
Normalization items $845.0 $(339.8) $201.2 $706.4 $.95 40.2%
2006
Reported $792.5 $(311.5) $156.5 $637.5 $.82 39.3%
Percentage Change -
2007 vs. 2006
Reported 10.0% 18.4% 10.9% 15.9% 90 pts
Excluding
Normalization items 6.6% 28.6% 10.8% 15.9% 90 pts
Nine Months
2007
Reported $2,264.6 $(902.7) $539.3 $1,901.2 $2.49 39.9%
Gain on Sale of
Spanish Theme Park (16.0) 6.1 -- (9.9) (.01)
Gain on Sale of
Distribution Rights (26.5) 10.2 -- (16.3) (.02)
Modelo Restructuring -- -- 16.0 16.0 .02
Excluding
Normalization
items $2,222.1 $(886.4) $555.3 $1,891.0 $2.48 39.9%
2006
Reported $2,172.1 $(846.9) $449.3 $1,774.5 $2.28 39.0%
Texas Income Tax
Legislation Benefit -- (7.8) -- (7.8) (.01)
Excluding One-Time
Item $2,172.1 $(854.7) $449.3 $1,766.7 $2.27 39.3%
Percentage Change -
2007 vs. 2006
Reported 4.3% 20.0% 7.1% 9.2% 90 pts
Excluding
Normalization items 2.3% 23.6% 7.0% 9.3% 60 pts
(2) Domestic revenue per barrel is calculated as net sales generated by
the company's U.S. beer operations on barrels of beer sold,
determined on a U.S. GAAP basis, divided by the volume of beer
shipped to U.S. wholesalers.
(3) U.S. Beer Income Before Income Taxes
Third Quarter Nine Months
2007
Reported $814.4 $2,372.3
Gain on Sale of Distribution Rights (26.5) (26.5)
Excluding Gain $787.9 $2,345.8
2006
Reported $776.6 $2,334.1
Percentage Change - 2007 vs. 2006
Reported 4.9% 1.6%
Excluding Gain 1.5% 0.5%
(4) International Beer Net Income
Third Quarter Nine Months
2007
Reported $204.3 $585.4
Modelo Restructuring 16.0 16.0
Excluding Restructuring $220.3 $601.4
2006
Reported $172.0 $492.9
Percentage Change - 2007 vs. 2006
Reported 18.8% 18.8%
Excluding Restructuring 28.1% 22.0%
This release contains forward-looking statements regarding the company's
expectations concerning its future operations, earnings and prospects. On the
date the forward-looking 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's expectations
involve risks and uncertainties (both favorable and unfavorable) and are based
on 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. Important
factors that could cause actual results to differ (favorably or unfavorably)
from the expectations stated in this release include, among others, changes in
the pricing environment for the company's products; changes in U.S. demand for
malt beverage products, including changes in U.S. demand for other alcohol
beverages; changes in consumer preference for the company's malt beverage
products; changes in the distribution for the company's malt beverage
products; changes in the cost of marketing the company's malt beverage
products; regulatory or legislative changes, including changes in beer excise
taxes at either the federal or state level and changes in income taxes;
changes in the litigation to which the company is a party; changes in raw
materials prices; changes in packaging materials costs; changes in energy
costs; changes in the financial condition of the company's suppliers; changes
in interest rates; changes in foreign currency exchange rates; unusual weather
conditions that could impact beer consumption in the U.S.; changes in
attendance and consumer spending patterns for the company's theme park
operations; changes in demand for aluminum beverage containers; changes in the
company's international beer business or in the beer business of the company's
international equity partners; changes in the economies of the countries in
which the company, its international beer business or its international equity
partners operate; future acquisitions or divestitures by the company,
including effects on its credit rating; changes resulting from transactions
among the company's global competitors; and the effect of stock market
conditions on the company's share repurchase program. Anheuser-Busch
disclaims any obligation to update or revise any of these forward-looking
statements. Additional risk factors concerning the company can be found in
the company's most recent Form 10-K.
Anheuser-Busch Companies, Inc.
Comparative Consolidated Statement of Earnings (Unaudited)
(In Millions, Except Per Share)
Third Quarter Nine Months
Ended September 30, Ended September 30,
2007 2006 2007 2006
Gross sales $5,237.4 $4,876.5 $14,769.2 $14,026.8
Excise taxes (619.7) (595.8) (1,777.7) (1,734.5)
Net Sales 4,617.7 4,280.7 12,991.5 12,292.3
Cost of sales (2,868.5) (2,644.6) (8,201.1) (7,723.0)
Marketing, distribution
and administrative
expenses (777.4) (738.2) (2,199.3) (2,068.2)
Gain on sale of
distribution rights 26.5 -- 26.5 --
Operating income 998.3 897.9 2,617.6 2,501.1
Interest expense (119.4) (111.3) (359.0) (341.6)
Interest capitalized 4.5 4.4 12.2 13.4
Interest income 0.7 0.6 2.7 1.4
Other income/(expense),
net (12.6) 0.9 (8.9) (2.2)
Income before income taxes 871.5 792.5 2,264.6 2,172.1
Provision for income
taxes (350.0) (311.5) (902.7) (846.9)
Equity income, net of tax 185.2 156.5 539.3 449.3
Net income $706.7 $637.5 $1,901.2 $1,774.5
Basic earnings per share $.96 $.83 $2.53 $2.30
Diluted earnings per share $.95 $.82 $2.49 $2.28
Weighted Average Shares
Outstanding
Basic 738.6 769.0 752.3 771.6
Diluted 745.4 775.9 763.0 778.0
Anheuser-Busch Companies, Inc.
Business Segments (Unaudited)
Third Quarter Ended September 30
(In Millions)
Inter- Enter-
U.S. national Pack- tain- Corporate Consoli-
Beer Beer aging ment & Elims dated
2007
Gross Sales $3,810.0 373.7 698.6 479.5 (124.4) $5,237.4
Net Sales:
- Intersegment $0.8 0.1 256.9 - (257.8) $-
- External $3,258.1 305.0 441.7 479.5 133.4 $4,617.7
Income Before
Income Taxes $814.4 33.7 50.6 175.0 (202.2) $871.5
Equity Income $1.8 183.4 - - - $185.2
Net Income $506.7 204.3 31.4 108.5 (144.2) $706.7
2006
Gross Sales $3,594.2 319.1 641.8 444.4 (123.0) $4,876.5
Net Sales:
- Intersegment $0.7 - 240.4 - (241.1) $-
- External $3,054.9 262.0 401.4 444.4 118.0 $4,280.7
Income Before
Income Taxes $776.6 27.3 39.0 157.3 (207.7) $792.5
Equity Income $1.4 155.1 - - - $156.5
Net Income $482.8 172.0 24.2 97.5 (139.0) $637.5
In 2007, the company changed reporting responsibility for certain
administrative and technology support costs from Corporate to the U.S. beer
segment. 2006 segment results have been updated to conform to this reporting
convention.
Anheuser-Busch Companies, Inc.
Business Segments (Unaudited)
Nine Months Ended September 30
(In Millions)
Inter- Enter-
U.S. national Pack- tain- Corporate Consoli-
Beer Beer aging ment & Elims dated
2007
Gross Sales $11,022.6 1,002.5 2,048.0 1,065.1 (369.0) $14,769.2
Net Sales:
- Intersegment $2.5 0.6 738.6 - (741.7) $-
- External $9,425.6 818.7 1,309.4 1,065.1 372.7 $12,991.5
Income Before
Income Taxes $2,372.3 79.9 150.1 270.4 (608.1) $2,264.6
Equity Income $3.4 535.9 - - - $539.3
Net Income $1,474.2 585.4 93.1 167.6 (419.1) $1,901.2
2006
Gross Sales $10,480.4 916.1 1,985.9 984.5 (340.1) $14,026.8
Net Sales:
- Intersegment $2.2 - 709.6 - (711.8) $-
- External $8,913.2 746.6 1,276.3 984.5 371.7 $12,292.3
Income Before
Income Taxes $2,334.1 75.4 122.9 248.2 (608.5) $2,172.1
Equity Income $3.1 446.2 - - - $449.3
Net Income $1,450.2 492.9 76.2 153.9 (398.7) $1,774.5
In 2007, the company changed reporting responsibility for certain
administrative and technology support costs from Corporate to the U.S. beer
segment. 2006 segment results have been updated to conform to this reporting
convention.
Anheuser-Busch Companies, Inc.
Consolidated Balance Sheet (Unaudited)
(In Millions)
September 30, December 31,
2007 2006
Assets
Current Assets:
Cash $301.5 $219.2
Accounts receivable 1,048.8 720.2
Inventories 666.5 694.9
Other current assets 202.6 195.2
Total current assets 2,219.4 1,829.5
Investments in affiliated companies 3,817.5 3,680.3
Plant and equipment, net 8,773.1 8,916.1
Intangible assets, including goodwill
of $1,112.5 and $1,077.8 1,472.4 1,367.2
Other assets 639.3 584.1
Total Assets $16,921.7 $16,377.2
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $1,450.0 $1,426.3
Accrued salaries, wages and benefits 338.2 342.8
Accrued taxes 294.1 133.9
Accrued interest 117.8 124.2
Other current liabilities 240.5 218.9
Total current liabilities 2,440.6 2,246.1
Retirement benefits 1,165.8 1,191.5
Debt 8,344.2 7,653.5
Deferred income taxes 1,207.7 1,194.5
Other long-term liabilities 225.5 152.9
Shareholders Equity:
Common stock 1,480.1 1,473.7
Capital in excess of par value 3,205.9 2,962.5
Retained earnings 17,950.3 16,741.0
Treasury stock, at cost (17,942.4) (16,007.7)
Accumulated nonowner changes in equity (1,156.0) (1,230.8)
Total Shareholders Equity 3,537.9 3,938.7
Commitments and contingencies -- --
Total Liabilities and Shareholders Equity $16,921.7 $16,377.2
Anheuser-Busch Companies, Inc.
Consolidated Statement of Cash Flows (Unaudited)
(In Millions)
Nine Months
Ended September 30,
2007 2006
Cash flow from operating activities:
Net income $1,901.2 $1,774.5
Adjustments to reconcile net income
to cash provided byoperating activities:
Depreciation and amortization 748.3 740.3
Decrease in deferred income taxes (71.1) (38.8)
Stock-based compensation expense 46.4 52.1
Undistributed earnings of
affiliated companies (126.0) (202.2)
Gain on sale of business (42.5) -
Other, net 79.6 (131.2)
Operating cash flow before the change
in working capital 2,535.9 2,194.7
(Increase)/Decrease in working capital (83.4) 30.8
Cash provided by operating activities 2,452.5 2,225.5
Cash flow from investing activities:
Capital expenditures (564.8) (486.5)
Acquisitions (84.7) (82.3)
Proceeds from sale of business 41.6 -
Cash used for investing activities (607.9) (568.8)
Cash flow from financing activities:
Increase in debt 906.4 317.3
Decrease in debt (257.8) (902.8)
Dividends paid to shareholders (691.8) (645.0)
Acquisition of treasury stock (1,934.9) (580.2)
Shares issued under stock plans 215.8 119.4
Cash used for financing activities (1,762.3) (1,691.3)
Net increase/(decrease) in cash
during the period 82.3 (34.6)
Cash, beginning of period 219.2 225.8
Cash, end of period $301.5 $191.2
SOURCE Anheuser-Busch Cos. Inc.
-0- 10/24/2007
/CONTACT: Kelli Powers, +1-314-577-9618, or Investor Relations,
+1-314-577-7772, both of Anheuser-Busch Cos. Inc./
/Web site: http://www.anheuser-busch.com /
(BUD)
END
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