Anheuser-Busch Optimistic About Growth Outlook

    Anheuser-Busch Executives Optimistic About Growth Outlook 
 
    BOSTON, Sept. 7 -- Management continues to expect accelerated sales and 
earnings growth in the second half of the year and earnings per share growth for 
the full year to exceed its 7 to 10 percent long-term objective,(1) Anheuser-
Busch executives told investors in a presentation given today at the Lehman 
Brothers Consumer Conference. 
    "We are adapting our portfolio and entire system to meet the demands of a 
changing marketplace and we are making good progress at strengthening our 
company's foundation for sustainable long-term growth," said August A. Busch 
IV, president and chief executive officer of the company. 
    U.S. beer industry volume in 2006 and year-to-date has grown at a healthy 
pace.  Over this period, import and craft beers in particular have enjoyed 
strong growth and Anheuser-Busch has added considerably to its portfolio and 
presence in these growing segments through alliances, acquisitions and new 
product development.  The company has also been leveraging its superior 
distribution system to pursue high-margin growth opportunities in non-alcohol 
beverages, such as energy drinks and super-premium waters. 
    While Anheuser-Busch's U.S. beer sales-to-retailers were below 
expectations in the first half of the year, volume trends have shown 
improvement in the second half.  So far in this quarter, total  
sales-to-retailers are up 2.4 percent, with both new brands and core brands 
contributing to growth.(2) 
    The pricing environment in the U.S. beer industry also was cited as 
favorable.  Anheuser-Busch's revenue per barrel was up 2.7 percent in the 
first half of the year,(3) benefiting in part from improved portfolio mix, and 
is expected to significantly exceed this level of increase for the second half 
of the year.  The company is planning to increase prices on the majority of 
volume early next year, with some increases coming in the fourth quarter of 
this year.  In addition, management continues to aggressively pursue 
productivity improvement, targeting $300 to $400 million in cost savings over 
the next four years. 
    Busch also provided highlights of the company's international beer 
business.  Net income from international beer has grown an average of 20 
percent per year since 1999.  The majority of international beer profits are 
driven by the company's 50 percent investment in Grupo Modelo, the leading 
brewer in Mexico and the brewer of Corona, the leading U.S. import brand. 
Modelo's new Crown import joint venture is significantly enhancing  
Anheuser-Busch's equity income growth this year.  Elsewhere, Anheuser-Busch is 
building a solid leadership position in China, the largest and fastest growing 
market in the world, among its other international efforts. 
    W. Randolph Baker, vice president and chief financial officer, highlighted 
the company's substantial cash flow.  In December, the company announced a 
more aggressive financial leverage target to more efficiently support existing 
operations, acquisitions, dividend growth and share repurchasing, while 
maintaining considerable financial flexibility.  Cash returned to shareholders 
has increased significantly this year.  The company announced an 11.9 percent 
increase in its quarterly dividend in July and continues to expect to spend 
$2.5 billion for share repurchases in 2007. 
 
    Other Matters 
    As previously announced, Anheuser-Busch Companies' Lehman Brothers 
Consumer Conference presentation will be broadcast live over the Internet 
today beginning at 1:30 p.m. EDT.  A replay will be available on the company's 
Web site.  For details visit http://www.anheuser-busch.com. 
     
    Notes 
 
    1.  Calculation of 2006 Earnings per Share for 2007 Comparison Purposes 
 
    The table below sets forth the assumption used in comparing 2007     
    normalized earnings per share expectations to normalized 2006 results. 
 
    2006 Earnings Per Share                          Full Year 
    Reported                                           $2.53 
    Texas Income Tax Legislation Benefit in 2Q         (0.01) 
    Excluding One-Time Benefit                         $2.52 
 
    2.  Sales-to-retailers results are on a comparable selling day adjusted  
        basis and include the contribution of newly acquired and alliance  
        brands.  Core brand sales-to-retailers are up 0.8 percent quarter to    
        date. 
 
    3.  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. 
 
    In the accompanying presentation, the following term is used: 
 
    4. The cash flow to total debt ratio is defined as: operating cash flow  
       before the change in working capital, adjusted for pension  
       contributions less service costs; divided by total debt, adjusted to  
       include the funded status of the company's single-employer defined  
       benefit pension plans 
 
    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's international beer business or its international equity 
partners operate; future acquisitions or divestitures; 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. 
 
SOURCE  Anheuser-Busch   

    CONTACT:  Kelli Powers of Anheuser-Busch, [phone] 
    Web site:  http://www.anheuser-busch.com  
    (BUD) 



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