Anheuser-Busch Optimistic About US Sales, Profitability

    Anheuser-Busch Optimistic About U.S. Beer Sales and Profitability 
 
    BOCA RATON, Fla., Feb. 22 -- Anheuser-Busch (NYSE: BUD) management reviewed
the company's strategies to accelerate U.S. beer sales and profitability, and
reaffirmed the company's 7 to 10 percent long-term earnings growth objective, in
a presentation given at the Consumer Analyst Group of New York Conference today.
    "Over the past year, we have broadened our portfolio to enhance our 
participation in faster-growing high-end categories and initiated a major 
transformation of our selling system to better position our company for  
long-term growth.  Our top priority in 2008 is to accelerate core beer sales 
and profitability," August A. Busch IV, president and chief executive officer 
of the company, said to the investors and analysts. 
    There has been an acceleration in consumer demand for beer over the past 
two years and the company aims to capitalize on the improved growth of the 
U.S. beer industry.  Based on an extensive consumer research effort, the 
company has fine-tuned its marketing messages, and redirected and enhanced its 
marketing and media resources to meet the demands of a changing marketplace.  
The company plans to increase total media spending by 10 percent in 2008 and 
will focus its national media spending on fewer brands, emphasizing those like 
Budweiser and Bud Light that benefit the most from large scale media exposure.  
This strategy includes more frequent updates of ad creative and increased 
media weight, especially over the key summer selling months. 
    The company's consumer research efforts have also identified promising 
opportunities for innovative new products, such as Bud and Bud Light Chelada, 
and Landshark Lager, which have been rolled out nationally in the first 
quarter, and Bud Light Lime, which will be launched nationally on May 5th.   
The company is confident it will achieve improved performance for  
Anheuser-Busch produced brands in 2008.  Through mid-February, the company's 
total wholesalers' sales-to-retailers increased 1.9 percent, with  
Anheuser-Busch produced brands up 0.6 percent. 
    In addition to volume, effective revenue and cost management are also key 
to accelerating U.S. beer company profit growth.  Management views the U.S. 
beer pricing environment as favorable and the company's price increase plans 
for 2008 have now been largely implemented. A strong revenue per barrel 
performance is expected in 2008, with the increase on core brands greater than 
in 2007.  Cost pressures continue, however, particularly for brewing 
materials.  Anheuser-Busch has a strong track record of consistently 
generating significant annual productivity improvement savings.  Productivity 
improvement and supply chain savings to mitigate commodity cost pressures are 
a very high priority for the company this year.  The company has expanded its 
"Blue Ocean" brewery cost reduction initiative to drive additional cost 
savings and process improvements across all areas of the company. 
    Busch also provided highlights of the company's international beer 
business, which is a significant contributor to Anheuser-Busch's consolidated 
earnings growth.  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.  The company is also 
well established in China, the largest and fastest growing beer market in the 
world, and particularly well-positioned in the country's most profitable beer 
segments.  Budweiser is by far the leading super-premium brand in China and 
will be the official international beer sponsor of the 2008 Summer Olympics in 
Beijing.  Anheuser-Busch also has a 27 percent equity stake in Tsingtao, 
China's leading premium brewer. 
    W. Randolph Baker, vice president and chief financial officer highlighted 
the company's 2007 financial performance, utilization of cash flow and  
long-term earnings growth outlook.  Anheuser-Busch achieved double-digits 
earnings per share growth in 2007, with a substantial increase in operating 
cash flow and a 100 basis point improvement in return on capital.  Under the 
company's new more aggressive leverage target, Anheuser-Busch also 
significantly increased cash payments to shareholders in 2007.  Last year, the 
company increased its quarterly dividend by 11.9 percent and repurchased  
$2.7 billion of its stock.  Management continues to expect to spend $2 billion 
on share repurchasing this year, subject as always to potential acquisition 
opportunities.  Baker also reviewed the company's long-term growth model, 
which continues to target earnings per share growth in the 7 to 10 percent 
range.   
 
    Other Matters 
    As previously announced, Anheuser-Busch's Consumer Analyst Group of New 
York presentation is being broadcast live over the Internet today beginning at 
2:30 p.m. ET.  A replay will be available on the company's Web site.  For 
details visit http://www.anheuser-busch.com. 
 
    Notes: 
    In the accompanying presentation, the following terms and normalizations 
are used: 
 
    1.  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. 
 
    2.  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. 
 
    3.  Reconciliation of Comparative Full Year Results 
        ($ in millions, except per share) 
     
                                  Income  Provision 
                                  Before    for                       Diluted 
                      Operating   Income   Income   Equity     Net   Earnings 
                       Income     Taxes    Taxes    Income   Income  Per Share  
    2007 
    Reported          $2,894.0  $2,422.7  $(969.8)  $662.4  $2,115.3  $2.79  
    Gain on Sale of   
     Spanish Theme Park     --     (16.0)     6.1       --      (9.9)  (.01)  
    Gain on Sale of   
     Distribution   
     Rights              (26.5)    (26.5)    10.2       --     (16.3)  (.02)  
    Modelo Restructuring    --        --       --     16.0      16.0    .02  
    Excluding   
     Normalization   
     items            $2,867.5  $2,380.2  $(953.5)  $678.4  $2,105.1  $2.78  
      
    2006                        
    Reported          $2,719.6  $2,276.9  $(900.5)  $588.8  $1,965.2  $2.53  
    Texas Income Tax   
     Legislation   
     Benefit                --        --     (7.8)      --      (7.8)  (.01)  
    Excluding One-Time   
     Item             $2,719.6  $2,276.9  $(908.3)  $588.8  $1,957.4  $2.52  
      
    Percentage Change -   
     2007 vs. 2006              
    Reported               6.4%      6.4%             12.5%      7.6%  10.3%  
    Excluding   
     Normalization   
     items                 5.4%      4.5%             15.2%      7.5%  10.3%  
     
 
    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 or domestic 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. 
 
SOURCE  Anheuser-Busch Companies 
    -0-                             02/22/2008 
    CONTACT:  Brenda Williams of Anheuser-Busch, [phone], 
[e-mail] 
    Web site:  http://www.anheuser-busch.com  
    (BUD) 




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