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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 |
Hot Features
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Anheuser-Busch Cos. Reports Increased Sales and Earnings for the Fourth
Quarter and Full Year of 2006
Substantial Progress on Strategic Initiatives in 2006
ST. LOUIS, Feb. 2 -- Anheuser-Busch Cos. Inc. (NYSE: BUD) today reported
that full year 2006 net sales increased 4.5 percent and diluted earnings per
share (excluding one-time items in both years) increased 9.1 percent (1). For
the fourth quarter of 2006, net sales increased 1.8 percent and diluted earnings
per share improved 31.6 percent.
"2006 was a successful year for the company," said August A. Busch IV,
president and chief executive officer of the company. "Growth momentum was
restored in the domestic beer business, significant progress was made on
several strategic initiatives to enhance shareholder value, and earnings per
share were up at the high end of our 7 percent to 10 percent long-term growth
objective."
In the domestic beer business, Anheuser-Busch shipments were up 1.2
percent for the year and wholesaler sales to retailers were up 1.1 percent,
with a strong performance in the fourth quarter. Revenue per barrel (2) was
up 1.4 percent in 2006 and productivity improvement reduced costs by almost
$100 million.
The company has made substantial progress to increase its participation in
the high-margin and fast-growing import and craft segments of the beer market,
including import alliances with InBev, Grolsch, Kirin, Tiger and the Czechvar
brand, the acquisition of the Rolling Rock brands, and the introduction of
several internally developed specialty brands. In addition, the company
significantly expanded its participation in the fast growing energy drink
business through a distribution agreement with Hansen Natural, including their
Monster energy brands.
Also, in December the company announced a more aggressive leverage target
(25% to 30% cash flow to total debt ratio) that will enable it to use its
balance sheet more effectively to support existing operations, acquisitions,
dividend growth and share repurchasing, while maintaining substantial
financial flexibility.
"These strategic initiatives, the restoration of momentum in our domestic
beer business, domestic price increases that are being implemented, and
Modelo's new U.S. import joint venture position the company well for continued
volume and earnings growth in 2007," said Busch.
BEER SALES RESULTS
The company's reported beer volume for the fourth quarter and full year
2006 is summarized in the following table:
Reported Beer Volume (millions of barrels) for Periods Ended December 31
Fourth Quarter Full year
Versus 2005 Versus 2005
2006 Barrels % 2006 Barrels %
Domestic 22.3 Dn (0.8) Dn (3.6)% 102.3 Up 1.2 Up 1.2%
International 5.6 Up 0.2 Up 4.6% 22.7 Up 1.9 Up 9.3%
Worldwide A-B
Brands 27.9 Dn (0.6) Dn (2.1)% 125.0 Up 3.1 Up 2.6%
Equity Partner
Brands 7.5 Up 0.9 Up 13.0% 31.6 Up 5.2 Up 19.7%
Total Brands 35.4 Up 0.3 Up 0.8% 156.6 Up 8.3 Up 5.6%
Wholesaler sales-to-retailers growth accelerated in the fourth quarter, to
1.6 percent, while domestic beer shipments decreased 3.6 percent in the
quarter as the company reduced wholesaler inventory levels by more than 1.5
days below 2005 year-end levels. Rolling Rock, Grolsch and Tiger contributed
0.7 and 0.8 points of growth to sales-to-retailers and shipments,
respectively. For the full year 2006, shipments-to-wholesalers increased 1.2
percent and sales-to-retailers increased 1.1 percent, with Rolling Rock,
Grolsch and Tiger contributing 0.5 points of growth to each.
Domestic beer industry volume, including imports, was very strong, up
approximately 2 percent in 2006. The company's estimated domestic market
share (excluding exports) for the full year was 48.4 percent, compared with
2005 market share of 48.7 percent. Domestic 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. The company's shipment-
based market share comparisons were adversely impacted by the reduction in
wholesaler inventories.
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 4.6
percent for the fourth quarter and 9.3 percent for full year 2006. These
increases are primarily due to increased volume in China, Canada and Mexico in
both periods, partially offset by volume declines in the United Kingdom and
Ireland for the year.
Worldwide Anheuser-Busch brands volume, comprised of domestic volume and
international volume, decreased 2.1 percent to 27.9 million for the fourth
quarter and increased 2.6 percent to 125 million barrels for the full year
2006. The fourth quarter decline is due to the reduction in domestic beer
wholesaler inventories.
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 35.4 million barrels in the
fourth quarter 2006, up 300,000 barrels, or 0.8 percent. Total brands volume
was up 5.6 percent, to 156.6 million barrels for the full year.
Equity partner brands volume grew 13 percent and 19.7 percent,
respectively, for the fourth quarter and full year 2006 due to Modelo and
Tsingtao volume growth. The company began equity accounting for Tsingtao in
May 2005.
FOURTH QUARTER 2006 FINANCIAL RESULTS
Effective in the first quarter 2006, Anheuser-Busch adopted FAS 123R,
"Share-Based Payment." FAS 123R requires the recognition of stock
compensation expense for stock options and other forms of equity compensation,
based on the fair value of the instruments on the date of grant. In order to
enhance the comparability of all periods presented and provide the fullest
understanding of the impact that expensing stock compensation has on the
company's financial results, Anheuser-Busch elected to apply the modified
retrospective method of adopting FAS 123R. The company has therefore recast
2005 results to incorporate the impact of previously disclosed pro forma stock
compensation expense. For financial reporting purposes, stock compensation
expense is included in cost of sales and marketing, distribution and
administrative expenses, depending on where the recipient's cash compensation
is reported. Stock compensation expense is classified as a corporate item for
segment reporting. Stock compensation expense was $.06 and $.07 per share in
the fourth quarter of 2006 and 2005, respectively, and was $.11 and $.12 per
share for the full years, respectively.
Key operating results and a discussion of financial highlights for the
fourth quarter 2006 versus 2005 follow.
($ in millions, except per share)
Fourth Quarter 2006 vs. 2005
2006 2005 $ %
Gross Sales $3,931 $3,882 Up $49 Up 1.3%
Net Sales $3,425 $3,365 Up $60 Up 1.8%
Income Before Income Taxes $105 $91 Up $14 Up 15.6%
Equity Income $140 $108 Up $32 Up 29.4%
Net Income $191 $146 Up $45 Up 31.0%
Diluted Earnings per Share $.25 $.19 Up $.06 Up 31.6%
- Net sales increased 1.8 percent primarily on increases from
international beer, packaging and entertainment operations.
International beer sales were up 5 percent on volume increases,
packaging sales were up 10 percent on higher recycling sales and
entertainment revenues increased 8 percent due to higher attendance and
higher in-park spending. Domestic beer segment sales declined 1 percent
due to 3.6 percent lower beer sales volume partially offset by a 2
percent increase in revenue per barrel.
- Income before income taxes increased 15.6 percent versus the prior year,
due primarily to higher domestic beer profits and lower corporate
expenses partially offset by decreases in international beer and
entertainment.
Pretax profits for the domestic beer segment increased 2.5 percent,
primarily due to increased revenue per barrel and lower marketing costs,
partially offset by lower beer sales volume and higher beer production
costs.
International beer pretax income was down $15 million versus prior year,
due to lower profits in the United Kingdom partially offset by increased
earnings in Ireland and Canada.
Packaging segment pretax profits were up 5 percent, primarily from
higher can and labeling profits.
Entertainment segment pretax results declined $6 million due to higher
park expenses and marketing costs, partially offset by higher attendance
and increased in-park spending.
- Equity income increased 29.4 percent reflecting Grupo Modelo volume
growth and price increases taken in Mexico at the beginning of the year.
- Net income increased 31 percent and diluted earnings per share increased
31.6 percent, to $.25. The effective income tax rate was 51.2 percent
for the fourth quarter 2006, a decrease versus 58.4 percent in the
fourth quarter 2005, primarily due to lower taxes on earnings from
foreign operations.
FULL YEAR 2006 FINANCIAL RESULTS
Key operating results and a discussion of financial highlights for the
full year 2006 vs. 2005 follow.
($ in millions, except per share)
Full year 2006 vs. 2005
2006 2005 $ %
Gross Sales $17,958 $17,254 Up $704 Up 4.1%
Net Sales $15,717 $15,036 Up $681 Up 4.5%
Income Before Income Taxes $2,277 $2,057 Up $220 Up 10.7%
Equity Income $589 $498 Up $91 Up 18.2%
Net Income $1,965 $1,744 Up $221 Up 12.7%
Diluted Earnings per Share $2.53 $2.23 Up $.30 Up 13.5%
- Net sales increased 4.5 percent due to contributions from all business
segments. Domestic beer net sales increased 2.8 percent due to 1.2
percent higher beer sales volume and 1.4 percent higher revenue per
barrel. International beer segment net sales grew 7 percent on volume
increases and packaging segment sales increased 10 percent on higher
recycling sales. Entertainment sales increased 9 percent primarily from
increased attendance and higher in-park spending.
- Income before income taxes increased 6.1 percent, (1) excluding from
2005 results both the $105 million pretax litigation settlement charge
and the $15.4 million pretax gain from the sale of the company's equity
interest in its Spanish theme park investment, Port Aventura. On a
reported basis, pretax income increased 10.7 percent, due to higher
profits in domestic beer and entertainment operations.
Income before income taxes for domestic beer was up 3.1 percent due to
higher volume, increased revenue per barrel and lower marketing costs,
partially offset by higher beer production costs.
International beer pretax income decreased $10 million due to lower
earnings in the United Kingdom partially offset by increased profits in
China, Canada, Ireland and Mexico.
Packaging segment pretax income was up $4 million primarily due to
higher can manufacturing profits.
Entertainment segment pretax results improved $27 million due to
increased attendance and in-park spending, partially offset by higher
park operating expenses and marketing costs.
- Equity income increased 18.2 percent primarily due to Grupo Modelo
volume increases, pricing growth in Mexico and a lower Mexican income
tax rate.
- Comparisons of net income, earnings per share and the effective income
tax rate are all impacted by one-time income tax events in both years,
as well as the 2005 litigation settlement and gain on the sale of the
Spanish theme park investment. In 2006, Anheuser-Busch recognized a
gain of $7.8 million from the reduction of deferred income taxes
resulting from state income tax reform legislation in Texas, while in
2005 the company recognized a similar gain of $7.2 million due to tax
reform legislation in Ohio and also reported a $6.8 million favorable
settlement of certain Chilean taxes associated with the 2004 sale of the
company's equity stake in Compania Cervecerias Unidas S.A. (CCU).
Excluding these one-time items from both years, net income and diluted
earnings per share for full year 2006 increased 8.5 percent and 9.1
percent, respectively, (1) and the 2006 effective income tax rate was
39.9 percent, an increase of 70 basis points versus 2005 primarily due
to higher taxes on foreign earnings. On a reported basis net income
increased 12.7 percent, diluted earnings per share were up 13.5 percent,
to $2.53 and the 2006 effective income tax rate was up 10 basis points
to 39.5 percent.
Earnings per share benefited from the company's repurchase of almost
17 million shares during 2006. In December, the company announced a new
multi-year 100 million share repurchase program (bringing total open
authorized repurchases to approximately 115 million shares).
Other Matters
Anheuser-Busch will conduct a conference call with investors to discuss
results for the fourth quarter and full year at 3:00 p.m. Central Time today.
The company will broadcast the conference call live via the Internet. For
details visit the company's site on the Internet at
http://www.anheuser-busch.com .
Notes
(1) Reconciliation of Comparative Fourth Quarter and Full Year Results
($ in millions, except per share)
Income Provision Diluted Effect-
Before for Earnings tive
Income Income Net Per Tax
Taxes Taxes Income Share Rate
Fourth Quarter
2006
Reported $104.8 $(53.6) $190.7 $.25 51.2%
2005
Reported $167.9 $(74.6) $201.2 $.26
FAS 123R Impact (77.2) 21.6 (55.6) (.07)
Including FAS 123R $90.7 $(53.0) $145.6 $.19 58.4%
Percentage Change -
2006 vs. 2005
Including FAS 123R 15.6% 31.0% 31.6% 720 bps
Full Year
2006
Reported $2,276.9 $(900.5) $1,965.2 $2.53 39.5%
Texas Income Tax
Legislation Benefit - (7.8) (7.8) (.01)
Excluding One-Time
Item $2,276.9 $(908.3) $1,957.4 $2.52 39.9%
2005
Reported $2,191.5 $(850.4) $1,839.2 $2.35
FAS 123R Impact (134.1) 39.3 (94.8) (.12)
Including FAS 123R 2,057.4 (811.1) 1,744.4 2.23 39.4%
Gain on Sale of Spanish
Theme Park (15.4) (3.5) (18.9) (.024)
Chile Income Tax
Settlement Benefit (6.8) (6.8) (.009)
Ohio Income Tax
Legislation Benefit (7.2) (7.2) (.009)
Litigation Settlement 105.0 (12.6) 92.4 .118
Excluding One-Time
Items $2,147.0 $(841.2) $1,803.9 $2.31 39.2%
Percentage Change -
2006 vs. 2005
Including FAS 123R 10.7% 12.7% 13.5% 10 bps
Excluding One-Time Items 6.1% 8.5% 9.1% 70 bps
(2) 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 to U.S. wholesalers.
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 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; changes in the company's credit rating resulting from 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.
Anheuser-Busch Companies, Inc.
Consolidated Statement of Income (Unaudited)
(In Millions, Except Per Share)
Fourth Quarter Full Year
Ended December 31 Ended December 31
2006 2005 2006 2005
Gross sales $3,931.0 $3,881.7 $17,957.8 $17,253.5
Excise taxes (506.2) (516.3) (2,240.7) (2,217.8)
Net Sales 3,424.8 3,365.4 15,717.1 15,035.7
Cost of sales (2,442.0) (2,377.9) (10,165.0) (9,606.3)
Marketing, distribution
And administrative
expenses (764.3) (782.4) (2,832.5) (2,837.5)
Litigation settlement - - - (105.0)
Operating income 218.5 205.1 2,719.6 2,486.9
Interest expense (109.7) (111.3) (451.3) (454.5)
Interest capitalized 4.2 5.1 17.6 19.9
Interest income 0.4 - 1.8 2.4
Other income/(expense),
net (8.6) (8.2) (10.8) 2.7
Income before income
taxes 104.8 90.7 2,276.9 2,057.4
Provision for income
taxes (53.6) (53.0) (900.5) (811.1)
Equity income, net of tax 139.5 107.9 588.8 498.1
Net income $190.7 $145.6 $1,965.2 $1,744.4
Basic earnings per share $.25 $.19 $2.55 $2.24
Diluted earnings per share $.25 $.19 $2.53 $2.23
Weighted Average Shares
Outstanding
Basic 767.2 777.0 770.6 777.5
Diluted 773.7 780.3 777.0 782.6
Anheuser-Busch Companies, Inc.
Comparative Business Segments (Unaudited)
Fourth Quarter Ended December 31
(In Millions)
Corp-
Inter- Enter- orate
Domestic national Pack- tain- and Consol-
Fourth Quarter Beer Beer aging ment Elims idated
2006
Gross Sales $2,913.8 319.5 576.4 194.0 (72.7) $3,931.0
Net Sales:
- Intersegment $0.6 -- 186.8 -- (187.4) $ --
- External $2,474.9 251.6 389.6 194.0 114.7 $3,424.8
Income Before
Income Taxes $391.9 1.3 22.1 (15.4) (295.1) $104.8
Equity Income $0.3 139.2 -- -- -- $139.5
Net Income $243.3 140.1 13.7 (9.6) (196.8) $190.7
2005
Gross Sales $2,946.6 301.5 552.1 180.4 (98.9) $3,881.7
Net Sales:
- Intersegment $0.6 -- 196.4 -- (197.0) $ --
- External $2,492.5 238.7 355.7 180.4 98.1 $3,365.4
Income Before
Income Taxes $382.2 16.4 21.1 (9.2) (319.8) $90.7
Equity Income -- $107.9 -- -- -- $107.9
Net Income $237.0 118.0 13.1 (5.7) (216.8) $145.6
The company adopted FAS 123R, "Share-Based Payment," effective in the
first quarter 2006 and has elected to apply the modified retrospective method
of adoption. Pursuant to the modified retrospective approach, 2005 corporate
information has therefore been updated to include the impact of previously
disclosed pro forma stock compensation expense. Stock compensation expense is
classified as a corporate item for segment reporting purposes.
Anheuser-Busch Companies, Inc.
Comparative Business Segments (Unaudited)
Full Year Ended December 31
(In Millions)
Corp-
Inter- Enter- orate
Domestic national Pack- tain- and Consol-
Full Year Beer Beer aging ment Elims idated
2006
Gross Sales $13,394.2 1,235.6 2,562.3 1,178.5 (412.8) $17,957.8
Net Sales:
- Intersegment $2.8 -- 896.4 -- (899.2) $ --
- External $11,388.2 998.2 1,665.9 1,178.5 486.3 $15,717.1
Income Before
Income Taxes $2,758.5 76.7 145.0 232.8 (936.1) $2,276.9
Equity Income $3.4 585.4 -- -- -- $588.8
Net Income $1,713.7 633.0 89.9 144.3 (615.7) $1,965.2
2005
Gross Sales $13,067.6 1,165.5 2,383.6 1,084.8 (448.0) $17,253.5
Net Sales:
- Intersegment $2.7 -- 871.1 -- (873.8) $ --
- External $11,079.8 932.8 1,512.5 1,084.8 425.8 $15,035.7
Income Before
Income Taxes $2,675.6 86.5 141.5 205.9 (1,052.1) $2,057.4
Equity Income -- $498.1 -- -- -- $498.1
Net Income $1,658.9 551.7 87.7 127.7 (681.6) $1,744.4
The company adopted FAS 123R, "Share-Based Payment," effective in the
first quarter 2006 and has elected to apply the modified retrospective method
of adoption. Pursuant to the modified retrospective approach, 2005 corporate
information has therefore been updated to include the impact of previously
disclosed pro forma stock compensation expense. Stock compensation expense is
classified as a corporate item for segment reporting purposes.
Anheuser-Busch Companies, Inc.
Consolidated Balance Sheet (Unaudited)
(In Millions)
December 31, December 31,
2006 2005
Assets
Current Assets:
Cash $219.2 $225.8
Accounts receivable 720.2 681.4
Inventories 694.9 654.5
Other current assets 195.2 197.0
Total current assets 1,829.5 1,758.7
Investments in affiliated companies 3,680.3 3,448.2
Plant and equipment, net 8,916.1 9,041.6
Intangible assets, including goodwill
of $1,077.8 and $1,034.5 1,367.2 1,232.6
Other assets 584.1 1,073.9
Total Assets $16,377.2 $16,555.0
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $1,426.3 $1,249.5
Accrued salaries, wages and benefits 342.8 250.9
Accrued taxes 133.9 156.7
Accrued interest 124.2 123.7
Other current liabilities 218.9 201.8
Total current liabilities 2,246.1 1,982.6
Retirement benefits 1,191.5 1,412.8
Debt 7,653.5 7,972.1
Deferred income taxes 1,194.5 1,345.9
Other long-term liabilities 152.9 161.8
Shareholders Equity:
Common stock 1,473.7 1,468.6
Capital in excess of par value 2,962.5 2,685.9
Retained earnings 16,741.0 15,698.0
Treasury stock, at cost (16,007.7) (15,258.9)
Accumulated non-owner changes in equity (1,230.8) (913.8)
Total Shareholders Equity 3,938.7 3,679.8
Commitments and contingencies - -
Total Liabilities and Shareholders Equity $16,377.2 $16,555.0
Anheuser-Busch Companies, Inc.
Consolidated Statement of Cash Flows (Unaudited)
(In Millions)
Year-Ended December 31,
2006 2005
Cash flow from operating activities:
Net income $1,965.2 $1,744.4
Adjustments to reconcile net income
to cash provided by operating activities:
Depreciation and amortization 988.7 979.0
Decrease in deferred income taxes (45.8) (39.1)
Stock-based compensation expense 122.9 134.1
Undistributed earnings of affiliated companies (341.8) (288.0)
Gain on sale of business - (15.4)
Other, net (168.6) 136.6
Operating cash flow before the change
in working capital 2,520.6 2,651.6
Decrease in working capital 188.8 50.3
Cash provided by operating activities 2,709.4 2,701.9
Cash flow from investing activities:
Capital expenditures (812.5) (1,136.7)
Acquisitions (101.0) -
Proceeds from sale of business - 48.3
Cash used for investing activities (913.5) (1,088.4)
Cash flow from financing activities:
Increase in debt 334.8 100.0
Decrease in debt (663.3) (456.0)
Dividends paid to shareholders (871.6) (800.8)
Acquisition of treasury stock (745.9) (620.4)
Shares issued under stock plans 143.5 161.4
Cash used for financing activities (1,802.5) (1,615.8)
Net decrease in cash during the period (6.6) (2.3)
Cash, beginning of period 225.8 228.1
Cash, end of period $219.2 $225.8
SOURCE Anheuser-Busch Cos. Inc.
-0- 02/02/2007
/CONTACT: Maureen Roth of Anheuser-Busch Cos. Inc., +1-314-765-6195/
/Web site: http://www.anheuser-busch.com /
(BUD)
END
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