Led by the combination of higher beer volume and increased revenue per barrel, Anheuser-Busch Companies, Inc. (NYSE:BUD) achieved record sales and earnings for the second quarter and first six months of 2000, it was announced today by August A. Busch III, Chairman of the Board and President. Second quarter and first six months earnings per share were up 15.6 percent and 15.4 percent, respectively, compared to last year.

"This is the seventh consecutive quarter of double-digit earnings per share growth for the company," said Mr. Busch. "With the strongest brand portfolio in the domestic beer industry, we are uniquely positioned to take advantage of continuing strong industry fundamentals. As a result, we continue to achieve significant increases in sales volume and revenue per barrel, resulting in accelerated earnings per share growth. For 2000, the company expects earnings per share growth in the 14 percent to 15 percent range. Longer term, we are confident in our ability to consistently achieve our double-digit earnings per share growth objective," said Mr. Busch.

As a result of this positive earnings growth outlook and Anheuser- Busch's strong stock price performance, the company also announced today a two-for-one common stock split and a 10 percent increase in the quarterly dividend to 33 cents from 30 cents, payable in September.

Domestic beer shipments increased 4.2 percent for the second quarter and 3.3 percent for the first six months of 2000, Mr. Busch said. Domestic sales to retailer volume was up 3.6 percent for the second quarter and 3.9 percent for the first six months of 2000. Volume growth was led by the Bud Family along with increased Michelob brand family sales. Domestic revenue per barrel grew 2.2 percent for the second quarter and first six months of 2000, compared to the same periods last year.

The company's beer volume is summarized in the following table:


Reported Beer Volume (millions of barrels)

Second Quarter Six Months Ended June 30
vs. 1999 vs. 1999

2000 Barrels % 2000 Barrels %

Domestic 25.8 Up 1.0 Up 4.2% 49.5 Up 1.6 Up 3.3%
International 1.9 Dn .02 Dn 0.9% 3.4 Up 0.1 Up 3.6%
Worldwide -
A-B Brands 27.7 Up 1.0 Up 3.8% 52.9 Up 1.7 Up 3.3%
Int'l Equity
Partner
Brands(1) 4.2 Dn .04 Dn 0.9% 7.6 Dn .03 Dn 0.4%
Total Brands(1) 31.9 Up 1.0 Up 3.2% 60.5 Up 1.7 Up 2.9%

(1) Normalized to exclude 1999 volume related to Anheuser-Busch's
previously held equity stake in Antarctica, equity partner
volume increased 2.3 percent in the second quarter and 4.1
percent for the first six months of 2000. Normalized total
volume increased 3.6 percent in the second quarter and 3.4
percent for the first six months of 2000 vs. comparable
periods last year.

Earnings per share for the second quarter 2000 were $1.04, an increase of 15.6 percent vs. second quarter 1999. Earnings per share for the first six months of 2000 were $1.80, an increase of 15.4 percent vs. the same period last year. Earnings per share growth is due primarily to increased domestic beer sales volume, higher domestic revenue per barrel and the strong performance from the company's 50 percent ownership in Grupo Modelo, Mexico's leading brewer.

The company is currently evaluating opportunities for selected price increases and additional discount reductions in the fourth quarter 2000. These revenue enhancement initiatives will again be tailored to specific markets, brands and packages, but the total scope is anticipated to be somewhat less than in the fourth quarter last year.

SECOND QUARTER 2000 FINANCIAL RESULTS

Key operating results for the second quarter of 2000 compared to
1999 are summarized below.

Second Quarter (in millions, except per share)
2000 1999 2000 vs. 1999
$ %
Gross Sales $3,799 $3,601 Up $198 Up 5.5%
Net Sales $3,266 $3,081 Up $185 Up 6.0%
Operating Income $748 $695 Up $53 Up 7.7%
Equity Income, Net of Tax $63 $48 Up $15 Up 29.7%
Net Income $478 $431 Up $47 Up 10.8%
Diluted Earnings per Share $1.04 $.90 Up $.14 Up 15.6%

A discussion of financial highlights for the second quarter 2000 follows:

  • Gross sales increased $198 million, or 5.5 percent, and net sales increased $185 million, or 6.0 percent, compared to the same period in 1999. These increases are due to higher domestic beer sales volume and higher domestic revenue per barrel.

  • Operating income increased $53 million, or 7.7 percent, over the comparable period last year. The increase in operating income was primarily due to increased domestic beer sales volume and higher revenue per barrel along with improved international beer performance and theme park operating results. Performance of the company's packaging operations declined during the second quarter due to the continuing competitive pricing environment for cans.

  • Equity income, net of tax, increased $15 million or 29.7 percent for the second quarter 2000 due to strong underlying pricing, volume and operating results of Grupo Modelo.

  • Net income increased $47 million, or 10.8 percent, over the comparable period in 1999.

  • Diluted earnings per share were $1.04, an increase of $.14, or 15.6 percent, compared to the second quarter 1999.

FIRST SIX MONTHS OF 2000 FINANCIAL HIGHLIGHTS

Key operating results for the first six months of 2000 compared to
1999 are summarized below:

Six Months Ended June 30
(in millions, except per share)
2000 1999 2000 vs. 1999
$ %
Gross Sales $7,099 $6,758 Up $341 Up 5.0%
Net Sales $6,077 $5,766 Up $311 Up 5.4%
Operating Income $1,330 $1,231 Up $99 Up 8.1%
Equity Income, Net of Tax $102 $80 Up $22 Up 27.3%
Net Income $828 $750 Up $78 Up 10.4%
Diluted Earnings per Share $1.80 $1.56 Up $.24 Up 15.4%

A discussion of financial highlights for the first six months of 2000 follows:

  • Gross sales increased $341 million, or 5.0 percent, and net sales increased $311 million, or 5.4 percent. The primary factors responsible for these increases were higher domestic beer sales volume and increased domestic revenue per barrel.

  • Operating income grew $99 million, or 8.1 percent, vs. the comparable period in 1999. This increase is primarily due to the domestic beer company's strong performance.

  • International beer segment net income increased 38.7 percent, due to a strong performance by Grupo Modelo and improved international operating results. International beer operating profits, excluding Modelo, improved, reflecting volume gains in Canada and China and lower costs in Japan due to the conversion of the company's joint venture into an exclusive licensing agreement, effective January 1, 2000.

  • Packaging segment operating profits were down $34.3 million, or 47.1 percent for the first six months compared to the first six months of 1999, reflecting lower pricing on Metal Container's beer and soft drink can sales and the first quarter adjustment to correct accounting errors at the company's label manufacturing business in Clarksville, Tennessee.

  • Entertainment segment operating results, excluding start-up costs associated with the new Discovery Cove park, improved due primarily to strong attendance in the Florida market.

  • Net income increased $78 million, or 10.4 percent, for the first six months of 2000.

  • Diluted earnings per share increased $.24, or 15.4 percent. Earnings per share for the first six months benefited from the company's ongoing share repurchase program. The company has repurchased over 10 million shares through the first six months of 2000.

BEER SALES RESULTS

Worldwide Beer Volume

Worldwide Anheuser-Busch beer sales volume grew 3.8 percent to 27.7 million barrels in the second quarter and were 52.9 million barrels, up 3.3 percent for the first six months of 2000, compared to similar periods last year. Worldwide beer volume is comprised of domestic volume and international volume. Domestic volume represents Anheuser- Busch beer produced and shipped within the United States. International volume represents exports from the company's U.S. breweries to markets around the world, plus Anheuser-Busch brands produced overseas by company-owned breweries and under license and contract brewing agreements.

Total volume, which combines equity volume (representing the company's share of its foreign equity partner's volume) with worldwide Anheuser-Busch brand volume, was 31.9 million barrels, up 3.2 percent in the second quarter and 60.5 million barrels, up 2.9 percent for the first six months. Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, equity partner volume increased 2.3 percent in the second quarter and 4.1 percent for the first six months of 2000. Normalized total volume increased 3.6 percent in the second quarter and 3.4 percent for the first six months of 2000 vs. comparable periods last year.

Domestic Beer Volume

Anheuser-Busch domestic beer sales to wholesalers were 49.5 million barrels, up 3.3 percent for the first six months of 2000. The increase reflects strong underlying sales-to-retailer trends, led by Bud Light which continues to grow at a double-digit pace.

Beer Market Share

The company's domestic market share (excluding exports) for the first six months of 2000 was 47.6 percent, an increase of one percentage point over 1999 market share of 46.6 percent. Including exports, the company's share of U.S. shipments was 47.3 percent vs. 46.3 percent for the first six months of 1999. Domestic market share and share of U.S. shipments are determined based on industry sales estimates provided by the Beer Institute.

International Beer

International beer volume (excluding Modelo) was essentially even in the second quarter compared to prior year, and grew 3.6 percent for the first six months of 2000. International beer operations experienced solid volume growth in Canada and China.

This release contains statements regarding the company's expectations concerning its future operations, earnings and prospects. These statements are forward-looking and involve significant risks and uncertainties, and accordingly, no assurances can be given that such expectations will be correct. These expectations 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. Further information on factors that could affect the company's future operations and earnings is included in the company's Forms 10-Q and 10-K.

Comparative Statement of Earnings
Second Quarter and Six Months Ended June 30, 2000 and 1999
(In Millions, Except Per Share)

Second Quarter Year-to-Date
2000 1999 2000 1999
Gross Sales $3,798.9 $3,600.8 $7,098.5 $6,758.0
Excise Taxes (533.4) (520.1) (1,021.1) (992.1)
Net Sales 3,265.5 3,080.7 6,077.4 5,765.9
Cost of Products & Services (1,973.9) (1,864.5) (3,753.6) (3,576.6)
Marketing, Distribution and
Administrative Expenses (543.4) (521.6) (993.4) (958.1)
Operating Income 748.2 694.6 1,330.4 1,231.2
Interest Expense (90.7) (79.2) (177.4) (155.0)
Interest Capitalized 8.3 4.2 15.2 7.5
Interest Income 0.1 0.9 0.4 1.8
Other Income/(Expense), Net 3.8 (3.1) 3.1 (4.3)
Income Before Income Taxes 669.7 617.4 1,171.7 1,081.2
Income Taxes (254.5) (234.5) (445.2) (410.8)
Equity Income, Net of Tax 62.5 48.1 101.5 79.7
Net Income $477.7 $431.0 $828.0 $750.1
Basic Earnings Per Share $1.06 $.92 $1.82 $1.58
Diluted Earnings Per Share $1.04 $.90 $1.80 $1.56

Capital Expenditures $262.1 $216.4 $541.6 $400.8
Depreciation and Amortization $195.1 $190.7 $387.9 $378.5
Weighted Average Shares:
Basic 452.4 470.9 454.1 473.5
Diluted 458.5 478.0 460.0 480.8


Business Segments
Second Quarter Ended June 30, 2000
($ in Millions)

Domestic Int'l Pack- Enter- Corp.
Beer Beer aging tain. Other & Elmin. Consol.
2000

Gross Sales $3,002.4 182.8 546.3 252.5 37.0 (222.1) $3,798.9

Net Sales:
- Intersegment - - $212.1 - 10.0 (222.1) -
- External $2,494.9 156.9 334.2 252.5 27.0 - $3,265.5

Income Before
Income Taxes $707.5 16.8 30.5 52.2 5.9 (143.2) $669.7

Equity Income,
Net of Tax - $62.5 - - - - $62.5

Net Income $438.6 72.9 18.9 32.4 3.7 (88.8) $477.7

1999

Gross Sales $2,827.9 212.9 514.3 225.7 36.1 (216.1) $3,600.8

Net Sales:
- Intersegment - - $207.0 - 9.1 (216.1) -
- External $2,343.4 177.3 307.3 225.7 27.0 - $3,080.7

Income Before
Income Taxes $638.5 12.2 46.2 47.7 5.8 (133.0) $617.4

Equity Income,
Net of Tax - $48.1 - - - - $48.1

Net Income $395.8 55.7 28.6 29.6 3.5 (82.2) $431.0

Note: 1999 segment results have been updated to reflect a change
in allocation method for certain Corporate support costs.

Business Segments
Six Months Ended June 30, 2000
($ in Millions)

Domestic Int'l Pack- Enter- Corp.
Beer Beer aging tain. Other & Elmin. Consol.
2000

Gross Sales $5,767.3 311.2 1,014.6 363.2 57.3 (415.1) $7,098.5

Net Sales:
- Intersegment - - $398.5 - 16.6 (415.1) -
- External $4,794.2 263.2 616.1 363.2 40.7 - $6,077.4

Income Before
Income Taxes $1,349.7 21.2 38.6 24.7 5.1 (267.6) $1,171.7

Equity Income,
Net of Tax - $101.5 - - - - $101.5

Net Income $836.8 114.6 23.9 15.3 3.2 (165.8) $828.0

1999

Gross Sales $5,480.6 341.4 950.0 339.6 58.1 (411.7) $6,758.0

Net Sales:
- Intersegment - - $396.9 - 14.8 (411.7) -
- External $4,543.4 286.5 553.1 339.6 43.3 - $5,765.9

Income Before
Income Taxes $1,215.2 4.6 72.9 34.2 5.4 (251.1) $1,081.2

Equity Income,
Net of Tax - $79.7 - - - - $79.7

Net Income $753.4 82.6 45.2 21.2 3.3 (155.6) $750.1

Note: 1999 segment results have been updated to reflect a change
in allocation method for certain Corporate support costs.