Driven by accelerated growth in revenue per barrel and continued strong unit volume growth in domestic beer operations, Anheuser-Busch Companies, Inc. (NYSE:BUD) achieved record sales and earnings for the third quarter and nine months ended September 30, 2000, it was announced today by August A. Busch III, Chairman of the Board and President. Earnings per share for the third quarter and nine months increased 14.3 percent and 15.0 percent, respectively, compared to last year.

"This is the eighth consecutive quarter of solid double-digit earnings per share growth for the company," said Mr. Busch. "The leading brand portfolio in the industry along with our marketing, sales and distribution strengths allow us to capitalize on the significantly improved domestic industry fundamentals."

Domestic revenue per barrel grew over 3 percent in the third quarter 2000 and is up 2.5 percent for the nine months, compared to the same periods last year. Strong revenue per barrel growth in the third quarter reflects the improved industry fundamentals and the company's strategy to focus on beer profit margin growth.

"Domestic beer sales-to-wholesalers increased 2.7 percent for the third quarter and 3.1 percent for the nine months of 2000," Mr. Busch said. Domestic sales-to-retailers volume was up 1.7 percent for the third quarter and 3.1 percent for the nine months of 2000, compared to the same periods last year. As previously communicated, third quarter 2000 sales-to-retailer results were negatively impacted by the timing of the 4th of July holiday which shifted volume from July to June. Normalized for this timing impact, third quarter sales-to-retailer volume increased 2.7 percent vs. the third quarter last year.

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

Reported Beer Volume (millions of barrels)

Nine Months Ended
Third Quarter September 30
----------- -----------
vs. 1999 vs. 1999
-------- --------
2000 Barrels % 2000 Barrels %

Domestic 26.3 Up 0.7 Up 2.7% 75.8 Up 2.3 Up 3.1%
International 2.0 Up .05 Up 2.7% 5.4 Up 0.2 Up 3.2%
Worldwide -
A-B Brands 28.3 Up 0.8 Up 2.7% 81.2 Up 2.5 Up 3.1%
Int'l Equity
Partner Brands 4.3 Up 0.3 Up 7.8% 11.9 Up 0.3 Up 2.4%(1)
Total Brands 32.6 Up 1.1 Up 3.4% 93.1 Up 2.8 Up 3.0%(1)

  • (1) Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, Equity Partner volume increased 5.4 percent for the nine months of 2000. Normalized Total Brands volume increased 3.4 percent for the nine months of 2000 vs. the same period last year.

  • Earnings per share were $.56 for the third quarter 2000, an increase of 14.3 percent vs. third quarter 1999 earnings per share of $.49 restated for the two-for-one stock split in September 2000. Earnings per share for the nine months of 2000 were $1.46, an increase of 15.0 percent vs. the same period last year. Earnings per share growth is due primarily to higher domestic revenue per barrel, increased domestic beer sales volume and the strong performance from the company's International Beer segment, including the 50 percent ownership in Grupo Modelo, Mexico's leading brewer.

    The strong domestic beer industry environment continues to support select price increases and additional discount reductions. Further discount reductions were realized in the third quarter and the company implemented the first stage of its planned revenue enhancement strategy for 2001 at the beginning of October. Selected price increases and discount reductions have been put into effect in markets representing 40 percent of the company's domestic volume. These revenue enhancement initiatives are being tailored to specific markets, brands and packages. Although in the early stages, preliminary results are once again encouraging. The second stage of revenue enhancement initiatives is expected to occur in the first quarter 2001.

    "For 2000, the company expects earnings per share growth of approximately 15 percent consistent with year-to-date results. Longer term, we are confident in our ability to consistently achieve our double-digit earnings per share growth objective with a 12 percent target for 2001," said Mr. Busch.

    THIRD QUARTER 2000 FINANCIAL RESULTS

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

    Third Quarter (in millions, except per share)
    2000 1999 2000 vs. 1999
    $ %
    Gross Sales $3,942 $3,765 Up $177 Up 4.7%
    Net Sales $3,398 $3,222 Up $176 Up 5.4%
    Operating Income $813 $742 Up $71 Up 9.7%
    Equity Income, Net of Tax $56 $45 Up $11 Up 24.2%
    Net Income $515 $462 Up $53 Up 11.5%
    Diluted Earnings per Share $.56 $.49 Up $.07 Up 14.3%(1)

  • (1) Third quarter 1999 earnings per share is reported as $.49 vs. $.485, after adjusting for the two-for-one stock split in September 2000.

  • A discussion of financial highlights for the third quarter 2000
    follows:
    • Gross sales increased $177 million, or 4.7 percent, and net sales increased $176 million, or 5.4 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 $71 million, or 9.7 percent, versus third quarter 1999, representing the highest quarterly growth rate so far in 2000. The increase in operating income was primarily due to higher domestic revenue per barrel and increased domestic beer sales volume, plus improved international beer performance. Performance of the company's packaging operations declined during the third quarter due to the continuing competitive pricing environment for cans.

    • Equity income, net of tax, increased $11 million, or 24.2 percent, for the third quarter 2000 due to the continuing strong underlying operating results of Grupo Modelo.

    • Net income increased $53 million, or 11.5 percent, over the comparable period in 1999, representing the highest quarterly growth rate in 2000.

    NINE MONTHS OF 2000 FINANCIAL HIGHLIGHTS

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

    Nine Months Ended September 30
    (in millions, except per share)
    2000 1999 2000 vs. 1999
    $ %

    Gross Sales $11,041 $10,523 Up $518 Up 4.9%
    Net Sales $9,475 $8,988 Up $487 Up 5.4%
    Operating Income $2,144 $1,973 Up $171 Up 8.7%
    Equity Income, Net of Tax $158 $125 Up $33 Up 26.2%
    Net Income $1,343 $1,212 Up $131 Up 10.8%
    Diluted Earnings per Share $1.46 $1.27 Up $.19 Up 15.0%

    A discussion of financial highlights for the nine months of 2000 follows:
    • Gross sales increased $518 million, or 4.9 percent, and net sales increased $487 million, or 5.4 percent. The primary factors responsible for these increases were increased domestic revenue per barrel and higher domestic beer sales volume.

    • Operating income grew $171 million, or 8.7 percent, vs. the comparable period in 1999. This increase is primarily due to the domestic beer company's strong performance.

    The international beer segment's net income increased 44 percent, due to the strong performance by Grupo Modelo and improved international operating results. International beer operating profits, excluding Modelo, improved on volume gains in China and lower costs in Japan due to the conversion of the company's joint venture into an exclusive licensing agreement.

    Packaging segment operating profits were down $43 million, or 36 percent for the nine months compared to the nine months of 1999, reflecting lower pricing on Metal Container's beer and soft drink can sales.

    Entertainment segment operating results, excluding start-up costs associated with the new Discovery Cove park, improved for the nine months due primarily to strong attendance in the Florida market. Discovery Cove began initial operations in July. Results to date have been positive.
    • Equity income, net of tax, increased 26.2 percent, to $158 million based on Grupo Modelo's strong pricing and volume performance.

    • Net income increased $131 million, or 10.8 percent, for the nine months of 2000.

    • Diluted earnings per share increased $.19, or 15.0 percent, to $1.46. Earnings per share for the nine months benefited from the company's ongoing share repurchase program. The company has repurchased over 26 million shares through the nine months of 2000.

    BEER SALES RESULTS

    Worldwide Beer Volume

    Worldwide Anheuser-Busch beer sales volume grew 2.7 percent to 28.3 million barrels in the third quarter and was 81.2 million barrels, up 3.1 percent for the nine months of 2000, compared to the same 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 32.6 million barrels, up 3.4 percent in the third quarter and 93.1 million barrels, up 3.0 percent for the nine months. Normalized to exclude 1999 volume related to Anheuser-Busch's previously held equity stake in Antarctica, equity partner volume increased 5.4 percent for the nine months of 2000, and total volume increased 3.4 percent for the nine months of 2000.

    Domestic Beer Volume

    Domestic beer sales to wholesalers were 75.8 million barrels, an increase of 3.1 percent for the nine months of 2000, reflecting strong underlying retail demand 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 nine months of 2000 was 47.9 percent, an increase of 0.7 percentage points over 1999 market share of 47.2 percent. Including exports, the company's share of U.S. shipments was 47.7 percent vs. 47.0 percent for the nine 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 up 2.7 percent in the third quarter 2000 compared to prior year, and grew 3.2 percent for the nine months of 2000, due primarily to solid volume growth in Canada and China.

    Other Matters

    Later today, Anheuser-Busch will conduct a conference call with investors to discuss these results at 3:00 p.m. (Central Daylight Time). The company will also broadcast the conference call live via the internet. For details visit the company's site on the internet at www.anheuser-busch.com.

    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
    Third Quarter and Nine Months Ended September 30, 2000 and 1999
    (In Millions, Except Per Share)

    Third Quarter Year-to-Date
    2000 1999 2000 1999

    Gross Sales $3,942.2 $3,765.2 $11,040.7 $10,523.2
    Excise Taxes (544.4) (542.9) (1,565.5) (1,535.0)
    Net Sales 3,397.8 3,222.3 9,475.2 8,988.2
    Cost of Products &
    Services (2,009.7) (1,905.5) (5,763.3) (5,482.1)
    Marketing, Distribution and
    Administrative Expenses (574.8) (575.2) (1,568.2) (1,533.3)
    Operating Income 813.3 741.6 2,143.7 1,972.8
    Interest Expense (85.5) (76.3) (262.9) (231.3)
    Interest Capitalized 9.0 4.2 24.2 11.7
    Interest Income 0.4 1.7 0.8 3.5
    Other Income/(Expense), Net 1.8 0.2 4.9 (4.1)
    Income Before Income Taxes 739.0 671.4 1,910.7 1,752.6
    Income Taxes (280.9) (255.2) (726.1) (666.0)
    Equity Income, Net of Tax 56.4 45.3 157.9 125.0
    Net Income $514.5 $461.5 $1,342.5 $1,211.6
    Basic Earnings Per Share $.57 $.49 $1.48 $1.29
    Diluted Earnings Per Share $.56 $.49 $1.46 $1.27

    Capital Expenditures $252.9 $209.6 $794.5 $610.4
    Depreciation and
    Amortization $203.2 $193.1 $591.1 $571.6
    Weighted Average Shares:
    Basic 904.5 934.4 907.0 942.8
    Diluted 917.5 948.9 919.5 957.8

    Business Segments
    Third Quarter Ended September 30, 2000
    ($ in Millions)

    Domestic Int'l Pack- Enter- Corp.
    Beer Beer aging tain. Other & Elmin. Consol.
    2000
    Gross Sales $3,069.5 173.7 545.2 336.8 37.2 (220.2) $3,942.2

    Net Sales:
    - Intersegment - - $216.2 - 4.0 (220.2) $ -
    - External $2,552.6 146.2 329.0 336.8 33.2 - $3,397.8

    Income Before
    Income Taxes $702.9 14.7 38.8 106.4 8.5 (132.3) $739.0

    Equity Income,
    Net of Tax - $56.4 - - - - $56.4

    Net Income $435.8 65.6 24.1 66.0 5.2 (82.2) $514.5

    1999
    Gross Sales $2,914.3 209.1 523.7 306.5 33.5 (221.9) $3,765.2

    Net Sales:
    - Intersegment - - $216.1 - 5.8 (221.9) $ -
    - External $2,410.8 169.7 307.6 306.5 27.7 - $3,222.3

    Income Before
    Income Taxes $639.3 (4.3) 47.5 105.1 5.8 (122.0) $671.4
    Equity Income,
    Net of Tax - $45.3 - - - - $45.3
    Net Income $396.4 42.6 29.4 65.2 3.6 (75.7) $461.5

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


    Business Segments
    Nine Months Ended September 30, 2000
    ($ in Millions)

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

    2000
    Gross Sales $8,836.8 484.9 1,559.8 700.0 94.5 (635.3) $11,040.7

    Net Sales:
    - Intersegment - - $614.7 - 20.6 (635.3) $ -
    - External $7,346.8 409.4 945.1 700.0 73.9 - $9,475.2

    Income Before
    Income Taxes
    $2,052.6 35.9 77.4 131.1 13.6 (399.9) $1,910.7

    Equity Income,
    Net of Tax - $157.9 - - - - $157.9

    Net Income $1,272.6 180.2 48.0 81.3 8.4 (248.0) $1,342.5

    1999
    Gross Sales $8,394.9 550.5 1,473.7 646.1 91.6 (633.6) $10,523.2
    Net Sales:
    - Intersegment - - $613.0 - 20.6 (633.6) $ -
    - External $6,954.2 456.2 860.7 646.1 71.0 - $8,988.2
    Income Before
    Income Taxes
    $1,854.5 0.3 120.4 139.3 11.2 (373.1) $1,752.6
    Equity Income,
    Net of Tax - $125.0 - - - - $125.0
    Net Income $1,149.8 125.2 74.6 86.4 6.9 (231.3) $1,211.6

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