<PAGE>1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1994
Commission file number 1-7823
ANHEUSER-BUSCH COMPANIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1162835
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Busch Place, St. Louis, Missouri 63118
(Address of principal executive offices) (Zip Code)
314-577-3314
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
$1 Par Value Common Stock - 264,414,496 shares as of April 30, 1994
<PAGE>2
<TABLE>
CONSOLIDATED STATEMENT OF INCOME
AND RETAINED EARNINGS
Anheuser-Busch Companies, Inc., and Subsidiaries (Unaudited)
(In millions, except per share data)
<CAPTION>
Three months ended March 31, 1994 1993
- - ---------------------------- ---- ----
<S> <C> <C>
Sales........................................... $3,015.2 $2,877.3
Less federal and state excise taxes........... 387.6 373.9
-------- --------
Net sales....................................... 2,627.6 2,503.4
Cost of products and services................. 1,733.9 1,653.1
-------- --------
Gross profit.................................... 893.7 850.3
Marketing, distribution and administrative
expenses...................................... 508.8 501.8
-------- --------
Operating income................................ 384.9 348.5
Other income and expenses:
Interest expense.............................. (54.8) (48.7)
Interest capitalized.......................... 4.4 12.9
Interest income............................... .8 1.5
Other income/(expense), net................... 2.7 1.0
-------- --------
Income before income taxes...................... 338.0 315.2
Provision for income taxes...................... 133.6 121.1
-------- --------
Net Income...................................... 204.4 194.1
Retained earnings, January 1.................... 6,023.4 5,794.9
Common stock dividends (per share: 1994--$.36;
1993--$.32) (95.8) (89.0)
-------- --------
Retained earnings, March 31..................... $6,132.0 $5,900.0
======== ========
Primary Earnings Per Share...................... $ .76 $ .69
======== ========
Fully Diluted Earnings Per Share................ $ .76 $ .69
======== ========
<FN>
See accompanying Notes to Consolidated Financial Statements on Page 3.
</TABLE>
2
<PAGE>3
Notes to Consolidated Financial Statements
1. Unaudited Financial Statements: The accompanying unaudited financial
statements have been prepared in accordance with generally accepted
accounting principles and applicable SEC guidelines pertaining to
interim financial information. These statements should be read in
conjunction with the financial statements and notes thereto included in
the company's Annual Report to Shareholders for the year ended December
31, 1993. In the opinion of the company's management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair
presentation of the financial statements have been included therein.
2. Earnings Per Share: Primary earnings per share of common stock are
based on the weighted average number of shares of common stock
outstanding during the period. Fully diluted earnings per share of
common stock assume the conversion of the company's 8% Convertible
Debentures due 1996 and the elimination of related after-tax interest
expense. For the First Quarter 1994 and 1993, there is no difference
between primary and fully diluted earnings per share.
3
<PAGE>
<PAGE>4
<TABLE>
CONSOLIDATED BALANCE SHEET
Anheuser-Busch Companies, Inc., and Subsidiaries (Unaudited)
(In millions)
<CAPTION>
MARCH 31, DEC. 31,
ASSETS 1994 1993 1993
CURRENT ASSETS: ---- ---- ----
<S> <C> <C> <C>
Cash and marketable securities........... $ 92.8 $ 104.1 $ 127.4
Receivables, less allowance for
doubtful accounts...................... 889.8 755.4 751.1
Inventories--
Raw materials and supplies............. 392.4 419.4 385.5
Work in progress....................... 111.9 108.7 99.4
Finished goods......................... 171.1 191.4 141.8
Total inventories.................... 675.4 719.5 626.7
Other current assets..................... 324.8 281.8 290.0
--------- --------- ---------
Total current assets................... 1,982.8 1,860.8 1,795.2
--------- --------- ---------
INVESTMENTS AND OTHER ASSETS:
Investments in and advances to
affiliated companies................... 638.6 160.3 629.5
Investment properties.................... 149.5 164.9 151.9
Deferred charges and other
non-current assets..................... 313.4 357.5 310.7
Excess of cost over net assets of
acquired businesses, net............... 492.4 502.2 495.9
--------- --------- ---------
1,593.9 1,184.9 1,588.0
--------- --------- ---------
PLANT AND EQUIPMENT:
Land..................................... 284.7 272.8 281.9
Buildings................................ 3,447.8 3,301.6 3,445.5
Machinery and equipment.................. 7,681.1 7,134.0 7,656.5
Construction in progress................. 459.2 831.0 343.2
--------- --------- ---------
11,872.8 11,539.4 11,727.1
Accumulated depreciation................. (4,354.8) (3,989.4) (4,230.0)
--------- --------- ---------
7,518.0 7,550.0 7,497.1
--------- --------- ---------
$11,094.7 $10,595.7 $10,880.3
========= ========= =========
</TABLE>
4
<PAGE>5
<TABLE>
LIABILITIES AND SHAREHOLDERS EQUITY
(In millions)
<CAPTION>
MARCH 31, DEC. 31,
1994 1993 1993
---- ---- ----
<S> <C> <C> <C>
CURRENT LIABILITIES:
Short-term debt........................... $ 403.7 $ 94.6 $ --
Accounts payable.......................... 685.9 650.9 812.5
Accrued salaries, wages and benefits...... 254.5 267.3 243.9
Accrued interest payable.................. 49.8 47.2 54.9
Due to customers for returnable
containers.............................. 52.3 50.4 50.3
Accrued taxes, other than
income taxes............................ 127.4 136.1 121.7
Estimated income taxes.................... 142.2 116.5 91.0
Restructuring accrual..................... 177.6 -- 189.2
Other current liabilities................. 271.0 263.6 252.1
--------- --------- ---------
Total current liabilities............... 2,164.4 1,626.6 1,815.6
--------- --------- ---------
POSTRETIREMENT BENEFITS..................... 619.7 548.5 607.1
--------- --------- ---------
LONG-TERM DEBT.............................. 2,822.4 2,534.7 3,031.7
--------- --------- ---------
DEFERRED INCOME TAXES....................... 1,194.4 1,287.5 1,170.4
--------- --------- ---------
SHAREHOLDERS EQUITY:
Common stock.............................. 343.2 341.7 342.5
Capital in excess of par value............ 826.3 775.4 808.7
Retained earnings......................... 6,132.0 5,900.0 6,023.4
Foreign currency translation adjustment... (36.8) (5.3) (33.0)
--------- --------- --------
7,264.7 7,011.8 7,141.6
Treasury stock, at cost................... (2,593.5) (2,006.9) (2,479.6)
ESOP debt guarantee offset................ (377.4) (406.5) (406.5)
--------- --------- ---------
4,293.8 4,598.4 4,255.5
--------- --------- ---------
COMMITMENTS AND CONTINGENCIES............... - - -
$11,094.7 $10,595.7 $10,880.3
========= ========= =========
</TABLE>
5
<PAGE>6
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
Anheuser-Busch Companies, Inc., and Subsidiaries (Unaudited)
(In millions, except per share data)
<CAPTION>
Three months ended March 31, 1994 1993
- - ---------------------------- ---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income...................................... $ 204.4 $ 194.1
Adjustments to net income to arrive at net cash
provided by operations:
Depreciation and amortization............... 155.8 148.0
Increase in deferred income taxes........... 24.0 10.6
Increase in non-cash working capital........ (277.1) (83.7)
Other, net.................................. 3.4 22.4
------- -------
Cash provided by operating activities........... 110.5 291.4
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures............................ (170.6) (177.0)
New business acquisitions....................... (6.7) --
-------- -------
Cash used for investing activities.............. (177.3) (177.0)
------- ------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase in short-term debt..................... 403.7 94.6
Increase in long-term debt...................... .5 .6
Decrease in long-term debt...................... (180.6) (80.5)
Acquisition of treasury stock................... (113.9) (164.0)
Dividends paid to stockholders.................. (95.8) (89.0)
Shares issued under stock plans................. 18.3 13.0
------- ------
Cash used for financing activities.............. 32.2 (225.3)
------- ------
Net (decrease) in cash and marketable securities
during the period............................. (34.6) (110.9)
Cash and marketable securities at beginning of
period........................................ 127.4 215.0
------- ------
Cash and marketable securities at end of period. $ 92.8 $104.1
======= ======
<FN>
A more adequate understanding of the company's financial position and business can be
gained by reference to the Anheuser-Busch Companies, Inc. Annual Report on Form 10-K for
the fiscal year ended December 31, 1993.
</TABLE>
6
<PAGE>7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This discussion summarizes the significant factors affecting the
consolidated operating results, financial condition and
liquidity/cash flows of Anheuser-Busch Companies, Inc. for the
first quarter ended March 31, 1994 compared to the first quarter
ended March 31, 1993 and the year ended December 31, 1993. This
discussion should be read in conjunction with the financial
statements and notes thereto included in the company's Annual
Report to Shareholders for the year ended December 31, 1993.
Additional information concerning the company's consolidated
financial and operating results is contained in the Letter to
Shareholders section of the First Quarter 1994 Shareholders Report.
OPERATIONS
- - ----------
Anheuser-Busch Companies, Inc. achieved gross sales of $3.02
billion during the first quarter of 1994, an increase of 4.8% over
1993 first quarter gross sales of $2.88 billion. The increase in
gross sales during the quarter is primarily attributable to higher
beer volume sales by Anheuser-Busch, Inc., the company's brewing
subsidiary, and higher international beer sales associated with the
company's new Japanese joint venture which began during the fourth
quarter 1993.
Anheuser-Busch, Inc., the company's largest contributor to
consolidated sales, sold 20.248 million barrels of beer to
wholesalers during the first quarter of 1994. This sales volume
level represents an increase of 858 thousand barrels --- or 4.4%
- - --- over first quarter 1993 beer volume sales of 19.390 million barrels.
Beer sales-to-retailers, which represent a more accurate measure
of underlying consumer demand than sales-to-wholesalers, increased
more than 5% in the quarter. Sales-to-retailers of the Bud Family
increased in excess of 6%. The increase was led by Bud Light,
which continues to grow at double-digit rates, and Ice Draft, which
has been steadily gaining market share since its national roll-out
in January, 1994.
7
<PAGE>
<PAGE>8
Anheuser-Busch, Inc. increased its market share during the first
quarter of 1994 compared to the first quarter of 1993 by 1.1 share
points, with sales volume representing 44.3 percent of total
brewing industry sales in the U.S. (including imports and non-
alcohol brews), according to estimates based on information
provided by the Beer Institute. Anheuser-Busch has led the brewing
industry in sales volume and market share each quarter since 1957.
Cost of products and services for the first quarter of 1994 was
$1.73 billion, a 4.9% increase compared to the $1.65 billion
reported for the first quarter of 1993. The increase in cost of
products and services is directly attributable to the increase in
beer sales volume.
Gross profit as a percentage of net sales for both the first
quarter of 1994 and the first quarter of 1993 was 34.0%, reflecting
the maintenance of margins by Anheuser-Busch, Inc. Material costs
were lower for Anheuser-Busch, Inc., but these advantages were
offset by higher depreciation charges related to the start-up of
the Cartersville brewery and costs associated with the roll-out of
Ice Draft.
Marketing, distribution and administration expenses for the
first quarter of 1994 were $508.8 million compared with the $501.8
million for the first quarter of 1993, an increase of 1.4%. The
increase during first quarter 1994 compared to 1993 is primarily
related to increased marketing and distribution costs associated
with the company's international operations. These costs were
partially offset by lower personnel costs due to the 10% reduction
in the salaried workforce which resulted from the Enhanced
Retirement Plan implemented in conjunction with the company's 1993
Profitability Enhancement Program.
Operating income was $384.9 million for the first quarter of
1994, an increase of $36.4 million or 10.5% compared to $348.5
million for the first quarter of 1993. Operating income was
favorably impacted by the higher beer sales volume and a modest
increase in distribution and administrative expenses.
Additionally, the Profitability Enhancement Program initiated in
the third quarter last year is generating the savings anticipated.
8
<PAGE>
<PAGE>9
Campbell Taggart, Inc., the company's baking subsidiary,
reported lower profits during the first quarter due to pricing
pressure. It is expected that 1994 will be a difficult year for
Campbell Taggart and profitability is expected to be lower for the
full year.
Busch Entertainment, Inc., the company's family entertainment
subsidiary, reported double-digit attendance growth at its
principal Florida parks and improved attendance in California
during the first quarter. Accordingly, Busch Entertainment
contributed to consolidated earnings growth during the first
quarter 1994 compared to the first quarter 1993.
Net interest cost (interest expense less interest income) was
$54.0 million for the first quarter of 1994, an increase of $6.8
million, or 14.4%, compared to net interest cost of $47.2 million
for the first quarter of 1993. The increase is due primarily to
higher average debt balances outstanding during the period,
primarily as a result of financing international brewing
investments and share repurchases. The net change in debt during
this period is summarized in the Financial Condition Section of
this Discussion.
Interest capitalized decreased $8.5 million, or 66.1%, for the
first quarter of 1994 as compared to the corresponding period of
1993. The decline in interest capitalized in 1994 is primarily
related to the Spring 1993 start-up of the company's new brewery in
Cartersville, GA, which resulted in the cessation of interest
capitalization on this major capital investment.
The effective income tax rate was 39.5% of pre-tax earnings for
the first quarter of 1994 compared to 38.4% for the first quarter
of 1993. The increase in the effective tax rate reflects the
increase in the federal income tax rate from 34% to 35% due to the
Revenue Reconciliation Act of 1993, implemented last August.
Net income for the first quarter of 1994 was $204.4 million, an
increase of 5.4% over the comparable period in 1993. Net income
for the first quarter of 1994 reflects the negative impact of the
1% increase in the federal income tax rate. Excluding this tax
rate increase, net income for the first quarter of 1994 would have
been 7.1% higher than the first quarter of 1993.
9
<PAGE>
<PAGE>10
Fully diluted earnings per share for the first quarter of 1994
were $.76, an increase of 10.1% as compared to the first quarter of
1993.
Fully diluted earnings per share assume the conversion of the
company's 8% Convertible Debentures due 1996 and the elimination of
related after-tax interest expense. The difference between the
percentage change in net income and the percentage change in
earnings per share was due to the reduction in the number of shares
outstanding as a result of the company's continuing share
repurchase program.
FINANCIAL CONDITION
- - -------------------
Cash and marketable securities at March 31, 1994 were $92.8
million, a decrease of $11.3 million from the March 31, 1993 level
and a decrease of $34.6 million from the December 31, 1993 level.
The decline in cash and marketable securities at March 31, 1994 is
primarily related to cash used to finance the company's
international brewing investments, capital expenditures program and
share repurchase program, partially offset by cash generated from
operating activities and increased commercial paper borrowings.
Total short-term and long-term debt increased $596.8 million
during the twelve month period ended March 31, 1994. The net
increase in debt during this period is primarily due to the
following:
Debt Issuances......$919.1 million
--------------
- 7.375% notes due 2023 ... $200 million
- Commercial paper ... $719.1 million
Debt Reduction...$322.3 million
--------------
- Redemption of $228.9 million debt including: $100 million, 8%
notes; $6.9 million, 8.625% debentures; $63.0 million, 10%
debentures; $53.7 million, 8% dual currency notes; and $5.3
million long-term notes at varying interest rates.
- Redemption of Industrial revenue bonds ... $4.3 million
- Maturity of Medium-term notes at varying interest rates ...
$60 million
- ESOP debt repayment (guarantee) ... $29.1 million.
10
<PAGE>
<PAGE>11
At March 31, 1994, $813.7 million of commercial paper borrowings
were outstanding. $403.7 million of borrowings were required to
meet short-term financing needs, while $410.0 million of
borrowings, intended to be maintained on a long-term basis, were
classified as long-term debt. Commercial paper borrowings are
supported by on-going credit provided by the company's revolving
credit agreements.
Capital expenditures during the first quarter of 1994 were
$170.6 million compared to $177.0 million for the first quarter of
1993. The company continues to expect capital expenditures in 1994
will approximate $800 million.
ENVIRONMENTAL MATTERS
- - ---------------------
The company is subject to federal, state and local environmental
protection laws and regulations and is operating within such laws
or is taking action aimed at assuring compliance with such laws
and regulations. Compliance with these laws and regulations is not
expected to materially affect the company's competitive position.
The company has not been identified as a Potentially Responsible Party
(PRP) at an Environmental Protection Agency designated clean-up site which
could have a material impact on the company's consolidated financial
statements.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of the company held April
27, 1994, the following matters were voted upon:
1. Election of Andrew B. Craig III, Bernard A. Edison, Vernon
R. Loucks, Jr., Vilma S. Martinez and Edward E. Whitacre, Jr.
to serve as Directors of the company for a term of three years.
For Withheld Non-Votes
--- -------- ---------
Andrew B. Craig III 219,467,184 2,856,625 0
Bernard A. Edison 219,053,186 3,270,624 0
Vernon R. Loucks, Jr. 218,881,797 3,442,013 0
Vilma S. Martinez 219,378,665 2,945,145 0
Edward E. Whiteacre, Jr. 219,178,166 3,145,644 0
11
<PAGE>
<PAGE>12
2. Approve certain amendments to the Anheuser-Busch Companies,
-------------------------
Inc. 1989 Incentive Stock Plan.
-------------------------
For 198,520,450
Against 22,061,986
Abstain 1,741,373
Non-Votes 0
3. Approve the employment of Price Waterhouse, as independent
accountants, to audit the books and accounts of the
company for 1994.
For 219,888,550
Against 1,514,505
Abstain 920,754
Non-Votes 0
4. Shareholder proposal to abolish the Retirement Plan for
-------------------
Non-Employee Directors.
----------------------
For 42,397,635
Against 157,746,544
Abstain 3,610,324
Non-Votes 18,569,307
5. Shareholder proposal to require preparation
of a beer marketing report.
For 10,826,808
Against 177,378,964
Abstain 14,925,201
Non-Votes 19,192,836
Item 5. Other Information
In March 1994, the company's Board of Directors authorized the
repurchase of 25 million shares, or approximately nine percent of
the company's outstanding common stock. This share repurchase
authorization will supplement the company's previous 20 million
share repurchase authorization, which was approved in June, 1992.
The June, 1992 program is more than 90 percent complete. No
timetable was set for completion of these share repurchase
programs.
12
<PAGE>13
The national labor contract affecting the majority of the
company's beer production employees expired February 28, 1994. The
company and union representatives reached a tentative agreement in
March, and on April 26 employees overwhelmingly voted in favor of
all national issues. In addition, local agreements were ratified
at 11 of the company's 13 breweries. Operations at all 13
breweries are continuing.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
4 - Indenture between the company and Manufacturers
Hanover Trust Company (Incorporated by reference to
Exhibit 4 to Registration Statement on Form S-3,
Registration No. 33-14685, filed with the Commission
on June 3, 1987.) (Other indentures are not
filed, but the company agrees to furnish copies
of such instruments to the Securities and Exchange
Commission upon request.)
12 - Ratio of Earnings to Fixed Charges
(b) Reports on Form 8-K
-------------------
Item Reported Date of Report
------------- --------------
Item 7(c). Exhibits - (Ratio of Earnings February 24, 1994
to Fixed Charges)
13
<PAGE>14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ANHEUSER-BUSCH COMPANIES, INC.
(Registrant)
Jerry E. Ritter
Jerry E. Ritter
Executive Vice President -
Chief Financial and Administrative
Officer
(Chief Financial Officer)
May 12, 1994
Gerald C. Thayer
Gerald C. Thayer
Vice President and Controller
(Chief Accounting Officer)
May 12, 1994
14
<PAGE>1
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of the Company's earnings
to fixed charges, on a consolidated basis, for the periods
indicated:
Three Months
Ended
March 31, Year Ended December 31
------------- ------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
7.6X 7.7X 5.2X 1/ 7.8X 6.4X 5.1X 6.6X
For purposes of this ratio, earnings have been calculated by adding
to income before income taxes the amount of fixed charges. Fixed
charges consist of interest on all indebtedness, amortization of
debt discount and that portion of rental expense deemed to
represent interest.
1/ Includes the impact of the one-time, pretax restructuring charge
of $565 million as a result of the company's Profitability
Enhancement Program. Excluding the non-recurring special charge,
the ratio would have been 7.6X.
