Anheuser-Busch Declares Quarterly Common Stock Dividend

February 1, 2006

ST. LOUIS, February 1, 2006 - Anheuser-Busch Cos. Inc. today reported that consolidated net sales increased 0.7 percent for the full year 2005, while diluted earnings per share (excluding one-time gains in both 2005 and 2004 plus a legal settlement in 2005) declined 11 percent 1/. Fourth quarter 2005 net sales were essentially level and earnings per share decreased 33 percent 1/.

“We’ve had a challenging year in the domestic beer business and our 2005 sales and earnings per share were disappointing,” said Patrick Stokes, president and chief executive officer of the company. “However, as we move into 2006 we are encouraged with the progress of the company’s initiatives to enhance beer volume and market share growth. Wholesaler sales-to-retailers were up (selling day adjusted) 0.8 percent in the second half of 2005 and were up 1.8 percent from Labor Day through the end of 2005. Additionally, IRI data shows Anheuser-Busch increased its market share in supermarkets in the second half of the year. We are pleased with this progress and anticipate sales and earnings growth in 2006 2/.

“The domestic beer business is currently implementing previously announced revenue enhancement initiatives. Moderate price increases and discount reductions will cover the majority of the company’s domestic volume. As in the past, pricing initiatives are tailored to specific markets, brands and packages.”

FOURTH QUARTER 2005 FINANCIAL RESULTS

Key operating results for the fourth quarter 2005 vs. 2004 are summarized below:

	($ in millions, except per share)
	Fourth Quarter		2005 vs. 2004
	2005	2004	$	%
Gross Sales	$3,882	$3,880	Up $2	--
Net Sales	$3,365	$3,367	Dn $(2)	Dn (0.1)%
Income Before Income Taxes	$168	$370	Dn $(202)	Dn (54.7)%
Equity Income	$108	$105	Up $3	Up 2.7%
Net Income	$201	$332	Dn $(131)	Dn (39.5)%
Diluted Earnings per Share	$.26	$.42	Dn $(.16)	Dn (38.1)%

A discussion of financial highlights for the fourth quarter 2005 follows:

• Net sales were essentially level with prior year due to lower domestic beer sales revenue mostly offset by sales increases for international beer, packaging operations and entertainment operations.
  
  Domestic beer segment sales revenue declined 2.3 percent on lower revenue per barrel partially offset by higher beer sales volume. Domestic revenue per barrel ^3/ decreased 2.7 percent in the fourth quarter 2005 vs. prior year primarily due to the deferral of price increases in a number of markets until early 2006 and higher promotional activities.
  
  Reported income before income taxes decreased 55 percent vs. the fourth quarter 2004, reflecting lower profits in the domestic beer, international beer and packaging segments. Excluding the $13.4 million gain from the CCU sale in 2004, pretax income for 2005 decreased 53 percent ^1/.
  
  Domestic beer pretax income decreased 28 percent due to lower revenue per barrel and higher costs, partially offset by higher beer sales volume. Higher costs resulted from commodity cost pressures for aluminum, glass and energy, plus costs for new packaging initiatives such as applied plastic labels and aluminum bottles.
  
  International beer pretax income decreased $24 million in 2005 primarily due to lower results in China and the impact of the CCU sale gain in 2004. Excluding the CCU gain, international beer 2005 pretax profits decreased 39 percent ^4/ vs. prior year.
  
  Packaging segment pretax profits were down $5 million primarily due to higher energy and material costs for glass and can manufacturing operations and lower profits for the label manufacturing operation.
  
  Entertainment segment pretax results increased $2 million due primarily to increased attendance.
  
  Equity income increased $3 million in the fourth quarter 2005 vs. 2004, reflecting the benefit of Grupo Modelo volume growth, a lower Mexican income tax rate and the inclusion of Tsingtao equity earnings in 2005. Equity income for 2004 includes a one-time $18 million deferred income tax benefit from a reduction in Mexican tax rates. Excluding this benefit from 2004 results, equity income increased 24 percent ^1/ in 2005. This tax rate benefit was partially offset in 2004 by $8 million in higher U.S. deferred income taxes in the consolidated tax provision.
  
  
• Net income and diluted earnings per share decreased 39.5 percent and 38 percent, respectively, for the fourth quarter to $201 million and $.26, respectively. Excluding the CCU sale gain and the Mexican deferred income tax benefit from 2004 results, net income and diluted earnings per share for the fourth quarter 2005 decreased 35 percent and 33 percent, respectively ^1/. The effective income tax rate of 44.4 percent for the fourth quarter 2005 increased 580 basis points compared to 2004 due to the disproportionate impact of U.S. income taxes related to equity subsidiaries in the fourth quarter and higher current and deferred foreign taxes.
  
  

FULL YEAR 2005 FINANCIAL RESULTS

Key operating results for the full year 2005 vs. 2004 are summarized below:

	($ in millions, except per share)
	Full Year		2005 vs. 2004
	2005	2004	$	%
Gross Sales	$17,254	$17,160	Up $94	Up 0.5%
Net Sales	$15,036	$14,934	Up $102	Up 0.7%
Income Before Income Taxes	$2,192	$2,999	Dn $(807)	Dn (26.9)%
Equity Income	$498	$404	Up $94	Up 23.3%
Net Income	$1,839	$2,240	Dn $(401)	Dn (17.9)%
Diluted Earnings per Share	$2.35	$2.77	Dn $(.42)	Dn (15.2)%

A discussion of financial highlights for the full year 2005 follows:

• Net sales increased 0.7 percent vs. 2004, due primarily to higher international beer sales in China, Canada and Mexico, increased packaging operations sales and higher entertainment segment sales, partially offset by lower domestic beer sales revenue.
  
  Domestic beer segment sales revenue decreased 2.5 percent primarily due to lower beer sales volume and slightly lower revenue per barrel. Domestic revenue per barrel decreased 0.5 percent for the year.
  
  
• Reported income before income taxes decreased 27 percent vs. 2004, primarily reflecting lower profits in domestic beer, international beer and packaging operations, partially offset by improved results from entertainment operations.
  
  Income before income taxes includes the impact of previously disclosed one-time gains in both 2005 and 2004 plus the 2005 litigation settlement. Excluding these one-time items from both years, income before income taxes decreased 23 percent ^1/.
  
  Pretax income for international beer decreased $44 million for the full year primarily due to lower profits in China and the United Kingdom and the impact of the CCU sale gain in 2004, partially offset by improved results in Canada. Excluding the CCU sale gain, pretax income for international beer decreased 26 percent ^4/.
  
  Packaging segment pretax profits were down $22 million during the full year 2005 due to higher energy and materials costs for can and glass manufacturing operations and lower profits for the company's aluminum recycling and label manufacturing operations.
  
  Entertainment segment pretax results improved $33 million due to increased attendance, admissions pricing and in-park spending, partially offset by higher park operating expenses. Results in 2004 were adversely impacted by four hurricanes in Florida.
  
  Equity income increased 23 percent for the full year, reflecting the benefit of Grupo Modelo volume growth, lower Mexican income taxes and the impact of reporting Tsingtao equity income, partially offset by the reduction in equity income due to the sale of the company's investment in CCU and the 2004 one-time Mexican deferred income tax benefit. Excluding the tax benefit from 2004 results, equity income for full year 2005 increased 29 percent ^1/.
  
  
• Net income decreased 18 percent compared with the full year 2004, while reported diluted earnings per share decreased 15 percent, to $2.35. Excluding one-time items, net income and diluted earnings per share decreased by 14 percent and 11 percent, respectively ^1/. Earnings per share for 2005 benefited from the company's repurchase of nearly 13 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 p.m. Central Time today. The company will broadcast the conference call via the Internet. For details visit the company's Internet site at www.anheuser-busch.com.

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 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.

NOTES:

1.	Reconciliation of Fourth Quarter and Full Year Comparative Earnings Per Share
	Fourth Quarter	Income Before Income Taxes		Provision for IncomeTaxes		Equity Income		Net Income		Earnings Per Share		Effective Tax Rate
	2005
	Reported	$ 167.9		$ (74.6)		$ 107.9		$ 201.2		$ 0.26		44.4%
	2004
	Reported	$ 370.4		$ (142.9)		$105.0		$ 332.5		$ 0.42		38.6%
	Gain on Sale of CCU	(13.4)		(1.3)		-		(14.7)		(0.018)
	Deferred Income Tax Benefit From   Mexican Income Tax Rate Reduction	-		8.0		(18.0)		(10.0)		(0.013)
	Excluding One-Time Items	$ 357.0		$ (136.2)		$ 87.0		$ 307.8		$ 0.39		38.2%
	Percentage Change - 2005 vs. 2004
	Reported	(54.7)%				2.7%		(39.5)%		(38.1)%		(5.8) pts
	Excluding One-Time Items	(53.0)%				24.0%		(34.7)%		(33.3)%		(6.2) pts
	Full Year
	2005
	Reported	$ 2,191.5		$ (850.4)		$ 498.1		$ 1,839.2		$ 2.35		38.8%
	Gain on Sale of Spanish Theme Park	(15.4)		(3.5)				(18.9)		(.024)
	Favorable Chile Income Tax   Settlement on CCU Sale	-		(6.8)				(6.8)		(.009)
	Deferred Income Tax Benefit from   Favorable Ohio Tax Legislation			(7.2)				(7.2)		(.009)
	Litigation Settlement	105.0		(12.6)				92.4		.118
	Excluding One-Time Items	$ 2,281.1		$ (880.5)		$ 498.1		$ 1,898.7		$ 2.43		38.6%
	2004
	Reported	$ 2,999.4		$ (1,163.2)		$ 404.1		$ 2,240.3		$ 2.77		38.8%
	Commodity Hedge Gain	(19.5)		7.4		-		(12.1)		(0.015)
	Gain on Sale of CCU	(13.4)		(1.3)		-		(14.7)		(0.018)
	Deferred Income Tax Benefit From   Mexican Income Tax Rate Reduction	-		8.0		(18.0)		(10.0)		(0.013)
	Excluding One-Time Items	$ 2,966.5		$ (1,149.1)		$ 386.1		$ 2,203.5		$ 2.73		38.7%
	Percentage Change - 2005 vs. 2004
	Reported	(26.9)%				23.3%		(17.9)%		(15.2)%		-
	Excluding One-Time Items	(23.1)%				29.0%		(13.8)%		(11.0)%		0.1 pts

 

2.	Calculation of 2005 Earnings Per Share for 2006 Comparison Purposes
	The table below sets forth the assumptions used in comparing 2006 earnings per share expectations to 2005 results.
		Earnings per Share
	2005 Excluding One-Time Items (Note 1)	$ 2.43
	Pro Forma Stock Option Expense	(.12)
	2005 Including Pro Forma Stock Option Expense	$ 2.31

3.	Revenue per Barrel 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 from the company's breweries to U.S. wholesalers.

 

4.	Reconciliation of 2005 International Beer Pretax Income Growth
		Fourth Quarter								Full Year
		2005		2004			Decrease			2005		2004			Decrease
	Reported	$ 16.4		$ 40.4			(59.4)%			$ 86.5		$ 130.9			(33.9)%
	Gain on Sale of CCU	-		(13.4)						-		(13.4)
	Excluding CCU Gain	$ 16.4		$ 27.0			(39.3)%			$ 86.5		$ 117.5			(26.4)%

 

Anheuser-Busch Companies, Inc. Consolidated Income Statement (Unaudited) (In Millions, Except Per Share)
(In millions, except per share)
	Fourth Quarter Ended December 31,					Full Year Ended December 31,
	2005		2004			2005		2004
Gross sales	$ 3,881.7		$ 3,880.4			$ 17,253.5		$ 17,160.2
Excise taxes	(516.3)		(513.3)			(2,217.8)		(2,226.0)
Net sales	3,365.4		3,367.1			15,035.7		14,934.2
Cost of sales	(2,362.5)		(2,216.7)			(9,579.5)		(8,982.5)
Gross profit	1,002.9		1,150.4			5,456.2		5,951.7
Marketing, distribution and       administrative expenses	(720.6)		(681.6)			(2,730.2)		(2,590.7)
Litigation settlement	-		-			(105.0)		-
Operating income	282.3		468.8			2,621.0		3,361.0
Interest expense	(111.3)		(112.1)			(454.5)		(426.9)
Interest capitalized	5.1		6.2			19.9		21.9
Interest income	-		1.3			2.4		4.7
Other income/(expense), net	(8.2)		6.2			2.7		38.7
Income before income taxes	167.9		370.4			2,191.5		2,999.4
Provision for income taxes	(74.6)		(142.9)			(850.4)		(1,163.2)
Equity income, net of tax	107.9		105.0			498.1		404.1
Net income	201.2		332.5			$ 1,839.2		$ 2,240.3
Basic earnings per share	$ 0.26		$ 0.42			$ 2.37		$ 2.80
Diluted earnings per share	$ 0.26		$ 0.42			$ 2.35		$ 2.77
Capital Expenditures	$ 313.6		$ 363.1			$ 1,136.7		$ 1,089.6
Depreciation and Amortization	$ 246.7		$ 240.7			$ 979.0		$ 932.7
Weighted Average Shares:
Basic	777.0		786.9			777.5		798.9
Diluted	780.3		795.0			782.6		808.5

 

Anheuser-Busch Companies, Inc. Business Segments Fourth Quarter Ended December 31 (In Millions)
	Domestic Beer	International Beer	Packaging	Entertain.	Corporate & Elims.	Consol.
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)	(242.6)	$167.9
Equity Income	-	$107.9	-	-	-	$107.9
Net Income	$237.0	118.0	13.1	(5.7)	(161.2)	$201.2
2004
Gross Sales	$3,001.4	299.9	518.0	162.1	(101.0)	$3,880.4
Net Sales:
- Intersegment	$0.7	-	192.0	-	(192.7)	$ -
- External	$2,551.7	235.6	326.0	162.1	91.7	$3,367.1
Income Before   Income Taxes	$531.5	40.4	25.7	(11.0)	(216.2)	$370.4
Equity Income	-	$105.0	-	-	-	$105.0
Net Income	$329.5	130.1	15.9	(6.8)	(136.2)	$332.5
Note:	In the first quarter 2005, the company began including its transportation business in the Domestic Beer segment and its real estate business within Corporate. These groups previously comprised the Other segment. Segment results for 2004 have been updated to conform to the 2005 reporting convention.

 

Anheuser-Busch Companies, Inc. Business Segments Full year Ended December 31 (In Millions)
	Domestic Beer	International Beer	Packaging	Entertain.	Corporate & Elims.	Consol.
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	(918.0)	$2,191.5
Equity Income	-	$498.1	-	-	-	$498.1
Net Income	$1,658.9	551.7	87.7	127.7	(586.8)	$1,839.2
2004
Gross Sales	$13,388.5	1,015.1	2,276.8	989.3	(509.5)	$17,160.2
Net Sales:
- Intersegment	$2.8	-	880.1	-	(882.9)	$ -
- External	$11,364.9	809.9	1,396.7	989.3	373.4	$14,934.2
Income Before Income Taxes	$3,279.0	130.9	163.9	172.7	(747.1)	$2,999.4
Equity Income	-	$404.1	-	-	-	$404.1
Net Income	$2,033.0	485.3	101.6	107.1	(486.7)	$2,240.3
Note:	In the first quarter 2005, the company began including its transportation business in the Domestic Beer segment and its real estate business within Corporate. These groups previously comprised the Other segment. Segment results for 2004 have been updated to conform to the 2005 reporting convention.

Anheuser-Busch Companies, Inc. Consolidated Balance Sheet (Unaudited) (In Millions)
(In millions, except per share)	December 31, 2005		December 31, 2004
Assets
Current Assets:
Cash	$ 225.8		$ 228.1
Accounts receivable	681.4		696.1
Inventories	654.5		690.3
Other current assets	197.0		203.9
Total current assets	1,758.7		1,818.4
Investments in affiliated companies	3,448.2		3,150.2
Plant and equipment, net	9,041.6		8,847.4
Intangible assets, including goodwill of $1,034.5 and $984.1	1,232.6		1,191.9
Other assets	1,073.9		1,165.5
Total assets	$ 16,555.0		$ 16,173.4
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable	$ 1,249.5		$ 1,194.8
Accrued salaries, wages and benefits	250.9		291.4
Accrued taxes	156.7		152.9
Accrued interest	123.7		125.2
Other current liabilities	201.8		204.7
Total current liabilities	1,982.6		1,969.0
Postretirement benefits	444.3		454.2
Debt	7,972.1		8,278.6
Deferred income taxes	1,682.4		1,727.2
Other long-term liabilities	1,130.3		1,076.3
Shareholders Equity:
Common stock, $1.00 par, authorized 1.6 billion shares	1,468.6		1,463.0
Capital in excess of par value	1,601.8		1,425.3
Retained earnings	16,445.6		15,407.2
Treasury stock, at cost	(15,258.9)		(14,638.5)
Accumulated non-owner changes in equity	(913.8)		(988.9)
Total Shareholders Equity	3,343.3		2,668.1
Commitments and contingencies	-		-
Total Liabilities and Shareholders Equity	$ 16,555.0		$ 16,173.4

 

Anheuser-Busch Companies, Inc. Consolidated Statement of Cash Flows (Unaudited) (In Millions)
(In millions)	Full Year Ended December 31,