USA: Anheuser-Busch Companies, Inc. announces more aggressive leverage target and 100 Million share repurchase program

August A. Busch IV, president and chief executive officer of Anheuser-Busch Cos. Inc., announced that the Board of Directors has approved a new, more aggressive leverage target to enhance shareholder value, according to company’s press room, December 20.

The company intends to modestly increase leverage and reduce its cash flow to total debt target from the previous 30 to 40 percent range to the 25 to 30 percent range.

“The more aggressive leverage target will enable Anheuser-Busch to use its balance sheet more efficiently to support existing operations, acquisitions, dividend growth and share repurchasing, while maintaining substantial financial flexibility,” said Busch. “Our first priority is to invest in our businesses to enhance profit growth. This includes capital expenditures in existing operations, and acquisitions and investments to enhance our long-term earnings growth. The second priority is to return cash to shareholders by consistently increasing dividends in line with expected growth in earnings per share, and share repurchasing, consistent with the new leverage target.”

“Investing for growth which enhances competitive advantage and increases economic value added is our primary focus,” added Busch. “We are sharply focused on increasing shareholder value through profit growth and capital efficiency. In 2006, capital spending was reduced by over $300 million to about $825 million. This was done without compromising productivity improvement, which reduced annual costs by about $100 million in 2006,” Busch said.

In conjunction with the more aggressive leverage target, the Board of Directors of Anheuser-Busch Cos. Inc. has approved a new 100 million share repurchase program. The program follows a similar 100 million share program authorized in March 2003. Approximately 15 million shares remain open under the 2003 program (bringing total open authorized repurchases to approximately 115 million shares).

The new 100 million share repurchase program represents approximately 13 percent of outstanding common stock. Anheuser-Busch has been repurchasing stock since 1984. Approximately 3.6 percent of shares outstanding have been repurchased annually over the five-year period ending in 2005. The company expects to repurchase about $2.5 billion of stock during 2007, subject to the level of business investment. Although the company does not give short-term earnings guidance, it continues to target 7 to 10 percent annual earnings per share growth over the long-term.

Based in St. Louis, Anheuser-Busch is the leading American brewer. The company brews the world’s largest-selling beers, Budweiser and Bud Light. Anheuser-Busch also owns a 50 percent share in Grupo Modelo, Mexico’s leading brewer, and a 27 percent share in Tsingtao, the leading premium brewer in China. The company also is one of the largest theme park operators in the United States, is a major manufacturer of aluminum beverage cans and one of the world’s largest recyclers of aluminum cans.

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