Altria Group, Inc. Chairman and CEO Louis C. Camilleri Presents at Morgan Stanley Global Consumer Conference; Reaffirms Previously Disclosed Earnings Guidance.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 5, 2003 Highlights Improving Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Environment Altria Group, Inc. (NYSE NYSE See: New York Stock Exchange : MO) Chairman and Chief Executive Officer Louis C. Camilleri Louis C. Camilleri (b. 1955, Alexandria, Egypt) is the Chairman and CEO of Altria Group, the parent company of Philip Morris. Camilleri received a degree in economics and business administration from HEC Lausanne, the prestigious business school of the University of Lausanne , speaking at the Morgan Stanley Global Consumer Conference at the Grand Hyatt Hotel in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , told investors today that Altria is focused on "a single overriding objective - to deliver superior returns to shareholders over the long-term." The full text of Mr. Camilleri's remarks will be posted to the investor relations Investor relations The process by which the corporation communicates with its investors. section of the Altria Web site at www.altria.com later in the day on November 5, 2003. 2003 Full-Year Guidance During his presentation, Mr. Camilleri confirmed Altria's previously disclosed earnings guidance of $4.50 to $4.60 per share for the full year 2003 on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, including charges, and said, "We are comfortable with the current consensus estimate of $4.53 on a GAAP basis, including charges, for our 2003 full-year diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of ." Improvement in Litigation Environment Mr. Camilleri emphasized that, "2003 has been a watershed year for tobacco litigation, with positive implications extending many years into the future." He pointed specifically to a number of major developments in 2003, including the U.S. Supreme Court decision in the State Farm case in April reining in excessive punitive damages Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer. , decertification of the Engle class action in Florida in May, and a ruling in the Price case in September by the Illinois Supreme Court, upholding the original appeal bond and announcing that it would hear Philip Morris USA's appeal without need for intermediate appellate court A court having jurisdiction to review decisions of a trial-level or other lower court. An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. review. Outlook for Operating Companies Regarding the outlook for Altria's operating companies in 2004 and beyond, Mr. Camilleri said: -- Philip Morris USA Philip Morris USA is the United States tobacco division of Altria Group, Inc. General information On January 27, 2003, Philip Morris Companies Inc. changed its name to Altria Group, Inc. Even under this new name, Altria continues to own 100% of Philip Morris USA. will be in a position to improve its operating companies income performance in 2004 with growth in the low single digits as the economy recovers. -- Philip Morris International Philip Morris International, (PMI) based in Lausanne, Switzerland, held a 15.5% share of the international cigarette market in 2005. Its brands, led by Marlboro and L&M, are sold in over 160 countries around the world. (PMI See Private Mortgage Insurance. ) total volume in 2003 will be up around 2%. However, in the longer term, PMI is confident that its volume growth will be approximately 3% to 4%, excluding acquisitions. PMI's operating companies income should be able to grow in the high single digits, without acquisitions, and subject to currency - although in certain years PMI may exceed that rate of growth. -- Kraft has acknowledged that 2004 will be a difficult year. Kraft is addressing its challenges and is taking the actions needed to restore growth. Kraft has committed $200 million in incremental marketing spending between September and December of this year, primarily behind cheese, cold cuts, coffee and biscuits, and is encouraged by the progress to date. Kraft expects to grow discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. by more than 10% this year. -- Philip Morris Capital Corporation is expected to generate cash flow of nearly $1 billion by year-end 2003, reflecting its shift in strategic focus to maximizing gains and generating cash flow from its leased assets. Cash Flow Projection A Cash Flow Projection is an attempt to forecast the cash flows that will be generated by an asset, often a company, over a specified time frame. Methodology Projections can be made with varying levels of detail, but any cash flow projection for a business entails and Closing Remarks Mr. Camilleri projected discretionary cash flow after capital expenditures of $50 billion in the five years through 2007 for Altria Group, Inc. "We will continue to use the vast majority of this cash to reward shareholders through dividends and share repurchases," Mr. Camilleri said. In closing, Mr. Camilleri said, "The entire management team is committed to delivering superior returns to our shareholders and I can assure you that the Altria Board joins us in that commitment. I am confident that the Board will fully consider all alternatives in deciding how best to achieve that goal, once the litigation environment permits." Altria Group, Inc. Profile Altria Group, Inc. is the parent company of Kraft Foods Inc., with approximately 84% ownership of outstanding Kraft common shares, Philip Morris International Inc., Philip Morris USA Inc. and Philip Morris Capital Corporation. In addition, Altria Group, Inc. has a 36% economic interest in SABMiller plc, the world's second-largest brewer. The brand portfolio of Altria Group, Inc.'s consumer packaged goods companies includes such well-known names as Kraft, Jacobs, L&M, Marlboro, Maxwell House, Nabisco, Oreo, Oscar Mayer, Parliament, Philadelphia, Post and Virginia Slims. Altria Group, Inc. recorded 2002 net revenues of $80.4 billion. Trademarks and service marks mentioned in this release are the registered property of, or licensed by, the subsidiaries of Altria Group, Inc. Prior to January 27, 2003, Altria Group, Inc. was named Philip Morris Companies Inc. This news release refers to Altria Group, Inc. even when historical events took place under the company's former name. On May 30, 2002, Altria Group, Inc. announced an agreement with South African Breweries South African Breweries was founded in 1895 by Jacob Letterstedt specifically to serve a new market of miners and prospectors in and around Johannesburg. Two years later, it became the first industrial company to list on the Johannesburg Stock Exchange (JSE). plc (SAB) to merge Miller Brewing Co. into SAB. The transaction closed on July 9, 2002 and SAB changed its name to SABMiller plc (SABMiller). The transaction resulted in a pre-tax gain of $2.6 billion or $1.7 billion after-tax in the third quarter of 2002. Altria records its share of SABMiller's net earnings based on its economic ownership percentage in minority interest in earnings, net, on the condensed consolidated statement of earnings. Forward-Looking and Cautionary Statements This press release contains projections of future results and other forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The following important factors could cause actual results and outcomes to differ materially from those contained in such forward-looking statements. Altria Group, Inc.'s consumer products subsidiaries are subject to unfavorable currency movements; intense price competition, changes in consumer preferences and demand for their products; changing prices for raw materials, fluctuations in levels of customer inventories and the effects of foreign economies and local economic and market conditions. Their results are dependent upon their continued ability to promote brand equity successfully; to anticipate and respond to new consumer trends; to develop new products and markets and to broaden brand portfolios in order to compete effectively with lower-priced products in a consolidating environment at the retail and manufacturing levels; to improve productivity; and to respond effectively to changing prices for their raw materials. Altria Group, Inc.'s tobacco subsidiaries (Philip Morris USA and Philip Morris International) continue to be subject to litigation, including risks associated with adverse jury and judicial determinations, courts reaching conclusions at variance with the company's understanding of applicable law, bonding requirements and the absence of adequate appellate remedies to get timely relief from any of the foregoing; price disparities and changes in price disparities between premium and lowest-price brands; legislation, including actual and potential excise tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. increases; increasing marketing and regulatory restrictions; the effects of price increases related to excise tax increases and concluded tobacco litigation settlements on consumption rates and consumer preferences within price segments; health concerns relating to the use of tobacco products and exposure to environmental tobacco smoke environmental tobacco smoke (ETS/passive smoke), n the gaseous by-product of burning tobacco products, including but not limited to commercially manufactured cigarettes and cigars; contains toxic elements harmful to the health of adults and children ; governmental regulation; privately imposed smoking restrictions; and governmental and grand jury investigations. As a result of recent actions by credit rating agencies Credit Rating Agencies Firms that compile information on and issue public credit ratings for a large number of companies. , Altria Group, Inc. is currently unable to access the commercial paper market and must rely on its revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facilities instead. Altria Group, Inc.'s financial services subsidiary (Philip Morris Capital Corporation) is subject to the effects of a weak economy, particularly with respect to aircraft leases to the troubled airline industry. Altria Group, Inc.'s consumer products subsidiaries are subject to other risks detailed from time to time in its publicly filed documents, including its Annual Report on Form 10-K for the period ended December 31, 2002 and its Quarterly Report on Form 10-Q for the period ended June 30, 2003. Altria Group, Inc. cautions that the foregoing list of important factors is not complete and does not undertake to update any forward-looking statements that it may make. Audio Webcast Remarks by Mr. Camilleri were webcast on November 5, 2003, at www.altria.com. The text of Mr. Camilleri's business presentation is being posted to the company's Web site later in the day on November 5 and an archived copy of the webcast will be available until 5:00 p.m. eastern time November 12, 2003. |
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