Altria Group, Inc. Reports 2005 Fourth-Quarter and Full-Year Results.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Altria Group “Philip Morris” redirects here. For the racecar driver, see Philip Morris (autoracer). Altria Group, Inc. (NYSE: MO) (previously named Philip Morris Companies Inc. , Inc. (NYSE NYSE See: New York Stock Exchange :MO): FOURTH-QUARTER 2005 --Diluted earnings per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the up 13.5% to $1.09 vs. $0.96 in year-ago quarter, including the items detailed on Schedule 7 --Earnings from continuing operations up 15.0% to $2.3 billion FULL-YEAR 2005 --Diluted earnings per share from continuing operations up 11.6% to $5.10 vs. $4.57 in 2004, including the items detailed on Schedule 8 --Earnings from continuing operations up 13.2% to $10.7 billion 2006 OUTLOOK --Full-year 2006 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 from continuing operations projected in a range of $4.85 to $4.95 --Includes approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.36 per share in charges for Kraft's restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). program, an unfavorable currency impact of $0.14 per share, based on current exchange rates, and about $0.10 per share for lower tobacco income in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. --Excludes any future acquisitions or divestitures Altria Group, Inc. (NYSE:MO) today announced fourth-quarter 2005 diluted earnings per share from continuing operations were up 13.5% to $1.09, including the items detailed on Schedule 7, versus $0.96 in the same quarter a year ago. For the full year 2005, diluted earnings per share from continuing operations were up 11.6% to $5.10, including items detailed on Schedule 8, versus $4.57 for the full year 2004. "Overall, we achieved solid results in 2005, with strong income growth in our tobacco businesses partially offset by weaker results in food," said 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 , chairman and chief executive officer of Altria Group, Inc. "We enter 2006 with considerable momentum. However, circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or affecting some of PMI's key markets, most notably Spain, dictate TO DICTATE. To pronounce word for word what is destined to be at the same time written by another. Merlin Rep. mot Suggestion, p. 5 00; Toull. Dr. Civ. Fr. liv. 3, t. 2, c. 5, n. 410. a cautious earnings outlook this early in the year. In addition, unfavorable currency, Kraft's restructuring costs and the inclusion of an extra week of results at Kraft in 2005 will make for difficult comparisons this year. I am nevertheless confident that we have the strategic wherewithal where·with·al n. The necessary means, especially financial means: didn't have the wherewithal to survive an economic downturn. conj. Wherewith. pron. Wherewith. and resources to manage the challenges ahead and successfully seize seize v. To exhibit symptoms of seizure activity, usually with convulsions. the considerable opportunities ahead of us." 2006 Full-Year Forecast Altria Group is projecting 2006 full-year diluted earnings per share from continuing operations in a range of $4.85 to $4.95. This forecast includes approximately $0.36 per share in charges associated with the Kraft restructuring program, unfavorable currency of $0.14 per share at current exchange rates, about $0.10 per share for lower tobacco income in Spain, $0.05 per share due to higher shares outstanding, and $0.04 per share as a result of a higher base income tax rate of 33.9% versus a corresponding rate of 33.4% in 2005. It does not include any future acquisitions or divestitures, or the benefit of potential tax accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. reversals following the completion of audits in certain jurisdictions. The factors described in the Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and Cautionary Statements section of this release represent continuing risks to this projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. . Conference Call A conference call with members of the investment community and news media will be Webcast at 9:00 a.m. Eastern Time on January January: see month. 31, 2006. Access is available at www.altria.com. ALTRIA GROUP, INC. As described in "Note 15. Segment Reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four " of Altria Group, Inc.'s 2005 Annual Report, management reviews operating companies operating company A business that engages in transactions with outsiders. income, which is defined as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before corporate expenses and amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. , to evaluate segment performance and allocate To reserve a resource such as memory or disk. See memory allocation. resources. Management believes it is appropriate to disclose this measure to help investors analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. business performance and trends. For a reconciliation of operating companies income to operating income, see the Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Statements of Earnings contained in this release. Altria Group, Inc.'s consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statement of earnings for the year ended December December: see month. 31, 2005 includes a 53rd week for Kraft. Kraft's subsidiaries generally end their fiscal years on the last Saturday Saturday: see week; Sabbath. of the year. Accordingly, most years contain 52 weeks of operating results, while every fifth or sixth year includes 53 weeks. The extra week at Kraft added an estimated $625 million in net revenues and $100 million in operating income to Altria's results for the full year and fourth quarter of 2005. All references in this news release are to continuing operations, unless otherwise noted. 2005 Full-Year Results Net revenues for the full year 2005 increased 9.2% versus 2004 to $97.9 billion, including favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency of $2.0 billion, the favorable impact from acquisitions of $1.6 billion and the benefit of an additional shipping week at Kraft in 2005. Operating income increased 9.3% to $16.6 billion, reflecting the items described in the attached reconciliation on Schedule 6, including favorable currency of $421 million, $341 million from acquisitions, primarily Sampoerna Sampoerna (PT Hanjaya Mandala Sampoerna Tbk) is an Indonesian tobacco company whose cigarette brands are smoked by millions of Indonesians. It is reportedly the largest Indonesian tobacco company, ahead of Gudang Garam and Djarum. , the absence of the upfront expense related to the 2004 E.C. agreement, lower charges for asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. , implementation and exit costs, primarily at Kraft, gains on sales of businesses, the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of a 2004 accrual related to tobacco quota quota In international trade, a government-imposed limit on the quantity of goods and services that may be exported or imported over a specified period of time. Quotas are more effective than tariffs in restricting trade, since they limit the availability of goods rather buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. legislation and higher results from operations for domestic and international tobacco, and the impact of the extra week at Kraft. These were partially offset by a larger provision in 2005 than in 2004 for airline industry exposure at Philip Philip, tetrarch of Ituraea Philip, d. A.D. 34, tetrarch of Ituraea, son of Herod the Great. He was perhaps the ablest of the Herod dynasty. He is mentioned in the Gospel of St. Luke. Morris Capital Corporation (PMCC PMCC Product Moment Correlation Coefficient PMCC Postmark Collectors Club PMCC Professional Military Comptroller Course PMCC Packet Mode Channel Connect PMCC Project Management Core Competency PMCC Pensky-Martens Closed Cup test ), a charge for PM USA's portion of the losses incurred by the federal government on the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of its pool tobacco stock and lower results at Kraft. Earnings from continuing operations increased 13.2% to $10.7 billion, primarily reflecting the items mentioned above and a lower tax rate, partially offset by higher minority interest and lower equity income from SABMiller SABMiller (South African Breweries - Miller) (LSE: SAB, JSE: SAB,Official site) is one of the world’s largest brewers, with brewing interests and distribution agreements in over 60 countries across six continents. . The Company's effective tax rate was 29.9% for the full-year 2005 compared to 32.4% in 2004. This lower tax rate reflects the reversal of tax accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. no longer required at Kraft and PMI See Private Mortgage Insurance. , tax benefits generated by the repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of $6.0 billion of earnings under provisions of the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act and associated foreign tax benefits, foreign rate differentials net of associated repatriation impacts and the new domestic manufacturers' deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. . Net earnings, including discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , increased 10.8% to $10.4 billion. Diluted earnings per share, including discontinued operations as detailed on Schedule 4, increased 9.4% to $4.99. On October October: see month. 12, 2005, SABMiller plc completed its acquisition of Bavaria Bavaria (bəvâr`ēə), Ger. Bayern, state (1994 pop. 11,600,000), 27,239 sq mi (70,549 sq km), S Germany. Munich is the capital. SA, the second-largest brewer in South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . As a result, Altria's ownership has been reduced from 33.9% to 28.7% of the enlarged SABMiller plc. During 2005, Altria Group, Inc. increased its regular quarterly dividend by 9.6% to $0.80 per common share, which represents an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of $3.20 per common share. 2005 Fourth-Quarter Results Net revenues for the fourth quarter of 2005 increased 9.4% versus 2004 to $24.5 billion, including $582 million from acquisitions, favorable currency of $136 million and the benefit of an additional week at Kraft. Operating income increased 5.3% to $3.6 billion, reflecting the items described in the attached reconciliation on Schedule 3, including higher results from operations for North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. food and international food, which included the benefit of the extra week at Kraft, the impact of acquisitions of $121 million, primarily Sampoerna, and a favorable comparison to the year-earlier period, which included a $140 million provision against PMCC's airline industry exposure. These were partially offset by $342 million in charges for asset impairment, implementation and exit costs, primarily at Kraft, in the fourth quarter of 2005 versus $268 million in the fourth quarter of 2004. Earnings from continuing operations increased 15.0% to $2.3 billion, reflecting the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. factors and a lower effective tax rate. The company's effective tax rate was 30.7% in the fourth quarter of 2005 compared to 35.5% in 2004. The effective tax rate reflects certain tax benefits from the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of Stella D'oro Stella D'Oro is a brand of cookies and breadsticks formerly owned by Kraft Foods. Stella D'Oro was established in 1930 by Joseph Kresivich, who had immigrated to the United States from Trieste, Italy in 1922. , foreign rate differentials net of associated repatriation impacts, dividend repatriation tax benefits and the new domestic manufacturers' deduction. Net earnings, including discontinued operations, increased 17.6% to $2.3 billion. Diluted earnings per share, including discontinued operations as detailed on Schedule 1, increased 16.0% to $1.09. DOMESTIC TOBACCO 2005 Full-Year Results For the full year 2005, 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. Inc. (PM USA), Altria Group, Inc.'s domestic tobacco business, achieved balanced income and retail share growth. Shipment volume of 185.5 billion units was down 0.8% from the previous year, but was estimated to be essentially flat when adjusted for the timing of promotional shipments and trade inventory changes, and two less shipping days versus 2004. Premium mix for PM USA increased by 0.2 percentage points to 91.6%. Operating companies income increased 4.0%, to $4.6 billion, primarily driven by lower wholesale promotional allowance rates and aided by the reversal of a 2004 accrual related to tobacco quota buyout legislation, partially offset by lower volume, charges for the disposition of pool tobacco stock, higher R&D expenses and a $56 million accrual for the Boeken case. As shown in the following table, PM USA's total retail share reached a record 50.0% in 2005, driven by Marlboro, which increased its retail share by 0.5 points to a record 40.0%, as measured by the IRI/Capstone Total Retail Panel.
Philip Morris USA Annual Retail Share*
----------------------------------------------------------------------
2005 2004 Change
--------- --------- ----------
Marlboro 40.0% 39.5% 0.5 pp
Parliament 1.7% 1.7% 0.0 pp
Virginia Slims 2.3% 2.4% -0.1 pp
Basic 4.3% 4.2% 0.1 pp
--------- --------- ----------
Focus Brands 48.3% 47.8% 0.5 pp
Other PM USA 1.7% 2.0% -0.3 pp
--------- --------- ----------
Total PM USA 50.0% 49.8% 0.2 pp
* IRI/Capstone Total Retail Panel was developed to measure market
share in retail stores selling cigarettes. It is not designed to
capture Internet or direct mail sales.
PM USA's share of the premium category was stable at 62.1% for the full year, while its share of the declining discount category grew 0.2 share points to 16.3%, reflecting the performance of Basic. The total industry's premium category share increased 0.4 points to 73.6% for the full year, while the discount category share declined to 26.4%. Within the discount category, the share of the deep discount segment (which includes both major manufacturers' private label brands and all other manufacturers' discount brands) was flat at 11.8%. 2005 Fourth-Quarter Results For the fourth quarter of 2005, PM USA's total retail share was up 0.1 point to 50.0%. Shipment volume of 45.5 billion units was down 3.4% from the previous year, but was estimated to be essentially flat when adjusted for the timing of promotional shipments and trade inventory changes, and one less shipping day versus the fourth quarter of 2004. Operating companies income increased 0.4%, to $1.1 billion, primarily driven by lower wholesale promotional allowance rates and favorable quota buyout costs, largely offset by lower volume and the reversal of the first three quarters of Grower's Trust expense in the fourth quarter of 2004. During the quarter, PM USA announced a reduction in the wholesale promotional allowance on its Focus on Four brands of $0.50 per carton, from $5.50 to $5.00, effective December 19, 2005. In addition, effective December 27, 2005, the price of its non-focus brands was increased by $0.50 per carton. As shown in the following table, PM USA's total retail share improved in the fourth quarter of 2005 to 50.0%, driven by Marlboro. Share for Marlboro grew 0.4 points to 40.1% in the fourth quarter, while Basic's retail share was down 0.1 point to 4.2%.
Philip Morris USA Quarterly Retail Share*
----------------------------------------------------------------------
Q4 2005 Q4 2004 Change
----------- --------- ----------
Marlboro 40.1% 39.7% 0.4 pp
Parliament 1.7% 1.7% 0.0 pp
Virginia Slims 2.3% 2.3% 0.0 pp
Basic 4.2% 4.3% -0.1 pp
----------- --------- ---------
Focus Brands 48.3% 48.0% 0.3 pp
Other PM USA 1.7% 1.9% -0.2 pp
----------- --------- ---------
Total PM USA 50.0% 49.9% 0.1 pp
* See note above.
The total industry's premium category share increased 0.5 points to 73.8% in the fourth quarter of 2005, while the discount category share correspondingly declined to 26.2%. Within the discount category, share was flat at 11.8% for the deep discount segment. In the premium category, PM USA's segment share declined by 0.1 point to 62.0% in the fourth quarter, reflecting significant levels of competitive bonus product promotions. INTERNATIONAL TOBACCO 2005 Full-Year Results For the full year 2005, cigarette cigarette Paper-wrapped roll of finely cut tobacco for smoking. Cigarette tobacco is usually milder than cigar tobacco. The Aztecs and other New World peoples smoked tobacco in hollow reeds, in canes, or wrapped in leaves, but it was in pipes and as cigars (cut tobacco shipment volume for 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. Inc. (PMI), Altria Group, Inc.'s international tobacco business, increased 5.7% to 804.5 billion units. Widespread volume gains in many markets, particularly Egypt Egypt (ē`jĭpt), Arab. Misr, biblical Mizraim, officially Arab Republic of Egypt, republic (2005 est. pop. 77,506,000), 386,659 sq mi (1,001,449 sq km), NE Africa and SW Asia. , France, Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , the Philippines Philippines officially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. , Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). , Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia. , Turkey and Ukraine Ukraine (y  `krān, ykrān`), Ukr. Ukraina, republic (2005 est. pop. , coupled with
acquisitions in Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago. and Colombia Colombia (kəlŭm`bēə, Span. kōlōm`byä), officially Republic of Colombia, republic (2005 est. pop. 42,954,000), 439,735 sq mi (1,138,914 sq km), NW South America. Bogotá is the capital and largest city. , were partially offset by lower
shipments in the EU. Excluding the impact of acquisitions, PMI's
cigarette shipment volume increased 0.7% versus 2004. PMI's total
tobacco volume, which included 7.1 billion cigarette equivalent units of
other tobacco products (OTPs), grew 6.1% versus the prior year, and 1.2%
excluding acquisitions.Operating companies income rose 19.2% to $7.8 billion due primarily to higher pricing, as well as the impact of acquisitions of $341 million, positive currency of $331 million, higher income from the return of the Marlboro license in Japan, the impact of a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. inventory sale in Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. and a favorable comparison with 2004 when PMI recorded a $250 million charge for the E.C. agreement. These were partially offset by unfavorable volume/mix, higher R&D, manufacturing, distribution, trade and selling expenses and higher asset impairment and exit costs. PMI achieved market share gains in 2005 in many markets, including Egypt, France, Italy, Japan, Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. , Mexico, the Netherlands, the Netherlands, The officially Kingdom of The Netherlands byname Holland Country, northwestern Europe. Area: 16,034 sq mi (41,528 sq km). Population (2005 est.): 16,300,000. Capital: Amsterdam. Seat of government: The Hague. Most of the people are Dutch. Philippines, Russia, Thailand, Turkey, Ukraine and the United Kingdom. In addition, in Indonesia, Sampoerna's share in 2005 was significantly higher than the prior year. Total Marlboro cigarette shipments of 322.1 billion increased 6.2 billion units or 2.0% in 2005. Gains in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. , the Middle East and Africa, as well as higher inventories in Japan following the Marlboro take-back in May 2005 and the one-time inventory sale in Italy, were partially offset by declines in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and worldwide duty free. Excluding the one-time gains in Italy and Japan, Marlboro volume was essentially flat. Share gains for Marlboro were achieved in the top income markets of Egypt, France, Japan, Mexico, Portugal Portugal (pôr`chəgəl), officially Portuguese Republic, republic (2005 est. pop. 10,566,000), 35,553 sq mi (92,082 sq km), SW Europe, on the western side of the Iberian Peninsula and including the Madeira Islands and the Azores in the , Russia, Turkey, Ukraine and the United Kingdom. In the EU region, cigarette volume was down 2.7%, due primarily to Germany, and PMI's cigarette market share was 39.3%, down 0.2 points from the previous year. In Germany, the total cigarette market declined 14.7% or 16.7 billion units in 2005 versus the previous year. However, this was partially offset by an increase of 10.2 billion units of OTPs, principally tobacco portions, which are taxed at a significantly lower rate than cigarettes. In total, industry consumption of cigarettes and OTPs was down 4.3% for the full year. PMI's cigarette market share was down 0.2 points to 36.6%, while it recorded a 16.9% share of the tobacco portions segment, up 9.1 points versus prior year, driven by Marlboro, Next and f6 portions. While PMI's share of total tobacco consumption was down 0.8 points to 28.6%, it grew its share of total tobacco consumption sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen through the year from 28.1% in the first quarter to 29.0% in the fourth quarter. During the fourth quarter of 2005, the European Court of Justice European Court of Justice, judicial branch of the European Union (EU). Located in Luxembourg, it was founded in 1958 as the joint court for the three treaty organizations that were consolidated into the European Community (the predecessor of the EU) in 1967. issued a mandate A judicial command, order, or precept, written or oral, from a court; a direction that a court has the authority to give and an individual is bound to obey. A mandate might be issued upon the decision of an appeal, which directs that a particular action be taken, or upon a that requires the German government to equalize e·qual·ize v. e·qual·ized, e·qual·iz·ing, e·qual·iz·es v.tr. 1. To make equal: equalized the responsibilities of the staff members. 2. To make uniform. the tax burden between cigarettes and tobacco portions. As a result of this ruling, tobacco portions in Germany will be taxed at the same rate as cigarettes for products manufactured as of April 1, 2006. Accordingly, lower priced portions are expected to remain available at retail for some time due to anticipated high stock levels. In Italy, the total cigarette market was down 6.1% in 2005, largely reflecting tax driven pricing and the impact of indoor indoor strictly in a human dwelling; more widely includes an animal dwelling. indoor environment the physical, social and psychological environment within a human dwelling that can influence the health of a companion animal. smoking restrictions in public places since January 2005. PMI's cigarette shipment volume increased 2.7%, due primarily to the one-time inventory sale to PMI's new distributor, Logista. Excluding the one-time inventory sale of 3.0 billion units, shipment volume in Italy was down 3.2%. However, share improved to 52.6% in 2005, an increase of 1.1 points, driven principally by Diana Diana, in Roman religion Diana (dīăn`ə), in Roman religion, goddess of the moon, forests, animals, and women in childbirth. She was probably originally a forest goddess and a special patroness of women. . In France, PMI's volume and share performance in 2005 were robust, reflecting a stable pricing environment and moderate price gaps. Shipments rose 2.5% and share grew from 39.8% to 41.7%, an increase of 1.9 points behind the strong performance of Marlboro and the Philip Morris brand. In Spain, the total cigarette market declined 0.6%. PMI's shipments were down 2.2%, reflecting increased consumer down trading to the deep discount segment, which expanded to 20% for the full year 2005, double its 2004 share, and surged to a 31.2% share in the fourth quarter. As a result of growing price gaps, PMI's share declined 1.1 points to 34.5% for the full year, and declined 3.4 points to 31.5% in the fourth quarter, with a pronounced product mix deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. . On January 21, 2006, the Spanish government
In Eastern Europe, the Middle East and Africa, PMI's shipments grew 6.4%, due mainly to Ukraine, Turkey, Russia and Egypt. Shipments in Ukraine were up versus the same period a year ago, driven by improved economic conditions and continued up trading to Marlboro, Chesterfield Chesterfield, city (1991 pop. 73,352) and district, Derbyshire, central England. An important industrial center, Chesterfield produces mining equipment, railroad cars, metal products, glass, and pottery. , L&M and Bond Street. In Turkey, PMI shipment volume was up 8.6% and market share increased 4.4 points to 41.4%, fueled by the growth of Marlboro, Parliament, Lark, and Bond Street. Shipments in Russia were up 2.7% and market share rose 0.7 points to 27.0%, due to the continued success of Marlboro, Muratti The Muratti is an annual men's football match, inaugurated in 1905, between the Channel Islands of Guernsey, Jersey and Alderney, the prize for winning being a trophy called the Muratti Vase. , Parliament, Next and Chesterfield. In Egypt, shipments rose 39.6% and market share climbed 2.1 points to 8.8%, driven by the introduction of Next and the strong performance of Marlboro and L&M, reflecting better economic conditions and price stability. In Asia (including Japan) volume increased 21.3%, primarily due to the acquisition of Sampoerna in Indonesia. Excluding Sampoerna, volume was essentially flat. PMI achieved a full-year 26.1% share in Indonesia, driven by A Mild, Dji Sam (1) (Security Accounts Manager) The part of Windows NT that manages the database of usernames, passwords and permissions. A SAM resides in each server as well as in each domain controller. See PDC and trust relationship. Soe and A Hijau. The integration of Sampoerna into PMI's global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. has proceeded extremely well. In Japan, the total market declined 2.8% in 2005 while PMI's shipments were down slightly. Market share rose 0.3 points to a record 24.8%, driven by Marlboro and Virginia Slims Virginia Slims cigarette trademark marketed to “independent women.” “You’ve come a long way, baby,” as slogan. [Trademarks: Crowley Trade, 630] See : Feminism . Marlboro Ultra Lights Menthol menthol, white crystalline substance with a characteristic pungent odor. It is derived from the oil of the peppermint plant, Mentha piperita (see mint), or prepared synthetically from coal tar. was successfully introduced in mid- mid- pref. Middle: midbrain. 2005, helping the Marlboro family to increase its share 0.5 points to 9.7%. In the Philippines, PMI's shipments increased 3.9% in 2005 and share rose 0.8 points to 30.5%, driven by Marlboro's successful sales programs and improved retail outlet retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → coverage. In Thailand, PMI's shipments were up 17.4% and market share increased 3.3 points to 20.8% on the strength of L&M. In Korea, the total market was down over 20% in 2005, due to the December 2004 tax-driven price increase, and PMI's shipments declined 11.8%. However, PMI's market share in Korea grew 0.9 points to 8.3%, driven by Marlboro and Parliament. PMI's volume in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. increased 5.5%, reflecting the acquisition of Coltabaco in Colombia and higher shipments in Mexico, partially offset by declines in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. and Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . Excluding the impact of acquisitions, volume was down 3.8%. In Mexico, the cigarette industry declined 1.5% in 2005. However, PMI's shipments increased 1.0%, while market share rose 1.9 points to 62.1%, driven by Marlboro's continued momentum. In Argentina, the total market declined 1.4% and PMI's shipments were down 7.0%. Share declined 3.7 points to 61.4% in Argentina, due to a surge See power surge. SURGE - Sorter, Updater, Report Generator, Etc. IBM 704, 1959. Sammet 1969, p.8. in the ultra low price segment. In Brazil, continued down trading to the low price segment resulted in a 6.2% decline in PMI's annual shipment volume and a market share loss of 1.5 points to 12.8%. 2005 Fourth-Quarter Results In the fourth quarter of 2005, cigarette shipment volume for PMI increased by 6.6% to 184.2 billion units, driven by gains in Turkey and Ukraine, and the impact of acquisitions in Indonesia and Colombia, partially offset by declines in the EU region, namely Germany, Italy and Poland Poland, Pol. Polska, officially Republic of Poland, republic (2005 est. pop. 38,635,000), 120,725 sq mi (312,677 sq km), central Europe. It borders on Germany in the west, on the Baltic Sea and the Kaliningrad region of Russia in the north, on Lithuania, . Excluding acquisitions, PMI's cigarette shipment volume declined 1.9% versus the same period a year ago. PMI's total tobacco volume, which includes 2.0 billion cigarette equivalent units of OTPs, grew 7.1% versus the prior year quarter, and was down 1.3% excluding acquisitions. Operating companies income rose 7.1% to $1.5 billion, driven by higher pricing and the impact of acquisitions of $121 million, partially offset by higher asset impairment and exit costs, negative currency of $11 million, unfavorable mix, higher R&D, marketing and selling expenses. PMI achieved market share gains in the fourth quarter in many markets, including Austria Austria (ô`strēə), Ger. Österreich [eastern march], officially Republic of Austria, federal republic (2005 est. pop. 8,185,000), 32,374 sq mi (83,849 sq km), central Europe. , Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. , Egypt, France, Germany, Italy, Japan, Korea, Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. , Mexico, the Philippines, Russia, Thailand, Turkey, Ukraine and the United Kingdom. In addition, in Indonesia, Sampoerna's share in the quarter was significantly higher than the prior year. Total Marlboro cigarette shipments were down 1.3% in the fourth quarter, principally due to declines in Germany, Italy and worldwide duty free, partially offset by higher volume in Ukraine and Japan. However, Marlboro's share improved in many of its top income markets. In the EU region, cigarette volume declined 6.7% in the fourth quarter, due to declines in Germany, Italy and Poland. PMI's cigarette market share in the EU for the fourth quarter was down 1.4 points to 38.6%, due to losses in Spain as a result of the surge in the deep discount segment, and Poland, which was also impacted by consumer down trading. In Germany, PMI's cigarette market share rose 0.4 share points to 36.6%, off a depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. 2004 base. PMI's share of total tobacco consumption increased 0.6 points to 29.0%. However, PMI's cigarette volume declined 18.1% and total tobacco volume declined 7.0%. PMI's share of tobacco portions rose 10.1 points to 20.4% in the fourth quarter. In Italy, PMI's volume declined 7.6%, driven by a total market decline of 6.0% and the timing of shipments. Market share advanced 0.3 points to 52.3%, due to Diana's continued share momentum. In France, market share of 42.0% grew 1.7 points with Marlboro up 0.9 points to 30.4%. In Spain, PMI's shipments were down 1.4% and market share declined 3.4 points to 31.5%, due to losses incurred by Marlboro, Chesterfield and L&M, partially offset by the growth of Next and Basic. In Poland, PMI's volume declined 12.0% due to the continued growth of the deep discount segment. PMI's share was down 6.4 points to 36.9%, due mainly to L&M. In Eastern Europe, the Middle East and Africa, volume increased 4.3% in the fourth quarter, driven by Egypt, Russia, Serbia Serbia (sûr`bēə), Serbian Srbija (sŭr`bēä), officially Republic of Serbia, republic (1995 est. pop. and Ukraine. In Russia, volume was up slightly and share increased 0.4 points to 27.0%, driven by Marlboro. In Asia (including Japan), volume was up 34.7% in the fourth quarter, due mainly to the acquisition in Indonesia. Excluding the impact of acquisitions, volume was down 2.5%. In Japan, the total market declined 3.7% and PMI cigarette volume was up slightly. Market share in Japan rose 0.3 points to 24.8%, driven by Marlboro, which added 0.6 points to 9.8% behind the success of Marlboro Ultra Lights Menthol. During the quarter, PMI launched Virginia Slims Duo in an innovative pack. During the fourth quarter, PMI and the China National Tobacco Corporation (CNTC CNTC Canadian Network of Toxicology Centres CNTC China National Tobacco Corporation CNTC Confederação Nacional Trab Comércio CNTC Chief of Naval Telecommunications CNTC Control Character ) announced the establishment of a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategic alliance. Agreements were signed for the licensed manufacture and sale of Marlboro in China and the formation of an international joint venture, equally owned by CNTC and PMI. The joint venture will offer consumers a portfolio of Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. heritage brands globally and pursue other business development opportunities. In Latin America, PMI volume was up 8.2% in the fourth quarter, driven by the acquisition in Colombia. Excluding acquisitions, volume was down 3.4%, due mainly to lower consumption and the continued increase in the deep discount segment in both Argentina and Brazil. FOOD Yesterday, Kraft Foods Kraft Foods Inc. (NYSE: KFT) is the largest food and beverage company headquartered in North America and the second largest in the world after Nestlé SA. The Philip Morris Company (now known as Altria Group), a company that produces tobacco products, acquired Kraft for Inc. (Kraft) reported 2005 fourth-quarter and full-year results. For the full year 2005, Kraft's net revenues were up 6.0% to $34.1 billion, reflecting pricing, positive mix, favorable currency of $533 million and the impact of the extra shipping week in 2005. Kraft estimates that this additional week positively impacted volume, revenue and operating income growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. by approximately 2% for the full year and 7% for the fourth quarter. Ongoing volume was up approximately 2% for the full year, but was essentially flat on a comparable 52-week basis, including a 0.7 point benefit from acquisitions. Factors contributing to the volume softness included Kraft's focus on mix improvement, its SKU (StockKeeping Unit) The number of one specific product available for sale. If a hardware device or software package comes in different versions, there is an SKU for each one. SKU - stock-keeping unit reduction program and the impact of pricing. The pricing impact was most pronounced in the competitive European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. environment, where discount retailers' store brands generally either lagged or did not follow Kraft's price increases. Operating income increased 3.0% to $4.8 billion for the full year, driven by positive mix, productivity and restructuring savings, lower restructuring and impairment costs, favorable currency of $90 million, gains on sales of businesses and brands and the benefit of the extra week. These were partially offset by significantly higher commodity costs (net of pricing), increased post-employment benefit costs and increased consumer marketing support. For the fourth quarter of 2005, Kraft's net revenues were up 10.0% to $9.7 billion, reflecting the benefits of favorable currency of $68 million and the benefit of the extra week, as well as pricing across multiple categories and countries and positive mix, partially offset by the impact of divestitures. Revenue growth was particularly strong in U.S. Beverages and U.S. Convenient Meals. Ongoing volume was down approximately 2% on a comparable 13-week basis, reflecting the factors mentioned above for full-year volume. Operating income was essentially flat at $1.2 billion, as increased post-employment benefit costs, higher restructuring and divestiture-related impairment costs and higher commodity costs (net of pricing) essentially offset productivity and restructuring savings, positive mix, favorable currency of $17 million and the benefit of an extra week of results. NORTH AMERICAN FOOD 2005 Full-Year Results For the full year 2005, Kraft North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Commercial (KNAC) net revenues grew 5.6% to $23.3 billion, reflecting positive mix, net pricing, the benefit of the extra week and favorable currency of $172 million. Ongoing volume increased 2.8%, or approximately 1% adjusted for the extra week. Operating companies income declined 1.0% to $3.8 billion, with increased post-employment benefit costs, higher commodity costs net of pricing and increased marketing spending partially offset by productivity and restructuring savings, volume growth, positive mix, lower restructuring and impairment charges, the benefit of the extra week and favorable currency of $31 million. 2005 Fourth-Quarter Results For the fourth quarter of 2005, KNAC net revenues grew 11.0% to $6.4 billion, reflecting favorable currency of $44 million, the benefit of the extra week, positive mix and pricing. Revenue growth was strong across multiple categories, including coffee, meats, biscuits and cereals. Ongoing volume was up 7.3%, but was approximately flat excluding the impact of the extra week, as growth in meat and cheese was offset by the impact of the company's SKU reduction program. Operating companies income decreased 3.4% to $915 million, as higher commodity costs net of pricing, increased restructuring and impairment charges and higher post-employment benefit costs were partially offset by productivity and restructuring savings, the benefit of the extra week and favorable currency of $9 million. INTERNATIONAL FOOD 2005 Full-Year Results For the full year 2005, net revenues for Kraft International Commercial (KIC KIC Kuwait Investment Company KIC Keep in Contact (alumni programme of Deutsche Post World Net) KIC Ketchikan Indian Community (Ketchikan, Alaska) KIC Keep It Coming ) increased 7.0% to $10.8 billion, reflecting growth in both the Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Middle East & Africa and the Latin America &
Asia Pacific segments, favorable currency of $361 million and the
benefit of the extra week. Ongoing volume was down 0.6%, or
approximately 3% adjusted for the impact of the extra week. Operating
companies income increased 20.3% to $1.1 billion, benefiting from lower
restructuring and impairment charges, a gain on sale of brands and
related assets, positive mix, favorable currency of $59 million and the
benefit of the extra week, partially offset by higher commodity costs
net of pricing, increased developing market infrastructure costs and
lost income from divestitures.2005 Fourth-Quarter Results For the fourth quarter of 2005, net revenues for KIC were up 8.1% to $3.2 billion, benefiting from favorable currency of $24 million and the benefit of the extra week, and driven by positive mix and pricing, partially offset by the impact of divestitures. Revenues grew in most developing markets with particularly strong growth in Eastern Europe. Ongoing volume was up 0.7%, but was down approximately 6% excluding the additional week, reflecting the impact of pricing actions, particularly in coffee and chocolate chocolate, general term for the products of the seeds of the cacao or chocolate tree, used for making beverages or confectionery. The flavor of chocolate depends not only on the quality of the cocoa nibs (the remainder after the seeds are fermented, dried, and in the EU, product re-sizing, particularly in Latin America, and the company's SKU reduction program. Operating companies income increased 10.0% to $330 million, driven by lower restructuring and impairment charges, positive mix, favorable currency of $8 million and the benefit of the extra week, partially offset by a loss on sale of brands and related assets and lost income from divestitures. FINANCIAL SERVICES The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. 2005 Full-Year and Fourth-Quarter Results Philip Morris Capital Corporation (PMCC) reported operating companies income of $31 million for the full year 2005 and $41 million for the fourth quarter of 2005, versus operating companies income of $144 million for the full year 2004 and an operating companies loss of $106 million for the fourth quarter of 2004. Results for the full year 2005 include a $200 million increase to the provision for losses related to the troubled airline industry in the third quarter of 2005, an increase of $60 million over the prior year's fourth quarter provision, and lower gains from asset sales partially offset by lower interest expense. Consistent with its strategic shift in 2003, PMCC is focused on managing its existing portfolio of finance assets in order to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. gains and generate cash flow from asset sales and related activities. PMCC is no longer making new investments and expects that its operating companies income will fluctuate over time as investments mature or are sold. Altria Group, Inc. Profile Altria Group, Inc. owns approximately 87.2% of the outstanding common shares of Kraft Foods Inc. and 100% of the outstanding common shares of Philip Morris International Inc., Philip Morris USA Inc. and Philip Morris Capital Corporation. In addition, Altria Group, Inc. owns 28.7% of SABMiller plc. The brand portfolio of Altria Group, Inc.'s consumer packaged goods Noun 1. packaged goods - groceries that are packaged for sale foodstuff, grocery - (usually plural) consumer goods sold by a grocer plural, plural form - the form of a word that is used to denote more than one companies includes such well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. names as Kraft, Jacobs, L&M, Marlboro, Maxwell House Maxwell House is a brand of coffee manufactured by a like-named division of Kraft Foods. It is named in honor of the Maxwell House Hotel in Nashville, Tennessee. For many years until the late 1980s it was the largest-selling coffee in the U.S. and is currently (ca. , Nabisco, Oreo, Oscar Mayer Oscar Mayer is an American meat and cold cut production company, now owned by Kraft Foods, known for its hot dogs, bologna, bacon and Lunchables products. German immigrant Oscar Ferdinand Mayer , Parliament, Philadelphia Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. , Post and Virginia Slims. Altria Group, Inc. recorded 2005 net revenues of $97.9 billion. Trademarks and service marks mentioned in this release are the registered property of, or licensed by, the subsidiaries of Altria Group, Inc. A complete copy of Altria Group, Inc.'s audited 2005 financial statements will be available through Altria Group, Inc.'s Web site after they are filed with the Securities and Exchange Commission on or about February February: see month. 7, 2006. If you do not have Internet access See how to access the Internet. but would like to receive a copy of the 2005 audited financial statements for Altria Group, Inc., please call toll free (800) 367-5415 in the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of to request a copy. Forward-Looking and Cautionary Statements This press release contains projections of future results and other forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 changing prices for raw materials; intense price competition; changes in consumer preferences and demand for their products; fluctuations in levels of customer inventories; the effects of foreign economies and local economic and market conditions; and unfavorable currency movements or changes to income tax laws. 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; 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 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. , including risks associated with adverse jury and judicial determinations, courts reaching conclusions at variance var·i·ance n. 1. a. The act of varying. b. The state or quality of being variant or variable; a variation. c. A difference between what is expected and what actually occurs. 2. with the company's understanding of applicable law, bonding requirements and the absence of adequate appellate Relating to appeals; reviews by superior courts of decisions of inferior courts or administrative agencies and other proceedings. remedies rem·e·dy n. pl. rem·e·dies 1. Something, such as medicine or therapy, that relieves pain, cures disease, or corrects a disorder. 2. Something that corrects an evil, fault, or error. 3. 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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. Altria Group, Inc. and its subsidiaries are subject to other risks detailed from time to time in its publicly filed documents, including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the period ended December 31, 2004 and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended September September: see month. 30, 2005. 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.
ALTRIA GROUP, INC. Schedule 1
and Subsidiaries
Condensed Statements of Earnings
For the Quarters Ended December 31,
(in millions, except per share data)
(Unaudited)
2005 2004 % Change
---------------------------------
Net revenues $ 24,490 $ 22,380 9.4 %
Cost of sales 9,877 9,030 9.4 %
Excise taxes on products (*) 6,663 6,016 10.8 %
----------------------
Gross profit 7,950 7,334 8.4 %
Marketing, administration and
research costs 3,745 3,394
Domestic tobacco headquarters
relocation charges 1 6
Asset impairment and exit costs 307 159
Losses (gains) on sales of
businesses, net 7 (5)
Provision for airline industry
exposure - 140
----------------------
Operating companies income 3,890 3,640 6.9 %
Amortization of intangibles 14 5
General corporate expenses 237 158
Asset impairment and exit costs 9 29
----------------------
Operating income 3,630 3,448 5.3 %
Interest and other debt expense, net 250 291
----------------------
Earnings from continuing operations
before income taxes, minority
interest, and equity earnings, net 3,380 3,157 7.1 %
Provision for income taxes 1,037 1,121 (7.5)%
----------------------
Earnings from continuing operations
before minority interest and equity
earnings, net 2,343 2,036 15.1 %
Minority interest in earnings from
continuing operations, and equity
earnings, net 54 46
----------------------
Earnings from continuing operations 2,289 1,990 15.0 %
(Loss) earnings from discontinued
operations, net of income taxes and
minority interest(**) - (43)
----------------------
Net earnings $ 2,289 $ 1,947 17.6 %
======================
Per share data(***):
Basic earnings per share from
continuing operations $ 1.10 $ 0.97 13.4 %
Basic earnings per share from
discontinued operations $ - $ (0.02)
----------------------
Basic earnings per share $ 1.10 $ 0.95 15.8 %
======================
Diluted earnings per share from
continuing operations $ 1.09 $ 0.96 13.5 %
Diluted earnings per share from
discontinued operations $ - $ (0.02)
----------------------
Diluted earnings per share $ 1.09 $ 0.94 16.0 %
======================
Weighted average number of
shares outstanding - Basic 2,078 2,052 1.3 %
- Diluted 2,098 2,068 1.5 %
(*) The detail of excise taxes on products sold is as follows:
2005 2004
----------------------
Domestic tobacco $ 898 $ 930
International tobacco 5,765 5,086
----------------------
Total excise taxes $ 6,663 $ 6,016
======================
(**) In 2004 discontinued operations includes $(59) from impairment
loss, and $16 of earnings, net of minority interest.
(***) Basic and diluted earnings per share are computed for each of
the periods presented. Accordingly, the sum of the quarterly
earnings per share amounts may not agree to the year-to-date
amounts.
ALTRIA GROUP, INC. Schedule 2
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended December 31,
(in millions)
(Unaudited)
North
Domestic International American International
tobacco tobacco food food
----------------------------------------------------
2005 Net Revenues $ 4,467 $ 10,303 $ 6,438 $ 3,225
2004 Net Revenues 4,420 9,113 5,801 2,983
% Change 1.1% 13.1% 11.0% 8.1%
Reconciliation:
---------------
2004 Net Revenues $ 4,420 $ 9,113 $ 5,801 $ 2,983
Divested
businesses - 2004 - - (38) (31)
Divested
businesses - 2005 - - - 4
Implementation -
2004 - - 2 -
Implementation -
2005 - - (1) -
Acquired
businesses - 582 - -
Currency - 68 44 24
Operations 47 540 630 245
----------------------------------------------------
2005 Net Revenues $ 4,467 $ 10,303 $ 6,438 $ 3,225
====================================================
Financial
services Total
--------------------------
2005 Net Revenues $ 57 $ 24,490
2004 Net Revenues 63 22,380
% Change (9.5)% 9.4%
Reconciliation:
---------------
2004 Net Revenues $ 63 $ 22,380
Divested
businesses - 2004 - (69)
Divested
businesses - 2005 - 4
Implementation -
2004 - 2
Implementation -
2005 - (1)
Acquired
businesses - 582
Currency - 136
Operations (6) 1,456
--------------------------
2005 Net Revenues $ 57 $ 24,490
==========================
Note: The detail of excise taxes on products sold is as follows:
2005 2004
-------------------------
Domestic tobacco $ 898 $ 930
International
tobacco 5,765 5,086
-------------------------
Total excise taxes $ 6,663 $ 6,016
=========================
Currency increased international tobacco excise taxes by $46 million.
ALTRIA GROUP, INC. Schedule 3
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended December 31,
(in millions)
(Unaudited)
North
Domestic International American International
tobacco tobacco food food
----------------------------------------------------
2005 Operating
Companies Income $ 1,080 $ 1,524 $ 915 $ 330
2004 Operating
Companies Income 1,076 1,423 947 300
% Change 0.4% 7.1% (3.4)% 10.0%
Reconciliation:
---------------
2004 Operating
Companies Income $ 1,076 $ 1,423 $ 947 $ 300
Divested
businesses - 2004 - - (7) (10)
Domestic tobacco
headquarters
relocation
charges - 2004 6 - - -
Asset impairment
and exit costs -
2004 - 20 102 37
Gains on sales of
businesses - 2004 - - - (5)
Investment
impairment - 2004 - - - 47
Implementation
costs - 2004 - - 27 6
Provision for
airline industry
exposure - 2004 - - - -
----------------------------------------------------
6 20 122 75
----------------------------------------------------
Divested
businesses - 2005 - - - 1
Domestic tobacco
headquarters
relocation
charges - 2005 (1) - - -
Asset impairment
and exit costs -
2005 - (33) (211) (63)
Losses on sales of
businesses - 2005 - - - (7)
Implementation
costs - 2005 - - (12) (14)
----------------------------------------------------
(1) (33) (223) (83)
----------------------------------------------------
Acquired
businesses - 121 - -
Currency - (11) 9 8
Operations (1) 4 60 30
----------------------------------------------------
2005 Operating
Companies Income $ 1,080 $ 1,524 $ 915 $ 330
====================================================
Financial
services Total
-------------------------
2005 Operating
Companies Income $ 41 $ 3,890
2004 Operating
Companies Income (106) 3,640
% Change NA 6.9%
Reconciliation:
---------------
2004 Operating
Companies Income $ (106) $ 3,640
Divested
businesses - 2004 - (17)
Domestic tobacco
headquarters
relocation
charges - 2004 - 6
Asset impairment
and exit costs -
2004 - 159
Gains on sales of
businesses - 2004 - (5)
Investment
impairment - 2004 - 47
Implementation
costs - 2004 - 33
Provision for
airline industry
exposure - 2004 140 140
-------------------------
140 363
-------------------------
Divested
businesses - 2005 - 1
Domestic tobacco
headquarters
relocation
charges - 2005 - (1)
Asset impairment
and exit costs -
2005 - (307)
Losses on sales of
businesses - 2005 - (7)
Implementation
costs - 2005 - (26)
-------------------------
- (340)
-------------------------
Acquired
businesses - 121
Currency - 6
Operations 7 100
-------------------------
2005 Operating
Companies Income $ 41 $ 3,890
=========================
ALTRIA GROUP, INC. Schedule 4
and Subsidiaries
Condensed Statements of Earnings
For the Twelve Months Ended December 31,
(in millions, except per share data)
(Unaudited)
2005 2004 % Change
---------------------------------
Net revenues $ 97,854 $ 89,610 9.2 %
Cost of sales 36,764 33,959 8.3 %
Excise taxes on products (*) 28,934 25,647 12.8 %
----------------------
Gross profit 32,156 30,004 7.2 %
Marketing, administration and
research costs 14,078 13,014
Domestic tobacco headquarters
relocation charges 4 31
Domestic tobacco loss on U.S. tobacco
pool 138 -
Domestic tobacco quota buy-out (115) -
International tobacco E.C. agreement - 250
Asset impairment and exit costs 569 648
(Gains) losses on sales of
businesses, net (108) 3
Provision for airline industry
exposure 200 140
----------------------
Operating companies income 17,390 15,918 9.2 %
Amortization of intangibles 28 17
General corporate expenses 721 651
Asset impairment and exit costs 49 70
----------------------
Operating income 16,592 15,180 9.3 %
Interest and other debt expense, net 1,157 1,176
----------------------
Earnings from continuing operations
before income taxes, minority
interest, and equity earnings, net 15,435 14,004 10.2 %
Provision for income taxes 4,618 4,540 1.7 %
----------------------
Earnings from continuing operations
before minority interest and equity
earnings, net 10,817 9,464 14.3 %
Minority interest in earnings from
continuing operations, and equity
earnings, net 149 44
----------------------
Earnings from continuing operations 10,668 9,420 13.2 %
(Loss) earnings from discontinued
operations, net of income taxes and
minority interest(**) (233) (4)
----------------------
Net earnings $ 10,435 $ 9,416 10.8 %
======================
Per share data (***):
Basic earnings per share from
continuing operations $ 5.15 $ 4.60 12.0 %
Basic earnings per share from
discontinued operations $ (0.11)$ -
----------------------
Basic earnings per share $ 5.04 $ 4.60 9.6 %
======================
Diluted earnings per share from
continuing operations $ 5.10 $ 4.57 11.6 %
Diluted earnings per share from
discontinued operations $ (0.11)$ (0.01)
----------------------
Diluted earnings per share $ 4.99 $ 4.56 9.4 %
======================
Weighted average number of
shares outstanding - Basic 2,070 2,047 1.1 %
- Diluted 2,090 2,063 1.3 %
(*) The detail of excise taxes on products sold is as follows:
2005 2004
----------------------
Domestic tobacco $ 3,659 $ 3,694
International tobacco 25,275 21,953
----------------------
Total excise taxes $ 28,934 $ 25,647
======================
(**) Discontinued operations 2005 includes $(255) from loss on sale,
and $22 of earnings, net of minority interest impact. In 2004
discontinued operations includes $(59) from impairment loss, and
$55 of earnings, net of minority interest impact.
(***) Basic and diluted earnings per share are computed for each of
the periods presented. Accordingly, the sum of the quarterly
earnings per share amounts may not agree to the year-to-date
amounts.
ALTRIA GROUP, INC. Schedule 5
and Subsidiaries
Selected Financial Data by Business Segment
For the Twelve Months Ended December 31,
(in millions)
(Unaudited)
North
Domestic International American International
tobacco tobacco food food
----------------------------------------------------
2005 Net Revenues $ 18,134 $ 45,288 $ 23,293 $ 10,820
2004 Net Revenues 17,511 39,536 22,060 10,108
% Change 3.6% 14.5% 5.6% 7.0%
Reconciliation:
---------------
2004 Net Revenues $ 17,511 $ 39,536 $ 22,060 $ 10,108
Divested
businesses - 2004 - - (166) (108)
Divested
businesses - 2005 - - 69 31
Implementation -
2004 - - 7 -
Implementation -
2005 - - (2) -
Acquired
businesses - 1,604 41 1
Currency - 1,515 172 361
Operations 623 2,633 1,112 427
----------------------------------------------------
2005 Net Revenues $ 18,134 $ 45,288 $ 23,293 $ 10,820
====================================================
Financial
services Total
--------------------------
2005 Net Revenues $ 319 $ 97,854
2004 Net Revenues 395 89,610
% Change (19.2)% 9.2%
Reconciliation:
---------------
2004 Net Revenues $ 395 $ 89,610
Divested
businesses - 2004 - (274)
Divested
businesses - 2005 - 100
Implementation -
2004 - 7
Implementation -
2005 - (2)
Acquired
businesses - 1,646
Currency - 2,048
Operations (76) 4,719
--------------------------
2005 Net Revenues $ 319 $ 97,854
==========================
Note: The detail of excise taxes on products sold is as follows:
2005 2004
-------------------------
Domestic tobacco $ 3,659 $ 3,694
International
tobacco 25,275 21,953
-------------------------
Total excise taxes $ 28,934 $ 25,647
=========================
Currency increased international tobacco excise taxes by $939
million.
ALTRIA GROUP, INC. Schedule 6
and Subsidiaries
Selected Financial Data by Business Segment
For the Twelve Months Ended December 31,
(in millions)
(Unaudited)
North
Domestic International American International
tobacco tobacco food food
----------------------------------------------------
2005 Operating
Companies Income $ 4,581 $ 7,825 $ 3,831 $ 1,122
2004 Operating
Companies Income 4,405 6,566 3,870 933
% Change 4.0% 19.2% (1.0)% 20.3%
Reconciliation:
---------------
2004 Operating
Companies Income $ 4,405 $ 6,566 $ 3,870 $ 933
Divested
businesses - 2004 - - (11) (28)
Domestic tobacco
headquarters
relocation
charges - 2004 31 - - -
International
tobacco E.C.
agreement - 2004 - 250 - -
Asset impairment
and exit costs -
2004 1 44 391 212
Loss on sales of
businesses - 2004 - - - 3
Investment
impairment - 2004 - - - 47
Implementation
costs - 2004 - - 40 10
Provision for
airline industry
exposure - 2004 - - - -
---------------------------------------------------
32 294 420 244
---------------------------------------------------
Divested
businesses - 2005 - - 2 4
Domestic tobacco
headquarters
relocation
charges - 2005 (4) - - -
Domestic tobacco
loss on U.S.
tobacco pool -
2005 (138) - - -
Domestic tobacco
quota buy-out -
2005 115 - - -
Asset impairment
and exit costs -
2005 - (90) (335) (144)
(Losses) / Gains
on sales of
businesses - 2005 - - (1) 109
Implementation
costs - 2005 - - (55) (32)
Provision for
airline industry
exposure - - - -
----------------------------------------------------
(27) (90) (389) (63)
----------------------------------------------------
Acquired
businesses - 341 - -
Currency - 331 31 59
Operations 171 383 (101) (51)
----------------------------------------------------
2005 Operating
Companies Income $ 4,581 $ 7,825 $ 3,831 $ 1,122
====================================================
Financial
services Total
--------------------------
2005 Operating
Companies Income $ 31 $ 17,390
2004 Operating
Companies Income 144 15,918
% Change (78.5)% 9.2%
Reconciliation:
---------------
2004 Operating
Companies Income $ 144 $ 15,918
Divested
businesses - 2004 - (39)
Domestic tobacco
headquarters
relocation
charges - 2004 - 31
International
tobacco E.C.
agreement - 2004 - 250
Asset impairment
and exit costs -
2004 - 648
Loss on sales of
businesses - 2004 - 3
Investment
impairment - 2004 - 47
Implementation
costs - 2004 - 50
Provision for
airline industry
exposure - 2004 140 140
--------------------------
140 1,130
--------------------------
Divested
businesses - 2005 - 6
Domestic tobacco
headquarters
relocation
charges - 2005 - (4)
Domestic tobacco
loss on U.S.
tobacco pool -
2005 - (138)
Domestic tobacco
quota buy-out -
2005 - 115
Asset impairment
and exit costs -
2005 - (569)
(Losses) / Gains
on sales of
businesses - 2005 - 108
Implementation
costs - 2005 - (87)
Provision for
airline industry
exposure (200) (200)
--------------------------
(200) (769)
--------------------------
Acquired
businesses - 341
Currency - 421
Operations (53) 349
--------------------------
2005 Operating
Companies Income $ 31 $ 17,390
==========================
ALTRIA GROUP, INC. Schedule 7
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Quarters Ended December 31,
($ in millions, except per share data)
(Unaudited)
Net Diluted
Earnings E.P.S. (*)
-------------- --------------
2005 Continuing Earnings $ 2,289 $ 1.09
2004 Continuing Earnings $ 1,990 $ 0.96
% Change 15.0 % 13.5 %
Reconciliation:
---------------
2004 Continuing Earnings $ 1,990 $ 0.96
2004 Domestic tobacco headquarters
relocation charges 4 -
2004 Asset impairment, exit and
implementation costs, net of
minority interest impact 122 0.06
2004 Gain on sales of business, net
of minority interest impact (3) -
2004 Corporate asset impairment and
exit costs 19 0.01
2004 Investment impairment, net of
minority interest impact 26 0.01
2004 Provision for airline industry
exposure 85 0.04
2004 Tax items, net of minority
interest impact (4) -
-------------- --------------
249 0.12
-------------- --------------
2005 Asset impairment, exit and
implementation costs, net of
minority interest impact (198) (0.10)
2005 Loss on sales of businesses,
net of minority interest impact (4) -
2005 Corporate asset impairment and
exit costs (6) -
2005 Tax items, net of minority
interest impact 51 0.02
-------------- --------------
(157) (0.08)
-------------- --------------
Currency 5 -
Change in shares - (0.01)
Change in tax rate 106 0.05
Operations 96 0.05
-------------- --------------
2005 Continuing Earnings $ 2,289 $ 1.09
-------------- --------------
2005 Discontinued Earnings $ - $ -
-------------- --------------
2005 Net Earnings $ 2,289 $ 1.09
============== ==============
(*) Basic and diluted earnings per share are computed for each of the
periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.
ALTRIA GROUP, INC. Schedule 8
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Twelve Months Ended December 31,
($ in millions, except per share data)
(Unaudited)
Net Diluted
Earnings E.P.S. (*)
-------------- --------------
2005 Continuing Earnings $ 10,668 $ 5.10
2004 Continuing Earnings $ 9,420 $ 4.57
% Change 13.2 % 11.6 %
Reconciliation:
---------------
2004 Continuing Earnings $ 9,420 $ 4.57
2004 Domestic tobacco headquarters
relocation charges 20 0.01
2004 Asset impairment, exit and
implementation costs, net of
minority interest impact 401 0.19
2004 International tobacco E.C.
agreement 161 0.08
2004 Loss on sales of businesses,
net of minority interest impact 2 -
2004 Corporate asset impairment and
exit costs 45 0.02
2004 Investment impairment, net of
minority interest impact 26 0.01
2004 Provision for airline industry
exposure 85 0.04
2004 Tax items, net of minority
interest impact (419) (0.20)
2004 Gains from investments at
SABMiller (111) (0.05)
-------------- --------------
210 0.10
-------------- --------------
2005 Domestic tobacco headquarters
relocation charges (2) -
2005 Domestic tobacco loss on U.S.
tobacco pool (87) (0.04)
2005 Domestic tobacco quota buy-out 72 0.03
2005 Asset impairment, exit and
implementation costs, net of
minority interest impact (393) (0.19)
2005 Gains on sales of businesses,
net of minority interest impact 60 0.03
2005 Corporate asset impairment and
exit costs (33) (0.02)
2005 Provision for airline industry
exposure (129) (0.06)
2005 Tax items, net of minority
interest impact 521 0.25
-------------- --------------
9 -
-------------- --------------
Currency 272 0.13
Change in shares - (0.07)
Change in tax rate 332 0.16
Operations 425 0.21
-------------- --------------
2005 Continuing Earnings $ 10,668 $ 5.10
-------------- --------------
2005 Discontinued Earnings $ (233) $ (0.11)
-------------- --------------
2005 Net Earnings $ 10,435 $ 4.99
============== ==============
(*) Basic and diluted earnings per share are computed for each of the
periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.
ALTRIA GROUP, INC. Schedule 9
and Subsidiaries
Condensed Balance Sheets
(in millions, except ratios)
(Unaudited)
December 31, December 31,
2005 2004
------------ ------------
Assets
------
Cash and cash equivalents $ 6,258 $ 5,744
Assets of discontinued operations held for
sale - 1,458
All other current assets 19,523 18,699
Property, plant and equipment, net 16,678 16,305
Goodwill 31,219 28,056
Other intangible assets, net 12,196 11,056
Other assets 14,667 12,485
------------ ------------
Total consumer products assets 100,541 93,803
Total financial services assets 7,408 7,845
------------ ------------
Total assets $ 107,949 $ 101,648
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Short-term borrowings $ 2,836 $ 2,546
Current portion of long-term debt 3,430 1,751
Accrued settlement charges 3,503 3,501
All other current liabilities 16,389 15,776
Long-term debt 15,653 16,462
Deferred income taxes 8,492 8,295
Other long-term liabilities 13,813 14,287
------------ ------------
Total consumer products liabilities 64,116 62,618
Total financial services liabilities 8,126 8,316
------------ ------------
Total liabilities 72,242 70,934
Total stockholders' equity 35,707 30,714
------------ ------------
Total liabilities and
stockholders' equity $ 107,949 $ 101,648
============ ============
Total consumer products debt $ 21,919 $ 20,759
Debt/equity ratio - consumer products 0.61 0.68
Total debt $ 23,933 $ 22,980
Total debt/equity ratio 0.67 0.75
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