Altria Group, Inc. Reports 2005 Second-Quarter Results; Diluted Earnings Per Share from Continuing Operations Up 11.1% to $1.40 vs. $1.26 in Year-Ago Quarter, Including the Items Detailed on Schedule 7.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): --Earnings 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 11.7% to $2.9 Billion --2005 Full-Year Forecast for 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 Revised to Range of $5.00 to $5.10, up $0.05 from Previous Forecast Altria Group, Inc. (NYSE: MO) today announced second-quarter 2005 diluted earnings per share from continuing operations of $1.40, including the charges and gains detailed on Schedule 7, versus $1.26 in the same quarter a year ago. "Solid second-quarter results were in line with our expectations and we look forward to a good second half of the year," 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. "I am pleased that the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. earnings impact of 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 International's acquisition 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. , supplemented by an income tax benefit, will more than offset the adverse effect of the recent appreciation of the dollar, allowing us to raise our guidance for the year." "Both our domestic and international tobacco businesses continued to perform strongly. 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. , in particular, had a robust quarter with widespread progress overwhelming a few key market challenges, which are being addressed," Mr. Camilleri Camilleri is a surname. People with Camilleri as a surname
Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. results." 2005 Full-Year Forecast Altria Group, Inc. is projecting 2005 full-year diluted earnings per share from continuing operations in a range of $5.00 to $5.10, reflecting an increase of $0.05 versus previous guidance and growth of 9.4% to 11.6% versus $4.57 earned in 2004. The increase in guidance reflects the impact of the previously announced acquisition of PT HM 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. Tbk TBK - Tool Builder Kit (Sampoerna), which is projected to increase 2005 diluted earnings per share by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.03 to $0.04. This new 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. also includes a favorable $0.10 per share tax benefit 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, partially offset by an increase of approximately $0.01 to $0.02 in the anticipated cost of the USA pool tobacco 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. and $0.07 in lower currency benefit than originally estimated. The new projection continues to include Kraft restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $0.12 per share, but excludes any benefit that may be derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the potential 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 prior year 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. accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. contributions to the National Tobacco Grower Settlement Trust, pending the outcome of 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. . 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. Acquisitions and Divestitures In May 2005, a subsidiary of PMI See Private Mortgage Insurance. completed the acquisition of 98% of the outstanding shares of Sampoerna, an Indonesian tobacco company. The total cost of the transaction was approximately $4.8 billion, including Sampoerna's debt of approximately $200 million. During the second quarter, PMI also acquired a 97.9% stake in Coltabaco for approximately $300 million. Coltabaco is the largest tobacco company in 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. , with a 48% market share. In June June: see month. 2005, 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) completed the sale of substantially all of its sugar confectionery confectionery, delicacies or sweetmeats that have sugar as a principal ingredient, combined with coloring matter and flavoring and often with fruit or nuts. In the United States it is usually called candy, in Great Britain, sweets or boiled sweets. business for approximately $1.5 billion. The sale included the Life Savers Savers, Inc. headquartered in Bellevue, Wash., is a privately held for-profit thrift store chain offering the best in secondhand shopping. An international company, Savers has more than 200 locations throughout the United States, Canada and Australia, and receives its merchandise , Creme n. 1. Cream; - a term used esp. in cookery, names of liqueurs, etc. Savers, Altoids Altoids are a brand of breath mints that have existed since the turn of the 19th century. Somewhat uniquely, Altoids are far less popular in their country of origin than in the markets they are exported to - Altoids are produced in Britain yet are virtually unheard of there. , Trolli Trolli is a brand of gummies introduced by German candy manufacturer Mederer Corporation in 1981, and is now manufactured by Farley's & Sathers Candy Company, Inc. and Sugus brands. Altria has reflected the results of Kraft's sugar confectionery business as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. on 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. 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: statements of earnings for the six months and three months ended June 30, 2005 and 2004. The assets related to the sugar confectionery business were reflected as assets of discontinued operations held for sale on the consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. at December December: see month. 31, 2004. As a result of the sale, Kraft recorded a net loss on sale of discontinued operations of $297 million in the second quarter of 2005, related largely to taxes on the transaction. Altria's share of the net loss, net of minority interest, was $255 million. Kraft also completed the sale of its fruit snacks Fruit snack is a processed snack food made from fruit, sugar, and/or other natural and artificial flavors and colors. Many fruit snacks are high in vitamin C. They tend to be more healthy than candy but less healthy than actual fruit. business during the second quarter of 2005 for approximately $30 million. American Jobs Creation Act At the end of June, Altria Group, Inc. finalized See finalization. its plan to repatriate repatriate To bring home assets that are currently held in a foreign country. Domestic corporations are frequently taxed on the profits that they repatriate, a factor inducing the firms to leave overseas the profits earned there. $6.0 billion of earnings under the provisions of the American Jobs Creation Act. Deferred taxes had previously been provided for a portion of the dividends to be remitted. Their reversal more than offset the tax costs tax costs n. a motion to contest a claim for court costs submitted by a prevailing party in a lawsuit. It is called a "Motion to Tax Costs" and asks the judge to deny or reduce claimed costs. to repatriate the earnings and resulted in a net tax reduction of $209 million ($0.10 per share) in the consolidated income tax provision during the second quarter. A conference call with members of the investment community will be Webcast at 9:00 a.m. Eastern Time on July July: see month. 20, 2005. Access is available at www.altria.com. ALTRIA GROUP, INC. Prior-period results for Altria Group, Inc. have been restated to reflect the impact of discontinued operations, following Kraft's agreement on November November: see month. 15, 2004, to sell its sugar confectionery business. As such, net revenues and operating companies operating company A business that engages in transactions with outsiders. income for the sugar confectionery business are excluded from the company's results, while the net earnings impact is included as a single line item. All references in this news release are to continuing operations, unless otherwise noted. 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 2004 Annual Report, management reviews operating companies 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 Statements of Earnings contained in this release. 2005 Second-Quarter Results Net revenues for the second quarter of 2005 increased 8.3% versus 2004 to $24.8 billion, including favorable currency of $797 million. Operating income increased 15.1% to $4.5 billion, reflecting a favorable comparison to the second quarter of 2004 when PMI recorded a $250 million initial charge for the international tobacco agreement with the European Community European Community: see European Union. European Community (EC) Organization formed in 1967 with the merger of the European Economic Community, European Coal and Steel Community, and European Atomic Energy Community. (EC), as well as lower 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. and exit costs, primarily for the food business 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). , and higher results from operations at Philip Morris USA (PM USA) and Philip Morris International (PMI). Also affecting operating income comparisons were favorable currency of $159 million and the other items described in the attached reconciliation on Schedule 3. Earnings from continuing operations increased 11.7% to $2.9 billion, due primarily to increases at PM USA and PMI, the impact of the international tobacco agreement initial charge in 2004, lower asset impairment and exit costs in 2005 and favorable currency, partially offset by a higher effective tax rate of 28.7% in the second quarter of 2005 compared to 26.5% in 2004. The effective tax rate comparison reflects the previously mentioned $209 million benefit related to the dividend repatriation under the American Jobs Creation Act in 2005, and the reversal of $320 million 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 due to tax events during the second quarter of 2004. Net earnings, which include the loss from discontinued operations as detailed on Schedule 1, increased 1.5% to $2.7 billion. Diluted earnings per share, including discontinued operations as detailed on Schedule 1, increased 0.8% to $1.28. During the second quarter of 2005, Altria Group, Inc. declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a regular quarterly dividend of $0.73 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 $2.92 per common share. DOMESTIC TOBACCO 2005 Second-Quarter Results Philip Morris USA Inc. (PM USA), Altria Group, Inc.'s domestic tobacco business, achieved solid income growth and strong share performance for its focus brands. Shipment volume of 49.3 billion units was up 1.4% from the previous year, but was essentially flat when adjusted for the timing of promotional shipments and the timing of trade purchases in advance of the July 4th holiday. Premium mix for PM USA increased by 0.1 percentage point to 91.6%. Operating companies income increased 4.0%, to $1.3 billion, primarily driven by higher volume and lower wholesale promotional allowance rates, partially offset by expenses related to the 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 legislation and higher spending for R&D. As shown in the following table, PM USA's total retail share improved in the second quarter of 2005, driven by Marlboro and Parliament in the premium category. In a highly competitive environment, retail share also increased for Basic in the discount category.
Philip Morris USA Quarterly Retail Share*
-----------------------------------------
Q2 2005 Q2 2004 Change
------- ------- -------
Marlboro 40.0% 39.6% 0.4 pp
Parliament 1.7% 1.6% 0.1 pp
Virginia Slims 2.3% 2.3% 0.0 pp
Basic 4.3% 4.2% 0.1 pp
------- ------- -------
Focus Brands 48.3% 47.7% 0.6 pp
Other Philip Morris USA 1.7% 2.1% -0.4 pp
------- ------- -------
Total Philip Morris 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 maintained its share of the premium category at 62.0% in the second quarter versus the year-ago period. In the discount category, PM USA's share increased 0.4 share points to 16.4%, driven by Basic. For the total industry, the premium category increased 0.3 points to 73.7% in the second quarter of 2005, while the discount category declined to 26.3%. Within this, the deep discount category of the industry, which includes both major manufacturers' private label brands and all other manufacturers' discount brands, was up 0.1 point to 11.8%. During the third quarter, PM USA will begin test marketing Parliament Blue. Featuring contemporary new packaging, Parliament Blue will be available at retail stores in the test market beginning in late August. INTERNATIONAL TOBACCO 2005 Second-Quarter Results 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 Inc. (PMI), Altria Group, Inc.'s international tobacco business, increased 5.0% to 202.4 billion units, fueled by growth 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 & Africa and acquisitions in Indonesia and Colombia, partially offset by lower shipments in Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). . Excluding acquisitions, PMI's cigarette shipment volume increased 1.6% versus the same period a year ago. PMI's total tobacco volume, which includes 1.6 billion units (cigarette equivalents) of other tobacco products (OTPs), grew 5.5% versus the prior year quarter, and 2.1% excluding acquisitions. Operating companies income rose 37.9% to $2.0 billion. The growth was attributed to a favorable comparison with the second quarter of 2004 when PMI recorded the initial $250 million charge for the EC tobacco agreement, higher pricing, favorable currency of $136 million, the impact of acquisitions and higher margin in Japan resulting from the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the license agreement with Japan Tobacco. Those increases were partially offset by unfavorable mix, higher R&D and selling expenses, and expenses related to the EC agreement. PMI achieved widespread market share gains, particularly in 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, Indonesia, 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. , 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 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. , Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. , 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). , Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. , 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, Ukraine Ukraine (y  `krān, ykrān`), Ukr. Ukraina, republic (2005 est. pop. and the United Kingdom.Total Marlboro cigarette shipments increased 3.2% in the second quarter, principally resulting from the timing of shipments to Japan, which more than offset decreases 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). . Excluding the timing of shipments to Japan, Marlboro cigarette shipments were down slightly. Marlboro share increased in many markets, including Egypt, France, Japan, Korea, Netherlands, 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, 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. , Switzerland, Thailand, Turkey, Ukraine and the United Kingdom. In Western Europe, PMI's cigarette volume declined 4.7%, caused mainly by Germany and Italy. However, PMI's overall market share grew 0.5 share points to 38.9%. In Germany, the combined industry consumption of cigarettes and OTPs was essentially equal to the prior year. Although total cigarette volume declined by 2.6 billion units or 9.1%, this was offset by an increase of 2.6 billion units of OTPs, principally tobacco portions. In the second quarter, PMI's total tobacco volume (cigarettes and OTPs) in Germany declined 4.1%, with cigarette volume down 9.7%, while OTP (1) (One Time Programmable) Refers to programming content or logic into chips such as EPROMs and EEPROMs, which cannot be reversed. See antifuse. (2) (One Time P volume more than doubled to 1.1 billion units. PMI's share of total tobacco consumption declined 1.2 points to 28.8% compared to the second quarter of 2004, although share increased 0.7 points compared to the first quarter of 2005. PMI's cigarette industry share of 36.9% declined 0.3 points versus the prior-year quarter, but recorded a sequential One after the other in some consecutive order such as by name or number. share increase for the second successive quarter. Within the OTP segment, PMI's share grew to 9.7%, compared to 6.0% in the same quarter last year. Share of tobacco portions for PMI climbed 5.8 points to 14.1% in the second quarter of 2005. Despite the challenging cigarette industry and economic environment in Germany, Marlboro's share of the cigarette market has grown in the last two quarters and the brand remains resilient See resiliency. . Additionally, PMI has successfully established Next in both the cigarette and OTP categories. In Italy, the total cigarette market was essentially flat, as effects of the 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 ban moderated due to warmer weather. As anticipated, an inventory reduction of approximately one billion units by PMI's new distributor occurred in the second quarter of 2005, resulting in PMI's cigarette volume declining 6.3%. Absent that reduction and timing of shipments due to other factors, volume in Italy rose approximately 2%. Market share in Italy was up 1.6 points to 52.8%, driven by the continued strong recovery of 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. and improved share performance for both L&M and 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. . In France, cigarette industry volume was unchanged compared to the prior year quarter. Although PMI's shipments were down 3.6% reflecting unfavorable inventory movements, its market share rose 1.9 points to 41.8%, with Marlboro adding 1.4 points to 30.6%. In Spain, the total cigarette market was flat. Shipments for PMI were down 1.3% and market share declined 0.3 points to 34.8%, reflecting increased competition in the lowest price segment, where PMI recently introduced Basic and Next. Marlboro's share, however, grew 0.2 points to 17.1%. In Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. , PMI's volume declined 3.4%, due to the timing of trade purchases in advance of 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 in Romania Romania (rōmān`ēə, –yə) or Rumania (r –), republic (v), 91,699 sq mi (237,500 sq km), SE Europe. and intense competition in the low price segment in 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, , partially
offset by gains in Greece Greece, Gr. Hellas or Ellas, republic (2005 est. pop. 10,668,000), 50,944 sq mi (131,945 sq km), SE Europe. It occupies the southernmost part of the Balkan Peninsula and borders on the Ionian Sea in the west, on the Mediterranean Sea in the south, on and the Czech and Slovak Slo·vak also Slo·va·ki·ann. 1. a. A native or inhabitant of Slovakia. b. A person of Slovak descent. 2. The Slavic language of the Slovaks. adj. Republics. PMI's shipments grew 8.5% in Greece, reflecting the strong performance of Next in the growing low price segment. In the Slovak Republic, shipments were up 17.3%, driven by the strong performances of L&M and Red & White. In worldwide duty-free du·ty-free adj. 1. Exempt from customs duties: duty-free merchandise. 2. Of, relating to, or being a region or establishment in which imported goods are exempt from customs duties: , volume increased 2.9%, due to gains in Turkey, Romania and Bulgaria Bulgaria (bŭlgâr`ēə), Bulgarian Balgarija, officially Republic of Bulgaria, republic (2005 est. pop. 7,450,000), 42,823 sq mi (110,912 sq km), SE Europe, on the E Balkan Peninsula. . In Eastern Europe, the Middle East and Africa, PMI's shipment growth of 12.1% was robust, reflecting gains in Russia, Ukraine, Turkey, Egypt and Saudi Arabia Saudi Arabia (sä `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. . In Russia, double-digit dou·ble-dig·itadj. Being between 10 and 99 percent: double-digit inflation. volume growth was fueled by Marlboro, Parliament, L&M, Chesterfield and 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. , as well as timing of shipments. Market share in Russia was also up, gaining 1.0 point to 27.1%. In Ukraine, volume growth of 21.9% and a market share increase of 1.3 share points to 32.1% were driven by consumer up-trading to PMI's higher-priced international brands. In Turkey, shipment volume was up 10.1%, arising from gains for Marlboro and Parliament, which benefited from reduced price gaps with the mid-price segment, the recent launch of Bond Street and the price repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of Lark. In Japan, volume increased 5.4%, attributed to the timing of shipments as a result of the handover n. 1. The act of relinquishing property or authority etc. to another; as, the handover of occupied territory to the original posssessors; the handover of power from the military back to the civilian authorities s>. of Marlboro from Japan Tobacco to PMI during the quarter. PMI's market share was also up, rising 0.3 points to 24.6%, driven by 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 Rose and Marlboro, reflecting the smooth transition consequent con·se·quent adj. 1. a. Following as a natural effect, result, or conclusion: tried to prevent an oil spill and the consequent damage to wildlife. b. to the expiration of the license agreement with Japan Tobacco. In the rest of Asia, volume increased 25.0%, primarily because of the acquisition of Sampoerna in Indonesia, which contributed volume of 4.4 billion units, and higher shipments in Thailand. These were partially offset by lower volume in Korea stemming from a double-digit decline in the total market as a result of the December 2004 tax-driven price increase. However, PMI's market share in Korea was up 0.5 points to 8.0% on the strength of Marlboro and Lark. 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. , PMI volume increased 5.0%, reflecting the acquisition of Coltabaco in Colombia, 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. , 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. and Mexico. In Argentina, the total market was flat, but smokers are increasingly switching from mid-price brands to low-price products. Reflecting that trend, PMI's volume in Argentina was down due primarily to lower shipments of its mid-price Philip Morris brand. In Mexico, despite a volume decline of 5.7% due to the timing of shipments, PMI's market share was up 0.7 points to 62.3%. FOOD 2005 Second-Quarter Results Yesterday, Kraft Foods Inc. (Kraft) reported 2005 second-quarter results. Kraft's net revenues were up 3.0% to $8.3 billion, due primarily to positive mix, price increases, favorable currency of $185 million and contributions from new products and developing markets, partially offset by the impact of divestitures, weak results in Germany, the shift in Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it timing from April last year to March this year and category declines in the U.S. due to higher retail prices. Ongoing volume was down 1.6%, also reflecting the impacts from the Germany decline, Easter shift and weaker category trends in the U.S., as well as lower shipments of U.S. ready-to-drink beverages due to trade inventory reductions and soft category trends. Operating income increased 3.4% to $1.3 billion, due to lower exit and implementation costs for Kraft's restructuring program, partially offset by the impacts of divested businesses. Excluding those charges, operating income was down as higher commodity costs (net of pricing), increased post-employment benefit costs (primarily pensions) and increased consumer marketing spending were partially offset by positive mix, cost reductions and favorable currency of $23 million. NORTH AMERICAN North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. FOOD 2005 Second-Quarter Results For the second quarter of 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 2.8% to $5.8 billion, reflecting positive mix across much of the portfolio, commodity-driven price increases, volume gains in cereals, biscuits and meat, and the benefit of higher marketing spending, partially offset by weaker category trends in certain businesses, such as coffee and nuts, due to higher retail prices and the impact of the shift in Easter timing. Ongoing volume declined 1.1%, reflecting lower ready-to-drink shipments due to trade inventory reductions and a category decline, as well as weaker trends in other categories due to higher prices and the shift in Easter timing. Operating companies income increased 2.3% to $1.1 billion, due primarily to lower restructuring and impairment charges. Excluding those charges and the impact of divested businesses, operating companies income was up slightly as the impact of increased pricing, positive mix and favorable currency were partially offset by increased marketing spending, increased post-employment benefit costs and higher commodity costs. INTERNATIONAL FOOD 2005 Second-Quarter Results For the second quarter of 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 3.5% to $2.6 billion, due primarily to favorable currency of $136 million, price increases and positive mix, partially offset by a decline in volume. Revenues were up in numerous markets, with developing markets up 4% overall, but revenues in Germany were down double-digits as competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. lagged Kraft's price increases in coffee. By the end of the second quarter, price gaps with key competitors in Germany overall returned to targeted ranges. Ongoing volume was down 3.3%, reflecting the negative impact of price increases and the shift in Easter timing. Operating companies income increased 11.8% to $247 million, benefiting from lower restructuring and impairment charges, partially offset by the impact of divestitures. Excluding those items, operating companies income declined as positive mix and favorable currency of $14 million were more than offset by significantly higher commodity costs net of pricing. Costs for key commodities in Kraft's international business were up substantially, with coffee up 60% and hazelnuts up more than 90% in the quarter versus the prior year. While Kraft has taken price increases in many geographies, the benefits of its pricing actions did not fully recover the impact of the commodity cost increases. 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 Second-Quarter Results Philip 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 ) reported operating companies income of $70 million for the second quarter of 2005 versus $125 million in 2004. Results reflect an unfavorable comparison to the year-ago period, when PMCC recorded gains on various asset sales totaling $84 million, versus a $30 million gain from asset sales in the second quarter of 2005. 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. It 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 85.8% 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. has a 33.9% economic interest in 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. 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 2004 net revenues of $89.6 billion. Trademarks and service marks mentioned in this release are the registered property of, or licensed by, the subsidiaries of Altria Group, Inc. 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. 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, 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 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 Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended March 31, 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 June 30,(*)
(in millions, except per share data)
2005 2004 % Change
---------------------------------
Net revenues $24,784 $22,894 8.3 %
Cost of sales 9,134 8,570 6.6 %
Excise taxes on products (**) 7,459 6,563 13.7 %
----------------------
Gross profit 8,191 7,761 5.5 %
Marketing, administration and
research costs 3,478 3,289
Domestic tobacco headquarters
relocation charges 2 10
International tobacco EC agreement - 250
Asset impairment and exit costs 50 152
Losses (gains) on sales of businesses 1 -
----------------------
Operating companies income 4,660 4,060 14.8 %
Amortization of intangibles 4 5
General corporate expenses 165 164
Asset impairment and exit costs 20 8
----------------------
Operating income 4,471 3,883 15.1 %
Interest and other debt expense, net 320 297
----------------------
Earnings from continuing operations
before income taxes and minority
interest 4,151 3,586 15.8 %
Provision for income taxes 1,192 952 25.2 %
----------------------
Earnings from continuing operations
before minority interest 2,959 2,634 12.3 %
Minority interest in earnings from
continuing operations, and
equity earnings, net 47 26
----------------------
Earnings from continuing operations $2,912 $2,608 11.7 %
----------------------
(Loss) earnings from discontinued
operations, net of income taxes
and minority interest(****) $(245) $19
----------------------
Net earnings $2,667 $2,627 1.5 %
======================
Per share data(***):
Basic earnings per share from
continuing operations $1.41 $1.27 11.0 %
----------------------
Basic earnings per share from
discontinued operations $(0.12) $0.01
----------------------
Basic earnings per share $1.29 $1.28 0.8 %
======================
Diluted earnings per share from
continuing operations $1.40 $1.26 11.1 %
----------------------
Diluted earnings per share from
discontinued operations $(0.12) $0.01
----------------------
Diluted earnings per share $1.28 $1.27 0.8 %
======================
Weighted average number of
shares outstanding - Basic 2,067 2,047 1.0 %
- Diluted 2,087 2,062 1.2 %
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
(**) The detail of excise taxes on products sold is as follows:
2005 2004
----------------------
Domestic tobacco $971 $958
International tobacco 6,488 5,605
----------------------
Total excise taxes $7,459 $6,563
======================
(***) 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.
(****) Discontinued operations 2005 includes $(255) from loss on sale,
and $10 of earnings, net of minority interest impact. In 2004
income from discontinued operations was $19 of earnings, net of
minority interest.
ALTRIA GROUP, INC. Schedule 2
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended June 30,(*)
(in millions)
North
Domestic International American International
tobacco tobacco food food
----------------------------------------------------
2005 Net Revenues $4,790 $11,565 $5,751 $2,583
2004 Net Revenues 4,582 10,064 5,596 2,495
% Change 4.5% 14.9% 2.8% 3.5%
Reconciliation:
---------------
2004 Net Revenues $4,582 $10,064 $5,596 $2,495
Divested
businesses - 2004 - - (43) (22)
Acquired
businesses - 227 - -
Divested
businesses - 2005 - - 20 -
Implementation
costs - 2005 - - (1) -
Currency - 612 49 136
Operations 208 662 130 (26)
----------------------------------------------------
2005 Net Revenues $4,790 $11,565 $5,751 $2,583
====================================================
Financial
services Total
--------------------------
2005 Net Revenues $95 $24,784
2004 Net Revenues 157 22,894
% Change (39.5)% 8.3%
Reconciliation:
---------------
2004 Net Revenues $157 $22,894
Divested
businesses - 2004 - (65)
Acquired
businesses - 227
Divested
businesses - 2005 - 20
Implementation
costs - 2005 - (1)
Currency - 797
Operations (62) 912
--------------------------
2005 Net Revenues $95 $24,784
==========================
Note: The detail of excise taxes on products sold is as follows:
2005 2004
--------------------------
Domestic tobacco $971 $958
International
tobacco 6,488 5,605
--------------------------
Total excise taxes $7,459 $6,563
==========================
Currency increased international tobacco excise taxes by $380 million.
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
ALTRIA GROUP, INC. Schedule 3
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended June 30,(*)
(in millions)
North
Domestic International American International
tobacco tobacco food food
----------------------------------------------------
2005 Operating
Companies Income $1,261 $2,024 $1,058 $247
2004 Operating
Companies Income 1,212 1,468 1,034 221
% Change 4.0% 37.9% 2.3% 11.8%
Reconciliation:
---------------
2004 Operating
Companies Income $1,212 $1,468 $1,034 $221
Divested
businesses - 2004 - - (1) (8)
Domestic tobacco
headquarters
relocation
charges - 2004 10 - - -
International
tobacco EC
agreement - 2004 - 250 - -
Asset impairment
and exit costs -
2004 - 23 39 90
Implementation
costs - 2004 - - 9 -
----------------------------------------------------
10 273 47 82
----------------------------------------------------
Divested
businesses - 2005 - - (2) -
Domestic tobacco
headquarters
relocation
charges - 2005 (2) - - -
Asset impairment
and exit costs -
2005 - (21) (5) (24)
(Losses) gains on
sales of
businesses - 2005 - - (1) -
Implementation
costs - 2005 - - (18) (8)
----------------------------------------------------
(2) (21) (26) (32)
----------------------------------------------------
Acquired
businesses - 79 - -
Currency - 136 9 14
Operations 41 89 (6) (38)
----------------------------------------------------
2005 Operating
Companies Income $1,261 $2,024 $1,058 $247
====================================================
Financial
services Total
--------------------------
2005 Operating
Companies Income $70 $4,660
2004 Operating
Companies Income 125 4,060
% Change (44.0)% 14.8%
Reconciliation:
---------------
2004 Operating
Companies Income $125 $4,060
Divested
businesses - 2004 - (9)
Domestic tobacco
headquarters
relocation
charges - 2004 - 10
International
tobacco EC
agreement - 2004 - 250
Asset impairment
and exit costs -
2004 - 152
Implementation
costs - 2004 - 9
--------------------------
- 412
--------------------------
Divested
businesses - 2005 - (2)
Domestic tobacco
headquarters
relocation
charges - 2005 - (2)
Asset impairment
and exit costs -
2005 - (50)
(Losses) gains on
sales of
businesses - 2005 - (1)
Implementation
costs - 2005 - (26)
--------------------------
- (81)
--------------------------
Acquired
businesses - 79
Currency - 159
Operations (55) 31
--------------------------
2005 Operating
Companies Income $70 $4,660
==========================
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
ALTRIA GROUP, INC. Schedule 4
and Subsidiaries
Condensed Statements of Earnings
For the Six Months Ended June 30,(*)
(in millions, except per share data)
2005 2004 % Change
---------------------------------
Net revenues $48,402 $44,615 8.5 %
Cost of sales 17,805 16,582 7.4 %
Excise taxes on products (**) 14,615 12,880 13.5 %
----------------------
Gross profit 15,982 15,153 5.5 %
Marketing, administration and
research costs 6,874 6,483
Domestic tobacco headquarters
relocation charges 3 20
International tobacco EC agreement - 250
Asset impairment and exit costs 203 444
Losses (gains) on sales of businesses (115) -
----------------------
Operating companies income 9,017 7,956 13.3 %
Amortization of intangibles 8 9
General corporate expenses 324 328
Asset impairment and exit costs 38 24
----------------------
Operating income 8,647 7,595 13.9 %
Interest and other debt expense, net 601 597
----------------------
Earnings from continuing operations
before income taxes and minority
interest 8,046 6,998 15.0 %
Provision for income taxes 2,483 2,132 16.5 %
----------------------
Earnings from continuing operations
before minority interest 5,563 4,866 14.3 %
Minority interest in earnings from
continuing operations, and
equity earnings, net 67 73
----------------------
Earnings from continuing operations $5,496 $4,793 14.7 %
----------------------
(Loss) earnings from discontinued
operations, net of income taxes
and minority interest(****) $(233) $28
----------------------
Net earnings $5,263 $4,821 9.2 %
======================
Per share data (***):
Basic earnings per share from
continuing operations $2.66 $2.34 13.7 %
----------------------
Basic earnings per share from
discontinued operations $(0.11) $0.02
----------------------
Basic earnings per share $2.55 $2.36 8.1 %
======================
Diluted earnings per share from
continuing operations $2.64 $2.33 13.3 %
----------------------
Diluted earnings per share from
discontinued operations $(0.11) $0.01
----------------------
Diluted earnings per share $2.53 $2.34 8.1 %
======================
Weighted average number of
shares outstanding - Basic 2,064 2,044 1.0 %
- Diluted 2,084 2,061 1.1 %
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
(**) The detail of excise taxes on products sold is as follows:
2005 2004
----------------------
Domestic tobacco $1,816 $1,810
International tobacco 12,799 11,070
----------------------
Total excise taxes $14,615 $12,880
======================
(***) 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.
(****) Discontinued operations 2005 includes $(255) from loss on sale,
and $22 of earnings, net of minority interest impact. In 2004
income from discontinued operations was $28 of earnings, net of
minority interest impact.
ALTRIA GROUP, INC. Schedule 5
and Subsidiaries
Selected Financial Data by Business Segment
For the Six Months Ended June 30,(*)
(in millions)
North
Domestic International American International
tobacco tobacco food food
----------------------------------------------------
2005 Net Revenues $8,936 $22,910 $11,304 $5,089
2004 Net Revenues 8,586 20,107 10,888 4,778
% Change 4.1% 13.9% 3.8% 6.5%
Reconciliation:
---------------
2004 Net Revenues $8,586 $20,107 $10,888 $4,778
Divested
businesses - 2004 - - (89) (46)
Acquired
businesses - 357 41 1
Divested
businesses - 2005 - - 69 12
Implementation
costs - 2005 - - (1) -
Currency - 1,189 83 266
Operations 350 1,257 313 78
----------------------------------------------------
2005 Net Revenues $8,936 $22,910 $11,304 $5,089
====================================================
Financial
services Total
--------------------------
2005 Net Revenues $163 $48,402
2004 Net Revenues 256 44,615
% Change (36.3)% 8.5%
Reconciliation:
---------------
2004 Net Revenues $256 $44,615
Divested
businesses - 2004 - (135)
Acquired
businesses - 399
Divested
businesses - 2005 - 81
Implementation
costs - 2005 - (1)
Currency - 1,538
Operations (93) 1,905
--------------------------
2005 Net Revenues $163 $48,402
==========================
Note: The detail of excise taxes on products sold is as follows:
2005 2004
------------ -------------
Domestic tobacco $1,816 $1,810
International
tobacco 12,799 11,070
------------ -------------
Total excise taxes $14,615 $12,880
============ =============
Currency increased international tobacco excise taxes by $732 million.
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
ALTRIA GROUP, INC. Schedule 6
and Subsidiaries
Selected Financial Data by Business Segment
For the Six Months Ended June 30,(*)
(in millions)
North
Domestic International American International
tobacco tobacco food food
----------------------------------------------------
2005 Operating
Companies Income $2,299 $4,099 $1,968 $540
2004 Operating
Companies Income 2,182 3,303 1,867 409
% Change 5.4% 24.1% 5.4% 32.0%
Reconciliation:
---------------
2004 Operating
Companies Income $2,182 $3,303 $1,867 $409
Divested
businesses - 2004 - - (2) (14)
Domestic tobacco
headquarters
relocation
charges - 2004 20 - - -
International
tobacco EC
agreement - 2004 - 250 - -
Asset impairment
and exit costs -
2004 1 23 284 136
Implementation
costs - 2004 - - 9 1
----------------------------------------------------
21 273 291 123
----------------------------------------------------
Divested
businesses - 2005 - - 2 3
Domestic tobacco
headquarters
relocation
charges - 2005 (3) - - -
Asset impairment
and exit costs -
2005 - (24) (122) (57)
(Losses) gains on
sales of
businesses - 2005 - - (1) 116
Implementation
costs - 2005 - - (32) (13)
----------------------------------------------------
(3) (24) (153) 49
----------------------------------------------------
Acquired
businesses - 83 - -
Currency - 262 14 31
Operations 99 202 (51) (72)
----------------------------------------------------
2005 Operating
Companies Income $2,299 $4,099 $1,968 $540
============ ============= =========== =============
Financial
services Total
--------------------------
2005 Operating
Companies Income $111 $9,017
2004 Operating
Companies Income 195 7,956
% Change (43.1)% 13.3%
Reconciliation:
---------------
2004 Operating
Companies Income $195 $7,956
Divested
businesses - 2004 - (16)
Domestic tobacco
headquarters
relocation
charges - 2004 - 20
International
tobacco EC
agreement - 2004 - 250
Asset impairment
and exit costs -
2004 - 444
Implementation
costs - 2004 - 10
--------------------------
- 708
--------------------------
Divested
businesses - 2005 - 5
Domestic tobacco
headquarters
relocation
charges - 2005 - (3)
Asset impairment
and exit costs -
2005 - (203)
(Losses) gains on
sales of
businesses - 2005 - 115
Implementation
costs - 2005 - (45)
--------------------------
- (131)
--------------------------
Acquired
businesses - 83
Currency - 307
Operations (84) 94
--------------------------
2005 Operating
Companies Income $111 $9,017
==========================
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
ALTRIA GROUP, INC. Schedule 7
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Quarters Ended June 30,(*)
($ in millions, except per share data)
Diluted
Net Earnings E.P.S. (**)
------------ ------------
2005 Continuing Earnings $2,912 $1.40
2004 Continuing Earnings $2,608 $1.26
% Change 11.7 % 11.1 %
Reconciliation:
---------------
2004 Continuing Earnings $2,608 $1.26
2004 Domestic tobacco headquarters
relocation charges 6 -
2004 Asset impairment, exit and
implementation costs, net of
minority interest impact 89 0.05
2004 International tobacco EC agreement 161 0.08
2004 Corporate asset impairment and
exit costs 5 -
2004 Tax items, net of minority
interest impact (320) (0.15)
------------ ------------
(59) (0.02)
------------ ------------
2005 Domestic tobacco headquarters
relocation charges (1) -
2005 Asset impairment, exit and
implementation costs, net of
minority interest impact (47) (0.02)
2005 (Losses) gains on sales of
business, net of minority interest
impact (1) -
2005 Corporate asset impairment and
exit costs (13) (0.01)
2005 Tax items, net of minority
interest impact 227 0.11
------------ ------------
165 0.08
------------ ------------
Currency 103 0.05
Change in shares - (0.01)
Change in tax rate 52 0.02
Operations 43 0.02
------------ ------------
2005 Continuing Earnings $2,912 $1.40
------------ ------------
2005 Discontinued Earnings $(245) $(0.12)
------------ ------------
2005 Net Earnings $2,667 $1.28
============ ============
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
(**) Basic and diluted earnings per share are computed for each of the
periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.
ALTRIA GROUP, INC. Schedule 8
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Six Months Ended June 30,(*)
($ in millions, except per share data)
Diluted
Net Earnings E.P.S. (**)
------------ ------------
2005 Continuing Earnings $5,496 $2.64
2004 Continuing Earnings $4,793 $2.33
% Change 14.7 % 13.3 %
Reconciliation:
---------------
2004 Continuing $4,793 $2.33
2004 Domestic tobacco headquarters
relocation charges 13 0.01
2005 Asset impairment, exit and
implementation costs, net of minority
interest impact 248 0.12
2004 International tobacco EC agreement 161 0.08
2004 Corporate asset impairment and
exit costs 15 0.01
2004 Tax items, net of minority
interest impact (350) (0.18)
------------ ------------
87 0.04
------------ ------------
2005 Domestic tobacco headquarters
relocation charges (2) -
2005 Asset impairment, exit and
implementation costs, net of minority
interest impact (144) (0.07)
2005 (Losses) gains on sales of
business, net of minority interest
impact 64 0.03
2005 Corporate asset impairment and
exit costs (25) (0.01)
2005 Tax items, net of minority
interest impact 266 0.13
------------ ------------
159 0.08
------------ ------------
Currency 198 0.10
Change in shares - (0.03)
Change in tax rate 101 0.05
Operations 158 0.07
------------ ------------
2005 Continuing Earnings $5,496 $2.64
------------ ------------
2005 Discontinued Earnings $(233) $(0.11)
------------ ------------
2005 Net Earnings $5,263 $2.53
============ ============
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
(**) 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)
June 30, December 31,
2005 2004
------------ ------------
Assets
------
Cash and cash equivalents $8,499 $5,744
Current assets of discontinued operations
held for sale - 1,458
All other current assets 19,009 18,699
Property, plant and equipment, net 16,247 16,305
Goodwill 32,427 28,056
Other intangible assets, net 11,011 11,056
Other assets 13,495 12,485
------------ ------------
Total consumer products assets 100,688 93,803
Total financial services assets 7,517 7,845
------------ ------------
Total assets $108,205 $101,648
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Short-term borrowings $5,589 $2,546
Current portion of long-term debt 3,173 1,751
Accrued settlement charges 2,241 3,501
All other current liabilities 17,072 15,776
Long-term debt 16,923 16,462
Deferred income taxes 6,936 7,677
Other long-term liabilities 14,709 14,905
------------ ------------
Total consumer products liabilities 66,643 62,618
Total financial services liabilities 8,174 8,316
------------ ------------
Total liabilities 74,817 70,934
Total stockholders' equity 33,388 30,714
------------ ------------
Total liabilities and
stockholders' equity $108,205 $101,648
============ ============
Total consumer products debt $25,685 $20,759
Debt/equity ratio - consumer products 0.77 0.68
Total debt $27,796 $22,980
Total debt/equity ratio 0.83 0.75
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