Altria Group, Inc. Reports 2006 First-Quarter Results; Diluted Earnings Per Share from Continuing Operations Up 33.1% to $1.65 vs. $1.24 in Year-Ago Quarter.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 -- Reaffirms Previously Announced Projection for 2006 Full-Year Diluted Earnings Per Share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of 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 in a Range of $5.25 to $5.35 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) today announced first-quarter 2006 diluted earnings per share from continuing operations of $1.65, up 33.1% versus the corresponding prior year period, including $0.46 per share from a previously announced reversal of tax reserves following the conclusion of an IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. examination of Altria's consolidated tax returns Consolidated tax return A tax return combining the reports of affiliated companies, that are at least 80% owned by a parent company. for the years 1996 through 1999, and several other items, which are detailed on the attached Schedule 4. "Our first quarter results were impacted by a number of items in both 2006 and the year-ago period. Absent those items, our businesses achieved operating results that were in line with our expectations," 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. "Our domestic tobacco business delivered strong share and income gains in the first quarter of 2006, reflecting the strength of the Marlboro brand," Mr. Camilleri Camilleri is a surname. People with Camilleri as a surname
"In our food business, Kraft continued to make progress against its 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. objectives, achieving both solid organic revenue growth and stronger results from operations. Although commodity costs and the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community business remain challenging, Kraft expects its momentum to build in 2006." 2006 Full-Year Forecast Altria Group reaffirmed its previously announced projection for 2006 full-year diluted earnings per share from continuing operations in a range of $5.25 to $5.35. This forecast includes the $0.46 tax benefit recorded in this quarter, as well as approximately $0.36 per share in charges associated with the Kraft 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 for the full year, unfavorable currency of $0.14 per share, about $0.10 per share for lower tobacco income in Spain, $0.05 per share due to higher shares outstanding, a $0.05 per share negative impact from Kraft's sale of the Milk-Bone Milk-Bone is a brand of dog treat. It was created in 1908 by the F. H. Bennett Biscuit Company, which operated a bakery on the Lower East Side of New York City. Originally named Maltoid, the biscuit was a bone-shaped treat made from minerals, meat products, and milk. brand, which was announced on March 16, 2006, and $0.03 per share in charges related to an Italian antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. action. It does not include the impact of any future potential acquisitions or divestitures. 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. 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 April 20, 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, 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 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. All references in this news release are to continuing operations, unless otherwise noted. 2006 First-Quarter Results Net revenues for the first quarter of 2006 increased 3.1% versus 2005 to $24.4 billion, including $708 million from acquisitions offset by unfavorable currency of $749 million. Operating income decreased 2.3% to $4.1 billion, reflecting the items described in the attached reconciliation on Schedule 3, including higher charges at Kraft 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. and exit costs, unfavorable currency of $163 million and difficult comparisons with the first quarter of 2005 when Kraft benefited from gains on sales of businesses and Philip Morris International Philip Morris International, (PMI) based in Lausanne, Switzerland, held a 15.5% share of the international cigarette market in 2005. Its brands, led by Marlboro and L&M, are sold in over 160 countries around the world. (PMI See Private Mortgage Insurance. ) recorded a $96 million benefit from the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. sale of inventory to its new distributor 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. . These were partially offset by the positive impact of acquisitions of approximately $146 million, 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. . Earnings from continuing operations increased 34.6% to $3.5 billion, reflecting the factors mentioned above and a significantly lower effective tax rate. The company's effective tax rate was 7.5% in the first quarter of 2006 compared to 33.1% for the same period in 2005, primarily reflecting the previously announced tax benefits recorded in the first quarter. 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 33.9% to $3.5 billion, aided by the previously announced tax benefits of approximately $1.0 billion. Diluted earnings per share, including discontinued operations as detailed on Schedule 1, increased 32.0% to $1.65, driven by the factors mentioned above. During the first quarter of 2006, Altria Group, Inc. declared a regular quarterly dividend of $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. DOMESTIC TOBACCO 2006 First-Quarter Results For the first quarter of 2006, 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. (PM USA), Altria Group, Inc.'s domestic tobacco business, achieved solid results. Shipment volume of 43.3 billion units was up 1.2% from the previous year, but was estimated to be essentially flat when adjusted for one more shipping day versus the first quarter of 2005. Premium mix for PM USA increased by 0.4 percentage points to 92.0% in the first quarter of 2006. Operating companies income increased 7.5% to $1.1 billion, primarily driven by lower wholesale and retail promotional allowance rates and higher volume. As shown in the following table, PM USA's total retail share increased to 50.4% in the first quarter of 2006, driven by Marlboro and Parliament.
Philip Morris USA Quarterly Retail Share*
-----------------------------------------
Q1 2006 Q1 2005 Change
-------- -------- --------
Marlboro 40.4% 39.8% 0.6 pp
Parliament 1.8% 1.7% 0.1 pp
Virginia Slims 2.3% 2.3% 0.0 pp
Basic 4.2% 4.3% -0.1 pp
-------- -------- --------
Focus Brands 48.7% 48.1% 0.6 pp
Other PM USA 1.7% 1.9% -0.2 pp
-------- -------- --------
Total PM USA 50.4% 50.0% 0.4 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 unchanged at 62.1%, while its share of the discount category grew 0.2 share points to 16.5%, reflecting the performance of Basic. The total industry's premium category share increased 0.8 points to 74.3% in the first quarter of 2006, while the discount category share correspondingly declined to 25.7%. Within the discount category, share of the deep discount segment (which includes both major manufacturers' private label brands and all other manufacturers' discount brands) declined 0.2 points to 11.6%. INTERNATIONAL TOBACCO 2006 First-Quarter Results Cigarette shipment volume for Philip Morris International Inc. (PMI), Altria Group, Inc.'s international tobacco business, increased 4.6% to 210.2 billion units. The favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of 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. , coupled with solid gains 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. , 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, 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). , Turkey and Ukraine Ukraine (y  `krān, ykrān`), Ukr. Ukraina, republic (2005 est. pop. ,
were partially offset by declines in Japan (reflecting the prior-year
Marlboro inventory build-up build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. in anticipation of 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 Marlboro license in April 2005), Spain (due to lower share and lower total consumption), 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: (due to timing of shipments and lower travel allowances in Turkey) and the impact of the inventory sale to a new distributor in Italy during the first quarter of 2005. Excluding acquisitions, as well as the 2005 inventory sale in Italy and Marlboro inventory build-up in Japan, PMI's cigarette shipment volume was essentially flat. PMI's total tobacco volume, which included 2.3 billion cigarette equivalent units of other tobacco products (OTPs), grew 5.0% to 212.5 billion units versus the same period last year. Operating companies income was down 5.2% to $2.0 billion, due primarily to a negative currency impact of $156 million, a $61 million charge related to an Italian antitrust action, unfavorable volume and mix, higher R&D expenses, and a difficult comparison with 2005 when PMI recorded income of $96 million for the inventory sale in Italy. Partially offsetting the above factors were higher pricing and the favorable impact of acquisitions of $146 million. PMI's market shares in the first quarter of 2006 advanced in many countries, with robust gains achieved by several top income markets including Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , 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. , France, 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). , Indonesia, Italy, the 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. , Turkey and Ukraine. Total Marlboro cigarette shipments of 80.5 billion were down 6.5% compared to the first quarter of 2005, which benefited from the inventory sale in Italy and the inventory build-up in Japan. Absent those items, Marlboro cigarette shipments were down 0.6%, due mainly to declines in Germany, Spain and worldwide duty-free, partially offset by gains in France, Japan, the Philippines and Russia. Marlboro market shares grew in Australia, France, 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 , Italy, Japan, 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 Netherlands, Russia, Saudi Arabia Saudi Arabia (sä `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. , 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 and Ukraine.In the European Union (EU) region, PMI's cigarette shipments declined 11.9%, but when adjusted to exclude the 2005 inventory sale in Italy, shipments were down 6.8% due largely to Spain. PMI's cigarette market share in the EU region was 39.4%, down 0.6 points as strong share performances in France, Germany and Italy were offset by declines in the Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. , Poland, Portugal and Spain. In Germany, the total consumption of cigarettes and other tobacco products declined 2.6% and PMI's total tobacco shipments were up 3.1%. PMI's share of total tobacco consumption increased 1.1 points to 29.1%, representing sequential share growth for the second consecutive quarter. The total cigarette market declined 9.8%, while PMI's cigarette volume was down 6.5%, resulting in PMI's cigarette market share rising 0.7 points to 37.1%, driven by the recent 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 L&M, the growth of Next and the resilience resilience (r  ·zilˑ·yens),n of Marlboro, attributable to the growth of Marlboro Red. Total tobacco portions volume in the first quarter rose 26.2% to 6.5 billion units and PMI's share of tobacco portions rose 6.1 points to 19.1%. Late last year, 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. ruled that the German government's favorable tax treatment of tobacco portions was against EU law. Accordingly, tobacco portions manufactured as of April 1, 2006, now incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. the same 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. as that levied on cigarettes. Existing stocks of tobacco portions are expected to remain in the market through the third quarter of this year. In Italy, the total cigarette market rose 3.6% versus a low base in the first quarter of 2005, when it was adversely impacted by the compounding effect of the January 2005 smoking ban and the December 2004 tax-driven price increase. PMI's reported shipment volume was down 28.8%, reflecting the inventory sale in 2005, the timing of shipments and distributor inventory movements. However, PMI's in-market sales advanced 5.7%, resulting in a share gain of 1.1 points to 53.3%, driven by Marlboro. In France, PMI's volume and share performance were robust, reflecting a stable pricing environment and moderate price gaps. Shipments rose 12.0% and share grew from 41.5% to 42.6%, an increase of 1.1 point behind the strong performance of Marlboro and the Philip Morris brand. In Spain, the total cigarette market was down 4.3%, primarily due to the impact of a new tobacco law implemented on January 1, 2006. PMI's shipments were 18.0% lower and share was down 4.1 points versus the prior year to 32.6%, attributable to declines in 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. and L&M as a result of down-trading to the low-price segment. However, PMI achieved sequential share growth of 1.0 point in total, and its premium and mid-price brands Marlboro, Chesterfield and L&M were up a combined 2.3 share points versus the fourth quarter of 2005. Retail share for the low-price segment, which includes all brands priced at 2.00 euros or less per pack of 20 cigarettes, peaked at 31% in the fourth quarter of 2005, but declined to 29% in the first quarter of 2006. On February 11, 2006 the government introduced a minimum excise tax (MET) on cigarettes of 1.10 euros per pack, and further increased ad valorem According to value. The term ad valorem is derived from the Latin ad valentiam, meaning "to the value." It is commonly applied to a tax imposed on the value of property. and specific tax rates. While this action was partially effective, a number of competitive brands priced at 1.75 to 1.85 euros per pack still remain on the market. In this challenging environment, PMI's profitability was significantly below the prior-year level, due largely to the impact of higher excise taxes excise taxes, governmental levies on specific goods produced and consumed inside a country. They differ from tariffs, which usually apply only to foreign-made goods, and from sales taxes, which typically apply to all commodities other than those specifically exempted. , lower volume and unfavorable mix. In Poland, the total market was down 3.3%, due to consumer out-switching to other tobacco products. PMI's shipments declined 6.5% and share was down 1.6 points to 38.5%, driven by the continuing decline of the 70mm segment, partially offset by increases for L&M following its February 1, 2006 price repositioning. In the Czech Republic, the total market was essentially flat. PMI's shipments were down 14.6% and its share was lower, reflecting intense price competition. In Portugal, the total market was down 12.0%, due primarily to lower overall consumption. PMI's shipments declined 14.7% and share was down 2.8 points to 85.6%. 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, PMI's shipments grew 5.3%, driven primarily by Egypt, Russia, Turkey and Ukraine, partially offset by Romania and Saudi Arabia. In Russia, shipments were up 11.0%, due largely to favorable distributor inventory movements, while market share was down 0.4 points to 26.8%, with declines in PMI's lower-margin offerings partially offset by gains for its premium brands Marlboro and Parliament. In Turkey, shipments rose 4.9% and market share was up 5.5 points to a record 43.6%, driven by the strong performance of premium-price Parliament, as well as Lark and Muratti. In Ukraine, shipments and market share were higher, aided by improved economic conditions and the continued success of Marlboro, Parliament and Chesterfield. In Asia (including Japan), volume increased 30.2%, driven by the acquisition of Sampoerna in Indonesia. Excluding the acquisition, volume was down 4.8%, due primarily to the 2005 Marlboro inventory build-up in Japan and a decline in Thailand, partially offset by gains in the Philippines and Korea. In Indonesia, PMI achieved a 27.3% share in the first quarter, demonstrating the continued strength of its brand portfolio, led by A Mild, A Hijau, 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 Marlboro. In Japan, PMI's shipments were down 7.1%, due to the 2005 Marlboro inventory build-up, as well as a decline of 1.4% in the total market. Market share was flat in the first quarter at 24.8%, although Marlboro's share was up 0.5 points to 10.1%. 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 19.1%, driven by the acquisition of Coltabaco in Colombia. Excluding that acquisition, volume advanced 3.7%, due mainly to Argentina. The total market in Argentina was up 8.3%, while PMI's shipments grew 10.3% and share was up 1.2 points to 63.7%, driven by the price repositioning of the Philip Morris brand and the recent launch of Next in the ultra low-price segment. In Mexico, the total market was up slightly. PMI's shipments grew 1.9% and market share of 61.6% was unchanged versus the prior-year first quarter. However, Marlboro's share in Mexico advanced 0.2 points to 46.7%. FOOD 2006 First-Quarter Results 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 2006 first-quarter results. Kraft's net revenues were up 0.8% to $8.1 billion, reflecting positive product mix and pricing, partially offset by lower volume, the impact of divestitures and unfavorable currency of $95 million. Ongoing volume was down approximately 1.1% for the first quarter, driven by declines in the European Union and ready-to-drink beverages, and the impact of discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: products. Operating income decreased 12.0% to $1.0 billion for the first quarter, driven by higher restructuring and impairment costs, higher commodity costs (net of pricing), unfavorable currency of $7 million, and gains on sales of businesses in 2005, partially offset by favorable product mix and cost saving initiatives. NORTH AMERICAN North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. FOOD 2006 First-Quarter Results For the first quarter 2006, 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 were up 1.6% to $5.6 billion, reflecting increases in Beverages, Convenient Meals, Snacks & Cereals and favorable currency of $24 million, partially offset by declines in Cheese & Foodservice and Grocery. Ongoing volume decreased 0.9% due to lower volume in Beverages, Cheese & Foodservice and Grocery, partially offset by increases in Convenient Meals and Snacks & Cereals. Operating companies income declined 1.5% to $896 million, with higher asset impairment and exit costs, higher commodity costs net of pricing and increased marketing spending only partially offset by productivity and restructuring savings, positive mix and favorable currency of $5 million. INTERNATIONAL FOOD 2006 First-Quarter Results For the first quarter 2006, 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 ) decreased 1.0% to $2.5 billion, reflecting challenges in the European Union and unfavorable currency of $119 million, partially offset by an increase in Developing Markets, Oceania and North Asia North Asia or Northern Asia is a subregion of Asia. The most common definition of the term is;
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. 2006 First-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 $96 million for the first quarter of 2006, versus operating companies income of $41 million for the year-earlier period, reflecting higher asset management gains. Consistent with its strategic shift in 2003, PMCC is focused on managing its existing portfolio of finance assets in order to maximize 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 leases mature or assets are sold. Altria Group, Inc. Profile Altria Group, Inc. owns approximately 87.6% 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 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, Post 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 . 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. 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; unfavorable currency movements and 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 to get timely relief from any of the foregoing; price gaps and changes in price gaps between premium and lowest-price brands; legislation, including actual and potential excise tax increases; discriminatory dis·crim·i·na·to·ry adj. 1. Marked by or showing prejudice; biased. 2. Making distinctions. dis·crim excise tax structures; increasing marketing and regulatory restrictions; the effects of price increases related to excise tax increases and concluded tobacco litigation settlements on consumption rates and consumer preferences within price segments; health concerns relating to 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, 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 March 31,
(in millions, except per share data)
(Unaudited)
2006 2005 % Change
-------------------------------
Net revenues $ 24,355 $ 23,618 3.1 %
Cost of sales 8,915 8,671 2.8 %
Excise taxes on products (*) 7,546 7,156 5.4 %
---------------------
Gross profit 7,894 7,791 1.3 %
Marketing, administration and research
costs 3,387 3,396
Domestic tobacco headquarters
relocation charges - 1
Italian antitrust charge 61 -
Asset impairment and exit costs 204 153
Losses (gains) on sales of
businesses, net 3 (116)
---------------------
Operating companies income 4,239 4,357 (2.7)%
Amortization of intangibles 7 4
General corporate expenses 153 159
Asset impairment and exit costs - 18
---------------------
Operating income 4,079 4,176 (2.3)%
Interest and other debt expense, net 243 281
---------------------
Earnings from continuing operations
before income taxes, minority
interest, and equity earnings, net 3,836 3,895 (1.5)%
Provision for income taxes 289 1,291 (77.6)%
---------------------
Earnings from continuing operations
before minority interest and equity
earnings, net 3,547 2,604 36.2 %
Minority interest in earnings from
continuing operations, and equity
earnings, net 70 20
---------------------
Earnings from continuing operations 3,477 2,584 34.6 %
Earnings from discontinued operations,
net of income taxes and minority
interest - 12
---------------------
Net earnings $ 3,477 $ 2,596 33.9 %
=====================
Per share data:
Basic earnings per share from
continuing operations $ 1.67 $ 1.25 33.6 %
Basic earnings per share from
discontinued operations $ - $ 0.01
---------------------
Basic earnings per share $ 1.67 $ 1.26 32.5 %
=====================
Diluted earnings per share from
continuing operations $ 1.65 $ 1.24 33.1 %
Diluted earnings per share from
discontinued operations $ - $ 0.01
---------------------
Diluted earnings per share $ 1.65 $ 1.25 32.0 %
=====================
Weighted average number of
shares outstanding - Basic 2,082 2,061 1.0 %
Diluted 2,101 2,081 1.0 %
(*) The detail of excise taxes on products sold is as follows:
2006 2005
---------------------
Domestic tobacco $ 855 $ 845
International tobacco 6,691 6,311
---------------------
Total excise taxes $ 7,546 $ 7,156
=====================
ALTRIA GROUP, INC. Schedule 2
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended March 31,
(in millions)
(Unaudited)
North
Domestic International American International
tobacco tobacco food food
---------------------------------------------------
2006 Net Revenues $ 4,323 $ 11,801 $ 5,643 $ 2,480
2005 Net Revenues 4,146 11,345 5,553 2,506
% Change 4.3% 4.0% 1.6% (1.0)%
Reconciliation:
---------------
2005 Net Revenues $ 4,146 $ 11,345 $ 5,553 $ 2,506
Divested
businesses - 2005 - - (118) (17)
Divested
businesses - 2006 - - 10 -
Acquired businesses - 708 - -
Currency - (654) 24 (119)
Operations 177 402 174 110
---------------------------------------------------
2006 Net Revenues $ 4,323 $ 11,801 $ 5,643 $ 2,480
===================================================
Financial
services Total
-------------------------
2006 Net Revenues $ 108 $ 24,355
2005 Net Revenues 68 23,618
% Change 58.8% 3.1%
Reconciliation:
---------------
2005 Net Revenues $ 68 $ 23,618
Divested
businesses - 2005 - (135)
Divested
businesses - 2006 - 10
Acquired businesses - 708
Currency - (749)
Operations 40 903
-------------------------
2006 Net Revenues $ 108 $ 24,355
=========================
Note: The detail of excise taxes on products sold is as follows:
2006 2005
-------------------------
Domestic tobacco $ 855 $ 845
International
tobacco 6,691 6,311
-------------------------
Total excise taxes $ 7,546 $ 7,156
=========================
Currency decreased international tobacco excise taxes by $361
million.
ALTRIA GROUP, INC. Schedule 3
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended March 31,
(in millions)
(Unaudited)
North
Domestic International American International
tobacco tobacco food food
---------------------------------------------------
2006 Operating
Companies Income $ 1,116 $ 1,967 $ 896 $ 164
2005 Operating
Companies Income 1,038 2,075 910 293
% Change 7.5% (5.2)% (1.5)% (44.0)%
Reconciliation:
---------------
2005 Operating
Companies Income $ 1,038 $ 2,075 $ 910 $ 293
Divested
businesses - 2005 - - (4) (3)
Domestic tobacco
headquarters
relocation
charges - 2005 1 - - -
Asset impairment
and exit costs -
2005 - 3 117 33
Gains on sales of
businesses - 2005 - - - (116)
Implementation
costs - 2005 - - 14 5
---------------------------------------------------
1 3 127 (81)
---------------------------------------------------
Divested
businesses - 2006 - - (1) -
Italian antitrust
charge - 2006 - (61) - -
Asset impairment
and exit costs -
2006 - (2) (134) (68)
Losses on sales of
businesses - 2006 - - (3) -
Implementation
costs - 2006 - - (7) (6)
---------------------------------------------------
- (63) (145) (74)
---------------------------------------------------
Acquired businesses - 146 - -
Currency - (156) 5 (12)
Operations 77 (38) (1) 38
---------------------------------------------------
2006 Operating
Companies Income $ 1,116 $ 1,967 $ 896 $ 164
===================================================
Financial
services Total
-------------------------
2006 Operating
Companies Income $ 96 $ 4,239
2005 Operating
Companies Income 41 4,357
% Change NA (2.7)%
Reconciliation:
---------------
2005 Operating
Companies Income $ 41 $ 4,357
Divested
businesses - 2005 - (7)
Domestic tobacco
headquarters
relocation
charges - 2005 - 1
Asset impairment
and exit
costs - 2005 - 153
Gains on sales of
businesses - 2005 - (116)
Implementation
costs - 2005 - 19
-------------------------
- 50
-------------------------
Divested businesses
- 2006 - (1)
Italian antitrust
charge - 2006 - (61)
Asset impairment
and exit costs -
2006 - (204)
Losses on sales of
businesses - 2006 - (3)
Implementation
costs - 2006 - (13)
-------------------------
- (282)
-------------------------
Acquired businesses - 146
Currency - (163)
Operations 55 131
-------------------------
2006 Operating
Companies Income $ 96 $ 4,239
=========================
ALTRIA GROUP, INC. Schedule 4
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Quarters Ended March 31,
($ in millions, except per share data)
(Unaudited)
Net Diluted
Earnings E.P.S.
----------- -----------
2006 Continuing Earnings $ 3,477 $ 1.65
2005 Continuing Earnings $ 2,584 $ 1.24
% Change 34.6 % 33.1 %
Reconciliation:
---------------
2005 Continuing Earnings $ 2,584 $ 1.24
2005 Domestic tobacco headquarters relocation
charges 1 -
2005 Asset impairment, exit and
implementation costs, net of minority
interest impact 97 0.04
2005 Gain on sales of business, net of
minority interest impact (65) (0.03)
2005 Corporate asset impairment and exit
costs 12 0.01
2005 Tax items, net of minority interest
impact (39) (0.02)
----------- -----------
6 -
----------- -----------
2006 Italian antitrust charge (61) (0.03)
2006 Asset impairment, exit and
implementation costs, net of minority
interest impact (125) (0.06)
2006 Loss on sales of businesses, net of
minority interest impact (3) -
2006 Tax items, net of minority interest
impact 967 0.46
----------- -----------
778 0.37
----------- -----------
Currency (107) (0.05)
Change in shares - (0.02)
Change in tax rate 31 0.02
Operations 185 0.09
----------- -----------
2006 Continuing Earnings $ 3,477 $ 1.65
2006 Discontinued Earnings $ - $ -
----------- -----------
2006 Net Earnings $ 3,477 $ 1.65
=========== ===========
ALTRIA GROUP, INC. Schedule 5
and Subsidiaries
Condensed Balance Sheets
(in millions, except ratios)
(Unaudited)
March 31, December 31,
2006 2005
------------ ------------
Assets
------
Cash and cash equivalents $ 2,491 $ 6,258
All other current assets 19,633 19,523
Property, plant and equipment, net 16,719 16,678
Goodwill 31,634 31,219
Other intangible assets, net 12,201 12,196
Other assets 15,181 14,667
------------ ------------
Total consumer products assets 97,859 100,541
Total financial services assets 6,955 7,408
------------ ------------
Total assets $ 104,814 $ 107,949
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Short-term borrowings $ 3,845 $ 2,836
Current portion of long-term debt 3,541 3,430
Accrued settlement charges 1,125 3,503
All other current liabilities 14,883 16,389
Long-term debt 14,042 15,653
Deferred income taxes 8,703 8,492
Other long-term liabilities 12,619 13,813
------------ ------------
Total consumer products liabilities 58,758 64,116
Total financial services liabilities 7,912 8,126
------------ ------------
Total liabilities 66,670 72,242
Total stockholders' equity 38,144 35,707
------------ ------------
Total liabilities and
stockholders' equity $ 104,814 $ 107,949
============ ============
Total consumer products debt $ 21,428 $ 21,919
Debt/equity ratio - consumer products 0.56 0.61
Total debt $ 23,444 $ 23,933
Total debt/equity ratio 0.61 0.67
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