Altria Group, Inc. Reports 2006 Fourth-Quarter and Full-Year Results.FOURTH-QUARTER 2006 -- Reported 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 up 28.4% to $1.40 vs. $1.09 in year-ago quarter, including the items detailed on Schedule 7 -- Adjusted for items detailed in table below, diluted earnings per share up 8.5% to $1.27 versus $1.17 in year-ago quarter FULL-YEAR 2006 -- Reported diluted earnings per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the up 12.0% to $5.71 versus $5.10 in 2005, including the items detailed on Schedule 8 -- Adjusted for items detailed in table below, diluted earnings per share from continuing operations up 4.9% to $5.35 versus $5.10 in 2005 2007 OUTLOOK -- Reported 2007 full-year diluted earnings per share from continuing operations are forecast in a range of $4.15 to $4.20 at current exchange rates. This forecast includes charges of approximately $0.08 per share and excludes Kraft, which will be accounted for as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. for the full-year 2007, reflecting the distribution of Kraft shares. -- Adjusted for the $.08 per share of charges, Altria projects that the growth rate of diluted earnings per share from continuing operations will be in the mid-single-digit range for the full-year 2007, from an adjusted base of $4.05 per share for 2006. 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) today announced fourth-quarter 2006 reported diluted earnings per share were up 28.4% to $1.40, including items detailed on the attached Schedule 7, versus $1.09 in the year-ago period. Adjusted for items detailed in the table below, diluted earnings per share were up 8.5% to $1.27, versus $1.17 in the year-earlier period. For the full year 2006, reported diluted earnings per share from continuing operations were up 12.0% to $5.71, including items detailed on Schedule 8, versus $5.10 for the full year 2005. Adjusted for items detailed in the table below, diluted earnings per share were up 4.9% to $5.35, versus $5.10 for 2005. "We finished 2006 with a strong fourth quarter and enter 2007 on an exciting note with today's announcement of the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of 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 to Altria shareholders," 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. "For the full year 2006, our tobacco businesses achieved strong results, benefiting from improving trends 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). at 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. and from an increase in total retail share, to 50.3%, at 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. ," Mr. Camilleri Camilleri is a surname. People with Camilleri as a surname
Kraft Spin-Off As announced in a separate news release, the Board of Directors of Altria Group, Inc. voted earlier today to authorize To empower another with the legal right to perform an action. The Constitution authorizes Congress to regulate interstate commerce. authorize v. to officially empower someone to act. (See: authority) the spin-off of all shares of Kraft Foods Inc. owned by Altria to Altria's shareholders. The distribution of the approximately 89% of Kraft's outstanding shares owned by Altria will be made on March 30, 2007, to Altria shareholders of record as of the close of business on March 16, 2007. Altria will distribute approximately 0.7 of a share of Kraft for every share of Altria common stock outstanding as of the record date, based on the number of Altria shares outstanding at 5:00 p.m. Eastern Time on that date. The exact distribution ratio will be determined on the record date. On or about March 20, 2007, Altria will mail an Information Statement to all shareholders of Altria common stock as of the record date. The Information Statement will include information regarding the procedures by which the distribution will be effected and other details of the transaction. 2006 Results Excluding Items After adjusting for the items shown in the table below, the 8.5% increase in diluted earnings per share to $1.27 for the fourth quarter of 2006 reflected strong tobacco operating results and positive currency of $0.01 per share, partially offset by the negative impact of the inclusion of an extra week of results at Kraft in the fourth quarter of 2005. For the full year 2006, the 4.9% increase in diluted earnings per share from continuing operations to $5.35 after adjusting for the items shown in the table was primarily driven by the same factors, partially offset by unfavorable currency of $0.05 per share. [TABLE OMITTED] 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 recorded during the fourth quarter of 2006 included the non-cash pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $245 million or $0.07 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share related to Kraft's Tassimo Tassimo is a consumer hot beverage system that prepares one-cup servings of espresso, regular coffee, tea, hot chocolate, and various other coffee drinks, notably those including milk such as latte or cappuccino. single-serve hot beverage system. The diluted earnings per share figures shown in the table above include the impact of acquisitions and divestitures in 2006 and 2005, as well as the extra week of shipments at Kraft in 2005. Acquisitions and Divestitures In July July: see month. 2006, Kraft agreed to acquire the Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. and Portuguese operations of United Biscuits __FORCETOC__ United Biscuits ("UB") is a British multinational food manufacturer, makers of McVitie's biscuits, KP nuts, Hula Hoops, The Real McCoy's crisps, Phileas Fogg crisps, and Jacob's Cream Crackers. (UB), and rights to all Nabisco trademarks in 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 , 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, for a total cost of $1.1 billion. The non-cash acquisition was financed by Kraft's assumption of $541 million of debt issued by the acquired business immediately prior to the acquisition, as well as $530 million of value for the redemption of Kraft's outstanding investment in UB. The redemption of Kraft's investment in UB resulted in a $251 million pre-tax gain on closing, benefiting Altria Group, Inc. by $0.06 per diluted share, after taxes and minority interest. Kraft also completed the sale of its 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. pet snacks brand and assets in July 2006 for approximately $580 million and recorded additional taxes of approximately $60 million related to the sale. This sale and the additional taxes were recorded in the third quarter of 2006 and resulted in a negative impact of $0.03 per share to Altria Group, Inc., after taxes and minority interest. In addition, Kraft agreed to sell its Minute Rice brand and related assets for approximately $280 million during 2006. The transaction closed in the fourth quarter and resulted in a pre-tax gain to Altria Group, Inc. of approximately $226 million or $0.07 per diluted share, after taxes and minority interest. In November November: see month. 2006, Philip Morris International Inc. (PMI See Private Mortgage Insurance. ) announced that it was reorganizing its tobacco and beer equity holdings in the Dominican Republic Dominican Republic (dəmĭn`ĭkən), republic (2005 est. pop. 8,950,000), 18,700 sq mi (48,442 sq km), West Indies, on the eastern two thirds of the island of Hispaniola. The capital and largest city is Santo Domingo. . The transaction was completed before the end of the year, and PMI now owns 100% of the cigarette business and no longer holds an interest in the beer business of E. Leon Leon Medieval kingdom, northwestern Spain. Leon proper included the cities of León, Salamanca, and Zamora—the adjacent areas of Vallodolid and Palencia being disputed with Castile, originally its eastern frontier. Jimenes, C. por. A. The transaction increased Altria's 2006 pre-tax income by $488 million or $0.15 per diluted share. On January 19, 2007, PMI announced that it had entered into an agreement to acquire an additional 50.21% stake in Pakistan cigarette manufacturer, Lakson Tobacco Company Limited from a number of Lakson Tobacco's principal shareholders for approximately $339 million. PMI currently holds a 40% stake in Lakson Tobacco and the transaction will bring PMI's stake to approximately 90%. On January 24, 2007, PMI notified the Securities and Exchange Commission of Pakistan The Securities and Exchange Commission of Pakistan (SECP) is an organization whose purpose is to develop a modern and efficient corporate sector and a capital market based on sound regulatory principles, in order to foster economic growth and prosperity in Pakistan. and local stock exchanges of its intention to publicly announce and commence a public tender offer on February 15, 2007, for the remaining shares. Lakson Tobacco is Pakistan's second-largest tobacco company, with cigarette volume of approximately 30 billion units in the fiscal year ending June 30, 2006. Based on a price per share of $10.96, the company is valued at approximately $675 million. 2007 Full-Year Forecast Altria forecasts reported 2007 full-year diluted earnings per share from continuing operations in a range of $4.15 to $4.20 at current exchange rates and excluding Kraft, which will be accounted for as a discontinued operation for the full-year 2007, reflecting the distribution of Kraft shares. The company's projection includes a higher tax rate in 2007 versus 2006, and charges of approximately $0.08 per share. Diluted earnings per share from continuing operations are forecast to grow in the mid-single-digit range for the full-year 2007, versus $4.05 per share for 2006 including certain net charges shown below. The company's forecast excludes the impact of any potential future acquisitions or divestitures. The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to this projection. [TABLE OMITTED] Conference Call A conference call with members of the investment community and news media will be Webcast at 1:00 p.m. Eastern Time on January 31, 2007. 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. Altria Group, Inc.'s consolidated statement of earnings for the year ended December 31, 2005 included a 53(rd) week for Kraft. Kraft's subsidiaries generally end their fiscal years on the last Saturday of the year. Accordingly, most years contain 52 weeks of operating results, while every fifth or sixth year includes 53 weeks. The extra week at Kraft added an estimated $625 million in net revenues and $100 million in operating companies income to Altria's results for the full year and fourth quarter of 2005. References to international tobacco market share are PMI estimates based on a number of industry sources. All references in this news release are to continuing operations, unless otherwise noted. 2006 Fourth-Quarter Results Net revenues for the fourth quarter of 2006 increased 3.7% versus the year-ago quarter to $25.4 billion, including acquisitions, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency of $413 million and the positive impact of pricing, primarily at PMI. Comparison with the year-ago period was adversely impacted by the extra week at Kraft in the fourth quarter of 2005. Operating income increased 16.2% to $4.2 billion, reflecting the items described in the attached reconciliation on Schedule 3, including the $488 million gain from PMI's reorganization of its tobacco and beer equity holdings in the Dominican Republic, the gain on the sale of Minute Rice, acquisitions, favorable currency of $45 million and higher results from operations of $87 million, driven by international and domestic tobacco. These increases were partially offset by charges for asset impairment, exit and implementation costs, which were $204 million higher in the fourth quarter of 2006 versus the year-earlier period, and the impact of the extra week at Kraft in 2005. Net earnings increased 29.3% to $3.0 billion, primarily reflecting the factors mentioned above and a lower effective tax rate in the fourth quarter of 2006. The company's effective tax rate was 26.6% in the fourth quarter of 2006 compared to 30.7% for the same period in 2005. The decrease in the effective tax rate was due primarily to a change in the mix of foreign earnings and taxes, reversals 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 and the favorable resolution of foreign tax audits. Diluted earnings per share, as detailed on Schedule 1, increased 28.4% to $1.40. 2006 Full-Year Results Net revenues for the full year 2006 increased 3.6% versus 2005 to $101.4 billion. The comparison with 2005 includes the favorable impact from acquisitions of $1.3 billion and an increase in net revenues from tobacco and international food, partially offset by unfavorable currency of $506 million, divestitures and the additional week at Kraft in 2005. Operating income increased 4.9% to $17.4 billion, reflecting the items described in the attached reconciliation on Schedule 6, including PMI's gain on the Dominican Republic transaction, Kraft's $251 million gain on the redemption of its interest in UB, Kraft's gain on the sale of Minute Rice, acquisitions and higher results from operations of $511 million, driven by increases in all businesses. These were partially offset by unfavorable currency of $154 million, charges for asset impairment, exit and implementation costs, which were $570 million higher in 2006 including the Tassimo asset impairment charge, and the extra shipping week at Kraft in 2005. The operating income comparison also benefited from charges recorded for airline industry exposure at 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 ) of $200 million in 2005 versus $103 million in 2006, and net charges at Philip Morris USA (PM USA) related to tobacco quota quota In international trade, a government-imposed limit on the quantity of goods and services that may be exported or imported over a specified period of time. Quotas are more effective than tariffs in restricting trade, since they limit the availability of goods rather buy-out buy·out also buy-out n. 1. The purchase of the entire holdings or interests of an owner or investor. 2. The purchase of a company or business: legislation. Earnings from continuing operations increased 12.7% to $12.0 billion, primarily reflecting the items mentioned above and a lower effective tax rate in 2006. The company's effective tax rate was 26.3% for the full year 2006. The 2006 tax rate includes the benefit from the 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, as announced in the first quarter of 2006, and the other tax benefits mentioned above. By comparison, the company's effective tax rate for the full year 2005 was 29.9%. 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 15.2% to $12.0 billion, reflecting the factors mentioned above. Diluted earnings per share, including discontinued operations as detailed on Schedule 4, increased 14.4% to $5.71. During 2006, Altria Group, Inc. increased its regular quarterly dividend by 7.5% to $0.86 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 $3.44 per common share. DOMESTIC TOBACCO 2006 Fourth-Quarter Results For the fourth quarter of 2006, Philip Morris USA (PM USA), Altria Group, Inc.'s domestic tobacco business, achieved a market share increase of 0.1 point to 50.1%, driven by Marlboro and Parliament. Operating companies income increased 4.2% to $1.1 billion, primarily driven by lower wholesale promotional allowance rates, partially offset by lower volume. During the fourth quarter of 2006, PM USA announced a further reduction in the wholesale promotional allowance on its Focus on Four brands of $1.00 per carton, from $5.00 to $4.00, effective December 18, 2006. In addition, the price of its non-focus brands was increased by $1.00 per carton. Shipment volume of 45.3 billion units was down 0.4% versus the previous year, but was estimated to be down approximately 2.0% when adjusted for trade inventory changes and the timing of promotional shipments versus the fourth quarter of 2005. Premium mix for PM USA increased by 0.7 percentage points to 92.3% in the fourth quarter of 2006. As shown in the following table, PM USA's total retail share increased to 50.1% in the fourth quarter of 2006, driven by Marlboro and Parliament. [TABLE OMITTED] PM USA's share of the premium category was down 0.1 share point versus the year-earlier period to 61.9%, as gains by Marlboro and Parliament were more than offset by segment share losses incurred by other PM USA non-focus premium brands. PM USA's share of the discount category declined 0.2 share point to 16.0%. The total industry's premium category share increased 0.5 share points to 74.3% in the fourth quarter of 2006, while the discount category share correspondingly declined to 25.7%. Within the discount category, industry share for the deep discount segment (which includes both major manufacturers' private label brands and all other manufacturers' discount brands) was flat at 11.8% versus the year-ago period. In late 2006, PM USA announced that it will introduce Marlboro Smooth at retail in March 2007. Marlboro Smooth is a new menthol menthol, white crystalline substance with a characteristic pungent odor. It is derived from the oil of the peppermint plant, Mentha piperita (see mint), or prepared synthetically from coal tar. product in the Marlboro brand family. This line extension reinforces Marlboro's flavor heritage and its position as the leader in the premium category by offering adult smokers a uniquely rich and smooth taste. 2006 Full-Year Results For the full year 2006, PM USA's domestic tobacco business, achieved solid retail share and income growth. Operating companies income increased 5.0% to $4.8 billion, primarily driven by lower wholesale promotional allowance rates, partially offset by lower volume. Results for 2005 included charges for the disposition of pool tobacco stock and a $56 million accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for the Boeken case, partially offset by the reversal of a 2004 accrual related to tobacco quota buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. legislation. Shipment volume of 183.4 billion units was down 1.1% versus 2005 but was estimated to be down approximately 1.5% when adjusted for trade inventory changes and the timing of promotional shipments. Premium mix for PM USA increased by 0.5 percentage points to 92.1% in 2006. As shown in the following table, PM USA's total retail share increased to 50.3% in 2006, driven by Marlboro and Parliament. [TABLE OMITTED] PM USA's share of the premium category declined 0.1 share point versus the prior year to 62.0%, as gains by Marlboro and Parliament were more than offset by category share losses incurred by other PM USA non-focus premium brands. PM USA's share of the discount category grew 0.1 share point to 16.4%, reflecting the performance of Basic. The total industry's premium category share increased 0.8 points to 74.4% in 2006, while the discount category share correspondingly declined to 25.6%. Within the discount category, industry share of the deep discount segment (which includes both major manufacturers' private label brands and all other manufacturers' discount brands) declined 0.2 share points to 11.6%. INTERNATIONAL TOBACCO 2006 Fourth-Quarter Results In the fourth quarter of 2006, cigarette shipment volume for Philip Morris International (PMI), Altria Group, Inc.'s international tobacco business, increased 3.9% to 191.4 billion units, driven by improved results in all geographic regions and worldwide duty-free. Operating companies income increased 46.5% to $2.2 billion, due primarily to higher pricing and volume, the impact of the $488 million gain from the Dominican Republic transaction and favorable currency of $30 million. Adjusted for the gain from the Dominican Republic transaction, PMI's operating companies income was up approximately 14.4%. PMI's market share in the fourth quarter of 2006 advanced in many countries, with gains in Argentina, Australia, Austria, Belgium, Egypt, France, Greece, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Hungary, Indonesia, Ireland, Italy, Korea, Lithuania, Mexico, Norway, the Philippines, Poland, Serbia, Singapore, Spain, Sweden, Thailand and Ukraine. Total Marlboro cigarette shipments of 73.5 billion units were up 4.1%, due mainly to France, Korea, the Philippines, Russia, Turkey and Ukraine, and favorable timing of shipments in the Middle East, Japan and Mexico, partially offset by declines in Argentina, Germany and Spain. Marlboro market share was up in Belgium, Egypt, France, Greece, Hong Kong, Italy, Korea, Mexico, the Philippines, Poland, Romania, Russia, Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. , Singapore, Spain, Switzerland, Taiwan, Thailand and
Ukraine.In the European Union (EU) region, PMI's cigarette shipments were up 2.3% or 1.3 billion units, representing the strongest volume performance in this region in three years. Improving trends in the key markets of Germany, Italy, France and Poland contributed to the shipment increase. PMI's cigarette market share in the EU region was up 0.7 share points to 39.5% and PMI's share of total tobacco consumption (cigarettes and other tobacco products) in the EU was also up 0.5 share points to 35.4%. In Germany, despite a higher total cigarette market of 4.5% or one billion units, total tobacco consumption declined 5.8%, reflecting the elimination of tobacco portions. PMI's total tobacco in-market sales were down 2.4%, resulting in total tobacco consumption share increasing 1.0 point to 30.0%. PMI's in-market cigarette sales grew 3.1%, but PMI's cigarette market share declined 0.5 points to 36.1%, reflecting lower share for Marlboro, partially offset by gains of low-price offerings L&M and Next. In Italy, the total cigarette market rose 1.8% and PMI's market share grew 2.0 points to 54.3%, driven by Marlboro, which was up 0.9 points to 23.1%, and Diana. In France, the total market was essentially unchanged versus the prior-year quarter. PMI shipments were up 7.4% and market share grew 0.9 points to 42.9% on the continued strength of Marlboro and the Philip Morris brand. In Spain, the total cigarette market increased 5.4%. PMI cigarette shipments were down 4.6%. However, in-market retail sales were up 7.8%, resulting in share growth of 0.7 points to 32.3%, driven by Marlboro, which added 1.5 points to 17.0%. On November 10, 2006, the Spanish government
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. to 70 euros per thousand. Effective December 30, 2006, PMI raised prices on all its brands, with Marlboro's price increasing from 2.75 euros per pack to 2.95 euros per pack. As a result, PMI believes that its overall profitability should improve in Spain in 2007. In Eastern Europe, the Middle East and Africa, PMI's shipments increased 1.8%, due mainly to gains in Egypt and Ukraine, and favorable timing in Russia and Saudi Arabia, which were partially offset by a decline in Romania. In Russia, share was down 0.3 points to 26.7%, as declines of low-price brands and L&M were partially offset by the continued growth of Marlboro, Muratti, Parliament 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. . Combined share for these brands rose 0.9 share points in Russia in the fourth quarter of 2006. In Ukraine, shipments grew strongly and share advanced 0.7 points to 33.0% as consumers continued to trade up to higher-priced Marlboro and Chesterfield. Total Asia volume rose 4.2%, due primarily to favorable timing in Japan and gains in Indonesia and the Philippines, partially offset by lower shipments in Thailand. In Japan, the total market declined 6.4%, due mainly to the July 1, 2006, tax-driven price increase. PMI shipments were up 2.4%, reflecting inventory reductions in the fourth quarter of 2005 and higher inventory in the fourth quarter of 2006 related to new product launches. PMI in-market sales were down 6.8% and market share was down 0.1 points to 24.7%. Marlboro share in Japan was down 0.1 points to 9.7%. In Indonesia, PMI shipment volume rose 12.7% and market share increased 0.6 points to 28.2%, driven by A Hijau and A Mild. In Thailand, PMI shipments were down 20.8%, reflecting a lower total market as a result of the tax-driven price increase in December 2005. However, PMI's share in Thailand increased 0.1 point to 19.1%. During the fourth quarter, PMI successfully launched Marlboro Filter Plus in Korea, which helped to drive a 0.9 share point increase for Marlboro to 3.7%. Marlboro Filter Plus is an innovative new product in terms of packaging and cigarette and filter construction that delivers excellent taste for a one-milligram product. PMI shipment 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. advanced 10.7%, due mainly to gains in Argentina and favorable timing in Mexico. The total market in Argentina was up approximately 5.0%, while PMI shipments grew 17.7% and share was up 7.5 points to 67.6%, due primarily to the continued growth of the Philip Morris brand. In Mexico, the total market rose 5.7%, due to trade purchasing in December 2006 ahead of the January 2007 excise tax increase. PMI shipments advanced 12.6%, due to favorable timing, and market share rose 2.8 points to 65.5%, mainly driven by higher volume for Marlboro, which benefited from the successful launch of Marlboro Wides. 2006 Full-Year Results Cigarette shipment volume for PMI increased 3.4% versus 2005 to 831.4 billion units, driven mainly by higher volume in Argentina, Colombia, Egypt, France, Indonesia, Mexico, Poland, Russia and Ukraine. Partially offsetting these increases was lower volume in Belarus, 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. , Italy, Japan, Portugal, Romania, Spain, Thailand and Turkey. Excluding acquisitions, and adjusting for the one-time inventory benefit in Italy in 2005, PMI's cigarette shipment volume was up 0.4%. PMI's total tobacco volume, which included 8.3 billion cigarette equivalent units of other tobacco products (OTPs), increased 3.5% to 839.7 billion units. Total tobacco volume increased 0.6% excluding acquisitions and the one-time inventory benefit in Italy in 2005. Operating companies income increased 8.1% to $8.5 billion, due primarily to pricing, the Dominican Republic transaction and a $232 million benefit from acquisitions. These were partially offset by negative currency of $183 million, a $61 million charge in the first quarter of 2006 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 and higher asset impairment and exit costs. PMI market share advanced in many countries in 2006, with gains in Argentina, Austria, Belgium, Egypt, Finland, France, Germany, Hong Kong, Hungary, Indonesia, Italy, Korea, Mexico, Poland, Singapore, Sweden, Thailand, Turkey and Ukraine. Total Marlboro cigarette shipments of 316.0 billion units were down 1.9%, due mainly to declines in Argentina, Germany, Japan and Spain. Share performance for Marlboro was strong, most notably in France, Greece, Hong Kong, Italy, Japan, Korea, Kuwait, Mexico, Poland, Romania, Russia, Saudi Arabia, Singapore, Spain, Thailand and Ukraine. In the European Union (EU) region, PMI cigarette shipments were down 2.8% for the full year 2006, although adjusted for the 2005 one-time distribution change in Italy of 3.0 billion units, EU volume declined a more moderate 1.7% in 2006. Declines in Czech Republic, Germany, Portugal and Spain were partially offset by gains in France, Hungary and Poland. PMI cigarette market share in the EU region was essentially unchanged at 39.4% and share of total tobacco consumption (cigarettes and OTPs) in the EU was up 0.2 share points to 35.3%. In Spain, the total cigarette market declined 2.8%, due to excise A tax imposed on the performance of an act, the engaging in an occupation, or the enjoyment of a privilege. A tax on the manufacture, sale, or use of goods or on the carrying on of an occupation or activity, or a tax on the transfer of property. tax-driven price increases. PMI cigarette shipments were down 12.8% and market share declined 2.4 points to 32.2%, mainly reflecting Chesterfield and L&M, which suffered from consumers switching to the lowest-price segment and to brands that were previously in the premium segment, but were repositioned to lower-price segments. Share for Marlboro advanced 0.1 points to 17.1% in 2006 versus 2005, underscoring the brand's resilience resilience (r  ·zilˑ·yens),n in a highly competitive environment. In Germany, total tobacco consumption was down 5.9% in 2006, reflecting the decline and ultimate exit of tobacco portions from the market. PMI's total tobacco in-market sales declined 0.2%, while its share of total tobacco consumption increased 1.7 points to 30.4%. The total cigarette market declined 3.9%, due to lower consumption as a result of tax-driven price increases. PMI's in-market cigarette volume declined 3.4%. However, cigarette market share rose 0.2 points to 36.8%, driven by 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 L&M. Cigarette share for Marlboro declined 1.6 points in 2006 to 28.0%. In Italy, the total cigarette market rose 1.1%. PMI shipment volume decreased 3.9%, but adjusted for the 2005 one-time distribution change, volume rose 1.9%. Market share advanced 1.3 points to 53.8%, driven by Marlboro, Diana and Chesterfield. In France, the total market grew 1.8% and PMI shipments were up 7.0%, driven by price stability, moderate price gaps and favorable timing of shipments. Market share continued to grow, rising 1.0 point to a record high 42.7% behind the solid performance of Marlboro and the Philip Morris brand. In Poland, the total market declined 1.9%, but PMI shipments were up 6.3%, due mainly to higher L&M and Next. Market share advanced 2.8 points to 40.0%. In Eastern Europe, the Middle East and Africa, PMI shipments were up 1.7%, driven by gains in Russia, Ukraine and Egypt, partially offset by declines in Romania and Turkey. In Romania, shipments declined 15.1% and share was down 2.1 points to 31.4%, as L&M came under intense competition from the low-price segment. However, Marlboro share in Romania grew 2.2 points to 12.0%. In Turkey, shipments declined 3.5%, reflecting the continued decline of low-price Bond Street. However, PMI market share in Turkey rose 1.4 points to 42.5% as consumers traded up to its higher-margin brands, Parliament and Muratti. In Russia, shipments rose 3.4%, driven by Marlboro, Muratti, Parliament and Chesterfield. Market share, however, declined 0.4 points to 26.6% in Russia, but this primarily reflected declines of low-price brands and L&M. Combined market share in Russia for higher-margin brands, Marlboro and Parliament, was up 0.4 share points versus 2005. In Ukraine, shipments increased and share advanced 0.8 points to 33.0% as consumers continued to trade up to higher-priced Marlboro and Chesterfield. Total Asia volume was up 12.3%, due primarily to gains in Indonesia, partially offset by lower volume in Japan and Thailand. In Japan, the total market declined 4.4%, or 12.5 billion units, driven by the July 1, 2006, price increase. PMI in-market sales were down 4.8% and market share declined 0.1 points to 24.7%. Marlboro share rose 0.2 points to 9.9%. Shipment volume for PMI in 2006 declined 5.4%, mainly reflecting lower in-market sales. In Indonesia, PMI shipment volume rose 69.6%, aided by the acquisition of Sampoerna in 2005. Market share grew 1.5 points to 27.7% on the strength of its brand portfolio, led by A Hijau and A Mild. PMI volume in Latin America increased 10.8%, driven by strong gains in Argentina and Mexico, as well as higher volume in Colombia due to the 2005 acquisition of Coltabaco. In Argentina, the total market advanced 7.5%, while PMI shipments grew 15.9% and share was up 4.9 points to a new record of 66.3%, due mainly to the Philip Morris brand. In Mexico, the total market was up 2.1% and PMI shipments grew 6.0%. Market share rose 1.4 points to a record high of 63.5%, reflecting the continued strong performance of Marlboro, which rose 1.4 share points to 47.7%, and Benson & Hedges. FOOD 2006 Fourth-Quarter Results Kraft Foods Inc. (Kraft) also reported 2006 fourth-quarter and full-year results today. Kraft's net revenues decreased 3.0% to $9.4 billion in the fourth quarter, reflecting one less shipping week in 2006 compared to 2005, which negatively impacted reported net revenues by approximately 7.0 percentage points. Total ongoing volume declined 4.4%, reflecting the estimated 7.0 percentage point impact of one less week in 2006. However, there were strong performances from a number of products, including 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 meats and Nabisco cookies and snack crackers in 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. , Milka chocolate in the EU, Jacobs soluble soluble /sol·u·ble/ (sol´u-b'l) susceptible of being dissolved. sol·u·ble adj. Capable of being dissolved, especially easily dissolved. coffee in Russia and Ukraine, and Lacta chocolate in Brazil. These gains were partially offset by product item pruning pruning, the horticultural practice of cutting away an unwanted, unnecessary, or undesirable plant part, used most often on trees, shrubs, hedges, and woody vines. and the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of select product lines, primarily in North America Foodservice and in the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. ready-to-drink beverage business, as well as share declines in 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. coffee, Kraft salad dressings and Planters Planters is an American snack food company under Kraft Foods manufacturing, best known for its nuts and the Mr. Peanut icon that symbolizes them. Started by Italian immigrants Amedeo Obici and Mario Peruzzi in Wilkes-Barre, Pennsylvania, in 1906, it was incorporated in 1908 snacks nuts. Operating income decreased 18.6% to $974 million. Excluding asset impairment, exit and implementation costs and gains/losses on the sale of businesses, operating income decreased 11.3% and operating income margin decreased to 14.2% in 2006 from 15.6% in 2005. The decline was primarily due to higher investments in marketing and in research and development. 2006 Full-Year Results For the full year 2006, Kraft's net revenues were up 0.7% to $34.4 billion, primarily reflecting the factors mentioned above, including one less shipping week, which negatively impacted net revenues by approximately 2.0 percentage points. Ongoing volume declined 1.7%, due primarily to the impact of product item pruning and the discontinuation of select product lines, primarily in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Foodservice and Canadian ready-to-drink beverage businesses, as well as one less shipping week in 2006. Partially offsetting those factors were strong gains achieved across numerous products, including those mentioned for the fourth quarter. Operating income decreased 4.8% to $4.5 billion for 2006 versus 2005, due primarily to higher asset impairment, exit and implementation costs, including the Tassimo charge, and one less shipping week in 2006, partially offset by the gain on the redemption of Kraft's investment in UB in the third quarter of 2006. Additional information concerning Kraft's results is available at www.Kraft.com. 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 Fourth-Quarter and Full-Year Results Philip Morris Capital Corporation (PMCC) reported operating companies income of $38 million for the fourth quarter of 2006 and $176 million for the full year 2006, versus $41 million for the fourth quarter of 2005 and $31 million for the full year 2005. Results for the fourth quarter of 2006 reflect lower revenues, primarily as a result of lower investment balances. Results for the full year 2006 include higher gains from asset sales and an increase of $103 million in the provision for losses related to the airline industry during the second quarter of 2006, versus a $200 million increase in the third 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 gains and generate cash flow from asset sales and related activities. PMCC is no longer making new investments and expects that its operating companies income will fluctuate over time as investments mature or are sold. Altria Group, Inc. Profile As of December 31, 2006, Altria Group, Inc. owned approximately 89.0% 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. owned approximately 28.6% 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, Nabisco, Oreo, Oscar 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 2006 net revenues of $101.4 billion. Trademarks and service marks mentioned in this release are the registered property of, or licensed by, the subsidiaries of Altria Group, Inc. A complete copy of Altria Group, Inc.'s audited 2006 financial statements will be available through Altria Group, Inc.'s website after they are filed with the Securities and Exchange Commission on or about February 6, 2007. If you do not have Internet access See how to access the Internet. but would like to receive a copy of the 2006 audited financial statements for Altria Group, Inc. please call toll-free (800) 367-5415 in the U.S. and Canada to request a copy. Forward-Looking and Cautionary Statements This press release contains projections of future results and other forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The following important factors could cause actual results and outcomes to differ materially from those contained in such forward-looking statements. Altria Group, Inc.'s consumer products subsidiaries are subject to changing prices for raw materials; intense price competition; changes in consumer preferences and demand for their products; fluctuations in levels of customer inventories; the effects of foreign economies and local economic and market conditions; 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 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, and 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 and bonding requirements in the limited number of jurisdictions that do not limit the dollar amount of appeal bonds; 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 and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended September 30, 2006. 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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