Altria Group, Inc. Reports 2007 Second-Quarter Results.* 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 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 5.0% to $1.05, including charges of $0.12 per share 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, as well as other items detailed on Schedule 7 * Adjusted diluted earnings per share from continuing operations up 9.5% to $1.15 versus $1.05 in 2006 * Full-year 2007 reported diluted earnings per share from continuing operations revised to a range of $4.05 to $4.10, reflecting $0.15 in additional charges for asset impairment and exit costs, versus a previously announced range of $4.20 to $4.25 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 -- Regulatory News: 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 second-quarter reported diluted earnings per share from continuing operations of $1.05, up 5.0% versus the prior year, including charges of $0.12 per share for asset impairment and exit costs, primarily related to the previously announced closing of Philip Morris USA's (PM USA) cigarette manufacturing facility in Cabarrus, NC as well as other items detailed on the attached Schedule 7. After adjusting results as detailed in the table below, diluted earnings per share from continuing operations were up 9.5% to $1.15, versus $1.05 in the corresponding prior-year period. "Altria had a solid quarter. The underlying fundamentals in our tobacco businesses remained strong, with operating companies operating company A business that engages in transactions with outsiders. income well ahead of the prior-year period when adjusted for the impact of asset impairment and exit costs," 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. "In our U.S. tobacco business, Marlboro achieved a record retail share of 41.0%. In our international tobacco business, operating companies income adjusted for asset impairment and exit costs grew 7.2%, 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. ) continued to introduce innovative products including Marlboro Filter Plus in Korea, Ukraine and Russia, L&M Essence in a number of key markets and Marlboro kretek in Indonesia in early July." 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 July 18, 2007. Access is available at www.altria.com. 2007 Second-Quarter Results Excluding Items After adjusting for the items shown in the table below, diluted earnings per share from continuing operations increased 9.5% to $1.15 for the second quarter of 2007. [TABLE OMITTED] 2007 Full-Year Forecast Altria revised its forecast to a range of $4.05 to $4.10 for reported 2007 full-year diluted earnings per share from continuing operations, reflecting $0.15 in additional charges for asset impairment and exit costs, versus its previously announced range of $4.20 to $4.25. The revised projection includes charges of $0.24 per share, which are $0.15 per share higher ($0.12 for PM USA and $0.03 for PMI) than the $0.09 in previously forecasted charges. The projection also includes $0.06 per share for cash recoveries 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 ), which were recorded in the first half of 2007. The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to this projection. Manufacturing Optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. Program On June 26, 2007 Altria announced plans by its tobacco operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. to optimize optimize - optimisation worldwide cigarette production by moving U.S.-based cigarette production for non-U.S. markets to PMI facilities in Europe. PMI is expected to shift sourcing of approximately 57 billion cigarettes to facilities in Europe by the third quarter of 2008, while PM USA will close its Cabarrus, NC manufacturing facility by the end of 2010 and consolidate manufacturing for the U.S. market at its Richmond, VA Manufacturing Center. PM USA recorded an initial pre-tax charge of $318 million or $0.10 per share in the second quarter of 2007 for costs related to the program, primarily for employee separation, with additional estimated pre-tax charges of approximately $55 million or $0.02 per share for the remainder of 2007. The program is expected to generate cost savings beginning in 2008, with total estimated annual cost savings of approximately $335 million by 2011, of which $179 million will be realized by PMI and $156 million by PM USA. Cumulative total expenses through 2011 are estimated at approximately $670 million, all of which will be at PM USA. PMI Announces Agreement in Principle to Acquire Additional 30% Stake in Mexican Tobacco Business On July 18, PMI announced that it had reached an agreement in principle to acquire an additional 30% stake in its Mexican tobacco business from its joint venture partner, Grupo Carso Grupo Carso is a conglomerate of companies owned by the Mexican tycoon Carlos Slim. It was formed in 1990 after the merge of Corporación Industrial Carso and Grupo Inbursa. The name Carso stands for Carlos Slim and Soumaya Domit de Slim †, wife of Slim. , S.A.B. de C.V. PMI currently holds a 50% stake in its Mexican tobacco business and this transaction would bring PMI's stake to 80%. Grupo Carso would retain a 20% stake in the business. The transaction has a value of approximately $1.1 billion and is expected to be completed later this year, subject to execution of definitive agreements and customary regulatory approvals. When completed, the transaction is expected to increase Altria's 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. net earnings by approximately $0.03 per share. 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 2006 Annual Report, management reviews operating companies income, which is defined as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before corporate expenses and amortization of intangibles, 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 2007 reported results and previous-year results reflect Kraft 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. . As such, net revenues and operating companies income for Kraft are excluded from the company's results, while the net earnings impact is included as a single line item. The products of Altria's subsidiaries include cigarettes and other tobacco products manufactured and sold by 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) in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and by Philip Morris International (PMI) outside the United States. PMI's operations are organized and managed by geographic region. Beginning with the second quarter of 2007, Altria's reportable segments are U.S. Tobacco; 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 (EU); 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. , Middle East & Africa (EEMA EEMA - European Electronic Messaging Association ); Asia; 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. ; and 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. . All references in this news release are to continuing operations, unless otherwise noted. References to international tobacco market shares are PMI estimates based on a number of sources. Schedules with restated results by reportable segments for the years 2006 and 2007 are attached. 2007 Second-Quarter Results Revenues net of 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. and currency increased 2.9% to $9.5 billion for the second quarter of 2007, driven by all segments except PMCC. Operating income increased 0.6% to $3.2 billion, reflecting the items described in the attached reconciliation on Schedule 3, including higher results from operations of $126 million, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency of $87 million and the net impact of a cash recovery of $78 million at PMCC from assets which had been previously written down, compared to a provision of $103 million at PMCC in the second quarter of 2006. Largely offsetting those factors were asset impairment and exit costs of $394 million, primarily at PM USA. Earnings from continuing operations increased 4.9% to $2.2 billion, reflecting the items above as well as a decrease in interest expense due to lower debt outstanding. The company's effective tax rate at 33.5% was unchanged for the second quarter of 2007 versus the year-earlier period. 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. , decreased 18.3% to $2.2 billion, primarily due to the Kraft 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. and the factors mentioned above. Diluted earnings per share, including discontinued operations as detailed on Schedule 1, decreased 18.6% to $1.05. U.S. TOBACCO 2007 Second-Quarter Results Philip Morris USA (PM USA), Altria Group, Inc.'s U.S. tobacco business, reported that its second-quarter revenues net of excise taxes increased 1.5% to $3.9 billion. Operating companies income decreased 22.8% to $1.0 billion compared to the year-earlier period. The decline was largely a result of the $318 million pre-tax charge for asset impairment and exit costs related to the previously announced closure of the Cabarrus, NC cigarette manufacturing facility, as well as lower volume and increased resolution expenses, partially offset by lower wholesale promotional allowance rates and lower expenses for marketing, administrative and research costs. Adjusted for the $318 million in asset impairment and exit costs, PM USA's operating companies income would have increased by 1.6% to $1.3 billion. PM USA's cigarette shipment volume of 45.6 billion units was 3.3% or 1.6 billion units lower than that recorded in the prior-year period. In the first half of 2007, PM USA estimates that total cigarette industry volume declined between 4% and 5%, and for the full year 2007 PM USA is maintaining its prior estimate of a 3% to 4% decline in total cigarette industry volume. Cigarette volume performance by brand for PM USA is summarized in the table below: [TABLE OMITTED] * U.S. unit volume includes units sold as well as promotional units, and excludes Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. and U.S. Territories. ** Calculation based on millions of units. PM USA's total retail share was unchanged at 50.5% in the second quarter of 2007 versus the prior-year period. However, Marlboro had a strong gain of 0.4 retail share points. Marlboro Smooth performed well in the second quarter of 2007, contributing to Marlboro's overall performance. Marlboro Smooth was introduced nationally in March and offers adult smokers a uniquely rich and smooth 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. taste. Parliament's retail share was unchanged, while 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 and Basic declined by 0.1 and 0.2 share points, respectively. PM USA's cigarette retail share performance by brand is summarized in the table below: [TABLE OMITTED] PM USA is announcing today that it will introduce Marlboro Smooth 100's Box and Marlboro Virginia Blend King Box and 100's Box at retail in September. Based on the success of Marlboro Smooth, PM USA is expanding the brand with Marlboro Smooth 100's Box, which will offer the same uniquely rich and smooth taste to the more than 40% of menthol adult smokers that choose the 100's format. Marlboro's newest offering is Marlboro Virginia Blend, a single-leaf blend crafted from U.S.-grown Virginia (Bright) tobaccos, which has a distinctive crisp and mellow mel·low adj. mel·low·er, mel·low·est 1. a. Soft, sweet, juicy, and full-flavored because of ripeness: a mellow fruit. b. taste and is intended for adult smokers looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. a new flavor experience. Both products reinforce the Marlboro tradition of flavor and its position as the leader in the premium category. As part of its tobacco category adjacency strategy to develop new revenue and income sources for the future, PM USA announced that it will test market Marlboro Snus in the Dallas/Fort Worth, Texas, area beginning in August 2007. Marlboro Snus is a spit-free tobacco pouch pouch (pouch) a pocket or sac. abdominovesical pouch one formed by reflection of the peritoneum from the abdominal wall to the anterior surface of the bladder. product that utilizes a unique flavor strip and dried tobacco. INTERNATIONAL TOBACCO 2007 Second-Quarter Results Philip Morris International (PMI), Altria Group, Inc.'s international tobacco business, reported that its revenues net of excise taxes and currency increased 4.0% to $5.6 billion. Operating companies income grew 4.7% to $2.2 billion, due primarily to higher pricing and favorable currency of $87 million, partially offset by asset impairment and exit costs of $76 million. Cigarette shipment volume increased 3.3% or 7.1 billion units to 221.0 billion units, due largely to acquisition volume from Lakson Tobacco in Pakistan. Gains in Argentina, Egypt, Indonesia, Korea, the Philippines and Ukraine, as well as the favorable timing of shipments in certain markets, were offset by shipment declines in Russia, Germany and 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. , as well as Japan, where comparisons to the second quarter of 2006 were distorted by heavy trade purchases in anticipation of the July 2006 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. increase. Excluding the impact of acquisitions, PMI's cigarette shipment volume was down 0.5%. PMI's volume performance by segment is summarized in the table below: [TABLE OMITTED] *Calculation based on millions of units. PMI's market share in the second quarter of 2007 advanced in many countries, including Argentina, Australia, Austria, Belgium, the Czech Republic, Egypt, France, Italy, Korea, Mexico, Netherlands, Russia, Serbia, the Philippines, Portugal and Ukraine. Total Marlboro cigarette shipment volume of 81.1 billion units was down 0.5%. Lower Marlboro volume in Germany, Japan and Turkey was partially offset by gains in Argentina, Korea, Poland, Romania and Russia. Marlboro market share was up in many markets, including Argentina, Brazil, the Czech Republic, Egypt, France, Hungary, Indonesia, Kazakhstan, Korea, Kuwait, Mexico, Netherlands, Poland, Russia, Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. , Serbia and Ukraine.
EUROPEAN UNION 2007 Second-Quarter Results In the European Union (EU), PMI's cigarette shipment volume of 67.8 billion units was down 0.9%, due mainly to declines in the Czech Republic and Germany and unfavorable distributor inventory movements in France and Italy. However, cigarette market share in the EU rose 0.4 points to 39.7%, representing quarter-over-quarter market share growth for three consecutive periods. Operating companies income increased 12.3% to $1.1 billion, due primarily to higher pricing and favorable currency of $85 million. In the Czech Republic, the total cigarette market was down 26.6% due to trade purchases prior to the March 2007 excise tax increase. PMI's shipment volume declined 22.7%, but market share increased 3.1 points to 60.4%. In France, PMI's market share continued its forward momentum, reaching 43.4% in the second quarter, up 0.6 points versus the same period last year. Both Marlboro and the Philip Morris brand drove this growth. PMI's shipment volume was down 2.6%, reflecting unfavorable distributor inventory movements compared to last year. In the German market, total tobacco consumption was down 4.7% and PMI's share of total tobacco consumption declined 0.7 points to 30.1%. The cigarette market decreased 2.5%, mainly driven by the effects of higher prices and PMI's cigarette volume decreased 4.0%. PMI's cigarette market share declined 0.6 points to 37.0%, reflecting a 38.4% volume decline in the vending channel. The vending channel accounted for 15% of total industry volume in the quarter, compared to 23.7% in the comparative period last year due to the reduction in vending machines vending machine, coin-operated, automatic device for selling goods. Many vending machines are capable of making change, and some of the more sophisticated ones accept paper money or credit cards. resulting from new regulations that require electronic age verification. PMI's share of the vending channel at 51% is over-indexed relative to its overall market share, and as a consequence PMI has been adversely impacted by this development. PMI expects the volume share of the vending channel to gradually improve. Marlboro share was down 2.8 points to 26.1%, with most of this decline being driven by shrinkage Shrinkage The amount by which inventory on hand is shorter than the amount of inventory recorded. Notes: The missing inventory could be due to theft, damage, or book keeping errors. in the vending channel. L&M continued to grow strongly, adding 2.5 share points to reach 4.7%. In Italy, PMI's powerful and broad brand portfolio drove share up 1.0 point to 54.6%. Merit, 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. , Philip Morris and Muratti all contributed to the growth. Marlboro remains resilient See resiliency. and its share at 22.8% was unchanged versus last year. The total industry in Italy declined moderately by 1.4%, and although PMI's shipment volume declined 4.7%, this was wholly due to unfavorable distributor inventory movements and the timing of shipments. The Spanish market has achieved stability and declined less than 1% in the second quarter of 2007. PMI's market share at 31.5% was down 0.1 point from last year, as share gains for Chesterfield and L&M offset a 0.6 point decline for Marlboro. PMI's shipment volume rose 2.8%, but was essentially flat when adjusted for favorable trade inventory movements. EASTERN EUROPE, MIDDLE EAST & AFRICA 2007 Second-Quarter Results In Eastern Europe, Middle East & Africa, PMI's cigarette shipment volume of 75.9 billion units was up 0.8%, due to gains in Ukraine and Egypt and the timing of shipments in Saudi Arabia and Israel, partially offset by the continued decline of L&M in Turkey and Russia, and lower worldwide duty-free volume. Operating companies income increased 12.4% to $634 million, due mainly to improved pricing, volume/mix and favorable currency of $21 million. In Egypt, shipment volume rose 23.3%, driven mainly by L&M, while market share grew 1.4 points to 11.4%. In Russia, shipment volume was down 2.6%, but share rose 0.2 points to 26.7%, as several brands in PMI's strong portfolio, including Marlboro, Parliament, Virginia Slims and Chesterfield increased share, helping to more than offset a 0.6 point loss for L&M. PMI's brand portfolio in Russia was also strengthened by new brand initiatives, including Muratti Slims, Virginia Slims Uno in an innovative package and Marlboro Filter Plus. In addition, profitability in Russia continued to grow strongly, driven by an improving brand mix and better pricing. In Turkey, shipment volume was down 4.4% and market share declined 2.7 points to 40.2%, due mainly to the decline of L&M and Lark, which face intense competition at the low-price end of the market. Marlboro's share was down slightly, but Parliament was up 0.8 points to 5.8%, further cementing PMI's commanding share in the premium segment. In Ukraine, shipment volume grew 4.3% and market share rose 0.5 points to 33.7%. Marlboro share advanced 0.5 points to 5.1%, as consumers continued to trade up to international brands at the expense of local brands. Parliament and Chesterfield also grew strongly. During the second quarter of 2007, PMI launched a new line-up of cigarette products for L&M and initial results are encouraging. ASIA 2007 Second-Quarter Results In Asia, PMI's cigarette shipment volume of 55.8 billion units rose 15.9%, due to acquisition volume in Pakistan and gains in Korea, Indonesia and the Philippines, partially offset by a volume decline in Japan. Excluding acquired volume, shipment volume in Asia declined 1.2%. Operating companies income decreased 12.1% to $429 million, due to unfavorable currency of $22 million and unfavorable volume/mix, primarily in Japan. In Indonesia, PMI shipment volume rose 1.3%. Market share of 28.0% was down slightly, reflecting the impact of the tax-driven price increase that took effect in May, following the March 2007 excise tax increase. A Hijau's share rose 0.8 points to 6.0%, but A Mild and Dji Sam Soe lost 0.6 and 0.3 share points, respectively, due to low-price competition and temporarily widened price gaps with competitive brands. Marlboro share grew 0.1 point to 4.1%. In early July 2007, a kretek version of Marlboro was launched to expand Marlboro's strong consumer appeal. In Japan, the total cigarette market was down 16.7 billion units or 20.3% versus the same quarter last year, reflecting heavy trade purchases in June 2006 ahead of the July 2006 excise tax increase. PMI's in-market sales were down 20.7% and overall market share declined 0.1 point to 24.3%. Marlboro share of 9.8% was unchanged. Cigarette shipment volume was down 8.7% as favorable distributor inventory movements were more than offset by the lower in-market sales. PMI estimates that the underlying industry decline after the July 2006 price increase has been approximately 6%, but anticipates that by the fourth quarter of this year the market contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction will return to a more normalized 2.5% to 3.0% decline. In Korea, shipment volume increased 19.1%, due mainly to recent new line extensions, including Marlboro Filter Plus and Virginia Slims One. Market share increased 1.3 points to 9.5%, with Marlboro up 0.9 points to 4.2%. LATIN AMERICA 2007 Second-Quarter Results In Latin America, cigarette shipment volume of 21.5 billion units was down 2.6%, due mainly to declines 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. and Mexico, partially offset by gains in Argentina. Operating companies income decreased 21.5% to $102 million, primarily as a result of asset impairment and exit costs, and the 2006 divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of PMI's interest in the beer business in the Dominican Republic. In Argentina, the total cigarette market was stable and PMI's shipment volume increased 2.2%. Market share increased 1.7 points to a record 68.0%, driven by the strong growth of the Philip Morris brand, which gained 2.0 share points to 31.6%, and Marlboro, which rose 1.9 share points to 21.2%. In the Dominican Republic, shipment volume declined 35.8%, reflecting a lower total market following January and February 2007 price increases to partially compensate for a very significant excise tax increase on cigarettes that was imposed in January of this year. Market share in the second quarter was 77.6%, down 0.5 points, as Marlboro declined 2.6 share points to 24.3%, partially offset by gains for other PMI brands. In Mexico, the total cigarette market declined 8.5%, due primarily to the timing of the Easter holiday in March 2007 versus April 2006, as well as tax-driven price increases and unfavorable inventory movements. However, PMI market share reached a new record of 64.2%, up 1.4 points on the strength of Marlboro, which grew 1.0 share point to 47.8%, aided by the national introduction of Marlboro Wides in May 2007, and continued strong performances of Benson & Hedges and Delicados. In the second quarter of 2007, PMI shipment volume was down 5.9%, due to the lower total market. FINANCIAL SERVICES 2007 Second-Quarter Results Philip Morris Capital Corporation (PMCC) reported operating companies income of $139 million for the second quarter of 2007 versus an operating companies loss of $59 million for the year-earlier period. Second-quarter 2007 results reflected cash recoveries of $78 million from the sale of bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most claims related to certain airline leases that had been previously written down and higher asset management gains versus the prior year, partially offset by lower lease revenues, primarily as a result of lower investment balances. The prior-year results reflected a charge of $103 million to the provision for losses related to the airline industry. 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 June 30, 2007, Altria Group, Inc. owned 100% of Philip Morris International Inc., Philip Morris USA Inc. and Philip Morris Capital Corporation, and approximately 28.6% of SABMiller plc. The brand portfolio of Altria Group, Inc.'s tobacco operating companies includes such well-known names as Marlboro, L&M, Parliament and Virginia Slims. Altria Group, Inc. recorded 2006 net revenues from continuing operations of $67.1 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 tobacco subsidiaries (Philip Morris USA and Philip Morris International) are subject to 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; and to improve productivity. Altria Group, Inc.'s tobacco subsidiaries 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 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 Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended March 31, 2007. 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] [TABLE OMITTED] [TABLE OMITTED] |
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