Altria Group Inc
Altria Group, Inc. Reports 2004 Fourth-Quarter and Full-Year Results
FOURTH-QUARTER 2004
-- Diluted earnings per share from continuing operations down 5.9% to
$0.96, including $0.12 in fourth-quarter 2004 charges as detailed on
Schedule 7
-- Earnings from continuing operations down 4.2% to $2.0 billion
FULL-YEAR 2004
-- Diluted earnings per share from continuing operations up 2.0% to $4.57,
including $0.10 in full-year 2004 net charges as detailed on Schedule 8
-- Earnings from continuing operations up 3.3% to $9.4 billion
2005 OUTLOOK
-- Full-year 2005 diluted earnings per share from continuing operations
projected in a range of $4.95 to $5.05 based on current exchange rates;
includes $0.12 per share in charges and excludes $0.03 per share for
discontinued operations
Altria Group, Inc. (NYSE: MO) today announced fourth-quarter 2004 diluted
earnings per share from continuing operations of $0.96, including $0.12 in
fourth-quarter 2004 charges as detailed on Schedule 7, versus $1.02 in the same
quarter a year ago. The decline resulted largely from $0.08 per share in asset
impairment, exit and implementation costs, primarily related to the Kraft
restructuring, and $0.04 per share from an increase in the provision for airline
industry exposure at Philip Morris Capital Corporation (PMCC).
For the full year 2004, diluted earnings per share from continuing operations
were up 2.0% to $4.57, including $0.10 in full-year 2004 net charges as detailed
on Schedule 8, versus $4.48 for the same period a year ago.
"On balance, our business fundamentals were solid in 2004. I am particularly
pleased that our momentum improved as the year unfolded, proof that we have
begun to reap the benefits of our investments in marketing," said Louis C.
Camilleri, chairman and chief executive officer of Altria Group, Inc. "Both our
domestic and international tobacco businesses performed strongly, and Kraft
executed well against its Sustainable Growth Plan."
"We enter 2005 in a strong competitive, financial and strategic position," Mr.
Camilleri said. "This is not to say that we do not continue to face challenges
across all our businesses, but I believe that we are better armed to deal with
them than we have been for several years."
Altria Group, Inc. is projecting 2005 full-year diluted earnings per share from
continuing operations (which excludes a $0.03 impact for Kraft's discontinued
operations) in a range of $4.95 to $5.05, representing growth of 8.3% to 10.5%,
compared with $4.57 in 2004. This projection assumes current foreign exchange
rates, a base income tax rate of 34.7% and approximately $0.12 per share in
charges associated with the continuing Kraft restructuring. However, it does not
include any tax benefits that could arise from the repatriation of funds from
its international businesses under provisions of the American Jobs Creation Act,
nor does it include any benefit from prior year accrued contributions to the
National Tobacco Growers Settlement Trust. The factors described in the
Forward-Looking and Cautionary Statements section of this release represent
continuing risks to this projection.
A conference call with members of the investment community will be Webcast at
2:00 p.m. Eastern Time on January 26, 2005. Access is available at
www.altria.com.
ALTRIA GROUP, INC.
Results for Altria Group, Inc. have been restated to reflect the impact of
discontinued operations, following Kraft's agreement on November 15, 2004, to
sell its sugar confectionery business. As such, net revenues and operating
companies income for the sugar confectionery business are excluded from the
company's results, while the net earnings impact is included as a single line
item. All references in this news release are to continuing operations, unless
otherwise noted. Schedules with restated results for the years 2003 and 2004 are
attached.
As described in "Note 14. Segment Reporting" of Altria Group, Inc.'s 2003 Annual
Report, management reviews operating companies income, which is defined as
operating income before corporate expenses and amortization of intangibles, to
evaluate segment performance and allocate 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 Statements of Earnings contained in this
release.
2004 Full-Year Results
Net revenues for the full year 2004 increased 10.2% versus 2003 to $89.6
billion, due primarily to favorable currency of $3.3 billion and to increases
from Altria's tobacco and North American food businesses.
Operating income decreased 3.7% to $15.2 billion, due primarily to charges for
asset impairment, exit and implementation costs primarily related to the
business restructuring component of Kraft's Sustainable Growth Plan, which more
than offset increases at Philip Morris USA (PM USA) and Philip Morris
International (PMI). Also affecting operating income comparisons were favorable
currency of $638 million and the other items described in the attached
reconciliation.
Earnings from continuing operations increased 3.3% to $9.4 billion, including
$210 million or $0.10 per share in full-year 2004 net charges, due primarily to
better results at PM USA and PMI, higher equity income from SABMiller (which is
included in minority interest in earnings from continuing operations, and equity
earnings, net) and a lower effective tax rate of 32.4% in 2004 compared to 34.9%
in 2003, due to the reversal of tax provisions that are no longer required and
the favorable resolution of an outstanding tax item.
During 2004, Altria Group, Inc. raised its dividend 7.4% to an annualized rate
of $2.92 per common share, marking the 37th time in 35 years that the dividend
has been increased.
2004 Fourth-Quarter Results
Net revenues for the fourth quarter of 2004 increased 8.8% versus 2003 to $22.4
billion, due primarily to favorable currency of $679 million and to increases in
domestic tobacco, international tobacco and North American food.
Operating income decreased 4.4% to $3.4 billion, due primarily to the Kraft
restructuring and an increase in the provision for airline industry exposure at
Philip Morris Capital Corporation (PMCC). Also affecting operating income
comparisons were favorable currency of $142 million and other items as described
in the attached reconciliation.
Earnings from continuing operations decreased 4.2% to $2.0 billion, including
$249 million or $0.12 per share in fourth-quarter 2004 charges, due primarily to
the Kraft restructuring and the increased provision for airline industry
exposure at PMCC.
DOMESTIC TOBACCO
2004 Full-Year Results
Philip Morris USA Inc. (PM USA), Altria Group, Inc.'s domestic tobacco business,
achieved robust retail share growth, driven by Marlboro, and a strong increase
in operating companies income. In a declining cigarette market, its shipment
volume of 187.1 billion units was down 0.1% from the previous year. Operating
companies income increased 13.3%, to $4.4 billion, primarily driven by savings
resulting from changes to the 2004 trade programs, including PM USA's returned
goods policy and lower Wholesale Leaders program discounts, as well as the
absence of a one-time inventory buy-down in 2003 and $202 million in charges
related to the 2003 tobacco growers settlement, partially offset by increased
costs under state settlement agreements.
PM USA's total retail share improved significantly in 2004, driven by Marlboro,
while retail share remained stable for Parliament, Virginia Slims and Basic, as
shown in the following table:
Philip Morris USA Annual Retail Share*
--------------------------------------
2004 2003 Change
----- ----- -------
Marlboro 39.5% 38.0% 1.5 pp
Parliament 1.7% 1.7% 0.0 pp
Virginia Slims 2.4% 2.4% 0.0 pp
Basic 4.2% 4.2% 0.0 pp
----- ----- -------
Focus Brands 47.8% 46.3% 1.5 pp
Other Philip Morris USA 2.0% 2.4% -0.4 pp
----- ----- -------
Total Philip Morris USA 49.8% 48.7% 1.1 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 grew retail share in both the premium and discount segments, with its
share of the premium segment increasing 0.9 share points to 62.1% and discount
segment share increasing 0.4 share points to 16.1% in 2004.
During the year, PM USA successfully introduced Marlboro Menthol 72mm, a
premium-priced menthol cigarette and Virginia Slims Ultra Lights 120mm box,
while Parliament Lights 100mm round corner box was expanded to national
distribution.
In January 2005, PM USA began shipping Marlboro Red and Lights 72mm in
commemorative 50th Anniversary packs. During the first quarter, it also will
begin test marketing Marlboro UltraSmooth in several test markets to evaluate
consumer acceptance of its taste.
2004 Fourth-Quarter Results
PM USA's retail share increased 0.8 share points to 49.9% in the fourth quarter
of 2004, driven primarily by Marlboro. Total shipment volume increased 1.5% to
47.1 billion units in the fourth quarter, but was estimated to be essentially
flat when adjusted for the timing of promotions and wholesaler inventory
changes.
Operating companies income increased 9.0% to $1.1 billion, driven primarily by
higher volume, savings resulting from changes to 2004 trade programs and absence
of charges related to the 2003 tobacco growers settlement, partially offset by
increased costs under state settlement agreements. During the quarter, PM USA
recorded charges related to its obligation under the recently enacted Fair and
Equitable Tobacco Reform Act, but these charges had no material impact when
compared to the prior-year period, as they were offset by the absence of 2004
National Tobacco Growers Settlement Trust costs. PM USA announced a reduction in
the wholesale promotional allowance on its Focus on Four brands of $1.00 per
carton, from $6.50 to $5.50, effective December 12, 2004. In addition, effective
January 16, 2005, the price of its other brands was increased by $5.00 per
thousand cigarettes or $1.00 per carton.
PM USA's improved retail share in the quarter was driven by a 1.2 share point
gain in Marlboro, while retail share was essentially stable for Parliament,
Virginia Slims and Basic combined, as shown in the following table:
Philip Morris USA Quarterly Retail Share*
-----------------------------------------
Q4 2004 Q4 2003 Change
------- ------- -------
Marlboro 39.7% 38.5% 1.2 pp
Parliament 1.7% 1.7% 0.0 pp
Virginia Slims 2.3% 2.4% -0.1 pp
Basic 4.3% 4.2% 0.1 pp
------- ------- -------
Focus Brands 48.0% 46.8% 1.2 pp
Other Philip Morris USA 1.9% 2.3% -0.4 pp
------- ------- -------
Total Philip Morris USA 49.9% 49.1% 0.8 pp
* See note in table above
In line with the full-year trend, PM USA's fourth quarter retail share of the
premium segment increased 0.6 share points to 62.1%, while its share of the
discount segment increased 0.5 share points to 16.3%.
INTERNATIONAL TOBACCO
2004 Full-Year Results
Cigarette shipment volume for Philip Morris International Inc. (PMI), Altria
Group, Inc.'s international tobacco business, increased 3.5% to 761.4 billion
units, reflecting the impact of acquired volume in Greece, Serbia and the
Philippines, and widespread growth around the world. Overall growth was impacted
by lower PMI volume in France, Germany and Italy, reflecting significant
declines in industry volume in those markets.
Operating companies income for PMI rose 4.5% to $6.6 billion, due primarily to
pricing, favorable currency of $540 million, the impact of acquisitions and
higher volume, partially offset by higher overhead expenses and marketing costs,
unfavorable mix, the initial $250 million charge and ongoing annual charges for
the cooperation agreement with the EC.
PMI achieved widespread market share gains, including in its top income markets
of Austria, Belgium, Egypt, France, Greece, Japan, Mexico, Netherlands, Poland,
Russia, Saudi Arabia, Spain, Turkey and the Ukraine.
Total Marlboro shipments declined 1.3% in 2004, as solid gains in Central
Europe, Eastern Europe and Asia, including Japan, were more than offset by lower
volume in Western Europe, mainly France and Germany. Marlboro share increased in
many top income markets, including Argentina, Belgium, Japan, Mexico, Poland,
Portugal, Russia, Spain, Turkey, the United Kingdom and the Ukraine.
In Western Europe, cigarette volume declined 8.7%, due primarily to declines in
France, Germany and Italy. PMI's cigarette market share for 2004 was 38.6%,
slightly lower than the previous year.
In France, the total cigarette market declined 21.1%. PMI's cigarette volume
declined 19.5%, but market share grew by 0.7 share points to 39.9%, due to the
success of Basic and the Philip Morris brand and the resilience of Marlboro. In
the fourth quarter, PMI's French business regained both volume and share
momentum, with volume advancing 5.9% and share up a robust 1.4 points to 40.3%,
with Marlboro contributing 0.8 points to the share gain.
In Germany, the combined consumption of cigarettes and other tobacco products
declined 7.0% for the year, while total cigarette volume declined 15.5%, as
consumers switched to low-priced tobacco portions, which grew from 5.4 billion
units in 2003 to 13.5 billion units in 2004. PMI's cigarette market share was
down 0.4 points to 36.8%. In addition, it recorded a 7.8% share of the tobacco
portions segment since the April 2004 launch of Marlboro and Next tobacco
portions. With increasing tobacco portions manufacturing capacity being
installed, PMI's share of this segment grew to 10.3% in the fourth quarter and
13.2% in December. In addition, PMI successfully launched Marlboro Blend 29 in
selected channels in October.
PMI's German business announced a tax-driven price increase of euro 0.40 per
pack effective December 1, 2004. The industry-wide price increase has resulted
in a significant decline in the total cigarette market in December. PMI's volume
declined 18.6% in the fourth quarter and market share declined 1.2 share points
to 36.2%, reflecting the timing of PMI's shipments of new-priced stock versus
its competitors.
In Italy, PMI's annual volume was down 6.4% and market share declined 2.6 points
to 51.5%, due mainly to losses in low-price Diana and, to a lesser extent,
Marlboro. However, on a sequential basis, PMI's market share has been relatively
stable since April 2004, and grew to 52.0% in the fourth quarter from 51% in the
third quarter, reflecting the recovery of Marlboro, new product initiatives and
significant investments in sales force expansion. On December 14, 2004, PMI
announced a tax-driven price increase of euro 0.20 per pack for all of its
brands. The industry-wide price increase led to a decline in total market volume
in the fourth quarter, with PMI's volume declining 10.9%. Marlboro's share at
22.5% in the fourth quarter of 2004 was flat with the same quarter a year ago.
During the quarter, Italy passed a minimum reference price law, similar to
France, and implementation regulations are expected in the first quarter of
2005.
In Central Europe, PMI's volume rose 15.2% in 2004, due mainly to Poland and
Romania and the favorable impact of acquired volume in Greece and Serbia,
partially offset by declines in Lithuania and Hungary. However, share improved
to a record 32.6% in Hungary. In Poland, volume increased 5.0% and market share
advanced 2.8 points to 38.5%, driven by gains in Marlboro, Bond Street and the
July 2004 launch of Red & White. In Romania, volume rose 8.7%, mainly reflecting
higher volume for Marlboro. In worldwide duty-free, volume rose 7.2% as a result
of the global recovery in travel and a favorable comparison to 2003, which was
depressed by the effects of SARS and the war in Iraq.
In Eastern Europe, the Middle East and Africa, volume grew 9.6%, reflecting
widespread gains in most markets, including Russia, Kazakhstan, Saudi Arabia,
Turkey and the Ukraine. In Russia, volume was up 3.5% and market share rose 1.4
share points to a record 26.4%, driven by Marlboro, Parliament, L&M, Next and
Chesterfield. In Turkey, volume rose 20.3% and market share was up 4.7 points to
a record 37.0% on the continued strength of L&M and the renewed growth of
Marlboro and Parliament. Strong volume and share gains were also achieved in the
Ukraine, with volume up 26.7% and market share advancing 1.8 points to a record
31.0%, driven by Marlboro, Chesterfield, L&M, Bond Street, Next and the national
launch of Optima.
In Asia, volume was up 7.6% in 2004, due mainly to robust gains in Korea,
Malaysia, the Philippines and Thailand. In Korea, PMI's volume was up 23.1% and
market share rose 0.8 points to 7.4%, driven by new products including Marlboro
Ultra Lights, Lark One, Elan Super Slim Lights and L&M. In Japan, PMI's volume
was up slightly, while the total market declined 2.5%. PMI's market share rose
0.4 points to a record 24.4% in Japan, driven by the strength of Marlboro and
new products Virginia Slims Rose and Lark Pacific Green.
In Latin America, PMI volume was down 2.0% in 2004. Lower PMI shipments in
Argentina of 5.7%, reflecting a total industry decline and consumer down
trading, were partially offset by gains in Mexico. PMI achieved a record market
share of 60.2% in Mexico in 2004, up 0.8 points, driven mainly by Marlboro,
which benefited from two new line extensions, Marlboro Milds and Marlboro
Medium.
2004 Fourth-Quarter Results
Cigarette shipment volume for PMI increased 2.6% to 172.7 billion units in the
fourth quarter of 2004, reflecting increases in many markets, partially offset
by lower volume in Germany and Italy. Excluding those two markets, PMI's volume
was up 5.3% in the quarter.
Operating companies income rose 11.7% to $1.4 billion in the fourth quarter, due
primarily to favorable currency of $115 million and higher volume and pricing,
partially offset by increased marketing costs and ongoing costs related to the
cooperation agreement with the EC.
PMI achieved widespread market share gains in the fourth quarter, including
increases in the top income markets of Argentina, Australia, Austria, Egypt,
France, Greece, Japan, Poland, Russia, Spain, Turkey, the Ukraine and the United
Kingdom.
Marlboro volume declined 2.3% in the fourth quarter, due primarily to a decline
in Germany. However, its share improved in many of its top income markets.
In Western Europe, cigarette volume declined 9.4% in the fourth quarter, due
primarily to declines in Germany and Italy. PMI's cigarette market share for the
fourth quarter was down 0.1 point to 38.5%.
In Central Europe, PMI's volume rose 5.7% in the fourth quarter, due mainly to
Poland and acquisition volume in Greece. In worldwide duty-free, volume declined
1.9%.
In Eastern Europe, the Middle East and Africa, volume increased 10.9% in the
fourth quarter, reflecting widespread gains in most markets, including Russia,
Saudi Arabia, Turkey and the Ukraine.
In Asia, volume was up 14.2% in the fourth quarter, due to strong gains in
Japan, the Philippines and Thailand. In Japan, PMI's volume was up 14.0% due to
timing of shipments. PMI's market share in Japan rose 0.4 points to 24.5%,
driven by the strength of Marlboro.
In Latin America, PMI volume was down 6.8% in the fourth quarter, reflecting
lower shipments in Argentina, Brazil and Mexico.
FOOD
Yesterday, Kraft Foods Inc. (Kraft) reported 2004 full-year and fourth-quarter
results. For the full year 2004, Kraft's net revenues were up 5.5% to $32.2
billion, driven by new products, the impact of increased marketing spending,
favorable currency of $838 million and commodity-driven pricing. Kraft's volume
was up 2.8%, as ongoing volume growth of 3.0% (including 2.1 percentage points
of growth from acquisitions) was partially offset by the impact of divestitures.
Operating income declined 21.3% to $4.6 billion, driven by restructuring and
impairment charges, higher commodity costs and increased marketing spending,
partially offset by volume growth, pricing, cost reduction initiatives and
favorable currency of $98 million.
For the fourth quarter, Kraft's net revenues were up 7.0% to $8.8 billion, with
increased volume, positive mix, pricing, acquisitions and favorable currency of
$213 million all contributing to growth. Kraft's volume was up 3.4%, as ongoing
volume growth of 3.6% (including 2.2 percentage points of growth from
acquisitions) was partially offset by the impact of divestitures. Operating
income declined 18.0% to $1.2 billion, driven by the same factors described
above for the full year, including favorable currency of $27 million.
Kraft reached agreements to divest its sugar confectionery, U.K. desserts and
U.S. yogurt businesses during the fourth quarter. All of the transactions are
expected to be completed by mid-2005. In accordance with relevant accounting
rules, the sugar confectionery business has been reflected as discontinued
operations.
NORTH AMERICAN FOOD
2004 Full-Year Results
For the full year 2004, Kraft North America Commercial (KNAC) net revenues grew
5.4% to $22.1 billion, driven by increased volume, positive mix, net pricing,
the Veryfine beverages acquisition and favorable currency of $164 million.
Volume was up 4.3% (including 2.6 percentage points of growth from acquisitions)
with growth across much of the portfolio including cheese, convenient meals and
snacks. Operating companies income declined 16.9% to $3.9 billion, due to
restructuring and impairment charges of $431 million, higher commodity costs,
increased marketing spending and higher post-employment benefit costs, partially
offset by the contributions from revenue growth and productivity.
2004 Fourth-Quarter Results
For the fourth quarter of 2004, KNAC net revenues increased a strong 8.8% to
$5.8 billion, with higher volume from new product launches and increased
marketing spending, positive mix and pricing in certain businesses, including
cheese and foodservice, and favorable currency of $39 million. Volume was up
6.2% (including 3.1 percentage points of growth from acquisitions) with growth
across much of the portfolio including cheese, convenient meals and snacks.
Operating companies income declined 8.9% to $947 million, due to restructuring
and impairment charges of $129 million, higher commodity costs, increased
marketing spending and higher post-employment benefit costs, partially offset by
the contributions from revenue growth and productivity.
INTERNATIONAL FOOD
2004 Full-Year Results
For the full year 2004, net revenues for Kraft International Commercial (KIC)
grew 5.7% to $10.1 billion, driven by favorable currency of $674 million and
positive mix, partially offset by the impact of divestitures, lower volume and
net price reductions. Volume was down 1.1%, due primarily to the impact of
divestitures. Operating companies income decreased 33.0% to $933 million, as
restructuring and impairment charges of $269 million in 2004, a gain on the sale
of businesses in 2003, higher marketing spending and increased commodity costs
were partially offset by favorable currency of $69 million.
2004 Fourth-Quarter Results
For the fourth quarter of 2004, net revenues for KIC increased 3.8% to $3.0
billion, driven by favorable currency of $174 million and positive mix,
partially offset by lower volume and the impact of divestitures. Volume was down
2.8%, due to declines in Europe, Middle East & Africa and Latin America & Asia
Pacific, and the impact of divestitures. Operating companies income decreased
35.8% to $300 million, as restructuring and impairment charges of $90 million,
increased commodity costs and higher marketing spending were partially offset by
favorable currency of $19 million.
FINANCIAL SERVICES
2004 Full-Year and Fourth-Quarter Results
Philip Morris Capital Corporation (PMCC) reported operating companies income of
$144 million for the full year 2004 and an operating companies loss of $106
million for the fourth quarter of 2004, significantly below results for
comparable periods in 2003, reflecting an increase of $140 million in the
provision for credit exposure related to the troubled airline industry in the
fourth quarter of 2004 and lower lease portfolio revenues.
Altria Group, Inc. Profile
Altria Group, Inc. is the parent company of Kraft Foods Inc., with approximately
85% ownership of outstanding Kraft common shares, Philip Morris International
Inc., Philip Morris USA Inc. and Philip Morris Capital Corporation. In addition,
Altria Group, Inc. has a 33.9% economic interest in SABMiller plc. The brand
portfolio of Altria Group, Inc.'s consumer packaged goods companies includes
such well-known names as Kraft, Jacobs, L&M, Marlboro, Maxwell House, Nabisco,
Oreo, Oscar Mayer, Parliament, Philadelphia, Post and Virginia Slims. Altria
Group, Inc. recorded 2004 net revenues of $89.6 billion.
Trademarks and service marks mentioned in this release are the registered
property of, or licensed by, the subsidiaries of Altria Group, Inc.
A complete copy of Altria Group, Inc.'s audited 2004 financial statements will
be available through Altria Group, Inc.'s Web site after they are filed with the
Securities and Exchange Commission on or about February 2, 2005. If you do not
have Internet access but would like to receive a copy of the 2004 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 that involve a number of risks and uncertainties and
are made pursuant to the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. The following important factors could cause
actual results and outcomes to differ materially from those contained in such
forward-looking statements.
Altria Group, Inc.'s consumer products subsidiaries are subject to changing
prices for raw materials; intense price competition; changes in consumer
preferences and demand for their products; fluctuations in levels of customer
inventories; the effects of foreign economies and local economic and market
conditions; and unfavorable currency movements. Their results are dependent upon
their continued ability to promote brand equity successfully; to anticipate and
respond to new consumer trends; to develop new products and markets and to
broaden brand portfolios in order to compete effectively with lower-priced
products; to improve productivity; and to respond effectively to changing prices
for their raw materials.
Altria Group, Inc.'s tobacco subsidiaries (Philip Morris USA and Philip Morris
International) continue to be subject to litigation, including risks associated
with adverse jury and judicial determinations, courts reaching conclusions at
variance with the company's understanding of applicable law, bonding
requirements and the absence of adequate appellate remedies to get timely relief
from any of the foregoing; price disparities and changes in price disparities
between premium and lowest-price brands; legislation, including actual and
potential excise tax increases; increasing marketing and regulatory
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 the use of
tobacco products and exposure to environmental tobacco smoke; governmental
regulation; privately imposed smoking restrictions; and governmental and grand
jury investigations.
Altria Group, Inc.'s consumer products subsidiaries are subject to other risks
detailed from time to time in its publicly filed documents, including its Annual
Report on Form 10-K for the period ended December 31, 2003 and its Quarterly
Report on Form 10-Q for the period ended September 30, 2004. Altria Group, Inc.
cautions that the foregoing list of important factors is not complete and does
not undertake to update any forward-looking statements that it may make.
ALTRIA GROUP, INC. Schedule 1
and Subsidiaries
Condensed Statements of Earnings
For the Quarters Ended December 31,(*)
(in millions, except per share data)
2004 2003 % Change
------------------------------
Net revenues $ 22,380 $ 20,568 8.8 %
Cost of sales 9,030 8,338 8.3 %
Excise taxes on products (**) 6,016 5,260 14.4 %
---------------------
Gross profit 7,334 6,970 5.2 %
Marketing, administration and research
costs 3,394 3,086
Domestic tobacco headquarters relocation
charges 6 33
Domestic tobacco legal settlement - 20
Asset impairment and exit costs 159 13
Losses (gains) on sales of businesses (5) (8)
Integration costs - (13)
Provision for airline industry exposure 140 -
---------------------
Operating companies income 3,640 3,839 (5.2)%
Amortization of intangibles 5 2
General corporate expenses 158 162
Asset impairment and exit costs 29 67
---------------------
Operating income 3,448 3,608 (4.4)%
Interest and other debt expense, net 291 303
---------------------
Earnings from continuing operations
before income taxes and minority
interest 3,157 3,305 (4.5)%
Provision for income taxes 1,121 1,147 (2.3)%
---------------------
Earnings from continuing operations
before minority interest 2,036 2,158 (5.7)%
Minority interest in earnings from
continuing operations, and equity
earnings, net 46 81
---------------------
Earnings from continuing operations $ 1,990 $ 2,077 (4.2)%
---------------------
(Loss) earnings from discontinued
operations, net of income taxes and
minority interest(****) $ (43) $ 14
---------------------
Net earnings $ 1,947 $ 2,091 (6.9)%
=====================
Per share data(***):
Basic earnings per share from
continuing operations $ 0.97 $ 1.02 (4.9)%
---------------------
Basic earnings per share from
discontinued operations $ (0.02) $ 0.01
---------------------
Basic earnings per share $ 0.95 $ 1.03 (7.8)%
=====================
Diluted earnings per share from
continuing operations $ 0.96 $ 1.02 (5.9)%
---------------------
Diluted earnings per share from
discontinued operations $ (0.02) $ -
---------------------
Diluted earnings per share $ 0.94 $ 1.02 (7.8)%
=====================
Weighted average number of shares
outstanding
- Basic 2,052 2,030 1.1 %
- Diluted 2,068 2,046 1.1 %
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
(**) The detail of excise taxes on products sold is as follows:
2004 2003
---------------------
Domestic tobacco $ 930 $ 917
International tobacco 5,086 4,343
---------------------
Total excise taxes $ 6,016 $ 5,260
=====================
(***) Basic and diluted earnings per share are computed for each of
the periods presented. Accordingly, the sum of the quarterly
earnings per share amounts may not agree to the year-to-date
amounts.
(****) Discontinued operations 2004 includes $(59) from impairment
loss, and $16 of earnings, net of minority interest impact. In
2003 income from discontinued operations was $14 of earnings,
net of minority interest impact.
ALTRIA GROUP, INC. Schedule 2
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended December 31,(*)
(in millions)
North
Domestic International American International
tobacco tobacco food food
--------------------------------------------------
2004 Net Revenues $ 4,420 $ 9,113 $ 5,801 $ 2,983
2003 Net Revenues $ 4,246 $ 8,010 $ 5,333 $ 2,874
% Change 4.1% 13.8% 8.8% 3.8%
Reconciliation:
---------------
2003 Net Revenues $ 4,246 $ 8,010 $ 5,333 $ 2,874
Divested businesses
- 2004 - - - -
Divested businesses
- 2003 - - - (34)
Implementation -
2004 - - (2) -
Currency - 466 39 174
Operations 174 637 431 (31)
--------------------------------------------------
2004 Net Revenues $ 4,420 $ 9,113 $ 5,801 $ 2,983
==================================================
Financial
services Total
-----------------------
2004 Net Revenues $ 63 $ 22,380
2003 Net Revenues $ 105 20,568
% Change (40.0)% 8.8%
Reconciliation:
---------------
2003 Net Revenues $ 105 $ 20,568
Divested businesses
- 2004 - -
Divested businesses
- 2003 - (34)
Implementation -
2004 - (2)
Currency - 679
Operations (42) 1,169
-----------------------
2004 Net Revenues $ 63 $ 22,380
=======================
Note: The detail of excise taxes on products sold is as follows:
2004 2003
-----------------------
Domestic tobacco $ 930 $ 917
International
tobacco 5,086 4,343
-----------------------
Total excise taxes $ 6,016 $ 5,260
=======================
Currency increased international tobacco excise taxes by $282 million.
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
ALTRIA GROUP, INC. Schedule 3
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended December 31,(*)
(in millions)
North
Domestic International American International
tobacco tobacco food food
---------------------------------------------------
2004 Operating
Companies Income $ 1,076 $ 1,423 $ 947 $ 300
2003 Operating
Companies Income $ 987 $ 1,274 $ 1,039 $ 467
% Change 9.0% 11.7% (8.9)% (35.8)%
Reconciliation:
---------------
2003 Operating
Companies Income $ 987 $ 1,274 $ 1,039 $ 467
Divested businesses
- 2003 - - - (2)
Domestic tobacco
headquarters
relocation charges
- 2003 33 - - -
Domestic tobacco
legal settlement -
2003 20 - - -
Asset impairment
and exit costs -
2003 13 - - -
Gains on sales of
businesses - 2003 - - - (8)
Integration costs -
2003 - - (13) -
---------------------------------------------------
66 - (13) (10)
---------------------------------------------------
Divested businesses
- 2004 - - - -
Domestic tobacco
headquarters
relocation charges
- 2004 (6) - - -
Asset impairment
and exit costs -
2004 - (20) (102) (37)
Gains on sales of
businesses - 2004 - - - 5
Investment
impairment - 2004 - - - (47)
Implementation
costs - 2004 - - (27) (6)
Provision for
airline industry
exposure - 2004 - - - -
---------------------------------------------------
(6) (20) (129) (85)
---------------------------------------------------
Currency - 115 8 19
Operations 29 54 42 (91)
---------------------------------------------------
2004 Operating
Companies Income $ 1,076 $ 1,423 $ 947 $ 300
===================================================
Financial
services Total
-----------------------
2004 Operating
Companies Income $ (106) $ 3,640
2003 Operating
Companies Income $ 72 3,839
% Change (100.0+)% (5.2)%
Reconciliation:
---------------
2003 Operating
Companies Income $ 72 $ 3,839
Divested businesses
- 2003 - (2)
Domestic tobacco
headquarters
relocation charges
- 2003 - 33
Domestic tobacco
legal settlement -
2003 - 20
Asset impairment
and exit costs -
2003 - 13
Gains on sales of
businesses - 2003 (8)
Integration costs -
2003 - (13)
-----------------------
- 43
-----------------------
Divested businesses
- 2004 - -
Domestic tobacco
headquarters
relocation charges
- 2004 - (6)
Asset impairment
and exit costs -
2004 - (159)
Gains on sales of
businesses - 2004 - 5
Investment
impairment - 2004 - (47)
Implementation
costs - 2004 - (33)
Provision for
airline industry
exposure - 2004 (140) (140)
-----------------------
(140) (380)
-----------------------
Currency - 142
Operations (38) (4)
-----------------------
2004 Operating
Companies Income $ (106) $ 3,640
=======================
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
ALTRIA GROUP, INC. Schedule 4
and Subsidiaries
Condensed Statements of Earnings
For the Twelve Months Ended December 31,(*)
(in millions, except per share data)
2004 2003 % Change
-------------------------------
Net revenues $ 89,610 $ 81,320 10.2 %
Cost of sales 33,959 31,573 7.6 %
Excise taxes on products (**) 25,647 21,128 21.4 %
---------------------
Gross profit 30,004 28,619 4.8 %
Marketing, administration and research
costs 13,014 11,834
Domestic tobacco headquarters
relocation charges 31 69
Domestic tobacco legal settlement - 202
International tobacco E.C. agreement 250 -
Asset impairment and exit costs 648 19
Losses (gains) on sales of businesses 3 (31)
Integration costs - (13)
Provision for airline industry exposure 140 -
---------------------
Operating companies income 15,918 16,539 (3.8)%
Amortization of intangibles 17 9
General corporate expenses 651 704
Asset impairment and exit costs 70 67
---------------------
Operating income 15,180 15,759 (3.7)%
Interest and other debt expense, net 1,176 1,150
---------------------
Earnings from continuing operations
before income taxes and minority
interest 14,004 14,609 (4.1)%
Provision for income taxes 4,540 5,097 (10.9)%
---------------------
Earnings from continuing operations
before minority interest 9,464 9,512 (0.5)%
Minority interest in earnings from
continuing operations, and equity
earnings, net 44 391
---------------------
Earnings from continuing operations $ 9,420 $ 9,121 3.3 %
---------------------
(Loss) earnings from discontinued
operations, net of income taxes and
minority interest(****) $ (4) $ 83
---------------------
Net earnings $ 9,416 $ 9,204 2.3 %
=====================
Per share data (***):
Basic earnings per share from
continuing operations $ 4.60 $ 4.50 2.2 %
---------------------
Basic earnings per share from
discontinued operations $ - $ 0.04
---------------------
Basic earnings per share $ 4.60 $ 4.54 1.3 %
=====================
Diluted earnings per share from
continuing operations $ 4.57 $ 4.48 2.0 %
---------------------
Diluted earnings per share from
discontinued operations $ (0.01) $ 0.04
---------------------
Diluted earnings per share $ 4.56 $ 4.52 0.9 %
=====================
Weighted average number of shares
outstanding
- Basic 2,047 2,028 0.9 %
- Diluted 2,063 2,038 1.2 %
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
(**) The detail of excise taxes on products sold is as follows:
2004 2003
---------------------
Domestic tobacco $ 3,694 $ 3,698
International tobacco 21,953 17,430
---------------------
Total excise taxes $ 25,647 $ 21,128
=====================
(***) Basic and diluted earnings per share are computed for each of
the periods presented. Accordingly, the sum of the quarterly
earnings per share amounts may not agree to the year-to-date
amounts.
(****) Discontinued operations 2004 includes $(59) from impairment
loss, and $55 of earnings, net of minority interest impact. In
2003 income from discontinued operations was $83 of earnings,
net of minority interest impact.
ALTRIA GROUP, INC. Schedule 5
and Subsidiaries
Selected Financial Data by Business Segment
For the Twelve Months Ended December 31,(*)
(in millions)
North
Domestic International American International
tobacco tobacco food food
---------------------------------------------------
2004 Net Revenues $ 17,511 $ 39,536 $ 22,060 $ 10,108
2003 Net Revenues 17,001 33,389 20,937 9,561
% Change 3.0% 18.4% 5.4% 5.7%
Reconciliation:
---------------
2003 Net Revenues $ 17,001 $ 33,389 $ 20,937 $ 9,561
Divested
businesses - 2004 - - - 19
Divested
businesses - 2003 - - - (145)
Implementation -
2004 - - (7) -
Currency - 2,499 164 674
Operations 510 3,648 966 (1)
---------------------------------------------------
2004 Net Revenues $ 17,511 $ 39,536 $ 22,060 $ 10,108
===================================================
Financial
services Total
------------------------
2004 Net Revenues $ 395 $ 89,610
2003 Net Revenues 432 81,320
% Change (8.6)% 10.2%
Reconciliation:
---------------
2003 Net Revenues $ 432 $ 81,320
Divested
businesses - 2004 - 19
Divested
businesses - 2003 - (145)
Implementation -
2004 - (7)
Currency - 3,337
Operations (37) 5,086
------------------------
2004 Net Revenues $ 395 $ 89,610
========================
Note: The detail of excise taxes on products sold is as follows:
2004 2003
------------------------
Domestic tobacco $ 3,694 $ 3,698
International
tobacco 21,953 17,430
------------------------
Total excise taxes $ 25,647 $ 21,128
========================
Currency increased international tobacco excise taxes by $1,461
million.
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
ALTRIA GROUP, INC. Schedule 6
and Subsidiaries
Selected Financial Data by Business Segment
For the Twelve Months Ended December 31,(*)
(in millions)
North
Domestic International American International
tobacco tobacco food food
---------------------------------------------------
2004 Operating
Companies Income $ 4,405 $ 6,566 $ 3,870 $ 933
2003 Operating
Companies Income 3,889 6,286 4,658 1,393
% Change 13.3% 4.5% (16.9)% (33.0)%
Reconciliation:
---------------
2003 Operating
Companies Income $ 3,889 $ 6,286 $ 4,658 $ 1,393
Divested
businesses - 2003 - - - (19)
Domestic tobacco
headquarters
relocation
charges - 2003 69 - - -
Domestic tobacco
legal settlement
- 2003 202 - - -
Asset impairment
and exit costs -
2003 13 - - 6
Gains on sales of
businesses - 2003 - - - (31)
Integration costs
- 2003 - - (13) -
---------------------------------------------------
284 - (13) (44)
---------------------------------------------------
Divested
businesses - 2004 - - - 1
Domestic tobacco
headquarters
relocation
charges - 2004 (31) - - -
International
tobacco E.C.
agreement - 2004 - (250) - -
Asset impairment
and exit costs -
2004 (1) (44) (391) (212)
Loss on sales of
businesses - 2004 - - - (3)
Investment
impairment - 2004 - - - (47)
Implementation
costs - 2004 - - (40) (10)
Provision for
airline industry
exposure - 2004 - - - -
---------------------------------------------------
(32) (294) (431) (271)
---------------------------------------------------
Currency - 540 29 69
Operations 264 34 (373) (214)
---------------------------------------------------
2004 Operating
Companies Income $ 4,405 $ 6,566 $ 3,870 $ 933
===================================================
Financial
services Total
------------------------
2004 Operating
Companies Income $ 144 $ 15,918
2003 Operating
Companies Income 313 16,539
% Change (54.0)% (3.8)%
Reconciliation:
---------------
2003 Operating
Companies Income $ 313 $ 16,539
Divested
businesses - 2003 - (19)
Domestic tobacco
headquarters
relocation
charges - 2003 - 69
Domestic tobacco
legal settlement
- 2003 - 202
Asset impairment
and exit costs -
2003 - 19
Gains on sales of
businesses - 2003 - (31)
Integration costs
- 2003 - (13)
------------------------
- 227
------------------------
Divested
businesses - 2004 - 1
Domestic tobacco
headquarters
relocation
charges - 2004 - (31)
International
tobacco E.C.
agreement - 2004 - (250)
Asset impairment
and exit costs -
2004 - (648)
Loss on sales of
businesses - 2004 - (3)
Investment
impairment - 2004 - (47)
Implementation
costs - 2004 - (50)
Provision for
airline industry
exposure - 2004 (140) (140)
------------------------
(140) (1,168)
------------------------
Currency - 638
Operations (29) (318)
------------------------
2004 Operating
Companies Income $ 144 $ 15,918
========================
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
ALTRIA GROUP, INC. Schedule 7
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Quarters Ended December 31,(*)
($ in millions, except per share data)
Net Diluted
Earnings E.P.S. (**)
---------- ----------
2004 Continuing $ 1,990 $ 0.96
2003 Continuing $ 2,077 $ 1.02
% Change (4.2)% (5.9)%
Reconciliation:
---------------
2003 Continuing $ 2,077 $ 1.02
2003 Domestic tobacco headquarters relocation
charges 22 0.01
2003 Domestic tobacco legal settlement 14 -
2003 Asset impairment, and exit costs, net of
minority interest impact 52 0.02
2003 Gains on sales of businesses, net of
minority interest impact (4) -
2003 Integration costs, net of minority
interest impact (7) -
---------- ----------
77 0.03
---------- ----------
2004 Domestic tobacco headquarters relocation
charges (4) -
2004 Asset impairment, exit and
implementation costs, net of minority
interest impact (122) (0.06)
2004 Gain on sales of business, net of
minority interest impact 3 -
2004 Corporate asset impairment and exit
costs (19) (0.01)
2004 Investment impairment, net of minority
interest impact (26) (0.01)
2004 Provision for airline industry exposure (85) (0.04)
2004 Special one-time tax items, net of
minority interest impact 4 -
---------- ----------
(249) (0.12)
---------- ----------
Currency 93 0.05
Change in shares - (0.01)
Change in tax rate (26) (0.01)
Operations 18 -
---------- ----------
2004 Continuing $ 1,990 $ 0.96
---------- ----------
2004 Discontinued $ (43) $ (0.02)
---------- ----------
2004 Net Earnings $ 1,947 $ 0.94
========== ==========
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
(**) Basic and diluted earnings per share are computed for each of the
periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.
ALTRIA GROUP, INC. Schedule 8
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Twelve Months Ended December 31,(*)
($ in millions, except per share data)
Net Diluted
Earnings E.P.S. (**)
---------- ----------
2004 Continuing $ 9,420 $ 4.57
2003 Continuing $ 9,121 $ 4.48
% Change 3.3 % 2.0 %
Reconciliation:
---------------
2003 Continuing $ 9,121 $ 4.48
2003 Domestic tobacco headquarters relocation
charges 45 0.02
2003 Domestic tobacco legal settlement 132 0.06
2003 Asset impairment and exit costs, net of
minority interest impact 55 0.03
2003 Gains on sales of businesses, net of
minority interest impact (17) (0.01)
2003 Integration costs, net of minority
interest impact (7) -
---------- ----------
208 0.10
---------- ----------
2004 Domestic tobacco headquarters relocation
charges (20) (0.01)
2004 International tobacco E.C. agreement (161) (0.08)
2004 Asset impairment, exit and
implementation costs, net of minority
interest impact (401) (0.19)
2004 Loss on sales of businesses, net of
minority interest impact (2) -
2004 Corporate asset impairment and exit
costs (45) (0.02)
2004 Investment impairment, net of minority
interest impact (26) (0.01)
2004 Provision for airline industry exposure (85) (0.04)
2004 Special one-time tax items, net of
minority interest impact 419 0.20
2004 One-time gains from investments at
SABMiller 111 0.05
---------- ----------
(210) (0.10)
---------- ----------
Currency 415 0.20
Change in shares - (0.06)
Change in tax rate (89) (0.04)
Operations*** (25) (0.01)
---------- ----------
2004 Continuing $ 9,420 $ 4.57
---------- ----------
2004 Discontinued $ (4) $ (0.01)
---------- ----------
2004 Net Earnings $ 9,416 $ 4.56
========= ==========
(*) Due to a change for Discontinued Operations, prior period results
have been restated.
(**) Basic and diluted earnings per share are computed for each of the
periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.
(***) includes $0.09 per share related to lower minority interest in
earnings and other, net, reflecting lower net earnings at Kraft
and higher equity earnings for SABMiller.
ALTRIA GROUP, INC. Schedule 9
and Subsidiaries
Condensed Statements of Earnings
Restated for Discontinued Operations
For the Quarters Ended
March 31, June 30, September 30, December 31, 2004
(in millions, except per share data)
Q1 2004 Q2 2004 Q3 2004 Q4 2004
Adjusted Adjusted Adjusted Adjusted
---------------------------------------
Net revenues $ 21,721 $ 22,894 $ 22,615 $ 22,380
Cost of sales 8,012 8,570 8,347 9,030
Excise taxes on products 6,317 6,563 6,751 6,016
---------------------------------------
Gross profit 7,392 7,761 7,517 7,334
Marketing, administration and
research costs 3,194 3,289 3,137 3,394
Domestic tobacco headquarters
relocation charges 10 10 5 6
International tobacco E.C.
agreement - 250 - -
Asset impairment and exit
costs 292 152 45 159
Losses (gains) on sales of
businesses - - 8 (5)
Provision for airline industry
exposure - - - 140
---------------------------------------
Operating companies income 3,896 4,060 4,322 3,640
Amortization of intangibles 4 5 3 5
General corporate expenses 164 164 165 158
Asset impairment and exit
costs 16 8 17 29
---------------------------------------
Operating income 3,712 3,883 4,137 3,448
Interest and other debt
expense, net 300 297 288 291
---------------------------------------
Earnings from continuing
operations before income
taxes and minority interest 3,412 3,586 3,849 3,157
Provision for income taxes 1,180 952 1,287 1,121
---------------------------------------
Earnings from continuing
operations before minority
interest 2,232 2,634 2,562 2,036
Minority interest in earnings
from continuing operations,
and equity earnings, net 47 26 (75) 46
---------------------------------------
Earnings from continuing
operations $ 2,185 $ 2,608 $ 2,637 $ 1,990
---------------------------------------
(Loss) earnings from
discontinued operations, net
of income taxes and minority
interest $ 9 $ 19 $ 11 $ (43)
---------------------------------------
Net earnings $ 2,194 $ 2,627 $ 2,648 $ 1,947
=======================================
Per share data (*):
Basic earnings per share from
continuing operations $ 1.07 $ 1.27 $ 1.29 $ 0.97
---------------------------------------
Basic earnings per share from
discontinued operations $ - $ 0.01 $ - $ (0.02)
---------------------------------------
Basic earnings per share $ 1.07 $ 1.28 $ 1.29 $ 0.95
=======================================
Diluted earnings per share
from continuing operations $ 1.06 $ 1.26 $ 1.28 $ 0.96
---------------------------------------
Diluted earnings per share
from discontinued operations $ 0.01 $ 0.01 $ 0.01 $ (0.02)
---------------------------------------
Diluted earnings per share $ 1.07 $ 1.27 $ 1.29 $ 0.94
=======================================
Weighted average number of
shares outstanding
- Basic 2,041 2,047 2,048 2,052
- Diluted 2,059 2,062 2,060 2,068
2004 YTD
Adjusted
--------
Net revenues $ 89,610
Cost of sales 33,959
Excise taxes on products 25,647
--------
Gross profit 30,004
Marketing, administration and
research costs 13,014
Domestic tobacco headquarters
relocation charges 31
International tobacco E.C.
agreement 250
Asset impairment and exit
costs 648
Losses (gains) on sales of
businesses 3
Provision for airline industry
exposure 140
--------
Operating companies income 15,918
Amortization of intangibles 17
General corporate expenses 651
Asset impairment and exit
costs 70
--------
Operating income 15,180
Interest and other debt
expense, net 1,176
--------
Earnings from continuing
operations before income
taxes and minority interest 14,004
Provision for income taxes 4,540
--------
Earnings from continuing
operations before minority
interest 9,464
Minority interest in earnings
from continuing operations,
and equity earnings, net 44
--------
Earnings from continuing
operations $ 9,420
--------
(Loss) earnings from
discontinued operations, net
of income taxes and minority
interest $ (4)
--------
Net earnings $ 9,416
========
Per share data (*):
Basic earnings per share from
continuing operations $ 4.60
--------
Basic earnings per share from
discontinued operations $ -
--------
Basic earnings per share $ 4.60
========
Diluted earnings per share
from continuing operations $ 4.57
--------
Diluted earnings per share
from discontinued operations $ (0.01)
--------
Diluted earnings per share $ 4.56
========
Weighted average number of
shares outstanding
- Basic 2,047
- Diluted 2,063
(*) Basic and diluted earnings per share are computed for each of the
periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.
ALTRIA GROUP, INC. Schedule 10
and Subsidiaries
Condensed Statements of Earnings
Restated for Discontinued Operations
For the Quarters Ended
March 31, June 30, September 30, December 31, 2003
(in millions, except per share data)
Q1 2003 Q2 2003 Q3 2003 Q4 2003
Adjusted Adjusted Adjusted Adjusted
---------------------------------------
Net revenues $ 19,247 $ 20,696 $ 20,809 $ 20,568
Cost of sales 7,493 7,919 7,823 8,338
Excise taxes on products 4,887 5,344 5,637 5,260
---------------------------------------
Gross profit 6,867 7,433 7,349 6,970
Marketing, administration and
research costs 2,855 2,913 2,980 3,086
Domestic tobacco headquarters
relocation charges - 9 27 33
Domestic tobacco legal
settlement - 182 - 20
Asset impairment and exit
costs - - 6 13
Losses (gains) on sales of
businesses - - (23) (8)
Food Integration Cost - - - (13)
---------------------------------------
Operating companies income 4,012 4,329 4,359 3,839
Amortization of intangibles 2 3 2 2
General corporate expenses 183 183 176 162
Asset impairment and exit
costs - - - 67
---------------------------------------
Operating income 3,827 4,143 4,181 3,608
Interest and other debt
expense, net 283 263 301 303
---------------------------------------
Earnings from continuing
operations before income
taxes and minority interest 3,544 3,880 3,880 3,305
Provision for income taxes 1,248 1,365 1,337 1,147
---------------------------------------
Earnings from continuing
operations before minority
interest 2,296 2,515 2,543 2,158
Minority interest in earnings
from continuing operations,
and equity earnings, net 130 105 75 81
---------------------------------------
Earnings from continuing
operations $ 2,166 $ 2,410 $ 2,468 $ 2,077
---------------------------------------
(Loss) earnings from
discontinued operations,
net of income taxes and
minority interest $ 20 $ 27 $ 22 $ 14
---------------------------------------
Net earnings $ 2,186 $ 2,437 $ 2,490 $ 2,091
=======================================
Per share data (*):
Basic earnings per share from
continuing operations $ 1.07 $ 1.19 $ 1.22 $ 1.02
---------------------------------------
Basic earnings per share from
discontinued operations $ 0.01 $ 0.01 $ 0.01 $ 0.01
---------------------------------------
Basic earnings per share $ 1.08 $ 1.20 $ 1.23 $ 1.03
=======================================
Diluted earnings per share
from continuing operations $ 1.06 $ 1.19 $ 1.21 $ 1.02
---------------------------------------
Diluted earnings per share
from discontinued operations $ 0.01 $ 0.01 $ 0.01 $ -
---------------------------------------
Diluted earnings per share $ 1.07 $ 1.20 $ 1.22 $ 1.02
======== ======== ======== ========
Weighted average number of shares outstanding
- Basic 2,032 2,023 2,027 2,030
- Diluted 2,040 2,029 2,036 2,046
2003 YTD
Adjusted
--------
Net revenues $ 81,320
Cost of sales 31,573
Excise taxes on products 21,128
--------
Gross profit 28,619
Marketing, administration and
research costs 11,834
Domestic tobacco headquarters
relocation charges 69
Domestic tobacco legal
settlement 202
Asset impairment and exit
costs 19
Losses (gains) on sales of
businesses (31)
Food Integration Cost (13)
--------
Operating companies income 16,539
Amortization of intangibles 9
General corporate expenses 704
Asset impairment and exit
costs 67
--------
Operating income 15,759
Interest and other debt
expense, net 1,150
--------
Earnings from continuing
operations before income
taxes and minority interest 14,609
Provision for income taxes 5,097
--------
Earnings from continuing
operations before minority
interest 9,512
Minority interest in earnings
from continuing operations,
and equity earnings, net 391
--------
Earnings from continuing
operations $ 9,121
--------
(Loss) earnings from
discontinued operations, net
of income taxes and minority
interest $ 83
--------
Net earnings $ 9,204
========
Per share data (*):
Basic earnings per share from
continuing operations $ 4.50
--------
Basic earnings per share from
discontinued operations $ 0.04
--------
Basic earnings per share $ 4.54
========
Diluted earnings per share
from continuing operations $ 4.48
--------
Diluted earnings per share
from discontinued operations $ 0.04
--------
Diluted earnings per share $ 4.52
========
Weighted average number of
shares outstanding
- Basic 2,028
- Diluted 2,038
(*) Basic and diluted earnings per share are computed for each of the
periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.
ALTRIA GROUP, INC. Schedule 11
and Subsidiaries
Condensed Balance Sheets
(in millions, except ratios)
December 31, December 31,
2004 2003
------------ ------------
Assets
------
Cash and cash equivalents $ 5,744 $ 3,777
Current assets of discontinued
operations held for sale 1,458 -
All other current assets 18,699 17,605
Property, plant and equipment, net 16,305 16,067
Goodwill 28,056 27,742
Other intangible assets, net 11,056 11,803
Other assets 12,485 10,641
------------ ------------
Total consumer products assets 93,803 87,635
Total financial services assets 7,845 8,540
------------ ------------
Total assets $ 101,648 $ 96,175
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Short-term borrowings $ 2,546 $ 1,715
Current portion of long-term debt 1,751 1,661
Accrued settlement charges 3,501 3,530
All other current liabilities 15,776 14,487
Long-term debt 16,462 18,953
Deferred income taxes 7,677 7,295
Other long-term liabilities 14,905 15,137
------------ ------------
Total consumer products liabilities 62,618 62,778
Total financial services liabilities 8,316 8,320
------------ ------------
Total liabilities 70,934 71,098
Total stockholders' equity 30,714 25,077
------------ ------------
Total liabilities and
stockholders' equity $ 101,648 $ 96,175
============ ============
Total consumer products debt $ 20,759 $ 22,329
Debt/equity ratio - consumer products 0.68 0.89
Total debt $ 22,980 $ 24,539
Total debt/equity ratio 0.75 0.98
CONTACT: Altria Group, Inc.
Nicholas M. Rolli, 917-663-3460
Timothy R. Kellogg, 917-663-2759
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