Regulatory News:
Third-Quarter 2013
-
Reported diluted earnings per share of $1.44, up by $0.12 or 9.1%
versus $1.32 in 2012
-
Excluding unfavorable currency of $0.09, reported diluted earnings
per share up by $0.21 or 15.9% versus $1.32 in 2012 as detailed in
the attached Schedule 13
-
Adjusted diluted earnings per share of $1.44, up by $0.06 or 4.3%
versus $1.38 in 2012
-
Excluding unfavorable currency of $0.09, adjusted diluted earnings
per share up by $0.15 or 10.9% versus $1.38 in 2012 as detailed in
the attached Schedule 12
-
Cigarette shipment volume of 223.1 billion units, down by 5.7%
-
Cigarette shipment volume decrease of 4.1%, excluding the
Philippines
-
Reported net revenues, excluding excise taxes, of $7.9 billion, up by
0.1%
-
Excluding unfavorable currency, reported net revenues, excluding
excise taxes, up by 1.6%
-
Reported operating companies income of $3.7 billion, down by 1.0%
-
Excluding unfavorable currency, reported operating companies
income up by 3.3%
-
Adjusted operating companies income of $3.7 billion, down by 1.9%
-
Excluding unfavorable currency, adjusted operating companies
income up by 2.4%
-
Reported operating income of $3.6 billion, down by 0.8%
-
Increased its regular quarterly dividend by 10.6% to an annualized
rate of $3.76 per common share
-
Repurchased 16.7 million shares of the company's common stock for $1.5
billion
Nine Months Year-to-Date 2013
-
Reported diluted earnings per share of $4.02, up by $0.10 or 2.6%
versus $3.92 in 2012
-
Excluding unfavorable currency of $0.23, reported diluted earnings
per share up by $0.33 or 8.4% versus $3.92 in 2012 as detailed in
the attached Schedule 17
-
Adjusted diluted earnings per share of $4.03, up by $0.04 or 1.0%
versus $3.99 in 2012
-
Excluding unfavorable currency of $0.23, adjusted diluted earnings
per share up by $0.27 or 6.8% versus $3.99 in 2012 as detailed in
the attached Schedule 16
-
Cigarette shipment volume of 657.0 billion units, down by 5.3%
-
Cigarette shipment volume decrease of 3.0%, excluding the
Philippines
-
Reported net revenues, excluding excise taxes, of $23.4 billion, down
by 0.3%
-
Excluding unfavorable currency, reported net revenues, excluding
excise taxes, up by 1.7%
-
Reported operating companies income of $10.5 billion, down by 2.9%
-
Excluding unfavorable currency, reported operating companies
income up by 1.0%
-
Adjusted operating companies income, reflecting the items detailed in
the attached Schedule 15, of $10.5 billion, down by 3.3%
-
Excluding unfavorable currency, adjusted operating companies
income up by 0.6%
-
Reported operating income of $10.3 billion, down by 3.0%
-
Repurchased 50.1 million shares of the company's common stock for $4.5
billion
Full-Year 2013
-
PMI revises its 2013 full-year reported diluted earnings per share
forecast to be in a range of $5.35 to $5.40, versus $5.17 in 2012
-
This forecast includes the unfavorable special tax item of $0.01
per share associated with the enactment of the American Taxpayer
Relief Act of 2012 reported in the first quarter of 2013, an
anticipated 2013 fourth-quarter charge, related to a previously
announced organizational restructuring, of approximately $0.03 per
share, and reflects a cautious outlook regarding certain markets
-
Excluding an unfavorable currency impact, at prevailing exchange
rates, of approximately $0.33 for the full-year 2013, and the
aforementioned tax item and restructuring charge, reported diluted
earnings per share are projected to increase by approximately 10%
versus adjusted diluted earnings per share of $5.22 in 2012 as
detailed in the attached Schedule 20
Philip Morris International Inc. (NYSE / Euronext Paris: PM) today
announced its 2013 third-quarter results.
“Our strong EPS and cash flow performance this quarter primarily
reflected robust pricing. Our share momentum, particularly in the EU,
partially offset weaker industry volumes,” said André Calantzopoulos,
Chief Executive Officer.
“While the evolution of the macro-economic environment and tax-paid
cigarette industry volume remain a challenge, our business fundamentals
are solid and we continue to anticipate a strong final quarter.
"Our confidence in these fundamentals was further reflected in our
announcement during the quarter of an increase in our regular quarterly
dividend of 10.6%. Since the spin-off, we have increased the dividend
every year by an accumulated 104.3% to reach an annualized rate of $3.76
per common share.”
Conference Call
A conference call, hosted by Jacek Olczak, Chief Financial Officer, with
members of the investor community and news media, will be webcast at
9:00 a.m., Eastern Time, on October 17, 2013. Access is available at www.pmi.com/webcasts.
Dividends and Share Repurchase Program
During the quarter, PMI declared a regular quarterly dividend of $0.94,
representing an annualized rate of $3.76 per common share, and spent
$1.5 billion to repurchase 16.7 million shares, as shown in the table
below.
|
Current $18 Billion, Three-Year Program
|
|
|
|
|
|
|
|
Value
|
|
|
Shares
|
|
|
|
|
|
|
|
($ Mio.)
|
|
|
000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August - December 2012
|
|
|
|
|
$
|
2,853
|
|
|
32,206
|
|
|
January - March 2013
|
|
|
|
|
|
1,500
|
|
|
16,685
|
|
|
April - June 2013
|
|
|
|
|
|
1,545
|
|
|
16,665
|
|
|
July - September 2013
|
|
|
|
|
|
1,455
|
|
|
16,717
|
|
|
Total Under Program
|
|
|
|
|
$
|
7,353
|
|
|
82,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Since May 2008, when PMI began its first share repurchase program, the
company has spent an aggregate of $32.4 billion to repurchase 539.0
million shares at an average price of $60.02 per share, or 25.6% of the
shares outstanding at the time of the spin-off in March 2008.
Acquisitions and Agreements
The previously announced sale by Grupo Carso, S.A.B. de C. V. to PMI of
its 20% interest in PMI's Mexican tobacco business was completed on
September 30, 2013, with the approval of the Mexican antitrust
authority, for $703 million. The transaction, which resulted in PMI
owning 100% of its Mexican business, is projected to be marginally
accretive to PMI's earnings per share as of the fourth quarter of 2013.
On September 30, 2013, PMI announced its entry into a definitive
agreement to acquire 49% of the shares of United Arab Emirates-based
Arab Investors-TA (FZC) (“AITA”) for $625 million. Through its
acquisition of 49% of the shares of AITA, PMI will secure an almost 25%
economic interest in the Société des Tabacs Algéro-Emiratie, a joint
venture which is 51% owned by AITA and 49% by the Algerian state-owned
Société Nationale des Tabacs et Allumettes SpA. This equity investment
in AITA will provide PMI with enhanced earnings from Algeria and is
projected to be accretive to PMI’s earnings per share as of 2014.
2013 Full-Year Forecast
PMI revises its 2013 full-year reported diluted earnings per share
forecast to be in a range of $5.35 to $5.40, versus $5.17 in 2012. This
forecast includes the unfavorable special tax item of $0.01 per share
associated with the enactment of the American Taxpayer Relief Act of
2012 reported in the first quarter of 2013, an anticipated 2013
fourth-quarter charge, related to a previously announced organizational
restructuring, of approximately $0.03 per share, and reflects a cautious
outlook regarding certain markets.
Excluding an unfavorable currency impact, at prevailing exchange rates,
of approximately $0.33 for the full-year 2013, and the aforementioned
tax item and restructuring charge, reported diluted earnings per share
are projected to increase by approximately 10% versus adjusted diluted
earnings per share of $5.22 in 2012 as detailed in the attached Schedule
20.
This forecast includes a one-year gross productivity and cost savings
target for 2013 of approximately $300 million and a share repurchase
target for 2013 of $6.0 billion.
This forecast excludes the impact of any potential future acquisitions,
unanticipated asset impairment and exit cost charges, future changes in
currency exchange rates and any unusual events.
The factors described in the Forward-Looking and Cautionary Statements
section of this release represent continuing risks to these projections.
2013 THIRD-QUARTER CONSOLIDATED RESULTS
In this press release, “PMI” refers to Philip Morris International
Inc. and its subsidiaries. References to total international
cigarette market, defined as worldwide cigarette volume excluding the
United States, total cigarette market, total market and market shares
are PMI estimates based on the latest available data from a number of
internal and external sources and may, in defined instances, exclude the
People's Republic of China and/or PMI's duty-free business. The
term “net revenues” refers to operating revenues from the sale of our
products, excluding excise taxes and net of sales and promotion
incentives. Operating companies income, or “OCI,” is defined as
operating income before general corporate expenses and the amortization
of intangibles. PMI's management evaluates business segment
performance and allocates resources based on OCI. Management also
reviews OCI, OCI margins and earnings per share, or “EPS,” on an
adjusted basis (which may exclude the impact of currency and other items
such as acquisitions, asset impairment and exit costs, discrete tax
items and unusual items), earnings before interest, taxes, depreciation,
and amortization, or “EBITDA,” free cash flow, defined as net cash
provided by operating activities less capital expenditures, and net debt.
PMI believes it is appropriate to disclose these measures as they
improve comparability and help investors analyze business performance
and trends. Non-GAAP measures used in this release should be
considered neither in isolation nor as a substitute for the financial
measures prepared in accordance with U.S. GAAP. Comparisons are
to the same prior-year period unless otherwise stated. For a
reconciliation of non-GAAP measures to corresponding GAAP measures, see
the relevant schedules provided with this release.
|
NET REVENUES
|
|
|
|
|
|
PMI Net Revenues ($ Millions)
|
|
|
|
|
|
Third-Quarter
|
|
|
|
Nine Months Year-to-Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excl.
|
|
|
|
|
|
|
|
Excl.
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|
Curr.
|
|
2013
|
|
2012
|
|
Change
|
|
Curr.
|
|
|
European Union
|
|
|
$
|
2,281
|
|
$
|
2,125
|
|
7.3
|
%
|
|
1.8
|
%
|
|
$
|
6,457
|
|
$
|
6,463
|
|
(0.1
|
)%
|
|
(1.9
|
)%
|
|
|
Eastern Europe, Middle East & Africa
|
|
|
|
2,285
|
|
|
2,207
|
|
3.5
|
%
|
|
3.9
|
%
|
|
|
6,509
|
|
|
6,193
|
|
5.1
|
%
|
|
5.9
|
%
|
|
|
Asia
|
|
|
|
2,543
|
|
|
2,761
|
|
(7.9
|
)%
|
|
(0.8
|
)%
|
|
|
8,025
|
|
|
8,393
|
|
(4.4
|
)%
|
|
1.1
|
%
|
|
|
Latin America & Canada
|
|
|
|
818
|
|
|
827
|
|
(1.1
|
)%
|
|
2.9
|
%
|
|
|
2,437
|
|
|
2,439
|
|
(0.1
|
)%
|
|
3.2
|
%
|
|
|
Total PMI
|
|
|
$
|
7,927
|
|
$
|
7,920
|
|
0.1
|
%
|
|
1.6
|
%
|
|
$
|
23,428
|
|
$
|
23,488
|
|
(0.3
|
)%
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues of $7.9 billion were up by 0.1%, including unfavorable
currency of $120 million. Excluding currency, net revenues increased by
1.6%, driven by favorable pricing of $488 million across all Regions,
partially offset by unfavorable volume/mix of $361 million.
|
OPERATING COMPANIES INCOME
|
|
|
|
|
|
PMI Operating Companies Income ($
Millions)
|
|
|
|
|
|
Third-Quarter
|
|
|
|
Nine Months Year-to-Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excl.
|
|
|
|
|
|
|
|
Excl.
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|
Curr.
|
|
2013
|
|
2012
|
|
Change
|
|
Curr.
|
|
|
European Union
|
|
|
$
|
1,207
|
|
$
|
1,085
|
|
11.2
|
%
|
|
5.4
|
%
|
|
$
|
3,227
|
|
$
|
3,232
|
|
(0.2)
|
%
|
|
(1.8)
|
%
|
|
|
Eastern Europe, Middle East & Africa
|
|
|
|
1,088
|
|
|
1,047
|
|
3.9
|
%
|
|
7.0
|
%
|
|
|
2,968
|
|
|
2,805
|
|
5.8
|
%
|
|
8.1
|
%
|
|
|
Asia
|
|
|
|
1,097
|
|
|
1,297
|
|
(15.4)
|
%
|
|
(1.7)
|
%
|
|
|
3,567
|
|
|
4,068
|
|
(12.3)
|
%
|
|
(2.7)
|
%
|
|
|
Latin America & Canada
|
|
|
|
267
|
|
|
267
|
|
—
|
%
|
|
4.9
|
%
|
|
|
776
|
|
|
753
|
|
3.1
|
%
|
|
6.4
|
%
|
|
|
Total PMI
|
|
|
$
|
3,659
|
|
$
|
3,696
|
|
(1.0)
|
%
|
|
3.3
|
%
|
|
$
|
10,538
|
|
$
|
10,858
|
|
(2.9)
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported operating companies income of $3.7 billion was down by 1.0%,
including unfavorable currency of $160 million. Excluding currency,
operating companies income increased by 3.3%, reflecting favorable
pricing, partly offset by unfavorable volume/mix of $289 million,
primarily in the Philippines and Russia.
Adjusted operating companies income decreased by 1.9% as shown in the
table below and detailed in Schedule 11. Adjusted operating companies
income, excluding unfavorable currency, increased by 2.4%.
|
PMI Operating Companies Income ($
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Quarter
|
|
|
Nine Months Year-to-Date
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
|
Reported OCI
|
|
|
$
|
3,659
|
|
|
$
|
3,696
|
|
|
(1.0
|
)%
|
|
|
$
|
10,538
|
|
|
$
|
10,858
|
|
|
(2.9
|
)%
|
|
|
|
Asset impairment & exit costs
|
|
|
|
—
|
|
|
|
(34
|
)
|
|
|
|
|
|
(8
|
)
|
|
|
(50
|
)
|
|
|
|
|
|
Adjusted OCI
|
|
|
$
|
3,659
|
|
|
$
|
3,730
|
|
|
(1.9
|
)%
|
|
|
$
|
10,546
|
|
|
$
|
10,908
|
|
|
(3.3
|
)%
|
|
|
|
Adjusted OCI Margin*
|
|
|
|
46.2
|
%
|
|
|
47.1
|
%
|
|
(0.9
|
)
|
p.p.
|
|
|
45.0
|
%
|
|
|
46.4
|
%
|
|
(1.4
|
)
|
p.p.
|
|
*Margins are calculated as adjusted OCI, divided by net revenues,
excluding excise taxes.
Adjusted operating companies income margin, excluding unfavorable
currency, increased by 0.4 points to 47.5%, as detailed in Schedule 11.
|
SHIPMENT VOLUME & MARKET SHARE
|
|
|
|
|
|
PMI Cigarette Shipment Volume (Million
Units)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Quarter
|
|
Nine Months Year-to-Date
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
|
|
European Union
|
|
|
48,969
|
|
51,629
|
|
(5.2
|
)%
|
|
140,659
|
|
151,222
|
|
(7.0
|
)%
|
|
|
Eastern Europe, Middle East & Africa
|
|
|
76,902
|
|
81,388
|
|
(5.5
|
)%
|
|
220,034
|
|
226,472
|
|
(2.8
|
)%
|
|
|
Asia
|
|
|
73,296
|
|
79,507
|
|
(7.8
|
)%
|
|
226,503
|
|
244,009
|
|
(7.2
|
)%
|
|
|
Latin America & Canada
|
|
|
23,957
|
|
24,007
|
|
(0.2
|
)%
|
|
69,774
|
|
72,214
|
|
(3.4
|
)%
|
|
|
Total PMI
|
|
|
223,124
|
|
236,531
|
|
(5.7
|
)%
|
|
656,970
|
|
693,917
|
|
(5.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Third-Quarter
PMI's cigarette shipment volume of 223.1 billion units decreased by
5.7%, or 13.4 billion units, due principally to a total industry volume
decline. The decrease in PMI's cigarette shipment volume mainly
reflected: in the EU, the unfavorable impact of excise tax-driven price
increases, the weak economic and employment environment, the share
growth of the other tobacco products (OTP) category, and the prevalence
of non-duty paid products; in EEMA, the impact of price increases in
Russia in the first and third quarters of 2013, an increase in illicit
trade and a weak economy; and, in Asia, the unfavorable impact of the
disruptive January 2013 excise tax increase in the Philippines, and
lower share and the reversal of trade inventory movements in Pakistan
following the excise tax increase in the second quarter of 2013, partly
offset by Indonesia. Excluding the Philippines, PMI's cigarette shipment
volume decreased by 4.1%. On a nine months year-to-date basis, PMI's
cigarette shipment volume decreased by 3.0%, excluding the Philippines.
Total cigarette shipments of Marlboro of 75.2 billion units
decreased by 2.5%, due primarily to declines in: the EU, notably France
and Spain, partly offset by Italy; EEMA, primarily Russia and Ukraine,
partly offset by North Africa; Asia, predominantly the Philippines,
partly offset by Japan reflecting the launch of Marlboro Clear Taste in
September; and Latin America & Canada, mainly Mexico. Excluding the
Philippines, total cigarette shipments of Marlboro decreased by
0.3%.
Total cigarette shipments of L&M of 24.1 billion units
decreased by 2.1%, driven notably by Algeria, Egypt and Turkey, partly
offset by Germany and Thailand. Total cigarette shipments of Bond
Street of 11.9 billion units decreased by 7.2%, due predominantly to
Russia and Ukraine. Total cigarette shipments of Philip Morris of
8.8 billion units decreased by 6.6%, due primarily to Italy and the
Philippines, partly offset by Argentina. Total cigarette shipments of Parliament
of 11.8 billion units increased by 0.4%, driven mainly by Turkey, partly
offset by Japan. Total cigarette shipments of Chesterfield of 9.2
billion units decreased by 1.9%, due primarily to Russia and Ukraine,
partly offset by Germany and Turkey. Total cigarette shipments of Lark
of 7.2 billion units decreased by 11.9%, due predominantly to Japan and
Turkey.
Total shipment volume of OTP, in cigarette equivalent units, decreased
by 1.7%, due mainly to a decline in Southern Africa, partly offset by
growth in the EU, notably in Italy. Total shipment volume for cigarettes
and OTP, in cigarette equivalent units, decreased by 5.5%.
PMI's market share increased in a number of key markets, including
Algeria, Argentina, Austria, Belgium, Brazil, Canada, Egypt, France,
Greece, Indonesia, Italy, Kazakhstan, Korea, the Netherlands, Poland,
Portugal, Saudi Arabia, Spain, Thailand, Turkey, Ukraine and the United
Kingdom.
EUROPEAN UNION REGION (EU)
2013 Third-Quarter
Net revenues of $2.3 billion increased by 7.3%. Excluding favorable
currency of $118 million, net revenues increased by 1.8%, reflecting
favorable pricing of $125 million, notably in Germany, France and Spain,
partly offset by unfavorable volume/mix of $87 million, largely
reflecting a lower total market, notably in France, Italy, Poland and
Spain.
Operating companies income of $1.2 billion increased by 11.2%, including
favorable currency of $63 million. Excluding currency, operating
companies income increased by 5.4%, mainly driven by favorable pricing,
partly offset by unfavorable volume/mix of $68 million.
Adjusted operating companies income increased by 11.2%, as shown in the
table below and detailed on Schedule 11. Adjusted operating companies
income, excluding favorable currency, increased by 5.4%.
|
EU Operating Companies Income ($ Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Quarter
|
|
|
Nine Months Year-to-Date
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
|
Reported OCI
|
|
|
$
|
1,207
|
|
|
$
|
1,085
|
|
|
11.2
|
%
|
|
|
$
|
3,227
|
|
|
$
|
3,232
|
|
|
(0.2
|
)%
|
|
|
|
Asset impairment & exit costs
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
Adjusted OCI
|
|
|
$
|
1,207
|
|
|
$
|
1,085
|
|
|
11.2
|
%
|
|
|
$
|
3,227
|
|
|
$
|
3,232
|
|
|
(0.2
|
)%
|
|
|
|
Adjusted OCI Margin*
|
|
|
|
52.9
|
%
|
|
|
51.1
|
%
|
|
1.8
|
|
p.p.
|
|
|
50.0
|
%
|
|
|
50.0
|
%
|
|
—
|
|
p.p.
|
|
*Margins are calculated as adjusted OCI, divided by net revenues,
excluding excise taxes.
Adjusted operating companies income margin, excluding favorable
currency, increased by 1.8 points to 52.9%, as detailed in Schedule 11.
The total cigarette market in the EU of 130.5 billion units decreased by
5.4%, representing a more modest rate of decline compared to the 10.6%
and 8.0% decrease in the first and second quarters of 2013,
respectively. On a September year-to-date basis, the total cigarette
market in the EU decreased by 7.9%. The decrease in the third quarter
was due primarily to the impact of tax-driven price increases, the
unfavorable economic and employment environment and the prevalence of
non-duty paid products. The total OTP market in the EU of 42.3 billion
cigarette equivalent units increased by 0.7%, reflecting a larger total
fine cut market, up by 0.3% to 37.0 billion cigarette equivalent units.
Although PMI's cigarette shipment volume of 49.0 billion units decreased
by 5.2%, due principally to a lower total market across the Region,
PMI's market share increased by 0.2 points to 38.3%. On a September
year-to-date basis, PMI's market share increased by 0.6 points to 38.6%.
While shipment volume of Marlboro of 24.2 billion units in the
quarter decreased by 3.0%, mainly due to a lower total market, market
share increased by 0.1 point to 18.8%. On a September year-to-date
basis, market share of Marlboro increased by 0.5 points to 19.0%.
Shipment volume of L&M in the quarter increased by 1.3% to
9.0 billion units and market share increased by 0.4 points to 6.9%.
Shipment volume of Chesterfield of 5.0 billion units increased by
5.7% and market share increased by 0.1 point to 4.0%, driven by gains,
notably in Austria, the Czech Republic, Portugal and the UK, partly
offset by Germany. Although shipment volume of Philip Morris of
2.5 billion units decreased by 13.1%, market share increased by 0.2
points to 1.9%, with gains notably in France and Italy.
PMI's shipments of OTP of 5.3 billion cigarette equivalent units
increased by 6.0%, driven by higher share. PMI's OTP total market share
was 12.8%, up by 1.0 point, driven by gains in the fine cut category,
notably in France, up by 1.9 points to 26.4%, Italy, up by 14.0 points
to 40.3%, Poland, up by 3.1 points to 21.0%, Portugal, up by 13.4 points
to 30.7%, and Spain, up by 2.3 points to 14.2%.
EU Key Market Commentaries
In France, the total cigarette market of 12.2 billion units decreased by
10.8%, mainly reflecting the unfavorable impact of price increases in
the fourth quarter of 2012 and July 2013, an increase in the prevalence
of non-duty paid products, growth of the fine cut category, and a weak
economy. Although PMI's shipments of 4.8 billion units decreased by
6.8%, market share increased by 1.1 points to 40.0%, mainly driven by
the resilience of premium Philip Morris, up by 0.7 points
to 8.9%, reinforced by the Philip Morris Green variants which
were introduced in February 2013, and the growth of Chesterfield,
up by 0.1 point to 3.4%. Market share of Marlboro and L&M
increased by 0.1 point each to 24.6% and 2.6%, respectively. The
total industry fine cut category of 3.5 billion cigarette equivalent
units increased by 0.7%. PMI's market share of the category increased by
1.9 points to 26.4%.
In Germany, the total cigarette market of 21.9 billion units increased
by 0.8%, mainly reflecting the favorable impact of competitors' trade
inventory movements. The underlying total market is estimated to have
declined by 2.7%, largely due to the impact of price increases in the
second quarter of 2013. PMI's shipments of 7.6 billion units decreased
by 1.4%. Market share decreased by 0.7 points to 34.5%, mainly due to Marlboro
and Chesterfield, down by 0.5 and 0.6 points to 20.5% and 1.7%,
respectively, partly offset by L&M, up by 0.5 points to
10.7%. While PMI's market share was down in the quarter, it was up by
0.2 points to 36.0% on a September year-to-date basis, driven by Marlboro,
up by 0.8 points to 22.0%. The total industry fine cut category of 10.9
billion cigarette equivalent units was flat. PMI's market share of the
category was down by 0.3 points to 13.7%.
In Italy, the total cigarette market of 20.1 billion units decreased by
4.1%, reflecting an unfavorable economic and employment environment and
the prevalence of illicit trade and substitute products. Although PMI's
shipments of 10.2 billion units decreased by 5.4%, market share
increased by 0.1 point to 53.3%, with Marlboro up by 0.3 points
to 26.2%. Market share of Philip Morris increased by 1.3 points
to 2.5%, benefiting from the 2012 launch of Philip Morris Selection
in the low-price segment, partially offset by Chesterfield, down
by 0.1 point to 3.5%, and Diana in the low-price segment, down by
1.1 points to 11.1%, impacted by the growth of the super-low price
segment and the availability of non-duty paid products. The total
industry fine cut category of 1.5 billion cigarette equivalent units
decreased by 1.9%, reflecting the 2012 excise tax-driven reduction of
the price gap differential with cigarettes. PMI's market share of the
category increased by 14.0 points to 40.3%, driven by Marlboro Red
and Gold fine cut.
In Poland, the total cigarette market of 12.7 billion units decreased by
8.3%, mainly reflecting the unfavorable impact of price increases in the
first quarter of 2013, and the availability of non-duty paid OTP
products. Although PMI's shipments of 4.7 billion units decreased by
7.4%, PMI's market share increased by 0.3 points to 37.4%, driven by Marlboro,
up by 0.3 points to 11.9% and by L&M and Chesterfield,
up by 2.3 and 0.3 points to 18.8% and 2.2%, respectively. While the
total industry fine cut category of 0.8 billion cigarette equivalent
units decreased by 6.5%, reflecting the prevalence of non-duty paid OTP
products, PMI's market share of the category increased by 3.1 points to
21.0%.
In Spain, the total cigarette market of 13.2 billion units decreased by
11.3%, mainly due to the impact of price increases in 2012 and the first
and third quarters of 2013, the unfavorable economic and employment
environment and illicit trade. Although PMI's shipments of 3.8 billion
units decreased by 13.5%, PMI's market share increased by 0.1 point to
31.1%, driven by higher share of Marlboro, up by 0.5 points to
15.3%. Market share of Chesterfield was flat at 8.9%, and share
of Philip Morris and L&M was down by 0.1 point and 0.2
points to 0.8% and 6.0%, respectively. The total industry fine cut
category of 2.7 billion cigarette equivalent units decreased by 5.5%,
due to tax-driven price increases in the first and third quarters. PMI's
market share of the category increased by 2.3 points to 14.2%.
EASTERN EUROPE, MIDDLE EAST & AFRICA REGION
(EEMA)
2013 Third-Quarter
Net revenues of $2.3 billion increased by 3.5%. Excluding unfavorable
currency of $9 million, net revenues increased by 3.9%, driven by
favorable pricing of $201 million, principally in Kazakhstan, Russia,
Turkey and Ukraine, partly offset by unfavorable volume/mix of $114
million, mainly due to lower volume in Russia.
Operating companies income of $1.1 billion increased by 3.9%. Excluding
unfavorable currency of $32 million, operating companies income
increased by 7.0%, due primarily to higher pricing, partly offset by
unfavorable volume/mix of $91 million.
Adjusted operating companies income increased by 3.9%, as shown in the
table below and detailed on Schedule 11. Adjusted operating companies
income, excluding unfavorable currency, increased by 7.0%.
|
EEMA Operating Companies Income ($
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Quarter
|
|
|
Nine Months Year-to-Date
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
|
Reported OCI
|
|
|
$
|
1,088
|
|
|
$
|
1,047
|
|
|
3.9
|
%
|
|
|
$
|
2,968
|
|
|
$
|
2,805
|
|
|
5.8
|
%
|
|
|
|
Asset impairment & exit costs
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
Adjusted OCI
|
|
|
$
|
1,088
|
|
|
$
|
1,047
|
|
|
3.9
|
%
|
|
|
$
|
2,968
|
|
|
$
|
2,805
|
|
|
5.8
|
%
|
|
|
|
Adjusted OCI Margin*
|
|
|
|
47.6
|
%
|
|
|
47.4
|
%
|
|
0.2
|
|
p.p.
|
|
|
45.6
|
%
|
|
|
45.3
|
%
|
|
0.3
|
|
p.p.
|
|
*Margins are calculated as adjusted OCI, divided by net revenues,
excluding excise taxes.
Adjusted operating companies income margin, excluding unfavorable
currency, increased by 1.4 points to 48.8%, as detailed on Schedule 11.
PMI's cigarette shipment volume of 76.9 billion units decreased by 5.5%,
mainly due to the Middle East, Russia and Serbia, partly offset by North
Africa.
PMI's cigarette shipment volume of premium brands decreased by 1.1%, due
principally to Marlboro, down by 2.4% to 22.2 billion units,
partly offset by Parliament, up by 4.3% to 8.9 billion units.
EEMA Key Market Commentaries
In Russia, PMI's shipment volume of 23.0 billion units decreased by
10.1%, mainly due to the unfavorable impact of tax-driven price
increases, illicit trade and a weak economy. Shipment volume of PMI's
premium portfolio decreased by 8.1%, mainly due to Marlboro and
Parliament, down by 16.7% and 4.1%, respectively. In the mid-price
segment, shipment volume decreased by 15.3%, mainly due to Chesterfield,
down by 20.7%. In the low-price segment, shipment volume decreased by
8.4%, mainly due to Bond Street, Optima and Apollo Soyuz,
down by 7.7%, 14.6% and 22.5%, respectively. While PMI's August
quarter-to-date market share of 26.1%, as measured by Nielsen, was down
by 0.4 points, it was stable compared to the first two quarters of 2013.
Market share of Parliament increased by 0.3 points to 3.4%, Marlboro
decreased by 0.2 points to 1.7%, L&M increased by 0.4 points
to 3.0%, Chesterfield decreased by 0.4 points to 3.0%, Bond
Street decreased by 0.2 points to 6.3%, and Next increased by
0.4 points to 3.3%.
In Turkey, the total cigarette market of 24.8 billion units decreased by
an estimated 5%, primarily reflecting the renewed growth of illicit
trade. PMI's shipment volume of 12.6 billion units decreased by 2.4%.
PMI's August quarter-to-date market share, as measured by Nielsen,
increased by 0.1 point to 46.1%, mainly driven by premium Parliament and
mid-price Muratti, up by 1.1 and 0.3 points to 10.2%
and 6.9%, respectively, partly offset by Marlboro, down by 0.2
points to 9.1%, and low-price L&M, down by 1.1 points to 7.4%.
In Ukraine, the total cigarette market of 20.1 billion units decreased
by an estimated 14%, mainly reflecting the impact of tax-driven price
increases in the first quarter of 2013 and an increase in illicit trade.
Although PMI's shipment volume of 6.9 billion units decreased by 5.9%,
PMI's August quarter-to-date market share, as measured by Nielsen,
increased by 0.6 points to 33.1%, mainly due to growth from PMI's
low-price segment brands of Bond Street, Optima and President.
Share for premium Parliament increased by 0.2 points to 3.4%.
Share of Marlboro decreased by 0.2 points to 5.5%.
ASIA REGION
2013 Third-Quarter
Net revenues of $2.5 billion decreased by 7.9%, including unfavorable
currency of $196 million. Excluding currency, net revenues decreased by
0.8%, due to unfavorable volume/mix of $144 million, primarily in the
Philippines, partially offset by favorable pricing of $122 million,
principally in Australia and Indonesia.
Operating companies income of $1.1 billion decreased by 15.4%, including
unfavorable currency of $178 million. Excluding currency, operating
companies income decreased by 1.7%, due primarily to unfavorable
volume/mix of $106 million, and higher manufacturing costs, principally
in Indonesia driven mainly by higher clove prices, partly offset by
favorable pricing.
Adjusted operating companies income decreased by 17.0% as shown in the
table below and detailed on Schedule 11. Adjusted operating companies
income, excluding unfavorable currency, decreased by 3.5%.
|
Asia Operating Companies Income ($
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Quarter
|
|
|
Nine Months Year-to-Date
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
|
Reported OCI
|
|
|
$
|
1,097
|
|
|
$
|
1,297
|
|
|
(15.4
|
)%
|
|
|
$
|
3,567
|
|
|
$
|
4,068
|
|
|
(12.3
|
)%
|
|
|
|
Asset impairment & exit costs
|
|
|
|
—
|
|
|
|
(24
|
)
|
|
|
|
|
|
(8
|
)
|
|
|
(24
|
)
|
|
|
|
|
|
Adjusted OCI
|
|
|
$
|
1,097
|
|
|
$
|
1,321
|
|
|
(17.0
|
)%
|
|
|
$
|
3,575
|
|
|
$
|
4,092
|
|
|
(12.6
|
)%
|
|
|
|
Adjusted OCI Margin*
|
|
|
|
43.1
|
%
|
|
|
47.8
|
%
|
|
(4.7
|
)
|
p.p.
|
|
|
44.5
|
%
|
|
|
48.8
|
%
|
|
(4.3
|
)
|
p.p.
|
|
*Margins are calculated as adjusted OCI, divided by net revenues,
excluding excise taxes.
Adjusted operating companies income margin, excluding unfavorable
currency, decreased by 1.3 points to 46.5%, as detailed on Schedule 11,
primarily reflecting the impact of unfavorable volume/mix, mainly in the
Philippines, and higher costs.
PMI's cigarette shipment volume of 73.3 billion units decreased by 7.8%,
due primarily to the lower total market in the Philippines, and lower
share and the reversal of trade inventory movements in Pakistan
following the excise tax increase in the second quarter of 2013, partly
offset by share growth in Indonesia. Excluding the Philippines, PMI's
cigarette shipment volume decreased by 2.8%.
Shipment volume of Marlboro of 19.5 billion units decreased by
1.6%. Excluding the Philippines, shipment volume of Marlboro
increased by 9.6%, primarily reflecting the launch of Marlboro Clear
Taste in Japan as well as market share growth in Indonesia and
Vietnam.
Asia Key Market Commentaries
In Indonesia, the total cigarette market of 74.1 billion units increased
by 0.3%. PMI's shipment volume in the quarter of 27.1 billion units
increased by 1.6%. PMI's market share increased by 0.4 points to 36.6%,
driven notably by machine-made, Low Tar Low Nicotine (LTLN) Sampoerna
A in the premium segment, up by 0.6 points to 14.8%, and
machine-made, LTLN mid-price U Mild, up by 0.9 points to 4.3%.
Market share of the hand-rolled, full-flavor Dji Sam Soe in the
premium segment decreased by 1.4 points to 6.7%, mainly due to a retail
price change ahead of competition. Marlboro's market share
increased by 0.5 points to 5.4% and its share of the “white” cigarettes
segment, representing 7.0% of the total cigarette market, increased by
5.7 points to 77.8%.
In Japan, the total cigarette market of 50.0 billion units decreased by
1.2%. PMI's shipment volume of 13.5 billion units decreased by 2.0%,
principally due to a lower total market and share. PMI's market share
decreased by 1.0 point to 26.5%, reflecting the impact of PMI's
principal competitor's brand launches and significant promotional
activities since the start of 2013. Although Marlboro's market
share decreased by 0.3 points to 12.2% in the quarter, it was
essentially stable compared to the first and second quarters, reflecting
the brand's overall resilience which was supported by the launch of Marlboro
Clear Taste in September. Share of Lark and Philip Morris in
the quarter decreased by 0.3 and 0.2 points to 7.9% and 2.1%,
respectively. Share of Virginia S. was flat at 2.0%.
In Korea, the total cigarette market of 23.6 billion units decreased by
2.7%. Although PMI's shipment volume of 4.6 billion units decreased
slightly by 0.6%, market share increased by 0.4 points to 19.4%,
reflecting the second sequential quarter of share growth. Market share
of Marlboro and Parliament in the quarter increased by 0.2
and 0.5 points to 7.7% and 6.9%, respectively. Market share of Virginia
S. decreased by 0.1 point to 4.3%.
In the Philippines, the total industry cigarette volume of 23.0 billion
units was estimated to have decreased by 6.7%, reflecting a partial, but
insufficient, improvement in declared tax-paid volume by PMI's main
local competitor as well as government tax enforcement. PMI's shipment
volume of 17.8 billion units decreased by 20.7%, primarily reflecting
the unfavorable impact of the disruptive excise tax increase in January
2013 and the prevalence of non-duty paid domestic product. PMI's market
share in the quarter decreased by 13.6 points to 77.2%, primarily due to
down-trading to competitors' brands. Marlboro's market share
decreased by 5.9 points to 15.3%. Share of low-price Fortune
decreased by 22.6 points to 27.5%, partly offset by gains from PMI's
other local low-price brands.
LATIN AMERICA & CANADA REGION
2013 Third-Quarter
Net revenues of $818 million decreased by 1.1%, including unfavorable
currency of $33 million. Excluding currency, net revenues increased by
2.9%, driven by favorable pricing of $40 million, principally in
Argentina, Canada and Mexico, partially offset by unfavorable volume/mix
of $16 million.
Operating companies income of $267 million was flat, including
unfavorable currency of $13 million. Excluding currency, operating
companies income increased by 4.9%, primarily driven by favorable
pricing, partially offset by unfavorable volume/mix of $24 million.
Adjusted operating companies income decreased by 3.6% as shown in the
table below and detailed on Schedule 11. Adjusted operating companies
income, excluding unfavorable currency, increased by 1.1%.
Latin America & Canada Operating
Companies Income ($ Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Quarter
|
|
|
Nine Months Year-to-Date
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
2013
|
|
2012
|
|
Change
|
|
|
Reported OCI
|
|
|
$
|
267
|
|
|
$
|
267
|
|
|
—
|
%
|
|
|
$
|
776
|
|
|
$
|
753
|
|
|
3.1
|
%
|
|
|
Asset impairment & exit costs
|
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
|
|
|
—
|
|
|
|
(26
|
)
|
|
|
|
|
Adjusted OCI
|
|
|
$
|
267
|
|
|
$
|
277
|
|
|
(3.6
|
)%
|
|
|
$
|
776
|
|
|
$
|
779
|
|
|
(0.4
|
)%
|
|
|
Adjusted OCI Margin*
|
|
|
|
32.6
|
%
|
|
|
33.5
|
%
|
|
(0.9
|
)
|
p.p.
|
|
|
31.8
|
%
|
|
|
31.9
|
%
|
|
(0.1
|
)
|
p.p.
|
|
*Margins are calculated as adjusted OCI, divided by net revenues,
excluding excise taxes.
Adjusted operating companies income margin, excluding unfavorable
currency, decreased by 0.6 points to 32.9%, as detailed on Schedule 11.
PMI's cigarette shipment volume of 24.0 billion units decreased by
0.2%, principally due to a lower total market and share in Mexico.
Shipment volume of Marlboro of 9.2 billion units decreased by
3.0%, mainly reflecting a lower total market and share in Mexico, partly
offset by higher share in Brazil and Colombia.
Latin America & Canada Key Market Commentaries
In Argentina, the total cigarette market of 10.3 billion units increased
by 1.1%. PMI's cigarette shipment volume of 7.9 billion units increased
by 2.1%. PMI's market share increased by 1.0 point to 76.0%, driven by
mid-price Philip Morris, up by 2.4 points to 42.2%, reflecting
the positive impact of its capsule variants, partly offset by low-price Next,
down by 0.7 points to 2.4%. Share of Marlboro decreased by
0.3 points to 23.7%.
In Canada, the total cigarette market of 7.7 billion units decreased by
2.4%. PMI's cigarette shipment volume of 2.9 billion units increased by
0.1% and market share increased by 1.5 points to 38.4%, with premium
brands Benson & Hedges and Belmont up by 0.2 points
each to 2.5% and 2.8%, respectively. Market share of low-price brand Next
was up by 2.1 points to 10.5%, partly offset by mid-price Number 7
and low-price Accord, down by 0.3 points each to 4.2% and 2.9%,
respectively. Market share of mid-price Canadian Classics was up
by 0.5 points to 10.6%.
In Mexico, the total cigarette market of 8.4 billion units decreased by
0.9%. PMI's cigarette shipment volume of 6.0 billion units decreased by
2.5%. PMI's market share decreased by 1.2 points to 72.4%, due mainly
to: unfavorable segment mix following the impact of price increases in
January 2013; and a competitor's launch of brands in a 15s per pack
format, at price parity with 14s, in the low price segment. While market
share of Marlboro and Benson & Hedges decreased by 3.1
and 0.6 share points to 50.5% and 5.5%, respectively, PMI's share of the
premium price segment increased by 1.1 points to 90.9%. Market share of
low-price Delicados, the second best-selling brand in the market,
increased by 1.2 points to 11.7%, and PMI's other local low-price brands
increased by a combined 1.3 points to 4.5%.
Philip Morris International Inc. Profile
Philip Morris International Inc. (PMI) is the leading international
tobacco company, with seven of the world's top 15 international brands,
including Marlboro, the number one cigarette brand worldwide.
PMI's products are sold in more than 180 markets. In 2012, the company
held an estimated 16.3% share of the total international cigarette
market outside of the U.S., or 28.8% excluding the People's Republic of
China and the U.S. For more information, see www.pmi.com.
Forward-Looking and Cautionary Statements
This press release contains projections of future results and other
forward-looking statements. Achievement of projected results is subject
to risks, uncertainties and inaccurate assumptions. In the event that
risks or uncertainties materialize, or underlying assumptions prove
inaccurate, actual results could vary materially from those contained in
such forward-looking statements. Pursuant to the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995, PMI
is identifying important factors that, individually or in the aggregate,
could cause actual results and outcomes to differ materially from those
contained in any forward-looking statements made by PMI.
PMI's business risks include: significant increases in cigarette-related
taxes; the imposition of discriminatory excise tax structures;
fluctuations in customer inventory levels due to increases in product
taxes and prices; increasing marketing and regulatory restrictions,
often with the goal of reducing or preventing the use of tobacco
products; health concerns relating to the use of tobacco products and
exposure to environmental tobacco smoke; litigation related to tobacco
use; intense competition; the effects of global and individual country
economic, regulatory and political developments; changes in adult smoker
behavior; lost revenues as a result of counterfeiting, contraband and
cross-border purchases; governmental investigations; unfavorable
currency exchange rates and currency devaluations; adverse changes in
applicable corporate tax laws; adverse changes in the cost and quality
of tobacco and other agricultural products and raw materials; and the
integrity of its information systems. PMI's future profitability may
also be adversely affected should it be unsuccessful in its attempts to
produce products with the potential to reduce the risk of
smoking-related diseases; if it is unable to successfully introduce new
products, promote brand equity, enter new markets or improve its margins
through increased prices and productivity gains; if it is unable to
expand its brand portfolio internally or through acquisitions and the
development of strategic business relationships; or if it is unable to
attract and retain the best global talent.
PMI is further subject to other risks detailed from time to time in its
publicly filed documents, including the Form 10-Q for the quarter ended
June 30, 2013. PMI cautions that the foregoing list of important factors
is not a complete discussion of all potential risks and uncertainties.
PMI does not undertake to update any forward-looking statement that it
may make from time to time, except in the normal course of its public
disclosure obligations.
|
|
|
|
|
|
|
Schedule 1
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Condensed Statements of Earnings
|
|
|
For the Quarters Ended September 30,
|
|
|
($ in millions, except per share data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
% Change
|
|
|
Net revenues
|
|
|
$
|
|
|
|
20,629
|
|
|
$
|
|
|
|
19,592
|
|
|
|
|
5.3
|
%
|
|
|
Cost of sales
|
|
|
|
|
|
|
2,618
|
|
|
|
|
|
|
2,584
|
|
|
|
|
1.3
|
%
|
|
|
Excise taxes on products (1)
|
|
|
|
|
|
|
12,702
|
|
|
|
|
|
|
11,672
|
|
|
|
|
8.8
|
%
|
|
|
Gross profit
|
|
|
|
|
|
|
5,309
|
|
|
|
|
|
|
5,336
|
|
|
|
|
(0.5
|
)%
|
|
|
Marketing, administration and research costs
|
|
|
|
|
|
|
1,650
|
|
|
|
|
|
|
1,606
|
|
|
|
|
|
|
|
Asset impairment and exit costs
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
Operating companies income
|
|
|
|
|
|
|
3,659
|
|
|
|
|
|
|
3,696
|
|
|
|
|
(1.0
|
)%
|
|
|
Amortization of intangibles
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
24
|
|
|
|
|
|
|
|
General corporate expenses
|
|
|
|
|
|
|
43
|
|
|
|
|
|
|
49
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
3,593
|
|
|
|
|
|
|
3,623
|
|
|
|
|
(0.8
|
)%
|
|
|
Interest expense, net
|
|
|
|
|
|
|
239
|
|
|
|
|
|
|
211
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
|
|
|
|
3,354
|
|
|
|
|
|
|
3,412
|
|
|
|
|
(1.7
|
)%
|
|
|
Provision for income taxes
|
|
|
|
|
|
|
952
|
|
|
|
|
|
|
1,088
|
|
|
|
|
(12.5
|
)%
|
|
|
Net earnings
|
|
|
|
|
|
|
2,402
|
|
|
|
|
|
|
2,324
|
|
|
|
|
3.4
|
%
|
|
|
Net earnings attributable to noncontrolling interests
|
|
|
|
|
|
|
62
|
|
|
|
|
|
|
97
|
|
|
|
|
|
|
|
Net earnings attributable to PMI
|
|
|
$
|
|
|
|
2,340
|
|
|
$
|
|
|
|
2,227
|
|
|
|
|
5.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
$
|
|
|
|
1.44
|
|
|
$
|
|
|
|
1.32
|
|
|
|
|
9.1
|
%
|
|
|
Diluted earnings per share
|
|
|
$
|
|
|
|
1.44
|
|
|
$
|
|
|
|
1.32
|
|
|
|
|
9.1
|
%
|
|
|
(1) The segment detail of excise taxes on products sold for the
quarters ended September 30, 2013 and 2012 is shown on Schedule 2.
|
|
|
|
|
(2) Net earnings and weighted-average shares used in the basic and
diluted earnings per share computations for the quarters ended
September 30, 2013 and 2012 are shown on Schedule 4, Footnote 1.
|
|
|
|
|
|
|
|
|
Schedule 2
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Selected Financial Data by Business Segment
|
|
|
For the Quarters Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues excluding Excise Taxes
|
|
|
|
|
|
|
|
European
Union
|
|
EEMA
|
|
Asia
|
|
Latin
America &
Canada
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
Net Revenues (1)
|
|
|
$
|
|
7,487
|
|
|
$
|
|
|
|
5,546
|
|
|
$
|
|
|
5,144
|
|
|
$
|
2,452
|
|
|
$
|
20,629
|
|
|
|
|
|
Excise Taxes on Products
|
|
|
|
|
(5,206
|
)
|
|
|
|
|
|
(3,261
|
)
|
|
|
|
|
(2,601
|
)
|
|
|
(1,634
|
)
|
|
|
(12,702
|
)
|
|
|
|
|
Net Revenues excluding Excise Taxes
|
|
|
|
|
2,281
|
|
|
|
|
|
|
2,285
|
|
|
|
|
|
2,543
|
|
|
|
818
|
|
|
|
7,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
Net Revenues
|
|
|
$
|
|
6,904
|
|
|
$
|
|
|
|
5,125
|
|
|
$
|
|
|
5,174
|
|
|
$
|
2,389
|
|
|
$
|
19,592
|
|
|
|
|
|
Excise Taxes on Products
|
|
|
|
|
(4,779
|
)
|
|
|
|
|
|
(2,918
|
)
|
|
|
|
|
(2,413
|
)
|
|
|
(1,562
|
)
|
|
|
(11,672
|
)
|
|
|
|
|
Net Revenues excluding Excise Taxes
|
|
|
|
|
2,125
|
|
|
|
|
|
|
2,207
|
|
|
|
|
|
2,761
|
|
|
|
827
|
|
|
|
7,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance
|
|
Currency
|
|
|
|
|
118
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
(196
|
)
|
|
|
(33
|
)
|
|
|
(120
|
)
|
|
|
|
|
Acquisitions
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
Operations
|
|
|
|
|
38
|
|
|
|
|
|
|
87
|
|
|
|
|
|
(22
|
)
|
|
|
24
|
|
|
|
127
|
|
|
|
|
|
Variance Total
|
|
|
|
|
156
|
|
|
|
|
|
|
78
|
|
|
|
|
|
(218
|
)
|
|
|
(9
|
)
|
|
|
7
|
|
|
|
|
|
Variance Total (%)
|
|
|
|
|
7.3
|
%
|
|
|
|
|
|
3.5
|
%
|
|
|
|
|
(7.9
|
)%
|
|
|
(1.1
|
)%
|
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance excluding Currency
|
|
|
|
|
38
|
|
|
|
|
|
|
87
|
|
|
|
|
|
(22
|
)
|
|
|
24
|
|
|
|
127
|
|
|
|
|
|
Variance excluding Currency (%)
|
|
|
|
|
1.8
|
%
|
|
|
|
|
|
3.9
|
%
|
|
|
|
|
(0.8
|
)%
|
|
|
2.9
|
%
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance excluding Currency & Acquisitions
|
|
|
|
|
38
|
|
|
|
|
|
|
87
|
|
|
|
|
|
(22
|
)
|
|
|
24
|
|
|
|
127
|
|
|
|
|
|
Variance excluding Currency & Acquisitions (%)
|
|
|
|
|
1.8
|
%
|
|
|
|
|
|
3.9
|
%
|
|
|
|
|
(0.8
|
)%
|
|
|
2.9
|
%
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 2013 Currency increased (decreased) net revenues as follows:
|
|
|
|
|
European Union
|
|
|
$
|
|
387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EEMA
|
|
|
|
|
(62
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
|
|
|
|
|
(310
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America & Canada
|
|
|
|
|
(124
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
(109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 3
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Selected Financial Data by Business Segment
|
|
|
For the Quarters Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Companies Income
|
|
|
|
|
|
European
Union
|
|
EEMA
|
|
Asia
|
|
Latin
America &
Canada
|
|
Total
|
|
|
2013
|
|
|
$
|
|
1,207
|
|
|
$
|
|
|
|
1,088
|
|
|
$
|
|
|
1,097
|
|
|
$
|
267
|
|
|
$
|
|
3,659
|
|
|
|
2012
|
|
|
|
|
1,085
|
|
|
|
|
|
|
1,047
|
|
|
|
|
|
1,297
|
|
|
|
267
|
|
|
|
|
3,696
|
|
|
|
% Change
|
|
|
|
|
11.2
|
%
|
|
|
|
|
|
3.9
|
%
|
|
|
|
|
(15.4
|
)%
|
|
|
—
|
%
|
|
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended September 30, 2012
|
|
|
$
|
|
1,085
|
|
|
$
|
|
|
|
1,047
|
|
|
$
|
|
|
1,297
|
|
|
$
|
267
|
|
|
$
|
|
3,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 Asset impairment and exit costs
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
24
|
|
|
|
10
|
|
|
|
|
34
|
|
|
|
2013 Asset impairment and exit costs
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired businesses
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Currency
|
|
|
|
|
63
|
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
(178
|
)
|
|
|
(13
|
)
|
|
|
|
(160
|
)
|
|
|
Operations
|
|
|
|
|
59
|
|
|
|
|
|
|
73
|
|
|
|
|
|
(46
|
)
|
|
|
3
|
|
|
|
|
89
|
|
|
|
For the quarter ended September 30, 2013
|
|
|
$
|
|
1,207
|
|
|
$
|
|
|
|
1,088
|
|
|
$
|
|
|
1,097
|
|
|
$
|
267
|
|
|
$
|
|
3,659
|
|
|
|
|
|
|
|
|
|
Schedule 4
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Diluted Earnings Per Share
|
|
|
For the Quarters Ended September 30,
|
|
|
($ in millions, except per share data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
E.P.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Diluted Earnings Per Share
|
|
|
|
|
|
$
|
|
1.44
|
|
(1) |
|
|
2012 Diluted Earnings Per Share
|
|
|
|
|
|
$
|
|
1.32
|
|
(1) |
|
|
Change
|
|
|
|
|
|
$
|
|
0.12
|
|
|
|
|
% Change
|
|
|
|
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation:
|
|
|
|
|
|
|
|
|
|
2012 Diluted Earnings Per Share
|
|
|
|
|
|
$
|
|
1.32
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Special Items:
|
|
|
|
|
|
|
|
|
|
2012 Asset impairment and exit costs
|
|
|
|
|
|
0.01
|
|
|
|
|
2012 Tax items
|
|
|
|
|
|
0.05
|
|
|
|
|
2013 Asset impairment and exit costs
|
|
|
|
|
|
—
|
|
|
|
|
2013 Tax items
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
(0.09
|
)
|
|
|
|
Interest
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
Change in tax rate
|
|
|
|
|
|
0.03
|
|
|
|
|
Impact of lower shares outstanding and share-based payments
|
|
|
|
|
|
0.05
|
|
|
|
|
Operations
|
|
|
|
|
|
0.08
|
|
|
|
|
2013 Diluted Earnings Per Share
|
|
|
|
|
|
$
|
|
1.44
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Basic and diluted EPS were calculated using the following (in
millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2013
|
|
|
Q3 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to PMI
|
|
|
$
|
|
|
2,340
|
|
|
|
$
|
|
2,227
|
|
|
|
|
Less distributed and undistributed earnings attributable
|
|
|
|
|
|
|
|
|
|
to share-based payment awards
|
|
|
12
|
|
|
|
12
|
|
|
|
|
Net earnings for basic and diluted EPS
|
|
|
$
|
|
|
2,328
|
|
|
|
$
|
|
2,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares for basic and diluted EPS
|
|
|
1,614
|
|
|
|
1,683
|
|
|
|
|
|
|
|
|
|
|
Schedule 5
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Condensed Statements of Earnings
|
|
|
For the Nine Months Ended September 30,
|
|
|
($ in millions, except per share data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
% Change
|
|
|
Net revenues
|
|
|
$
|
|
|
59,639
|
|
|
$
|
|
|
57,651
|
|
|
3.4
|
%
|
|
|
Cost of sales
|
|
|
|
|
|
7,808
|
|
|
|
|
|
7,692
|
|
|
1.5
|
%
|
|
|
Excise taxes on products (1)
|
|
|
|
|
|
36,211
|
|
|
|
|
|
34,163
|
|
|
6.0
|
%
|
|
|
Gross profit
|
|
|
|
|
|
15,620
|
|
|
|
|
|
15,796
|
|
|
(1.1
|
)%
|
|
|
Marketing, administration and research costs
|
|
|
|
|
|
5,074
|
|
|
|
|
|
4,888
|
|
|
|
|
|
Asset impairment and exit costs
|
|
|
|
|
|
8
|
|
|
|
|
|
50
|
|
|
|
|
|
Operating companies income
|
|
|
|
|
|
10,538
|
|
|
|
|
|
10,858
|
|
|
(2.9
|
)%
|
|
|
Amortization of intangibles
|
|
|
|
|
|
71
|
|
|
|
|
|
73
|
|
|
|
|
|
General corporate expenses
|
|
|
|
|
|
155
|
|
|
|
|
|
155
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
10,312
|
|
|
|
|
|
10,630
|
|
|
(3.0
|
)%
|
|
|
Interest expense, net
|
|
|
|
|
|
721
|
|
|
|
|
|
633
|
|
|
|
|
|
Earnings before income taxes
|
|
|
|
|
|
9,591
|
|
|
|
|
|
9,997
|
|
|
(4.1
|
)%
|
|
|
Provision for income taxes
|
|
|
|
|
|
2,777
|
|
|
|
|
|
3,034
|
|
|
(8.5
|
)%
|
|
|
Net earnings
|
|
|
|
|
|
6,814
|
|
|
|
|
|
6,963
|
|
|
(2.1
|
)%
|
|
|
Net earnings attributable to noncontrolling interests
|
|
|
|
|
|
225
|
|
|
|
|
|
258
|
|
|
|
|
|
Net earnings attributable to PMI
|
|
|
$
|
|
|
6,589
|
|
|
$
|
|
|
6,705
|
|
|
(1.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:(2)
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
$
|
|
|
4.02
|
|
|
$
|
|
|
3.92
|
|
|
2.6
|
%
|
|
|
Diluted earnings per share
|
|
|
$
|
|
|
4.02
|
|
|
$
|
|
|
3.92
|
|
|
2.6
|
%
|
|
|
|
|
(1) The segment detail of excise taxes on products sold for the nine
months ended September 30, 2013 and 2012 is shown on Schedule 6.
|
|
|
|
(2) Net earnings and weighted-average shares used in the basic and
diluted earnings per share computations for the nine months ended
September 30, 2013 and 2012 are shown on Schedule 8, Footnote 1.
|
|
|
|
|
|
|
|
Schedule 6
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Selected Financial Data by Business Segment
|
|
|
For the Nine Months Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues excluding Excise Taxes
|
|
|
|
|
|
|
European
Union
|
|
EEMA
|
|
Asia
|
|
Latin
America &
Canada
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
Net Revenues (1)
|
|
$
|
|
21,255
|
|
|
$
|
|
|
|
15,346
|
|
|
$
|
|
|
15,776
|
|
|
$
|
7,262
|
|
|
$
|
|
59,639
|
|
|
|
|
|
Excise Taxes on Products
|
|
|
|
(14,798
|
)
|
|
|
|
|
|
(8,837
|
)
|
|
|
|
|
(7,751
|
)
|
|
|
(4,825
|
)
|
|
|
|
(36,211
|
)
|
|
|
|
|
Net Revenues excluding Excise Taxes
|
|
|
|
6,457
|
|
|
|
|
|
|
6,509
|
|
|
|
|
|
8,025
|
|
|
|
2,437
|
|
|
|
|
23,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
Net Revenues
|
|
$
|
|
20,654
|
|
|
$
|
|
|
|
14,256
|
|
|
$
|
|
|
15,668
|
|
|
$
|
7,073
|
|
|
$
|
|
57,651
|
|
|
|
|
|
Excise Taxes on Products
|
|
|
|
(14,191
|
)
|
|
|
|
|
|
(8,063
|
)
|
|
|
|
|
(7,275
|
)
|
|
|
(4,634
|
)
|
|
|
|
(34,163
|
)
|
|
|
|
|
Net Revenues excluding Excise Taxes
|
|
|
|
6,463
|
|
|
|
|
|
|
6,193
|
|
|
|
|
|
8,393
|
|
|
|
2,439
|
|
|
|
|
23,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance
|
|
Currency
|
|
|
|
120
|
|
|
|
|
|
|
(48
|
)
|
|
|
|
|
(458
|
)
|
|
|
(80
|
)
|
|
|
|
(466
|
)
|
|
|
|
|
Acquisitions
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
Operations
|
|
|
|
(126
|
)
|
|
|
|
|
|
364
|
|
|
|
|
|
90
|
|
|
|
78
|
|
|
|
|
406
|
|
|
|
|
|
Variance Total
|
|
|
|
(6
|
)
|
|
|
|
|
|
316
|
|
|
|
|
|
(368
|
)
|
|
|
(2
|
)
|
|
|
|
(60
|
)
|
|
|
|
|
Variance Total (%)
|
|
|
|
(0.1
|
)%
|
|
|
|
|
|
5.1
|
%
|
|
|
|
|
(4.4
|
)%
|
|
|
(0.1
|
)%
|
|
|
|
(0.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance excluding Currency
|
|
|
|
(126
|
)
|
|
|
|
|
|
364
|
|
|
|
|
|
90
|
|
|
|
78
|
|
|
|
|
406
|
|
|
|
|
|
Variance excluding Currency (%)
|
|
|
|
(1.9
|
)%
|
|
|
|
|
|
5.9
|
%
|
|
|
|
|
1.1
|
%
|
|
|
3.2
|
%
|
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance excluding Currency & Acquisitions
|
|
|
|
(126
|
)
|
|
|
|
|
|
364
|
|
|
|
|
|
90
|
|
|
|
78
|
|
|
|
|
406
|
|
|
|
|
|
Variance excluding Currency & Acquisitions (%)
|
|
|
|
(1.9
|
)%
|
|
|
|
|
|
5.9
|
%
|
|
|
|
|
1.1
|
%
|
|
|
3.2
|
%
|
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 2013 Currency increased (decreased) net revenues as follows:
|
|
|
|
|
European Union
|
|
$
|
|
403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EEMA
|
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
|
|
|
|
(666
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America & Canada
|
|
|
|
(313
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
(694
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 7
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Selected Financial Data by Business Segment
|
|
|
For the Nine Months Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Companies Income
|
|
|
|
|
|
European
Union
|
|
EEMA
|
|
Asia
|
|
Latin
America &
Canada
|
|
Total
|
|
|
2013
|
|
|
$
|
|
3,227
|
|
|
$
|
|
|
|
2,968
|
|
|
$
|
|
|
3,567
|
|
|
$
|
776
|
|
|
$
|
|
10,538
|
|
|
|
2012
|
|
|
|
|
3,232
|
|
|
|
|
|
|
2,805
|
|
|
|
|
|
4,068
|
|
|
|
753
|
|
|
|
|
10,858
|
|
|
|
% Change
|
|
|
|
|
(0.2
|
)%
|
|
|
|
|
|
5.8
|
%
|
|
|
|
|
(12.3
|
)%
|
|
|
3.1
|
%
|
|
|
|
(2.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2012
|
|
|
$
|
|
3,232
|
|
|
$
|
|
|
|
2,805
|
|
|
$
|
|
|
4,068
|
|
|
$
|
753
|
|
|
$
|
|
10,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 Asset impairment and exit costs
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
24
|
|
|
|
26
|
|
|
|
|
50
|
|
|
|
2013 Asset impairment and exit costs
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
(8
|
)
|
|
|
—
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired businesses
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Currency
|
|
|
|
|
53
|
|
|
|
|
|
|
(63
|
)
|
|
|
|
|
(393
|
)
|
|
|
(25
|
)
|
|
|
|
(428
|
)
|
|
|
Operations
|
|
|
|
|
(58
|
)
|
|
|
|
|
|
226
|
|
|
|
|
|
(124
|
)
|
|
|
22
|
|
|
|
|
66
|
|
|
|
For the nine months ended September 30, 2013
|
|
|
$
|
|
3,227
|
|
|
$
|
|
|
|
2,968
|
|
|
$
|
|
|
3,567
|
|
|
$
|
776
|
|
|
$
|
|
10,538
|
|
|
|
|
|
|
|
|
|
Schedule 8
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Diluted Earnings Per Share
|
|
|
For the Nine Months Ended September 30,
|
|
|
($ in millions, except per share data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
E.P.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Diluted Earnings Per Share
|
|
|
|
|
|
|
$
|
|
4.02
|
|
(1) |
|
|
2012 Diluted Earnings Per Share
|
|
|
|
|
|
|
$
|
|
3.92
|
|
(1) |
|
|
Change
|
|
|
|
|
|
|
$
|
|
0.10
|
|
|
|
|
% Change
|
|
|
|
|
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
2012 Diluted Earnings Per Share
|
|
|
|
|
|
|
$
|
|
3.92
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Special Items:
|
|
|
|
|
|
|
|
|
|
|
2012 Asset impairment and exit costs
|
|
|
|
|
|
|
0.02
|
|
|
|
|
2012 Tax items
|
|
|
|
|
|
|
0.05
|
|
|
|
|
2013 Asset impairment and exit costs
|
|
|
|
|
|
|
—
|
|
|
|
|
2013 Tax items
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(0.23
|
)
|
|
|
|
Interest
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
Change in tax rate
|
|
|
|
|
|
|
0.04
|
|
|
|
|
Impact of lower shares outstanding and share-based payments
|
|
|
|
|
|
|
0.16
|
|
|
|
|
Operations
|
|
|
|
|
|
|
0.11
|
|
|
|
|
2013 Diluted Earnings Per Share
|
|
|
|
|
|
|
$
|
|
4.02
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Basic and diluted EPS were calculated using the following (in
millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD September 2013
|
|
|
YTD September 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to PMI
|
|
|
|
$
|
|
|
6,589
|
|
|
|
$
|
|
6,705
|
|
|
|
|
Less distributed and undistributed earnings attributable
|
|
|
|
|
|
|
|
|
|
|
to share-based payment awards
|
|
|
|
35
|
|
|
|
36
|
|
|
|
|
Net earnings for basic and diluted EPS
|
|
|
|
$
|
|
|
6,554
|
|
|
|
$
|
|
6,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares for basic and diluted EPS
|
|
|
|
1,630
|
|
|
|
1,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 9
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Condensed Balance Sheets
|
|
|
($ in millions, except ratios)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
3,382
|
|
|
|
|
$
|
2,983
|
|
|
|
|
All other current assets
|
|
|
|
12,634
|
|
|
|
|
13,607
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
6,583
|
|
|
|
|
6,645
|
|
|
|
|
Goodwill
|
|
|
|
9,177
|
|
|
|
|
9,900
|
|
|
|
|
Other intangible assets, net
|
|
|
|
3,290
|
|
|
|
|
3,619
|
|
|
|
|
Investments in unconsolidated subsidiaries
|
|
|
|
665
|
|
|
|
|
24
|
|
|
|
|
Other assets
|
|
|
|
1,064
|
|
|
|
|
892
|
|
|
|
|
Total assets
|
|
|
|
$
|
36,795
|
|
|
|
|
$
|
37,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' (Deficit)
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
|
$
|
3,668
|
|
|
|
|
$
|
2,419
|
|
|
|
|
Current portion of long-term debt
|
|
|
|
1,255
|
|
|
|
|
2,781
|
|
|
|
|
All other current liabilities
|
|
|
|
11,095
|
|
|
|
|
11,816
|
|
|
|
|
Long-term debt
|
|
|
|
21,877
|
|
|
|
|
17,639
|
|
|
|
|
Deferred income taxes
|
|
|
|
1,807
|
|
|
|
|
1,875
|
|
|
|
|
Other long-term liabilities
|
|
|
|
3,001
|
|
|
|
|
2,993
|
|
|
|
|
Total liabilities
|
|
|
|
42,703
|
|
|
|
|
39,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
|
|
1,283
|
|
|
|
|
1,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total PMI stockholders' deficit
|
|
|
|
(7,429
|
)
|
|
|
|
(3,476
|
)
|
|
|
|
Noncontrolling interests
|
|
|
|
238
|
|
|
|
|
322
|
|
|
|
|
Total stockholders' deficit
|
|
|
|
(7,191
|
)
|
|
|
|
(3,154
|
)
|
|
|
|
Total liabilities and stockholders' (deficit) equity
|
|
|
|
$
|
36,795
|
|
|
|
|
$
|
37,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
|
$
|
26,800
|
|
|
|
|
$
|
22,839
|
|
|
|
|
Total debt to EBITDA
|
|
|
|
1.86
|
|
(1) |
|
|
1.55
|
|
(1) |
|
|
Net debt to EBITDA
|
|
|
|
1.62
|
|
(1) |
|
|
1.35
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the calculation of Total Debt to EBITDA and Net Debt to
EBITDA ratios, refer to Schedule 18.
|
|
|
|
|
|
|
|
|
Schedule 10
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Adjustments for the Impact of Currency and Acquisitions
|
|
|
For the Quarters Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change in Reported Net
Revenues excluding Excise
Taxes
|
|
|
Reported
Net
Revenues
|
|
Less
Excise
Taxes
|
|
Reported
Net
Revenues
excluding
Excise
Taxes
|
|
Less
Currency
|
|
Reported
Net
Revenues
excluding
Excise
Taxes &
Currency
|
|
Less
Acquisi-
tions
|
|
Reported Net
Revenues
excluding
Excise Taxes,
Currency &
Acquisitions
|
|
|
|
Reported
Net
Revenues
|
|
Less
Excise
Taxes
|
|
Reported
Net
Revenues
excluding
Excise
Taxes
|
|
Reported
|
|
Reported
excluding
Currency
|
|
Reported
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,487
|
|
$
|
5,206
|
|
$
|
2,281
|
|
$
|
118
|
|
|
$
|
2,163
|
|
$
|
—
|
|
$
|
2,163
|
|
European Union
|
|
$
|
6,904
|
|
$
|
4,779
|
|
$
|
2,125
|
|
7.3
|
%
|
|
1.8
|
%
|
|
1.8
|
%
|
|
|
|
5,546
|
|
|
3,261
|
|
|
2,285
|
|
|
(9
|
)
|
|
|
2,294
|
|
|
—
|
|
|
2,294
|
|
EEMA
|
|
|
5,125
|
|
|
2,918
|
|
|
2,207
|
|
3.5
|
%
|
|
3.9
|
%
|
|
3.9
|
%
|
|
|
|
5,144
|
|
|
2,601
|
|
|
2,543
|
|
|
(196
|
)
|
|
|
2,739
|
|
|
—
|
|
|
2,739
|
|
Asia
|
|
|
5,174
|
|
|
2,413
|
|
|
2,761
|
|
(7.9
|
)%
|
|
(0.8
|
)%
|
|
(0.8
|
)%
|
|
|
|
2,452
|
|
|
1,634
|
|
|
818
|
|
|
(33
|
)
|
|
|
851
|
|
|
—
|
|
|
851
|
|
Latin America
& Canada
|
|
|
2,389
|
|
|
1,562
|
|
|
827
|
|
(1.1
|
)%
|
|
2.9
|
%
|
|
2.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20,629
|
|
$
|
12,702
|
|
$
|
7,927
|
|
$
|
(120
|
)
|
|
$
|
8,047
|
|
$
|
—
|
|
$
|
8,047
|
|
PMI Total
|
|
$
|
19,592
|
|
$
|
11,672
|
|
$
|
7,920
|
|
0.1
|
%
|
|
1.6
|
%
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change in Reported Operating
Companies Income
|
|
|
Reported
Operating
Companies
Income
|
|
|
|
|
|
Less
Currency
|
|
Reported
Operating
Companies
Income
excluding
Currency
|
|
Less
Acquisi-
tions
|
|
Reported
Operating
Companies
Income
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
Reported
Operating
Companies
Income
|
|
Reported
|
|
Reported
excluding
Currency
|
|
Reported
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,207
|
|
|
|
|
|
$
|
63
|
|
|
$
|
1,144
|
|
$
|
—
|
|
$
|
1,144
|
|
European Union
|
|
|
|
|
|
$
|
1,085
|
|
11.2
|
%
|
|
5.4
|
%
|
|
5.4
|
%
|
|
|
|
1,088
|
|
|
|
|
|
|
(32
|
)
|
|
|
1,120
|
|
|
—
|
|
|
1,120
|
|
EEMA
|
|
|
|
|
|
|
1,047
|
|
3.9
|
%
|
|
7.0
|
%
|
|
7.0
|
%
|
|
|
|
1,097
|
|
|
|
|
|
|
(178
|
)
|
|
|
1,275
|
|
|
—
|
|
|
1,275
|
|
Asia
|
|
|
|
|
|
|
1,297
|
|
(15.4
|
)%
|
|
(1.7
|
)%
|
|
(1.7
|
)%
|
|
|
|
267
|
|
|
|
|
|
|
(13
|
)
|
|
|
280
|
|
|
—
|
|
|
280
|
|
Latin America
& Canada
|
|
|
|
|
|
|
267
|
|
—
|
%
|
|
4.9
|
%
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,659
|
|
|
|
|
|
$
|
(160
|
)
|
|
$
|
3,819
|
|
$
|
—
|
|
$
|
3,819
|
|
PMI Total
|
|
|
|
|
|
$
|
3,696
|
|
(1.0
|
)%
|
|
3.3
|
%
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 11
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Reconciliation of Reported Operating Companies Income to Adjusted
Operating Companies Income &
|
|
|
Reconciliation of Adjusted Operating Companies Income Margin,
excluding Currency and Acquisitions
|
|
|
For the Quarters Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change in Adjusted Operating
Companies Income
|
|
|
Reported
Operating
Companies
Income
|
|
Less
Asset
Impairment &
Exit Costs
|
|
Adjusted
Operating
Companies
Income
|
|
Less
Currency
|
|
Adjusted
Operating
Companies
Income
excluding
Currency
|
|
Less
Acquisi-
tions
|
|
Adjusted
Operating
Companies
Income
excluding
Currency &
Acquisitions
|
|
|
|
Reported
Operating
Companies
Income
|
|
Less
Asset
Impairment &
Exit Costs
|
|
Adjusted
Operating
Companies
Income
|
|
Adjusted
|
|
Adjusted
excluding
Currency
|
|
Adjusted
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,207
|
|
|
$
|
—
|
|
|
$
|
1,207
|
|
|
$
|
63
|
|
|
$
|
1,144
|
|
|
$
|
—
|
|
|
$
|
1,144
|
|
|
European Union
|
|
$
|
1,085
|
|
|
$
|
—
|
|
|
$
|
1,085
|
|
|
11.2
|
%
|
|
5.4
|
%
|
|
5.4
|
%
|
|
|
1,088
|
|
|
—
|
|
|
1,088
|
|
|
(32
|
)
|
|
1,120
|
|
|
—
|
|
|
1,120
|
|
|
EEMA
|
|
1,047
|
|
|
—
|
|
|
1,047
|
|
|
3.9
|
%
|
|
7.0
|
%
|
|
7.0
|
%
|
|
|
1,097
|
|
|
—
|
|
|
1,097
|
|
|
(178
|
)
|
|
1,275
|
|
|
—
|
|
|
1,275
|
|
|
Asia
|
|
1,297
|
|
|
(24
|
)
|
|
1,321
|
|
|
(17.0
|
)%
|
|
(3.5
|
)%
|
|
(3.5
|
)%
|
|
|
267
|
|
|
—
|
|
|
267
|
|
|
(13
|
)
|
|
280
|
|
|
—
|
|
|
280
|
|
|
Latin America
& Canada
|
|
267
|
|
|
(10
|
)
|
|
277
|
|
|
(3.6
|
)%
|
|
1.1
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,659
|
|
|
$
|
—
|
|
|
$
|
3,659
|
|
|
$
|
(160
|
)
|
|
$
|
3,819
|
|
|
$
|
—
|
|
|
$
|
3,819
|
|
|
PMI Total
|
|
$
|
3,696
|
|
|
$
|
(34
|
)
|
|
$
|
3,730
|
|
|
(1.9
|
)%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
% Points Change
|
|
|
Adjusted
Operating
Companies
Income
excluding
Currency
|
|
Net Revenues
excluding
Excise Taxes
& Currency(1)
|
|
Adjusted
Operating
Companies
Income
Margin
excluding
Currency
|
|
|
|
Adjusted
Operating
Companies
Income
excluding
Currency &
Acquisitions
|
|
Net Revenues
excluding
Excise Taxes,
Currency &
Acquisitions(1)
|
|
Adjusted
Operating
Companies
Income
Margin
excluding
Currency &
Acquisitions
|
|
|
|
Adjusted
Operating
Companies
Income
|
|
Net
Revenues
excluding
Excise
Taxes(1)
|
|
Adjusted
Operating
Companies
Income
Margin
|
|
|
|
Adjusted
Operating
Companies
Income
Margin
excluding
Currency
|
|
Adjusted
Operating
Companies
Income
Margin
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,144
|
|
|
$
|
2,163
|
|
|
52.9
|
%
|
|
|
|
$
|
1,144
|
|
|
$
|
2,163
|
|
|
52.9
|
%
|
|
European Union
|
|
$
|
1,085
|
|
|
$
|
2,125
|
|
|
51.1
|
%
|
|
|
|
1.8
|
|
|
1.8
|
|
|
|
1,120
|
|
|
2,294
|
|
|
48.8
|
%
|
|
|
|
1,120
|
|
|
2,294
|
|
|
48.8
|
%
|
|
EEMA
|
|
1,047
|
|
|
2,207
|
|
|
47.4
|
%
|
|
|
|
1.4
|
|
|
1.4
|
|
|
|
1,275
|
|
|
2,739
|
|
|
46.5
|
%
|
|
|
|
1,275
|
|
|
2,739
|
|
|
46.5
|
%
|
|
Asia
|
|
1,321
|
|
|
2,761
|
|
|
47.8
|
%
|
|
|
|
(1.3
|
)
|
|
(1.3
|
)
|
|
|
280
|
|
|
851
|
|
|
32.9
|
%
|
|
|
|
280
|
|
|
851
|
|
|
32.9
|
%
|
|
Latin America
&
Canada
|
|
277
|
|
|
827
|
|
|
33.5
|
%
|
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,819
|
|
|
$
|
8,047
|
|
|
47.5
|
%
|
|
|
|
$
|
3,819
|
|
|
$
|
8,047
|
|
|
47.5
|
%
|
|
PMI Total
|
|
$
|
3,730
|
|
|
$
|
7,920
|
|
|
47.1
|
%
|
|
|
|
0.4
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the calculation of net revenues excluding excise taxes,
currency and acquisitions, refer to Schedule 10.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 12
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS and
Adjusted Diluted EPS, excluding Currency
|
|
|
For the Quarters Ended September 30,
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Diluted EPS
|
|
|
$
|
|
|
1.44
|
|
|
$
|
|
|
|
1.32
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Asset impairment and exit costs
|
|
|
|
|
|
—
|
|
|
|
|
|
|
0.01
|
|
|
|
|
Tax items
|
|
|
|
|
|
—
|
|
|
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
|
|
|
$
|
|
|
1.44
|
|
|
$
|
|
|
|
1.38
|
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Currency impact
|
|
|
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted EPS, excluding Currency
|
|
|
$
|
|
|
1.53
|
|
|
$
|
|
|
|
1.38
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 13
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Reconciliation of Reported Diluted EPS to Reported Diluted EPS,
excluding Currency
|
|
|
For the Quarters Ended September 30,
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Diluted EPS
|
|
|
|
$
|
|
|
|
|
1.44
|
|
|
|
$
|
|
|
|
|
|
1.32
|
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency impact
|
|
|
|
|
|
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Diluted EPS, excluding Currency
|
|
|
|
$
|
|
|
|
|
1.53
|
|
|
|
$
|
|
|
|
|
|
1.32
|
|
|
15.9
|
%
|
|
|
|
|
|
|
|
|
Schedule 14
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Adjustments for the Impact of Currency and Acquisitions
|
|
|
For the Nine Months Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change in Reported Net
Revenues excluding Excise
Taxes
|
|
|
Reported Net
Revenues
|
|
Less
Excise
Taxes
|
|
Reported Net
Revenues
excluding
Excise Taxes
|
|
Less
Currency
|
|
Reported Net
Revenues
excluding
Excise Taxes
& Currency
|
|
Less
Acquisi-
tions
|
|
Reported Net
Revenues
excluding
Excise Taxes,
Currency &
Acquisitions
|
|
|
|
Reported
Net
Revenues
|
|
Less
Excise
Taxes
|
|
Reported Net
Revenues
excluding
Excise Taxes
|
|
Reported
|
|
Reported
excluding
Currency
|
|
Reported
excluding
Currency &
Acquisitions
|
|
|
$
|
21,255
|
|
|
$
|
14,798
|
|
|
$
|
6,457
|
|
|
$
|
120
|
|
|
$
|
6,337
|
|
|
$
|
—
|
|
|
$
|
6,337
|
|
|
European Union
|
|
$
|
20,654
|
|
|
$
|
14,191
|
|
|
$
|
6,463
|
|
|
(0.1
|
)%
|
|
(1.9
|
)%
|
|
(1.9
|
)%
|
|
|
15,346
|
|
|
8,837
|
|
|
6,509
|
|
|
(48
|
)
|
|
6,557
|
|
|
—
|
|
|
6,557
|
|
|
EEMA
|
|
14,256
|
|
|
8,063
|
|
|
6,193
|
|
|
5.1
|
%
|
|
5.9
|
%
|
|
5.9
|
%
|
|
|
15,776
|
|
|
7,751
|
|
|
8,025
|
|
|
(458
|
)
|
|
8,483
|
|
|
—
|
|
|
8,483
|
|
|
Asia
|
|
15,668
|
|
|
7,275
|
|
|
8,393
|
|
|
(4.4
|
)%
|
|
1.1
|
%
|
|
1.1
|
%
|
|
|
7,262
|
|
|
4,825
|
|
|
2,437
|
|
|
(80
|
)
|
|
2,517
|
|
|
—
|
|
|
2,517
|
|
|
Latin America
& Canada
|
|
7,073
|
|
|
4,634
|
|
|
2,439
|
|
|
(0.1
|
)%
|
|
3.2
|
%
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
59,639
|
|
|
$
|
36,211
|
|
|
$
|
23,428
|
|
|
$
|
(466
|
)
|
|
$
|
23,894
|
|
|
$
|
—
|
|
|
$
|
23,894
|
|
|
PMI Total
|
|
$
|
57,651
|
|
|
$
|
34,163
|
|
|
$
|
23,488
|
|
|
(0.3
|
)%
|
|
1.7
|
%
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change in Reported Operating
Companies Income
|
|
|
Reported
Operating
Companies
Income
|
|
|
|
|
|
Less
Currency
|
|
Reported
Operating
Companies
Income
excluding
Currency
|
|
Less
Acquisi-
tions
|
|
Reported
Operating
Companies
Income
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
Reported
Operating
Companies
Income
|
|
Reported
|
|
Reported
excluding
Currency
|
|
Reported
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,227
|
|
|
|
|
|
|
$
|
53
|
|
|
$
|
3,174
|
|
|
$
|
—
|
|
|
$
|
3,174
|
|
|
European Union
|
|
|
|
|
|
$
|
3,232
|
|
|
(0.2
|
)%
|
|
(1.8
|
)%
|
|
(1.8
|
)%
|
|
|
2,968
|
|
|
|
|
|
|
(63
|
)
|
|
3,031
|
|
|
—
|
|
|
3,031
|
|
|
EEMA
|
|
|
|
|
|
2,805
|
|
|
5.8
|
%
|
|
8.1
|
%
|
|
8.1
|
%
|
|
|
3,567
|
|
|
|
|
|
|
(393
|
)
|
|
3,960
|
|
|
—
|
|
|
3,960
|
|
|
Asia
|
|
|
|
|
|
4,068
|
|
|
(12.3
|
)%
|
|
(2.7
|
)%
|
|
(2.7
|
)%
|
|
|
776
|
|
|
|
|
|
|
(25
|
)
|
|
801
|
|
|
—
|
|
|
801
|
|
|
Latin America
& Canada
|
|
|
|
|
|
753
|
|
|
3.1
|
%
|
|
6.4
|
%
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,538
|
|
|
|
|
|
|
$
|
(428
|
)
|
|
$
|
10,966
|
|
|
$
|
—
|
|
|
$
|
10,966
|
|
|
PMI Total
|
|
|
|
|
|
$
|
10,858
|
|
|
(2.9
|
)%
|
|
1.0
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
Schedule 15
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Reconciliation of Reported Operating Companies Income to Adjusted
Operating Companies Income &
|
|
|
Reconciliation of Adjusted Operating Companies Income Margin,
excluding Currency and Acquisitions
|
|
|
For the Nine Months Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change in Adjusted Operating
Companies Income
|
|
|
Reported
Operating
Companies
Income
|
|
Less
Asset
Impairment &
Exit Costs
|
|
Adjusted
Operating
Companies
Income
|
|
Less
Currency
|
|
Adjusted
Operating
Companies
Income
excluding
Currency
|
|
Less
Acquisi-
tions
|
|
Adjusted
Operating
Companies
Income
excluding
Currency &
Acquisitions
|
|
|
|
Reported
Operating
Companies
Income
|
|
Less
Asset
Impairment &
Exit Costs
|
|
Adjusted
Operating
Companies
Income
|
|
Adjusted
|
|
Adjusted
excluding
Currency
|
|
Adjusted
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,227
|
|
|
$
|
—
|
|
|
$
|
3,227
|
|
|
$
|
53
|
|
|
$
|
3,174
|
|
|
$
|
—
|
|
|
$
|
3,174
|
|
|
European Union
|
|
$
|
3,232
|
|
|
$
|
—
|
|
|
$
|
3,232
|
|
|
(0.2
|
)%
|
|
(1.8
|
)%
|
|
(1.8
|
)%
|
|
|
2,968
|
|
|
—
|
|
|
2,968
|
|
|
(63
|
)
|
|
3,031
|
|
|
—
|
|
|
3,031
|
|
|
EEMA
|
|
2,805
|
|
|
—
|
|
|
2,805
|
|
|
5.8
|
%
|
|
8.1
|
%
|
|
8.1
|
%
|
|
|
3,567
|
|
|
(8
|
)
|
|
3,575
|
|
|
(393
|
)
|
|
3,968
|
|
|
—
|
|
|
3,968
|
|
|
Asia
|
|
4,068
|
|
|
(24
|
)
|
|
4,092
|
|
|
(12.6
|
)%
|
|
(3.0
|
)%
|
|
(3.0
|
)%
|
|
|
776
|
|
|
—
|
|
|
776
|
|
|
(25
|
)
|
|
801
|
|
|
—
|
|
|
801
|
|
|
Latin America
& Canada
|
|
753
|
|
|
(26
|
)
|
|
779
|
|
|
(0.4
|
)%
|
|
2.8
|
%
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,538
|
|
|
$
|
(8
|
)
|
|
$
|
10,546
|
|
|
$
|
(428
|
)
|
|
$
|
10,974
|
|
|
$
|
—
|
|
|
$
|
10,974
|
|
|
PMI Total
|
|
$
|
10,858
|
|
|
$
|
(50
|
)
|
|
$
|
10,908
|
|
|
(3.3
|
)%
|
|
0.6
|
%
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
% Points Change
|
|
|
Adjusted
Operating
Companies
Income
excluding
Currency
|
|
Net Revenues
excluding
Excise Taxes &
Currency(1)
|
|
Adjusted
Operating
Companies
Income
Margin
excluding
Currency
|
|
|
|
Adjusted
Operating
Companies
Income
excluding
Currency &
Acquisitions
|
|
Net Revenues
excluding
Excise Taxes,
Currency &
Acquisitions(1)
|
|
Adjusted
Operating
Companies
Income
Margin
excluding
Currency &
Acquisitions
|
|
|
|
Adjusted
Operating
Companies
Income
|
|
Net
Revenues
excluding
Excise
Taxes(1)
|
|
Adjusted
Operating
Companies
Income
Margin
|
|
|
|
Adjusted
Operating
Companies
Income
Margin
excluding
Currency
|
|
Adjusted
Operating
Companies
Income
Margin
excluding
Currency &
Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,174
|
|
|
$
|
6,337
|
|
|
50.1
|
%
|
|
|
|
$
|
3,174
|
|
|
$
|
6,337
|
|
|
50.1
|
%
|
|
European Union
|
|
$
|
3,232
|
|
|
$
|
6,463
|
|
|
50.0
|
%
|
|
|
|
0.1
|
|
|
0.1
|
|
|
|
3,031
|
|
|
6,557
|
|
|
46.2
|
%
|
|
|
|
3,031
|
|
|
6,557
|
|
|
46.2
|
%
|
|
EEMA
|
|
2,805
|
|
|
6,193
|
|
|
45.3
|
%
|
|
|
|
0.9
|
|
|
0.9
|
|
|
|
3,968
|
|
|
8,483
|
|
|
46.8
|
%
|
|
|
|
3,968
|
|
|
8,483
|
|
|
46.8
|
%
|
|
Asia
|
|
4,092
|
|
|
8,393
|
|
|
48.8
|
%
|
|
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|
|
801
|
|
|
2,517
|
|
|
31.8
|
%
|
|
|
|
801
|
|
|
2,517
|
|
|
31.8
|
%
|
|
Latin America
& Canada
|
|
779
|
|
|
2,439
|
|
|
31.9
|
%
|
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,974
|
|
|
$
|
23,894
|
|
|
45.9
|
%
|
|
|
|
$
|
10,974
|
|
|
$
|
23,894
|
|
|
45.9
|
%
|
|
PMI Total
|
|
$
|
10,908
|
|
|
$
|
23,488
|
|
|
46.4
|
%
|
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the calculation of net revenues excluding excise taxes,
currency and acquisitions, refer to Schedule 14.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 16
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS and
Adjusted Diluted EPS, excluding Currency
|
|
|
For the Nine Months Ended September 30,
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Diluted EPS
|
|
|
$
|
|
|
4.02
|
|
|
$
|
|
|
|
3.92
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Asset impairment and exit costs
|
|
|
|
|
|
—
|
|
|
|
|
|
|
0.02
|
|
|
|
|
Tax items
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
|
|
|
$
|
|
|
4.03
|
|
|
$
|
|
|
|
3.99
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Currency impact
|
|
|
|
|
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted EPS, excluding Currency
|
|
|
$
|
|
|
4.26
|
|
|
$
|
|
|
|
3.99
|
|
6.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 17
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Reconciliation of Reported Diluted EPS to Reported Diluted EPS,
excluding Currency
|
|
|
For the Nine Months Ended September 30,
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Diluted EPS
|
|
|
$
|
|
|
|
|
4.02
|
|
|
$
|
|
|
|
|
3.92
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Currency impact
|
|
|
|
|
|
|
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Diluted EPS, excluding Currency
|
|
|
$
|
|
|
|
|
4.25
|
|
|
$
|
|
|
|
|
3.92
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 18
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Calculation of Total Debt to EBITDA and Net Debt to EBITDA Ratios
|
|
|
($ in millions, except ratios)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
|
For the Year Ended
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
October ~
December
|
|
January ~
September
|
|
12 months
|
|
|
|
|
|
|
|
|
2012
|
|
2013
|
|
rolling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
$
|
|
2,990
|
|
$
|
|
9,591
|
|
$
|
|
|
|
12,581
|
|
|
$
|
|
12,987
|
|
|
Interest expense, net
|
|
|
|
|
226
|
|
|
|
721
|
|
|
|
|
|
947
|
|
|
|
|
859
|
|
|
Depreciation and amortization
|
|
|
|
|
233
|
|
|
|
659
|
|
|
|
|
|
892
|
|
|
|
|
898
|
|
|
EBITDA
|
|
|
$
|
|
3,449
|
|
$
|
|
10,971
|
|
$
|
|
|
|
14,420
|
|
|
$
|
|
14,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
|
|
|
|
$
|
|
|
|
3,668
|
|
|
$
|
|
2,419
|
|
|
Current portion of long-term debt
|
|
|
|
|
|
|
|
|
|
|
1,255
|
|
|
|
|
2,781
|
|
|
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
21,877
|
|
|
|
|
17,639
|
|
|
Total Debt
|
|
|
|
|
|
|
$
|
|
|
|
26,800
|
|
|
$
|
|
22,839
|
|
|
Less: Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
3,382
|
|
|
|
|
2,983
|
|
|
Net Debt
|
|
|
|
|
|
|
$
|
|
|
|
23,418
|
|
|
$
|
|
19,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt to EBITDA
|
|
|
|
|
|
|
|
|
|
|
1.86
|
|
|
|
|
1.55
|
|
|
Net Debt to EBITDA
|
|
|
|
|
|
|
|
|
|
|
1.62
|
|
|
|
|
1.35
|
|
|
|
|
|
|
|
|
Schedule 19
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
|
|
and Subsidiaries
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
Reconciliation of Operating Cash Flow to Free Cash Flow and Free
Cash Flow, excluding Currency
|
|
|
Reconciliation of Operating Cash Flow to Operating Cash Flow,
excluding Currency
|
|
|
For the Quarters and Nine Months Ended September 30,
|
|
|
($ in millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters Ended
|
|
|
|
|
For the Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
|
2013
|
|
2012
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities(a)
|
|
|
$
|
3,315
|
|
|
$
|
2,393
|
|
38.5
|
%
|
|
|
$
|
7,815
|
|
|
$
|
7,771
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
301
|
|
|
|
243
|
|
|
|
|
|
821
|
|
|
|
719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
|
$
|
3,014
|
|
|
$
|
2,150
|
|
40.2
|
%
|
|
|
$
|
6,994
|
|
|
$
|
7,052
|
|
(0.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency impact
|
|
|
|
(114
|
)
|
|
|
|
|
|
|
|
(135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow, excluding currency
|
|
|
$
|
3,128
|
|
|
$
|
2,150
|
|
45.5
|
%
|
|
|
$
|
7,129
|
|
|
$
|
7,052
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters Ended
|
|
|
|
|
For the Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
|
2013
|
|
2012
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities(a)
|
|
|
$
|
3,315
|
|
|
$
|
2,393
|
|
38.5
|
%
|
|
|
$
|
7,815
|
|
|
$
|
7,771
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency impact
|
|
|
|
(116
|
)
|
|
|
|
|
|
|
|
(150
|
)
|
|
|
|
|
|
|
Net cash provided by operating activities, excluding
currency
|
|
|
$
|
3,431
|
|
|
$
|
2,393
|
|
43.4
|
%
|
|
|
$
|
7,965
|
|
|
$
|
7,771
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Operating cash flow.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 20
|
|
|
|
|
|
|
|
|
|
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PHILIP MORRIS INTERNATIONAL INC.
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and Subsidiaries
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Reconciliation of Non-GAAP Measures
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Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS
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For the Year Ended December 31,
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(Unaudited)
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2012
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Reported Diluted EPS
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$
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5.17
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Adjustments:
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Asset impairment and exit costs
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0.03
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Tax items
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0.02
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Adjusted Diluted EPS
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$
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5.22
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Copyright Business Wire 2013