REG-Philip Morris International Inc. Philip Morris International Inc. (PMI) Reports 2016 Second-Quarter Results; Revises 2016 Full-Ye
19/07/2016 12:05
- Part 3: For the preceding part double click ID:nBw60Zzbrb
Operating Companies Income
European EEMA Asia Latin Total
Union America
& Canada
2016 $ 1,070 $ 794 $ 749 $ 224 $ 2,837
2015 1,005 853 797 325 2,980
% Change 6.5 % (6.9 )% (6.0 )% (31.1 )% (4.8 )%
Reconciliation:
For the quarter ended June 30, 2015 $ 1,005 $ 853 $ 797 $ 325 $ 2,980
2015 Asset impairment and exit costs — — — — —
2016 Asset impairment and exit costs — — — — —
Acquired businesses — — — — —
Currency 30 (145 ) (5 ) (78 ) (198 )
Operations 35 86 (43 ) (23 ) 55
For the quarter ended June 30, 2016 $ 1,070 $ 794 $ 749 $ 224 $ 2,837
Schedule 4
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Diluted Earnings Per Share
For the Quarters Ended June 30,
($ in millions, except per share data)
(Unaudited)
Diluted
E.P.S.
2016 Diluted Earnings Per Share $ 1.15 ((1))
2015 Diluted Earnings Per Share $ 1.21 ((1))
Change $ (0.06 )
% Change (5.0 )%
Reconciliation:
2015 Diluted Earnings Per Share $ 1.21 ((1))
Special Items:
2015 Asset impairment and exit costs —
2015 Tax items —
2016 Asset impairment and exit costs —
2016 Tax items —
Currency (0.08 )
Interest 0.02
Change in tax rate —
Impact of shares outstanding and share-based payments —
Operations —
2016 Diluted Earnings Per Share $ 1.15 ((1))
(1) Basic and diluted EPS were calculated using the following (in millions):
Q2 Q2
2016 2015
Net Earnings attributable to PMI $ 1,788 $ 1,887
Less distributed and undistributed earnings attributable
to share-based payment awards 5 6
Net Earnings for basic and diluted EPS $ 1,783 $ 1,881
Weighted-average shares for basic and diluted EPS 1,551 1,549
Schedule 5
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Condensed Statements of Earnings
For the Six Months Ended June 30,
($ in millions, except per share data)
(Unaudited)
2016 2015 % Change
Net Revenues $ 35,829 $ 36,115 (0.8)%
Cost of sales 4,460 4,607 (3.2)%
Excise Taxes on products (1) 23,097 22,640 2.0%
Gross profit 8,272 8,868 (6.7)%
Marketing, administration and research costs 3,009 3,062
Asset impairment and exit costs — —
Amortization of intangibles 37 43
Operating Income (2) 5,226 5,763 (9.3)%
Interest expense, net 470 534
Earnings before income taxes 4,756 5,229 (9.0)%
Provision for income taxes 1,346 1,528 (11.9)%
Equity (income)/loss in unconsolidated subsidiaries, net (37 ) (49 )
Net Earnings 3,447 3,750 (8.1)%
Net Earnings attributable to noncontrolling interests 129 68
Net Earnings attributable to PMI $ 3,318 $ 3,682 (9.9)%
Per share data (3):
Basic Earnings Per Share $ 2.13 $ 2.37 (10.1)%
Diluted Earnings Per Share $ 2.13 $ 2.37 (10.1)%
(1) The segment detail of Excise Taxes on products sold for the six months ended June 30, 2016 and 2015 is shown on Schedule 6.
(2) PMI's management evaluates segment performance and allocates resources based on operating companies income, which PMI defines as operating income, excluding general corporate expenses and amortization of intangibles, plus equity (income)/loss in unconsolidated subsidiaries, net. The reconciliation from operating income to operating companies income is as follows:
2016 2015 % Change
Operating Income $ 5,226 $ 5,763 (9.3)%
Excluding:
- Amortization of intangibles 37 43
- General corporate expenses (included in marketing, administration 83 82
and research costs above)
Plus: Equity (income)/loss in unconsolidated subsidiaries, net (37 ) (49 )
Operating Companies Income $ 5,383 $ 5,937 (9.3)%
(3) Net Earnings and weighted-average shares used in the basic and diluted
Earnings Per Share computations for the six months ended June 30, 2016 and
2015 are shown on Schedule 8, Footnote 1.
Schedule 6
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Selected Financial Data by Business Segment
For the Six Months Ended June 30,
($ in millions)
(Unaudited)
Net Revenues excluding Excise Taxes
European EEMA Asia Latin Total
Union America
& Canada
2016 Net Revenues (1) $ 13,277 $ 8,528 $ 9,901 $ 4,123 $ 35,829
Excise Taxes on products (9,259 ) (5,262 ) (5,800 ) (2,776 ) (23,097 )
Net Revenues excluding Excise Taxes 4,018 3,266 4,101 1,347 12,732
2015 Net Revenues $ 12,898 $ 8,801 $ 9,803 $ 4,613 $ 36,115
Excise Taxes on products (8,887 ) (5,170 ) (5,503 ) (3,080 ) (22,640 )
Net Revenues excluding Excise Taxes 4,011 3,631 4,300 1,533 13,475
Variance Currency (116 ) (374 ) (185 ) (319 ) (994 )
Acquisitions — — — — —
Operations 123 9 (14 ) 133 251
Variance Total 7 (365 ) (199 ) (186 ) (743 )
Variance Total (%) 0.2 % (10.1 )% (4.6 )% (12.1 )% (5.5 )%
Variance excluding Currency 123 9 (14 ) 133 251
Variance excluding Currency (%) 3.1 % 0.2 % (0.3 )% 8.7 % 1.9 %
Variance excluding Currency & Acquisitions 123 9 (14 ) 133 251
Variance excluding Currency & Acquisitions (%) 3.1 % 0.2 % (0.3 )% 8.7 % 1.9 %
(1) 2016 Currency decreased Net Revenues as follows:
European Union $ (409 )
EEMA (1,193 )
Asia (550 )
Latin America & Canada (1,239 )
$ (3,391 )
Schedule 7
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Selected Financial Data by Business Segment
For the Six Months Ended June 30,
($ in millions)
(Unaudited)
Operating Companies Income
European EEMA Asia Latin Total
Union America
& Canada
2016 $ 1,976 $ 1,427 $ 1,527 $ 453 $ 5,383
2015 1,932 1,719 1,731 555 5,937
% Change 2.3 % (17.0 )% (11.8 )% (18.4 )% (9.3 )%
Reconciliation:
For the six months ended June 30, 2015 $ 1,932 $ 1,719 $ 1,731 $ 555 $ 5,937
2015 Asset impairment and exit costs — — — — —
2016 Asset impairment and exit costs — — — — —
Acquired businesses — — — — —
Currency (24 ) (322 ) (68 ) (167 ) (581 )
Operations 68 30 (136 ) 65 27
For the six months ended June 30, 2016 $ 1,976 $ 1,427 $ 1,527 $ 453 $ 5,383
Schedule 8
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Diluted Earnings Per Share
For the Six Months Ended June 30,
($ in millions, except per share data)
(Unaudited)
Diluted
E.P.S.
2016 Diluted Earnings Per Share $ 2.13 ((1))
2015 Diluted Earnings Per Share $ 2.37 ((1))
Change $ (0.24 )
% Change (10.1 )%
Reconciliation:
2015 Diluted Earnings Per Share $ 2.37 ((1))
Special Items:
2015 Asset impairment and exit costs —
2015 Tax items —
2016 Asset impairment and exit costs —
2016 Tax items —
Currency (0.28 )
Interest 0.03
Change in tax rate 0.03
Impact of shares outstanding and share-based payments (0.01 )
Operations (0.01 )
2016 Diluted Earnings Per Share $ 2.13 ((1))
(1) Basic and diluted EPS were calculated using the following (in millions):
YTD June YTD June
2016 2015
Net Earnings attributable to PMI $ 3,318 $ 3,682
Less distributed and undistributed earnings attributable
to share-based payment awards 9 13
Net Earnings for basic and diluted EPS $ 3,309 $ 3,669
Weighted-average shares for basic and diluted EPS 1,551 1,549
Schedule 9
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Condensed Balance Sheets
($ in millions, except ratios)
(Unaudited)
June 30, December 31,
2016 2015
Assets
Cash and cash equivalents $ 3,814 $ 3,417
All other current assets 12,232 12,387
Property, plant and equipment, net 5,931 5,721
Goodwill 7,622 7,415
Other intangible assets, net 2,603 2,623
Investments in unconsolidated subsidiaries 948 890
Other assets 1,652 1,503
Total assets $ 34,802 $ 33,956
Liabilities and Stockholders' (Deficit) Equity
Short-term borrowings $ 696 $ 825
Current portion of long-term debt 1,175 2,405
All other current liabilities 10,801 12,156
Long-term debt 28,098 25,250
Deferred income taxes 1,463 1,543
Other long-term liabilities 3,368 3,253
Total liabilities 45,601 45,432
Total PMI stockholders' deficit (12,556 ) (13,244 )
Noncontrolling interests 1,757 1,768
Total stockholders' deficit (10,799 ) (11,476 )
Total liabilities and stockholders' (deficit) equity $ 34,802 $ 33,956
Total debt $ 29,969 $ 28,480
Total debt to Adjusted EBITDA 2.75 ((1)) 2.49 ((1))
Net debt to Adjusted EBITDA 2.40 ((1)) 2.19 ((1))
(1) For the calculation of Total Debt to Adjusted EBITDA and Net Debt to
Adjusted 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 June 30,
($ in millions)
(Unaudited)
2016 2015 % Change in Net Revenues
excluding Excise Taxes
Net Less Net Less Net Less Net Net Less Net Total Excluding Excluding
Revenues Excise Revenues Currency Revenues Acquisitions Revenues Revenues Excise Revenues Currency Currency &
Taxes excluding excluding excluding Taxes excluding Acquisitions
Excise Excise Excise Excise
Taxes Taxes & Taxes, Taxes
Currency Currency &
Acquisitions
$ 7,134 $ 4,979 $ 2,155 $ 39 $ 2,116 $ — $ 2,116 European Union $ 6,676 $ 4,616 $ 2,060 4.6 % 2.7 % 2.7%
4,531 2,867 1,664 (171 ) 1,835 — 1,835 EEMA 4,654 2,807 1,847 (9.9 )% (0.6 )% (0.6)%
5,212 3,079 2,133 (35 ) 2,168 — 2,168 Asia 5,039 2,894 2,145 (0.6 )% 1.1 % 1.1%
2,164 1,467 697 (136 ) 833 — 833 Latin America & Canada 2,394 1,587 807 (13.6 )% 3.2 % 3.2%
$ 19,041 $ 12,392 $ 6,649 $ (303 ) $ 6,952 $ — $ 6,952 PMI Total $ 18,763 $ 11,904 $ 6,859 (3.1 )% 1.4 % 1.4%
2016 2015 % Change in Operating Companies
Income
Operating Less Operating Less Operating Operating Total Excluding Excluding
Companies Currency Companies Acquisitions Companies Companies Currency Currency &
Income Income Income Income Acquisitions
excluding excluding
Currency Currency &
Acquisitions
$ 1,070 $ 30 $ 1,040 $ — $ 1,040 European Union $ 1,005 6.5 % 3.5 % 3.5%
794 (145 ) 939 — 939 EEMA 853 (6.9 )% 10.1 % 10.1%
749 (5 ) 754 — 754 Asia 797 (6.0 )% (5.4 )% (5.4)%
224 (78 ) 302 — 302 Latin America & Canada 325 (31.1 )% (7.1 )% (7.1)%
$ 2,837 $ (198 ) $ 3,035 $ — $ 3,035 PMI Total $ 2,980 (4.8 )% 1.8 % 1.8%
Schedule 11
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Companies Income to Adjusted Operating Companies Income &
Reconciliation of Adjusted Operating Companies Income Margin, excluding Currency and Acquisitions
For the Quarters Ended June 30,
($ in millions)
(Unaudited)
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