REG-Philip Morris International Inc. Philip Morris International Inc. (PMI) Reports 2016 Third-Quarter Results; Reaffirms 2016 Full-Y
18/10/2016 12:05
- Part 3: For the preceding part double click ID:nBw9t8jD5b
Latin America & Canada (584 )
$ (1,033 )
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 EEMA Asia Latin Total
Union America &
Canada
2016 $ 1,120 $ 962 $ 761 $ 224 $ 3,067
2015 1,045 1,002 690 294 3,031
% Change 7.2 % (4.0 )% 10.3 % (23.8 )% 1.2 %
Reconciliation:
For the quarter ended September 30, 2015 $ 1,045 $ 1,002 $ 690 $ 294 $ 3,031
2015 Asset impairment and exit costs — — — — —
2016 Asset impairment and exit costs — — — — —
Acquired businesses — — — — —
Currency 29 (127 ) 57 (53 ) (94 )
Operations 46 87 14 (17 ) 130
For the quarter ended September 30, 2016 $ 1,120 $ 962 $ 761 $ 224 $ 3,067
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.
2016 Diluted Earnings Per Share $ 1.25 ((1))
2015 Diluted Earnings Per Share $ 1.25 ((1))
Change $ —
% Change — %
Reconciliation:
2015 Diluted Earnings Per Share $ 1.25 ((1))
Special Items:
2015 Asset impairment and exit costs —
2015 Tax items (0.01 )
2016 Asset impairment and exit costs —
2016 Tax items —
Currency (0.04 )
Interest 0.01
Change in tax rate 0.01
Impact of shares outstanding and share-based payments —
Operations 0.03
2016 Diluted Earnings Per Share $ 1.25 ((1))
(1) Basic and diluted EPS were calculated using the following (in millions):
Q3 Q3
2016 2015
Net Earnings attributable to PMI $ 1,938 $ 1,942
Less distributed and undistributed earnings attributable
to share-based payment awards 5 7
Net Earnings for basic and diluted EPS $ 1,933 $ 1,935
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 Nine Months Ended September 30,
($ in millions, except per share data)
(Unaudited)
2016 2015 % Change
Net Revenues $ 55,764 $ 55,537 0.4%
Cost of sales 6,892 6,990 (1.4)%
Excise Taxes on products (1) 36,050 35,135 2.6%
Gross profit 12,822 13,412 (4.4)%
Marketing, administration and research costs 4,563 4,628
Asset impairment and exit costs — —
Amortization of intangibles 56 62
Operating Income (2) 8,203 8,722 (6.0)%
Interest expense, net 690 781
Earnings before income taxes 7,513 7,941 (5.4)%
Provision for income taxes 2,110 2,276 (7.3)%
Equity (income)/loss in unconsolidated subsidiaries, net (72 ) (69 )
Net Earnings 5,475 5,734 (4.5)%
Net Earnings attributable to noncontrolling interests 219 110
Net Earnings attributable to PMI $ 5,256 $ 5,624 (6.5)%
Per share data (3):
Basic Earnings Per Share $ 3.38 $ 3.62 (6.6)%
Diluted Earnings Per Share $ 3.38 $ 3.62 (6.6)%
(1) The segment detail of Excise Taxes on products sold for the nine months ended September 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 $ 8,203 $ 8,722 (6.0)%
Excluding:
- Amortization of intangibles 56 62
- General corporate expenses (included in marketing, administration 119 115
and research costs above)
Plus: Equity (income)/loss in unconsolidated subsidiaries, net (72 ) (69 )
Operating Companies Income $ 8,450 $ 8,968 (5.8)%
(3) Net Earnings and weighted-average shares used in the basic and diluted
Earnings Per Share computations for the nine months ended September 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 Nine Months Ended September 30,
($ in millions)
(Unaudited)
Net Revenues excluding Excise Taxes
European EEMA Asia Latin Total
Union America
& Canada
2016 Net Revenues (1) $ 20,664 $ 13,650 $ 15,014 $ 6,436 $ 55,764
Excise Taxes on products (14,446 ) (8,448 ) (8,777 ) (4,379 ) (36,050 )
Net Revenues excluding Excise Taxes 6,218 5,202 6,237 2,057 19,714
2015 Net Revenues $ 19,916 $ 13,908 $ 14,683 $ 7,030 $ 55,537
Excise Taxes on products (13,782 ) (8,261 ) (8,399 ) (4,693 ) (35,135 )
Net Revenues excluding Excise Taxes 6,134 5,647 6,284 2,337 20,402
Variance Currency (122 ) (515 ) (126 ) (427 ) (1,190 )
Acquisitions — — — — —
Operations 206 70 79 147 502
Variance Total 84 (445 ) (47 ) (280 ) (688 )
Variance Total (%) 1.4 % (7.9 )% (0.7 )% (12.0 )% (3.4 )%
Variance excluding Currency 206 70 79 147 502
Variance excluding Currency (%) 3.4 % 1.2 % 1.3 % 6.3 % 2.5 %
Variance excluding Currency & Acquisitions 206 70 79 147 502
Variance excluding Currency & Acquisitions (%) 3.4 % 1.2 % 1.3 % 6.3 % 2.5 %
(1) 2016 Currency decreased Net Revenues as follows:
European Union $ (468 )
EEMA (1,634 )
Asia (499 )
Latin America & Canada (1,823 )
$ (4,424 )
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 EEMA Asia Latin Total
Union America &
Canada
2016 $ 3,096 $ 2,389 $ 2,288 $ 677 $ 8,450
2015 2,977 2,721 2,421 849 8,968
% Change 4.0 % (12.2 )% (5.5 )% (20.3 )% (5.8 )%
Reconciliation:
For the nine months ended September 30, 2015 $ 2,977 $ 2,721 $ 2,421 $ 849 $ 8,968
2015 Asset impairment and exit costs — — — — —
2016 Asset impairment and exit costs — — — — —
Acquired businesses — — — — —
Currency 5 (449 ) (11 ) (220 ) (675 )
Operations 114 117 (122 ) 48 157
For the nine months ended September 30, 2016 $ 3,096 $ 2,389 $ 2,288 $ 677 $ 8,450
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.
2016 Diluted Earnings Per Share $ 3.38 ((1))
2015 Diluted Earnings Per Share $ 3.62 ((1))
Change $ (0.24 )
% Change (6.6 )%
Reconciliation:
2015 Diluted Earnings Per Share $ 3.62 ((1))
Special Items:
2015 Asset impairment and exit costs —
2015 Tax items (0.01 )
2016 Asset impairment and exit costs —
2016 Tax items —
Currency (0.32 )
Interest 0.04
Change in tax rate 0.04
Impact of shares outstanding and share-based payments (0.01 )
Operations 0.02
2016 Diluted Earnings Per Share $ 3.38 ((1))
(1) Basic and diluted EPS were calculated using the following (in millions):
YTD YTD
September September
2016 2015
Net Earnings attributable to PMI $ 5,256 $ 5,624
Less distributed and undistributed earnings attributable
to share-based payment awards 15 20
Net Earnings for basic and diluted EPS $ 5,241 $ 5,604
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)
September 30, December 31,
2016 2015
Assets
Cash and cash equivalents $ 4,884 $ 3,417
All other current assets 11,690 12,387
Property, plant and equipment, net 6,133 5,721
Goodwill 7,646 7,415
Other intangible assets, net 2,578 2,623
Investments in unconsolidated subsidiaries 986 890
Other assets 1,660 1,503
Total assets $ 35,577 $ 33,956
Liabilities and Stockholders' (Deficit) Equity
Short-term borrowings $ 710 $ 825
Current portion of long-term debt 2,417 2,405
All other current liabilities 11,131 12,156
Long-term debt 26,960 25,250
Deferred income taxes 1,376 1,543
Other long-term liabilities 3,300 3,253
Total liabilities 45,894 45,432
Total PMI stockholders' deficit (12,142 ) (13,244 )
Noncontrolling interests 1,825 1,768
Total stockholders' deficit (10,317 ) (11,476 )
Total liabilities and stockholders' (deficit) equity $ 35,577 $ 33,956
Total debt $ 30,087 $ 28,480
Total debt to Adjusted EBITDA 2.76 ((1)) 2.49 ((1))
Net debt to Adjusted EBITDA 2.31 ((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 September 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 Acquisit Revenues Revenues Excise Revenues Currency Currency &
Taxes excluding excluding ions excluding Taxes excluding Acquisitions
Excise Excise Excise Excise
Taxes Taxes & Taxes, Taxes
Currency Currency &
Acquisitions
$ 7,387 $ 5,187 $ 2,200 $ (6 ) $ 2,206 $ — $ 2,206 European Union $ 7,018 $ 4,895 $ 2,123 3.6 % 3.9% 3.9%
5,122 3,186 1,936 (141 ) 2,077 — 2,077 EEMA 5,107 3,091 2,016 (4.0 )% 3.0% 3.0%
5,113 2,977 2,136 59 2,077 — 2,077 Asia 4,880 2,896 1,984 7.7 % 4.7% 4.7%
2,313 1,603 710 (108 ) 818 — 818 Latin America & Canada 2,417 1,613 804 (11.7 )% 1.7% 1.7%
$ 19,935 $ 12,953 $ 6,982 $ (196 ) $ 7,178 $ — $ 7,178 PMI Total $ 19,422 $ 12,495 $ 6,927 0.8 % 3.6% 3.6%
2016 2015 % Change in Operating Companies
Income
Operating Less Operating Less Operating Operating Total Excluding Excluding
Companies Currency Companies Acquisit Companies Companies Currency Currency &
Income Income ions Income Income Acquisitions
excluding excluding
Currency Currency &
Acquisitions
$ 1,120 $ 29 $ 1,091 $ — $ 1,091 European Union $ 1,045 7.2 % 4.4% 4.4%
962 (127 ) 1,089 — 1,089 EEMA 1,002 (4.0 )% 8.7% 8.7%
761 57 704 — 704 Asia 690 10.3 % 2.0% 2.0%
224 (53 ) 277 — 277 Latin America & Canada 294 (23.8 )% (5.8)% (5.8)%
$ 3,067 $ (94 ) $ 3,161 $ — $ 3,161 PMI Total $ 3,031 1.2 % 4.3% 4.3%
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 September 30,
($ in millions)
(Unaudited)
2016 2015 % Change in Adjusted Operating Companies Income
Operating Less Adjusted Less Adjusted Less Adjusted Operating Less Adjusted Adjusted Adjusted Adjusted
Companies Asset Operating Currency Operating Acquisitions Operating Companies Asset Operating excluding excluding
Income Impairment Companies Companies Companies Income Impairment Companies Currency Currency &
& Exit Income Income Income & Exit Income Acquisitions
Costs excluding excluding Costs
Currency Currency &
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