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Philip Morris International Inc. (PMI) Reports 2013 Third-Quarter Results; Revises 2013 Full-Year Reported Diluted EPS Forecast To A Range Of $5.35 To $5.40

Stocks in this article: PM PMI

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.

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