Delivered 2022 Second-Quarter Reported Diluted EPS of $1.43 and Pro Forma (Excluding Russia and Ukraine) Adjusted Diluted EPS of $1.32, Representing Currency-Neutral Growth of 5.6%; Targets 2022 Full-Year Reported Diluted EPS of $5.73 to $5.88 (Including Russia and Ukraine) and Pro Forma Adjusted Diluted EPS of $5.23 to $5.34, Representing Currency-Neutral Growth of 10% to 12%
NEW YORK--(BUSINESS WIRE)-- Regulatory News:
Philip Morris International Inc. (NYSE: PM) today announces its 2022 second-quarter and first-half results. Growth rates presented in this press release on an organic basis reflect adjusted results, excluding currency, acquisitions and disposals. Given the uncertainty and volatility regarding the company’s operations in Russia and Ukraine, PMI is also providing figures and comparisons on a pro forma basis, which exclude the company’s operations in these two markets for all periods and provide a more comparable view of PMI's business performance. A glossary of key terms, definitions and explanatory notes is included at the end of this press release. Adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures are included in the schedules to this press release.
2022 SECOND-QUARTER & YEAR-TO-DATE HIGHLIGHTS
|
| Second-Quarter |
| Six Months Year-to-Date | ||||||||||||
|
| Reported |
| Pro Forma Adjusted |
| Reported |
| Pro Forma Adjusted | ||||||||
Total Shipment Volume Growth |
| 1.1 | % |
|
| 3.0 | % |
|
| 2.2 | % |
|
| 4.0 | % |
|
HTU Shipment Volume (units billion) |
| 24.8 |
|
|
| 20.1 |
|
|
| 49.6 |
|
|
| 40.2 |
|
|
- Growth |
| 1.9 | % |
|
| 7.4 | % |
|
| 7.7 | % |
|
| 12.6 | % |
|
Net Revenue Growth |
| 3.1 | % |
|
| 6.2 | % | (a) |
| 2.6 | % |
|
| 8.1 | % | (a) |
Operating Income Growth |
| (2.3 | )% |
|
| 1.6 | % | (a) |
| (3.3 | )% |
|
| 5.4 | % | (a) |
Operating Income Margin Growth |
| (2.2 | )pp |
|
| (1.9 | )pp | (a) |
| (2.5 | )pp |
|
| (1.1 | )pp | (a) |
Diluted Earnings per Share |
| $1.43 |
|
|
| $1.32 |
|
|
| $2.93 |
|
|
| $2.79 |
|
|
- Growth |
| 2.9 | % |
|
| 5.6 | % | (b) |
| — | % |
|
| 10.4 | % | (b) |
(a) On an organic basis |
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(b) Excluding currency |
Second-Quarter
Six Months Year-to-Date
"First and foremost, the war in Ukraine continues to deeply affect the lives of our employees and families in the region," said Jacek Olczak, Chief Executive Officer. "My first priority is to give them the help they need and as a company we are focused on doing our utmost to support them throughout this conflict."
"Turning to our results, our strong underlying performance continued in the second quarter, with top- and bottom-line growth exceeding our initial expectations. This reflected excellent IQOS momentum, including accelerating growth in pro forma total IQOS users and heated tobacco unit in-market sales volume, as well as favorable cigarette category trends."
"We are raising our outlook for the full year and now expect to deliver pro forma adjusted growth in net revenues of 6% to 8%, on an organic basis, and diluted EPS of 10% to 12%, excluding currency, underpinned by pro forma heated tobacco unit shipment volume of 90 to 92 billion units."
"Building on our excellent financial results in 2021, this year's outlook puts us well on track to comfortably exceed our minimum compound annual net revenue and adjusted diluted EPS growth targets for 2021 to 2023 on a pro forma basis."
2022 SECOND-QUARTER SUMMARY
Pro forma adjusted net revenues increased by 6.2% on an organic basis, notably reflecting pro forma total shipment volume growth of 3.0%, driven by cigarettes (+2.4%) and heated tobacco units (+7.4%). As anticipated in April, heated tobacco unit shipment volume in the quarter was adversely impacted by the timing of shipments to Japan (approximately 2 billion units, which are expected in the second half) as the company manages the cancellation of planned heated tobacco unit manufacturing in Russia and disruptions in global supply chains generally. In-market sales for heated tobacco units increased by 19.9% in the quarter on a pro forma basis, a slight acceleration versus the first quarter.
Pro forma adjusted net revenue per unit increased by 3.0% on an organic basis, reflecting a further increase in the proportion of heated tobacco units in PMI’s sales mix (albeit at a lower rate than in prior quarters, due to the above-mentioned timing impact involving heated tobacco unit shipments to Japan) and higher pricing. Pro forma pricing for combustible products increased by 3.5%, or by almost 5% excluding Indonesia.
Pro forma adjusted operating income margin declined by 1.9 points on an organic basis, primarily reflecting: (i) investment to further expand and match the speed of growth of PMI's smoke-free portfolio, including the initial higher cost of ILUMA devices and heated tobacco units, as well as the transitory dilutive margin impact of higher device sales from the roll-out of ILUMA and the replenishment of distribution channels as device constraints ease (following component-related shortages) to support re-accelerating IQOS user growth; (ii) the impact of supply chain disruptions, notably due to the war in Ukraine; and (iii) cost inflation driven by the global pandemic recovery and exacerbated by the war in Ukraine, notably for certain direct materials, wages, energy and transportation costs. The decline also reflected a challenging prior year comparison, which included substantial productivity savings.
Despite the specific margin pressures in the quarter, the company’s strong net revenue growth, coupled with the positive effects from higher pricing and operating cost efficiencies, drove adjusted diluted EPS of $1.48 and pro forma adjusted diluted EPS of $1.32, reflecting currency-neutral growth of 3.8% and 5.6%, respectively, as shown in the table below.
|
| Quarters Ended June 30, | ||||||
|
| 2022 | 2021 | Currency | Var. excl. Currency | |||
Reported Diluted EPS |
| $ 1.43 | $ 1.39 | $ (0.16) | 14.4% | |||
Asset impairment and exit costs |
| — | 0.04 |
|
| |||
Amortization of intangibles |
| 0.02 | 0.01 |
|
| |||
Saudi Arabia customs assessments |
| — | 0.14 |
|
| |||
Costs associated with Swedish Match AB offer |
| 0.02 | — |
|
| |||
Charges related to the war in Ukraine |
| 0.04 | — |
|
| |||
Tax items |
| (0.03) | — |
|
| |||
Adjusted Diluted EPS |
| $ 1.48 | $ 1.58 | $ (0.16) | 3.8% | |||
Less: Net earnings attributable to Russia and Ukraine |
| 0.16 | 0.15 | 0.03 |
| |||
Pro Forma Adjusted Diluted EPS |
| $ 1.32 | $ 1.43 | $ (0.19) | 5.6% |
2022 FULL-YEAR FORECAST
| Full-Year | |||||||||
| 2022 Forecast |
| 2021 | Growth | ||||||
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| |
Reported Diluted EPS | $5.73 | - | $5.88 |
| $ 5.83 |
|
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| |
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| ||
Adjustments: |
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|
|
|
|
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| |
Asset impairment and exit costs | — |
| 0.12 |
|
|
|
| |||
Equity investee ownership dilution | — |
| (0.04) |
|
|
|
| |||
Amortization of intangibles | 0.08 |
| 0.05 |
|
|
|
| |||
Saudi Arabia customs assessments | — |
| 0.14 |
|
|
|
| |||
Charges related to the war in Ukraine | 0.07 |
| — |
|
|
|
| |||
Fair value adj. for equity security investments (1) | 0.03 |
| — |
|
|
|
| |||
Asset acquisition cost | — |
| 0.03 |
|
|
|
| |||
Costs associated with Swedish Match AB offer | 0.02 |
| — |
|
|
|
| |||
Tax items | (0.03) |
| — |
|
|
|
| |||
Total Adjustments | 0.17 |
| 0.30 |
|
|
|
| |||
|
|
|
|
|
|
|
|
| ||
Adjusted Diluted EPS | $5.90 | - | $6.05 |
| $ 6.13 |
|
|
|
| |
Less: Net earnings attributable to Russia and Ukraine (2) | 0.67 | - | 0.71 |
| 0.60 |
|
|
|
| |
Pro Forma Adjusted Diluted EPS | $5.23 | - | $5.34 |
| $ 5.53 |
|
|
|
| |
Less: Pro Forma Currency | (0.86) |
|
|
|
|
|
| |||
Pro Forma Adjusted Diluted EPS, ex-currency | $6.09 | - | $6.20 |
| $ 5.53 |
| 10% | - | 12% |
1) Reflects the adjustment resulting from share price movements in PMI's investments in India and Sri Lanka, which are publicly traded entities that are not controlled or influenced by PMI |
2) Includes a favorable currency variance of $0.17 per share for full-year 2022 |
Reported diluted EPS is forecast to be in a range of $5.73 to $5.88, at prevailing exchange rates, versus reported diluted EPS of $5.83 in 2021. Excluding (i) 2022 adjustments of $0.17 per share, (ii) net earnings attributable to Russia and Ukraine of $0.67 to $0.71 per share assumed for full-year 2022, and (iii) an adverse pro forma currency impact, at prevailing exchange rates, of $0.86 per share, this forecast represents a projected increase of 10% to 12% versus pro forma adjusted diluted EPS of $5.53 in 2021, as outlined in the above table.
2022 Full-Year Forecast Assumptions
This forecast assumes:
Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.
Swedish Match AB Offer
On May 11, 2022, Philip Morris Holland Holdings B.V. (PMHH), an affiliate of PMI, announced a recommended public offer to the shareholders of Swedish Match AB (Swedish Match) to tender all shares in Swedish Match (excluding treasury shares) to PMHH at a price of SEK 106 in cash per share.
On June 28, 2022, the offer document regarding PMHH's recommended offer was made public, following approval and registration by the Swedish Financial Supervisory Authority. The offer document and other public information regarding the offer are available on the offer website (www.smokefree-offer.com).
PMI expects the transaction to close in the fourth quarter of this year, subject to Swedish Match shareholder acceptance and all necessary regulatory and other approvals.
As of the date of the offer document, the waiting period for the transaction under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act), had expired, meaning that PMHH has satisfied its requirements under the HSR Act to proceed with the transaction.
Share Repurchase Program
On May 11, 2022, PMI announced the suspension of its three-year share repurchase program as part of the company's announcement of its recommended public offer to the shareholders of Swedish Match. Prior to the suspension of the program, the company made no share repurchases during the second quarter of 2022.
From January 1, 2022 through March 31, 2022, PMI repurchased approximately 2.0 million shares of common stock for approximately $199 million, at an average price of $100.95 per share, representing total repurchases of approximately $983 million since the start of the three-year program in July 2021.
War in Ukraine
Since the onset of the war in Ukraine, PMI's main priority has been the safety and security of its more than 1,300 employees and their families in the country. PMI has taken three critical steps in this regard: helping to evacuate more than 1,000 people from Ukraine and relocate over 2,700 others from conflict zones to locations in the country away from the heaviest fighting; providing critical aid to employees who cannot leave or who decide to remain in Ukraine; and providing those who have left the country with logistical, medical, financial, and other practical support in neighboring countries. The company is continuing to pay salaries to all its Ukrainian employees and is also providing substantial in-kind support to them and their families. In addition, PMI has already contributed approximately $10 million in funds and donated essential items across the country, directly to humanitarian organizations and through the company's own employee-led initiative, 'Projects With a Heart'.
On February 25th, PMI announced the temporary suspension of its operations in Ukraine, including at its factory, in Kharkiv. During the second quarter, the company resumed some retail activities where safety allowed, in order to provide product availability and service to adult consumers, and began to supply the market from production centers outside Ukraine. Production at the company's factory in Kharkiv remains suspended. PMI is applying increased security and safety measures for personnel.
In 2021, Ukraine accounted for around 2% of PMI’s total cigarette and heated tobacco unit shipment volume and under 2% of PMI’s total net revenues. As of June 30, 2022, PMI's Ukrainian operations have approximately $0.5 billion in total assets, excluding intercompany balances.
On March 24th, PMI announced the concrete steps it had taken to suspend planned investments and scale down its manufacturing operations in Russia. This included:
As previously announced, PMI intends to exit the Russian market in an orderly manner, as the complexities of continuing to operate in Russia increase, such as supply chain challenges and financial and banking sector restrictions. The company's Board of Directors and senior executives continue to actively work on options for doing so, in the context of an increasingly complex and rapidly changing regulatory and operating environment, including the requirement to obtain certain governmental approvals for any transaction.
PMI employs more than 3,200 people in Russia and will continue to support its employees there, including paying their salaries, while continuing to fulfil its legal obligations. The company will continue to make decisions with their safety and security as a priority.
In 2021, Russia made up almost 10% of total shipment volumes and around 6% of PMI net revenues. As of June 30, 2022, PMI's Russian operations have approximately $2.5 billion in total assets, excluding intercompany balances.
PMI recorded charges related to the war in Ukraine of approximately $80 million in the second quarter of 2022 and approximately $122 million in the first half of 2022. This includes charges in Russia related to the cancellation of the planned launch of IQOS ILUMA and the planned production of TEREA heated tobacco units.
Amortization and Impairment of Acquired Intangibles
Starting in the second quarter of 2022, and on a comparative basis, PMI will exclude amortization and impairment of acquired intangibles, if any, from its adjusted operating results (e.g., adjusted operating income and margin; adjusted diluted EPS). The company believes that operating results adjusted for these items better reflect the underlying performance of the business and provide a better comparison to past operating performance. Amortization of acquired intangibles is driven by the purchase price allocated to specific assets and is varied across acquisitions because of unique facts and circumstances, timing and terms of acquisition which result in amortization charges that could be inconsistent in size as compared to the revenues generated by those assets.
Conference Call
A conference call, hosted by Emmanuel Babeau, Chief Financial Officer, will be webcast at 9:00 a.m., Eastern Time, on July 21, 2022. Access the call at www.pmi.com/2022Q2earnings.
CONSOLIDATED SHIPMENT VOLUME & MARKET SHARE
PMI Shipment Volume by Region | Second-Quarter | Six Months Year-to-Date | ||||||||||
(million units) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||
Cigarettes |
|
|
|
|
|
| ||||||
European Union | 41,276 | 41,504 | (0.5)% | 77,720 | 78,273 | (0.7)% | ||||||
Eastern Europe | 20,633 | 22,785 | (9.4)% | 39,147 | 42,751 | (8.4)% | ||||||
Middle East & Africa | 34,544 | 30,347 | 13.8% | 64,015 | 57,989 | 10.4% | ||||||
South & Southeast Asia | 34,754 | 35,321 | (1.6)% | 72,215 | 70,209 | 2.9% | ||||||
East Asia & Australia | 10,391 | 10,968 | (5.3)% | 21,944 | 22,330 | (1.7)% | ||||||
Americas | 16,080 | 15,213 | 5.7% | 30,875 | 30,098 | 2.6% | ||||||
Total PMI | 157,678 | 156,138 | 1.0% | 305,916 | 301,650 | 1.4% | ||||||
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| ||||||
Heated Tobacco Units |
|
|
|
|
|
| ||||||
European Union | 9,353 | 6,921 | 35.1% | 17,919 | 13,347 | 34.3% | ||||||
Eastern Europe | 5,922 | 6,840 | (13.4)% | 11,788 | 12,475 | (5.5)% | ||||||
Middle East & Africa | 1,158 | 512 | +100% | 2,055 | 908 | +100% | ||||||
South & Southeast Asia | 96 | 39 | +100% | 190 | 72 | +100% | ||||||
East Asia & Australia | 8,186 | 9,904 | (17.3)% | 17,474 | 19,043 | (8.2)% | ||||||
Americas | 106 | 140 | (24.3)% | 214 | 245 | (12.7)% | ||||||
Total PMI | 24,821 | 24,356 | 1.9% | 49,640 | 46,090 | 7.7% | ||||||
|
|
|
|
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| ||||||
Cigarettes and Heated Tobacco Units |
|
|
|
|
|
| ||||||
European Union | 50,629 | 48,425 | 4.6% | 95,639 | 91,620 | 4.4% | ||||||
Eastern Europe | 26,555 | 29,625 | (10.4)% | 50,935 | 55,226 | (7.8)% | ||||||
Middle East & Africa | 35,702 | 30,859 | 15.7% | 66,070 | 58,897 | 12.2% | ||||||
South & Southeast Asia | 34,850 | 35,360 | (1.4)% | 72,405 | 70,281 | 3.0% | ||||||
East Asia & Australia | 18,577 | 20,872 | (11.0)% | 39,418 | 41,373 | (4.7)% | ||||||
Americas | 16,186 | 15,353 | 5.4% | 31,089 | 30,343 | 2.5% | ||||||
Total PMI | 182,499 | 180,494 | 1.1% | 355,556 | 347,740 | 2.2% |
Second-Quarter
PMI's total shipment volume increased by 1.1%, driven by:
partly offset by
On a pro forma basis, PMI's total shipment volume increased by 3.0%, with a decrease of 3.4% in the Eastern Europe Region, as detailed in Appendix 3 and Appendix 4, respectively.
Impact of Inventory Movements
Excluding the net unfavorable impact of estimated distributor inventory movements of approximately 1.9 billion units, PMI’s total in-market sales increased by 2.2%.
The net unfavorable impact of approximately 1.9 billion units reflected:
On a pro forma basis, PMI's total in-market sales increased by 4.2%.
PMI's total heated tobacco unit in-market sales volume in the quarter was 25.7 billion units, or 21.1 billion units on a pro forma basis, representing growth of 12.1% and 19.9%, respectively.
Six Months Year-to-Date
PMI's total shipment volume increased by 2.2%, driven by:
partly offset by
On a pro forma basis, PMI's total shipment volume increased by 4.0%, with an increase of 0.2% in the Eastern Europe Region, as detailed in Appendix 3 and Appendix 4, respectively.
Impact of Inventory Movements
Excluding the net unfavorable impact of estimated distributor inventory movements of approximately 0.3 billion units, PMI’s total in-market sales increased by 2.4%.
The net unfavorable impact of approximately 0.3 billion units reflected:
On a pro forma basis, PMI's total in-market sales increased by 4.0%, in line with the increase in total shipment volume.
PMI's total heated tobacco unit in-market sales volume in the six months year-to-date was 50.6 billion units, or 40.6 billion units on a pro forma basis, representing growth of 14.3% and 19.7%, respectively.
PMI Shipment Volume by Brand
PMI Shipment Volume by Brand |
| Second-Quarter |
| Six Months Year-to-Date | ||||
(million units) |
| 2022 | 2021 | Change |
| 2022 | 2021 | Change |
Cigarettes |
|
|
|
|
|
|
|
|
Marlboro |
| 62,671 | 58,466 | 7.2% |
| 119,936 | 112,148 | 6.9% |
L&M |
| 21,022 | 22,096 | (4.9)% |
| 41,220 | 42,464 | (2.9)% |
Chesterfield |
| 17,086 | 14,269 | 19.7% |
| 32,691 | 27,027 | 21.0% |
Parliament |
| 10,960 | 10,023 | 9.3% |
| 20,111 | 18,980 | 6.0% |
Philip Morris |
| 10,317 | 10,590 | (2.6)% |
| 20,070 | 20,774 | (3.4)% |
Sampoerna A |
| 9,786 | 9,186 | 6.5% |
| 19,505 | 17,884 | 9.1% |
Dji Sam Soe |
| 5,928 | 5,422 | 9.3% |
| 11,700 | 11,126 | 5.2% |
Lark |
| 2,866 | 3,882 | (26.2)% |
| 6,318 | 7,781 | (18.8)% |
Next |
| 2,394 | 2,300 | 4.1% |
| 4,336 | 4,168 | 4.0% |
Others |
| 14,648 | 19,904 | (26.4)% |
| 30,029 | 39,298 | (23.6)% |
Total Cigarettes |
| 157,678 | 156,138 | 1.0% |
| 305,916 | 301,650 | 1.4% |
Heated Tobacco Units |
| 24,821 | 24,356 | 1.9% |
| 49,640 | 46,090 | 7.7% |
Total PMI |
| 182,499 | 180,494 | 1.1% |
| 355,556 | 347,740 | 2.2% |
Note: Lark includes Lark Harmony; Next includes Next Dubliss; Philip Morris includes Philip Morris/Dubliss; and Sampoerna A includes Sampoerna. |
Second-Quarter
The increase in PMI's heated tobacco unit shipment volume was mainly driven by the EU (notably Italy and Poland) and Middle East & Africa (primarily Egypt, Lebanon and PMI Duty Free), partly offset by Japan and Eastern Europe (mainly Russia and Ukraine). On a pro forma basis, PMI's heated tobacco unit shipment volume increased by 7.4%.
PMI's cigarette shipment volume of the following brands increased:
PMI's cigarette shipment volume of the following brands decreased:
On a pro forma basis, PMI's cigarette shipment volume increased by 5.6% for Marlboro, 8.6% for Chesterfield, 15.3% for Parliament and 18.0% for Philip Morris, and decreased by 2.9% for L&M and 5.2% for Next.
International Share of Market
PMI's pro forma total international market share (excluding China and the U.S.), defined as PMI's cigarette and heated tobacco unit sales volume as a percentage of total industry cigarette and heated tobacco unit sales volume, increased by 0.4 points to 27.0%, reflecting:
PMI's pro forma total international cigarette sales volume as a percentage of pro forma total industry cigarette sales volume increased by 0.1 point to 24.7%, mainly reflecting a higher cigarette market share and/or favorable geographic mix impact, notably in Brazil, Indonesia, PMI Duty Free, Poland and Turkey, partly offset by France and the Philippines.
Six Months Year-to-Date
The increase in PMI's heated tobacco unit shipment volume was mainly driven by the EU (notably Italy and Poland) and Middle East & Africa (primarily Egypt, Lebanon and PMI Duty Free), partly offset by Japan and Eastern Europe (mainly Russia and Ukraine). On a pro forma basis, PMI's heated tobacco unit shipment volume increased by 12.6%.
PMI's cigarette shipment volume of the following brands increased:
PMI's cigarette shipment volume of the following brands decreased:
On a pro forma basis, PMI's cigarette shipment volume increased by 5.4% for Marlboro, 9.6% for Chesterfield, 10.4% for Parliament, 15.6% for Philip Morris and 0.1% for Next, and decreased by 1.5% for L&M.
International Share of Market
PMI's pro forma total international market share (excluding China and the U.S.) increased by 0.6 points to 26.9%, reflecting:
PMI's pro forma total international cigarette sales volume as a percentage of total industry cigarette sales volume increased by 0.3 points to 24.6%, mainly reflecting higher cigarette market share and/or a favorable geographic mix impact, notably in Indonesia, PMI Duty Free, Poland and Turkey, partly offset by Germany and Thailand.
CONSOLIDATED FINANCIAL SUMMARY
Second-Quarter
Financial Summary - Quarters Ended June 30, |
|
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|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | |||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | ||||||||||||
(in millions) |
|
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|
| |||||||||||||||||||||
Net Revenues |
| $ | 7,832 |
| $ | 7,594 |
|
| 3.1 | % | 8.7 | % |
| 238 |
| (501 | ) | 79 |
| 142 | 265 |
| 253 |
| |||||||
Saudi Arabia Customs Assessments |
|
| — |
|
| (246 | ) |
| +100 | % | +100 | % |
| 246 |
| — |
| — |
| — | — |
| 246 |
| |||||||
Adjusted Net Revenues |
| $ | 7,832 |
| $ | 7,840 |
|
| (0.1 | )% | 5.3 | % |
| (8 | ) | (501 | ) | 79 |
| 142 | 265 |
| 7 |
| |||||||
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| ||||||||||||||||||
Net Revenues (1) |
| $ | 7,832 |
| $ | 7,594 |
|
| 3.1 | % | 8.7 | % |
| 238 |
| (501 | ) | 79 |
| 142 | 265 |
| 253 |
| |||||||
Cost of Sales |
|
| (2,648 | ) |
| (2,353 | ) |
| (12.5 | )% | (15.3 | )% |
| (295 | ) | 116 |
| (51 | ) | — | (282 | ) | (78 | ) | |||||||
Marketing, Administration and Research Costs |
|
| (2,092 | ) |
| (2,093 | ) |
| — | % | (2.4 | )% |
| 1 |
| 86 |
| (34 | ) | — | — |
| (51 | ) | |||||||
Amortization of Intangibles |
|
| (36 | ) |
| (19 | ) |
| (89.5 | )% | 5.3 | % |
| (17 | ) | — |
| (18 | ) | — | — |
| 1 |
| |||||||
Operating Income |
| $ | 3,056 |
| $ | 3,129 |
|
| (2.3 | )% | 8.0 | % |
| (73 | ) | (299 | ) | (24 | ) | 142 | (17 | ) | 125 |
| |||||||
Asset Impairment & Exit Costs (2) |
|
| — |
|
| (79 | ) |
| +100 | % | +100 | % |
| 79 |
| — |
| — |
| — | — |
| 79 |
| |||||||
Amortization of Intangibles |
|
| (36 | ) |
| (19 | ) |
| (89.5 | )% | 5.3 | % |
| (17 | ) | — |
| (18 | ) | — | — |
| 1 |
| |||||||
Charges related to the war in Ukraine (3) |
|
| (80 | ) |
| — |
|
| — | % | — | % |
| (80 | ) | — |
| — |
| — | — |
| (80 | ) | |||||||
Costs associated with Swedish Match AB offer (2) |
|
| (52 | ) |
| — |
|
| — | % | — | % |
| (52 | ) | — |
| — |
| — | — |
| (52 | ) | |||||||
Saudi Arabia Customs Assessments (4) |
|
| — |
|
| (246 | ) |
| +100 | % | +100 | % |
| 246 |
| — |
| — |
| — | — |
| 246 |
| |||||||
Adjusted Operating Income |
| $ | 3,224 |
| $ | 3,473 |
|
| (7.2 | )% | 1.6 | % |
| (249 | ) | (299 | ) | (6 | ) | 142 | (17 | ) | (69 | ) | |||||||
Adjusted Operating Income Margin |
|
| 41.2 | % |
| 44.3 | % |
| (3.1 | )pp | (1.5 | )pp |
|
|
|
|
|
|
| ||||||||||||
(1) Favorable Cost/Other variance includes a reduction in net revenues of $246 million in 2021 related to the Saudi Arabia customs assessments. | |||||||||||||||||||||||||||||||
(2) Included in Marketing, Administration and Research Costs above. | |||||||||||||||||||||||||||||||
(3) Included in Cost of Sales ($20 million) and Marketing, Administration and Research Costs ($60 million) above. | |||||||||||||||||||||||||||||||
(4) Included in Net Revenues above. |
Net revenues increased by 8.7%, excluding currency and acquisitions, mainly reflecting: favorable volume/mix, primarily driven by higher heated tobacco unit volume, device volume and cigarette volume, partly offset by unfavorable device mix and cigarette mix; a favorable comparison related to the Saudi Arabia customs assessments of $246 million in 2021, shown in "Cost/Other"; and a favorable pricing variance, driven by higher combustible tobacco pricing, partly offset by lower device pricing. Adjusted net revenues increased by 5.3% on an organic basis.
During the quarter, Russia and Ukraine accounted for around 8% of PMI's total net revenues. Pro forma adjusted net revenues increased by 6.2% on an organic basis, as detailed in Schedule 11.
Operating income increased by 8.0%, excluding currency and acquisitions, notably reflecting: a favorable comparison versus the prior year period related to the Saudi Arabia customs assessments (as noted above for net revenues) and asset impairment and exit costs, partly offset by 2022 charges related to the war in Ukraine and 2022 costs associated with the Swedish Match AB offer.
Adjusted operating income increased by 1.6% on an organic basis, primarily reflecting: a favorable pricing variance, partly offset by higher manufacturing costs (mainly due to higher logistics costs and other inflationary impacts, partially offset by productivity). Volume/mix was slightly unfavorable, reflecting unfavorable cigarette mix, heated tobacco unit mix and device mix, as well as the unfavorable impact on profitability of higher device volume, partly offset by higher heated tobacco unit volume and cigarette volume. Adjusted operating income margin decreased by 1.5 points on an organic basis.
Pro forma adjusted operating income increased by 1.6% on an organic basis, while pro forma adjusted operating income margin decreased by 1.9 points, on the same basis, as detailed in Schedule 11. The margin decline primarily reflected the impact of significantly higher device sales; the growth of IQOS ILUMA (with its higher initial unit cost for devices and consumables); the temporary adverse timing impact related to heated tobacco unit shipments to Japan; and inflation in certain elements of the company's supply chain, which was also exacerbated by the impact of the war in Ukraine. The decline also reflected a challenging prior year comparison, which included substantial productivity savings.
Six Months Year-to-Date
Financial Summary - Six Months Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | |||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | ||||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net Revenues |
| $ | 15,578 |
| $ | 15,179 |
|
| 2.6 | % | 8.8 | % |
| 399 |
| (1,091 | ) | 149 |
| 250 | 827 |
| 264 |
| |||||||
Saudi Arabia Customs Assessments |
|
| — |
|
| (246 | ) |
| +100 | % | +100 | % |
| 246 |
| — |
| — |
| — | — |
| 246 |
| |||||||
Adjusted Net Revenues |
| $ | 15,578 |
| $ | 15,425 |
|
| 1.0 | % | 7.1 | % |
| 153 |
| (1,091 | ) | 149 |
| 250 | 827 |
| 18 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Net Revenues (1) |
| $ | 15,578 |
| $ | 15,179 |
|
| 2.6 | % | 8.8 | % |
| 399 |
| (1,091 | ) | 149 |
| 250 | 827 |
| 264 |
| |||||||
Cost of Sales |
|
| (5,256 | ) |
| (4,627 | ) |
| (13.6 | )% | (16.8 | )% |
| (629 | ) | 241 |
| (93 | ) | — | (580 | ) | (197 | ) | |||||||
Marketing, Administration and Research Costs |
|
| (3,894 | ) |
| (3,942 | ) |
| 1.2 | % | (0.5 | )% |
| 48 |
| 136 |
| (69 | ) | — | — |
| (19 | ) | |||||||
Amortization of Intangibles |
|
| (74 | ) |
| (37 | ) |
| -(100 | )% | — | % |
| (37 | ) | — |
| (37 | ) | — | — |
| — |
| |||||||
Operating Income |
| $ | 6,354 |
| $ | 6,573 |
|
| (3.3 | )% | 8.3 | % |
| (219 | ) | (714 | ) | (50 | ) | 250 | 247 |
| 48 |
| |||||||
Asset Impairment & Exit Costs (2) |
|
| — |
|
| (127 | ) |
| +100 | % | +100 | % |
| 127 |
| — |
| — |
| — | — |
| 127 |
| |||||||
Amortization of Intangibles |
|
| (74 | ) |
| (37 | ) |
| -(100 | )% | — | % |
| (37 | ) | — |
| (37 | ) | — | — |
| — |
| |||||||
Charges related to the war in Ukraine (3) |
|
| (122 | ) |
| — |
|
| — | % | — | % |
| (122 | ) | — |
| — |
| — | — |
| (122 | ) | |||||||
Costs associated with Swedish Match AB offer (2) |
|
| (52 | ) |
| — |
|
| — | % | — | % |
| (52 | ) | — |
| — |
| — | — |
| (52 | ) | |||||||
Saudi Arabia Customs Assessments (4) |
|
| — |
|
| (246 | ) |
| +100 | % | +100 | % |
| 246 |
| — |
| — |
| — | — |
| 246 |
| |||||||
Adjusted Operating Income |
| $ | 6,602 |
| $ | 6,983 |
|
| (5.5 | )% | 5.0 | % |
| (381 | ) | (714 | ) | (13 | ) | 250 | 247 |
| (151 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Adjusted Operating Income Margin |
|
| 42.4 | % |
| 45.3 | % |
| (2.9 | )pp | (0.9 | )pp |
|
|
|
|
|
|
| ||||||||||||
(1) Favorable Cost/Other variance includes a reduction in net revenues of $246 million in 2021 related to the Saudi Arabia customs assessments. | |||||||||||||||||||||||||||||||
(2) Included in Marketing, Administration and Research Costs above. | |||||||||||||||||||||||||||||||
(3) Included in Cost of Sales ($46 million) and Marketing, Administration and Research Costs ($76 million) above. | |||||||||||||||||||||||||||||||
(4) Included in Net Revenues above. |
Net revenues increased by 8.8%, excluding currency and acquisitions, mainly reflecting: favorable volume/mix, primarily driven by higher heated tobacco unit volume, device volume and cigarette volume, partly offset by unfavorable cigarette mix and device mix; a favorable pricing variance, driven by higher combustible tobacco pricing, partly offset by lower device pricing; and a favorable comparison related to the Saudi Arabia customs assessments of $246 million in 2021, shown in "Cost/Other". Adjusted net revenues increased by 7.1% on an organic basis.
During the first half, Russia and Ukraine accounted for around 7% of PMI's total net revenues. Pro forma adjusted net revenues increased by 8.1% on an organic basis, as detailed in Schedule 11.
Operating income increased by 8.3%, excluding currency and acquisitions, notably reflecting: a favorable comparison versus the prior year period related to the Saudi Arabia customs assessments (as noted above for net revenues) and asset impairment and exit costs, partly offset by 2022 charges related to the war in Ukraine and 2022 costs associated with the Swedish Match AB offer.
Adjusted operating income increased by 5.0% on an organic basis, reflecting: a favorable pricing variance; and favorable volume/mix, primarily driven by higher heated tobacco unit volume and cigarette volume, partly offset by unfavorable cigarette mix, heated tobacco unit mix and device mix, as well as the unfavorable impact on profitability of higher device volume; partially offset by higher manufacturing costs (primarily due to higher logistics costs and other inflationary impacts, partly offset by productivity). Adjusted operating income margin decreased by 0.9 points on an organic basis.
Pro forma adjusted operating income increased by 5.4% on an organic basis, while pro forma adjusted operating income margin decreased by 1.1 points, on the same basis, as detailed in Schedule 11. The margin decline primarily reflects the same factors as in the quarter.
EUROPEAN UNION REGION
Second-Quarter
Financial Summary - Quarters Ended June 30, |
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | |||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Net Revenues |
| $ | 3,143 |
| $ | 3,149 |
|
| (0.2 | )% | 10.1 | % |
| (6 | ) | (327 | ) | 3 | (35 | ) | 353 | — |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Operating Income |
| $ | 1,519 |
| $ | 1,641 |
|
| (7.4 | )% | 7.5 | % |
| (122 | ) | (245 | ) | — | (35 | ) | 221 | (63 | ) | |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (35 | ) |
| +100 | % | +100 | % |
| 35 |
| — |
| — | — |
| — | 35 |
| |||||||
Amortization of Intangibles |
|
| (9 | ) |
| (9 | ) |
| — | % | — | % |
| — |
| — |
| — | — |
| — | — |
| |||||||
Costs associated with Swedish Match AB offer |
|
| (23 | ) |
| — |
|
| — | % | — | % |
| (23 | ) | — |
| — | — |
| — | (23 | ) | |||||||
Adjusted Operating Income |
| $ | 1,551 |
| $ | 1,685 |
|
| (8.0 | )% | 6.6 | % |
| (134 | ) | (245 | ) | — | (35 | ) | 221 | (75 | ) | |||||||
Adjusted Operating Income Margin |
|
| 49.3 | % |
| 53.5 | % |
| (4.2 | )pp | (1.7 | )pp |
|
|
|
|
|
|
|
Net revenues increased by 10.1% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume and device volume, partly offset by lower cigarette volume; partially offset by an unfavorable pricing variance, primarily reflecting lower device pricing, partly offset by higher combustible pricing.
Operating income increased by 7.5%, excluding currency and acquisitions, primarily reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume, partly offset by lower cigarette volume; partially offset by higher marketing, administration and research costs; an unfavorable pricing variance; and higher manufacturing costs (primarily due to inflationary impacts).
Adjusted operating income increased by 6.6% on an organic basis. Adjusted operating income margin decreased by 1.7 points on the same basis.
Six Months Year-to-Date
Financial Summary - Six Months Ended June 30, |
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | ||||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net Revenues |
| $ | 6,155 |
| $ | 6,058 |
|
| 1.6 | % | 10.3 | % |
| 97 |
| (533 | ) | 7 |
| (30 | ) | 653 | — |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Operating Income |
| $ | 3,046 |
| $ | 3,131 |
|
| (2.7 | )% | 9.8 | % |
| (85 | ) | (390 | ) | (2 | ) | (30 | ) | 429 | (92 | ) | |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (44 | ) |
| +100 | % | +100 | % |
| 44 |
| — |
| — |
| — |
| — | 44 |
| |||||||
Amortization of Intangibles |
|
| (18 | ) |
| (18 | ) |
| — | % | — | % |
| — |
| — |
| — |
| — |
| — | — |
| |||||||
Costs associated with Swedish Match AB offer |
|
| (23 | ) |
| — |
|
| — | % | — | % |
| (23 | ) | — |
| — |
| — |
| — | (23 | ) | |||||||
Adjusted Operating Income |
| $ | 3,087 |
| $ | 3,193 |
|
| (3.3 | )% | 9.0 | % |
| (106 | ) | (390 | ) | (2 | ) | (30 | ) | 429 | (113 | ) | |||||||
Adjusted Operating Income Margin |
|
| 50.2 | % |
| 52.7 | % |
| (2.5 | )pp | (0.6 | )pp |
|
|
|
|
|
|
|
Net revenues increased by 10.3% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume and device volume, partly offset by lower cigarette volume, unfavorable cigarette mix, and unfavorable heated tobacco unit mix; partially offset by an unfavorable pricing variance, mainly due to lower device pricing and heated tobacco unit pricing, partly offset by higher combustible pricing.
Operating income increased by 9.8%, excluding currency and acquisitions, primarily reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume, partly offset by lower cigarette volume, unfavorable cigarette mix and unfavorable heated tobacco unit mix; partially offset by higher marketing, administration and research costs; higher manufacturing costs (primarily due to inflationary impacts); and an unfavorable pricing variance.
Adjusted operating income increased by 9.0% on an organic basis. Adjusted operating income margin decreased by 0.6 points on the same basis.
Total Market, PMI Shipment & Market Share Commentaries
European Union Key Data |
| Second-Quarter |
| Six Months Year-to-Date | ||||||||||||||
|
|
|
| Change |
|
|
| Change | ||||||||||
|
| 2022 |
| 2021 |
| % / pp |
| 2022 |
| 2021 |
| % / pp | ||||||
Total Market (billion units) |
| 126.4 |
| 122.2 |
| 3.4 | % |
| 235.9 |
| 228.7 |
| 3.2 | % | ||||
|
|
|
|
|
|
|
|
| ||||||||||
PMI Shipment Volume (million units) |
|
|
|
|
|
|
|
| ||||||||||
Cigarettes |
| 41,276 |
| 41,504 |
| (0.5 | )% |
| 77,720 |
| 78,273 |
| (0.7 | )% | ||||
Heated Tobacco Units |
| 9,353 |
| 6,921 |
| 35.1 | % |
| 17,919 |
| 13,347 |
| 34.3 | % | ||||
Total EU |
| 50,629 |
| 48,425 |
| 4.6 | % |
| 95,639 |
| 91,620 |
| 4.4 | % | ||||
|
|
|
|
|
|
|
|
| ||||||||||
PMI Market Share |
|
|
|
|
|
|
|
| ||||||||||
Marlboro |
| 16.0 | % | 16.6 | % | (0.6 | ) |
| 16.1 | % | 16.8 | % | (0.7 | ) | ||||
L&M |
| 5.4 | % | 5.6 | % | (0.2 | ) |
| 5.4 | % | 5.7 | % | (0.3 | ) | ||||
Chesterfield |
| 5.6 | % | 5.4 | % | 0.2 |
|
| 5.6 | % | 5.5 | % | 0.1 |
| ||||
Philip Morris |
| 2.0 | % | 2.2 | % | (0.2 | ) |
| 2.1 | % | 2.2 | % | (0.1 | ) | ||||
Heated Tobacco Units |
| 7.1 | % | 5.5 | % | 1.6 |
|
| 7.3 | % | 5.5 | % | 1.8 |
| ||||
Others |
| 3.0 | % | 3.1 | % | (0.1 | ) |
| 3.0 | % | 3.0 | % | — |
| ||||
Total EU |
| 39.1 | % | 38.4 | % | 0.7 |
|
| 39.6 | % | 38.8 | % | 0.8 |
| ||||
Note: Sum may not foot due to roundings. |
Second-Quarter
The estimated total market in the EU increased by 3.4% to 126.4 billion units, primarily driven by:
partly offset by
PMI's total shipment volume increased by 4.6% to 50.6 billion units, mainly driven by:
Six Months Year-to-Date
The estimated total market in the EU increased by 3.2% to 235.9 billion units, primarily driven by:
partly offset by
PMI's total shipment volume increased by 4.4% to 95.6 billion units, mainly driven by:
EASTERN EUROPE REGION
Second-Quarter
Financial Summary - Quarters Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | |||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | ||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net Revenues |
| $ | 898 |
| $ | 895 |
|
| 0.3 | % | (1.7 | )% |
| 3 |
| 18 | — | 89 | (104 | ) | — |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Operating Income |
| $ | 291 |
| $ | 314 |
|
| (7.3 | )% | (25.2 | )% |
| (23 | ) | 56 | — | 89 | (69 | ) | (99 | ) | |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (7 | ) |
| +100 | % | +100 | % |
| 7 |
| — | — | — | — |
| 7 |
| |||||||
Amortization of Intangibles |
|
| — |
|
| (1 | ) |
| +100 | % | +100 | % |
| 1 |
| — | — | — | — |
| 1 |
| |||||||
Charges related to the war in Ukraine |
|
| (80 | ) |
| — |
|
| — | % | — | % |
| (80 | ) | — | — | — | — |
| (80 | ) | |||||||
Costs associated with Swedish Match AB offer |
|
| (6 | ) |
| — |
|
| — | % | — | % |
| (6 | ) | — | — | — | — |
| (6 | ) | |||||||
Adjusted Operating Income |
| $ | 377 |
| $ | 322 |
|
| 17.1 | % | (0.3 | )% |
| 55 |
| 56 | — | 89 | (69 | ) | (21 | ) | |||||||
Adjusted Operating Income Margin |
|
| 42.0 | % |
| 36.0 | % |
| 6.0 | pp | 0.5 | pp |
|
|
|
|
|
|
|
Net revenues decreased by 1.7% on an organic basis, reflecting: unfavorable volume/mix, mainly due to lower cigarette volume and heated tobacco unit volume; partly offset by a favorable pricing variance, primarily driven by higher combustible pricing. During the quarter, Russia and Ukraine accounted for around 68% of PMI's total net revenues in the Region. Pro forma net revenues increased by 5.7% on an organic basis, as detailed in Schedule 11.
Operating income decreased by 25.2%, excluding currency and acquisitions, primarily reflecting 2022 charges related to the war in Ukraine.
Adjusted operating income decreased by 0.3% on an organic basis, mainly reflecting: unfavorable volume/mix, primarily due to the same factors as for net revenues; and higher manufacturing costs; partly offset by a favorable pricing variance. Adjusted operating income margin increased by 0.5 points on an organic basis.
On an organic basis, pro forma adjusted operating income and adjusted operating income margin increased by 6.3% and 0.2 points, respectively, as detailed in Schedule 11.
Six Months Year-to-Date
Financial Summary - Six Months Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Net Revenues |
| $ | 1,624 |
| $ | 1,691 |
|
| (4.0 | )% | (0.8 | )% |
| (67 | ) | (54 | ) | — | 125 | (138 | ) | — |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Operating Income |
| $ | 435 |
| $ | 575 |
|
| (24.3 | )% | (23.7 | )% |
| (140 | ) | (4 | ) | — | 125 | (95 | ) | (166 | ) | |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (9 | ) |
| +100 | % | +100 | % |
| 9 |
| — |
| — | — | — |
| 9 |
| |||||||
Amortization of Intangibles |
|
| (1 | ) |
| (1 | ) |
| — | % | — | % |
| — |
| — |
| — | — | — |
| — |
| |||||||
Charges related to the war in Ukraine |
|
| (122 | ) |
| — |
|
| — | % | — | % |
| (122 | ) | — |
| — | — | — |
| (122 | ) | |||||||
Costs associated with Swedish Match AB offer |
|
| (6 | ) |
| — |
|
| — | % | — | % |
| (6 | ) | — |
| — | — | — |
| (6 | ) | |||||||
Adjusted Operating Income |
| $ | 564 |
| $ | 585 |
|
| (3.6 | )% | (2.9 | )% |
| (21 | ) | (4 | ) | — | 125 | (95 | ) | (47 | ) | |||||||
Adjusted Operating Income Margin |
|
| 34.7 | % |
| 34.6 | % |
| 0.1 | pp | (0.8 | )pp |
|
|
|
|
|
|
|
Net revenues decreased by 0.8% on an organic basis, reflecting: unfavorable volume/mix, mainly due to lower cigarette volume, lower heated tobacco unit volume and unfavorable cigarette mix; largely offset by a favorable pricing variance, primarily driven by higher combustible pricing. During the first six months of 2022, Russia and Ukraine accounted for around 67% of PMI's total net revenues in the Region. Pro forma net revenues increased by 8.1% on an organic basis, as detailed in Schedule 11.
Operating income decreased by 23.7%, excluding currency and acquisitions, primarily reflecting 2022 charges related to the war in Ukraine.
Adjusted operating income decreased by 2.9% on an organic basis, primarily reflecting: unfavorable volume/mix, mainly due to the same factors as for net revenues; higher manufacturing costs; and higher marketing, administration and research costs; partly offset by a favorable pricing variance. Adjusted operating income margin decreased by 0.8 points on an organic basis.
Pro forma adjusted operating income increased by 6.2% on an organic basis, while pro forma adjusted operating income margin decreased by 0.7 points, on the same basis, as detailed in Schedule 11.
Total Market, PMI Shipment & Market Share Commentaries
Given the company's intention to exit the Russian market and the impact of the war in Ukraine on business operations in the country, PMI's references to the total market estimate for the Eastern Europe Region exclude Russia and Ukraine.
The company's reported shipment volume, presented in the table below, includes Russia and Ukraine.
PMI Shipment Volume | Second-Quarter | Six Months Year-to-Date | ||||||||||
(million units) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||
Cigarettes | 20,633 | 22,785 | (9.4)% | 39,147 | 42,751 | (8.4)% | ||||||
Heated Tobacco Units | 5,922 | 6,840 | (13.4)% | 11,788 | 12,475 | (5.5)% | ||||||
Total Eastern Europe | 26,555 | 29,625 | (10.4)% | 50,935 | 55,226 | (7.8)% |
Second-Quarter
The pro forma estimated total market in Eastern Europe decreased, mainly due to:
partly offset by
PMI's total shipment volume decreased by 10.4% to 26.6 billion units, primarily due to:
During the quarter, Russia and Ukraine accounted for around 71% of PMI's total shipment volume in the Region. Pro forma total shipment volume, excluding Russia and Ukraine, decreased by 3.4%, as detailed in Appendix 4.
Six Months Year-to-Date
The pro forma estimated total market in Eastern Europe decreased, mainly due to:
partly offset by
PMI's total shipment volume decreased by 7.8% to 50.9 billion units, primarily due to:
During the first six months of 2022, Russia and Ukraine accounted for around 72% of PMI's total shipment volume in the Region. Pro forma total shipment volume, excluding Russia and Ukraine, increased by 0.2%, as detailed in Appendix 4.
MIDDLE EAST & AFRICA REGION
Second-Quarter
Financial Summary - Quarters Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | |||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | ||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net Revenues |
| $ | 1,006 |
| $ | 560 |
|
| 79.6 | % | 87.7 | % |
| 446 |
| (45 | ) | — | 20 | 221 | 250 |
| |||||||
Saudi Arabia Customs Assessments |
|
| — |
|
| (246 | ) |
| +100 | % | +100 | % |
| 246 |
| — |
| — | — | — | 246 |
| |||||||
Adjusted Net Revenues |
| $ | 1,006 |
| $ | 806 |
|
| 24.8 | % | 30.4 | % |
| 200 |
| (45 | ) | — | 20 | 221 | 4 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Net Revenues (1) |
| $ | 1,006 |
| $ | 560 |
|
| 79.6 | % | 87.7 | % |
| 446 |
| (45 | ) | — | 20 | 221 | 250 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Operating Income |
| $ | 498 |
| $ | 16 |
|
| +100 | % | +100 | % |
| 482 |
| (4 | ) | — | 20 | 182 | 284 |
| |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (8 | ) |
| +100 | % | +100 | % |
| 8 |
| — |
| — | — | — | 8 |
| |||||||
Amortization of Intangibles |
|
| (2 | ) |
| (2 | ) |
| — | % | — | % |
| — |
| — |
| — | — | — | — |
| |||||||
Saudi Arabia Customs Assessments |
|
| — |
|
| (246 | ) |
| +100 | % | +100 | % |
| 246 |
| — |
| — | — | — | 246 |
| |||||||
Costs associated with Swedish Match AB offer |
|
| (6 | ) |
| — |
|
| — | % | — | % |
| (6 | ) | — |
| — | — | — | (6 | ) | |||||||
Adjusted Operating Income |
| $ | 506 |
| $ | 272 |
|
| 86.0 | % | 87.5 | % |
| 234 |
| (4 | ) | — | 20 | 182 | 36 |
| |||||||
Adjusted Operating Income Margin |
|
| 50.3 | % |
| 33.7 | % |
| 16.6 | pp | 14.8 | pp |
|
|
|
|
|
|
|
Net revenues increased by 87.7%, excluding currency and acquisitions, notably reflecting a favorable comparison related to the Saudi Arabia customs assessments of $246 million in 2021, shown in "Cost/Other".
Adjusted net revenues increased by 30.4% on an organic basis, as detailed above, reflecting: favorable volume/mix, mainly driven by higher cigarette volume, higher heated tobacco unit volume and favorable cigarette mix; and a favorable pricing variance, driven by combustible pricing.
Operating income increased by +100%, excluding currency and acquisitions, notably reflecting a favorable comparison related to the Saudi Arabia customs assessments in 2021 (as noted above for net revenues).
Adjusted operating income increased by 87.5% on an organic basis, primarily reflecting: favorable volume/mix, mainly driven by the same factors as for net revenues; lower marketing, administration and research costs; and a favorable pricing variance. Adjusted operating income margin increased by 14.8 points on an organic basis.
Six Months Year-to-Date
Financial Summary - Six Months Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | |||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | ||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net Revenues |
| $ | 1,997 |
| $ | 1,361 |
|
| 46.7 | % | 61.0 | % |
| 636 |
| (194 | ) | — | 183 | 386 | 261 |
| |||||||
Saudi Arabia Customs Assessments |
|
| — |
|
| (246 | ) |
| +100 | % | +100 | % |
| 246 |
| — |
| — | — | — | 246 |
| |||||||
Adjusted Net Revenues |
| $ | 1,997 |
| $ | 1,607 |
|
| 24.3 | % | 36.3 | % |
| 390 |
| (194 | ) | — | 183 | 386 | 15 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Net Revenues |
| $ | 1,997 |
| $ | 1,361 |
|
| 46.7 | % | 61.0 | % |
| 636 |
| (194 | ) | — | 183 | 386 | 261 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Operating Income |
| $ | 1,019 |
| $ | 351 |
|
| +100 | % | +100 | % |
| 668 |
| (119 | ) | — | 183 | 307 | 297 |
| |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (10 | ) |
| +100 | % | +100 | % |
| 10 |
| — |
| — | — | — | 10 |
| |||||||
Amortization of Intangibles |
|
| (4 | ) |
| (4 | ) |
| — | % | — | % |
| — |
| — |
| — | — | — | — |
| |||||||
Saudi Arabia Customs Assessments |
|
| — |
|
| (246 | ) |
| +100 | % | +100 | % |
| 246 |
| — |
| — | — | — | 246 |
| |||||||
Costs associated with Swedish Match AB offer |
|
| (6 | ) |
| — |
|
| — | % | — | % |
| (6 | ) | — |
| — | — | — | (6 | ) | |||||||
Adjusted Operating Income |
| $ | 1,029 |
| $ | 611 |
|
| 68.4 | % | 87.9 | % |
| 418 |
| (119 | ) | — | 183 | 307 | 47 |
| |||||||
Adjusted Operating Income Margin |
|
| 51.5 | % |
| 38.0 | % |
| 13.5 | pp | 14.4 | pp |
|
|
|
|
|
|
|
Net revenues increased by 61.0%, excluding currency and acquisitions, notably reflecting a favorable comparison related to the Saudi Arabia customs assessments of $246 million in 2021, shown in "Cost/Other".
Adjusted net revenues increased by 36.3% on an organic basis, as detailed above, reflecting: favorable volume/mix, primarily driven by higher cigarette volume, higher heated tobacco unit volume and favorable cigarette mix; and a favorable pricing variance, mainly driven by combustible pricing.
Operating income increased by +100%, excluding currency and acquisitions, notably reflecting a favorable comparison related to the Saudi Arabia customs assessments in 2021 (as noted above for net revenues).
Adjusted operating income increased by 87.9% on an organic basis, mainly reflecting: favorable volume/mix, primarily driven by the same factors as for net revenues; a favorable pricing variance; and lower marketing, administration and research costs; partly offset by higher manufacturing costs. Adjusted operating income margin increased by 14.4 points on an organic basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume | Second-Quarter | Six Months Year-to-Date | ||||||||||
(million units) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||
Cigarettes | 34,544 | 30,347 | 13.8% | 64,015 | 57,989 | 10.4% | ||||||
Heated Tobacco Units | 1,158 | 512 | +100% | 2,055 | 908 | +100% | ||||||
Total Middle East & Africa | 35,702 | 30,859 | 15.7% | 66,070 | 58,897 | 12.2% |
Second-Quarter
The estimated total market in the Middle East & Africa increased, mainly driven by:
partly offset by
PMI's total shipment volume increased by 15.7% to 35.7 billion units, mainly driven by:
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 10.9%.
Six Months Year-to-Date
The estimated total market in the Middle East & Africa increased, mainly driven by:
partly offset by
PMI's total shipment volume increased by 12.2% to 66.1 billion units, mainly driven by:
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 7.6%.
SOUTH & SOUTHEAST ASIA REGION
Second-Quarter
Financial Summary - Quarters Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Net Revenues |
| $ | 1,034 |
| $ | 1,046 |
|
| (1.1 | )% | 2.6 | % |
| (12 | ) | (39 | ) | — | 17 | 10 |
| — |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Operating Income |
| $ | 306 |
| $ | 331 |
|
| (7.6 | )% | (0.9 | )% |
| (25 | ) | (22 | ) | — | 17 | (36 | ) | 16 |
| |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (10 | ) |
| +100 | % | +100 | % |
| 10 |
| — |
| — | — | — |
| 10 |
| |||||||
Amortization of Intangibles |
|
| (5 | ) |
| (4 | ) |
| (25.0 | )% | (25.0 | )% |
| (1 | ) | — |
|
| — | — |
| (1 | ) | |||||||
Costs associated with Swedish Match AB offer |
|
| (5 | ) |
| — |
|
| — | % | — | % |
| (5 | ) | — |
|
| — | — |
| (5 | ) | |||||||
Adjusted Operating Income |
| $ | 316 |
| $ | 345 |
|
| (8.4 | )% | (2.0 | )% |
| (29 | ) | (22 | ) | — | 17 | (36 | ) | 12 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Adjusted Operating Income Margin |
|
| 30.6 | % |
| 33.0 | % |
| (2.4 | )pp | (1.5 | )pp |
|
|
|
|
|
|
|
Net revenues increased by 2.6% on an organic basis, reflecting: a favorable pricing variance, driven by combustible pricing; and favorable volume/mix, primarily driven by favorable cigarette mix, partly offset by lower cigarette volume.
Operating income decreased by 0.9%, excluding currency and acquisitions, primarily reflecting: unfavorable volume/mix, mainly due to lower cigarette volume; partly offset by a favorable pricing variance; and lower marketing, administration and research costs.
Adjusted operating income decreased by 2.0% on an organic basis. Adjusted operating income margin decreased by 1.5 points on the same basis.
Six Months Year-to-Date
Financial Summary - Six Months Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Net Revenues |
| $ | 2,157 |
| $ | 2,219 |
|
| (2.8 | )% | 0.9 | % |
| (62 | ) | (83 | ) | — | (128 | ) | 149 | — |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Operating Income |
| $ | 751 |
| $ | 860 |
|
| (12.7 | )% | (7.2 | )% |
| (109 | ) | (47 | ) | — | (128 | ) | 51 | 15 |
| |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (13 | ) |
| +100 | % | +100 | % |
| 13 |
| — |
| — | — |
| — | 13 |
| |||||||
Amortization of Intangibles |
|
| (9 | ) |
| (8 | ) |
| (12.5 | )% | (12.5 | )% |
| (1 | ) | — |
| — | — |
| — | (1 | ) | |||||||
Costs associated with Swedish Match AB offer |
|
| (5 | ) |
| — |
|
| — | % | — | % |
| (5 | ) | — |
| — | — |
| — | (5 | ) | |||||||
Adjusted Operating Income |
| $ | 765 |
| $ | 881 |
|
| (13.2 | )% | (7.8 | )% |
| (116 | ) | (47 | ) | — | (128 | ) | 51 | 8 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Adjusted Operating Income Margin |
|
| 35.5 | % |
| 39.7 | % |
| (4.2 | )pp | (3.4 | )pp |
|
|
|
|
|
|
|
Net revenues increased by 0.9% on an organic basis, reflecting: favorable volume/mix, primarily driven by higher cigarette volume and favorable cigarette mix; partly offset by an unfavorable pricing variance, mainly due to combustible pricing.
Operating income decreased by 7.2%, excluding currency and acquisitions, primarily reflecting: an unfavorable pricing variance; partly offset by favorable volume/mix, mainly driven by higher cigarette volume; and lower marketing, administration and research costs.
Adjusted operating income decreased by 7.8% on an organic basis. Adjusted operating income margin decreased by 3.4 points on the same basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume | Second-Quarter | Six Months Year-to-Date | ||||||||||
(million units) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||
Cigarettes | 34,754 | 35,321 | (1.6)% | 72,215 | 70,209 | 2.9% | ||||||
Heated Tobacco Units | 96 | 39 | +100% | 190 | 72 | +100% | ||||||
Total South & Southeast Asia | 34,850 | 35,360 | (1.4)% | 72,405 | 70,281 | 3.0% |
Second-Quarter
The estimated total market in South & Southeast Asia increased, mainly driven by:
partly offset by
PMI's total shipment volume decreased by 1.4% to 34.9 billion units, mainly due to:
partly offset by
Six Months Year-to-Date
The estimated total market in South & Southeast Asia increased, mainly driven by:
partly offset by
PMI's total shipment volume increased by 3.0% to 72.4 billion units, mainly driven by:
partly offset by
EAST ASIA & AUSTRALIA REGION
Second-Quarter
Financial Summary - Quarters Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Net Revenues |
| $ | 1,206 |
| $ | 1,514 |
|
| (20.3 | )% | (12.9 | )% |
| (308 | ) | (112 | ) | — | 27 | (223 | ) | — |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Operating Income |
| $ | 346 |
| $ | 715 |
|
| (51.6 | )% | (39.3 | )% |
| (369 | ) | (88 | ) | — | 27 | (316 | ) | 8 |
| |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (15 | ) |
| +100 | % | +100 | % |
| 15 |
| — |
| — | — | — |
| 15 |
| |||||||
Amortization of Intangibles |
|
| — |
|
| — |
|
| — | % | — | % |
| — |
| — |
| — | — | — |
| — |
| |||||||
Costs associated with Swedish Match AB offer |
|
| (10 | ) |
| — |
|
| — | % | — | % |
| (10 | ) | — |
| — | — | — |
| (10 | ) | |||||||
Adjusted Operating Income |
| $ | 356 |
| $ | 730 |
|
| (51.2 | )% | (39.2 | )% |
| (374 | ) | (88 | ) | — | 27 | (316 | ) | 3 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Adjusted Operating Income Margin |
|
| 29.5 | % |
| 48.2 | % |
| (18.7 | )pp | (14.5 | )pp |
|
|
|
|
|
|
|
Net revenues decreased by 12.9% on an organic basis, reflecting: unfavorable volume/mix, mainly due to lower heated tobacco unit volume (primarily in Japan, as the company manages temporary production and supply chain impacts, described earlier), as well as lower cigarette volume, unfavorable cigarette mix and unfavorable device mix, partly offset by higher device volume; partially offset by a favorable pricing variance, primarily driven by higher combustible pricing, partly offset by lower heated tobacco unit pricing and device pricing.
Operating income decreased by 39.3%, excluding currency and acquisitions, mainly reflecting: unfavorable volume/mix, primarily due to lower heated tobacco unit volume, as well as lower cigarette volume, the unfavorable impact on profitability of higher device volume, and unfavorable mix for cigarettes, heated tobacco units and devices; and higher manufacturing costs (mainly due to higher logistics costs); partly offset by a favorable pricing variance; and lower marketing, administration and research costs.
Adjusted operating income decreased by 39.2% on an organic basis. Adjusted operating income margin decreased by 14.5 points on the same basis. The margin decline notably reflected the impact of: higher device sales; the growth of IQOS ILUMA within the Region's smoke-free product portfolio mix, with its higher initial unit cost of devices and consumables; the timing of heated tobacco unit shipments to Japan; and higher logistics costs, including costs related to the use of air freight to Japan to support: (i) the strong up-take of IQOS ILUMA and TEREA consumables, and (ii) the re-sourcing of select cigarette brands due to the war in Ukraine.
Six Months Year-to-Date
Financial Summary - Six Months Ended June 30, |
|
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Net Revenues |
| $ | 2,610 |
| $ | 2,986 |
|
| (12.6 | )% | (5.3 | )% |
| (376 | ) | (218 | ) | — | 57 | (215 | ) | — |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Operating Income |
| $ | 917 |
| $ | 1,410 |
|
| (35.0 | )% | (23.9 | )% |
| (493 | ) | (156 | ) | — | 57 | (437 | ) | 43 |
| |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (46 | ) |
| +100 | % | +100 | % |
| 46 |
| — |
| — | — | — |
| 46 |
| |||||||
Amortization of Intangibles |
|
| (1 | ) |
| (1 | ) |
| — | % | — | % |
| — |
| — |
| — | — | — |
| — |
| |||||||
Costs associated with Swedish Match AB offer |
|
| (10 | ) |
| — |
|
| — | % | — | % |
| (10 | ) | — |
| — | — | — |
| (10 | ) | |||||||
Adjusted Operating Income |
| $ | 928 |
| $ | 1,457 |
|
| (36.3 | )% | (25.6 | )% |
| (529 | ) | (156 | ) | — | 57 | (437 | ) | 7 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Adjusted Operating Income Margin |
|
| 35.6 | % |
| 48.8 | % |
| (13.2 | )pp | (10.5 | )pp |
|
|
|
|
|
|
|
Net revenues decreased by 5.3% on an organic basis, reflecting: unfavorable volume/mix, mainly due to lower heated tobacco unit volume (primarily in Japan, reflecting the same factors as in the quarter), as well as lower cigarette volume, unfavorable cigarette mix and unfavorable device mix, partly offset by higher device volume; partially offset by a favorable pricing variance, primarily driven by higher combustible pricing, partly offset by lower device pricing.
Operating income decreased by 23.9%, excluding currency and acquisitions, mainly reflecting: unfavorable volume/mix, primarily due to lower heated tobacco unit volume, as well as lower cigarette volume, the unfavorable impact on profitability of higher device volume, and unfavorable mix for cigarettes, heated tobacco units and devices; and higher manufacturing costs (mainly due to higher logistics costs); partly offset by a favorable pricing variance; and lower marketing, administration and research costs.
Adjusted operating income decreased by 25.6% on an organic basis. Adjusted operating income margin decreased by 10.5 points on the same basis. The margin decline notably reflected the impact of the same factors as in the quarter.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume | Second-Quarter | Six Months Year-to-Date | ||||||||||
(million units) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||
Cigarettes | 10,391 | 10,968 | (5.3)% | 21,944 | 22,330 | (1.7)% | ||||||
Heated Tobacco Units | 8,186 | 9,904 | (17.3)% | 17,474 | 19,043 | (8.2)% | ||||||
Total East Asia & Australia | 18,577 | 20,872 | (11.0)% | 39,418 | 41,373 | (4.7)% |
Second-Quarter
The estimated total market in East Asia & Australia, excluding China, decreased, mainly due to:
partly offset by
PMI's total shipment volume decreased by 11.0% to 18.6 billion units, mainly due to:
Excluding the net unfavorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 2.2%.
Six Months Year-to-Date
The estimated total market in East Asia & Australia, excluding China, decreased, mainly due to:
partly offset by
PMI's total shipment volume decreased by 4.7% to 39.4 billion units, mainly due to:
Excluding the net unfavorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 0.7%.
AMERICAS REGION
Second-Quarter
Financial Summary - Quarters Ended June 30, |
|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | |||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Net Revenues |
| $ | 469 |
| $ | 430 |
|
| 9.1 | % | 8.1 | % |
| 39 |
| 4 | — | 24 | 8 | 3 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating Income |
| $ | 130 |
| $ | 112 |
|
| 16.1 | % | 12.5 | % |
| 18 |
| 4 | — | 24 | 1 | (11 | ) | |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (4 | ) |
| +100 | % | +100 | % |
| 4 |
| — | — | — | — | 4 |
| |||||||
Amortization of Intangibles |
|
| (2 | ) |
| (3 | ) |
| 33.3 | % | 33.3 | % |
| 1 |
| — | — | — | — | 1 |
| |||||||
Costs associated with Swedish Match AB offer |
|
| (2 | ) |
| — |
|
| — | % | — | % |
| (2 | ) | — | — | — | — | (2 | ) | |||||||
Adjusted Operating Income |
| $ | 134 |
| $ | 119 |
|
| 12.6 | % | 9.2 | % |
| 15 |
| 4 | — | 24 | 1 | (14 | ) | |||||||
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Adjusted Operating Income Margin |
|
| 28.6 | % |
| 27.7 | % |
| 0.9 | pp | 0.3 | pp |
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|
Net revenues increased by 8.1% on an organic basis, primarily reflecting: a favorable pricing variance, driven by combustible pricing; and favorable volume/mix, driven by higher cigarette volume, partly offset by unfavorable cigarette mix.
Operating income increased by 12.5%, excluding currency and acquisitions, mainly reflecting: a favorable pricing variance; partly offset by higher manufacturing costs (primarily due to inflationary impacts); and higher marketing, administration and research costs. Volume/mix was slightly favorable, reflecting higher cigarette volume, largely offset by unfavorable cigarette mix.
Adjusted operating income increased by 9.2% on an organic basis. Adjusted operating income margin increased by 0.3 points on the same basis.
Six Months Year-to-Date
Financial Summary - Six Months Ended June 30, |
|
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|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||||
(in millions) |
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| ||||||||||||||||||||
Net Revenues |
| $ | 893 |
| $ | 864 |
|
| 3.4 | % | 4.4 | % |
| 29 |
| (9 | ) | — | 43 | (8 | ) | 3 |
| |||||||
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Operating Income |
| $ | 251 |
| $ | 246 |
|
| 2.0 | % | 1.2 | % |
| 5 |
| 2 |
| — | 43 | (8 | ) | (32 | ) | |||||||
Asset Impairment & Exit Costs |
|
| — |
|
| (5 | ) |
| +100 | % | +100 | % |
| 5 |
| — |
| — | — | — |
| 5 |
| |||||||
Amortization of Intangibles |
|
| (4 | ) |
| (5 | ) |
| 20.0 | % | 20.0 | % |
| 1 |
| — |
| — | — | — |
| 1 |
| |||||||
Costs associated with Swedish Match AB offer |
|
| (2 | ) |
| — |
|
| — | % | — | % |
| (2 | ) | — |
| — | — | — |
| (2 | ) | |||||||
Adjusted Operating Income |
| $ | 257 |
| $ | 256 |
|
| 0.4 | % | (0.4 | )% |
| 1 |
| 2 |
| — | 43 | (8 | ) | (36 | ) | |||||||
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Adjusted Operating Income Margin |
|
| 28.8 | % |
| 29.6 | % |
| (0.8 | )pp | (1.3 | )pp |
|
|
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|
|
Net revenues increased by 4.4% on an organic basis, primarily reflecting: a favorable pricing variance, driven by combustible pricing; partly offset by unfavorable volume/mix, mainly due to unfavorable cigarette mix, partially offset by higher cigarette volume.
Operating income increased by 1.2%, excluding currency and acquisitions, mainly reflecting: a favorable pricing variance; largely offset by higher manufacturing costs (primarily due to inflationary impacts); higher marketing, administration and research costs; and unfavorable volume/mix, mainly due to the same factors as for net revenues.
Adjusted operating income decreased by 0.4% on an organic basis. Adjusted operating income margin decreased by 1.3 points on the same basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume | Second-Quarter | Six Months Year-to-Date | ||||||||||
(million units) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||
Cigarettes | 16,080 | 15,213 | 5.7% | 30,875 | 30,098 | 2.6% | ||||||
Heated Tobacco Units | 106 | 140 | (24.3)% | 214 | 245 | (12.7)% | ||||||
Total Americas | 16,186 | 15,353 | 5.4% | 31,089 | 30,343 | 2.5% |
Second-Quarter
The estimated total market in Americas, excluding the U.S., increased, primarily driven by:
partly offset by
PMI's total shipment volume increased by 5.4% to 16.2 billion units, mainly driven by:
Six Months Year-to-Date
The estimated total market in Americas, excluding the U.S., increased, primarily driven by:
partly offset by
PMI's total shipment volume increased by 2.5% to 31.1 billion units, mainly driven by:
partly offset by
WELLNESS AND HEALTHCARE
In the third quarter of 2021, PMI acquired Fertin Pharma A/S, Vectura Group plc. and OtiTopic, Inc. On March 31, 2022, PMI launched a new Wellness and Healthcare business -- Vectura Fertin Pharma -- consolidating these entities. The operating results of this business are reported in the Wellness and Healthcare segment (formerly the Other category). The business operations of PMI's Wellness and Healthcare segment are managed and evaluated separately from the geographical segments.
Second-Quarter
Financial Summary - Quarters Ended June 30, |
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|
|
|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||
(in millions) |
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Net Revenues |
| $ | 76 |
| $ | — |
| — | % | — | % |
| 76 |
| — | 76 |
| — | — | — |
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Operating Income / (Loss) |
| $ | (34 | ) | $ | — |
| — | % | — | % |
| (34 | ) | — | (24 | ) | — | — | (10 | ) | |||||||
Amortization of Intangibles |
|
| (18 | ) |
| — |
| — | % | — | % |
| (18 | ) | — | (18 | ) | — | — | — |
| |||||||
Adjusted Operating Income / (Loss) |
| $ | (16 | ) | $ | — |
| — | % | — | % |
| (16 | ) | — | (6 | ) | — | — | (10 | ) | |||||||
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Adjusted Operating Income / (Loss) Margin |
|
| (21.1 | )% |
| n/a |
| — | pp | — | pp |
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|
PMI recorded net revenues of $76 million in the Wellness and Healthcare segment, with an operating loss of $34 million, primarily reflecting the amortization of intangibles related to the acquisitions, as well as investments in research and development. Excluding the amortization of acquired intangibles, the segment recorded an adjusted operating loss of $16 million and an adjusted operating loss margin of 21.1%.
Six Months Year-to-Date
Financial Summary - Six Months Ended June 30, |
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|
| Change Fav./(Unfav.) |
| Variance Fav./(Unfav.) | ||||||||||||||||||||
| 2022 |
| 2021 |
| Total |
| Excl. Curr. & Acquis. |
| Total |
| Cur- rency |
| Acqui- sitions |
| Price |
| Vol/ Mix |
| Cost/ Other | |||||||||
(in millions) |
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| ||||||||||||||||||
Net Revenues |
| $ | 142 |
| $ | — |
| — | % | — | % |
| 142 |
| — | 142 |
| — | — | — |
| |||||||
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Operating Income / (Loss) |
| $ | (65 | ) | $ | — |
| — | % | — | % |
| (65 | ) | — | (48 | ) | — | — | (17 | ) | |||||||
Amortization of Intangibles |
|
| (37 | ) |
| — |
| — | % | — | % |
| (37 | ) | — | (37 | ) | — | — | — |
| |||||||
Adjusted Operating Income / (Loss) |
| $ | (28 | ) | $ | — |
| — | % | — | % |
| (28 | ) | — | (11 | ) | — | — | (17 | ) | |||||||
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Adjusted Operating Income / (Loss) Margin |
|
| (19.7 | ) % |
| n/a |
| — | pp | — | pp |
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|
PMI recorded net revenues of $142 million in the Wellness and Healthcare segment, with an operating loss of $65 million, primarily reflecting the amortization of intangibles related to the acquisitions, investments in research and development, and expenses related to employee retention programs. Excluding the amortization of acquired intangibles, the segment recorded an adjusted operating loss of $28 million and an adjusted operating loss margin of 19.7%.
Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is a leading international tobacco company working to deliver a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company’s current product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, vapor and oral nicotine products, which are sold in markets outside the U.S. Since 2008, PMI has invested more than USD 9 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. The U.S. Food and Drug Administration (FDA) has authorized the marketing of versions of PMI’s IQOS Platform 1 devices and consumables as Modified Risk Tobacco Products (MRTPs), finding that exposure modification orders for these products are appropriate to promote the public health. As of June 30, 2022, excluding Russia and Ukraine, PMI's smoke-free products were available for sale in 70 markets, and PMI estimates that approximately 13.2 million adults around the world had already switched to IQOS and stopped smoking. With a strong foundation and significant expertise in life sciences, in February 2021 PMI announced its ambition to expand into wellness and healthcare areas and deliver innovative products and solutions that aim to address unmet consumer and patient needs. For more information, please visit www.pmi.com and www.pmiscience.com.
Forward-Looking and Cautionary Statements
This press release contains projections of future results and other forward-looking statements. Achievement of future 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: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco use and intellectual property; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences of Russia's invasion of Ukraine; changes in adult smoker behavior; the impact of COVID-19 on PMI's business; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost, availability, and quality of tobacco and other agricultural products and raw materials, as well as components and materials for our electronic devices; and the integrity of its information systems and effectiveness of its data privacy policies. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; 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, including women or diverse candidates. Future results are also subject to the lower predictability of our reduced-risk product category's performance.
In addition, important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties related to: the possibility that expected benefits related to recent or pending acquisitions, including the proposed transaction with Swedish Match, may not materialize as expected; the proposed transaction not being timely completed, if completed at all; regulatory approvals required for the transaction not being timely obtained, if obtained at all, or being obtained subject to conditions; prior to the completion of the transaction, Swedish Match’s business experiencing disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, licensees, other business partners or governmental entities; difficulty retaining key employees; the outcome of any legal proceedings related to the proposed transaction; and the parties being unable to successfully implement integration strategies or to achieve expected synergies and operating efficiencies within the expected time-frames or at all.
Important information for U.S. Swedish Match shareholders: The offer described in this release is made for the issued and outstanding shares of Swedish Match, a company incorporated under Swedish law, and is subject to Swedish disclosure and procedural requirements, which may be different from those of the United States. The offer is made in the United States pursuant to Section 14(e) of the U.S. Securities Exchange Act of 1934, as amended, and Regulation 14E thereunder, to the extent applicable, and otherwise in compliance with the disclosure and procedural requirements of Swedish law, including with respect to withdrawal rights, the offer timetable, notices of extensions, announcements of results, settlement procedures (including as regards to the time when payment of the consideration is rendered) and waivers of conditions, which may be different from requirements or customary practices in relation to U.S. domestic tender offers. Swedish Match’s financial statements, including any included in any documents relating to the offer, have been or will be prepared in accordance with IFRS and may not be comparable to the financial statements or financial information of companies in the United States or other companies whose financial statements are prepared in accordance with U.S. GAAP. To the extent permissible under applicable law or regulations, PMI and its affiliates or its brokers and its brokers' affiliates (acting as agents for PMI or its affiliates, as applicable) may from time to time and during the pendency of the offer, and other than pursuant to the offer, directly or indirectly purchase or arrange to purchase shares of Swedish Match outside the United States, or any securities that are convertible into, exchangeable for or exercisable for such shares. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices, and information about such purchases will be disclosed by means of a press release or other means reasonably calculated to inform shareholders of Swedish Match domiciled in the U.S. (“U.S. Holders”) of such information, to the extent required by applicable laws and regulations. The receipt of cash pursuant to the offer by a U.S. Holder may be a taxable transaction for U.S. federal income tax purposes and under applicable U.S. state and local, as well as foreign and other, tax laws. Each shareholder is urged to consult an independent professional adviser regarding the tax consequences of accepting the offer.
PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI's Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2021 and the Form 10-Q for the quarter ended June 30, 2022, which will be filed in the coming days. 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.
Key Terms, Definitions and Explanatory Notes
General
Financial
Reduced-Risk Products
Note: The above IQOS user metrics reflect PMI estimates, which are based on consumer claims and sample-based statistical assessments with an average margin of error of +/-5% at a 95% Confidence Interval in key volume markets. The accuracy and reliability of IQOS user metrics may vary based on individual market maturity and availability of information.
As of December 2020, PMI heat-not-burn products and HTUs include licensed KT&G heat-not-burn products and HTUs, respectively.
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| Appendix 1 | |||||||||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||
Key Market Data | ||||||||||||||||||||||||||||||||||||||||||
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Quarters Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||
Market |
| Total Market, bio units |
| PMI Shipments, bio units |
| PMI Market Share, %(2) | ||||||||||||||||||||||||||||||||||||
|
| Total |
| Cigarette |
| HTU |
| Total |
| HTU | ||||||||||||||||||||||||||||||||
| 2022 |
| 2021 |
| % Change |
| 2022 |
| 2021 |
| % Change |
| 2022 |
| 2021 |
| % Change |
| 2022 |
| 2021 |
| % Change |
| 2022 |
| 2021 |
| pp Change |
| 2022 |
| 2021 |
| pp Change | |||||||
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Total (1) (3) |
| 602.5 | 586.6 | 2.7 |
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| 182.5 | 180.5 | 1.1 |
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| 157.7 | 156.1 | 1.0 |
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| 24.8 | 24.4 | 1.9 |
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| 27.0 | 26.6 | 0.4 |
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| 3.5 | 3.0 | 0.5 |
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European Union |
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France |
| 8.5 | 9.1 | (6.8 | ) |
| 3.8 | 4.1 | (8.2 | ) |
| 3.7 | 4.1 | (8.5 | ) |
| 0.1 | — | — |
|
| 42.8 | 43.5 | (0.7 | ) |
| 0.7 | 0.6 | 0.1 |
| ||||||||||||
Germany |
| 17.9 | 18.6 | (3.4 | ) |
| 7.0 | 7.2 | (3.2 | ) |
| 6.5 | 6.7 | (2.7 | ) |
| 0.5 | 0.5 | (9.3 | ) |
| 38.9 | 38.8 | 0.1 |
|
| 2.5 | 2.7 | (0.2 | ) | ||||||||||||
Italy |
| 18.9 | 17.9 | 5.5 |
|
| 10.9 | 9.9 | 10.6 |
|
| 7.8 | 7.7 | 2.4 |
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| 3.1 | 2.2 | 38.7 |
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| 54.0 | 53.0 | 1.0 |
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| 14.4 | 11.2 | 3.2 |
| ||||||||||||
Poland |
| 14.8 | 12.5 | 18.5 |
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| 5.6 | 4.7 | 20.1 |
|
| 4.5 | 3.9 | 15.7 |
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| 1.1 | 0.8 | 42.4 |
|
| 38.0 | 37.5 | 0.5 |
|
| 7.5 | 6.3 | 1.2 |
| ||||||||||||
Spain |
| 11.5 | 10.5 | 9.2 |
|
| 3.7 | 4.1 | (10.6 | ) |
| 3.5 | 4.0 | (13.5 | ) |
| 0.2 | 0.1 | 74.2 |
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| 30.3 | 31.1 | (0.8 | ) |
| 1.7 | 1.2 | 0.5 |
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Eastern Europe |
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Russia |
| n/a | 55.4 | — |
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| 16.8 | 17.6 | (4.5 | ) |
| 12.9 | 13.3 | (3.2 | ) |
| 3.9 | 4.3 | (8.8 | ) |
| n/a | 31.5 | — |
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| n/a | 7.3 | — |
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Middle East & Africa |
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Egypt |
| 22.5 | 22.8 | (1.1 | ) |
| 4.9 | 5.1 | (5.2 | ) |
| 4.7 | 5.1 | (8.8 | ) |
| 0.2 | — | — |
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| 23.1 | 22.4 | 0.7 |
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| 0.8 | — | 0.8 |
| ||||||||||||
Turkey |
| 31.5 | 30.7 | 2.4 |
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| 14.5 | 13.5 | 7.4 |
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| 14.5 | 13.5 | 7.4 |
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| — | — | — |
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| 46.2 | 44.1 | 2.1 |
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| — | — | — |
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South & Southeast Asia |
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Indonesia |
| 76.8 | 72.1 | 6.6 |
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| 21.4 | 20.1 | 6.2 |
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| 21.4 | 20.1 | 6.2 |
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| — | — | — |
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| 27.8 | 27.9 | (0.1 | ) |
| — | — | — |
| ||||||||||||
Philippines |
| 11.5 | 13.8 | (16.5 | ) |
| 7.1 | 8.6 | (17.7 | ) |
| 7.0 | 8.5 | (17.8 | ) |
| — | — | — |
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| 61.3 | 62.2 | (0.9 | ) |
| 0.4 | 0.3 | 0.1 |
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East Asia & Australia |
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Australia |
| 2.3 | 2.4 | (5.3 | ) |
| 0.7 | 0.7 | (2.0 | ) |
| 0.7 | 0.7 | (2.0 | ) |
| — | — | — |
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| 31.9 | 30.8 | 1.1 |
|
| — | — | — |
| ||||||||||||
Japan (3) |
| 37.4 | 38.1 | (1.7 | ) |
| 12.0 | 14.2 | (15.0 | ) |
| 5.1 | 5.5 | (8.5 | ) |
| 7.0 | 8.6 | (19.2 | ) |
| 37.3 | 35.3 | 2.0 |
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| 23.0 | 20.8 | 2.2 |
| ||||||||||||
South Korea |
| 18.7 | 18.1 | 3.5 |
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| 3.6 | 3.6 | (1.9 | ) |
| 2.4 | 2.4 | 0.1 |
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| 1.1 | 1.2 | (5.9 | ) |
| 19.0 | 20.0 | (1.0 | ) |
| 5.9 | 6.5 | (0.6 | ) | ||||||||||||
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Americas |
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Argentina |
| 7.5 | 6.8 | 10.2 |
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| 4.7 | 4.5 | 4.3 |
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| 4.7 | 4.5 | 4.3 |
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| — | — | — |
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| 63.3 | 66.8 | (3.5 | ) |
| — | — | — |
| ||||||||||||
Mexico |
| 8.0 | 8.0 | (0.4 | ) |
| 5.2 | 5.1 | 2.1 |
|
| 5.1 | 5.0 | 1.9 |
|
| — | — | — |
|
| 64.8 | 63.2 | 1.6 |
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| 0.4 | 0.3 | 0.1 |
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| ||||||||||||||||||
(1) Total market and market share estimates exclude Russia & Ukraine | ||||||||||||||||||||||||||||||||||||||||||
(2) Market share estimates are calculated using IMS data | ||||||||||||||||||||||||||||||||||||||||||
(3) Total market and market share estimates include cigarillos in Japan |
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| Appendix 2 | |||||||||||||||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||
Key Market Data | ||||||||||||||||||||||||||||||||||||||||||
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Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||
Market | Total Market, bio units | PMI Shipments, bio units | PMI Market Share, % (2) | |||||||||||||||||||||||||||||||||||||||
Total | Cigarette | HTU | Total | HTU | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | 2022 | 2021 | % Change | 2022 | 2021 | % Change | 2022 | 2021 | pp Change | 2022 | 2021 | pp Change | |||||||||||||||||||||||||
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Total (1) (3) | 1,162.2 | 1,143.4 | 1.6 |
| 355.6 | 347.7 | 2.2 |
| 305.9 | 301.7 | 1.4 |
| 49.6 | 46.1 | 7.7 |
| 26.9 | 26.3 | 0.6 |
| 3.5 | 3.0 | 0.5 |
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European Union |
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France | 16.3 | 17.3 | (5.6 | ) | 7.3 | 7.9 | (7.5 | ) | 7.2 | 7.8 | (7.7 | ) | 0.1 | 0.1 | 0.8 |
| 43.8 | 43.6 | 0.2 |
| 0.7 | 0.6 | 0.1 |
| ||||||||||||||||||
Germany | 34.0 | 36.0 | (5.4 | ) | 13.8 | 14.3 | (3.7 | ) | 12.4 | 13.2 | (6.1 | ) | 1.4 | 1.1 | 24.9 |
| 40.5 | 39.8 | 0.7 |
| 4.1 | 3.1 | 1.0 |
| ||||||||||||||||||
Italy | 35.6 | 33.8 | 5.4 |
| 20.7 | 19.5 | 5.9 |
| 14.9 | 15.1 | (1.3 | ) | 5.7 | 4.4 | 30.4 |
| 54.1 | 52.9 | 1.2 |
| 14.6 | 11.2 | 3.4 |
| ||||||||||||||||||
Poland | 27.6 | 23.2 | 18.6 |
| 10.4 | 8.6 | 20.4 |
| 8.3 | 7.3 | 14.4 |
| 2.1 | 1.4 | 52.3 |
| 37.7 | 37.1 | 0.6 |
| 7.5 | 5.9 | 1.6 |
| ||||||||||||||||||
Spain | 21.5 | 20.1 | 7.0 |
| 7.0 | 6.8 | 2.8 |
| 6.6 | 6.6 | 0.3 |
| 0.4 | 0.2 | 71.2 |
| 30.3 | 31.1 | (0.8 | ) | 1.6 | 1.2 | 0.4 |
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Eastern Europe |
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Russia | n/a | 104.5 | — |
| 30.9 | 33.3 | (7.1 | ) | 23.6 | 25.4 | (6.9 | ) | 7.3 | 7.9 | (7.6 | ) | n/a | 31.3 | — |
| n/a | 7.5 | — |
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Middle East & Africa |
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Egypt | 46.0 | 46.3 | (0.5 | ) | 10.2 | 10.0 | 2.5 |
| 9.9 | 10.0 | (0.9 | ) | 0.3 | — | — |
| 22.5 | 21.2 | 1.3 |
| 0.8 | — | 0.8 |
| ||||||||||||||||||
Turkey | 55.3 | 56.0 | (1.2 | ) | 25.5 | 24.5 | 4.3 |
| 25.5 | 24.5 | 4.3 |
| — | — | — |
| 46.2 | 43.7 | 2.5 |
| — | — | — |
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South & Southeast Asia |
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Indonesia | 152.0 | 143.1 | 6.2 |
| 42.3 | 40.0 | 5.7 |
| 42.3 | 40.0 | 5.7 |
| — | — | — |
| 27.8 | 28.0 | (0.2 | ) | — | — | — |
| ||||||||||||||||||
Philippines | 26.9 | 26.8 | 0.4 |
| 16.7 | 16.7 | (0.1 | ) | 16.6 | 16.7 | (0.2 | ) | 0.1 | 0.1 | 31.0 |
| 62.0 | 62.3 | (0.3 | ) | 0.3 | 0.3 | — |
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East Asia & Australia |
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Australia | 4.5 | 4.8 | (6.4 | ) | 1.5 | 1.5 | (3.1 | ) | 1.5 | 1.5 | (3.1 | ) | — | — | — |
| 32.9 | 31.8 | 1.1 |
| — | — | — |
| ||||||||||||||||||
Japan (3) | 71.8 | 73.7 | (2.5 | ) | 26.3 | 28.0 | (6.0 | ) | 11.2 | 11.4 | (1.8 | ) | 15.1 | 16.5 | (8.9 | ) | 37.3 | 35.7 | 1.6 |
| 23.0 | 21.2 | 1.8 |
| ||||||||||||||||||
South Korea | 35.6 | 34.9 | 1.9 |
| 6.8 | 7.0 | (2.3 | ) | 4.6 | 4.7 | (0.7 | ) | 2.2 | 2.3 | (5.6 | ) | 19.3 | 20.0 | (0.7 | ) | 6.2 | 6.6 | (0.4 | ) | ||||||||||||||||||
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Americas |
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Argentina | 15.2 | 14.5 | 4.6 |
| 9.6 | 9.8 | (1.8 | ) | 9.6 | 9.8 | (1.8 | ) | — | — | — |
| 63.4 | 67.5 | (4.1 | ) | — | — | — |
| ||||||||||||||||||
Mexico | 14.5 | 14.7 | (1.9 | ) | 9.2 | 9.1 | 1.6 |
| 9.2 | 9.1 | 1.4 |
| 0.1 | — | — |
| 63.9 | 61.7 | 2.2 |
| 0.4 | 0.3 | 0.1 |
| ||||||||||||||||||
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| ||||||||||||||||||||||||
(1) Total market and market share estimates excludes Russia & Ukraine | ||||||||||||||||||||||||||||||||||||||||||
(2) Market share estimates are calculated using IMS data | ||||||||||||||||||||||||||||||||||||||||||
(3) Total market and market share includes cigarillos in Japan |
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|
| Appendix 3 | ||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||
PMI Shipment Volume Adjusted for the Impact of Russia and Ukraine | ||||||||||||||
(in million units) / (Unaudited) | ||||||||||||||
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|
| Year Ended December 31, | ||||
Quarters Ended June 30, |
|
|
| Six Months Ended June 30, |
| |||||||||
2022 |
| 2021 |
| % Change |
|
|
| 2022 |
| 2021 |
| % Change |
| 2021 |
|
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| ||||
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|
|
| Cigarettes |
|
|
|
|
|
| ||||
157,678 | 156,138 | 1.0% |
| Shipment Volume |
| 305,916 | 301,650 | 1.4% |
| 624,875 | ||||
12,871 | 13,294 |
|
| Russia |
| 23,643 | 25,395 |
|
| 52,499 | ||||
1,331 | 2,799 |
|
| Ukraine |
| 3,542 | 5,157 |
|
| 10,669 | ||||
143,477 | 140,046 | 2.4% |
| Pro Forma Shipment Volume |
| 278,731 | 271,098 | 2.8% |
| 561,707 | ||||
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| ||||
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| Heated Tobacco Units |
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| ||||
24,821 | 24,356 | 1.9% |
| Shipment Volume |
| 49,640 | 46,090 | 7.7% |
| 94,976 | ||||
3,907 | 4,283 |
|
| Russia |
| 7,267 | 7,864 |
|
| 16,309 | ||||
814 | 1,352 |
|
| Ukraine |
| 2,197 | 2,546 |
|
| 5,168 | ||||
20,100 | 18,721 | 7.4% |
| Pro Forma Shipment Volume |
| 40,176 | 35,680 | 12.6% |
| 73,499 | ||||
|
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| ||||
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|
|
| Cigarettes & HTU |
|
|
|
|
|
| ||||
182,499 | 180,494 | 1.1% |
| Shipment Volume |
| 355,556 | 347,740 | 2.2% |
| 719,851 | ||||
16,778 | 17,577 |
|
| Russia |
| 30,909 | 33,259 |
|
| 68,807 | ||||
2,145 | 4,151 |
|
| Ukraine |
| 5,739 | 7,703 |
|
| 15,838 | ||||
163,577 | 158,767 | 3.0% |
| Pro Forma Shipment Volume |
| 318,907 | 306,778 | 4.0% |
| 635,206 |
|
|
|
|
|
|
|
| Appendix 4 | ||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||
Eastern Europe Shipment Volume Adjusted for the Impact of Russia and Ukraine | ||||||||||||
(in million units) / (Unaudited) | ||||||||||||
|
|
|
|
|
|
|
|
| ||||
Quarters Ended June 30, |
|
|
| Six Months Ended June 30, | ||||||||
2022 | 2021 | % Change |
|
|
| 2022 | 2021 | % Change | ||||
|
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|
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| ||||
|
|
|
| Cigarettes |
|
|
|
| ||||
20,633 | 22,785 | (9.4)% |
| Shipment Volume |
| 39,147 | 42,751 | (8.4)% | ||||
12,871 | 13,294 |
|
| Russia |
| 23,643 | 25,395 |
| ||||
1,331 | 2,799 |
|
| Ukraine |
| 3,542 | 5,157 |
| ||||
6,432 | 6,693 | (3.9)% |
| Pro Forma Shipment Volume |
| 11,962 | 12,199 | (1.9)% | ||||
|
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|
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| ||||
|
|
|
| Heated Tobacco Units |
|
|
|
| ||||
5,922 | 6,840 | (13.4)% |
| Shipment Volume |
| 11,788 | 12,475 | (5.5)% | ||||
3,907 | 4,283 |
|
| Russia |
| 7,267 | 7,864 |
| ||||
814 | 1,352 |
|
| Ukraine |
| 2,197 | 2,546 |
| ||||
1,201 | 1,205 | (0.3)% |
| Pro Forma Shipment Volume |
| 2,324 | 2,065 | 12.5% | ||||
|
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|
|
|
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|
|
| ||||
|
|
|
| Cigarettes & HTU |
|
|
|
| ||||
26,555 | 29,625 | (10.4)% |
| Shipment Volume |
| 50,935 | 55,226 | (7.8)% | ||||
16,778 | 17,577 |
|
| Russia |
| 30,909 | 33,259 |
| ||||
2,145 | 4,151 |
|
| Ukraine |
| 5,739 | 7,703 |
| ||||
7,633 | 7,898 | (3.4)% |
| Pro Forma Shipment Volume |
| 14,286 | 14,264 | 0.2% |
|
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|
|
|
|
| Schedule 1 | ||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||
Diluted Earnings Per Share (EPS) | ||||||||||||||||||||||||
($ in millions, except per share data) / (Unaudited) | ||||||||||||||||||||||||
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| ||||||||
Quarters Ended |
| Diluted EPS |
| Six Months Ended | ||||||||||||||||||||
June 30, |
|
| June 30, | |||||||||||||||||||||
|
| $ | 1.43 |
|
|
|
| 2022 Diluted Earnings Per Share (1) |
|
|
| $ | 2.93 |
|
|
| ||||||||
|
| $ | 1.39 |
|
|
|
| 2021 Diluted Earnings Per Share (1) |
|
|
| $ | 2.93 |
|
|
| ||||||||
|
| $ | 0.04 |
|
|
|
| Change |
|
|
| $ | — |
|
|
| ||||||||
|
|
| 2.9 | % |
|
|
| % Change |
|
|
|
| — | % |
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| ||||||||
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| ||||||||||||
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|
|
| Reconciliation: |
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| ||||||||||||
|
| $ | 1.39 |
|
|
|
| 2021 Diluted Earnings Per Share (1) |
|
|
| $ | 2.93 |
|
|
| ||||||||
|
|
| 0.04 |
|
|
|
| 2021 Asset impairment and exit costs |
|
|
|
| 0.07 |
|
|
| ||||||||
|
|
| 0.01 |
|
|
|
| 2021 Amortization of intangibles |
|
|
|
| 0.02 |
|
|
| ||||||||
|
|
| 0.14 |
|
|
|
| 2021 Saudi Arabia customs assessments |
|
|
|
| 0.14 |
|
|
| ||||||||
|
|
| — |
|
|
|
| 2022 Asset impairment and exit costs |
|
|
|
| — |
|
|
| ||||||||
|
|
| (0.02 | ) |
|
|
| 2022 Amortization of intangibles |
|
|
|
| (0.04 | ) |
|
| ||||||||
|
|
| (0.02 | ) |
|
|
| 2022 Costs associated with Swedish Match AB offer |
|
|
|
| (0.02 | ) |
|
| ||||||||
|
|
| (0.04 | ) |
|
|
| 2022 Charges related to the war in Ukraine |
|
|
|
| (0.07 | ) |
|
| ||||||||
|
|
| — |
|
|
|
| 2022 Fair value adjustment for equity security investments |
|
|
|
| (0.03 | ) |
|
| ||||||||
|
|
| 0.03 |
|
|
|
| 2022 Tax Items |
|
|
|
| 0.03 |
|
|
| ||||||||
|
|
| (0.16 | ) |
|
|
| Currency |
|
|
|
| (0.39 | ) |
|
| ||||||||
|
|
| 0.01 |
|
|
|
| Interest |
|
|
|
| 0.02 |
|
|
| ||||||||
|
|
| (0.01 | ) |
|
|
| Change in tax rate |
|
|
|
| 0.02 |
|
|
| ||||||||
|
|
| 0.06 |
|
|
|
| Operations (2) |
|
|
|
| 0.25 |
|
|
| ||||||||
|
| $ | 1.43 |
|
|
|
| 2022 Diluted Earnings Per Share (1) |
|
|
| $ | 2.93 |
|
|
| ||||||||
(1) Basic and diluted EPS were calculated using the following (in millions): | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Quarters Ended |
|
|
| Six Months Ended | ||||||||||||||||||||
June 30, |
|
|
| June 30, | ||||||||||||||||||||
| 2022 |
|
| 2021 |
|
|
|
| 2022 |
|
| 2021 | ||||||||||||
$ | 2,233 |
| $ | 2,172 |
| Net Earnings attributable to PMI |
| $ | 4,564 |
| $ | 4,590 | ||||||||||||
| 7 |
|
| 6 |
| Less: Distributed and undistributed earnings attributable to share-based payment awards |
|
| 13 |
|
| 14 | ||||||||||||
$ | 2,226 |
| $ | 2,166 |
| Net Earnings for basic and diluted EPS |
| $ | 4,551 |
| $ | 4,576 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| 1,551 |
|
| 1,558 |
| Weighted-average shares for basic EPS |
|
| 1,550 |
|
| 1,558 | ||||||||||||
| 1 |
|
| 2 |
| Plus Contingently Issuable Performance Stock Units |
|
| 2 |
|
| 2 | ||||||||||||
| 1,552 |
|
| 1,560 |
| Weighted-average shares for diluted EPS |
|
| 1,552 |
|
| 1,560 | ||||||||||||
(2) Includes the impact of shares outstanding and share-based payments |
|
|
|
|
|
|
|
| Schedule 2 | ||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||
Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency, | ||||||||||
and Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS, excluding Currency | ||||||||||
(Unaudited) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended June 30, |
|
|
| Six Months Ended June 30, |
|
| ||||
2022 | 2021 | % Change |
|
|
| 2022 | 2021 | % Change |
|
|
$ 1.43 | $ 1.39 | 2.9% |
| Reported Diluted EPS |
| $ 2.93 | $ 2.93 | —% |
|
|
(0.16) |
|
|
| Less: Currency |
| (0.39) |
|
|
|
|
$ 1.59 | $ 1.39 | 14.4% |
| Reported Diluted EPS, excluding Currency |
| $ 3.32 | $ 2.93 | 13.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended June 30, |
|
|
| Six Months Ended June 30, |
| Year Ended | ||||
2022 | 2021 | % Change |
|
|
| 2022 | 2021 | % Change |
| 2021 |
$ 1.43 | $ 1.39 | 2.9% |
| Reported Diluted EPS |
| $ 2.93 | $ 2.93 | —% |
| $ 5.83 |
— | 0.04 |
|
| Asset impairment and exit costs |
| — | 0.07 |
|
| 0.12 |
0.02 | 0.01 |
|
| Amortization of intangibles |
| 0.04 | 0.02 |
|
| 0.05 |
— | 0.14 |
|
| Saudi Arabia customs assessments |
| — | 0.14 |
|
| 0.14 |
— | — |
|
| Equity investee ownership dilution |
| — | — |
|
| (0.04) |
— | — |
|
| Asset acquisition cost |
| — | — |
|
| 0.03 |
0.02 | — |
|
| Costs associated with Swedish Match AB offer |
| 0.02 | — |
|
| — |
0.04 | — |
|
| Charges related to the war in Ukraine |
| 0.07 | — |
|
| — |
— | — |
|
| Fair value adjustment for equity security investments |
| 0.03 | — |
|
| — |
(0.03) | — |
|
| Tax items |
| (0.03) | — |
|
| — |
$ 1.48 | $ 1.58 | (6.3)% |
| Adjusted Diluted EPS |
| $ 3.06 | $ 3.16 | (3.2)% |
| $ 6.13 |
(0.16) |
|
|
| Less: Currency |
| (0.39) |
|
|
|
|
$ 1.64 | $ 1.58 | 3.8% |
| Adjusted Diluted EPS, excluding Currency |
| $ 3.45 | $ 3.16 | 9.2% |
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| Schedule 3 | |||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions | ||||||||||||||||||
($ in millions) / (Unaudited) | ||||||||||||||||||
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| ||||||
Net Revenues |
| Currency |
| Net Revenues excluding Currency |
| Acqui- sitions |
| Net Revenues excluding Currency & Acquisitions |
| Quarters Ended June 30, |
| Net Revenues |
| Total |
| Excluding Currency |
| Excluding Currency & Acquisitions |
2022 |
| Combustible Products |
| 2021 |
| % Change | ||||||||||||
$ 1,954 | $ (200) | $ 2,154 | $ (1) | $ 2,154 |
| European Union |
| $ 2,162 |
| (9.6)% | (0.4)% | (0.4)% | ||||||
585 | 15 | 570 | — | 570 |
| Eastern Europe |
| 555 |
| 5.5% | 2.8% | 2.8% | ||||||
933 | (41) | 974 | — | 974 |
| Middle East & Africa |
| 527 | (1) | 76.9% | 84.7% | 84.7% | ||||||
1,029 | (39) | 1,068 | — | 1,068 |
| South & Southeast Asia |
| 1,045 |
| (1.5)% | 2.3% | 2.3% | ||||||
528 | (42) | 570 | — | 570 |
| East Asia & Australia |
| 611 |
| (13.6)% | (6.8)% | (6.8)% | ||||||
460 | 4 | 456 | — | 456 |
| Americas |
| 418 |
| 10.0% | 9.0% | 9.0% | ||||||
$ 5,489 | $ (302) | $ 5,791 | $ (1) | $ 5,792 |
| Total Combustible |
| $ 5,318 |
| 3.2% | 8.9% | 8.9% | ||||||
2022 |
| Reduced-Risk Products |
| 2021 |
| % Change | ||||||||||||
$ 1,189 | $ (127) | $ 1,316 | $ 4 | $ 1,313 |
| European Union |
| $ 987 |
| 20.5% | 33.4% | 33.0% | ||||||
313 | 3 | 310 | — | 310 |
| Eastern Europe |
| 340 |
| (8.0)% | (8.9)% | (8.9)% | ||||||
73 | (4) | 77 | — | 77 |
| Middle East & Africa |
| 33 |
| +100% |
| +100% |
| +100% | ||||
5 | — | 5 | — | 5 |
| South & Southeast Asia |
| 1 |
| +100% |
| +100% |
| +100% | ||||
678 | (70) | 748 | — | 748 |
| East Asia & Australia |
| 903 |
| (24.9)% | (17.1)% | (17.1)% | ||||||
9 | — | 9 | — | 9 |
| Americas |
| 12 |
| (24.4)% | (22.9)% | (22.9)% | ||||||
$ 2,267 | $ (199) | $ 2,466 | $ 4 | $ 2,462 |
| Total RRPs |
| $ 2,276 |
| (0.4)% | 8.3% | 8.2% | ||||||
2022 |
| Wellness and Healthcare |
| 2021 |
| % Change | ||||||||||||
$ 76 | $ — | $76 | $76 | $ — |
| Wellness and Healthcare |
| $ — |
| — % | — % | — % | ||||||
2022 |
| PMI |
| 2021 |
| % Change | ||||||||||||
$ 3,143 | $ (327) | $ 3,470 | $ 3 | $ 3,467 |
| European Union |
| $ 3,149 |
| (0.2)% | 10.2% | 10.1% | ||||||
898 | 18 | 880 | — | 880 |
| Eastern Europe |
| 895 |
| 0.3% | (1.7)% | (1.7)% | ||||||
1,006 | (45) | 1,051 | — | 1,051 |
| Middle East & Africa |
| 560 | (1) | 79.6% | 87.7% | 87.7% | ||||||
1,034 | (39) | 1,073 | — | 1,073 |
| South & Southeast Asia |
| 1,046 |
| (1.1)% | 2.6% | 2.6% | ||||||
1,206 | (112) | 1,318 | — | 1,318 |
| East Asia & Australia |
| 1,514 |
| (20.3)% | (12.9)% | (12.9)% | ||||||
469 | 4 | 465 | — | 465 |
| Americas |
| 430 |
| 9.1% | 8.1% | 8.1% | ||||||
76 | — | 76 | 76 | — |
| Wellness and Healthcare |
| — |
| —% | —% | —% | ||||||
$ 7,832 | $ (501) | $ 8,333 | $79 | $ 8,254 |
| Total PMI |
| $ 7,594 |
| 3.1% | 9.7% | 8.7% | ||||||
(1) Includes a reduction in net revenues of $246 million related to the Saudi Arabia customs assessments | ||||||||||||||||||
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million |
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| Schedule 4 | |||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions | ||||||||||||||||||
($ in millions) / (Unaudited) | ||||||||||||||||||
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| ||||||||
Net Revenues | Currency | Net Revenues excluding Currency | Acquisitions | Net Revenues excluding Currency & Acquisitions | Six Months Ended June 30, | Net Revenues |
| Total | Excluding Currency | Excluding Currency & Acquisitions | ||||||||
2022 | Combustible Products | 2021 |
| % Change | ||||||||||||||
$ 3,763 | $ (324) | $ 4,087 | $ — | $ 4,087 | European Union | $ 4,113 |
| (8.5)% | (0.6)% | (0.6)% | ||||||||
1,042 | (31) | 1,073 | — | 1,073 | Eastern Europe | 1,047 |
| (0.5)% | 2.5% | 2.5% | ||||||||
1,862 | (189) | 2,051 | — | 2,051 | Middle East & Africa | 1,307 | (1) | 42.4% | 56.9% | 56.9% | ||||||||
2,147 | (83) | 2,230 | — | 2,230 | South & Southeast Asia | 2,216 |
| (3.1)% | 0.6% | 0.6% | ||||||||
1,129 | (81) | 1,210 | — | 1,210 | East Asia & Australia | 1,259 |
| (10.3)% | (3.9)% | (3.9)% | ||||||||
876 | (8) | 885 | — | 885 | Americas | 840 |
| 4.3% | 5.3% | 5.3% | ||||||||
$ 10,819 | $ (717) | $ 11,537 | $ — | $ 11,537 | Total Combustible | $ 10,781 |
| 0.4% | 7.0% | 7.0% | ||||||||
2022 | Reduced-Risk Products | 2021 |
| % Change | ||||||||||||||
$ 2,392 | $ (209) | $ 2,601 | $ 7 | $ 2,593 | European Union | $ 1,945 |
| 22.9% | 33.7% | 33.3% | ||||||||
582 | (23) | 605 | — | 605 | Eastern Europe | 644 |
| (9.6)% | (6.1)% | (6.1)% | ||||||||
135 | (5) | 140 | — | 140 | Middle East & Africa | 54 |
| +100% |
| +100% |
| +100% | ||||||
10 | — | 10 | — | 10 | South & Southeast Asia | 3 |
| +100% |
| +100% |
| +100% | ||||||
1,481 | (137) | 1,618 | — | 1,618 | East Asia & Australia | 1,727 |
| (14.2)% | (6.3)% | (6.3)% | ||||||||
17 | (1) | 17 | — | 17 | Americas | 24 |
| (29.8)% | (27.7)% | (27.7)% | ||||||||
$ 4,617 | $ (374) | $ 4,991 | $ 7 | $ 4,983 | Total RRPs | $ 4,398 |
| 5.0% | 13.5 % | 13.3 % | ||||||||
2022 | Wellness and Healthcare | 2021 |
| % Change | ||||||||||||||
$ 142 | $ — | $142 | $142 | $ — | Wellness and Healthcare | $ — |
| —% | —% | —% | ||||||||
2022 | PMI | 2021 |
| % Change | ||||||||||||||
$ 6,155 | $ (533) | $ 6,688 | $ 7 | $ 6,681 | European Union | $ 6,058 |
| 1.6% | 10.4% | 10.3% | ||||||||
1,624 | (54) | 1,678 | — | 1,678 | Eastern Europe | 1,691 |
| (4.0)% | (0.8)% | (0.8)% | ||||||||
1,997 | (194) | 2,191 | — | 2,191 | Middle East & Africa | 1,361 | (1) | 46.7% | 61.0% | 61.0% | ||||||||
2,157 | (83) | 2,240 | — | 2,240 | South & Southeast Asia | 2,219 |
| (2.8)% | 0.9% | 0.9% | ||||||||
2,610 | (218) | 2,828 | — | 2,828 | East Asia & Australia | 2,986 |
| (12.6)% | (5.3)% | (5.3)% | ||||||||
893 | (9) | 902 | — | 902 | Americas | 864 |
| 3.4% | 4.4% | 4.4% | ||||||||
142 | — | 142 | 142 | — | Wellness and Healthcare | — |
| —% | —% | —% | ||||||||
$ 15,578 | $ (1,091) | $ 16,669 | $149 | $ 16,520 | Total PMI | $ 15,179 |
| 2.6% | 9.8% | 8.8% | ||||||||
(1) Includes a reduction in net revenues of $246 million related to the Saudi Arabia customs assessments | ||||||||||||||||||
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million |
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| Schedule 5 | |
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||
Reconciliation of Non-GAAP Measures | |||||||||||||||||
Reconciliation of Net Revenues to Adjusted Net Revenues, excluding Currency and Acquisitions | |||||||||||||||||
($ in millions) / (Unaudited) | |||||||||||||||||
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|
|
Net Revenues | Special Items | Adjusted Net Revenues | Currency | Adjusted Net Revenues excluding Currency | Acqui- sitions | Adjusted Net Revenues excluding Currency & Acqui- sitions |
|
|
| Net Revenues | Special Items | Adjusted Net Revenues |
| Total | Excluding Currency | Excluding Currency & Acqui- sitions | |
2022 | Quarters Ended June 30, |
| 2021 |
| % Change | ||||||||||||
$ 3,143 | $ — | $ 3,143 | $ (327) | $ 3,470 | $ 3 | $ 3,467 |
| European Union |
| $ 3,149 | $ — |
| $ 3,149 |
| (0.2)% | 10.2% | 10.1% |
898 | — | 898 | 18 | 880 | — | 880 |
| Eastern Europe |
| 895 | — |
| 895 |
| 0.3% | (1.7)% | (1.7)% |
1,006 | — | 1,006 | (45) | 1,051 | — | 1,051 |
| Middle East & Africa |
| 560 | (246) | (1) | 806 |
| 24.8% | 30.4% | 30.4% |
1,034 | — | 1,034 | (39) | 1,073 | — | 1,073 |
| South & Southeast Asia |
| 1,046 | — |
| 1,046 |
| (1.1)% | 2.6% | 2.6% |
1,206 | — | 1,206 | (112) | 1,318 | — | 1,318 |
| East Asia & Australia |
| 1,514 | — |
| 1,514 |
| (20.3)% | (12.9)% | (12.9)% |
469 | — | 469 | 4 | 465 | — | 465 |
| Americas |
| 430 | — |
| 430 |
| 9.1% | 8.1% | 8.1% |
76 | — | 76 | — | 76 | 76 | — |
| Wellness and Healthcare |
| — | — |
| — |
| —% | —% | —% |
$ 7,832 | $ — | $ 7,832 | $ (501) | $ 8,333 | $ 79 | $ 8,254 |
| Total PMI |
| $ 7,594 | $ (246) |
| $ 7,840 |
| (0.1)% | 6.3% | 5.3% |
2022 |
| Six Months Ended June 30, |
| 2021 |
| % Change | |||||||||||
$ 6,155 | $ — | $ 6,155 | $ (533) | $ 6,688 | $ 7 | $ 6,681 |
| European Union |
| $ 6,058 | $ — |
| $ 6,058 |
| 1.6% | 10.4% | 10.3% |
1,624 | — | 1,624 | (54) | 1,678 | — | 1,678 |
| Eastern Europe |
| 1,691 | — |
| 1,691 |
| (4.0)% | (0.8)% | (0.8)% |
1,997 | — | 1,997 | (194) | 2,191 | — | 2,191 |
| Middle East & Africa |
| 1,361 | (246) | (1) | 1,607 |
| 24.3% | 36.3% | 36.3% |
2,157 | — | 2,157 | (83) | 2,240 | — | 2,240 |
| South & Southeast Asia |
| 2,219 | — |
| 2,219 |
| (2.8)% | 0.9% | 0.9% |
2,610 | — | 2,610 | (218) | 2,828 | — | 2,828 |
| East Asia & Australia |
| 2,986 | — |
| 2,986 |
| (12.6)% | (5.3)% | (5.3)% |
893 | — | 893 | (9) | 902 | — | 902 |
| Americas |
| 864 | — |
| 864 |
| 3.4% | 4.4% | 4.4% |
142 | — | 142 | — | 142 | 142 | — |
| Wellness and Healthcare |
| — | — |
| — |
| —% | —% | —% |
$ 15,578 | $ — | $ 15,578 | $ (1,091) | $ 16,669 | $ 149 | $ 16,520 |
| Total PMI |
| $ 15,179 | $ (246) |
| $ 15,425 |
| 1.0% | 8.1% | 7.1% |
(1) Represents the Saudi Arabia customs assessments |
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| Schedule 6 | |
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||
Adjustments of Operating Income for the Impact of Currency and Acquisitions | ||||||||||||
($ in millions) / (Unaudited) | ||||||||||||
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|
|
Operating Income | Currency | Operating Income excluding Currency | Acqui- sitions | Operating Income excluding Currency & Acquisitions |
|
|
| Operating Income |
| Total | Excluding Currency | Excluding Currency & Acquisitions |
2022 |
| Quarters Ended June 30, |
| 2021 |
| % Change | ||||||
$ 1,519 | $ (245) | $ 1,764 | $ — | $ 1,764 |
| European Union |
| $ 1,641 |
| (7.4)% | 7.5% | 7.5% |
291 | 56 | 235 | — | 235 |
| Eastern Europe |
| 314 |
| (7.3)% | (25.2)% | (25.2)% |
498 | (4) | 502 | — | 502 |
| Middle East & Africa |
| 16 |
| +100% | +100% | +100% |
306 | (22) | 328 | — | 328 |
| South & Southeast Asia |
| 331 |
| (7.6)% | (0.9)% | (0.9)% |
346 | (88) | 434 | — | 434 |
| East Asia & Australia |
| 715 |
| (51.6)% | (39.3)% | (39.3)% |
130 | 4 | 126 | — | 126 |
| Americas |
| 112 |
| 16.1% | 12.5% | 12.5% |
(34) | — | (34) | (24) | (10) |
| Wellness and Healthcare |
| — |
| —% | —% | —% |
$ 3,056 | $ (299) | $ 3,355 | $ (24) | $ 3,379 |
| Total PMI |
| $ 3,129 |
| (2.3)% | 7.2% | 8.0% |
2022 |
| Six Months Ended June 30, |
| 2021 |
| % Change | ||||||
$ 3,046 | $ (390) | $ 3,436 | $ (2) | $ 3,438 |
| European Union |
| $ 3,131 |
| (2.7)% | 9.7% | 9.8% |
435 | (4) | 439 | — | 439 |
| Eastern Europe |
| 575 |
| (24.3)% | (23.7)% | (23.7)% |
1,019 | (119) | 1,138 | — | 1,138 |
| Middle East & Africa |
| 351 |
| +100% | +100% | +100% |
751 | (47) | 798 | — | 798 |
| South & Southeast Asia |
| 860 |
| (12.7)% | (7.2)% | (7.2)% |
917 | (156) | 1,073 | — | 1,073 |
| East Asia & Australia |
| 1,410 |
| (35.0)% | (23.9)% | (23.9)% |
251 | 2 | 249 | — | 249 |
| Americas |
| 246 |
| 2.0% | 1.2% | 1.2% |
(65) | — | (65) | (48) | (17) |
| Wellness and Healthcare |
| — |
| —% | —% | —% |
$ 6,354 | $ (714) | $ 7,068 | $ (50) | $ 7,118 |
| Total PMI |
| $ 6,573 |
| (3.3)% | 7.5% | 8.3% |
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| Schedule 7 | |
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||
Reconciliation of Operating Income to Adjusted Operating Income, excluding Currency and Acquisitions | ||||||||||||||||
($ in millions) / (Unaudited) | ||||||||||||||||
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Operating Income | Asset Impairment & Exit Costs and Others | Adjusted Operating Income | Currency | Adjusted Operating Income excluding Currency | Acqui- sitions | Adjusted Operating Income excluding Currency & Acqui- sitions |
|
|
| Operating Income | Asset Impairment & Exit Costs and Others | Adjusted Operating Income |
| Total | Excluding Currency | Excluding Currency & Acqui- sitions |
2022 |
| Quarters Ended June 30, |
| 2021 |
| % Change | ||||||||||
$ 1,519 | $ (32) | $ 1,551 | $ (245) | $ 1,796 | $ — | $ 1,796 |
| European Union |
| $ 1,641 | $ (44) | $ 1,685 |
| (8.0)% | 6.6 % | 6.6% |
291 | (86) | 377 | 56 | 321 | — | 321 |
| Eastern Europe |
| 314 | (8) | 322 |
| 17.1% | (0.3) % | (0.3)% |
498 | (8) | 506 | (4) | 510 | — | 510 |
| Middle East & Africa |
| 16 | (256) | 272 |
| 86.0% | 87.5 % | 87.5% |
306 | (10) | 316 | (22) | 338 | — | 338 |
| South & Southeast Asia |
| 331 | (14) | 345 |
| (8.4)% | (2.0) % | (2.0)% |
346 | (10) | 356 | (88) | 444 | — | 444 |
| East Asia & Australia |
| 715 | (15) | 730 |
| (51.2)% | (39.2) % | (39.2)% |
130 | (4) | 134 | 4 | 130 | — | 130 |
| Americas |
| 112 | (7) | 119 |
| 12.6% | 9.2 % | 9.2% |
(34) | (18) | (16) | — | (16) | (6) | (10) |
| Wellness and Healthcare |
| — | — | — |
| —% | — % | —% |
$ 3,056 | $ (168) | $ 3,224 | $ (299) | $ 3,523 | $ (6) | $ 3,529 |
| Total PMI |
| $ 3,129 | $ (344) | $ 3,473 |
| (7.2)% | 1.4 % | 1.6% |
2022 |
| Six Months Ended June 30, |
| 2021 |
| % Change | ||||||||||
$ 3,046 | $ (41) | $ 3,087 | $ (390) | $ 3,477 | $ (2) | $ 3,479 |
| European Union |
| $ 3,131 | $ (62) | $ 3,193 |
| (3.3)% | 8.9% | 8.9% |
435 | (129) | 564 | (4) | 568 | — | 568 |
| Eastern Europe |
| 575 | (10) | 585 |
| (3.6)% | (2.9)% | (2.9)% |
1,019 | (10) | 1,029 | (119) | 1,148 | — | 1,148 |
| Middle East & Africa |
| 351 | (260) | 611 |
| 68.4% | 87.9% | 87.9% |
751 | (14) | 765 | (47) | 812 | — | 812 |
| South & Southeast Asia |
| 860 | (21) | 881 |
| (13.2)% | (7.8)% | (7.8)% |
917 | (11) | 928 | (156) | 1,084 | — | 1,084 |
| East Asia & Australia |
| 1,410 | (47) | 1,457 |
| (36.3)% | (25.6)% | (25.6)% |
251 | (6) | 257 | 2 | 255 | — | 255 |
| Americas |
| 246 | (10) | 256 |
| 0.4% | (0.4)% | (0.4)% |
(65) | (37) | (28) | — | (28) | (11) | (17) |
| Wellness and Healthcare |
| — | — | — |
| —% | —% | —% |
$ 6,354 | $ (248) | $ 6,602 | $ (714) | $ 7,316 | $ (13) | $ 7,329 |
| Total PMI |
| $ 6,573 | $ (410) | $ 6,983 |
| (5.5)% | 4.8% | 5.0% |
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| Schedule 8 | |
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||||
Reconciliation of Adjusted Operating Income Margin, excluding Currency and Acquisitions | ||||||||||||||||||||
($ in millions) / (Unaudited) | ||||||||||||||||||||
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Adjusted Operating Income (1) | Adjusted Net Revenues (2) | Adjusted Operating Income Margin |
| Adjusted Operating Income excluding Currency (1) | Adjusted Net Revenues excluding Currency (2) | Adjusted Operating Income Margin excluding Currency |
| Adjusted Operating Income excluding Currency & Acqui- sitions (1) | Adjusted Net Revenues excluding Currency & Acqui- sitions (2) | Adjusted Operating Income Margin excluding Currency & Acqui- sitions |
|
|
| Adjusted Operating Income (1) | Adjusted Net Revenues (2) | Adjusted Operating Income Margin |
| Adjusted Operating Income Margin | Adjusted Operating Income Margin excluding Currency | Adjusted Operating Income Margin excluding Currency & Acqui- sitions |
2022 | Quarters Ended June 30, | 2021 |
| % Points Change | ||||||||||||||||
$ 1,551 | $ 3,143 | 49.3% |
| $ 1,796 | $ 3,470 | 51.8% |
| $ 1,796 | $ 3,467 | 51.8% |
| European Union |
| $ 1,685 | $ 3,149 | 53.5% |
| (4.2) | (1.7) | (1.7) |
377 | 898 | 42.0% |
| 321 | 880 | 36.5% |
| 321 | 880 | 36.5% |
| Eastern Europe |
| 322 | 895 | 36.0% |
| 6.0 | 0.5 | 0.5 |
506 | 1,006 | 50.3% |
| 510 | 1,051 | 48.5% |
| 510 | 1,051 | 48.5% |
| Middle East & Africa |
| 272 | 806 | 33.7% |
| 16.6 | 14.8 | 14.8 |
316 | 1,034 | 30.6% |
| 338 | 1,073 | 31.5% |
| 338 | 1,073 | 31.5% |
| South & Southeast Asia |
| 345 | 1,046 | 33.0% |
| (2.4) | (1.5) | (1.5) |
356 | 1,206 | 29.5% |
| 444 | 1,318 | 33.7% |
| 444 | 1,318 | 33.7% |
| East Asia & Australia |
| 730 | 1,514 | 48.2% |
| (18.7) | (14.5) | (14.5) |
134 | 469 | 28.6% |
| 130 | 465 | 28.0% |
| 130 | 465 | 28.0% |
| Americas |
| 119 | 430 | 27.7% |
| 0.9 | 0.3 | 0.3 |
$ (16) | $ 76 | (21.1)% |
| $ (16) | $ 76 | (21.1)% |
| $ (10) | $ — | —% |
| Wellness and Healthcare |
| $ — | $ — | —% |
| — | — | — |
$ 3,224 | $ 7,832 | 41.2% |
| $ 3,523 | $ 8,333 | 42.3% |
| $ 3,529 | $ 8,254 | 42.8% |
| Total PMI |
| $ 3,473 | $ 7,840 | 44.3% |
| (3.1) | (2.0) | (1.5) |
2022 |
| Six Months Ended June 30, |
| 2021 |
| % Points Change | ||||||||||||||
$ 3,087 | $ 6,155 | 50.2% |
| $ 3,477 | $ 6,688 | 52.0% |
| $ 3,479 | $ 6,681 | 52.1% |
| European Union |
| $ 3,193 | $ 6,058 | 52.7% |
| (2.5) | (0.7) | (0.6) |
564 | 1,624 | 34.7% |
| 568 | 1,678 | 33.8% |
| 568 | 1,678 | 33.8% |
| Eastern Europe |
| 585 | 1,691 | 34.6% |
| 0.1 | (0.8) | (0.8) |
1,029 | 1,997 | 51.5% |
| 1,148 | 2,191 | 52.4% |
| 1,148 | 2,191 | 52.4% |
| Middle East & Africa |
| 611 | 1,607 | 38.0% |
| 13.5 | 14.4 | 14.4 |
765 | 2,157 | 35.5% |
| 812 | 2,240 | 36.3% |
| 812 | 2,240 | 36.3% |
| South & Southeast Asia |
| 881 | 2,219 | 39.7% |
| (4.2) | (3.4) | (3.4) |
928 | 2,610 | 35.6% |
| 1,084 | 2,828 | 38.3% |
| 1,084 | 2,828 | 38.3% |
| East Asia & Australia |
| 1,457 | 2,986 | 48.8% |
| (13.2) | (10.5) | (10.5) |
257 | 893 | 28.8% |
| 255 | 902 | 28.3% |
| 255 | 902 | 28.3% |
| Americas |
| 256 | 864 | 29.6% |
| (0.8) | (1.3) | (1.3) |
(28) | 142 | (19.7)% |
| (28) | 142 | (19.7)% |
| (17) | — | —% |
| Wellness and Healthcare |
| — | — | —% |
| — | — | — |
$ 6,602 | $ 15,578 | 42.4% |
| $ 7,316 | $ 16,669 | 43.9% |
| $ 7,329 | $ 16,520 | 44.4% |
| Total PMI |
| $ 6,983 | $ 15,425 | 45.3% |
| (2.9) | (1.4) | (0.9) |
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(1) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions refer to Schedule 7 | ||||||||||||||||||||
(2) For the calculation of Adjusted Net Revenues excluding currency and acquisitions refer to Schedule 5 |
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| Schedule 9 | |||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||
Condensed Statements of Earnings | ||||||||||||||
($ in millions, except per share data) / (Unaudited) | ||||||||||||||
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| ||||||
Quarters Ended June 30, |
|
|
| Six Months Ended June 30, | ||||||||||
2022 |
| 2021 |
| Change Fav./(Unfav.) |
|
|
| 2022 | 2021 |
| Change Fav./(Unfav.) | |||
$ 20,409 |
| $ 20,421 |
| (0.1 | )% |
| Revenues including Excise Taxes |
| $ 39,750 | $ 39,776 |
| (0.1 | )% | |
12,577 |
| 12,827 |
| 1.9 | % |
| Excise Taxes on products |
| 24,172 | 24,597 |
| 1.7 | % | |
7,832 |
| 7,594 |
| 3.1 | % |
| Net Revenues |
| 15,578 | 15,179 |
| 2.6 | % | |
2,648 |
| 2,353 |
| (12.5 | )% |
| Cost of sales |
| 5,256 | 4,627 |
| (13.6 | )% | |
5,184 |
| 5,241 |
| (1.1 | )% |
| Gross profit |
| 10,322 | 10,552 |
| (2.2 | )% | |
2,092 |
| 2,093 |
| — | % |
| Marketing, administration and research costs |
| 3,894 | 3,942 |
| 1.2 | % | |
36 |
| 19 |
|
|
| Amortization of intangibles |
| 74 | 37 |
|
| |||
3,056 |
| 3,129 |
| (2.3 | )% |
| Operating Income |
| 6,354 | 6,573 |
| (3.3 | )% | |
126 |
| 161 |
| 21.7 | % |
| Interest expense, net |
| 280 | 328 |
| 14.6 | % | |
5 |
| 27 |
| 81.5 | % |
| Pension and other employee benefit costs |
| 9 | 55 |
| 83.6 | % | |
2,925 |
| 2,941 |
| (0.5 | )% |
| Earnings before income taxes |
| 6,065 | 6,190 |
| (2.0 | )% | |
594 |
| 646 |
| 8.0 | % |
| Provision for income taxes |
| 1,213 | 1,343 |
| 9.7 | % | |
(15 | ) | (3 | ) |
|
| Equity investments and securities (income)/loss, net |
| 41 | (46 | ) |
| |||
2,346 |
| 2,298 |
| 2.1 | % |
| Net Earnings |
| 4,811 | 4,893 |
| (1.7 | )% | |
113 |
| 126 |
|
|
| Net Earnings attributable to noncontrolling interests |
| 247 | 303 |
|
| |||
$ 2,233 |
| $ 2,172 |
| 2.8 | % |
| Net Earnings attributable to PMI |
| $ 4,564 | $ 4,590 |
| (0.6 | )% | |
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| Per share data (1): |
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| ||||||
$ 1.44 |
| $ 1.39 |
| 3.6 | % |
| Basic Earnings Per Share |
| $ 2.94 | $ 2.94 |
| — | % | |
$ 1.43 |
| $ 1.39 |
| 2.9 | % |
| Diluted Earnings Per Share |
| $ 2.93 | $ 2.93 |
| — | % |
(1) Net Earnings and weighted-average shares used in the basic and diluted Earnings Per Share computations for the quarters and for the six months ended June 30, 2022 and 2021 are shown on Schedule 1, Footnote 1 |
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| Schedule 10 | |||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||
Adjustments for the Impact of Russia and Ukraine, excluding Currency | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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Quarters Ended June 30, |
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| Six Months Ended June 30, | ||||||||||||
2022 | 2021 | Currency | Variance excluding Currency |
|
|
| 2022 | 2021 | Currency | Variance excluding Currency | ||||||
$ 1.48 | $ 1.58 | $ (0.16) | 3.8% |
| Adjusted Diluted EPS (1) |
| $ 3.06 | $ 3.16 | $ (0.39) | 9.2% | ||||||
0.16 | 0.15 | 0.03 |
|
| Net Earnings attributable to Russia and Ukraine |
| $ 0.27 | $ 0.28 | $ — |
| ||||||
$ 1.32 | $ 1.43 | $ (0.19) | 5.6% |
| Pro Forma Adjusted Diluted EPS |
| $ 2.79 | $ 2.88 | $ (0.39) | 10.4% | ||||||
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(1) For the calculation of Adjusted Diluted EPS, see Schedule 2 |
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| Schedule 11 | ||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||||
PMI & EE Region - Adjustments for the Impact of Russia and Ukraine, excluding Currency and Acquisitions | ||||||||||||||||||||
($ in millions) / (Unaudited) | ||||||||||||||||||||
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Quarters Ended June 30, |
| Six Months Ended June 30, | ||||||||||||||||||
2022 | 2021 | Currency | Acqui- sitions | Variance excluding Curr. & Acquis. |
| 2022 | 2021 | Currency | Acqui- sitions | Variance excluding Currency & Acqui- sitions | ||||||||||
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| PMI |
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| ||||||||||
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$ 7,832 |
| $ 7,840 |
| $ (501) |
| $ 79 |
| 5.3% | Adjusted Net Revenues (1) | $ 15,578 |
| $ 15,425 |
| $ (1,091) |
| $ 149 |
| 7.1% | ||
614 |
| 612 |
| 33 |
| — |
|
| Net Revenues attributable to Russia and Ukraine | 1,088 |
| 1,173 |
| (30) |
| — |
|
| ||
$ 7,218 |
| $ 7,228 |
| $ (534) |
| $ 79 |
| 6.2% | Pro Forma Adjusted Net Revenues | $ 14,490 |
| $ 14,252 |
| $ (1,061) |
| $ 149 |
| 8.1% | ||
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| ||
$ 3,224 |
| $ 3,473 |
| $ (299) |
| $ (6) |
| 1.6% | Adjusted Operating Income (2) | $ 6,602 |
| $ 6,983 |
| $ (714) |
| $ (13) |
| 5.0% | ||
313 |
| 257 |
| 50 |
| — |
|
| Operating Income attributable to Russia and Ukraine | 494 |
| 484 |
| 12 |
| — |
|
| ||
$ 2,911 |
| $ 3,216 |
| $ (349) |
| $ (6) |
| 1.6% | Pro Forma Adjusted Operating Income | $ 6,108 |
| $ 6,499 |
| $ (726) |
| $ (13) |
| 5.4% | ||
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| ||
41.2% |
| 44.3% |
| (1.1)pp |
| (0.5)pp |
| (1.5)pp | Adjusted Operating Income Margin | 42.4% |
| 45.3% |
| (1.5)pp |
| (0.5)pp |
| (0.9)pp | ||
0.9pp |
| (0.2)pp |
|
|
|
|
|
| Adjusted OI margin attributable to Russia and Ukraine | 0.2pp |
| (0.3)pp |
|
|
|
|
|
| ||
40.3% |
| 44.5% |
| (1.8)pp |
| (0.5)pp |
| (1.9)pp | Pro Forma Adjusted Operating Income Margin | 42.2% |
| 45.6% |
| (1.7)pp |
| (0.6)pp |
| (1.1)pp | ||
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| Eastern Europe |
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$ 898 |
| $ 895 |
| $ 18 |
| $ — |
| (1.7)% | Adjusted Net Revenues (1) | $ 1,624 |
| $ 1,691 |
| $ (54) |
| $ — |
| (0.8)% | ||
614 |
| 612 |
| 33 |
| — |
|
| Net Revenues attributable to Russia and Ukraine | 1,088 |
| 1,173 |
| (30) |
| — |
|
| ||
$ 284 |
| $ 283 |
| $ (15) |
| $ — |
| 5.7% | Pro Forma Adjusted Net Revenues | $ 536 |
| $ 518 |
| $ (24) |
| $ — |
| 8.1% | ||
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| ||
$ 377 |
| $ 322 |
| $ 56 |
| $ — |
| (0.3)% | Adjusted Operating Income (2) | $ 564 |
| $ 585 |
| $ (4) |
| $ — |
| (2.9)% | ||
313 |
| 257 |
| 50 |
| — |
|
| Operating Income attributable to Russia and Ukraine | 494 |
| 484 |
| 12 |
| — |
|
| ||
(71) |
| (58) |
| 2 |
| — |
|
| Corporate expenses apportioned to Russia and Ukraine | (132) |
| (108) |
| 4 |
| — |
|
| ||
$ 135 |
| $ 123 |
| $ 4 |
| $ — |
| 6.3% | Pro Forma Adjusted Operating Income | $ 202 |
| $ 209 |
| $ (20) |
| $ — |
| 6.2% | ||
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| ||
42.0% |
| 36.0% |
| 5.5pp |
| —pp |
| 0.5pp | Adjusted Operating Income Margin | 34.7% |
| 34.6% |
| 0.9pp |
| —pp |
| (0.8)pp | ||
(5.5)pp |
| (7.5)pp |
|
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|
|
| Adjusted OI margin attributable to Russia and Ukraine (3) | (3.0)pp |
| (5.7)pp |
|
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| ||
47.5% |
| 43.5% |
| 3.8pp |
| —pp |
| 0.2pp | Pro Forma Adjusted Operating Income Margin | 37.7% |
| 40.3% |
| (1.9)pp |
| —pp |
| (0.7)pp | ||
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(1) For the calculation of Adjusted Net Revenues, see Schedule 5 |
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| ||||||||||||||||||
(2) For the calculation of Adjusted Operating Income, see Schedule 7 |
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| ||||||||||||||||||
(3) Includes also impact of corporate expenses apportioned to Russia and Ukraine |
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Note: Sum might not foot to Total due to roundings, which could impact variance % |
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| Schedule 12 | |||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||
Net Revenues by Product Category and Adjustments for the Impact of Russia and Ukraine | ||||||||||||||||||||||
($ in millions) / (Unaudited) | ||||||||||||||||||||||
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| Year Ended December 31, | |||||||||||
Quarters Ended June 30, |
| Six Months Ended June 30, | ||||||||||||||||||||
2022 |
| 2021 |
| Currency |
| Acqui- sitions |
| Variance excluding Currency & Acqui- sitions |
|
|
| 2022 |
| 2021 |
| Currency |
| Acqui- sitions |
| Variance excluding Currency & Acqui- sitions |
| 2021 |
|
|
|
|
| Combustible Products |
|
|
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|
|
| |||||||||||
$ 5,489 | $ 5,564 | $ (302) | $ (1) | 4.1% | Adjusted Net Revenues | $ 10,819 | $ 11,027 | $ (717) | $ — | 4.6% | $ 22,436 | |||||||||||
368 | 337 | 25 | — |
| Net Revenues attributable to Russia and Ukraine | 637 | 645 | (15) | — |
| 1,399 | |||||||||||
$ 5,121 | $ 5,227 | $ (328) | $ (1) | 4.2% | Pro Forma Adjusted Net Revenues | $ 10,182 | $ 10,383 | $ (702) | $ — | 4.8% | $ 21,037 | |||||||||||
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| Reduced-Risk Products |
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| |||||||||||
$ 2,267 | $ 2,276 | $ (199) | $ 4 | 8.2% | Adjusted Net Revenues | $ 4,617 | $ 4,398 | $ (374) | $ 7 | 13.3% | $ 9,115 | |||||||||||
246 | 275 | 8 | — |
| Net Revenues attributable to Russia and Ukraine | 451 | 528 | (15) | — |
| 1,072 | |||||||||||
$ 2,021 | $ 2,001 | $ (206) | $ 4 | 11.1% | Pro Forma Adjusted Net Revenues | $ 4,166 | $ 3,869 | $ (359) | $ 7 | 16.8% | $ 8,042 | |||||||||||
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| |||||||||||
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|
| Wellness and Healthcare |
|
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| |||||||||||
$ 76 | $ — | $ — | $ 76 | —% | Adjusted Net Revenues | $ 142 | $ — | $ — | $ 142 | —% | $ 101 | |||||||||||
— | — | — | — |
| Net Revenues attributable to Russia and Ukraine | — | — | — | — |
| — | |||||||||||
$ 76 | $ — | $ — | $ 76 | —% | Pro Forma Adjusted Net Revenues | $ 142 | $ — | $ — | $ 142 | —% | $ 101 | |||||||||||
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| |||||||||||
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| PMI |
|
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|
|
| |||||||||||
$ 7,832 | $ 7,840 | $ (501) | $ 79 | 5.3% | Adjusted Net Revenues (1) | $ 15,578 | $ 15,425 | $ (1,091) | $ 149 | 7.1% | $ 31,651 | |||||||||||
614 | 612 | 33 | — |
| Net Revenues attributable to Russia and Ukraine | 1,088 | 1,173 | (30) | — |
| 2,471 | |||||||||||
$ 7,218 | $ 7,228 | $ (534) | $ 79 | 6.2% | Pro Forma Adjusted Net Revenues | $ 14,490 | $ 14,252 | $ (1,061) | $ 149 | 8.1% | $ 29,180 | |||||||||||
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(1) For the calculation of Adjusted Net Revenues, see Schedule 5 | ||||||||||||||||||||||
Note: Sum of product categories might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million |
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| Schedule 13 | ||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
| |||||||||||||||||||
Reconciliation of Non-GAAP Measures |
| |||||||||||||||||||
Reconciliation of Reported Diluted EPS to Pro Forma Adjusted Diluted EPS |
| |||||||||||||||||||
(Unaudited) |
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| Quarter Ended |
| Quarter Ended |
| Six Months Ended |
| Quarter Ended |
| Nine Months Ended |
| Quarter Ended |
| Year Ended |
| Quarter Ended | |||||
| March 31, |
| June 30, |
| June 30, |
| September 30, |
| September 30, |
| December 31, |
| December 31, |
| March 31, | |||||
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2022 | |||||
Reported Diluted EPS | $ 1.55 | $ 1.39 | $ 2.93 | $ 1.55 |
| $ 4.48 |
| $ 1.34 |
| $ 5.83 |
| $ 1.50 | ||||||||
Asset impairment and exit costs | 0.02 | 0.04 | 0.07 | 0.02 |
| 0.09 |
| 0.02 |
| 0.12 |
| — | ||||||||
Asset acquisition cost | — | — | — | 0.03 |
| 0.03 |
| — |
| 0.03 |
| — | ||||||||
Equity investee ownership dilution | — | — | — | (0.02 | ) | (0.02 | ) | (0.01 | ) | (0.04 | ) | — | ||||||||
Saudi Arabia customs assessments | — | 0.14 | 0.14 | — |
| 0.14 |
| — |
| 0.14 |
| — | ||||||||
Charges related to the war in Ukraine | — | — | — | — |
| — |
| — |
| — |
| 0.03 | ||||||||
Fair value adjustment for equity security investments | — | — | — | — |
| — |
| — |
| — |
| 0.03 | ||||||||
Amortization of intangibles | 0.01 | 0.01 | 0.02 | 0.01 |
| 0.03 |
| 0.02 |
| 0.05 |
| 0.02 | ||||||||
Adjusted Diluted EPS | $ 1.58 | $ 1.58 | $ 3.16 | $ 1.59 |
| $ 4.75 |
| $ 1.37 |
| $ 6.13 |
| $ 1.58 | ||||||||
Net Earnings attributable to Russia & Ukraine | 0.13 | 0.15 | 0.28 | 0.15 |
| 0.43 |
| 0.17 |
| 0.60 |
| 0.10 | ||||||||
Pro Forma Adjusted Diluted EPS | $ 1.45 | $ 1.43 | $ 2.88 | $ 1.44 |
| $ 4.32 |
| $ 1.20 |
| $ 5.53 |
| $ 1.48 | ||||||||
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|
|
| ||||||||||||
Weighted-average shares for diluted EPS | 1,560 | 1,560 | 1,560 | 1,560 |
| 1,560 |
| 1,557 |
| 1,559 |
| 1,552 | ||||||||
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| ||||||||||||
Note: EPS is computed independently for each of the periods presented. Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year |
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| Schedule 14 | ||||||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||
Reconciliation of Reported Operating Income to Adjusted Operating Income | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
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| ||||||||||||||||
| Quarter Ended |
| Quarter Ended |
| Six Months Ended |
| Quarter Ended |
| Nine Months Ended |
| Quarter Ended |
| Year Ended |
| Quarter Ended | |||||||||
| March 31, |
| June 30, |
| June 30, |
| September 30, |
| September 30, |
| December 31, |
| December 31, |
| March 31, | |||||||||
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2022 | |||||||||
PMI |
|
|
|
|
|
|
|
| ||||||||||||||||
Operating Income | $ 3,444 |
| $ 3,129 |
| $ 6,573 |
| $ 3,455 |
| $ 10,028 |
| $ 2,947 |
| $ 12,975 |
| $ 3,298 |
| ||||||||
Asset impairment and exit costs | (48 | ) | (79 | ) | (127 | ) | (43 | ) | (170 | ) | (46 | ) | (216 | ) | — |
| ||||||||
Asset acquisition cost | — |
| — |
| — |
| (51 | ) | (51 | ) | — |
| (51 | ) | — |
| ||||||||
Saudi Arabia customs assessments | — |
| (246 | ) | (246 | ) | — |
| (246 | ) | — |
| (246 | ) | — |
| ||||||||
Amortization of intangibles | (18 | ) | (19 | ) | (37 | ) | (18 | ) | (55 | ) | (41 | ) | (96 | ) | (38 | ) | ||||||||
Charges related to the war in Ukraine | — |
| — |
| — |
| — |
| — |
| — |
| — |
| (42 | ) | ||||||||
Adjusted Operating Income | $ 3,510 |
| $ 3,473 |
| $ 6,983 |
| $ 3,567 |
| $ 10,550 |
| $ 3,034 |
| $ 13,584 |
| $ 3,378 |
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Note: Sum of Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million |
|
|
|
|
|
|
| Schedule 15a | |||||||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||
Reconciliation of Reported Operating Income to Adjusted Operating Income | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
| Quarter Ended |
| Quarter Ended |
| Six Months Ended |
| Quarter Ended |
| Nine Months Ended |
| Quarter Ended |
| Year Ended |
| Quarter Ended | |||||||||
| March 31, |
| June 30, |
| June 30, |
| September 30, |
| September 30, |
| December 31, |
| December 31, |
| March 31, | |||||||||
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2022 | |||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
European Union |
|
|
|
|
|
|
|
| ||||||||||||||||
Reported Operating Income | $ 1,490 |
| $ 1,641 |
| $ 3,131 |
| $ 1,680 |
| $ 4,811 |
| $ 1,308 |
| $ 6,119 |
| $ 1,527 |
| ||||||||
Asset impairment and exit costs | (9 | ) | (35 | ) | (44 | ) | (12 | ) | (56 | ) | (12 | ) | (68 | ) | — |
| ||||||||
Amortization of intangibles | (9 | ) | (9 | ) | (18 | ) | (8 | ) | (26 | ) | (9 | ) | (35 | ) | (9 | ) | ||||||||
Adjusted Operating Income | $ 1,508 |
| $ 1,685 |
| $ 3,193 |
| $ 1,700 |
| $ 4,893 |
| $ 1,329 |
| $ 6,222 |
| $ 1,536 |
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Eastern Europe |
|
|
|
|
|
|
|
| ||||||||||||||||
Reported Operating Income | $ 261 |
| $ 314 |
| $ 575 |
| $ 338 |
| $ 913 |
| $ 300 |
| $ 1,213 |
| $ 144 |
| ||||||||
Asset impairment and exit costs | (2 | ) | (7 | ) | (9 | ) | (2 | ) | (11 | ) | (3 | ) | (14 | ) | — |
| ||||||||
Amortization of intangibles | — |
| (1 | ) | (1 | ) | — |
| (1 | ) | (1 | ) | (2 | ) | (1 | ) | ||||||||
Charges related to the war in Ukraine | — |
| — |
| — |
| — |
| — |
| — |
| — |
| (42 | ) | ||||||||
Adjusted Operating Income | $ 263 |
| $ 322 |
| $ 585 |
| $ 340 |
| $ 925 |
| $ 304 |
| $ 1,229 |
| $ 187 |
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Middle East & Africa |
|
|
|
|
|
|
|
| ||||||||||||||||
Reported Operating Income | $ 335 |
| $ 16 |
| $ 351 |
| $ 388 |
| $ 739 |
| $ 407 |
| $ 1,146 |
| $ 521 |
| ||||||||
Asset impairment and exit costs | (2 | ) | (8 | ) | (10 | ) | (3 | ) | (13 | ) | (4 | ) | (17 | ) | — |
| ||||||||
Saudi Arabia customs assessments | — |
| (246 | ) | (246 | ) | — |
| (246 | ) | — |
| (246 | ) | — |
| ||||||||
Amortization of intangibles | (2 | ) | (2 | ) | (4 | ) | (2 | ) | (6 | ) | (2 | ) | (8 | ) | (2 | ) | ||||||||
Adjusted Operating Income | $ 339 |
| $ 272 |
| $ 611 |
| $ 393 |
| $ 1,004 |
| $ 413 |
| $ 1,417 |
| $ 523 |
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
|
|
|
|
|
| Schedule 15b | |||||||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||
Reconciliation of Reported Operating Income to Adjusted Operating Income (continued) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
| ||||||||||||||||||||||||
| Quarter Ended |
| Quarter Ended |
| Six Months Ended |
| Quarter Ended |
| Nine Months Ended |
| Quarter Ended |
| Year Ended |
| Quarter Ended | |||||||||
| March 31, |
| June 30, |
| June 30, |
| September 30, |
| September 30, |
| December 31, |
| December 31, |
| March 31, | |||||||||
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| 2022 | |||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
South & Southeast Asia |
|
|
|
|
|
|
|
| ||||||||||||||||
Reported Operating Income | $ 529 |
| $ 331 |
| $ 860 |
| $ 348 |
| $ 1,208 |
| $ 298 |
| $ 1,506 |
| $ 445 |
| ||||||||
Asset impairment and exit costs | (3 | ) | (10 | ) | (13 | ) | (4 | ) | (17 | ) | (4 | ) | (21 | ) | — |
| ||||||||
Amortization of intangibles | (4 | ) | (4 | ) | (8 | ) | (5 | ) | (13 | ) | (8 | ) | (21 | ) | (4 | ) | ||||||||
Adjusted Operating Income | $ 536 |
| $ 345 |
| $ 881 |
| $ 357 |
| $ 1,238 |
| $ 310 |
| $ 1,548 |
| $ 449 |
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
East Asia & Austr. |
|
|
|
|
|
|
|
| ||||||||||||||||
Reported Operating Income | $ 695 |
| $ 715 |
| $ 1,410 |
| $ 631 |
| $ 2,041 |
| $ 515 |
| $ 2,556 |
| $ 571 |
| ||||||||
Asset impairment and exit costs | (31 | ) | (15 | ) | (46 | ) | (21 | ) | (67 | ) | (21 | ) | (88 | ) | — |
| ||||||||
Amortization of intangibles | (1 | ) | — |
| (1 | ) | (1 | ) | (2 | ) | (1 | ) | (3 | ) | (1 | ) | ||||||||
Adjusted Operating Income | $ 727 |
| $ 730 |
| $ 1,457 |
| $ 653 |
| $ 2,110 |
| $ 537 |
| $ 2,647 |
| $ 572 |
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Americas |
|
|
|
|
|
|
|
| ||||||||||||||||
Reported Operating Income | $ 134 |
| $ 112 |
| $ 246 |
| $ 121 |
| $ 367 |
| $ 120 |
| $ 487 |
| $ 121 |
| ||||||||
Asset impairment and exit costs | (1 | ) | (4 | ) | (5 | ) | (1 | ) | (6 | ) | (2 | ) | (8 | ) | — |
| ||||||||
Amortization of intangibles | (2 | ) | (3 | ) | (5 | ) | (2 | ) | (7 | ) | (2 | ) | (9 | ) | (2 | ) | ||||||||
Adjusted Operating Income | $ 137 |
| $ 119 |
| $ 256 |
| $ 124 |
| $ 380 |
| $ 124 |
| $ 504 |
| $ 123 |
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Wellness and Healthcare |
|
|
|
|
|
|
|
| ||||||||||||||||
Reported Operating Income | $ — |
| $ — |
| $ — |
| $ (51 | ) | $ (51 | ) | $ (1 | ) | $ (52 | ) | $ (31 | ) | ||||||||
Asset impairment and exit costs | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| ||||||||
Asset acquisition cost | — |
| — |
| — |
| (51 | ) | (51 | ) | — |
| (51 | ) | — |
| ||||||||
Amortization of intangibles | — |
| — |
| — |
| — |
| — |
| (18 | ) | (18 | ) | (19 | ) | ||||||||
Adjusted Operating Income | $ — |
| $ — |
| $ — |
| $ — |
| $ — |
| $ 17 |
| $ 17 |
| $ (12 | ) | ||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Note: Sum of Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million |
|
|
| Schedule 16 | ||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||
Condensed Balance Sheets | ||||||||
($ in millions) / (Unaudited) | ||||||||
|
|
| ||||||
| June 30, |
| December 31, | |||||
| 2022 |
| 2021 | |||||
Assets |
|
| ||||||
Cash and cash equivalents | $ | 5,036 |
| $ | 4,496 |
| ||
All other current assets |
| 13,340 |
|
| 13,221 |
| ||
Property, plant and equipment, net |
| 5,965 |
|
| 6,168 |
| ||
Goodwill |
| 6,318 |
|
| 6,680 |
| ||
Other intangible assets, net |
| 2,656 |
|
| 2,818 |
| ||
Equity investments |
| 4,328 |
|
| 4,463 |
| ||
Other assets |
| 3,317 |
|
| 3,444 |
| ||
Total assets | $ | 40,960 |
| $ | 41,290 |
| ||
|
|
| ||||||
Liabilities and Stockholders' (Deficit) Equity |
|
| ||||||
Short-term borrowings | $ | 1,558 |
| $ | 225 |
| ||
Current portion of long-term debt |
| 4,149 |
|
| 2,798 |
| ||
All other current liabilities |
| 14,840 |
|
| 16,232 |
| ||
Long-term debt |
| 22,345 |
|
| 24,783 |
| ||
Deferred income taxes |
| 856 |
|
| 726 |
| ||
Other long-term liabilities |
| 4,472 |
|
| 4,734 |
| ||
Total liabilities |
| 48,220 |
|
| 49,498 |
| ||
|
|
| ||||||
Total PMI stockholders' deficit |
| (9,044 | ) |
| (10,106 | ) | ||
Noncontrolling interests |
| 1,784 |
|
| 1,898 |
| ||
Total stockholders' (deficit) equity |
| (7,260 | ) |
| (8,208 | ) | ||
Total liabilities and stockholders' (deficit) equity | $ | 40,960 |
| $ | 41,290 |
|
|
|
|
|
|
| Schedule 17 | |||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||
Reconciliation of Non-GAAP Measures | |||||||||||||||
Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios | |||||||||||||||
($ in millions, except ratios) / (Unaudited) | |||||||||||||||
|
|
|
|
|
|
| |||||||||
| Year Ended June 30, 2022 |
| Year Ended December 31, 2021 | ||||||||||||
| July ~ December |
| January ~ June |
| 12 months |
| |||||||||
| 2021 |
| 2022 |
| rolling |
| |||||||||
Net Earnings | $ | 4,817 |
| $ | 4,811 |
| $ | 9,628 |
|
| $ | 9,710 |
| ||
Equity investments and securities (income)/loss, net |
| (103 | ) |
| 41 |
|
| (62 | ) |
|
| (149 | ) | ||
Provision for income taxes |
| 1,328 |
|
| 1,213 |
|
| 2,541 |
|
|
| 2,671 |
| ||
Interest expense, net |
| 300 |
|
| 280 |
|
| 580 |
|
|
| 628 |
| ||
Depreciation and amortization |
| 514 |
|
| 540 |
|
| 1,054 |
|
|
| 998 |
| ||
Asset impairment and exit costs and Others (1) |
| 140 |
|
| 174 |
|
| 314 |
|
|
| 513 |
| ||
Adjusted EBITDA | $ | 6,996 |
| $ | 7,059 |
| $ | 14,055 |
|
| $ | 14,371 |
| ||
|
|
|
|
|
|
| |||||||||
|
|
| June 30, |
| December 31, | ||||||||||
|
|
| 2022 |
| 2021 | ||||||||||
Short-term borrowings |
|
|
| $ | 1,558 |
|
| $ | 225 |
| |||||
Current portion of long-term debt |
|
|
|
| 4,149 |
|
|
| 2,798 |
| |||||
Long-term debt |
|
|
|
| 22,345 |
|
|
| 24,783 |
| |||||
Total Debt |
|
|
| $ | 28,052 |
|
| $ | 27,806 |
| |||||
Cash and cash equivalents |
|
|
|
| 5,036 |
|
|
| 4,496 |
| |||||
Net Debt |
|
|
| $ | 23,016 |
|
| $ | 23,310 |
| |||||
|
|
|
|
|
|
| |||||||||
Ratios: |
|
|
|
|
|
| |||||||||
Total Debt to Adjusted EBITDA |
|
|
|
| 2.00 |
|
|
| 1.93 |
| |||||
Net Debt to Adjusted EBITDA |
|
|
|
| 1.64 |
|
|
| 1.62 |
|
(1) For the period January 2022 to June 2022 "Others" includes $122 million of charges related to the war in Ukraine and $52 million of costs associated with Swedish Match AB offer. For the period July 2021 to December 2021 "Others" includes asset acquisition cost of $51 million related to OtiTopic Inc. Additionally, for the year ended December 31, 2021 "Others" includes a reduction in net revenues of $246 million related to the Saudi Arabia customs assessments that was recorded in the second quarter of 2021. |
|
|
|
| Schedule 18 | ||||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||
Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency | ||||||||||||||||||
($ in millions) / (Unaudited) | ||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||
Quarters Ended June 30, |
| Six Months Ended June 30, | ||||||||||||||||
| 2022 |
|
| 2021 | % Change |
|
| 2022 |
|
| 2021 | % Change | ||||||
$ | 3,524 |
| $ | 3,630 | (2.9)% | Net cash provided by operating activities (1) | $ | 4,642 |
| $ | 4,065 | 14.2% | ||||||
| (54 | ) |
|
| Less: Currency |
| (487 | ) |
|
| ||||||||
$ | 3,578 |
| $ | 3,630 | (1.4)% | Net cash provided by operating activities, excluding currency | $ | 5,129 |
| $ | 4,065 | 26.2% | ||||||
|
|
|
|
|
|
| ||||||||||||
(1) Operating cash flow |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220720006017/en/
Philip Morris InternationalInvestor Relations: New York: +1 (917) 663 2233 Lausanne: +41 (0)58 242 4666 InvestorRelations@pmi.com
Media: Lausanne: +41 (0)58 242 4500 David.Fraser@pmi.com
Source: Philip Morris International