Back to GetFilings.com



 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

(x)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

(  )

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________


Commission file number 1-8940

Altria Group, Inc.

(Exact name of registrant as specified in its charter)

 

 Virginia
(State or other jurisdiction of
incorporation or organization)
  13-3260245
(I.R.S. Employer
Identification No.)		 

 120 Park Avenue, New York, New York
(Address of principal executive offices)
  10017
(Zip Code)		 

Registrant’s telephone number, including area code (917) 663-4000

_____________________________________________________________________________________________
Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes  X  No      

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes  X  No      

At July 31, 2003, there were 2,029,497,651 shares outstanding of the registrant’s common stock, par value $0.33 1/3 per share.

 




ALTRIA GROUP, INC.

TABLE OF CONTENTS

 

 

 

 

Page No.

PART I

  —

FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

 

Financial Statements (Unaudited)

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets at June 30, 2003 and December 31, 2002

3 – 4

 

 

 

 

 

 

Condensed Consolidated Statements of Earnings for the

 

 

 

Six Months Ended June 30, 2003 and 2002

5

 

 

Three Months Ended June 30, 2003 and 2002

6

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Year Ended December 31, 2002 and the Six Months Ended June 30, 2003

7

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2003 and 2002

8 – 9

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

10 – 30

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

31 – 60

 

 

 

 

Item 4.

 

Controls and Procedures

61

 

 

 

 

PART II

—

OTHER INFORMATION

 

 

 

 

 

Item 1.

 

Legal Proceedings

62

 

 

 

 

Item 6.

 

Exhibits and Reports on Form 8-K

62

SIGNATURE

63  


-2-


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of dollars)
(Unaudited)

 

 

 

June 30,
2003

 

December 31,
2002

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Consumer products

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,832

 

$

565

 

Receivables (less allowances of $139 and $142)

 

 

5,596

 

 

5,139

 

Inventories:

 

 

 

 

 

 

 

Leaf tobacco

 

 

3,455

 

 

3,605

 

Other raw materials

 

 

2,152

 

 

1,935

 

Finished product

 

 

3,875

 

 

3,587

 

 

 

 

 

 

 

 

9,482

 

 

9,127

 

Other current assets

 

 

2,319

 

 

2,610

 

 

 

 

 

Total current assets

 

 

22,229

 

 

17,441

 

Property, plant and equipment, at cost

 

 

26,416

 

 

24,553

 

Less accumulated depreciation

 

 

10,795

 

 

9,707

 

 

 

 

 

 

 

 

15,621

 

 

14,846

 

Goodwill and other intangible assets, net

 

 

38,440

 

 

37,871

 

Other assets

 

 

8,725

 

 

8,151

 

 

 

 

 

Total consumer products assets

 

 

85,015

 

 

78,309

 

 

 

    

 

    

 

Financial services

 

 

 

 

 

 

 

Finance assets, net

 

 

8,993

 

 

9,075

 

Other assets

 

 

144

 

 

156

 

 

 

 

 

Total financial services assets

 

 

9,137

 

 

9,231

 

 

 

 

 

TOTAL ASSETS

 

$

94,152

 

$

87,540

 

 

 

 

 

See notes to condensed consolidated financial statements.

Continued


-3-


Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)
(in millions of dollars, except per share data)
(Unaudited)

 

 

 

June 30,
2003

 

December 31,
2002

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Consumer products

 

 

 

 

 

 

 

Short-term borrowings

 

$

5,485

 

$

407

 

Current portion of long-term debt

 

 

1,612

 

 

1,558

 

Accounts payable

 

 

2,650

 

 

3,088

 

Accrued liabilities:

 

 

 

 

 

 

 

Marketing

 

 

2,554

 

 

3,192

 

Taxes, except income taxes

 

 

2,455

 

 

1,735

 

Employment costs

 

 

968

 

 

1,099

 

Settlement charges

 

 

2,309

 

 

3,027

 

Other

 

 

2,572

 

 

2,563

 

Income taxes

 

 

1,191

 

 

1,103

 

Dividends payable

 

 

1,299

 

 

1,310

 

 

 

 

 

Total current liabilities

 

 

23,095

 

 

19,082

 

Long-term debt

 

 

18,890

 

 

19,189

 

Deferred income taxes

 

 

6,195

 

 

6,112

 

Accrued postretirement health care costs

 

 

3,174

 

 

3,128

 

Minority interest

 

 

4,628

 

 

4,366

 

Other liabilities

 

 

7,529

 

 

8,004

 

 

 

 

 

Total consumer products liabilities

 

 

63,511

 

 

59,881

 

Financial services

 

 

 

 

 

 

 

Short-term borrowings

 

 

314

 

 

 

 

Long-term debt

 

 

2,200

 

 

2,166

 

Deferred income taxes

 

 

5,642

 

 

5,521

 

Other liabilities

 

 

247

 

 

494

 

 

 

 

 

Total financial services liabilities

 

 

8,403

 

 

8,181

 

 

 

 

 

Total liabilities

 

 

71,914

 

 

68,062

 

Contingencies (Note 10)

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, par value $0.33 1/3 per share (2,805,961,317 shares issued)

 

 

935

 

 

935

 

Additional paid-in capital

 

 

4,748

 

 

4,642

 

Earnings reinvested in the business

 

 

45,167

 

 

43,259

 

Accumulated other comprehensive losses (including currency translation of $1,871 and $2,951)

 

 

(2,796

)

 

(3,956

)

 

 

 

 

 

 

 

48,054

 

 

44,880

 

Less cost of repurchased stock (776,915,117 and 766,701,765 shares)

 

 

(25,816

)

 

(25,402

)

 

 

 

 

Total stockholders’ equity

 

 

22,238

 

 

19,478

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

94,152

 

$

87,540

 

 

 

 

 

See notes to condensed consolidated financial statements.


-4-


Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of dollars, except per share data)
(Unaudited)

 

 

 

For the Six Months Ended
June 30,

 

 

 

 

 

 

2003

 

2002

 

 

 

 

 

Net revenues

 

$

40,202

 

$

41,638

 

Cost of sales

 

 

15,556

 

 

17,033

 

Excise taxes on products

 

 

10,231

 

 

9,158

 

 

 

 

 

Gross profit

 

 

14,415

 

 

15,447

 

Marketing, administration and research costs

 

 

6,164

 

 

6,339

 

Legal settlement

 

 

182

 

 

 

 

Domestic tobacco headquarters relocation charges

 

 

9

 

 

 

 

Gains on sales of businesses

 

 

 

 

 

(3

)

Integration costs

 

 

 

 

 

119

 

Separation programs and asset impairment

 

 

 

 

 

190

 

Amortization of intangibles

 

 

5

 

 

4

 

 

 

 

 

Operating income

 

 

8,055

 

 

8,798

 

Interest and other debt expense, net

 

 

546

 

 

602

 

 

 

 

 

Earnings before income taxes and minority interest

 

 

7,509

 

 

8,196

 

Provision for income taxes

 

 

2,643

 

 

2,909

 

 

 

 

 

Earnings before minority interest

 

 

4,866

 

 

5,287

 

Minority interest in earnings and other, net

 

 

243

 

 

312

 

 

 

 

 

Net earnings

 

$

4,623

 

$

4,975

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Basic earnings per share

 

$

2.28

 

$

2.32

 

 

 

 

 

Diluted earnings per share

 

$

2.27

 

$

2.30

 

 

 

 

 

Dividends declared

 

$

1.28

 

$

1.16

 

 

 

 

 

See notes to condensed consolidated financial statements.

 


-5-


Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of dollars, except per share data)
(Unaudited)

 

 

 

For the Three Months Ended
June 30,

 

 

 

 

 

 

2003

 

2002