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 September 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 |
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13-3260245 |
(State or other jurisdiction of |
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(I.R.S. Employer |
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120 Park Avenue, New York, New York |
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10017 |
(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: (917) 663-4000 |
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| _____________________________________________________________________________________________ |
| 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 October 31, 2003, there were 2,031,172,498 shares outstanding of the registrant’s common stock, par value $0.33 1/3 per share.
ALTRIA GROUP, INC.
TABLE OF CONTENTS
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Page No. |
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PART I - |
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Item 1. |
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3 – 4 |
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5 |
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6 |
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7 |
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8 – 9 |
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10 – 32 |
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Item 2. |
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33 – 60 |
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Item 4. |
61 |
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PART II - |
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Item 1. |
62 |
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Item 6. |
62 |
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63 |
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-2-
PART I – FINANCIAL INFORMATION
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of dollars)
(Unaudited)
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September
30, |
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December
31, |
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ASSETS |
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Consumer products |
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Cash and cash equivalents |
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$ |
6,048 |
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$ |
565 |
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Receivables (less allowances of $141 and $142) |
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5,161 |
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5,139 |
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Inventories: |
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Leaf tobacco |
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3,475 |
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3,605 |
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Other raw materials |
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2,039 |
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1,935 |
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Finished product |
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3,638 |
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3,587 |
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9,152 |
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9,127 |
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Other current assets |
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2,498 |
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2,610 |
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Total current assets |
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22,859 |
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17,441 |
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Property, plant and equipment, at cost |
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26,153 |
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24,553 |
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Less accumulated depreciation |
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10,776 |
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9,707 |
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15,377 |
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14,846 |
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Goodwill |
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26,751 |
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26,037 |
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Other intangible assets, net |
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11,807 |
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11,834 |
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Other assets |
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9,029 |
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8,151 |
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Total consumer products assets |
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85,823 |
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78,309 |
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Financial services |
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Finance assets, net |
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8,464 |
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9,075 |
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Other assets |
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139 |
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156 |
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Total financial services assets |
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8,603 |
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9,231 |
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TOTAL ASSETS |
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$ |
94,426 |
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$ |
87,540 |
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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)
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September
30, |
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December
31, |
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LIABILITIES |
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Consumer products |
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Short-term borrowings |
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$ |
4,427 |
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$ |
407 |
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Current portion of long-term debt |
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1,510 |
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1,558 |
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Accounts payable |
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2,639 |
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3,088 |
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Accrued liabilities: |
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Marketing |
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2,479 |
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3,192 |
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Taxes, except income taxes |
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2,195 |
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1,735 |
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Employment costs |
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1,103 |
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1,099 |
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Settlement charges |
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3,287 |
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3,027 |
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Other |
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2,603 |
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2,563 |
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Income taxes |
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1,497 |
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1,103 |
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Dividends payable |
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1,382 |
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1,310 |
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Total current liabilities |
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23,122 |
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19,082 |
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Long-term debt |
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18,548 |
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19,189 |
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Deferred income taxes |
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6,487 |
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6,112 |
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Accrued postretirement health care costs |
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3,194 |
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3,128 |
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Minority interest |
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4,657 |
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4,366 |
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Other liabilities |
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7,452 |
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8,004 |
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Total consumer products liabilities |
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63,460 |
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59,881 |
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Financial services |
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Long-term debt |
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2,083 |
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2,166 |
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Nonrecourse debt |
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156 |
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Deferred income taxes |
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5,729 |
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5,521 |
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Other liabilities |
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169 |
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494 |
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Total financial services liabilities |
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8,137 |
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8,181 |
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Total liabilities |
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71,597 |
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68,062 |
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Contingencies (Note 10) |
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STOCKHOLDERS’ EQUITY |
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Common stock, par value $0.33 1/3 per share (2,805,961,317 shares issued) |
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935 |
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935 |
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Additional paid-in capital |
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4,753 |
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4,642 |
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Earnings reinvested in the business |
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46,290 |
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43,259 |
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Accumulated other comprehensive losses (including currency translation of $2,366 and $2,951) |
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(3,369 |
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(3,956 |
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48,609 |
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44,880 |
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Less cost of repurchased stock (775,709,046 and 766,701,765 shares) |
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(25,780 |
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(25,402 |
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Total stockholders’ equity |
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22,829 |
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19,478 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
94,426 |
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$ |
87,540 |
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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)
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For the
Nine Months Ended |
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2003 |
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2002 |
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Net revenues |
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$ |
61,141 |
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$ |
61,634 |
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Cost of sales |
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23,456 |
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24,707 |
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Excise taxes on products |
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15,868 |
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13,916 |
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Gross profit |
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21,817 |
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23,011 |
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Marketing, administration and research costs |
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9,331 |
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9,311 |
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Domestic tobacco legal settlement |
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182 |
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Domestic tobacco headquarters relocation charges |
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36 |
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Gains on sales of businesses |
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(23 |
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(3 |
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Integration costs |
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119 |
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Asset impairment and exit costs |
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6 |
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223 |
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Amortization of intangibles |
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7 |
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5 |
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Operating income |
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12,278 |
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13,356 |
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Gain on Miller Brewing Company transaction |
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(2,653 |
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Interest and other debt expense, net |
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847 |
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881 |
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Earnings before income taxes and minority interest |
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11,431 |
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15,128 |
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Provision for income taxes |
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3,996 |
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5,370 |
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Earnings before minority interest |
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7,435 |
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9,758 |
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Minority interest in earnings and other, net |
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322 |
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424 |
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Net earnings |
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$ |
7,113 |
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$ |
9,334 |
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Per share data: |
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Basic earnings per share |
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$ |
3.51 |
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$ |
4.39 |
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Diluted earnings per share |
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$ |
3.50 |
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$ |
4.34 |
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Dividends declared |
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$ |
1.96 |
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$ |
1.80 |
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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)
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For the Three Months
Ended |
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2003 |
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2002 |
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Net revenues |
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$ |
20,939 |
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$ |
19,996 |
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Cost of sales |
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7,900 |
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7,674 |
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Excise taxes on products |
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5,637 |
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4,758 |
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Gross profit |
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7,402 |
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7,564 |
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Marketing, administration and research costs |
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3,167 |
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2,972 |
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Domestic tobacco headquarters relocation charges |
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27 |
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Gains on sales of businesses |
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(23 | ||||