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Philip Morris USAPhilip Morris USA (PM USA) is a wholly-owned subsidiary of Altria Group that manufactures and markets cigarettes and smokeless tobacco products in the United States. PM USA's role is to responsibly manufacture and market PM USA brands to adult tobacco consumers in a financially disciplined way. Philip Morris USA Select Brands
Performance and Financial Strength*PM USA delivered solid income and retail share results in 2008. For the full year 2008, net revenues increased 1.5% to $18.8 billion. Revenues net of excise taxes increased 2.6% to $15.4 billion, primarily driven by lower wholesale promotional allowance rates, partially offset by lower volume.
For the full year 2008, PM USA’s reported operating companies income was $4.9 billion, a 7.9% increase compared to 2007. The increase was due to lower wholesale promotional allowance rates and lower selling, general and administrative spending as well as lower charges related to the closure of its Cabarrus, North Carolina cigarette manufacturing facility, partially offset by lower volume, increased resolution expenses, costs related to the reduction of contract volume manufactured for PMI, higher leaf costs, and higher promotional expenditures. Adjusted for costs, PM USA’s 2008 operating companies increased by 2.5% to $5.0 billion, and its 2008 adjusted operating margins expanded by 0.6 percentage points to 33.3% versus 2007. Over the past two years, PM USA has reduced its selling, general and administrative expenses by $423 million. PM USA delivered $319 million in selling, general and administrative savings in 2007 and another $104 million in 2008.
PM USA’s 2008 domestic cigarette shipment volume of 169.4 billion units was 3.2% lower than the prior-year period, and was estimated to be down approximately 4% when adjusted for changes in trade inventories and calendar differences. For the full year 2008, PM USA’s retail cigarette share grew 0.1 share point to 50.7%, driven by Marlboro’s strong share gains. In 2008, Marlboro achieved record retail share as the brand gained 0.6 share points versus 2007 to 41.6%.
PM USA has been test marketing Marlboro Snus, a spit-free, smokeless tobacco pouch alternative designed especially for adult smokers, in Dallas, Texas and in Indianapolis, Indiana. Based on our consumer-driven insights and learnings from those test markets, PM USA has revamped the Marlboro Snus concept with new packaging, product enhancements and pricing. In December 2008, PM USA announced that it was replacing the existingMarlboro Snus products in the Dallas and Indianapolis test markets with the redesigned product, as well as expanding into a new test market in Arizona during the first quarter of 2009.
In January 2009, PM USA announced that it was discontinuing the Marlboro moist smokeless tobacco test market in Atlanta, Georgia and the surrounding counties. PM USA continues to believe the Marlboro brand has an important role to play in the smokeless tobacco category. PM USA is evaluating potential strategies and options for theMarlboro brand in light of Altria’s acquisition of UST’s smokeless tobacco business.
*Altria Group has revised its reporting segments to reflect the PMI spin-off and the December 2007 acquisition of John Middleton. Altria Group's reporting segments are Cigarettes and Other Tobacco Products, manufactured and sold by Philip Morris USA; Cigars, manufactured and sold by John Middleton; and Financial Services, provided by Philip Morris Capital Corporation. |
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Contact InformationPhilip Morris USA Related InformationOn Altria.com: Philip Morris USA Web Resources: |
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