Plus   Neg

Philip Morris International's Canadian Unit Granted CCAA Protection

Philip Morris International Inc. or PMI said that it was informed by its Canadian subsidiary, Rothmans, Benson & Hedges Inc. or RBH that RBH had obtained an initial order from the Ontario Superior Court of Justice granting it protection under the Companies' Creditors Arrangement Act or CCAA. RBH announced that obtaining creditor protection became necessary following recent developments in two Class Action proceedings in Québec against RBH, Imperial Tobacco Canada Limited, and JTI-Macdonald Corp.

The initial order includes a comprehensive stay of all tobacco-related litigation pending in Canada against RBH and PMI, thus providing an efficient forum for RBH to seek resolution of all such litigation.

The CCAA process allows RBH to carry on its business in the ordinary course with minimal disruption to its customers, suppliers and employees.

As a result of the filing, and under U.S. GAAP, PMI will deconsolidate RBH from its financial statements, resulting in an estimated one-time non-cash charge of approximately $0.10 per share.

While it remains under creditor protection, RBH does not anticipate paying dividends. As RBH has not paid dividends since the trial court's judgment in May 2015, the deconsolidation will not have an impact on PMI's current annualized dividend rate.

As a result of the deconsolidation of RBH, PMI today revises its full-year 2019 reported diluted earnings per share forecast to be at least $4.90 at prevailing exchange rates. This full-year guidance reflects:

The current estimated one-time net impact of the deconsolidation of RBH under U.S. GAAP of approximately $0.10 per share, to be recorded in the first quarter of 2019, which is a non-cash item, plus the tobacco litigation-related charge of approximately $0.09 per share announced on March 4, 2019; and The exclusion of RBH's previously anticipated earnings from PMI's consolidated financial statements from the date of deconsolidation to December 31, 2019, of approximately $0.28 per share.

Excluding the above deconsolidation-related items and the unfavorable impact of currency, at prevailing exchange rates, of approximately $0.14 per share, this forecast represents a projected increase of at least 8.0% versus a pro forma adjusted diluted earnings per share of $4.84 in 2018. The 2018 pro forma adjusted earnings per share of $4.84 is calculated as reported earnings per share of $5.08, plus tax items of $0.02 per share primarily related to the implementation of the Tax Cuts and Jobs Act, less approximately $0.26 of estimated net earnings attributable to RBH from March 22 through December 31, 2018, in order to present a like-for-like comparison.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
U.S. President Donald Trump said he discussed with Apple Inc.'s CEO Tim Cook about the impact of the U.S. tariffs on goods imported from China as well as the competition for Apple from South Korea's Samsung Electronics Co. Cook reportedly warned Trump that the tariffs on Chinese imports would hurt Apple's business as the tech giant relies heavily on manufacturing in China. Just Egg, a plant-based egg alternative, will be available in 2,100 stores owned by grocery chain Kroger Co. later this month. The product launch comes as plant-based meat and egg alternatives gain traction in the country. Just Egg, a product of California-based food technology company Just Inc., will be available at Kroger-owned stores, including Kroger, Fred Meyer and Ralphs. Boeing has delivered the first 787-10 Dreamliner to Vietnam Airlines, the flag carrier of Vietnam, as part of the eight 787-10 Dreamliner airplanes to be delivered on lease through Air Lease. Vietnam Airlines said the 787-10 Dreamliner, claimed by Boeing to be the most fuel-efficient twin-aisle airplane in the industry, will help it raise the customer experience on the Hanoi to Ho Chi Minh route.
Follow RTT