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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 28, 1999
PHILIP MORRIS COMPANIES INC.
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(Exact name of registrant as specified in its charter)
Virginia 1-8940 13-3260245
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
120 Park Avenue, New York, New York 10017-5592
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (917) 663-5000
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On June 28, 1999, Philip Morris Companies Inc. (the "Company") issued
the following press release:
"NEW YORK, June 28, 1999 -- Geoffrey C. Bible, chairman and chief
executive officer, Philip Morris Companies Inc. (NYSE: MO), told a
group of approximately 450 security analysts, investors and bankers at
the Grand Hyatt Hotel this afternoon that Philip Morris is "a powerful
company, poised for growth."
Mr. Bible said that Philip Morris is aiming for 1999 earnings per
share of about $3.30. He noted that earnings would be impacted by
unfavorable currency and by the fact that 1999 is a transition year
for the Company's two most profitable businesses, domestic and
international tobacco. He emphasized, however, that the Company's
international tobacco business has responded aggressively to economic
events, through measures such as successful development spending on
the Company's brands. He assured investors that "the future long-term
health of our brands is our top business priority."
Mr. Bible said that once the Company's tobacco businesses "emerge from
this transition year, we are aiming for earnings per share growth of
11-13% for 2000 through 2003 - clearly, a robust target for the
largest consumer packaged goods company in the world. Add to this our
anticipated dividends and share repurchases, and you will see that we
are delivering on our two principal financial goals: building our
businesses and increasing value for shareholders."
The Company said that it intends to keep raising its dividend at least
in line with earnings per share growth. Philip Morris also noted that
it prefers to accelerate its stock repurchases when possible. When its
current three-year $8 billion share repurchase program is completed,
the Company said that it would probably look to replace the program
with a larger one, consistent with its history and cash flow growth.
The Company said that from 1999 through 2003, its businesses should
generate some $55 billion in cumulative operating cash flow, which
will be used to grow the business, guard the Company's credit ratings
and enhance value for shareholders.
Finally, the Company said that it remains optimistic about its ability
to manage successfully the litigation, regulatory and legislative
challenges that it faces.
Other members of Philip Morris' senior management who presented at
today's meeting included William H. Webb, chief operating officer;
Murray H. Bring, vice chairman, external affairs and general counsel;
Steven C. Parrish, senior vice president, corporate affairs; Louis C.
Camilleri, senior vice president and chief financial officer; and the
following presidents and chief executive officers of Philip Morris'
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operating companies: Robert A. Eckert, Kraft Foods, Inc.; Roger K.
Deromedi, Kraft Foods International, Inc.; John D. Bowlin, Miller
Brewing Company; George R. Lewis, Philip Morris Capital Corporation;
Paul W. Hendrys, Philip Morris International Inc.; and Michael E.
Szymanczyk, Philip Morris U.S.A.
Forward-Looking and Cautionary Statements
All statements included in this press release and in today's investor
presentation that are not purely historical are "forward-looking
statements" within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Although management
believes that the expectations reflected in the earnings per share
growth targets, projected results and other forward-looking
information are based upon reasonable assumptions, it can give no
assurance that its expectations will be achieved and cautions
investors not to place undue reliance on such expectations. Investors
should be aware of the following important risk factors that could
cause actual results to differ materially from those contained in such
forward-looking statements.
The tobacco industry continues to be subject to health concerns
relating to the use of tobacco products and exposure to ETS,
legislation, including actual and potential excise tax increases,
increasing marketing and regulatory restrictions, privately imposed
smoking restrictions, governmental and grand jury investigations,
litigation, and the effects of price increases related to concluded
tobacco litigation settlements and excise tax increases on consumption
rates. The Company's international food and tobacco businesses are
subject to local economic conditions, particularly the timing of
economic recoveries in Asia and Eastern Europe and related shifts in
consumer preferences, the effects of changing prices for its raw
materials and the potential impact of the Y2K issue. The financial
targets and projected results assume the continued ability of the
Company's consumer products subsidiaries to promote brand equity
successfully, to anticipate and respond to new consumer trends, to
develop new products and markets and to broaden brand portfolios, to
compete effectively with lower priced products in a consolidating
environment at the retail and manufacturing levels, and to improve
productivity. Developments in any of these areas, many of which are
more fully described in the Company's most recent annual and quarterly
reports filed with the SEC, could cause the Company's results to
differ materially from the targets and projections announced today.
The Company cautions that the foregoing list of important risk factors
is not exclusive. The Company does not undertake to update any
forward-looking statement made in this press release or in the
investor meeting or to reflect any change in management's expectations
with regard thereto or any change in events, conditions, assumptions
or circumstances on which such statements are based.
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With 1998 operating revenues of $74 billion, the Philip Morris family
of companies is the world's largest producer and marketer of consumer
packaged goods. Philip Morris Companies Inc. has five principal
operating companies: Kraft Foods, Inc. (comprising Kraft Foods North
America and Kraft Foods International), Miller Brewing Company, Philip
Morris International Inc., Philip Morris Incorporated (Philip Morris
U.S.A.) and Philip Morris Capital Corporation."
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHILIP MORRIS COMPANIES INC.
BY /s/ G. PENN HOLSENBECK
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Vice President, Associate General Counsel
and Secretary
Date: July 1, 1999
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