Summary
Philip Morris International Inc. (PM) has filed an 8-K report detailing an "Other Event" concerning an agreement signed on June 19, 2009, with the Republic of Colombia, its Departments, the Capital District of Bogota, and PM's subsidiaries, Philip Morris Colombia and Coltabaco. This agreement aims to foster investment and cooperation within the Colombian tobacco market, with a significant focus on combating counterfeit and contraband tobacco products. As part of this agreement, PM will provide $200 million in funding to the Colombian governments over a 20-year period. This funding is earmarked for addressing mutual interests, including the fight against illegal cigarette trade and enhancing the quality and quantity of locally grown tobacco. The company anticipates recording a pre-tax charge of approximately $135 million (approximately $93 million after-tax) in the second quarter of 2009 as a result of this agreement, which is expected to impact earnings per share by about $0.05.
Key Highlights
- 1Philip Morris International (PM) entered into an Investment and Cooperation Agreement with the Republic of Colombia and its subsidiaries.
- 2The agreement is designed to promote investment and cooperation within the Colombian tobacco market.
- 3A key objective is to combat the illicit trade of tobacco products, including counterfeit and contraband cigarettes.
- 4PM commits to providing $200 million in funding to Colombian governments over a 20-year period.
- 5The funding will support efforts against illegal tobacco trade and improve local tobacco cultivation.
- 6PM will recognize a pre-tax charge of approximately $135 million (post-tax: $93 million) in Q2 2009.
- 7This charge is expected to reduce earnings per share by approximately $0.05.