Summary
Philip Morris International Inc. (PM) announced in an 8-K filing dated March 4, 2019, that its Canadian subsidiary, Rothmans, Benson & Hedges Inc., will incur a pre-tax charge of $194 million (approximately $142 million net of tax). This charge is a result of a judgment in two smoking and health class actions in Québec and will be recorded as tobacco litigation-related expenses in the first quarter of 2019. The company also noted that this charge is expected to impact its full-year 2019 reported diluted earnings per share forecast. It is important for investors to note that PMI itself is not a party to these legal cases. While this charge is a one-time event, its impact on EPS should be monitored for the current fiscal year.
Key Highlights
- 1PMI's Canadian subsidiary, Rothmans, Benson & Hedges Inc., faced a judgment in two smoking and health class action lawsuits in Québec.
- 2The company will incur a pre-tax charge of $194 million (approximately $142 million net of tax) due to this judgment.
- 3The charge will be recognized in the first quarter of 2019 as tobacco litigation-related expenses.
- 4This litigation charge is expected to negatively impact PMI's full-year 2019 reported diluted earnings per share (EPS) forecast.
- 5Philip Morris International Inc. (the parent company) is not directly a party to these legal proceedings.
- 6The information was disclosed via a press release dated March 4, 2019, attached as an exhibit to the 8-K filing.