Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Philip Morris International Inc. (NYSE:PM)

Analysis of Income Taxes

Advanced level


Income Tax Expense (Benefit)

Philip Morris International Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
United States federal and state 17  120  1,662  (39) (56)
Outside United States 2,417  2,425  3,146  2,625  2,762 
Current 2,434  2,545  4,808  2,586  2,706 
United States federal and state 24  (113) (384) 293  117 
Outside United States (165) 13  (117) (111) (135)
Deferred (141) (100) (501) 182  (18)
Provision for income taxes 2,293  2,445  4,307  2,768  2,688 

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Philip Morris International Inc.’s current decreased from 2017 to 2018 and from 2018 to 2019.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Philip Morris International Inc.’s deferred increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Philip Morris International Inc.’s provision for income taxes decreased from 2017 to 2018 and from 2018 to 2019.

Effective Income Tax Rate (EITR)

Philip Morris International Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
U.S. federal statutory tax rate 21.00% 21.00% 35.00% 35.00% 35.00%
Foreign rate differences 1.80% 1.30% -12.20% -12.60% -12.30%
Dividend repatriation cost -0.50% 2.50% 16.40% 5.80% 5.70%
Global intangible low-taxed income 1.40% 1.20% 0.00% 0.00% 0.00%
U.S. state taxes 0.70% -1.10% 0.00% 0.00% 0.00%
Foreign derived intangible income -1.20% -1.10% 0.00% 0.00% 0.00%
Other 0.00% -0.90% 1.50% -0.30% -0.40%
Effective tax rate 23.20% 22.90% 40.70% 27.90% 28.00%

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Philip Morris International Inc.’s effective tax rate decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Components of Deferred Tax Assets and Liabilities

Philip Morris International Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Accrued postretirement and postemployment benefits 184  193  239  287  275 
Accrued pension costs 620  390  334  256  230 
Inventory 176  136  131  241  174 
Accrued liabilities 130  138  117  137  153 
Net operating loss carryforwards and tax credits 486  452  213  —  — 
Foreign exchange —  —  91  —  — 
Other 101  37  57  173  164 
Deferred income tax assets 1,697  1,346  1,182  1,094  996 
Valuation allowance (304) (257) (156) —  — 
Deferred income tax assets, net of valuation allowance 1,393  1,089  1,026  1,094  996 
Trade names (469) (508) (546) (554) (593)
Property, plant and equipment (180) (222) (223) (217) (218)
Unremitted earnings (243) (123) (49) (636) (554)
Foreign exchange (256) (157) —  (725) (532)
Deferred income tax liabilities (1,148) (1,010) (818) (2,132) (1,897)
Net deferred income tax assets (liabilities) 245  79  208  (1,038) (901)

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

Item Description The company
Deferred income tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Philip Morris International Inc.’s deferred income tax assets increased from 2017 to 2018 and from 2018 to 2019.
Deferred income tax assets, net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Philip Morris International Inc.’s deferred income tax assets, net of valuation allowance increased from 2017 to 2018 and from 2018 to 2019.
Net deferred income tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Philip Morris International Inc.’s net deferred income tax assets (liabilities) decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Deferred Tax Assets and Liabilities, Classification

Philip Morris International Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current deferred tax assets —  —  —  —  488 
Noncurrent deferred tax assets 1,153  977  1,007  859  360 
Current deferred tax liabilities —  —  —  —  206 
Noncurrent deferred tax liabilities 908  898  799  1,897  1,543 

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

Item Description The company
Noncurrent deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Philip Morris International Inc.’s noncurrent deferred tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Philip Morris International Inc.’s noncurrent deferred tax liabilities increased from 2017 to 2018 and from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

Philip Morris International Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Current Assets
Current assets (as reported) 20,514  19,442  21,594  17,608  15,804 
Less: Current deferred tax assets, net —  —  —  —  488 
Current assets (adjusted) 20,514  19,442  21,594  17,608  15,316 
Adjustment to Total Assets
Total assets (as reported) 42,875  39,801  42,968  36,851  33,956 
Less: Current deferred tax assets, net —  —  —  —  488 
Less: Noncurrent deferred tax assets, net 1,153  977  1,007  859  360 
Total assets (adjusted) 41,722  38,824  41,961  35,992  33,108 
Adjustment to Current Liabilities
Current liabilities (as reported) 18,833  17,191  15,962  16,467  15,386 
Less: Current deferred tax liabilities, net —  —  —  —  206 
Current liabilities (adjusted) 18,833  17,191  15,962  16,467  15,180 
Adjustment to Total Liabilities
Total liabilities (as reported) 52,474  50,540  53,198  47,751  45,432 
Less: Current deferred tax liabilities, net —  —  —  —  206 
Less: Noncurrent deferred tax liabilities, net 908  898  799  1,897  1,543 
Total liabilities (adjusted) 51,566  49,642  52,399  45,854  43,683 
Adjustment to Total PMI Stockholders’ Deficit
Total PMI stockholders’ deficit (as reported) (11,577) (12,459) (12,086) (12,688) (13,244)
Less: Net deferred tax assets (liabilities) 245  79  208  (1,038) (901)
Total PMI stockholders’ deficit (adjusted) (11,822) (12,538) (12,294) (11,650) (12,343)
Adjustment to Net Earnings Attributable To PMI
Net earnings attributable to PMI (as reported) 7,185  7,911  6,035  6,967  6,873 
Add: Deferred income tax expense (benefit) (141) (100) (501) 182  (18)
Net earnings attributable to PMI (adjusted) 7,044  7,811  5,534  7,149  6,855 

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).


Philip Morris International Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Philip Morris International Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current Ratio
Reported current ratio 1.09 1.13 1.35 1.07 1.03
Adjusted current ratio 1.09 1.13 1.35 1.07 1.01
Net Profit Margin
Reported net profit margin 9.22% 9.91% 7.73% 9.30% 9.30%
Adjusted net profit margin 9.04% 9.79% 7.09% 9.54% 9.28%
Total Asset Turnover
Reported total asset turnover 1.82 2.01 1.82 2.03 2.18
Adjusted total asset turnover 1.87 2.06 1.86 2.08 2.23
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA 16.76% 19.88% 14.05% 18.91% 20.24%
Adjusted ROA 16.88% 20.12% 13.19% 19.86% 20.70%

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Philip Morris International Inc.’s adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Philip Morris International Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Philip Morris International Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Philip Morris International Inc.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Philip Morris International Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Current Ratio

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Current assets 20,514  19,442  21,594  17,608  15,804 
Current liabilities 18,833  17,191  15,962  16,467  15,386 
Liquidity Ratio
Current ratio1 1.09 1.13 1.35 1.07 1.03
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 20,514  19,442  21,594  17,608  15,316 
Adjusted current liabilities 18,833  17,191  15,962  16,467  15,180 
Liquidity Ratio
Adjusted current ratio2 1.09 1.13 1.35 1.07 1.01

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

2019 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 20,514 ÷ 18,833 = 1.09

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 20,514 ÷ 18,833 = 1.09

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Philip Morris International Inc.’s adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to PMI 7,185  7,911  6,035  6,967  6,873 
Revenues including excise taxes 77,921  79,823  78,098  74,953  73,908 
Profitability Ratio
Net profit margin1 9.22% 9.91% 7.73% 9.30% 9.30%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to PMI 7,044  7,811  5,534  7,149  6,855 
Revenues including excise taxes 77,921  79,823  78,098  74,953  73,908 
Profitability Ratio
Adjusted net profit margin2 9.04% 9.79% 7.09% 9.54% 9.28%

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

2019 Calculations

1 Net profit margin = 100 × Net earnings attributable to PMI ÷ Revenues including excise taxes
= 100 × 7,185 ÷ 77,921 = 9.22%

2 Adjusted net profit margin = 100 × Adjusted net earnings attributable to PMI ÷ Revenues including excise taxes
= 100 × 7,044 ÷ 77,921 = 9.04%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Philip Morris International Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenues including excise taxes 77,921  79,823  78,098  74,953  73,908 
Total assets 42,875  39,801  42,968  36,851  33,956 
Activity Ratio
Total asset turnover1 1.82 2.01 1.82 2.03 2.18
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues including excise taxes 77,921  79,823  78,098  74,953  73,908 
Adjusted total assets 41,722  38,824  41,961  35,992  33,108 
Activity Ratio
Adjusted total asset turnover2 1.87 2.06 1.86 2.08 2.23

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

2019 Calculations

1 Total asset turnover = Revenues including excise taxes ÷ Total assets
= 77,921 ÷ 42,875 = 1.82

2 Adjusted total asset turnover = Revenues including excise taxes ÷ Adjusted total assets
= 77,921 ÷ 41,722 = 1.87

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Philip Morris International Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 42,875  39,801  42,968  36,851  33,956 
Total PMI stockholders’ deficit (11,577) (12,459) (12,086) (12,688) (13,244)
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 41,722  38,824  41,961  35,992  33,108 
Adjusted total PMI stockholders’ deficit (11,822) (12,538) (12,294) (11,650) (12,343)
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

2019 Calculations

1 Financial leverage = Total assets ÷ Total PMI stockholders’ deficit
= 42,875 ÷ -11,577 =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total PMI stockholders’ deficit
= 41,722 ÷ -11,822 =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to PMI 7,185  7,911  6,035  6,967  6,873 
Total PMI stockholders’ deficit (11,577) (12,459) (12,086) (12,688) (13,244)
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to PMI 7,044  7,811  5,534  7,149  6,855 
Adjusted total PMI stockholders’ deficit (11,822) (12,538) (12,294) (11,650) (12,343)
Profitability Ratio
Adjusted ROE2

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

2019 Calculations

1 ROE = 100 × Net earnings attributable to PMI ÷ Total PMI stockholders’ deficit
= 100 × 7,185 ÷ -11,577 =

2 Adjusted ROE = 100 × Adjusted net earnings attributable to PMI ÷ Adjusted total PMI stockholders’ deficit
= 100 × 7,044 ÷ -11,822 =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to PMI 7,185  7,911  6,035  6,967  6,873 
Total assets 42,875  39,801  42,968  36,851  33,956 
Profitability Ratio
ROA1 16.76% 19.88% 14.05% 18.91% 20.24%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to PMI 7,044  7,811  5,534  7,149  6,855 
Adjusted total assets 41,722  38,824  41,961  35,992  33,108 
Profitability Ratio
Adjusted ROA2 16.88% 20.12% 13.19% 19.86% 20.70%

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

2019 Calculations

1 ROA = 100 × Net earnings attributable to PMI ÷ Total assets
= 100 × 7,185 ÷ 42,875 = 16.76%

2 Adjusted ROA = 100 × Adjusted net earnings attributable to PMI ÷ Adjusted total assets
= 100 × 7,044 ÷ 41,722 = 16.88%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Philip Morris International Inc.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.