Philip Morris International (PMI) today revised its 2019 full-year reported diluted earnings per share forecast for restructuring charges in Germany.
The revision is related to the company’s decision to end cigarette production at its factory in Berlin. PMI expects to record estimated pretax charges of approximately $355 million.
This estimated amount includes pension and employee separation costs of approximately $265 million, which will be paid in cash, and asset impairment costs of approximately $90 million primarily related to machinery and equipment, which are noncash charges.
The Berlin factory has a projected 2019 production capacity of approximately 40 billion units. Approximately 950 employees are impacted under the agreement. PMI will continue to produce expanded tobacco in Berlin.
Cost savings anticipated from this initiative are included in PMI’s annualized cost efficiencies target of more than $1 billion for the period 2019–2021.