Philip Morris USA Reaches Settlement With NY NPM Adjustment Disputes

(RTTNews) - Philip Morris USA Inc. and other cigarette manufacturers have reached a settlement with the State of New York of the long-standing non-participating manufacturer or NPM adjustment disputes. New York adds to the 22 other states (plus the District of Columbia and Puerto Rico) that have settled these disputes under the 1998 Master Settlement Agreement or MSA.

As per the deal announced today, the participating manufacturers will receive credits against their April 2016 MSA payments. Philip Morris USA's credit is about $126 million, which it expects to record as a corresponding increase in its reported pre-tax earnings for the third quarter of 2015. New York will receive approximately $718 million (plus accumulated earnings) from funds that the participating manufacturers had deposited in a disputed payments account.

The settlement resolves all NPM adjustment disputes from 2004 to 2014 with New York. It also includes a streamlined method of calculating reductions in MSA payments for NPM cigarettes sold in New York going forward.