- Altria commences a cash tender offer
for any and all of its 9.700% Notes due 2018, in connection with
which it expects to record a one-time, pre-tax charge against
reported earnings in the first quarter of 2015.
- Altria reaffirms its previously
announced guidance for 2015 full-year adjusted diluted earnings per
share (EPS) to be in the range of $2.75 to $2.80.
Altria Group, Inc. (Altria) (NYSE:MO) today announced that it is
commencing a cash tender offer for any and all of its senior
unsecured 9.700% Notes due 2018 (the “Notes”). Altria expects the
tender offer to reduce ongoing interest expense, its weighted
average coupon rate and debt scheduled to mature in the future. The
tender offer will expire at 5:00 p.m., New York City time, on
Wednesday, March 4, 2015, unless extended or earlier terminated by
Altria (the “Expiration Time”).
The terms and conditions of the tender offer are described in
the Offer to Purchase, dated February 26, 2015, the related Letter
of Transmittal and the Notice of Guaranteed Delivery. The following
table sets forth certain information relating to pricing for the
tender offer.
Title of Securities CUSIP Number
Outstanding Principal
Amount
U.S. Treasury Reference
Security
Fixed Spread
(bps)
Bloomberg Reference Page
9.700% Notes
due 2018
02209SAD5 $1,656,182,000
1.000% due
02/15/2018
65
FIT1
Upon the terms and subject to the conditions of the tender
offer, all Notes validly tendered and not validly withdrawn at or
prior to the Expiration Time will be accepted for purchase. Altria
reserves the right to terminate or withdraw the tender offer for
the Notes, subject to applicable law. In the event of a termination
or withdrawal of the tender offer, Notes tendered and not accepted
for purchase pursuant to the tender offer will be promptly returned
to the tendering holders.
Holders who wish to be eligible to receive the Total
Consideration (as defined below) must validly tender and not
validly withdraw their Notes at any time at or prior to the
Expiration Time. Tendered Notes may be withdrawn at any time at or
prior to the earlier of (i) the Expiration Time, and (ii) if the
tender offer is extended, the 10th business day after commencement
of the tender offer. Notes subject to the tender offer may also be
validly withdrawn in the event the tender offer has not been
consummated within 60 business days after commencement.
The total consideration per $1,000 principal amount of the Notes
(the “Total Consideration”) will be a price (calculated in
accordance with standard market practice) determined as described
in the Offer to Purchase by reference to a yield to maturity equal
to the sum of (i) the yield to maturity for the United States
Treasury (“UST”) Reference Security specified in the table above,
calculated based on the bid-side price of such UST Reference
Security as of 11:00 a.m., New York City time, on Wednesday, March
4, 2015, plus (ii) a fixed spread of 65 basis points.
In addition, holders whose Notes are purchased in the tender
offer will be paid accrued and unpaid interest on their purchased
Notes from the last interest payment date up to, but not including,
the payment date for such purchased Notes. Upon the terms and
subject to the conditions of the tender offer, the settlement of
the tender offer will occur promptly after the Expiration Time.
The tender offer is subject to the satisfaction or waiver of
certain conditions, as specified in the Offer to Purchase.
Information Relating to the Tender
Offer
Barclays Capital Inc., Citigroup Global Markets Inc., J.P.
Morgan Securities LLC and Credit Suisse Securities (USA) LLC are
acting as the Dealer Managers for the tender offer. Investors with
questions may contact Barclays Capital Inc. at (800) 438-3242
(toll-free) or (212) 528-7581 (collect), Citigroup Global Markets
Inc. at (800) 558-3745 (toll-free) or (212) 723-6106 (collect) and
J.P. Morgan Securities LLC at (800) 834-4666 (toll-free) or (212)
834-4811 (collect). Global Bondholder Services Corporation is the
Information Agent and Depositary and can be contacted at the
following numbers: banks and brokers can call (212) 430-3774
(collect), and all others can call (866) 470-3900 (toll-free).
Copies of the Offer to Purchase, related Letter of Transmittal
and Notice of Guaranteed Delivery are available at the following
web address: http://www.gbsc-usa.com/Altria/
This press release is neither an offer to sell nor a
solicitation of offers to buy any securities. The tender offer is
being made only pursuant to the Offer to Purchase, related Letter
of Transmittal and Notice of Guaranteed Delivery. The tender offer
is not being made to holders of Notes in any jurisdiction in which
the making or acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction. None
of Altria, the Dealer Managers, the Depositary, the Information
Agent or the trustee for the Notes makes any recommendation in
connection with the tender offer. Please refer to the Offer to
Purchase for a description of offer terms, conditions, disclaimers
and other information applicable to the tender offer.
2015 First Quarter Charge and Full-Year
EPS Guidance
Altria expects to record a one-time, pre-tax charge against
reported earnings in the first quarter of 2015, reflecting the loss
on early extinguishment of debt related to the tender offer. The
final pre-tax charge will depend upon the pricing and amount of
Notes purchased in the tender offer (the “Charge”).
Altria reaffirms its previously announced guidance for 2015
full-year adjusted diluted EPS to be in the range of $2.75 to
$2.80, which excludes the Charge as well as an approximate $0.02
per share provision that will be recorded by Philip Morris USA Inc.
(“PM USA”) in the first quarter of 2015, related to PM USA’s
previously announced tentative agreement to resolve approximately
415 pending federal Engle progeny cases. The 2015 full-year
adjusted diluted EPS guidance range represents a growth rate of 7%
to 9% from an adjusted diluted EPS base of $2.57 in 2014, which
excluded the special items in the table below.
The factors described in the Forward-Looking and Cautionary
Statements section of this release represent continuing risks to
this forecast.
Altria’s Adjusted Diluted Earnings Per Share
Full Year 2014 Reported diluted EPS
$2.56 NPM Adjustment Items (0.03) Loss on early
extinguishment of debt 0.02 Asset impairment, exit, integration and
acquisition-related costs 0.01 SABMiller special items 0.01 Tax
items (0.01) Tobacco and health litigation items 0.01
Adjusted
diluted EPS $2.57
Non-GAAP Financial
Measures
Altria reports its financial results in accordance with U.S.
generally accepted accounting principles (“GAAP”). Altria’s
management reviews certain financial results, including diluted
EPS, on an adjusted basis, which exclude certain income and expense
items that management believes are not part of underlying
operations. These items may include, for example, loss on early
extinguishment of debt, restructuring charges, SABMiller plc
(“SABMiller”) special items, certain tax items, charges associated
with tobacco and health litigation items, and settlements of, and
determinations made in connection with, certain non-participating
manufacturer (“NPM”) adjustment disputes (such settlements and
determinations are referred to collectively as "NPM Adjustment
Items"). Altria’s management does not view any of these special
items to be part of Altria’s sustainable results as they may be
highly variable, are difficult to predict and can distort
underlying business trends and results. Altria’s management
believes that these adjusted financial measures provide useful
insight into underlying business trends and results and provide a
more meaningful comparison of year-over-year results. Altria’s
management uses adjusted financial measures for planning,
forecasting and evaluating business and financial performance,
including allocating resources and evaluating results relative to
employee compensation targets. These adjusted financial measures
are not consistent with GAAP, and should thus be considered as
supplemental in nature and not considered in isolation or as a
substitute for the related financial information prepared in
accordance with GAAP.
Altria’s full-year adjusted diluted EPS guidance excludes the
impact of certain income and expense items, including those items
noted in the preceding paragraph. Altria’s management cannot
estimate on a forward-looking basis the impact of these items on
Altria’s reported diluted EPS because these items, which could be
significant, are difficult to predict and may be highly variable.
As a result, Altria does not provide a corresponding GAAP measure
for, or reconciliation to, its adjusted diluted EPS guidance.
Altria’s Profile
Altria’s wholly-owned subsidiaries include PM USA, U.S.
Smokeless Tobacco Company LLC (“USSTC”), John Middleton Co., Nu
Mark LLC, Ste. Michelle Wine Estates Ltd. (“Ste. Michelle”) and
Philip Morris Capital Corporation. Altria holds a continuing
economic and voting interest in SABMiller.
The brand portfolios of Altria’s tobacco operating companies
include Marlboro®, Black & Mild®, Copenhagen®, Skoal®, MarkTen®
and Green Smoke®. Ste. Michelle produces and markets premium wines
sold under various labels, including Chateau Ste. Michelle®,
Columbia Crest®, 14 Hands® and Stag’s Leap Wine Cellars™, and it
imports and markets Antinori®, Champagne Nicolas Feuillatte™,
Torres® and Villa Maria Estate™ products in the United States.
Trademarks and service marks related to Altria referenced in this
release are the property of Altria or its subsidiaries or are used
with permission. More information about Altria is available at
altria.com and on the Altria Investor app.
Forward-Looking and Cautionary
Statements
This press release contains projections of future results and
other forward-looking statements that involve a number of risks and
uncertainties and are made pursuant to the Safe Harbor Provisions
of the Private Securities Litigation Reform Act of 1995.
Important factors that may cause actual results and outcomes to
differ materially from those contained in the projections and
forward-looking statements included in this press release are
described in Altria’s publicly filed reports, including its Annual
Report on Form 10-K for the year ended December 31, 2014.
These factors include the following: significant competition;
changes in adult consumer preferences and demand for Altria’s
operating companies’ products; fluctuations in raw material
availability, quality and price; reliance on key facilities and
suppliers; reliance on critical information systems, many of which
are managed by third-party service providers; fluctuations in
levels of customer inventories; the effects of global, national and
local economic and market conditions; changes to income tax laws;
federal, state and local legislative activity, including actual and
potential federal and state excise tax increases; increasing
marketing and regulatory restrictions; the effects of price
increases related to excise tax increases and concluded tobacco
litigation settlements on trade inventories, consumption rates and
consumer preferences within price segments; health concerns
relating to the use of tobacco products and exposure to
environmental tobacco smoke; privately imposed smoking
restrictions; and, from time to time, governmental
investigations.
Furthermore, the results of Altria’s tobacco businesses are
dependent upon their continued ability to promote brand equity
successfully; to anticipate and respond to evolving adult consumer
preferences; to develop, manufacture, market and distribute
products that appeal to adult tobacco consumers (including, where
appropriate, through arrangements with, and investments in, third
parties); to improve productivity; and to protect or enhance
margins through cost savings and price increases.
Altria and its tobacco businesses are also subject to federal,
state and local government regulation, including broad-based
regulation of PM USA and USSTC by the U.S. Food and Drug
Administration. Altria and its subsidiaries continue to be subject
to litigation, including risks associated with adverse jury and
judicial determinations, courts reaching conclusions at variance
with the companies’ understanding of applicable law, bonding
requirements in the limited number of jurisdictions that do not
limit the dollar amount of appeal bonds and certain challenges to
bond cap statutes.
Altria cautions that the foregoing list of important factors is
not complete and does not undertake to update any forward-looking
statements that it may make except as required by applicable law.
All subsequent written and oral forward-looking statements
attributable to Altria or any person acting on its behalf are
expressly qualified in their entirety by the cautionary statements
referenced above.
Altria Client ServicesInvestor Relations804-484-8222orAltria
Client ServicesMedia Relations804-484-8897
Altria (NYSE:MO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Altria (NYSE:MO)
Historical Stock Chart
From Apr 2023 to Apr 2024