- Altria’s 2015 first-quarter reported
diluted earnings per share (EPS) decreased 11.9% to $0.52, as
comparisons were affected by special items.
- Altria’s 2015 first-quarter adjusted
diluted EPS, which excludes the impact of special items, increased
10.5% to $0.63.
- Altria reaffirms its 2015 full-year
adjusted diluted EPS to be in the range of $2.75 to $2.80,
representing a growth rate of 7% to 9% from an adjusted diluted EPS
base of $2.57 in 2014.
Altria Group, Inc. (Altria) (NYSE:MO) today announced its 2015
first-quarter business results and reaffirmed guidance for 2015
full-year adjusted diluted EPS.
“Altria delivered strong operating and financial results in the
first quarter, growing adjusted diluted EPS by 10.5% on the
strength of our core tobacco businesses and their leading premium
brands,” said Marty Barrington, Chairman, Chief Executive Officer
and President of Altria. “In the smokeable segment, PM USA’s steady
investments in Marlboro continued to strengthen the brand’s
leadership position. In the smokeless segment, USSTC grew its
volume, supported by retail share gains from Copenhagen and Skoal
combined. And Nu Mark began shipping its next generation e-vapor
product, MarkTen XL, into lead markets.”
Conference Call
As previously announced, a conference call with the investment
community and news media will be webcast on April 23, 2015 at 9:00
a.m. Eastern Time. Access to the webcast is available at
www.altria.com/webcasts and via the Altria Investor app.
Cash Returns to Shareholders -
Dividends and Share Repurchase Program
In February 2015, Altria’s Board of Directors (Board) declared a
regular quarterly dividend of $0.52 per share. The current
annualized dividend rate is $2.08 per share. As of April 17, 2015,
Altria’s annualized dividend yield was 4.0%. Altria paid
approximately $1.0 billion in dividends in the first quarter and
expects to continue to return a large amount of cash to
shareholders in the form of dividends by maintaining a dividend
payout ratio target of approximately 80% of its adjusted diluted
EPS. Future dividend payments remain subject to the discretion of
the Board.
During the first quarter of 2015, Altria repurchased
approximately 3.6 million shares of its common stock at an average
price of $53.03 for a total cost of $192 million. Altria has
approximately $326 million remaining in the current $1 billion
program, which it expects to complete by the end of 2015. The
timing of share repurchases depends upon marketplace conditions and
other factors. This program remains subject to the discretion of
the Board.
Innovative Tobacco
Products
Nu Mark LLC (Nu Mark) began shipping its next generation e-vapor
product, MarkTen XL, into lead markets in April 2015. MarkTen XL is
a larger format product that delivers twice the liquid and battery
life as previous MarkTen products.
Capital Markets Activity - Debt Tender
Offer
In March 2015, Altria completed a cash tender offer for
approximately $793 million aggregate principal amount of its senior
unsecured 9.700% Notes due 2018. The transaction resulted in a
one-time, pre-tax charge against reported earnings of $228 million,
or $0.07 per share, reflecting the loss on early extinguishment of
debt.
Previously Announced Agreement to
Resolve Federal Engle Progeny Litigation
In February 2015, Philip Morris USA Inc. (PM USA) announced that
it and certain other manufacturers had reached a tentative
agreement to resolve approximately 415 Engle progeny lawsuits
pending against them in federal court. Under the terms of the
tentative agreement, PM USA paid approximately $43 million into
escrow and recorded a corresponding pre-tax charge against reported
earnings, or $0.01 per share, during the first quarter of 2015.
2015 Full-Year Guidance
Altria reaffirms its guidance for 2015 full-year adjusted
diluted EPS, which excludes the 2015 special items shown in Table
2, to be in a range of $2.75 to $2.80, representing a growth rate
of 7% to 9% from an adjusted diluted EPS base of $2.57 in 2014, as
shown in Table 1 below. Altria continues to expect that its 2015
full-year effective tax rate on operations will be approximately
35%.
The factors described in the Forward-Looking and Cautionary
Statements section of this release represent continuing risks to
Altria’s forecast.
Table 1 - Altria’s 2014 Adjusted
Results Full Year 2014 Reported diluted
EPS $ 2.56 NPM Adjustment Items (0.03 ) Asset
impairment, exit, integration and acquisition-related costs 0.01
Tobacco and health litigation items 0.01 SABMiller special items
0.01 Loss on early extinguishment of debt 0.02 Tax items (0.01 )
Adjusted diluted EPS $
2.57
ALTRIA GROUP,
INC.
Altria reports its financial results in accordance with U.S.
generally accepted accounting principles (GAAP). Altria’s
management reviews operating companies income (OCI), which is
defined as operating income before general corporate expenses and
amortization of intangibles, to evaluate the performance of, and
allocate resources to, the segments. Altria’s management also
reviews OCI, operating margins and diluted EPS on an adjusted
basis, which excludes 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 also reviews income tax rates on an
adjusted basis. Altria’s effective tax rate on operations may
exclude certain tax items from its reported effective tax rate.
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. Reconciliations of historical adjusted
financial measures to corresponding GAAP measures are provided in
this release. Comparisons are to the corresponding prior-year
period unless otherwise stated.
Altria’s full-year adjusted diluted EPS guidance and full-year
forecast for its effective tax rate on operations exclude 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
its reported diluted EPS and its reported tax rate 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 or its forecast for its effective tax rate on
operations.
Altria’s reportable segments are smokeable products,
manufactured and sold by PM USA and John Middleton Co. (Middleton);
smokeless products, substantially all of which are manufactured and
sold by U.S. Smokeless Tobacco Company LLC (USSTC); and wine,
produced and/or distributed by Ste. Michelle Wine Estates Ltd.
(Ste. Michelle).
Altria’s 2015 first-quarter net revenues increased 5.2% to $5.8
billion, reflecting higher net revenues in all reportable segments.
Altria’s revenues net of excise taxes increased 6.6% to $4.3
billion for the first quarter.
Altria’s 2015 first-quarter reported diluted EPS decreased 11.9%
to $0.52, primarily driven by loss on early extinguishment of debt,
lower earnings from Altria’s equity investment in SABMiller
(SABMiller’s results were negatively affected by special items and
unfavorable currency impacts from a stronger U.S. dollar), 2014
first-quarter interest income related to NPM Adjustment Items and
higher investment in innovative tobacco products. These factors
were partially offset by higher reported OCI in the smokeable
products segment and fewer shares outstanding. Altria’s
first-quarter adjusted diluted EPS, which excludes the special
items shown in Table 2, grew 10.5% to $0.63, primarily driven by
higher adjusted OCI in the smokeable products segment and fewer
shares outstanding, partially offset by higher investment in
innovative tobacco products.
Table 2 - Altria’s Adjusted Results
First Quarter 2015
2014 Change Reported diluted EPS $
0.52 $ 0.59 (11.9)% NPM Adjustment
Items — (0.02 ) Tobacco and health litigation items 0.01 —
SABMiller special items 0.03 — Loss on early extinguishment of debt
0.07 —
Adjusted diluted EPS
$ 0.63 $ 0.57
10.5%
SABMiller Special Items
Special items related to Altria’s equity investment in SABMiller
affected comparisons of Altria’s first-quarter reported diluted
EPS. For the first quarter of 2015, SABMiller pre-tax special items
totaled $86 million, or $0.03 per share, primarily reflecting asset
impairment charges.
NPM Adjustment Items
Comparisons of Altria’s first-quarter reported diluted EPS were
further affected by NPM Adjustment Items. During the first quarter
of 2014, PM USA recorded pre-tax interest income, which reduced
interest and other debt expense, net, related to NPM Adjustment
Items of approximately $64 million, or $0.02 per share.
SMOKEABLE
PRODUCTS
The smokeable products segment delivered strong net revenues,
adjusted OCI and adjusted OCI margin growth in the first quarter,
primarily through higher pricing. PM USA grew Marlboro’s retail
share and its total cigarette retail share for the quarter.
The smokeable products segment’s net revenues for the first
quarter grew 5.3%, primarily driven by higher pricing and volume.
Revenues net of excise taxes increased 6.9% in the first
quarter.
The smokeable products segment’s 2015 first-quarter reported OCI
increased 10.1%, primarily due to higher pricing, higher volume and
lower resolution expenses (due principally to the end of the
federal tobacco quota buy-out payments). These factors were
partially offset by higher costs (primarily due to pension and
benefit costs and the timing of selling, general and administrative
spending) and higher tobacco and health litigation items. Adjusted
OCI, which is calculated excluding the special items identified in
Table 3, grew 12.6% and adjusted OCI margins expanded 2.3
percentage points to 46.4%.
Table 3 - Smokeable Products: Revenues and OCI ($ in
millions)
First Quarter 2015 2014 Change Net
revenues $ 5,221 $ 4,958 5.3
% Excise taxes (1,495 ) (1,474 )
Revenues net of excise
taxes $ 3,726 $ 3,484
6.9 % Reported OCI $
1,686 $ 1,531 10.1 % Asset
impairment and exit costs — 2 Tobacco and health litigation items
43 3
Adjusted OCI $ 1,729
$ 1,536 12.6 % Adjusted OCI
margins 1 46.4
% 44.1 % 2.3 pp
1 Adjusted OCI margins are calculated as adjusted OCI divided by
revenues net of excise taxes.
PM USA’s 2015 first-quarter reported domestic cigarettes
shipment volume increased 1.6%, benefiting from a moderation in the
industry’s rate of decline, trade inventory movements and retail
share gains. When adjusted for trade inventory changes and other
factors, PM USA estimates that its first-quarter domestic
cigarettes shipment volume was essentially unchanged, and that
total industry cigarette volumes declined approximately 0.5% in the
first quarter.
Middleton’s reported cigars shipment volume increased 10.2% for
the first quarter, driven primarily by Black & Mild’s strong
performance in the tipped cigars segment. Table 4 summarizes
smokeable products segment volume performance.
Table 4 - Smokeable Products: Shipment Volume (sticks in
millions)
First Quarter 2015 2014 Change
Cigarettes: Marlboro 25,117 24,816 1.2 %
Other
premium 1,578 1,629 (3.1 )%
Discount 2,503 2,304
8.6 %
Total cigarettes 29,198
28,749 1.6 % Cigars:
Black & Mild 298 270 10.4 %
Other 4 4
— %
Total cigars 302 274
10.2 % Total smokeable products
29,500 29,023
1.6 %
Note:
Cigarettes volume includes units sold as well as promotional
units, but excludes units sold in Puerto Rico and U.S. Territories,
to overseas military and by Philip Morris Duty Free Inc., none of
which, individually or in the aggregate, is material to the
smokeable products segment.
Marlboro’s retail share increased by 0.3 points to 44.0% in the
first quarter. PM USA grew its total retail share in the first
quarter by 0.4 points due to gains by Marlboro and L&M in
Discount. These retail share gains were partially offset by share
losses on other portfolio brands. In the total machine-made large
cigars category, Black & Mild’s retail share declined 0.6
points in the first quarter. Middleton continued to concentrate on
the more profitable, tipped cigars segment, where Black & Mild
gained share.
Table 5 summarizes retail share performance by PM USA in
cigarettes and Middleton in machine-made large cigars.
Table 5 - Smokeable Products: Retail Share (percent)
First
Quarter 2015 2014
Percentage point
change
Cigarettes: Marlboro 44.0 % 43.7 % 0.3
Other
premium 2.8 2.9 (0.1)
Discount 4.3 4.1 0.2
Total cigarettes 51.1 % 50.7 %
0.4 Cigars: Black & Mild 27.1 %
27.7 % (0.6)
Other 0.3 0.2 0.1
Total
cigars 27.4 %
27.9 % (0.5)
Note: Retail share results for cigarettes are based on data from
IRI/MSAi, a tracking service that uses a sample of stores and
certain wholesale shipments to project market share and depict
share trends. Retail share results for cigars are based on data
from IRI InfoScan, a tracking service that uses a sample of stores
to project market share and depict share trends. Both services
track sales in the food, drug and mass merchandisers (including
Wal-Mart), convenience, military, dollar store and club trade
classes. For other trade classes selling cigarettes, retail share
is based on shipments from wholesalers to retailers (STARS). These
services are not designed to capture sales through other channels,
including the Internet, direct mail and some illicitly
tax-advantaged outlets. Retail share results for cigars are based
on data for machine-made large cigars. Middleton defines
machine-made large cigars as cigars, made by machine, that weigh
greater than three pounds per thousand, except cigars sold at
retail in packages of 20 cigars. Because the cigars service
represents retail share performance only in key trade channels, it
should not be considered a precise measurement of actual retail
share. It is IRI’s standard practice to periodically refresh its
services, which could restate retail share results that were
previously released in these services.
SMOKELESS
PRODUCTS
The smokeless products segment grew OCI and expanded OCI margins
in the first quarter of 2015. USSTC also increased Copenhagen and
Skoal’s combined retail share.
The smokeless products segment’s 2015 first-quarter net revenues
increased 3.6%, primarily driven by higher pricing, partially
offset by higher promotional investments. The smokeless products
segment’s revenues net of excise taxes increased 3.4% in the first
quarter.
The smokeless products segment’s 2015 first-quarter OCI
increased 5.0% primarily due to higher pricing, partially offset by
higher promotional investments. The smokeless products segment’s
OCI margins expanded 1.0 percentage point to 63.1% in the first
quarter. Table 6 summarizes revenues and OCI for the smokeless
products segment.
Table 6 - Smokeless Products: Revenues and OCI ($ in
millions)
First Quarter 2015 2014 Change
Net revenues $ 430 $ 415
3.6 % Excise taxes (32 ) (30 )
Revenues net of
excise taxes $ 398 $ 385
3.4 % Reported and Adjusted
OCI $ 251 $ 239
5.0 % OCI margins 1
63.1 % 62.1 %
1.0
pp
1 OCI margins are calculated as OCI divided by revenues net of
excise taxes.
The smokeless products segment’s reported domestic shipment
volume increased 2.7% in the first quarter of 2015. Copenhagen and
Skoal’s combined reported shipment volume increased 3.7% in the
first quarter.
After adjusting for trade inventory changes and other factors,
USSTC estimates that its domestic smokeless products shipment
volume grew approximately 4% in the first quarter of 2015. USSTC
estimates that the smokeless products category volume grew
approximately 2% over the last 12 months.
Table 7 summarizes volume performance for the smokeless products
segment.
Table 7 - Smokeless Products: Shipment Volume (cans and
packs in millions)
First Quarter 2015 2014 Change
Copenhagen 110.1 103.9 6.0 %
Skoal 64.0
64.0 — %
Copenhagen and Skoal 174.1
167.9 3.7 % Other 17.0 18.2
(6.6 )%
Total smokeless products
191.1 186.1 2.7 %
Note: Other includes certain USSTC and PM USA smokeless
products. Volume includes cans and packs sold, as well as
promotional units, but excludes international volume, which is not
material to the smokeless products segment. New types of smokeless
products, as well as new packaging configurations of existing
smokeless products, may or may not be equivalent to existing moist
smokeless tobacco (MST) products on a can-for-can basis. To
calculate volumes of cans and packs shipped, one pack of snus,
irrespective of the number of pouches in the pack, is assumed to be
equivalent to one can of MST.
Copenhagen and Skoal’s combined retail share increased 0.5 share
points to 51.2% in the first quarter of 2015. Copenhagen’s retail
share grew 1.0 share point, while Skoal’s retail share declined 0.5
share points.
Total smokeless products retail share for the first quarter of
2015 increased 0.2 share points to 54.9%. Table 8 summarizes
smokeless products retail share performance.
Table 8 - Smokeless Products: Retail Share (percent)
First
Quarter 2015 2014
Percentage point
change
Copenhagen 31.3 % 30.3 % 1.0
Skoal 19.9
20.4 (0.5)
Copenhagen and Skoal 51.2
50.7 0.5 Other 3.7 4.0 (0.3)
Total smokeless products
54.9 % 54.7 % 0.2
Note: Retail share results for smokeless products are based on
data from IRI InfoScan, a tracking service that uses a sample of
stores to project market share and depict share trends. The service
tracks sales in the food, drug and mass merchandisers (including
Wal-Mart), convenience, military, dollar store and club trade
classes on the number of cans and packs sold. Smokeless products is
defined by IRI as moist smokeless and spit-free tobacco products.
Other includes certain USSTC and PM USA smokeless products. New
types of smokeless products, as well as new packaging
configurations of existing smokeless products, may or may not be
equivalent to existing MST products on a can-for-can basis. One
pack of snus, irrespective of the number of pouches in the pack, is
assumed to be equivalent to one can of MST. All other products are
considered to be equivalent on a can-for-can basis. Because this
service represents retail share performance only in key trade
channels, it should not be considered a precise measurement of
actual retail share. It is IRI’s standard practice to periodically
refresh its InfoScan services, which could restate retail share
results that were previously released in this service.
WINE
In the wine segment, Ste. Michelle grew 2015 first-quarter net
revenues 3.9% and OCI 22.7%, primarily due to improved premium mix.
Ste. Michelle’s OCI margins expanded 3.2 percentage points in the
first quarter to 20.9%. Table 9 summarizes revenues and OCI for the
wine segment.
Table 9 - Wine: Revenues and OCI ($ in millions)
First
Quarter 2015 2014 Change Net
revenues $ 134 $ 129 3.9
% Excise taxes (5 ) (5 )
Revenues net of excise taxes
$ 129 $ 124 4.0
% Reported and Adjusted OCI $ 27
$ 22 22.7 % OCI
margins 1 20.9
% 17.7 % 3.2 pp
1 OCI margins are calculated as OCI divided by revenues net of
excise taxes.
Ste. Michelle grew wine shipment volume 0.5% for the first
quarter, as increased volume of Columbia Crest was mostly offset by
declines in Chateau Ste. Michelle and 14 Hands. Table 10 summarizes
Ste. Michelle’s reported shipment volume performance.
Table 10 - Wine: Shipment Volume (cases in thousands)
First
Quarter 2015 2014 Change Chateau
Ste. Michelle 551 573 (3.8 )%
Columbia Crest 227 192
18.2 %
14 Hands 381 386 (1.3 )%
Other 553 552
0.2 %
Total Wine
1,712 1,703 0.5 %
Altria’s Profile
Altria’s wholly-owned subsidiaries include PM USA, USSTC,
Middleton, Nu Mark, 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 (FDA). 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.
Schedule 1
ALTRIA GROUP, INC.and
SubsidiariesConsolidated Statements of EarningsFor the Quarters
Ended March 31,(dollars in millions, except per share
data)(Unaudited)
2015 2014 %
Change Net revenues $ 5,804
$ 5,517 5.2 % Cost of sales 1 1,797
1,752 Excise taxes on products 1 1,532 1,509 Gross
profit 2,475 2,256 9.7 % Marketing, administration and research
costs 552 463 Asset impairment and exit costs — 2
Operating companies income 1,923 1,791
7.4 % Amortization of intangibles 5 5 General
corporate expenses 53 52
Operating income
1,865 1,734 7.6 % Interest and other
debt expense, net 209 153 Loss on early extinguishment of debt 228
— Earnings from equity investment in SABMiller (134 ) (225 )
Earnings before income taxes 1,562 1,806 (13.5 )% Provision for
income taxes 544 631
Net earnings attributable to
Altria Group, Inc. $ 1,018 $
1,175 (13.4 )% Per share
data: Basic and diluted earnings per share attributable
to Altria Group, Inc. $ 0.52 $
0.59 (11.9 )% Weighted-average diluted
shares outstanding 1,966 1,986 (1.0 )%
1 Cost of sales includes charges for resolution expenses related
to state settlement and other tobacco agreements, and FDA user
fees. Supplemental information concerning those items and excise
taxes on products sold is shown in Schedule 3.
Schedule 2 ALTRIA GROUP, INC. and
Subsidiaries Selected Financial Data For the Quarters Ended March
31, (dollars in millions) (Unaudited)
Net Revenues
Smokeable Products
Smokeless Products
Wine All Other Total 2015 $ 5,221 $ 430 $ 134
$ 19 $ 5,804 2014 4,958 415 129 15 5,517 % Change 5.3 % 3.6 % 3.9 %
26.7 % 5.2 %
Reconciliation:
For the quarter ended March 31, 2014 $ 4,958
$ 415 $ 129 $ 15 $
5,517 Operations 263 15 5 4 287
For the quarter ended March 31, 2015 $
5,221 $ 430 $ 134
$ 19 $ 5,804
Operating Companies Income
(Loss)
Smokeable Products
Smokeless Products
Wine All Other Total 2015 $ 1,686 $ 251 $ 27 $
(41 ) $ 1,923 2014 1,531 239 22 (1 ) 1,791 % Change 10.1 % 5.0 %
22.7 % (100%)+ 7.4 %
Reconciliation:
For the quarter ended March 31, 2014 $ 1,531
$ 239 $ 22 $ (1 )
$ 1,791 Asset impairment and exit costs - 2014 2 — —
— 2 Tobacco and health litigation items - 2014 3 — —
— 3 5 — — — 5
Tobacco and health litigation items - 2015 (43 ) —
— — (43 ) (43 ) — — — (43
) Operations 193 12 5 (40 ) 170
For
the quarter ended March 31, 2015 $ 1,686
$ 251 $ 27 $
(41 ) $ 1,923
Schedule 3 ALTRIA GROUP, INC. and Subsidiaries Supplemental
Financial Data (dollars in millions) (Unaudited)
For the Quarters EndedMarch
31, 2015 2014 The segment detail of excise
taxes on products sold is as follows: Smokeable products
$ 1,495 $ 1,474 Smokeless products 32 30 Wine 5 5 $ 1,532
$ 1,509
The segment detail of charges for
resolution expenses related to state settlement and other
tobacco agreements included in cost of sales is as
follows: Smokeable products $ 1,049 $ 1,075 Smokeless
products 2 3 $ 1,051 $ 1,078
The
segment detail of FDA user fees included in cost of sales is
as follows: Smokeable products $ 67 $ 62 Smokeless
products 1 1 $ 68 $ 63 Schedule 4
ALTRIA GROUP, INC. and Subsidiaries Net Earnings and Diluted
Earnings Per Share - Attributable to Altria Group, Inc. For the
Quarters Ended March 31, (dollars in millions, except per share
data) (Unaudited)
Net
Earnings Diluted EPS 2015 Net
Earnings $ 1,018 $ 0.52 2014 Net
Earnings $ 1,175 $ 0.59 %
Change (13.4 )% (11.9 )%
Reconciliation:
2014 Net Earnings $ 1,175 $ 0.59
2014 NPM Adjustment Items (41 ) (0.02 ) 2014 Asset
impairment and exit costs 1 — 2014 Tobacco and health litigation
items 3 — 2014 SABMiller special items 6 — Subtotal
2014 special items (31 ) (0.02 ) 2015 Tobacco and health
litigation items (27 ) (0.01 ) 2015 SABMiller special items (56 )
(0.03 ) 2015 Loss on early extinguishment of debt (143 ) (0.07 )
2015 Tax items (2 ) — Subtotal 2015 special items (228 )
(0.11 ) Fewer shares outstanding — 0.01 Operations 102
0.05
2015 Net Earnings $ 1,018
$ 0.52 2015 Net Earnings
Adjusted For Special Items $ 1,246 $
0.63 2014 Net Earnings Adjusted For Special Items
$ 1,144 $ 0.57 % Change
8.9 % 10.5 % Schedule 5 ALTRIA
GROUP, INC. and Subsidiaries Condensed Consolidated Balance Sheets
(dollars in millions) (Unaudited)
March 31, 2015 December 31, 2014
Assets
Cash and cash equivalents $ 3,674 $ 3,321 Inventories 2,085 2,040
Deferred income taxes 1,143 1,143 Other current assets
331
374 Property, plant and equipment, net 1,972 1,983 Goodwill and
other intangible assets, net 17,329 17,334 Investment in SABMiller
5,850 6,183 Finance assets, net
1,360
1,614 Other long-term assets 468 483
Total assets
$ 34,212 $ 34,475
Liabilities and
Stockholders’ Equity
Current portion of long-term debt $ 1,000 $ 1,000 Accrued
settlement charges 4,551 3,500 Other current liabilities 3,344
3,173 Long-term debt 12,901 13,693 Deferred income taxes 5,907
6,088 Accrued postretirement health care costs 2,454 2,461 Accrued
pension costs 978 1,012 Other long-term liabilities 515 503
Total liabilities 31,650 31,430 Redeemable noncontrolling interest
34 35 Total stockholders’ equity 2,528 3,010
Total
liabilities and stockholders’ equity $ 34,212
$ 34,475 Total debt $ 13,901 $ 14,693
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