Altria Group, Inc. (Altria) (NYSE:MO) is participating in the
Consumer Analyst Group of New York Conference in Boca Raton, Fla.
today. Marty Barrington, Altria’s Chairman, Chief Executive Officer
and President, and other members of Altria’s senior management team
will highlight the strengths of Altria’s diverse business model,
its companies’ strong brands and strategies to create long-term
value for shareholders.
2016 Full-Year EPS
Guidance
Altria reaffirms its 2016 full-year guidance for adjusted
diluted earnings per share (EPS) to be in a range of $3.00 to
$3.05, representing a growth rate of 7% to 9% from an adjusted
diluted EPS base of $2.80 in 2015, as shown in Schedule 1.
In 2016, Altria expects to record a charge of $0.05 per share,
substantially all of which will be recorded in the first quarter,
for restructuring charges in connection with the productivity
initiative announced in January 2016. This charge is excluded from
Altria’s full-year adjusted diluted EPS guidance for 2016.
The factors described in the Forward-Looking and Cautionary
Statements section of this release represent continuing risks to
this forecast.
Remarks and Presentation
The presentation is being webcast live at altria.com in a
listen-only mode, beginning at approximately 12:30 p.m. Eastern
Time. A copy of the business presentation and remarks, and a replay
of the audio webcast of the remarks, will be available at
altria.com or through the Altria Investor app. The free app is
available for download at www.altria.com/irapp or through the Apple
App Store or Google Play.
Altria’s Profile
Altria’s wholly-owned subsidiaries include Philip Morris USA
Inc. (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 plc
(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 today’s remarks are
described in Altria’s publicly filed reports, including its Annual
Report on Form 10-K for the year ended December 31, 2014 and its
quarterly report on Form 10-Q for the period ended September 30,
2015.
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.
In addition, the factors related to Anheuser-Busch InBev SA/NV’s
(AB InBev) proposed transaction to effect a business combination
with SABMiller include the following: the risk that one or more
conditions to closing the proposed transaction may not be
satisfied; the risk that a shareholder or regulatory approval
required for the proposed transaction is not obtained or is
obtained subject to conditions that are not anticipated; AB InBev’s
inability to achieve the contemplated synergies and value creation
from the proposed transaction; the fact that Altria’s election to
receive transaction consideration in the form of equity is subject
to proration, which may result in a reduced percentage ownership of
the combined company, additional tax liabilities and/or changes in
our accounting treatment of the investment; the fact that the
equity securities to be received by Altria as transaction
consideration will be subject to restrictions on transfer lasting
five years from completion of the proposed transaction; the risk
that AB InBev’s share price, which affects the value of Altria’s
transaction consideration, will fluctuate based on a variety of
factors that are beyond Altria’s control; the fact that the
strengthening of the U.S. dollar against the British pound would
adversely affect Altria’s cash consideration as the British pound
would translate into fewer U.S. dollars; the risk that the tax
treatment of Altria’s transaction consideration is not guaranteed;
and that the tax treatment of the dividends Altria receives from
the new company may not be as favorable as dividends from
SABMiller.
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 Subsidiaries
Reconciliation of Altria’s 2015
Adjusted Results
Full Year 2015
Reported diluted EPS $ 2.67 NPM Adjustment
Items (0.03 ) Tobacco and health litigation items 0.05 SABMiller
special items 0.04 Loss on early extinguishment of debt 0.07
Adjusted diluted EPS $ 2.80
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 certain financial results, including OCI, operating margins
and 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
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 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 may not be calculated the
same as similarly titled measures used by other companies. These
adjusted financial measures 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 above. 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.
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