Altria Group, Inc. (Altria) (NYSE:MO) is participating in the
Consumer Analyst Group of New York Conference (CAGNY) 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 Altria’s companies’ strong
brands, strategies to create long-term value for shareholders and
the strengths of its diverse business model.
Remarks and Presentation
The presentation is being webcast live at altria.com in a
listen-only mode, beginning at approximately 9:15 a.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.
2017 Full-Year Guidance
Altria reaffirms its 2017 full-year guidance for adjusted
diluted earnings per share (EPS) to be in a range of $3.26 to
$3.32, representing a growth rate of 7.5% to 9.5% from an adjusted
diluted EPS base of $3.03 in 2016, as shown in Schedule 1.
In 2017, Altria expects to record a charge of approximately
$0.02 per share for restructuring charges in connection with the
facilities consolidation announced in October 2016. This charge is
excluded from Altria’s full-year adjusted diluted EPS guidance for
2017.
Altria’s full-year adjusted diluted EPS guidance excludes the
impact of 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, gain on AB InBev/SABMiller business combination, AB
InBev/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 under the
Master Settlement Agreement (such settlements and determinations
are referred to collectively as NPM Adjustment Items).
Altria’s management cannot estimate on a forward-looking basis
the impact of certain income and expense items, including those
items noted in the preceding paragraph, on its 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 U.S. generally accepted accounting
principles (GAAP) measure for, or reconciliation to, its adjusted
diluted EPS guidance.
The factors described in the Forward-Looking and Cautionary
Statements section of this release represent continuing risks to
Altria’s forecast.
Altria’s Profile
Altria’s wholly-owned subsidiaries include Philip Morris USA
Inc., U.S. Smokeless Tobacco Company LLC, John Middleton Co.,
Sherman Group Holdings, LLC and its subsidiaries, Nu Mark LLC, Ste.
Michelle Wine Estates Ltd. (Ste. Michelle) and Philip Morris
Capital Corporation. Altria holds an equity investment in
Anheuser-Busch InBev SA/NV (AB InBev).
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, 2015 and its
Quarterly Report on Form 10-Q for the period ended September 30,
2016.
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; product recalls; 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, 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 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 Altria’s investment in AB
InBev include the following: AB InBev’s inability to achieve the
contemplated synergies and value creation from the AB
InBev/SABMiller business combination (Transaction); that Altria’s
equity securities in AB InBev are subject to restrictions on
transfer until October 10, 2021; that Altria’s reported earnings
from and carrying value of its equity investment in AB InBev may be
adversely affected by unfavorable foreign currency exchange rates
and other factors, including the risks encountered by AB InBev in
its business; the risk that the tax treatment of Altria’s
Transaction consideration and the accounting treatment of its
equity investment are not guaranteed; and the risk that the tax
treatment of the dividends Altria receives from AB InBev may not be
as favorable as dividends from SABMiller plc (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 (dollars in
millions, except per share data) (Unaudited)
Reconciliation of Altria’s 2016 Adjusted Results
EarningsbeforeIncomeTaxes
Provisionfor
IncomeTaxes
NetEarnings
Net EarningsAttributable
toAltria Group, Inc.
DilutedEPS
For the year ended December 31, 2016 2016 Reported
$ 21,852 $ 7,608 $ 14,244
$ 14,239 $ 7.28 NPM Adjustment Items 18
7 11 11 0.01 Tobacco and health litigation items 105 34 71 71 0.04
SABMiller special items (89 ) (32 ) (57 ) (57 ) (0.03 ) Loss on
early extinguishment of debt 823 282 541 541 0.28 Asset impairment,
exit, implementation and
acquisition-related costs
206 71 135 135 0.07 Patent litigation settlement 21 8 13 13 0.01
Gain on AB InBev/SABMiller business
combination
(13,865 ) (4,864 ) (9,001 ) (9,001 ) (4.61 ) Tax items —
30 (30 ) (30 ) (0.02 )
2016
Adjusted for Special Items $ 9,071
$ 3,144 $ 5,927
$ 5,922 $ 3.03
Altria reports its financial results in accordance with GAAP.
Altria’s management reviews certain financial results, including
diluted EPS, on an adjusted basis, which excludes certain income
and expense items, including those items noted under “2017
Full-Year Guidance” above. Altria’s management does not view any of
these special items to be part of Altria’s underlying 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.
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