- Altria’s 2016 fourth-quarter
reported diluted earnings per share (EPS) increased 723.4% to
$5.27, as comparisons were affected by special items, including the
AB InBev/SABMiller transaction gain.
- Altria’s 2016 fourth-quarter
adjusted diluted EPS, which excludes the impact of special items,
increased 1.5% to $0.68.
- Altria’s 2016 full-year reported
diluted EPS increased 172.7% to $7.28, as comparisons were affected
by special items, including the AB InBev/SABMiller transaction
gain.
- Altria’s 2016 full-year adjusted
diluted EPS, which excludes the impact of special items, increased
8.2% to $3.03.
Altria Group, Inc. (Altria) (NYSE:MO) today announced its 2016
fourth-quarter and full-year business results and provided guidance
for 2017 full-year adjusted diluted EPS.
“Altria had another outstanding year,” said Marty Barrington,
Altria’s Chairman, Chief Executive Officer and President. “We grew
our earnings in line with our long-term objectives while returning
a large amount of cash to shareholders, improving our balance sheet
and strengthening our organizational capability, thus positioning
Altria to continue to deliver on our long-term financial goals. In
2016, Altria’s total return to shareholders of 20.5% outpaced both
the S&P 500 and the S&P Food, Beverage and Tobacco Index,
marking the fourth consecutive year that total shareholder return
exceeded 20%.”
“During the year, we also rewarded our shareholders by paying
out over $4.5 billion in dividends, raising our dividend by 8%, and
repurchasing over $1 billion of our shares under an expanded $3
billion share repurchase program. And with Altria’s support of
Anheuser-Busch InBev’s landmark business combination with
SABMiller, we enhanced the value of our beer investment and our
position in the global brewing profit pool.”
Conference Call
As previously announced, a conference call with the investment
community and news media will be webcast on February 1, 2017 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 December 2016, Altria’s Board of Directors (Board) declared a
regular quarterly dividend of $0.61 per share. Altria’s current
annualized dividend rate is $2.44 per share. As of January 27,
2017, Altria’s annualized dividend yield was 3.4%. Altria paid
nearly $1.2 billion in dividends in the fourth quarter and over
$4.5 billion in 2016. Altria 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.
In October 2016, Altria’s Board expanded and extended the $1
billion share repurchase program to $3 billion. Altria expects to
complete the share repurchase program by the end of the second
quarter of 2018. During the fourth quarter, Altria repurchased 8.1
million shares at an average price of $63.67, for a total cost of
approximately $518 million. For the full year, Altria repurchased
16.2 million shares at an average price of $63.48 for a total cost
of approximately $1 billion. Since the beginning of 2011, Altria
has repurchased over 150 million shares at an average price of
$37.05, for a total cost of approximately $5.6 billion. As of
December 31, 2016, Altria had approximately $1.9 billion remaining
in the share repurchase program. The timing of share repurchases
depends upon marketplace conditions and other factors. This program
remains subject to the discretion of the Board.
Product Innovation
In e-vapor, Nu Mark LLC (Nu Mark) continued its disciplined
expansion of MarkTen. At year-end, MarkTen was available in stores
representing about 55% of the e-vapor category volume in retail
channels, including c-stores.
In heated tobacco, Altria continues to partner with Philip
Morris International Inc. (PMI) on its U.S. Food and Drug
Administration (FDA) applications for IQOS. In December, PMI
submitted a modified risk tobacco product application to the FDA
for its heated tobacco product. PMI has announced that it plans on
filing its pre-market tobacco product application during the first
quarter of 2017. Philip Morris USA Inc. (PM USA) continues to make
progress on its U.S. plans for IQOS, including the implementation
of a dedicated commercialization team.
Productivity Initiative
In January 2016, Altria announced a productivity initiative
designed to maintain its operating companies’ leadership and cost
competitiveness (Productivity Initiative). Altria continues to
expect the Productivity Initiative, which reduces spending on
certain selling, general and administrative (SG&A)
infrastructure and implements a leaner organizational structure, to
deliver approximately $300 million in annualized productivity
savings by the end of 2017.
For the full year, Altria recorded total pre-tax restructuring
charges in connection with the Productivity Initiative of $132
million. These charges, substantially all of which result in cash
expenditures, consist of employee separation costs of $117 million
and other associated costs of $15 million.
Facilities Consolidation
In October 2016, Altria announced the consolidation of certain
of its operating companies’ manufacturing facilities to streamline
operations and achieve greater efficiencies (Facilities
Consolidation). The Facilities Consolidation is expected to be
completed by the first quarter of 2018 and deliver approximately
$50 million in annualized cost savings by the end of 2018.
As a result of the Facilities Consolidation, Altria expects to
record total pre-tax charges of approximately $150 million, or
$0.05 per share. Of this amount, Altria recorded pre-tax charges of
$71 million, or approximately $0.03 per share, in the fourth
quarter of 2016. Altria expects to record pre-tax charges of
approximately $70 million in 2017 and the remainder in 2018. The
total estimated pre-tax charges relate primarily to accelerated
depreciation ($55 million), employee separation costs ($45 million)
and other exit and implementation costs ($50 million).
Approximately $90 million of the total pre-tax charges are expected
to result in cash expenditures.
Completion of Anheuser-Busch InBev’s
Business Combination with SABMiller
In October 2016, Anheuser-Busch InBev SA/NV (AB InBev) completed
its business combination with SABMiller plc (the Transaction) with
Altria receiving shares representing a 9.6% ownership in the
combined company. Subsequently, Altria purchased approximately 12
million ordinary shares of AB InBev, increasing its ownership to
approximately 10.2%. As a result of the business combination,
including the impact of the currency derivatives that Altria
entered into to hedge its British pound exposure on the cash
consideration received, Altria recorded a pre-tax gain of $13.9
billion for full year 2016 (together, Gain on Transaction).
Altria uses the equity method of accounting for its investment
in AB InBev and will report its share of AB InBev’s results using a
one-quarter lag (ABI Timing Lag). Altria’s share of AB InBev’s 2016
fourth-quarter results will be recorded in Altria’s 2017
first-quarter statement of earnings. The ABI Timing Lag will not
affect Altria’s cash flows, but will impact year-over-year
comparability of reported and adjusted diluted EPS in the short
term.
Sherman Group
Acquisition
On January 17, 2017, Altria acquired privately-held Sherman
Group Holdings, LLC and its subsidiaries (Nat Sherman). Nat Sherman
sells super-premium cigarettes and premium cigars and joins
Altria’s smokeable products segment for reporting purposes.
2017 Full-Year Guidance
Altria forecasts 2017 full-year adjusted diluted EPS to be in a
range of $3.26 to $3.32, which excludes the estimated Facilities
Consolidation charges for 2017 (approximately $0.02 per share).
This represents a growth rate of 7.5% to 9.5% from an adjusted
diluted EPS base of $3.03 in 2016, which excludes the special items
shown in Table 1. Altria expects that its 2017 full-year effective
tax rate on operations will be approximately 36%.
Altria expects capital expenditures for 2017 in the range of
$180 million to $220 million and depreciation and amortization
expenses of approximately $220 million.
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 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 Transaction, AB InBev/SABMiller plc 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
and its reported effective 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 U.S.
generally accepted accounting principles (GAAP) measure for, or
reconciliation to, its adjusted diluted EPS guidance or its
effective tax rate on operations forecast.
The factors described in the Forward-Looking and Cautionary
Statements section of this release represent continuing risks to
Altria’s forecast.
ALTRIA GROUP,
INC.
Altria reports its financial results in accordance with 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, 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 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 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.
Reconciliations of historical adjusted financial measures to
corresponding GAAP measures are provided in this release.
Altria’s reportable segments are smokeable products,
manufactured and sold by PM USA, John Middleton Co. (Middleton) and
Nat Sherman; smokeless products, 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).
Comparisons are to the corresponding prior-year period unless
otherwise stated.
Altria’s net revenues decreased 1.0% to $6.3 billion in the
fourth quarter and increased 1.2% to $25.7 billion for full year
2016. Altria’s revenues net of excise taxes grew 0.1% to $4.7
billion in the quarter and grew 2.6% to $19.3 billion for the full
year.
Altria’s 2016 fourth-quarter reported diluted EPS increased
723.4% to $5.27, primarily driven by the Gain on Transaction.
Altria’s fourth-quarter adjusted diluted EPS, which excludes the
special items shown in Table 1, grew 1.5% to $0.68, primarily
driven by a lower effective tax rate on operations, higher adjusted
OCI in the smokeable and smokeless products segments and fewer
shares outstanding, partially offset by the ABI Timing Lag.
Altria’s lower fourth-quarter effective tax rate on operations was
driven by tax benefits associated with a dividend from AB InBev
that was larger than the dividend received from SABMiller in the
fourth quarter of 2015.
Altria’s 2016 full-year reported diluted EPS increased 172.7% to
$7.28, primarily driven by the Gain on Transaction, higher reported
OCI in the smokeable and smokeless products segments (which
includes the Productivity Initiative and Facilities Consolidation
charges), a lower effective tax rate, lower interest and other debt
expense, lower investment spending in innovative tobacco products
and higher operating results at Philip Morris Capital Corporation
(PMCC), partially offset by the higher loss on early extinguishment
of debt. Altria’s full-year adjusted diluted EPS, which excludes
the special items shown in Table 1, grew 8.2% to $3.03, primarily
driven by higher adjusted OCI in the smokeable and smokeless
products segments, a lower effective tax rate on operations, lower
investment spending in innovative tobacco products, lower interest
and other debt expense, higher operating results at PMCC and fewer
shares outstanding, partially offset by the ABI Timing Lag.
Altria’s lower full-year effective tax rate on operations was
driven by tax benefits associated with the higher cumulative
dividends received from SABMiller plc (SABMiller) and AB InBev in
2016.
Table 1 - Altria’s Adjusted Results
Fourth
Quarter Full Year 2016 2015 Change
2016 2015 Change Reported diluted EPS
$ 5.27 $ 0.64 100%+ $
7.28 $ 2.67 100%+ NPM Adjustment Items
— 0.01 0.01 (0.03 ) Tobacco and health litigation items 0.01 0.01
0.04 0.05 SABMiller special items (0.07 ) 0.01 (0.03 ) 0.04 Loss on
early extinguishment of debt — — 0.28 0.07 Asset impairment, exit
and implementation costs 0.03 — 0.07 — Patent litigation settlement
0.01 — 0.01 — Gain on AB InBev/SABMiller business combination (4.56
) — (4.61 ) — Tax items (0.01 ) — (0.02
) —
Adjusted diluted EPS
$ 0.68 $ 0.67 1.5%
$ 3.03 $ 2.80
8.2%
Note: For details of pre-tax, tax and after-tax amounts, see
Schedules 7 and 9.
NPM Adjustment Items
For full year 2016, PM USA recorded a pre-tax charge of $18
million related to a dispute with the State of Maryland. For full
year 2015, PM USA recorded pre-tax earnings of $84 million,
comprised of a reduction to cost of sales of $97 million, partially
offset by a decrease to interest income of $13 million for NPM
Adjustment Items. The EPS impact of the NPM Adjustment Items is
shown in Table 1 and Schedules 7 and 9.
Tobacco and Health Litigation
Items
In the fourth quarter of 2016, PM USA recorded pre-tax charges
for tobacco and health litigation items of $17 million related to a
judgment in the Merino case. For full year 2016 and 2015, PM USA
recorded total pre-tax charges for tobacco and health litigation
items and related interest costs of $105 million and $150 million,
respectively. The EPS impact of these charges, including interest
costs, is shown in Table 1 and Schedules 7 and 9.
SABMiller Special Items
Altria’s earnings from its equity investment in SABMiller for
the fourth quarter of 2016 included net pre-tax income of $236
million, consisting primarily of a gain related to SABMiller’s
formation of a bottling business, partially offset by SABMiller’s
Transaction-related costs. For full year 2016 and 2015, SABMiller
special items included net pre-tax income of $89 million and net
pre-tax charges of $126 million, respectively. The EPS impact of
these items is shown in Table 1 and Schedules 7 and 9.
Loss on Early Extinguishment of
Debt
In September 2016, Altria completed a cash tender offer in which
it purchased approximately $933 million aggregate principal amount
of its senior unsecured 9.95% and 10.20% Notes due in 2038 and
2039, respectively. That resulted in a one-time, pre-tax charge
against reported earnings in the third quarter of 2016 of $823
million, reflecting the loss on early extinguishment of debt.
In March 2015, Altria completed a cash tender offer in which it
purchased approximately $793 million aggregate principal amount of
its senior unsecured 9.700% Notes due in 2018. That resulted in a
one-time, pre-tax charge against reported earnings of $228 million
in the first quarter of 2015.
The EPS impact of these charges is shown in Table 1 and
Schedules 7 and 9.
Asset Impairment, Exit and
Implementation Costs
In the fourth quarter of 2016, Altria recorded pre-tax charges
of $73 million, substantially all of which related to the
Facilities Consolidation. For full year 2016, Altria recorded
pre-tax charges of $132 million related to the Productivity
Initiative and $71 million related to the Facilities Consolidation.
The EPS impact of these costs is shown in Table 1 and Schedules 7
and 9.
Gain on AB InBev/SABMiller Business
Combination
In the fourth quarter of 2016, Altria recorded a pre-tax Gain on
Transaction of approximately $13.7 billion. For full year 2016,
Altria recorded a pre-tax Gain on Transaction of approximately
$13.9 billion. The EPS impact is shown in Table 1 and Schedules 7
and 9.
SMOKEABLE
PRODUCTS
The smokeable products segment grew income in the fourth quarter
and delivered strong income growth for the full year despite tough
2015 full year comparisons. PM USA maintained its leading retail
share position in the fourth quarter and gained a tenth of a share
point for the full year.
Smokeable products segment’s net revenues decreased by 1.9% in
the fourth quarter, primarily driven by lower volume, partially
offset by higher pricing. For full year 2016, net revenues
increased by 0.3%, primarily driven by higher pricing, partially
offset by lower volume and higher promotional investments. Revenues
net of excise taxes decreased 0.9% in the fourth quarter and
increased 1.4% for the full year.
Smokeable products segment’s fourth-quarter reported OCI
increased 4.3%, primarily driven by higher pricing, 2015 NPM
Adjustment Items and lower benefits costs, partially offset by
lower volume, Facilities Consolidation charges and higher
promotional investments. Adjusted OCI, which is calculated
excluding the special items identified in Table 2, grew 3.7%, and
adjusted OCI margins expanded 2.0 percentage points to 46.7%.
For the full year, smokeable products segment’s reported OCI
increased 2.6% primarily driven by higher pricing, lower benefits
costs and lower tobacco and health litigation items. These factors
were partially offset by lower volume, higher promotional
investments, higher resolution expenses, Productivity Initiative
and Facilities Consolidation charges and 2015 NPM Adjustment Items.
Adjusted OCI grew 5.3% for the full year, and adjusted OCI margins
expanded 1.8 percentage points to 48.2%. Table 2 summarizes
revenues, OCI and OCI margins and special items for the smokeable
products segment.
Table 2 - Smokeable Products: Revenues and OCI ($ in
millions)
Fourth Quarter Full Year 2016 2015
Change 2016 2015 Change Net
revenues $ 5,453 $ 5,557
(1.9)% $ 22,851 $ 22,792
0.3% Excise taxes (1,478 ) (1,547 ) (6,247 ) (6,423 )
Revenues net of excise taxes $ 3,975
$ 4,010 (0.9)% $ 16,604
$ 16,369 1.4% Reported
OCI $ 1,813 $ 1,738 4.3%
$ 7,768 $ 7,569 2.6% NPM
Adjustment Items — 29 12 (97 ) Asset impairment, exit and
implementation costs 29 — 134 — Tobacco and health litigation items
16 25 88 127
Adjusted OCI
$ 1,858 $ 1,792
3.7% $ 8,002 $ 7,599
5.3% Adjusted OCI margins 1 46.7
% 44.7 % 2.0 pp 48.2
% 46.4 % 1.8 pp
1 Adjusted OCI margins are calculated as adjusted OCI divided by
revenues net of excise taxes.
PM USA’s reported domestic cigarettes shipment volume decreased
4.8% in the fourth quarter of 2016, primarily driven by the
industry’s rate of decline and one fewer shipping day. When
adjusted for calendar differences, PM USA estimates that its
fourth-quarter domestic cigarettes shipment volume decreased by
approximately 3.5%. PM USA estimates that fourth-quarter total
industry cigarette volumes also declined by approximately 3.5%.
For the full year, PM USA’s reported and adjusted domestic
cigarettes shipment volume decreased approximately 2.5%, primarily
driven by the industry’s rate of decline. PM USA estimates that
full-year total industry cigarette volumes also declined by
approximately 2.5%.
Middleton grew its fourth-quarter and full-year 2016 reported
cigars shipment volume by 5.3% and 5.9%, respectively, driven
primarily by Black & Mild in the tipped cigars segment. Table 3
summarizes smokeable products segment shipment volume
performance.
Table 3 - Smokeable Products: Shipment Volume (sticks in
millions)
Fourth Quarter Full Year
2016 2015 Change 2016 2015
Change Cigarettes: Marlboro 24,851 26,106
(4.8)% 105,297 108,113 (2.6)%
Other premium 1,524 1,639
(7.0)% 6,382 6,753 (5.5)%
Discount 2,682 2,769
(3.1)% 11,251 11,152 0.9%
Total cigarettes
29,057 30,514 (4.8)%
122,930 126,018 (2.5)%
Cigars: Black & Mild 351 332 5.7% 1,379 1,295
6.5%
Other 5 6 (16.7)% 24 30
(20.0)%
Total cigars 356 338
5.3% 1,403 1,325 5.9%
Total smokeable products
29,413 30,852
(4.7)% 124,333 127,343
(2.4)%
Note: Cigarettes volume includes units sold as well as
promotional units, but excludes units sold for distribution to and
in Puerto Rico, and units sold in 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 was 44.0% in the fourth quarter and for
the full year. PM USA’s total retail share was 51.4% for both
periods, unchanged in the fourth quarter and up 0.1 percentage
point for the full year.
Black & Mild’s retail share in the machine-made large cigars
category declined by 0.5 points in the fourth quarter and 1.0 point
for the full year. Table 4 summarizes retail share performance by
PM USA in cigarettes and Middleton in machine-made large
cigars.
Table 4 - Smokeable Products: Retail Share (percent)
Fourth Quarter Full Year 2016
2015
Percentagepoint change
2016 2015
Percentagepoint change
Cigarettes: Marlboro 44.0
% 44.0 % — 44.0 % 44.0 % —
Other premium 2.7 2.8 (0.1 ) 2.7
2.8 (0.1 )
Discount 4.7 4.6 0.1
4.7 4.5 0.2
Total
cigarettes 51.4 % 51.4 %
— 51.4 % 51.3
% 0.1 Cigars: Black
& Mild 26.4 % 26.9 % (0.5 ) 26.3 % 27.3 % (1.0 )
Other 0.2 0.5 (0.3 ) 0.4
0.3 0.1
Total cigars 26.6
% 27.4 % (0.8 )
26.7 % 27.6 %
(0.9 )
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 recorded strong income growth and
grew Copenhagen and Skoal’s combined retail share for the full year
of 2016.
Smokeless products segment’s net revenues increased 7.2% in the
fourth quarter and 9.2% for the full year, primarily driven by
higher pricing and volume, partially offset by higher promotional
investments and mix. Revenues net of excise taxes increased 7.7% in
the fourth quarter and 9.7% for the full year.
Smokeless products segment’s fourth quarter reported OCI
decreased 11.2%, primarily driven by Facilities Consolidation
charges, higher promotional investments, higher SG&A costs,
higher manufacturing costs and mix, partially offset by higher
pricing and volume. Adjusted OCI, which is calculated excluding the
special items identified in Table 5, grew 4.3% in the fourth
quarter.
For the full year, smokeless products segment’s reported OCI
increased 6.2%, primarily driven by higher pricing and volume,
partially offset by Productivity Initiative and Facilities
Consolidation charges, higher promotional investments, mix, higher
SG&A costs and higher manufacturing costs. Adjusted OCI
increased 11.0% for the full year. Table 5 summarizes revenues, OCI
and OCI margins and special items for the smokeless products
segment.
Table 5 - Smokeless Products: Revenues and OCI ($ in
millions)
Fourth Quarter Full Year
2016 2015 Change 2016 2015
Change Net revenues $ 521 $
486 7.2% $ 2,051 $ 1,879
9.2% Excise taxes (33 ) (33 ) (135 ) (133 )
Revenues net
of excise taxes $ 488 $ 453
7.7% $ 1,916 $
1,746 9.7% Reported OCI $
247 $ 278 (11.2)% $ 1,177
$ 1,108 6.2% Asset impairment, exit and
implementation costs 43 — 57 4
Adjusted OCI $ 290 $ 278
4.3% $ 1,234 $
1,112 11.0% Adjusted OCI margins
1 59.4 % 61.4
% (2.0) pp 64.4 % 63.7
% 0.7 pp
1 Adjusted OCI margins are calculated as adjusted OCI divided by
revenues net of excise taxes.
Smokeless products segment’s reported domestic shipment volume
increased 2.2% in the fourth quarter and 4.9% for the full year,
driven by Copenhagen, partially offset by declines in Skoal and
other portfolio brands. Copenhagen and Skoal’s combined reported
shipment volume increased 3.0% in the fourth quarter and 5.8% for
the full year.
After adjusting for trade inventory movements and other factors,
USSTC estimates that its domestic smokeless products shipment
volume grew approximately 4.5% in the fourth quarter and 5% for the
full year. USSTC estimates that the smokeless products category
volume grew approximately 2.5% over the past six months.
Table 6 summarizes shipment volume performance for the smokeless
products segment.
Table 6 - Smokeless Products: Shipment Volume (cans and
packs in millions)
Fourth Quarter Full Year 2016
2015 Change 2016 2015 Change
Copenhagen 132.8 123.2 7.8% 525.1 474.7 10.6%
Skoal 63.6 67.4 (5.6)% 260.9 267.9
(2.6)%
Copenhagen and Skoal 196.4
190.6 3.0% 786.0 742.6 5.8%
Other 16.7 17.9 (6.7)% 67.5 70.9
(4.8)%
Total smokeless products 213.1
208.5 2.2% 853.5
813.5 4.9%
Note: 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 grew combined retail share 1.1 points in
the fourth quarter to 52.5%. Copenhagen’s retail share increased
2.4 share points in the quarter, benefiting from Copenhagen Mint’s
national retail expansion earlier this year, and Skoal’s retail
share declined 1.3 share points. For the full year, Copenhagen and
Skoal’s combined retail share increased 0.9 share points to
52.2%.
Total smokeless products retail share increased 0.8 share points
to 55.8% in the fourth quarter and 0.7 share points to 55.6% for
the full year. Table 7 summarizes smokeless products retail share
performance.
Table 7 - Smokeless Products: Retail Share (percent)
Fourth Quarter Full Year 2016
2015
Percentagepoint change
2016 2015
Percentagepoint change
Copenhagen 34.5 % 32.1 % 2.4 33.8 %
31.6 % 2.2
Skoal 18.0 19.3 (1.3 ) 18.4
19.7 (1.3 )
Copenhagen and
Skoal 52.5 51.4 1.1 52.2
51.3 0.9 Other 3.3 3.6
(0.3 ) 3.4 3.6 (0.2 )
Total
smokeless products 55.8 %
55.0 % 0.8 55.6 %
54.9 % 0.7
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.
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. For
example, one pack of snus, irrespective of the number of pouches in
the pack, is assumed to be equivalent to one can of MST. 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 net revenues by 7.4% in
the fourth quarter and 7.8% for the full year of 2016. Ste.
Michelle’s reported OCI increased 16.4% in the fourth quarter,
primarily driven by higher volume and mix. Ste. Michelle’s reported
OCI increased 7.9% for the full year, primarily driven by higher
volume and mix, partially offset by higher costs. Adjusted OCI,
which is calculated excluding the special item identified in Table
8, grew 16.4% in the fourth quarter and 9.9% for the full year.
Table 8 summarizes revenues, OCI and OCI margins for the wine
segment.
Table 8 - Wine: Revenues and OCI ($ in millions)
Fourth Quarter Full Year 2016
2015 Change 2016 2015 Change
Net revenues $ 248 $ 231
7.4% $ 746 $ 692 7.8%
Excise taxes (8 ) (9 ) (25 ) (24 )
Revenues net of excise
taxes $ 240 $ 222
8.1% $ 721 $ 668
7.9% Reported OCI $ 64 $
55 16.4% $ 164 $ 152
7.9% Acquisition-related costs — — 3 —
Adjusted OCI $ 64 $
55 16.4% $ 167 $
152 9.9% Adjusted OCI margins 1
26.7 % 24.8 %
1.9 pp 23.2 % 22.8 %
0.4 pp
1 Adjusted OCI margins are calculated as adjusted OCI divided by
revenues net of excise taxes.
Ste. Michelle grew reported wine shipment volume by 4.2% in the
fourth quarter to approximately 3.1 million cases, primarily driven
by growth among its core premium brands. For the full year, Ste.
Michelle’s reported wine shipment volume increased 5.3% to
approximately 9.3 million cases.
Altria’s Profile
Altria’s wholly-owned subsidiaries include PM USA, USSTC,
Middleton, Nat Sherman, Nu Mark, Ste. Michelle and PMCC. Altria
holds an equity investment in 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 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, 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; 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 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.
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 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.
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 December 31,(dollars in millions, except per share
data)(Unaudited)
2016 2015 % Change Net
revenues $ 6,252 $ 6,318
(1.0)% Cost of sales 1 1,905 2,007 Excise taxes on products
1 1,519 1,589 Gross profit 2,828 2,722 3.9%
Marketing, administration and research costs 701 681 Asset
impairment and exit costs 56 —
Operating companies
income 2,071 2,041 1.5% Amortization of
intangibles 6 5 General corporate expenses 72 71
Operating income 1,993 1,965 1.4%
Interest and other debt expense, net 176 208 Earnings from equity
investment in SABMiller (231 ) (211 ) Gain on AB InBev/SABMiller
business combination (13,660 ) (5 ) Earnings before income taxes
15,708 1,973 100%+ Provision for income taxes 5,430 725
Net earnings 10,278 1,248 100%+
Net earnings attributable to noncontrolling interests (2 ) (1 )
Net earnings attributable to Altria Group, Inc. $
10,276 $ 1,247 100%+
Per share data: Basic and diluted earnings per
share attributable to
Altria Group, Inc.
$ 5.27 $ 0.64 100%+
Weighted-average diluted shares outstanding 1,946 1,958 (0.6)%
1 Cost of sales includes charges for resolution expenses related to
state settlement agreements and FDA user fees. Supplemental
information concerning those items and excise taxes on products
sold is shown in Schedule 5. Schedule 2 ALTRIA GROUP,
INC.and SubsidiariesSelected Financial DataFor the Quarters Ended
December 31,(dollars in millions)(Unaudited)
Net
Revenues Smokeable Products Smokeless
Products Wine All Other
Total 2016 $ 5,453 $ 521 $ 248 $ 30 $ 6,252
2015 5,557 486 231 44 6,318 % Change
(1.9
)%
7.2 % 7.4
%
(31.8
)%
(1.0
)%
Reconciliation:
For the quarter ended December 31, 2015 $
5,557 $ 486 $ 231 $
44 $ 6,318 Operations
(104
)
35 17
(14
)
(66
)
For the quarter ended December 31, 2016 $
5,453 $ 521 $ 248
$ 30 $ 6,252
Operating Companies Income (Loss)
Smokeable Products Smokeless Products
Wine All Other
Total 2016 $ 1,813 $ 247 $ 64 $
(53
)
$ 2,071 2015 1,738 278 55
(30
)
2,041 % Change
4.3
%
(11.2
)%
16.4 %
(76.7
)%
1.5
%
Reconciliation:
For the quarter ended December 31, 2015 $
1,738 $ 278 $ 55 $
(30
)
$ 2,041 NPM Adjustment Items - 2015 29 — — — 29
Integration costs - 2015 — — — 3 3 Tobacco and health litigation
items - 2015 25 — — — 25
54 — — 3 57 Asset
impairment, exit and implementation costs - 2016
(29
)
(43 ) — (1)
(73
)
Patent litigation settlement - 2016 — — —
(21
)
(21
)
Tobacco and health litigation items - 2016
(16
)
— — —
(16
)
(45
)
(43
) —
(22
)
(110
)
Operations 66 12 9
(4
)
83
For the quarter ended December 31, 2016 $
1,813 $ 247 $ 64
$
(53
)
$ 2,071 Schedule 3 ALTRIA GROUP,
INC.and SubsidiariesConsolidated Statements of EarningsFor the
Years Ended December 31,(dollars in millions, except per share
data)(Unaudited)
2016 2015 % Change
Net revenues $ 25,744 $
25,434 1.2% Cost of sales 1 7,746 7,740 Excise taxes
on products 1 6,407 6,580 Gross profit 11,591 11,114
4.3% Marketing, administration and research costs 2,407 2,450 Asset
impairment and exit costs 174 4
Operating
companies income 9,010 8,660 4.0%
Amortization of intangibles 21 21 General corporate expenses 222
237 Reduction of PMI tax-related receivable — 41 Corporate asset
impairment and exit costs 5 —
Operating income
8,762 8,361 4.8% Interest and other debt
expense, net 747 817 Loss on early extinguishment of debt 823 228
Earnings from equity investment in SABMiller (795 ) (757 ) Gain on
AB InBev/SABMiller business combination (13,865 ) (5 ) Earnings
before income taxes 21,852 8,078 100%+ Provision for income taxes
7,608 2,835
Net earnings 14,244
5,243 100%+ Net earnings attributable to
noncontrolling interests (5 ) (2 )
Net earnings attributable to
Altria Group, Inc. $ 14,239 $
5,241 100%+ Per share data
2: Basic and diluted earnings per share
attributable toAltria Group, Inc. $ 7.28
$ 2.67 100%+ Weighted-average diluted
shares outstanding 1,952 1,961 (0.5)% 1 Cost of sales
includes charges for resolution expenses related to state
settlement agreements and FDA user fees. Supplemental information
concerning those items and excise taxes on products sold is shown
in Schedule 5. 2 Basic and diluted earnings per share
attributable to Altria Group, Inc. are computed independently for
each period. Accordingly, the sum of the quarterly earnings per
share amounts may not agree to the year-to-date amounts.
Schedule 4 ALTRIA GROUP, INC.and SubsidiariesSelected
Financial DataFor the Years Ended December 31,(dollars in
millions)(Unaudited)
Net
Revenues Smokeable Products Smokeless
Products Wine All Other
Total 2016 $ 22,851 $ 2,051 $ 746 $ 96 $ 25,744 2015
22,792 1,879 692 71 25,434 % Change 0.3 % 9.2 %
7.8
%
35.2 %
1.2
%
Reconciliation:
For the year ended December 31, 2015 $ 22,792
$ 1,879 $ 692 $ 71
$ 25,434 Operations 59 172 54
25 310
For the year ended December 31,
2016 $ 22,851 $ 2,051
$ 746 $ 96
$ 25,744
Operating Companies Income (Loss)
Smokeable Products Smokeless Products
Wine All Other Total 2016 $ 7,768 $
1,177 $ 164 $ (99 ) $ 9,010 2015 7,569 1,108 152 (169 ) 8,660 %
Change 2.6 % 6.2 %
7.9
%
41.4 %
4.0
%
Reconciliation:
For the year ended December 31, 2015 $ 7,569
$ 1,108 $ 152 $ (169
) $ 8,660 NPM Adjustment Items - 2015 (97 ) —
— —
(97
)
Asset impairment, exit and integration costs - 2015 — 4 — 7 11
Tobacco and health litigation items - 2015 127 —
— — 127 30 4 — 7 41
NPM Adjustment Items - 2016 (12 ) — — —
(12
)
Asset impairment, exit, implementation and acquisition-related
costs - 2016 (134 ) (57 ) (3) (7 )
(201
)
Patent litigation settlement - 2016 — — — (21 )
(21
)
Tobacco and health litigation items - 2016 (88 ) — —
—
(88
)
(234 ) (57 )
(3
)
(28 )
(322
)
Operations 403 122 15 91 631
For the year ended December 31, 2016 $
7,768 $ 1,177 $
164 $ (99 ) $
9,010 Schedule 5 ALTRIA GROUP, INC.and
SubsidiariesSupplemental Financial Data(dollars in
millions)(Unaudited)
For the Quarters
Ended December 31,
For the YearsEnded December
31,
2016 2015 2016 2015 The segment
detail of excise taxes on products sold is as follows:
Smokeable products $ 1,478 $ 1,547 $ 6,247 $ 6,423 Smokeless
products 33 33 135 133 Wine 8 9 25 24 $ 1,519
$ 1,589 $ 6,407 $ 6,580
The
segment detail of charges for resolution expenses related to state
settlement agreements included in cost of sales is as follows:
Smokeable products $ 1,057 $ 1,136 $ 4,622 $ 4,469 Smokeless
products 2 2 8 8 $ 1,059 $ 1,138
$ 4,630 $ 4,477
The segment detail of FDA user fees
included in cost of sales is as follows:
Smokeable products $ 70 $ 70 $ 281 $ 271 Smokeless products
1 1 4 4 $ 71 $ 71 $ 285 $
275 Schedule 6 ALTRIA GROUP, INC.and SubsidiariesNet
Earnings and Diluted Earnings Per Share - Attributable to Altria
Group, Inc.For the Quarters Ended December 31,(dollars in millions,
except per share data)(Unaudited)
Net Earnings
Diluted EPS 2016 Net Earnings $
10,276 $ 5.27 2015 Net Earnings
$ 1,247 $ 0.64 % Change
100%
+
100%
+
Reconciliation:
2015 Net Earnings $ 1,247 $ 0.64
2015 NPM Adjustment Items 29 0.01 2015 Tobacco and health
litigation items 21 0.01 2015 SABMiller special items 20 0.01 2015
Integration costs 3 —
2015 Gain on AB InBev/SABMiller
business
combination
(3) — 2015 Tax items 6 — Subtotal 2015 special items 76 0.03
2016 Tobacco and health litigation items (15) (0.01) 2016 SABMiller
special items 153 0.07
2016 Asset impairment, exit
and implementation
costs
(51) (0.03) 2016 Patent litigation settlement (13) (0.01)
2016 Gain on AB InBev/SABMiller
business
combination
8,872 4.56 2016 Tax items 13 0.01 Subtotal 2016 special items 8,959
4.59 Fewer shares outstanding — 0.01 Change in tax rate 96
0.05 Operations (102) (0.05)
2016 Net Earnings $
10,276 $ 5.27
Schedule 7 ALTRIA GROUP, INC.and
SubsidiariesReconciliation of GAAP and non-GAAP Measures(dollars in
millions, except per share data)(Unaudited)
Earnings
before
Income
Taxes
Provision
for Income
Taxes
Net
Earnings
Net Earnings
Attributable to
Altria Group, Inc.
Diluted
EPS
For the quarter ended December 31, 2016 2016
Reported $ 15,708 $ 5,430 $
10,278 $ 10,276 $ 5.27 Tobacco
and health litigation items 17 2 15 15 0.01 SABMiller special items
(236 ) (83 ) (153 ) (153 ) (0.07 )
Asset impairment, exit and
implementation costs
73 22 51 51 0.03 Patent litigation settlement 21 8 13 13 0.01
Gain on AB InBev/SABMiller business
combination
(13,660 ) (4,788 ) (8,872 ) (8,872 ) (4.56 ) Tax items —
13 (13 ) (13 ) (0.01 )
2016 Adjusted for Special Items $ 1,923
$ 604 $ 1,319
$ 1,317 $
0.68 For the quarter ended December 31,
2015 2015 Reported $ 1,973 $
725 $ 1,248 $ 1,247 $
0.64 NPM Adjustment Items 42 13 29 29 0.01 Tobacco and
health litigation items 35 14 21 21 0.01 SABMiller special items 30
10 20 20 0.01 Integration costs 3 — 3 3 —
Gain on AB InBev/SABMiller
business combination
(5 ) (2 ) (3 ) (3 ) — Tax items — (6 ) 6
6 —
2015 Adjusted for
Special Items $ 2,078 $
754 $ 1,324
$ 1,323 $ 0.67
2016 Reported Net Earnings $ 10,276
$ 5.27 2015 Reported Net Earnings $
1,247 $ 0.64 % Change
100
%+
100
%+
2016 Net Earnings Adjusted for Special Items $
1,317 $ 0.68 2015 Net Earnings Adjusted for
Special Items $ 1,323 $ 0.67 %
Change (0.5 )% 1.5 %
Schedule 8 ALTRIA GROUP, INC.and SubsidiariesNet
Earnings and Diluted Earnings Per Share - Attributable to Altria
Group, Inc.For the Years Ended December 31,(dollars in millions,
except per share data)(Unaudited)
Net
Earnings
Diluted EPS
1
2016 Net Earnings $ 14,239 $
7.28 2015 Net Earnings $ 5,241 $
2.67 % Change
100%
+
100%
+
Reconciliation:
2015 Net Earnings $ 5,241 $ 2.67
2015 NPM Adjustment Items (51 ) (0.03 ) 2015 Tobacco and
health litigation items 94 0.05 2015 SABMiller special items 82
0.04 2015 Loss on early extinguishment of debt 143 0.07
2015 Asset impairment, exit and
integration costs
9 —
2015 Gain on AB InBev/SABMiller
business
combination
(3 ) — 2015 Tax items (11 ) — Subtotal 2015 special items
263 0.13 2016 NPM Adjustment Items (11 ) (0.01
) 2016 Tobacco and health litigation items (71 ) (0.04 ) 2016
SABMiller special items 57 0.03 2016 Loss on early extinguishment
of debt (541 ) (0.28 )
2016 Asset impairment, exit,
implementation and
acquisition-related
costs
(135 ) (0.07 ) 2016 Patent litigation settlement (13 ) (0.01 )
2016 Gain on AB InBev/SABMiller
business combination
9,001 4.61 2016 Tax items 30 0.02 Subtotal 2016
special items 8,317 4.25 Fewer shares
outstanding — 0.02 Change in tax rate 82 0.04 Operations 336
0.17
2016 Net Earnings $ 14,239
$ 7.28 1 Diluted earnings per share
attributable to Altria Group, Inc. is computed independently for
each period. Accordingly, the sum of the quarterly earnings per
share amounts may not agree to the year-to-date amounts.
Schedule 9 ALTRIA GROUP, INC.and
SubsidiariesReconciliation of GAAP and non-GAAP Measures(dollars in
millions, except per share data)(Unaudited)
Earnings
before
Income
Taxes
Provision
for Income
Taxes
Net
Earnings
Net Earnings
Attributable to
Altria Group, Inc.
Diluted
EPS
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 For the year
ended December 31, 2015 2015 Reported $
8,078 $ 2,835 $ 5,243 $
5,241 $ 2.67 NPM Adjustment Items (84 ) (33 )
(51 ) (51 )
(0.03
)
Tobacco and health litigation items 150 56 94 94 0.05 SABMiller
special items 126 44 82 82 0.04 Loss on early extinguishment of
debt 228 85 143 143 0.07 Asset impairment, exit and integration
costs 11 2 9 9 —
Gain on AB InBev/SABMiller business
combination
(5 ) (2 ) (3 ) (3 ) — Tax items 41 52
(11 ) (11 ) —
2015 Adjusted for Special
Items $ 8,545 $ 3,039
$ 5,506 $
5,504 $ 2.80
2016 Reported Net Earnings $ 14,239 $
7.28 2015 Reported Net Earnings $ 5,241
$ 2.67 % Change
100%
+
100%
+
2016 Net Earnings Adjusted for Special Items $
5,922 $ 3.03 2015 Net Earnings Adjusted for
Special Items $ 5,504 $ 2.80 %
Change 7.6 % 8.2%
Schedule 10 ALTRIA GROUP, INC.and SubsidiariesCondensed
Consolidated Balance Sheets(dollars in millions)(Unaudited)
December 31, 2016
December 31, 2015 1
Assets
Cash and cash equivalents $ 4,569 $ 2,369 Inventories 2,051 2,031
Other current assets 640 511 Property, plant and equipment, net
1,958 1,982 Goodwill and other intangible assets, net 17,321 17,313
Investment in AB InBev/SABMiller 17,852 5,483 Finance assets, net
1,028 1,239 Other long-term assets 513 531
Total
assets $ 45,932 $ 31,459
Liabilities and
Stockholders’ Equity
Current portion of long-term debt $ — $ 4 Accrued settlement
charges 3,701 3,590 Other current liabilities 3,674 3,476 Long-term
debt 13,881 12,843 Deferred income taxes 8,416 4,667 Accrued
postretirement health care costs 2,217 2,245 Accrued pension costs
805 1,277 Other long-term liabilities 427 447 Total
liabilities 33,121 28,549 Redeemable noncontrolling interest 38 37
Total stockholders’ equity 12,773 2,873
Total liabilities
and stockholders’ equity $ 45,932 $
31,459 Total debt $ 13,881 $ 12,847
1 Certain amounts have been reclassified
to conform with the current year’s presentation due to the
adoptions of certain accounting standards updates.
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