- Altria announces Annual Meeting
voting results.
- Altria declares regular quarterly
dividend of $0.61 per share.
Altria Group, Inc. (Altria) (NYSE: MO) held its 2017 Annual
Meeting of Shareholders (Annual Meeting) today. Altria’s Chairman,
Chief Executive Officer and President, Marty Barrington, summarized
Altria’s full-year 2016 and first-quarter 2017 operating and
financial results, discussed Altria’s corporate responsibility
initiatives and reaffirmed Altria’s guidance for 2017 full-year
adjusted diluted earnings per share (EPS). A copy of Mr.
Barrington’s prepared remarks and business presentation and a
replay of the audio webcast of the Annual Meeting are available on
altria.com and via the Altria Investor app.
Voting Results for Altria’s Annual
Meeting
At the Annual Meeting, Altria’s shareholders elected to a
one-year term each of the 11 nominees for director named in
Altria’s proxy statement; ratified the selection of
PricewaterhouseCoopers LLP as Altria’s independent registered
public accounting firm for the fiscal year ending December 31,
2017; approved, on an advisory basis, the compensation of Altria’s
named executive officers; approved, on an advisory basis, that
future advisory votes on the compensation of Altria’s named
executive officers should be held annually; and defeated one
shareholder proposal. Final voting results will be reported in a
Current Report on Form 8-K filed with the Securities and Exchange
Commission.
2017 Full-Year Guidance
During his remarks, Mr. Barrington reaffirmed Altria’s guidance
for 2017 full-year adjusted diluted EPS, which excludes the 2017
special items shown in Schedule 1, to be in a range of $3.26 to
$3.32. This range represents 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.
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 Anheuser-Busch InBev SA/NV(AB InBev)/SABMiller plc
(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, may be infrequent,
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.
Regular Quarterly
Dividend
Following the Annual Meeting, Altria’s Board of Directors
declared a regular quarterly dividend of $0.61 per share, payable
on July 10, 2017, to shareholders of record as of June 15, 2017.
The ex-dividend date is June 13, 2017.
Altria’s Profile
Altria’s wholly-owned subsidiaries include Philip Morris USA
Inc., USSTC, John Middleton Co., Sherman Group Holdings, LLC, Nu
Mark LLC, Ste. Michelle Wine Estates Ltd. and Philip Morris Capital
Corporation. 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, 2016 and its
Quarterly Report on Form 10-Q for the period ended March 31,
2017.
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 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 its business
combination with SABMiller; 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
from the AB InBev/SABMiller business combination and the accounting
treatment of its equity investment are not guaranteed; and the risk
that the tax treatment of the dividends Altria expects to receive
from AB InBev may not be as favorable as Altria anticipates.
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 GAAP and non-GAAP
Measures
(dollars in millions, except per share
data)
(Unaudited)
Reconciliation of Altria’s First Quarter 2017 Adjusted
Results
Earnings before
Income Taxes
Provision for Income
Taxes
Net Earnings
Net Earnings Attributable to
Altria Group, Inc.
Diluted EPS
For the quarter ended March 31, 2017 2017 Reported
$ 2,091 $ 689 $ 1,402
$ 1,401 $ 0.72 NPM Adjustment Items (1
) — (1 ) (1 ) — Tobacco and health litigation items 1 — 1 1 — AB
InBev special items 73 25 48 48 0.03 Asset impairment, exit,
implementation and acquisition-related costs 30 11 19 19 0.01 Tax
items — 58 (58 ) (58 )
(0.03 )
2017 Adjusted for Special Items $
2,194 $ 783
$ 1,411 $ 1,410
$ 0.73 Reconciliation of
Altria’s Full Year 2016 Adjusted Results
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
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, may be infrequent, are difficult to
predict and can distort underlying business trends and results.
Altria’s management believes that adjusted financial measures
provide useful additional 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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