Altria Group, Inc. (Altria) (NYSE: MO) is participating in the
Consumer Analyst Group of New York Conference (CAGNY) in Boca
Raton, Florida today. Howard Willard, Altria’s Chairman and Chief
Executive Officer and Billy Gifford, Altria’s Vice Chairman and
Chief Financial Officer will discuss Altria’s commitment to
responsibility as the U.S. leader in tobacco and Altria’s enhanced
business platform to create long-term shareholder value.
Remarks and Presentation
The presentation is being webcast live at altria.com in a
listen-only mode, beginning at approximately 2:00 p.m. Eastern
Time. A copy of the business presentation and prepared remarks and
a replay of the audio webcast will be available at altria.com and
via the Altria Investor app.
2020-2022 Adjusted Diluted EPS Growth
Objective
Altria maintains its compounded annual adjusted diluted earnings
per share (EPS) growth objective of 4% to 7% for the years 2020
through 2022.
2020 Full-Year Guidance
Altria reaffirms its guidance for 2020 full-year adjusted
diluted EPS to be in a range of $4.39 to $4.51, representing a
growth rate of 4% to 7% from an adjusted diluted EPS base of $4.22
in 2019, as shown in Schedule 1. Altria’s 2020 guidance reflects
increased investments related to PM USA’s commercialization efforts
for IQOS, Helix’s plans to manufacture and expand U.S. distribution
of on! and one extra shipping day in the first quarter.
The guidance range excludes estimated per share charges in 2020
of $0.05 of tax expense resulting from the Tax Cuts and Jobs Act
(Tax Reform Act) related to a tax basis adjustment to Altria’s ABI
investment.
Altria expects the 2020 full-year total domestic cigarette
industry adjusted volume decline rate to be in a range of 4% to 6%,
which includes the impact of federal legislation raising the
minimum age to purchase all tobacco products to 21.
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, restructuring charges, asset impairment charges,
acquisition-related costs, equity investment-related special items
(including any changes in fair value for the equity investment and
any related warrants and preemptive rights), certain tax items,
charges associated with tobacco and health litigation items, and
resolutions of certain nonparticipating manufacturer (NPM)
adjustment disputes under the Master Settlement Agreement (such
dispute resolutions are referred to 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 unusual or
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.
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. (Middleton), Sherman Group Holdings, LLC and its
subsidiaries (Nat Sherman), Ste. Michelle Wine Estates Ltd. (Ste.
Michelle) and Philip Morris Capital Corporation (PMCC). Altria owns
an 80% interest in Helix Innovations LLC (Helix). Altria holds
equity investments in Anheuser-Busch InBev SA/NV (ABI), JUUL Labs,
Inc. (JUUL) and Cronos Group Inc. (Cronos).
The brand portfolios of Altria’s tobacco operating companies
include Marlboro®, Black & Mild®,
Copenhagen®, Skoal® and on!®. Ste. Michelle
produces and markets premium wines sold under various labels,
including Chateau Ste. Michelle®, 14 Hands® and
Stag’s Leap Wine Cellars™, and it imports and markets
Antinori®, Champagne Nicolas Feuillatte™ 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, or follow Altria on Twitter, Facebook and
LinkedIn.
Forward-Looking and Cautionary
Statements
This 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 release are described
in Altria’s publicly filed reports, including its Annual Report on
Form 10-K for the year ended December 31, 2018 and its Quarterly
Reports on Form 10-Q for the periods ended March 31, 2019 and
September 30, 2019. These factors include the following:
- unfavorable litigation outcomes, including risks associated
with adverse jury and judicial determinations, courts and
arbitrators reaching conclusions at variance with our, our
subsidiaries’ and our investees’ understanding of applicable law,
bonding requirements in the jurisdictions that do not limit the
dollar amount of appeal bonds, and certain challenges to bond cap
statutes;
- government, including U.S. Food and Drug Administration (FDA),
and private sector actions that impact adult tobacco consumer
acceptability of, or access to, tobacco products;
- the growth of the e-vapor category and other innovative tobacco
products contributing to reductions in cigarette and smokeless
tobacco product consumption levels and sales volume;
- tobacco product taxation, including lower tobacco product
consumption levels and potential shifts in adult consumer purchases
as a result of federal and state excise tax increases;
- the failure by our tobacco and wine subsidiaries to compete
effectively in their respective markets;
- our tobacco and wine subsidiaries’ 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 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;
- changes, including in economic conditions that result in adult
consumers choosing lower-priced brands;
- the unsuccessful commercialization of adjacent products or
processes by our tobacco subsidiaries and investees, including
innovative tobacco products that may reduce the health risks
associated with current tobacco products and that appeal to adult
tobacco consumers;
- significant changes in price, availability or quality of
tobacco, other raw materials or component parts;
- the risks related to the reliance by our tobacco subsidiaries
on a few significant facilities and a small number of key
suppliers, including an extended disruption at a facility or of
service by a supplier;
- required or voluntary product recalls as a result of various
circumstances such as product contamination or FDA or other
regulatory action;
- the failure of our information systems or service providers’
information systems to function as intended, or cyber-attacks or
security breaches;
- unfavorable outcomes of any government investigations of
Altria, our subsidiaries or our investees;
- a successful challenge to our tax positions;
- the risks related to our and our investees’ international
business operations, including failure to prevent violations of
various United States and foreign laws and regulations such as laws
prohibiting bribery and corruption;
- our inability to attract and retain the best talent due to the
impact of decreasing social acceptance of tobacco usage and tobacco
control actions;
- the adverse effect of acquisitions, investments, dispositions
or other events on our credit rating;
- our inability to acquire attractive businesses or make
attractive investments on favorable terms, or at all, or to realize
the anticipated benefits from an acquisition or investment;
- the risks related to disruption and uncertainty in the credit
and capital markets, including risk of access to these markets both
generally and at current prevailing rates which may adversely
affect our earnings or dividend rate or both;
- impairment losses as a result of the write down of intangible
assets, including goodwill;
- the risks related to Ste. Michelle’s wine business, including
competition, changes in adult consumer preferences, unfavorable
changes in grape supply and governmental regulations;
- the adverse effects of risks encountered by ABI in its
business, foreign currency exchange rates and ABI’s stock price on
our equity investment in ABI, including on our reported earnings
from and carrying value of our investment in ABI and the dividends
paid by ABI on the shares we own;
- the risks related to our inability to transfer our equity
securities in ABI until October 10, 2021, and, if our ownership
percentage decreases below certain levels, the adverse effects of
additional tax liabilities, a reduction in the number of directors
that we have the right to have appointed to the ABI board of
directors, and our potential inability to use the equity method of
accounting for our investment in ABI;
- the risk of challenges to the tax treatment of the
consideration we received in the ABI/SABMiller plc business
combination and the tax treatment of our equity investment;
- the risks related to our inability to obtain antitrust
clearance required for the conversion of our non-voting JUUL shares
into voting shares in a timely manner or at all, including the
resulting limitations on our rights with respect to our investment
in JUUL;
- the risks generally related to our investments in JUUL and
Cronos, including our inability to realize the expected benefits of
our investments in the expected time frames, or at all, due to the
risks encountered by our investees in their businesses, such as
operational, compliance and regulatory risks at the international,
federal, state and local levels, including actions by the FDA, and
adverse publicity; potential disruptions to our investees’
management or current or future plans and operations; domestic or
international litigation developments, government investigations,
tax disputes or otherwise; and impairment of our investments;
- the risks related to our inability to acquire a controlling
interest in JUUL as a result of standstill restrictions or to
control the material decisions of JUUL, restrictions on our ability
to sell or otherwise transfer our shares of JUUL until December 20,
2024, and non-competition restrictions for the same time
period;
- the risks related to any decrease of our percentage ownership
in JUUL, including the loss of certain of our governance, consent,
preemptive and other rights; and
- the risks, including criminal, civil or tax liability for
Altria, related to Cronos’s or Altria’s failure to comply with
applicable laws, including cannabis laws.
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
Full-Year 2019 Adjusted Results
Earnings (losses) before
Income Taxes
Provision (Benefit) for Income
Taxes
Net Earnings (Losses)
Net Earnings (Losses)
Attributable to Altria
Diluted EPS
For the year ended December 31,
2019
Reported
$
766
$
2,064
$
(1,298
)
$
(1,293
)
$
(0.70
)
ABI-related special items
(354
)
(74
)
(280
)
(280
)
(0.15
)
Tobacco and health litigation items
77
19
58
58
0.03
Asset impairment, exit, implementation and
acquisition-related costs
331
62
269
269
0.15
Impairment of JUUL equity securities
8,600
—
8,600
8,600
4.60
Cronos-related special items
928
288
640
640
0.34
Tax items
—
99
(99
)
(99
)
(0.05
)
Adjusted for Special Items
$
10,348
$
2,458
$
7,890
$
7,895
$
4.22
While Altria reports its financial results in accordance with
GAAP, its management reviews certain financial results, including
diluted EPS, on an adjusted basis, which excludes certain income
and expense items, including those items noted under “2020
Full-Year Guidance.” 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 unusual or 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200219005540/en/
Altria Client Services Investor Relations (804) 484-8222
Altria Client Services Media Relations (804) 484-8897
Altria (NYSE:MO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Altria (NYSE:MO)
Historical Stock Chart
From Apr 2023 to Apr 2024