Altria Group, Inc. (NYSE: MO) today reports our 2022
fourth-quarter and full-year business results and provides our
guidance for 2023 full-year adjusted diluted earnings per share
(EPS).
“It was an exciting year for Altria as our businesses delivered
strong financial performance, and we continued to strategically
invest toward our Vision,” said Billy Gifford, Altria’s Chief
Executive Officer. “We generated strong adjusted diluted EPS growth
of 5% and made meaningful progress in several areas of our
smoke-free portfolio.”
“Our plans for 2023 include a continuation of our strategy to
balance earnings growth and shareholder returns with strategic
investments toward our Vision. We expect to deliver 2023 full-year
adjusted diluted EPS in a range of $4.98 to $5.13, representing a
growth rate of 3% to 6% from a base of $4.84 in 2022.”
Altria Headline Financials1
($ in millions, except per share data)
Q4 2022
Change vs. Q4
2021
Full Year 2022
Change vs. Full Year
2021
Net revenues
$6,111
(2.3)%
$25,096
(3.5)%
Revenues net of excise taxes
$5,083
(0.1)%
$20,688
(2.0)%
Reported tax rate
0.5%
(28.3) pp
22.0%
(13.3) pp
Adjusted tax rate
25.0%
(0.5) pp
24.9%
(0.2) pp
Reported diluted EPS2
$1.50
70.5%
$3.19
100%+
Adjusted diluted EPS2
$1.18
8.3%
$4.84
5.0%
1 “Adjusted” financial measures presented in this release
exclude the impact of special items. See “Basis of Presentation”
for more information. 2 “EPS” represents diluted earnings (losses)
per share attributable to Altria.
As previously announced, a conference call with the investment
community and news media will be webcast on February 1, 2023 at
9:00 a.m. Eastern Time. Access to the webcast is available at
www.altria.com/webcasts.
Cash Returns to Shareholders and Capital Markets
Activity
Share Repurchase Program
- We completed our previously authorized $3.5 billion share
repurchase program. In the fourth quarter, we repurchased 8.3
million shares at an average price of $45.09, for a total cost of
$374 million. For the full year, we repurchased 38.1 million shares
at an average price of $47.83, for a total cost of $1.8
billion.
- Our Board of Directors (Board) authorized a new $1 billion
share repurchase program, which we expect to complete by December
31, 2023. Share repurchases depend on marketplace conditions and
other factors, and the program remains subject to the discretion of
our Board.
Dividends
- We paid dividends of $1.7 billion in the fourth quarter and
$6.6 billion for the full year.
- We maintain our long-term objective of a dividend payout ratio
target of approximately 80% of our adjusted diluted EPS. Future
dividend payments remain subject to the discretion of our
Board.
Capital Markets Activity
- We expect to retire approximately $1.3 billion of notes coming
due later this month with available cash.
Macroeconomic and Geopolitical Conditions Impacting Our
Businesses
Impact on Tobacco Business Operations
- In 2022, our businesses were not materially impacted by
increased costs resulting from global supply chain challenges and
high inflation.
Impact on Adult Tobacco Consumers (ATCs)
- In 2022, we believe high rates of inflation impacted ATC
behaviors, discretionary income and spending. As a result, our
businesses and the industry experienced elevated volume declines,
and we observed accelerated share growth in discount cigarettes.
Despite these factors, our leading tobacco brands remained
resilient and we continued to observe significant brand loyalty in
the tobacco space overall.
Philip Morris Capital Corporation Update
- As of December 31, 2022, we completed the wind-down of Philip
Morris Capital Corporation (PMCC) and no finance assets
remain.
Environmental, Social and Governance (ESG)
Our Corporate Responsibility Focus Areas are: (i) reduce the
harm of tobacco products, (ii) prevent underage use, (iii) protect
the environment, (iv) drive responsibility through our value chain,
(v) support our people and communities and (vi) engage and lead
responsibly. Our corporate responsibility reports are available on
the Corporate Responsibility section of www.altria.com.
- Our responsibility efforts and recognitions from 2022 include
the following:
- We recently announced that we will conduct an equity and civil
rights assessment (Assessment). The Assessment follows last year’s
passage of a shareholder proposal recommending Altria commission a
civil rights equity audit and seeks to address feedback received
from recent robust shareholder engagement. We believe the
Assessment will identify opportunities to accelerate progress
toward our 2025 Corporate Responsibility focus area goals, enhance
stakeholder alignment and promote transparency.
- Continued to support efforts to reduce youth tobacco use.
Today, underage use of conventional tobacco products is at the
lowest levels in a generation. The 2022 Monitoring the Future (MTF)
study estimates youth smoking rates to be 2.1%, a nearly 93%
reduction from its 1997 peak of 28.3%. Prevalence of past 30-day
nicotine vaping among youth is 13.8% in 2022 versus its 2019 peak
of 18.1%. MTF surveys 8th, 10th and 12th graders. Rates reported
are for 8th, 10th and 12th graders combined.
- Continued to demonstrate environmental leadership with
recognition from CDP Global, a non-profit that runs a global
disclosure system on managing environmental impact, for addressing
climate change (A-) and protecting water security (A-), and
improved our rating for addressing the drivers of deforestation
(B).
- For the fourth consecutive year, we were chosen as one of the
“Best-of-the-Best” Corporations for Inclusion by the National
Business Inclusion Consortium. The Best-of-the-Best designation
honors corporations for their commitment to America’s diverse
employees and business owners.
2023 Full-Year Guidance
We expect our 2023 full-year adjusted diluted EPS to be in a
range of $4.98 to $5.13, representing a growth rate of 3% to 6%
from an adjusted diluted EPS base of $4.84 in 2022. While the 2023
full-year adjusted diluted EPS guidance accounts for a range of
scenarios, the external environment remains dynamic. We will
continue to monitor conditions related to (i) the economy,
including the impact of high inflation, rising interest rates and
global supply chain disruptions, (ii) ATC dynamics, including
disposable income, purchasing patterns and adoption of smoke-free
products, and (iii) regulatory and legislative developments.
Our 2023 full-year adjusted diluted EPS guidance range includes
planned investments in support of our Vision, such as (i) continued
smoke-free product research, development and regulatory preparation
expenses, (ii) enhancement of our digital consumer engagement
system and (iii) marketplace activities in support of our
smoke-free products. The guidance range also includes lower
expected net periodic benefit income due to market factors,
including higher interest rates, and the impact of the 2022
completion of the PMCC wind-down.
We expect our 2023 full-year adjusted effective tax rate will be
in a range of 24.5% to 25.5%. We also expect our 2023 capital
expenditures to be between $175 million and $225 million and 2023
depreciation and amortization expenses of approximately $230
million.
Our full-year adjusted diluted EPS guidance range and full-year
forecast for our adjusted effective tax rate 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, asset impairment charges, acquisition-related and
disposition-related costs, equity investment-related special items
(including any changes in fair value of our equity investment
recorded at fair value and any changes in the fair value of related
warrants and preemptive rights), certain income tax items, charges
associated with tobacco and health and certain other litigation
items, and resolutions of certain non-participating manufacturer
(NPM) adjustment disputes under the MSA (such dispute resolutions
are referred to as NPM Adjustment Items). See Table 1 below for the
income and expense items for the full-year 2022.
Our 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 our reported diluted EPS or
our reported effective tax rate because these items, which could be
significant, may be unusual or infrequent, are difficult to predict
and may be highly variable. As a result, we do not provide a
corresponding U.S. generally accepted accounting principles (GAAP)
measure for, or reconciliation to, our adjusted diluted EPS
guidance or our adjusted effective tax rate forecast.
ALTRIA GROUP, INC.
See “Basis of Presentation” below for an explanation of
financial measures and reporting segments discussed in this
release.
Financial Performance
Fourth Quarter
- Net revenues decreased 2.3% to $6.1 billion, primarily driven
by lower net revenues in the smokeable products segment. Revenues
net of excise taxes were essentially unchanged at $5.1
billion.
- Reported diluted EPS increased 70.5% to $1.50, primarily driven
by favorable income tax items, 2021 Cronos-related special items,
higher reported operating companies income (OCI), 2021 ABI-related
special items, fewer shares outstanding and favorable interest
expense, partially offset by 2022 changes in the estimated fair
value of our investment in JUUL (including the corresponding
adjustment for a tax valuation allowance).
- Adjusted diluted EPS increased 8.3% to $1.18, primarily driven
by higher adjusted OCI, fewer shares outstanding and favorable
interest expense.
Full Year
- Net revenues decreased 3.5% to $25.1 billion, primarily driven
by the sale of our former Ste. Michelle wine business in October
2021 and lower net revenues in the smokeable products segment.
Revenues net of excise taxes decreased 2.0% to $20.7 billion.
- Reported diluted EPS increased 100%+ to $3.19 primarily driven
by lower reported losses from our investment in ABI (due primarily
to a lower impairment of our investment in ABI), favorable income
tax items, 2021 losses on early extinguishment of debt, lower
losses from Cronos-related special items, higher reported OCI,
fewer shares outstanding and favorable interest expense, partially
offset by 2022 changes in the estimated fair value of our
investment in JUUL (including the corresponding adjustment for a
tax valuation allowance).
- Adjusted diluted EPS increased 5.0% to $4.84, primarily driven
by fewer shares outstanding, higher adjusted OCI and favorable
interest expense.
Table 1 - Altria’s Adjusted
Results
Fourth Quarter
Full Year
2022
2021
Change
2022
2021
Change
Reported diluted EPS
$
1.50
$
0.88
70.5
%
$
3.19
$
1.34
100
%+
NPM Adjustment Items
—
—
(0.03
)
(0.03
)
Asset impairment, exit, implementation,
acquisition and disposition-related costs
—
—
—
0.05
Tobacco and health and certain other
litigation items
0.01
0.02
0.05
0.07
JUUL changes in fair value
0.06
—
0.81
—
ABI-related special items
—
0.04
1.12
2.66
Cronos-related special items
—
0.15
0.10
0.25
Loss on early extinguishment of debt
—
—
—
0.27
Income tax items
(0.39
)
—
(0.40
)
—
Adjusted diluted EPS
$
1.18
$
1.09
8.3
%
$
4.84
$
4.61
5.0
%
Note: For details of pre-tax, tax and after-tax amounts, see
Schedules 7 and 9.
Special Items
The EPS impact of the following special items is shown in Table
1 and Schedules 6, 7, 8 and 9.
NPM Adjustment Items
- For the full-year 2022, we recorded pre-tax income of $68
million (or $0.03 per share) for NPM Adjustment Items and related
interest, including $63 million recorded as a reduction to cost of
sales in the smokeable products segment and $5 million recorded as
interest income.
- For the full-year 2021, we recorded pre-tax income of $76
million (or $0.03 per share) for NPM Adjustment Items and related
interest, including $53 million recorded as a reduction to cost of
sales in the smokeable products segment and $23 million recorded as
interest income.
Asset Impairment, Exit, Implementation, Acquisition and
Disposition-Related Costs
- For the full-year 2021, we recorded pre-tax charges of $120
million (or $0.05 per share), due primarily to charges associated
with the sale of our former Ste. Michelle wine business and
acquisition-related costs for the settlement of an arbitration
related to the 2019 on! transaction.
Tobacco and Health and Certain Other Litigation Items
- In the fourth quarter and for full-year 2022, we recorded
pre-tax charges of $30 million (or $0.01 per share) and $131
million (or $0.05 per share), respectively, for tobacco and health
and certain other litigation items and related interest costs.
- In the fourth quarter and for full-year 2021, we recorded
pre-tax charges of $34 million (or $0.02 per share) and $182
million (or $0.07 per share), respectively, for tobacco and health
and certain other litigation items and related interest costs.
JUUL Changes in Fair Value
We recorded non-cash, pre-tax unrealized (income) losses from
investments in equity securities as a result of changes in the
estimated fair value of our investment in JUUL consisting of the
following:
Fourth Quarter
Full Year
($ in millions, except per share
data)
2022
2021
2022
2021
(Income) losses from investments in equity
securities
$
100
$
—
$
1,455
$
—
Losses per share
$
0.06
$
—
$
0.81
$
—
We recorded corresponding adjustments to the JUUL tax valuation
allowance in 2022. As of December 31, 2022, the estimated fair
value of our investment in JUUL was $250 million.
ABI-Related Special Items
- In the fourth quarter of 2021, equity earnings from ABI
included net pre-tax charges of $92 million (or $0.04 per share),
substantially all of which related to ABI’s mark-to-market losses
on certain ABI financial instruments associated with share
commitments.
- For the full-year 2022 and 2021, equity earnings from ABI
included net pre-tax losses of $2.5 billion (or $1.12 per share)
and $6.2 billion (or $2.66 per share), respectively, substantially
all of which related to impairments of our investment in ABI.
The ABI-related special items above include our respective share
of the amounts recorded by ABI and additional adjustments related
to (i) conversion from international financial reporting standards
to GAAP and (ii) adjustments to our investment required under the
equity method of accounting.
Cronos-Related Special Items
We recorded net pre-tax expense consisting of the following:
Fourth Quarter
Full Year
($ in millions, except per share
data)
2022
2021
2022
2021
Loss on Cronos-related financial
instruments 1
$
1
$
20
$
15
$
148
(Income) losses from investments in equity
securities 2
5
246
171
318
Total Cronos-related special items -
(income) expense
$
6
$
266
$
186
$
466
Losses per share
$
—
$
0.15
$
0.10
$
0.25
1 Amounts are related to the non-cash change in the fair value
of the warrant (which we irrevocably abandoned in the fourth
quarter of 2022) and certain anti-dilution protections. 2 Amounts
include our share of special items recorded by Cronos and
additional adjustments, if required under the equity method of
accounting, related to our investment in Cronos including the $107
million and $205 million non-cash, pre-tax impairment of our
investment in Cronos for the years ended 2022 and 2021,
respectively.
We recorded corresponding adjustments to the Cronos tax
valuation allowance in 2022 and 2021 relating to the special
items.
Loss on Early Extinguishment of Debt
- For the full-year 2021, we recorded pre-tax losses on early
extinguishment of debt of $649 million (or $0.27 per share).
Income Tax Items
- In the fourth quarter and for full-year 2022, we recorded tax
items of $696 million (or $0.39 per share) and $729 million (or
$0.40 per share), respectively, due primarily to the release of
valuation allowances on deferred tax assets related to a portion of
our investment in JUUL and our Cronos warrant (which we irrevocably
abandoned in the fourth quarter of 2022) due to the anticipated
ability to utilize these losses.
SMOKEABLE PRODUCTS
Revenues and OCI
Fourth Quarter
- Net revenues decreased 2.4%, primarily driven by lower shipment
volume, partially offset by higher pricing and lower promotional
investments. Revenues net of excise taxes were essentially
unchanged.
- Reported OCI increased 3.3%, primarily driven by higher
pricing, lower promotional investments and lower per unit
settlement charges, partially offset by lower shipment volume and
higher costs (including higher tobacco and health and certain other
litigation items).
- Adjusted OCI increased 4.0%, primarily driven by higher
pricing, lower promotional investments and lower per unit
settlement charges, partially offset by lower shipment volume and
higher costs. Adjusted OCI margins increased by 2.2 percentage
points to 58.4%.
Full Year
- Net revenues decreased 1.7%, primarily driven by lower shipment
volume, partially offset by higher pricing and lower promotional
investments. Revenues net of excise taxes increased 0.4%.
- Reported and adjusted OCI increased 2.8% and 2.9%,
respectively, primarily driven by higher pricing and lower
promotional investments, partially offset by lower shipment volume,
higher costs and higher per unit settlement charges. Adjusted OCI
margins increased by 1.4 percentage points to 59%.
Table 2 - Smokeable Products: Revenues
and OCI ($ in millions)
Fourth Quarter
Full Year
2022
2021
Change
2022
2021
Change
Net revenues
$
5,456
$
5,591
(2.4
)%
$
22,476
$
22,866
(1.7
)%
Excise taxes
(1,000
)
(1,134
)
(4,289
)
(4,754
)
Revenues net of excise taxes
$
4,456
$
4,457
—
%
$
18,187
$
18,112
0.4
%
Reported OCI
$
2,576
$
2,493
3.3
%
$
10,688
$
10,394
2.8
%
NPM Adjustment Items
(3
)
—
(63
)
(53
)
Tobacco and health and certain other
litigation items
30
11
101
83
Adjusted OCI
$
2,603
$
2,504
4.0
%
$
10,726
$
10,424
2.9
%
Adjusted OCI margins 1
58.4
%
56.2
%
2.2 pp
59.0
%
57.6
%
1.4 pp
1 Adjusted OCI margins are calculated as adjusted OCI divided by
revenues net of excise taxes.
Shipment Volume
Fourth Quarter
- Smokeable products segment reported domestic cigarette shipment
volume decreased 12.1%, primarily driven by the industry’s decline
rate and retail share losses (both of which were impacted by
macroeconomic pressures on ATC disposable income) and calendar
differences.
- When adjusted for calendar differences, smokeable products
segment domestic cigarette shipment volume decreased by an
estimated 11%.
- When adjusted for trade inventory movements, calendar
differences and other factors, total estimated domestic cigarette
industry volume decreased by an estimated 9%.
- Reported cigar shipment volume decreased 3.8%, primarily driven
by macroeconomic pressures on ATC disposable income, trade
inventory movements and other factors.
Full Year
- Smokeable products segment reported domestic cigarette shipment
volume decreased 9.7%, primarily driven by the industry’s decline
rate and retail share losses (both of which were impacted by
macroeconomic pressures on ATC disposable income) and calendar
differences, partially offset by trade inventory movements.
- When adjusted for calendar differences and trade inventory
movements, smokeable products segment domestic cigarette shipment
volume decreased by an estimated 9.5%.
- When adjusted for trade inventory movements, calendar
differences and other factors, total estimated domestic cigarette
industry volume decreased by an estimated 8%.
- Reported cigar shipment volume decreased 4.0%, primarily driven
by macroeconomic pressures on ATC disposable income, trade
inventory movements and other factors.
Table 3 - Smokeable Products: Reported
Shipment Volume (sticks in millions)
Fourth Quarter
Full Year
2022
2021
Change
2022
2021
Change
Cigarettes:
Marlboro
17,597
19,848
(11.3
)%
75,406
82,970
(9.1
)%
Other premium
915
1,036
(11.7
)%
3,866
4,216
(8.3
)%
Discount
1,195
1,539
(22.4
)%
5,406
6,607
(18.2
)%
Total cigarettes
19,707
22,423
(12.1
)%
84,678
93,793
(9.7
)%
Cigars:
Black & Mild
424
440
(3.6
)%
1,727
1,796
(3.8
)%
Other
1
2
(50.0
)%
4
7
(42.9
)%
Total cigars
425
442
(3.8
)%
1,731
1,803
(4.0
)%
Total smokeable products
20,132
22,865
(12.0
)%
86,409
95,596
(9.6
)%
Note: Cigarettes volume includes units sold as well as
promotional units but excludes units sold for distribution to
Puerto Rico, U.S. Territories to overseas military and by Philip
Morris Duty Free Inc., none of which, individually or in the
aggregate, is material to our smokeable products segment.
Retail Share and Brand Activity
Fourth Quarter
- Marlboro retail share of the total cigarette category was
42.2%, a decrease of 0.4 share points, primarily due to increased
macroeconomic pressures on ATC disposable income and increased
competitive activity. However, Marlboro share of the premium
segment was 58.4%, an increase of 0.7 share points versus the prior
year and was flat sequentially.
- The cigarette industry discount retail share increased 1.7
share points to 27.8%, primarily due to the ATC factors mentioned
above.
Full Year
- Marlboro retail share of the total cigarette category was
42.5%, a decrease of 0.4 share points, primarily due to increased
macroeconomic pressures on ATC disposable income and increased
competitive activity. However, Marlboro share of the premium
segment grew to 58.2%, an increase of 0.5 share points.
- The cigarette industry discount retail share increased 1.4
share points to 26.9%, primarily due to the ATC factors mentioned
above.
Table 4 - Smokeable Products:
Cigarettes Retail Share (percent)
Fourth Quarter
Full Year
2022
2021
Percentage point
change
2022
2021
Percentage point
change
Cigarettes:
Marlboro
42.2
%
42.6
%
(0.4
)
42.5
%
42.9
%
(0.4
)
Other premium
2.3
2.3
—
2.3
2.3
—
Discount
2.9
3.3
(0.4
)
3.1
3.5
(0.4
)
Total cigarettes
47.4
%
48.2
%
(0.8
)
47.9
%
48.7
%
(0.8
)
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. This service tracks sales in the food, drug, mass
merchandisers, 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). This
service is not designed to capture sales through other channels,
including the internet, direct mail and some illicitly
tax-advantaged outlets. It is IRI’s standard practice to
periodically refresh its services, which could restate retail share
results that were previously released in this service.
ORAL TOBACCO PRODUCTS
Revenues and OCI
Fourth Quarter
- Net revenues decreased 4.7%, primarily driven by higher
promotional investments in on!, lower shipment volume and a higher
percentage of on! shipment volume relative to MST versus the prior
year (mix change), partially offset by higher pricing. Revenues net
of excise taxes decreased 4.0%.
- Reported and adjusted OCI decreased 5.1%, primarily driven by
higher promotional investments in on!, lower shipment volume and
mix change, partially offset by higher pricing. Adjusted OCI
margins declined by 0.7 percentage points to 61.3%.
Full Year
- Net revenues decreased 1.1%, primarily driven by higher
promotional investments in on!, lower shipment volume and mix
change, partially offset by higher pricing. Revenues net of excise
taxes decreased 0.6%.
- Reported OCI decreased 1.6%, primarily driven by higher
promotional investments in on!, lower shipment volume, mix change
and higher costs, partially offset by higher pricing and 2021
acquisition-related costs.
- Adjusted OCI decreased 3.8%, primarily driven by higher
promotional investments in on!, lower shipment volume, mix change
and higher costs, partially offset by higher pricing. Adjusted OCI
margins declined by 2.2 percentage points to 66.3%.
Table 5 - Oral Tobacco Products:
Revenues and OCI ($ in millions)
Fourth Quarter
Full Year
2022
2021
Change
2022
2021
Change
Net revenues
$
632
$
663
(4.7
)%
$
2,580
$
2,608
(1.1
)%
Excise taxes
(28
)
(34
)
(119
)
(132
)
Revenues net of excise taxes
$
604
$
629
(4.0
)%
$
2,461
$
2,476
(0.6
)%
Reported OCI
$
370
$
390
(5.1
)%
$
1,632
$
1,659
(1.6
)%
Asset impairment, exit, implementation,
acquisition and disposition-related costs
—
—
—
37
Adjusted OCI
$
370
$
390
(5.1
)%
$
1,632
$
1,696
(3.8
)%
Adjusted OCI margins 1
61.3
%
62.0
%
(0.7) pp
66.3
%
68.5
%
(2.2) pp
1 Adjusted OCI margins are calculated as adjusted OCI divided by
revenues net of excise taxes.
Shipment Volume
Fourth Quarter
- Oral tobacco products segment reported domestic shipment volume
decreased 4.3%, primarily driven by retail share losses, calendar
differences and other factors, partially offset by the industry’s
growth rate and trade inventory movements. When adjusted for
calendar differences and trade inventory movements, oral tobacco
products segment shipment volume decreased by an estimated
3.5%.
Full Year
- Oral tobacco products segment reported domestic shipment volume
decreased 2.4%, primarily driven by retail share losses, trade
inventory movements and calendar differences, partially offset by
the industry’s growth rate and other factors. When adjusted for
trade inventory movements and calendar differences, oral tobacco
products segment shipment volume decreased by an estimated 2%.
- Total oral tobacco industry volume increased by an estimated 1%
for the six months ended December 31, 2022, primarily driven by
growth in oral nicotine pouches, partially offset by declines in
MST volumes (which includes the impact of macroeconomic pressures
on ATC disposable income).
Table 6 - Oral Tobacco Products:
Reported Shipment Volume (cans and packs in millions)
Fourth Quarter
Full Year
2022
2021
Change
2022
2021
Change
Copenhagen
114.1
125.2
(8.9
)%
470.6
503.6
(6.6
)%
Skoal
43.3
49.2
(12.0
)%
179.4
197.4
(9.1
)%
on!
22.9
13.8
65.9
%
82.5
48.4
70.5
%
Other
16.8
17.8
(5.6
)%
68.1
70.9
(3.9
)%
Total oral tobacco products
197.1
206.0
(4.3
)%
800.6
820.3
(2.4
)%
Note: Volume includes cans and packs sold, as well as
promotional units, but excludes international volume, which is
currently not material to our oral tobacco products segment. New
types of oral tobacco products, as well as new packaging
configurations of existing oral tobacco products, may or may not be
equivalent to existing MST products on a can-for-can basis. To
calculate volumes of cans and packs shipped, one pack of snus or
one can of oral nicotine pouches, irrespective of the number of
pouches in the pack, is assumed to be equivalent to one can of
MST.
Retail Share and Brand Activity
Fourth Quarter
- Oral tobacco products segment retail share was 45.9%, and
Copenhagen continued to be the leading oral tobacco brand with a
retail share of 26.1%. In the oral tobacco products segment, share
declines for MST products were primarily driven by the share growth
of oral nicotine pouches.
- Total U.S. oral tobacco category share for on! nicotine pouches
grew to 5.9%, an increase of 2.1 percentage points.
- The U.S. nicotine pouch category grew to 24.4% of the U.S. oral
tobacco category, an increase of 6.5 share points versus the prior
year. In addition, on! share of the nicotine pouch category grew to
24.0%, an increase of 2.5 share points versus the prior year.
Full Year
- Oral tobacco products segment retail share was 46.4%, and
Copenhagen continued to be the leading oral tobacco brand with a
retail share of 27.0%. In the oral tobacco products segment, share
declines for MST products were primarily driven by the share growth
of oral nicotine pouches.
- Total U.S. oral tobacco category share for on! nicotine pouches
grew to 5.0%, an increase of 2.4 percentage points.
- The U.S. nicotine pouch category grew to 21.9% of the U.S. oral
tobacco category, an increase of 6.5 share points versus the prior
year. In addition, on! share of the nicotine pouch category grew to
23.0%, an increase of 6.1 share points versus the prior year.
Table 7 - Oral Tobacco Products: Retail
Share (percent)
Fourth Quarter
Full Year
2022
2021
Percentage point
change
2022
2021
Percentage point
change
Copenhagen
26.1
%
28.6
%
(2.5
)
27.0
%
29.5
%
(2.5
)
Skoal
10.8
12.0
(1.2
)
11.3
12.5
(1.2
)
on!
5.9
3.8
2.1
5.0
2.6
2.4
Other
3.1
3.2
(0.1
)
3.1
3.1
—
Total oral tobacco products
45.9
%
47.6
%
(1.7
)
46.4
%
47.7
%
(1.3
)
Note: The oral tobacco products retail share results exclude
international volume. Retail share results for oral tobacco
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. This service tracks sales in the food, drug, mass
merchandisers, convenience, military, dollar store and club trade
classes on the number of cans and packs sold. Oral tobacco products
is defined by IRI as moist smokeless, snus and oral nicotine
pouches. New types of oral tobacco products, as well as new
packaging configurations of existing oral tobacco products, may or
may not be equivalent to existing MST products on a can-for-can
basis. For example, one pack of snus or one can of oral nicotine
pouches, 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.
Altria’s Profile
We have a leading portfolio of tobacco products for U.S. tobacco
consumers age 21+. Our Vision by 2030 is to responsibly lead the
transition of adult smokers to a smoke-free future (Vision). We are
Moving Beyond Smoking™, leading the way in moving adult smokers
away from cigarettes by taking action to transition millions to
potentially less harmful choices - believing it is a substantial
opportunity for adult tobacco consumers, our businesses and
society.
Our wholly owned subsidiaries include leading manufacturers of
both combustible and smoke-free products. In combustibles, we own
Philip Morris USA Inc. (PM USA), the most profitable U.S. cigarette
manufacturer, and John Middleton Co. (Middleton), a leading U.S.
cigar manufacturer. Our smoke-free portfolio includes ownership of
U.S. Smokeless Tobacco Company LLC (USSTC), the leading global
moist smokeless tobacco (MST) manufacturer, and Helix Innovations
LLC (Helix), a leading manufacturer of oral nicotine pouches.
Additionally, we have a majority-owned joint venture, Horizon
Innovations LLC (Horizon), for the U.S. marketing and
commercialization of heated tobacco stick products and, through a
separate agreement, we have the exclusive U.S. commercialization
rights to the IQOS Tobacco Heating System® and Marlboro HeatSticks®
through April 2024.
Our equity investments include Anheuser-Busch InBev SA/NV (ABI),
the world’s largest brewer, Cronos Group Inc. (Cronos), a leading
Canadian cannabinoid company, and JUUL Labs, Inc. (JUUL), a U.S.
based e-vapor company.
The brand portfolios of our tobacco operating companies include
Marlboro®, Black & Mild®, Copenhagen®, Skoal® and on!®.
Trademarks and service marks related to Altria referenced in this
release are the property of Altria or our subsidiaries or are used
with permission.
Learn more about Altria at www.altria.com and follow us on
Twitter, Facebook and LinkedIn.
Basis of Presentation
We report our financial results in accordance with GAAP. Our
management reviews OCI, which is defined as operating income before
general corporate expenses and amortization of intangibles, to
evaluate the performance of, and allocate resources to, our
segments. Our management also reviews certain financial results,
including OCI, OCI margins and diluted EPS, on an adjusted basis,
which excludes certain income and expense items, including those
items noted under “2023 Full-Year Guidance.” Our management does
not view any of these special items to be part of our 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. Our management also reviews income tax
rates on an adjusted basis. Our adjusted effective tax rate may
exclude certain income tax items from our reported effective tax
rate. Our 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. Our 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 required by, or calculated in
accordance 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. We
provide reconciliations of historical adjusted financial measures
to corresponding GAAP measures in this release.
We use the equity method of accounting for our investment in ABI
and Cronos and report our share of ABI’s and Cronos’s results using
a one-quarter lag because ABI’s and Cronos’s results are not
available in time for us to record them in the concurrent period.
The one-quarter reporting lag for ABI and Cronos does not affect
our cash flows. We account for our investment in the equity
securities of JUUL at fair value.
Our reportable segments are (i) smokeable products, including
combustible cigarettes and cigars manufactured and sold by PM USA
and Middleton, respectively, and (ii) oral tobacco products,
including MST and snus products manufactured and sold by USSTC, and
oral nicotine pouches sold by Helix. Prior to the sale of Ste.
Michelle Wine Estates Ltd. (Ste. Michelle) on October 1, 2021, wine
produced and/or sold by Ste. Michelle was a reportable segment. We
have included results for PMCC, the IQOS Tobacco Heating System®
and Helix rest-of-world in “All Other.” Comparisons are to the
corresponding prior-year period unless otherwise stated.
Forward-Looking and Cautionary Statements
This release contains projections of future results and other
forward-looking statements that are subject to 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 to differ
materially from those contained in the forward-looking statements
included in this release are described in our publicly filed
reports, including our Annual Report on Form 10-K for the year
ended December 31, 2021 and our 2022 Quarterly Reports on Form
10-Q. 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 or any of 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 the U.S. Food and Drug Administration
(FDA)) and private sector actions that impact adult tobacco
consumer acceptability of, or access to, tobacco products;
- tobacco product taxation, including lower tobacco product
consumption levels and potential shifts in adult tobacco consumer
purchases as a result of federal, state and local excise tax
increases, and excise taxes on e-vapor and oral nicotine products
and the impact on adult tobacco consumers’ transition to lower
priced tobacco products;
- unfavorable outcomes of any government investigations of us or
our investees;
- a successful challenge to our tax positions, an increase to the
corporate income tax rate or other changes to federal or state tax
laws;
- 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
foreign privacy laws and laws prohibiting bribery and
corruption;
- the risks associated with health epidemics and pandemics,
including the COVID-19 pandemic and similar outbreaks, such as
their impact on our and our investees’ ability to continue
manufacturing and distributing products (directly or indirectly due
to their impact on suppliers, distributors and distribution chain
service providers) and their impact on macroeconomic conditions
and, in turn, adult tobacco consumer purchasing behavior;
- the failure of our and our investees’ efforts to compete
effectively in their respective markets;
- the growth of the e-vapor category and other innovative tobacco
products, including oral nicotine pouches, contributing to
reductions in cigarette and MST consumption levels and sales
volume;
- our ability to promote brand equity successfully; anticipate
and respond to evolving adult tobacco consumer preferences;
develop, manufacture, market and distribute products that appeal to
adult tobacco consumers; promote productivity; and protect or
enhance margins through cost savings and price increases;
- our failure to develop and commercialize innovative products,
including innovative tobacco products that may reduce the health
risks associated with cigarettes and other traditional tobacco
products, that appeal to adult tobacco consumers;
- changes, including in macroeconomic and geopolitical conditions
(including inflation), that result in shifts in adult tobacco
consumer disposable income and purchasing behavior, including
choosing lower-priced and discount brands;
- significant changes in price, availability or quality of
tobacco, other raw materials or component parts, including as a
result of changes in macroeconomic, climate and geopolitical
conditions, including the Russian invasion of Ukraine;
- the risks, including FDA regulatory risks, related to our and
our investees’ reliance on a few significant facilities and a small
number of key suppliers, distributors and distribution chain
service providers, and the risk of an extended disruption at a
facility of, or of service by, a supplier, distributor or
distribution chain service provider of our tobacco subsidiaries or
our investees;
- required or voluntary product recalls or prohibition on the
marketing or sale of our or any of our investees’ products as a
result of various circumstances such as FDA or other regulatory
action or product contamination;
- the failure of our information systems or the information
systems of key suppliers or service providers to function as
intended, or cyber attacks or security breaches;
- our inability to attract and retain the best talent due to the
impact of decreasing social acceptance of tobacco usage, tobacco
control actions and other factors, including current labor market
dynamics;
- impairment losses as a result of the write down of intangible
assets, including goodwill;
- 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 and our
inability to dispose of businesses or investments on favorable
terms or at all;
- the risks related to disruption and uncertainty in the credit
and capital markets, including risk of losing access to these
markets, which may adversely affect our earnings or dividend rate
or both;
- our inability to attract and retain investors due to the impact
of decreasing social acceptance of tobacco usage or unfavorable ESG
ratings;
- the risk that any challenge to our investment in JUUL, if
successful, could result in a broad range of resolutions, including
divestiture of the investment or rescission of the
transaction;
- 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, competitive, compliance, litigation and reputational
risks, and legislative and regulatory risks at the international,
federal, state and local levels; and changes in the fair value of
our investment in JUUL and impairment of our investment in
Cronos;
- 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 and restrictions on our
ability to sell or otherwise transfer our shares of JUUL until
December 20, 2024;
- the risks associated with our investment in ABI, including
effects of the COVID-19 pandemic, foreign currency exchange rates
and macroeconomic and geopolitical conditions, including the
Russian invasion of Ukraine, on ABI’s business and the impact on
our earnings from, and carrying value of, our investment in
ABI;
- the risks related to our ownership percentage in ABI decreasing
below certain levels, including 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 a successful challenge to the tax treatment of our
equity investment in ABI; and
- the risks, including criminal, civil or tax liability, related
to our or Cronos’s failure to comply with applicable laws,
including cannabis laws.
You should understand that it is not possible to predict or
identify all factors and risks. Consequently, you should not
consider the foregoing list complete. We do not undertake to update
any forward-looking statement that we may make from time to time
except as required by applicable law. All subsequent written and
oral forward-looking statements attributable to Altria or any
person acting on our behalf are expressly qualified in their
entirety by the cautionary statements referenced above.
Schedule 1
ALTRIA GROUP, INC.
and Subsidiaries
Consolidated Statements of
Earnings
For the Quarters Ended December
31,
(dollars in millions, except per
share data)
(Unaudited)
2022
2021
% Change
Net revenues
$
6,111
$
6,255
(2.3
)%
Cost of sales 1
1,573
1,771
Excise taxes on products 1
1,028
1,169
Gross profit
3,510
3,315
5.9
%
Marketing, administration and research
costs
573
473
Operating companies income
2,937
2,842
3.3
%
Amortization of intangibles
19
19
General corporate expenses
100
90
Operating income
2,818
2,733
3.1
%
Interest and other debt expense, net
226
293
Net periodic benefit income, excluding
service cost
(47
)
(50
)
(Income) losses from investments in equity
securities 1
(66
)
190
Loss on Cronos-related financial
instruments
1
20
Earnings before income taxes
2,704
2,280
18.6
%
Provision for income taxes
14
656
Net earnings attributable to
Altria
$
2,690
$
1,624
65.6
%
Per share data:
Diluted earnings per share attributable
to Altria
$
1.50
$
0.88
70.5
%
Weighted-average diluted shares
outstanding
1,790
1,832
(2.3
)%
1
Cost of sales includes charges for
resolution expenses related to state settlement agreements and FDA
user fees. Supplemental information concerning those items, excise
taxes on products sold and (income) losses from investments in
equity securities is shown in Schedule 5.
Schedule 2
ALTRIA GROUP, INC.
and Subsidiaries
Selected Financial Data
For the Quarters Ended December
31,
(dollars in millions)
(Unaudited)
Net Revenues
Smokeable Products
Oral Tobacco Products
All Other
Total
2022
$
5,456
$
632
$
23
$
6,111
2021
5,591
663
1
6,255
% Change
(2.4
)%
(4.7
)%
100
%+
(2.3
)%
Reconciliation:
For the quarter ended December
31, 2021
$
5,591
$
663
$
1
$
6,255
Operations
(135
)
(31
)
22
(144
)
For the quarter ended December
31, 2022
$
5,456
$
632
$
23
$
6,111
Operating Companies Income
(Loss)
Smokeable Products
Oral Tobacco Products
All Other
Total
2022
$
2,576
$
370
$
(9
)
$
2,937
2021
2,493
390
(41
)
2,842
% Change
3.3
%
(5.1
)%
78.0
%
3.3
%
Reconciliation:
For the quarter ended December
31, 2021
$
2,493
$
390
$
(41
)
$
2,842
Tobacco and health and certain
other litigation items - 2021
11
—
—
11
11
—
—
11
NPM Adjustment Items - 2022
3
—
—
3
Tobacco and health and certain
other litigation items - 2022
(30
)
—
—
(30
)
(27
)
—
—
(27
)
Operations
99
(20
)
32
111
For the quarter ended December
31, 2022
$
2,576
$
370
$
(9
)
$
2,937
Schedule 3
ALTRIA GROUP, INC.
and Subsidiaries
Consolidated Statements of
Earnings
For the Years Ended December
31,
(dollars in millions, except per
share data)
(Unaudited)
2022
2021
% Change
Net revenues
$
25,096
$
26,013
(3.5
)%
Cost of sales 1
6,442
7,119
Excise taxes on products 1
4,408
4,902
Gross profit
14,246
13,992
1.8
%
Marketing, administration and research
costs
1,962
2,015
Operating companies income
12,284
11,977
2.6
%
Amortization of intangibles
73
72
General corporate expenses
292
345
Operating income
11,919
11,560
3.1
%
Interest and other debt expense, net
1,058
1,162
Loss on early extinguishment of debt
—
649
Net periodic benefit income, excluding
service cost
(184
)
(202
)
(Income) losses from investments in equity
securities 1
3,641
5,979
Loss on Cronos-related financial
instruments
15
148
Earnings before income taxes
7,389
3,824
93.2
%
Provision for income taxes
1,625
1,349
Net earnings attributable to
Altria
$
5,764
$
2,475
100
%+
Per share data2:
Diluted earnings per share attributable
to Altria
$
3.19
$
1.34
100
%+
Weighted-average diluted shares
outstanding
1,804
1,845
(2.2
)%
1
Cost of sales includes charges for
resolution expenses related to state settlement agreements and FDA
user fees. Supplemental information concerning those items, excise
taxes on products sold and (income) losses from investments in
equity securities is shown in Schedule 5.
2
Diluted earnings per share attributable to
Altria 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 Subsidiaries
Selected Financial Data
For the Years Ended December
31,
(dollars in millions)
(Unaudited)
Net Revenues
Smokeable Products
Oral Tobacco Products
Wine
All Other
Total
2022
$
22,476
$
2,580
$
—
$
40
$
25,096
2021
22,866
2,608
494
45
26,013
% Change
(1.7
)%
(1.1
)%
(100.0
)%
(11.1
)%
(3.5
)%
Reconciliation:
For the year ended December
31, 2021
$
22,866
$
2,608
$
494
$
45
$
26,013
Operations
(390
)
(28
)
(494
)
(5
)
(917
)
For the year ended December
31, 2022
$
22,476
$
2,580
$
—
$
40
$
25,096
Operating Companies Income
(Loss)
Smokeable Products
Oral Tobacco Products
Wine
All Other
Total
2022
$
10,688
$
1,632
$
—
$
(36
)
$
12,284
2021
10,394
1,659
21
(97
)
11,977
% Change
2.8
%
(1.6
)%
(100.0
)%
62.9
%
2.6
%
Reconciliation:
For the year ended December
31, 2021
$
10,394
$
1,659
$
21
$
(97
)
$
11,977
NPM Adjustment Items - 2021
(53
)
—
—
—
(53
)
Asset impairment, exit,
implementation, acquisition and disposition-related costs -
2021
—
37
52
—
89
Tobacco and health and certain
other litigation items - 2021
83
—
—
—
83
30
37
52
—
119
NPM Adjustment Items - 2022
63
—
—
—
63
Tobacco and health and certain
other litigation items - 2022
(101
)
—
—
—
(101
)
(38
)
—
—
—
(38
)
Operations
302
(64
)
(73
)
61
226
For the year ended December
31, 2022
$
10,688
$
1,632
$
—
$
(36
)
$
12,284
Schedule 5
ALTRIA GROUP, INC.
and Subsidiaries
Supplemental Financial Data
(dollars in millions)
(Unaudited)
For the Quarters Ended
December 31,
For the Years Ended
December 31,
2022
2021
2022
2021
The segment detail of excise taxes on
products sold is as follows:
Smokeable products
$
1,000
$
1,134
$
4,289
$
4,754
Oral tobacco products
28
34
119
132
Wine
—
—
—
14
All other
—
1
—
2
$
1,028
$
1,169
$
4,408
$
4,902
The segment detail of charges for
resolution expenses related to state settlement agreements included
in cost of sales is as follows:
Smokeable products
$
922
$
1,086
$
3,908
$
4,269
Oral tobacco products
3
2
10
9
All other
—
1
—
2
$
925
$
1,089
$
3,918
$
4,280
The segment detail of FDA user fees
included in cost of sales is
as follows:
Smokeable products
$
66
$
67
$
270
$
273
Oral tobacco products
1
2
5
5
$
67
$
69
$
275
$
278
The detail of (income) losses from
investments in equity securities is as follows:
ABI
$
(182
)
$
(80
)
$
1,973
$
5,564
Cronos
16
270
213
415
JUUL
100
—
1,455
—
$
(66
)
$
190
$
3,641
$
5,979
Schedule 6
ALTRIA GROUP, INC.
and Subsidiaries
Net 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
2022 Net Earnings
$
2,690
$
1.50
2021 Net Earnings
$
1,624
$
0.88
% Change
65.6
%
70.5
%
Reconciliation:
2021 Net Earnings
$
1,624
$
0.88
2021 Asset impairment, exit,
implementation, acquisition and disposition-related costs
4
—
2021 Tobacco and health and certain other
litigation items
25
0.02
2021 ABI-related special items
73
0.04
2021 Cronos-related special items
265
0.15
2021 Income tax items
2
—
Subtotal 2021 special items
369
0.21
2022 NPM Adjustment Items
6
—
2022 Asset impairment, exit,
implementation, acquisition and disposition-related costs
(1
)
—
2022 Tobacco and health and certain other
litigation items
(22
)
(0.01
)
2022 JUUL changes in fair value
(100
)
(0.06
)
2022 ABI-related special items
12
—
2022 Cronos-related special items
(14
)
—
2022 Income tax items
696
0.39
Subtotal 2022 special items
577
0.32
Fewer shares outstanding
—
0.03
Change in tax rate
14
—
Operations
106
0.06
2022 Net Earnings
$
2,690
$
1.50
Schedule 7
ALTRIA GROUP, INC.
and Subsidiaries
Reconciliation of GAAP and
non-GAAP Measures
For the Quarters Ended December
31,
(dollars in millions, except per
share data)
(Unaudited)
Earnings before Income
Taxes
Provision for Income
Taxes
Net Earnings
Net Earnings Attributable to
Altria
Diluted EPS
2022 Reported
$
2,704
$
14
$
2,690
$
2,690
$
1.50
NPM Adjustment Items
(8
)
(2
)
(6
)
(6
)
—
Asset impairment, exit, implementation,
acquisition and disposition-related costs
1
—
1
1
—
Tobacco and health and certain other
litigation items
30
8
22
22
0.01
JUUL changes in fair value
100
—
100
100
0.06
ABI-related special items
(16
)
(4
)
(12
)
(12
)
—
Cronos-related special items
6
(8
)
14
14
—
Income tax items
—
696
(696
)
(696
)
(0.39
)
2022 Adjusted for Special Items
$
2,817
$
704
$
2,113
$
2,113
$
1.18
2021 Reported
$
2,280
$
656
$
1,624
$
1,624
$
0.88
Asset impairment, exit, implementation,
acquisition and disposition-related costs
3
(1
)
4
4
—
Tobacco and health and certain other
litigation items
34
9
25
25
0.02
ABI-related special items
92
19
73
73
0.04
Cronos-related special items
266
1
265
265
0.15
Income tax items
—
(2
)
2
2
—
2021 Adjusted for Special Items
$
2,675
$
682
$
1,993
$
1,993
$
1.09
2022 Reported Net Earnings
$
2,690
$
1.50
2021 Reported Net Earnings
$
1,624
$
0.88
% Change
65.6
%
70.5
%
2022 Net Earnings Adjusted for Special
Items
$
2,113
$
1.18
2021 Net Earnings Adjusted for Special
Items
$
1,993
$
1.09
% Change
6.0
%
8.3
%
Schedule 8
ALTRIA GROUP, INC.
and Subsidiaries
Net 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 EPS1
2022 Net Earnings
$
5,764
$
3.19
2021 Net Earnings
$
2,475
$
1.34
% Change
100%+
100%+
Reconciliation:
2021 Net Earnings
$
2,475
$
1.34
2021 NPM Adjustment Items
(57
)
(0.03
)
2021 Asset impairment, exit,
implementation, acquisition and disposition-related costs
99
0.05
2021 Tobacco and health and certain other
litigation items
138
0.07
2021 ABI-related special items
4,901
2.66
2021 Cronos-related special items
470
0.25
2021 Loss on early extinguishment of
debt
496
0.27
2021 Income tax items
(3
)
—
Subtotal 2021 special items
6,044
3.27
2022 NPM Adjustment Items
51
0.03
2022 Asset impairment, exit,
implementation, acquisition and disposition-related costs
(9
)
—
2022 Tobacco and health and certain other
litigation items
(98
)
(0.05
)
2022 JUUL changes in fair value
(1,455
)
(0.81
)
2022 ABI-related special items
(2,010
)
(1.12
)
2022 Cronos-related special items
(186
)
(0.10
)
2022 Income tax items
729
0.40
Subtotal 2022 special items
(2,978
)
(1.65
)
Fewer shares outstanding
—
0.11
Change in tax rate
14
—
Operations
209
0.12
2022 Net Earnings
$
5,764
$
3.19
1
Diluted earnings per share attributable to
Altria 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 9
ALTRIA GROUP, INC.
and Subsidiaries
Reconciliation of GAAP and
non-GAAP Measures
For the Years Ended December
31,
(dollars in millions, except per
share data)
(Unaudited)
Earnings before Income
Taxes
Provision for Income
Taxes
Net Earnings
Net Earnings Attributable to
Altria
Diluted EPS1
2022 Reported
$
7,389
$
1,625
$
5,764
$
5,764
$
3.19
NPM Adjustment Items
(68
)
(17
)
(51
)
(51
)
(0.03
)
Asset impairment, exit, implementation,
acquisition and disposition-related costs
11
2
9
9
—
Tobacco and health and certain other
litigation items
131
33
98
98
0.05
JUUL changes in fair value
1,455
—
1,455
1,455
0.81
ABI-related special items
2,544
534
2,010
2,010
1.12
Cronos-related special items
186
—
186
186
0.10
Income tax items
—
729
(729
)
(729
)
(0.40
)
2022 Adjusted for Special Items
$
11,648
$
2,906
$
8,742
$
8,742
$
4.84
2021 Reported
$
3,824
$
1,349
$
2,475
$
2,475
$
1.34
NPM Adjustment Items
(76
)
(19
)
(57
)
(57
)
(0.03
)
Asset impairment, exit, implementation,
acquisition and disposition-related costs
120
21
99
99
0.05
Tobacco and health and certain other
litigation items
182
44
138
138
0.07
ABI-related special items
6,203
1,302
4,901
4,901
2.66
Cronos-related special items
466
(4
)
470
470
0.25
Loss on early extinguishment of debt
649
153
496
496
0.27
Income tax items
—
3
(3
)
(3
)
—
2021 Adjusted for Special Items
$
11,368
$
2,849
$
8,519
$
8,519
$
4.61
2022 Reported Net Earnings
$
5,764
$
3.19
2021 Reported Net Earnings
$
2,475
$
1.34
% Change
100
%+
100
%+
2022 Net Earnings Adjusted for Special
Items
$
8,742
$
4.84
2021 Net Earnings Adjusted for Special
Items
$
8,519
$
4.61
% Change
2.6
%
5.0
%
1
Diluted earnings per share attributable to
Altria 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 10
ALTRIA GROUP, INC.
and Subsidiaries
Condensed Consolidated Balance
Sheets
(dollars in millions)
(Unaudited)
December 31, 2022
December 31, 2021
Assets
Cash and cash equivalents
$
4,030
$
4,544
Receivable from the sale of IQOS System
commercialization rights
1,721
—
Inventories
1,180
1,194
Other current assets
289
345
Property, plant and equipment, net
1,608
1,553
Goodwill and other intangible assets,
net
17,561
17,483
Investments in equity securities
9,600
13,481
Other long-term assets
965
923
Total assets
$
36,954
$
39,523
Liabilities and
Stockholders’ Equity (Deficit)
Current portion of long-term debt
$
1,556
$
1,105
Accrued settlement charges
2,925
3,349
Other current liabilities
4,135
4,125
Long-term debt
25,124
26,939
Deferred income taxes
2,897
3,692
Accrued pension costs
133
200
Accrued postretirement health care
costs
1,083
1,436
Deferred gain from the sale of IQOS System
commercialization rights
2,700
—
Other long-term liabilities
324
283
Total liabilities
40,877
41,129
Total stockholders’ equity (deficit)
(3,973
)
(1,606
)
Noncontrolling interest
50
—
Total liabilities and stockholders’
equity (deficit)
$
36,954
$
39,523
Total debt
$
26,680
$
28,044
Schedule 11
ALTRIA GROUP, INC.
and Subsidiaries
Supplemental Financial Data for
Special Items
For the Quarters Ended December
31,
(dollars in millions)
(Unaudited)
Cost of Sales
Marketing,
administration and research costs
General corporate
expenses
Interest and other debt
(income) expense, net
(Income) losses from
investments in equity securities
Loss on Cronos-related
financial instruments
2022 Special Items - (Income)
Expense
NPM Adjustment Items
$
(3
)
$
—
$
—
$
(5
)
$
—
$
—
Asset impairment, exit, implementation,
acquisition and disposition-related costs
—
—
22
(21
)
—
—
Tobacco and health and certain other
litigation items
—
30
—
—
—
—
JUUL changes in fair value
—
—
—
—
100
—
ABI-related special items
—
—
—
—
(16
)
—
Cronos-related special items
—
—
—
—
5
1
2021 Special Items - (Income)
Expense
Asset impairment, exit, implementation,
acquisition and disposition-related costs
$
—
$
—
$
3
$
—
$
—
$
—
Tobacco and health and certain other
litigation items
—
11
20
3
—
—
ABI-related special items
—
—
—
—
92
—
Cronos-related special items
—
—
—
—
246
20
Note: This schedule is intended to provide supplemental
financial data for certain income and expense items that management
believes are not part of underlying operations and their
presentation in Altria’s consolidated statements of earnings. This
schedule is not intended to provide, or reconcile, non-GAAP
financial measures.
Schedule 12
ALTRIA GROUP, INC.
and Subsidiaries
Supplemental Financial Data for
Special Items
For the Years Ended December
31,
(dollars in millions)
(Unaudited)
Cost of Sales
Marketing, administration and
research costs
General corporate
expenses
Interest and other debt
(income) expense, net
Loss on early extinguishment
of debt
(Income) losses from
investments in equity securities
Loss on Cronos-related
financial instruments
2022 Special Items - (Income)
Expense
NPM Adjustment Items
$
(63
)
$
—
$
—
$
(5
)
$
—
$
—
$
—
Asset impairment, exit, implementation,
acquisition and disposition-related costs
—
—
32
(21
)
—
—
—
Tobacco and health and certain other
litigation items
—
101
27
3
—
—
—
JUUL changes in fair value
—
—
—
—
—
1,455
—
ABI-related special items
—
—
—
—
—
2,544
—
Cronos-related special items
—
—
—
—
—
171
15
2021 Special Items - (Income)
Expense
NPM Adjustment Items
$
(53
)
$
—
$
—
$
(23
)
$
—
$
—
$
—
Asset impairment, exit, implementation,
acquisition and disposition-related costs
1
88
31
—
—
—
—
Tobacco and health and certain other
litigation items
—
83
90
9
—
—
—
ABI-related special items
—
—
—
—
—
6,203
—
Cronos-related special items
—
—
—
—
—
318
148
Loss on early extinguishment of debt
—
—
—
—
649
—
—
Note: This schedule is intended to provide supplemental
financial data for certain income and expense items that management
believes are not part of underlying operations and their
presentation in our consolidated statements of earnings (losses).
This schedule is not intended to provide, or reconcile, non-GAAP
financial measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230131005688/en/
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