- Altria discusses progress towards its Vision, corporate
responsibility priorities and environmental, social and governance
efforts
- Altria announces preliminary Annual Meeting voting
results
- Kathryn McQuade becomes Altria’s independent Chair of the
Board
- Altria reaffirms full-year 2021 earnings guidance
- Altria declares regular quarterly dividend of $0.86 per
share
Altria Group, Inc. (Altria) (NYSE: MO) held its 2021 Annual
Meeting of Shareholders (Annual Meeting) today. During the Annual
Meeting, Billy Gifford, Altria’s Chief Executive Officer,
summarized Altria’s full-year 2020 and first-quarter 2021 financial
results and discussed Altria’s progress towards its Vision of
responsibly transitioning adult smokers to a non-combustible
future. Mr. Gifford also shared Altria’s corporate responsibility
priorities and environmental, social and governance efforts,
reaffirmed Altria’s guidance for adjusted diluted earnings per
share (EPS) and addressed shareholder questions. Copies of these
prepared remarks and business presentation and a replay of the
audio webcast of the Annual Meeting are available on
altria.com.
Preliminary Voting Results for Altria’s Annual
Meeting
The preliminary voting results at the Annual Meeting were as
follows: 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 2021, approved,
on an advisory basis, the compensation of Altria’s named executive
officers and did not approve two shareholder proposals. Final
voting results will be reported in a Current Report on Form 8-K
that Altria will file with the Securities and Exchange
Commission.
Altria’s Independent Chair of the Board
On May 10, 2021, Altria’s Board of Directors (Board) elected
Kathryn McQuade, to serve as Altria’s independent Chair of the
Board. The appointment became effective today, following the
conclusion of the Annual Meeting.
2021 Full-Year Guidance
In his remarks, Mr. Gifford reaffirmed Altria’s guidance for
2021 full-year adjusted diluted EPS to be in a range of $4.49 to
$4.62, representing a growth rate of 3% to 6% from an adjusted
diluted EPS base of $4.36 in 2020.
Altria’s 2021 full-year adjusted diluted EPS guidance range
includes planned investments in support of its Vision, such as (i)
marketplace investments to expand the availability and awareness of
Altria’s non-combustible products, (ii) costs associated with
building an industry-leading consumer engagement platform that
enhances data collection and insights in support of adult tobacco
consumer conversion to non-combustible products and (iii) increased
non-combustible product research and development expense. Altria
expects 2021 adjusted diluted EPS growth in the last three quarters
of the year.
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, asset impairment charges, acquisition-related costs,
COVID-19 special items, equity investment-related special items
(including any changes in fair value of 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 1998 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.
Regular Quarterly Dividend
Following the Annual Meeting, Altria’s Board declared a regular
quarterly dividend of $0.86 per share, payable on July 9, 2021, to
shareholders of record as of June 15, 2021. The ex-dividend date is
June 14, 2021. Future dividend payments remain subject to the
discretion of Altria’s Board.
Altria’s Profile
Altria has a leading portfolio of tobacco products for U.S.
tobacco consumers age 21+. Altria’s Vision through 2030 is to
responsibly lead the transition of adult smokers to a
non-combustible future (Vision). Altria is 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, Altria’s businesses and society.
Altria’s wholly owned subsidiaries include the most profitable
tobacco companies in their categories: Philip Morris USA Inc. (PM
USA), U.S. Smokeless Tobacco Company LLC (USSTC) and John Middleton
Co. (Middleton). Altria’s non-combustible portfolio includes
ownership of Helix Innovations LLC (Helix), the maker of on! oral
nicotine pouches, exclusive U.S. commercialization rights to the
IQOS Tobacco Heating System® and Marlboro HeatSticks®, and an
equity investment in JUUL Labs, Inc. (JUUL).
Altria complements its tobacco portfolio with ownership of Ste.
Michelle Wine Estates (Ste. Michelle) and equity investments in
Anheuser-Busch InBev SA/NV (ABI), the world’s largest brewer, and
Cronos Group Inc. (Cronos), a leading Canadian cannabinoid
company.
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® and Champagne
Nicolas Feuillatte™ 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.
Learn more about Altria at www.altria.com and follow us 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, 2020 and its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2021. 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’ or 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 consumer purchases
as a result of federal, state and local excise tax increases;
- unfavorable outcomes of any government investigations of
Altria, our subsidiaries or investees;
- a successful challenge to our tax positions or an increase to
the corporate income tax rate;
- the risks related to our and our investees’ international
business operations, including failure to prevent violations of
various U.S. 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 financial performance and financial condition
and on our subsidiaries’ and investees’ ability to continue
manufacturing and distributing products, and the impact of health
epidemics and pandemics on general economic conditions (including
any resulting recession or other economic crisis) and, in turn,
adult consumer purchasing behavior, which may be further impacted
by any changes in government stimulus or unemployment
payments;
- the failure of our tobacco and wine subsidiaries and our
investees 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 tobacco and wine subsidiaries’ and our investees’ 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 (due to the COVID-19
pandemic or otherwise), that result in adult consumers choosing
lower-priced brands, including discount 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 cigarettes and other traditional tobacco products,
and that appeal to adult tobacco consumers;
- significant changes in price, availability or quality of
tobacco, other raw materials or component parts, including as a
result of the COVID-19 pandemic;
- the risks related to the reliance by our tobacco and wine
subsidiaries 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 or wine subsidiaries or investees,
including as a result of the COVID-19 pandemic;
- 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;
- 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;
- 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, unfavorable changes in grape supply, and changes in
adult consumer preferences that have resulted and may continue to
result in increased inventory levels and inventory write offs, and
governmental regulations;
- 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 access to these markets both
generally and at current prevailing rates, 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, legislative 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 investment in Cronos and changes in the fair
value of our investment in JUUL;
- 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
subject to certain exceptions;
- the adverse effects of risks encountered by ABI in its
business, including effects of the COVID-19 pandemic, foreign
currency exchange rates and the impact of movements in ABI’s stock
price on our equity investment in ABI, including on our reported
earnings from and carrying value of our investment in ABI, which
could result in impairment of our investment, 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 business combination
and the tax treatment of our equity investment; and
- the risks, including criminal, civil or tax liability for
Altria, related to Altria’s or Cronos’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 2020 Adjusted Results
Earnings before Income
Taxes
Provision for Income
Taxes
Net Earnings
Net Earnings Attributable to
Altria
Diluted EPS
For the year ended December 31,
2020
2020 Reported
$
6,890
$
2,436
$
4,454
$
4,467
$
2.40
NPM Adjustment Items
4
1
3
3
—
Asset impairment, exit, implementation and
acquisition-related costs
431
89
342
342
0.18
Tobacco and health litigation items
83
21
62
62
0.03
JUUL changes in fair value
(100
)
—
(100
)
(100
)
(0.05
)
Impairment of JUUL equity securities
2,600
—
2,600
2,600
1.40
ABI-related special items
763
160
603
603
0.32
Cronos-related special items
51
(2
)
53
53
0.03
COVID-19 special items
50
13
37
37
0.02
Tax items
—
(50
)
50
50
0.03
2020 Adjusted for Special Items
$
10,772
$
2,668
$
8,104
$
8,117
$
4.36
Altria reports its financial results in accordance with GAAP.
Altria’s management also reviews certain financial results,
including diluted EPS, on an adjusted basis, which excludes certain
income and expense items, including those items noted under “2021
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/20210520005999/en/
Altria Client Services Investor Relations 804-484-8222
Altria Client Services Media Relations 804-484-8897
Altria (NYSE:MO)
Historical Stock Chart
From Aug 2024 to Sep 2024
Altria (NYSE:MO)
Historical Stock Chart
From Sep 2023 to Sep 2024