Altria Group, Inc. (Altria) (NYSE:MO) today announced that it has
revised its guidance for 2013 full-year reported diluted earnings per
share (EPS) from a range of $2.51 to $2.56 to a range of $2.57 to $2.62.
The revised guidance reflects the impact of the September 11, 2013
decision by the arbitration panel presiding over the non-participating
manufacturer adjustment (NPM Adjustment) dispute for 2003 that six out
of 15 states failed to diligently enforce laws that require escrow
payments from the cigarette manufacturers that have not signed the
Master Settlement Agreement (Arbitration Panel Decision). As a result of
the Arbitration Panel Decision, Philip Morris USA Inc. (PM USA) expects
to receive a credit of approximately $145 million, plus interest,
against its 2014 Master Settlement Agreement payment obligations and to
record an increase of approximately $145 million in its reported pre-tax
earnings for the third quarter of 2013. Additionally, the revised
guidance reflects the reversal of tax accruals no longer required.
Altria reaffirms its guidance for 2013 full-year adjusted diluted EPS,
which excludes special items shown in the table below, to be in the
range of $2.36 to $2.41, representing a growth rate of 7% to 9% from an
adjusted diluted EPS base of $2.21 per share in 2012.
The factors described in the Forward-Looking and Cautionary Statements
section of this release represent continuing risks to this forecast.
Reconciliations of full-year adjusted to reported diluted EPS are show
in the table below.
|
|
|
|
|
|
|
Altria’s Full-Year Earnings Per Share Guidance Excluding Special
Items
|
|
Full Year
|
|
2013 Guidance
|
|
|
|
2012
|
|
|
|
Change
|
Reported diluted EPS
|
$
|
2.57
|
|
|
to
|
|
$
|
2.62
|
|
|
|
|
$
|
2.06
|
|
|
|
|
25
|
%
|
|
to
|
|
27
|
%
|
Loss on early extinguishment of debt
|
|
|
|
|
—
|
|
|
|
|
0.28
|
|
|
|
|
|
|
|
|
|
NPM Adjustment Items*
|
|
|
|
|
(0.21
|
)
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Asset impairment, exit and implementation costs
|
|
|
|
|
—
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
SABMiller special items
|
|
|
|
|
0.01
|
|
|
|
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
PMCC leveraged lease benefit
|
|
|
|
|
—
|
|
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
Tax items**
|
|
|
|
|
(0.01
|
)
|
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
Adjusted diluted EPS
|
$
|
2.36
|
|
|
|
to
|
|
$
|
2.41
|
|
|
|
|
$
|
2.21
|
|
|
|
|
7
|
|
%
|
|
to
|
|
9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Reflects the impact of PM USA’s settlement with certain states of
the NPM Adjustment disputes for 2003-2012 ($0.16) and the
Arbitration Panel Decision ($0.05).
|
**Excludes the tax impact of the Philip Morris Capital Corporation
(PMCC) leveraged lease benefit.
|
|
Altria’s Profile
Altria directly or indirectly owns 100% of each of PM USA, U.S.
Smokeless Tobacco Company LLC (USSTC), John Middleton Co. (Middleton),
Nu Mark LLC (Nu Mark), Ste. Michelle Wine Estates Ltd. (Ste. Michelle)
and PMCC. Altria holds a continuing economic and voting interest in
SABMiller plc (SABMiller).
The brand portfolios of Altria’s tobacco operating companies include Marlboro®,
Black & Mild®, Copenhagen®,
Skoal® and MarkTen™.
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™ 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.
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, 2012 and its Quarterly Report on Form 10-Q for
the period ended June 30, 2013.
These factors include the following: Altria’s tobacco businesses
(including PM USA, USSTC, Middleton and Nu Mark) being subject to
significant competition; changes in adult tobacco consumer preferences
and demand for their 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 on trade
inventories, 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 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 broad-based regulation of PM USA
and USSTC 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.
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.
Copyright Business Wire 2013