Altria Group, Inc. (NYSE: MO) today reports our 2023
fourth-quarter and full-year business results and provides our
guidance for 2024 full-year adjusted diluted earnings per share
(EPS).
“It was a pivotal year for Altria as we made significant
progress in pursuit of our Vision by enhancing our smoke-free
product portfolio while our businesses performed well in a
challenging environment,” said Billy Gifford, Altria’s Chief
Executive Officer. “We grew adjusted diluted EPS by 2.3% and
continued our long history of rewarding shareholders by delivering
nearly $7.8 billion in dividends and share repurchases.”
“Our plans for 2024 include a continuation of our strategy to
balance earnings growth and shareholder returns with strategic
investments toward our Vision. We expect to deliver 2024 full-year
adjusted diluted EPS in a range of $5.00 to $5.15, representing a
growth rate of 1% to 4% from a $4.95 base in 2023.”
Altria Headline Financials1
($ in millions, except per share data)
Q4 2023
Change vs.
Q4 2022
Full Year 2023
Change vs.
Full Year 2022
Net revenues
$5,975
(2.2)%
$24,483
(2.4)%
Revenues net of excise taxes
$5,024
(1.2)%
$20,502
(0.9)%
Reported tax rate
24.7%
24.2 pp
25.6%
3.6 pp
Adjusted tax rate
24.6%
(0.4) pp
24.7%
(0.2) pp
Reported diluted EPS2
$1.16
(22.7)%
$4.57
43.3%
Adjusted diluted EPS2
$1.18
—%
$4.95
2.3%
1 “Adjusted” financial measures presented in this release
exclude the impact of special items. See “Basis of Presentation”
for more information and see the schedules to this press release
for reconciliations to corresponding GAAP measures. 2 “EPS”
represents diluted earnings per share.
As previously announced, a conference call with the investment
community and news media will be webcast on February 1, 2024 at
9:00 a.m. Eastern Time. Access to the webcast is available at
www.altria.com/webcasts.
NJOY
Business Update
On June 1, 2023, we completed our acquisition of NJOY Holdings,
Inc. (NJOY Transaction). Our teams executed NJOY’s business plans
with speed and focus after the completion of the NJOY Transaction.
Our efforts were concentrated on:
- Strengthening NJOY’s global supply chain to provide sustainable
support for the anticipated volume increase associated with our
NJOY ACE (ACE) expansion plans. We expect to have the needed
capacity to support our expansion plans for ACE;
- Filling inventory gaps at retail and expanding distribution of
ACE to a total of 75,000 stores as of year-end, an increase of
40,000 stores since the completion of the NJOY Transaction. These
stores represent approximately 75% of e-vapor volume and 55% of
cigarette volume sold in the U.S. multi-outlet and convenience
channel;
- Generating awareness of ACE by amplifying visibility and
establishing strong positioning at retail; and
- Refining our understanding of adult vapers to inform our
consumer engagement strategies.
Business Results
For the fourth quarter:
- Reported shipment volume of NJOY consumables was approximately
11.1 million units.
- Reported shipment volume of NJOY devices was approximately 0.9
million units.
- Retail share of NJOY in the U.S. multi-outlet and convenience
channel was 3.7%.
Since June 1, 2023:
- Reported shipment volume of NJOY consumables was approximately
23.0 million units.
- Reported shipment volume of NJOY devices was approximately 1.3
million units.
Cash Returns to Shareholders
Share Repurchase Program
- We completed our previously authorized $1 billion share
repurchase program. In the fourth quarter, we repurchased 6.5
million shares at an average price of $41.41. For the full year, we
repurchased 22.7 million shares at an average price of $43.96, for
a total cost of $1 billion.
- Our Board of Directors (Board) authorized a new $1 billion
share repurchase program, which we expect to complete by December
31, 2024. 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
$6.8 billion for the full year.
2028 Enterprise Goals
At our 2023 Investor Day, we announced our 2028 Enterprise Goals
and our commitment to provide annual updates on our progress. Our
2028 goals and our progress through 2023 are listed below:
Corporate
- Deliver a mid-single digits adjusted diluted EPS compounded
annual growth rate in 2028 from a $4.84 base in 2022.
- In 2023, we delivered adjusted diluted EPS growth of 2.3%
- A progressive dividend goal targeting mid-single digits
dividend per share growth annually through 2028.
- In 2023, we increased our dividend by 4.3%. Future dividend
payments remain subject to the discretion of our Board.
- Maintain a debt-to-EBITDA ratio of approximately 2.0x.
- At year end, our debt-to-consolidated net earnings ratio was
3.2x and our debt-to-EBITDA ratio was 2.2x1.
- Maintain our leadership position in the U.S. tobacco space.
- On the strength of our brands Marlboro, Copenhagen, Black &
Mild, on! and NJOY, we maintained our leadership position in
2023.
- Maintain a total adjusted OCI margin of at least 60% in each
year through 2028.
- For 2023, our total OCI margin was 60.1% and our total adjusted
OCI margin was 60.3%1.
U.S. Smoke-Free Portfolio
- Grow U.S. smoke-free volumes by at least 35% from our 2022 base
of 800 million units.
- Our smoke-free volumes were essentially flat in 2023 when
compared to 2022.
- Approximately double our smoke-free net revenues to $5 billion
from our 2022 base of $2.6 billion, with $2 billion coming from
innovative smoke-free products.
- In 2023, total smoke-free net revenue was $2.7 billion and
revenue from innovative smoke-free products was $165 million.
Long-Term Growth
- Our aspiration is to compete in the international innovative
smoke-free markets and enter into non-nicotine categories.
- We are evaluating these opportunities and expect to provide
updates on our progress at CAGNY.
1See “Basis of Presentation” for more information on these
non-GAAP financial measures.
Environmental, Social and Governance
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 Responsibility section of www.altria.com.
- In November 2023, the 2023 National Youth Tobacco Survey
estimated smoking rates among middle and high school students was
1.6%, an over 85% reduction since 2011 when cigarette smoking
prevalence was estimated at 10.8%. The prevalence of past 30-day
e-cigarette use among middle and high school students was estimated
at 7.7% in 2023 versus its 2019 peak of 20%.
- At year-end 2023, we believe we achieved all our 2030
environmental targets. We submitted new environmental targets to
the Science Based Targets initiative for validation and we expect
to announce them in the coming months.
- In November 2023, we published the Task Force on
Climate-related Financial Disclosures (TCFD) index as a follow-up
to our full 2021 TCFD report. This index provides timely updates to
the dynamic aspects of our approach to identifying and managing
climate risk and opportunities.
- In 2023, we were ranked 5th among the top 1,000 companies in
the FTSE Russell Index by The Center for Political
Accountability-Zicklin Index in terms of voluntary disclosures of
our political spending. We were recognized as a “trendsetter” in
this area for the 8th consecutive year.
- For the 6th year, we received a perfect score of 100 in Human
Rights Campaign’s 2023 Corporate Equality Index for LGBTQ-inclusive
workplace policies and practices.
2024 Full-Year Guidance
We expect to deliver 2024 full-year adjusted diluted EPS in a
range of $5.00 to $5.15, representing a growth rate of 1% to 4%
from a base of $4.95 in 2023. We expect 2024 adjusted diluted EPS
growth to be weighted to the second half of the year. Our guidance
includes the impact of two additional shipping days in 2024 and
assumes limited impact from enforcement efforts in the illicit
e-vapor market on combustible and e-vapor volumes.
While the 2024 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 cumulative impact of inflation, (ii) adult tobacco
consumer (ATC) dynamics, including purchasing patterns and adoption
of smoke-free products, (iii) illicit e-vapor enforcement and (iv)
regulatory, litigation and legislative developments.
Our 2024 full-year adjusted diluted EPS guidance range includes
planned investments in support of our Vision, such as (i)
marketplace activities in support of our smoke-free products and
(ii) continued smoke-free product research, development and
regulatory preparation expenses.
The 2024 full-year adjusted diluted EPS guidance range excludes
an estimated per share gain of $1.14 related to the sale of the
IQOS Tobacco Heating System commercialization rights that we expect
to occur in the second quarter of 2024.
We expect our 2024 full-year adjusted effective tax rate to be
in a range of 24.5% to 25.5%, our 2024 capital expenditures to be
between $175 million and $225 million and 2024 depreciation and
amortization expenses of approximately $310 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 our 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, disposition and
integration-related items, equity investment-related special items
(including any changes in fair value of our former equity
investment recorded at fair value), 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 (NPM
Adjustment Items). See Table 1 below for the income and expense
items for the full-year 2023.
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 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 2.2% to $6.0 billion, primarily driven
by lower net revenues in the smokeable products segment, partially
offset by higher net revenues in the oral tobacco products segment.
Revenues net of excise taxes decreased 1.2% to $5.0 billion.
- Reported diluted EPS decreased 22.7% to $1.16, primarily driven
by unfavorable income tax items and unfavorable ABI special items,
partially offset by 2022 charges related to our former investment
in JUUL Labs, Inc. (JUUL) equity securities and fewer shares
outstanding.
- Adjusted diluted EPS was unchanged at $1.18, as lower adjusted
OCI was offset by fewer shares outstanding and a lower adjusted tax
rate.
Full Year
- Net revenues decreased 2.4% to $24.5 billion, primarily driven
by lower net revenues in the smokeable products segment, partially
offset by higher net revenues in the oral tobacco products segment.
Revenues net of excise taxes decreased 0.9% to $20.5 billion.
- Reported diluted EPS increased 43.3% to $4.57, primarily driven
by favorable reported results from our investment in ABI (due
primarily to our impairment of our investment in ABI in 2022),
lower charges related to our former investment in JUUL equity
securities, favorable Cronos-related special items, fewer shares
outstanding, favorable interest expense and higher reported OCI.
These drivers were partially offset by unfavorable income tax
items, higher tobacco and health and certain other litigation
items, acquisition costs related to the NJOY Transaction and lower
net periodic benefit income.
- Adjusted diluted EPS increased 2.3% to $4.95, primarily driven
by fewer shares outstanding, higher adjusted earnings from our
equity investments, higher adjusted OCI, lower adjusted tax rate
and favorable interest expense, partially offset by lower net
periodic benefit income and higher amortization due to the NJOY
Transaction.
Table 1 - Altria’s Adjusted
Results
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Reported diluted EPS
$
1.16
$
1.50
(22.7
)%
$
4.57
$
3.19
43.3
%
NPM Adjustment Items
(0.01
)
—
(0.02
)
(0.03
)
Acquisition, disposition and
integration-related items
0.01
—
0.01
—
Tobacco and health and certain other
litigation items
—
0.01
0.18
0.05
Loss on disposition and changes in fair
value of JUUL equity securities
—
0.06
0.14
0.81
ABI-related special items
0.02
—
0.03
1.12
Cronos-related special items
—
—
0.02
0.10
Income tax items
—
(0.39
)
0.02
(0.40
)
Adjusted diluted EPS
$
1.18
$
1.18
—
%
$
4.95
$
4.84
2.3
%
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 2023, we recorded pre-tax income of $50
million (or $0.02 per share) for NPM Adjustment Items and related
interest, including $29 million recorded as a reduction to cost of
sales in the smokeable products segment and $21 million recorded as
interest income.
- 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.
Tobacco and Health and Certain Other Litigation Items
- For the full-year 2023, we recorded pre-tax charges of $430
million (or $0.18 per share) for tobacco and health and certain
other litigation items and related interest costs. The charges for
the full year include the settlement of certain JUUL-related
litigation.
- For the full-year 2022, we recorded pre-tax charges of $131
million (or $0.05 per share) for tobacco and health and certain
other litigation items and related interest costs.
Loss on Disposition and Changes in Fair Value of JUUL Equity
Securities
As previously disclosed, we exchanged our entire minority
economic interest in JUUL for a non-exclusive, irrevocable global
license to certain of JUUL’s heated tobacco intellectual property
(2023 JUUL Transaction). In 2023, we recorded non-cash, pre-tax
losses from investments in equity securities as a result of the
2023 JUUL Transaction. In 2022, we recorded non-cash, pre-tax
losses as a result of changes in the estimated fair value of our
former investment in JUUL. Amounts consisted of the following:
Fourth Quarter
Full Year
($ in millions, except per share
data)
2023
2022
2023
2022
(Income) losses from investments in equity
securities
$
—
$
100
$
250
$
1,455
Losses per share
$
—
$
0.06
$
0.14
$
0.81
We recorded corresponding adjustments to the JUUL tax valuation
allowance in 2023 and 2022.
ABI-Related Special Items
- For the fourth quarter and full-year 2023, equity earnings from
ABI included net pre-tax losses of $35 million (or $0.02 per share)
and $89 million (or $0.03 per share), respectively, consisting
primarily of a loss on ABI’s sale of certain brands and associated
assets in the United States. The amounts for the full-year 2023
also included mark-to-market losses on certain ABI financial
instruments associated with its share commitments.
- For the full-year 2022, equity earnings from ABI included net
pre-tax losses of $2.5 billion (or $1.12 per share), substantially
all of which related to our impairment of our investment in
ABI.
The ABI-related special items include our respective share of
the amounts recorded by ABI and additional adjustments related to
(i) the conversion of ABI-related special items from international
financial reporting standards to GAAP and (ii) adjustments to our
investment required under the equity method of accounting.
Cronos-Related Special Items
We recorded net pre-tax (income) expense consisting of the
following:
Fourth Quarter
Full Year
($ in millions, except per share
data)
2023
2022
2023
2022
Loss on Cronos-related financial
instruments
$
—
$
1
$
—
$
15
(Income) losses from investments in equity
securities 1
(1
)
5
29
171
Total Cronos-related special items -
(income) expense
$
(1
)
$
6
$
29
$
186
Losses per share
$
—
$
—
$
0.02
$
0.10
1 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 non-cash pre-tax impairment of our investment in Cronos in
the second quarter of 2022.
We recorded corresponding adjustments to the Cronos tax
valuation allowance in 2023 and 2022 relating to the special
items.
Income Tax Items
- For the full-year 2023, we recorded income tax items of $32
million (or $0.02 per share), due primarily to tax expense
associated with a tax basis adjustment related to our investment in
ABI.
- In the fourth quarter and full-year 2022, we recorded tax items
of $696 million (or $0.39 per share) and $729 million (or $0.40 per
share), respectively, due primarily to the release of valuation
allowances on deferred tax assets related to a portion of our
former investment in JUUL and our Cronos warrant (which we
irrevocably abandoned in the fourth quarter of 2022) due to the
anticipated ability to utilize these losses.
SMOKEABLE PRODUCTS
Revenues and OCI
Fourth Quarter
- Net revenues decreased 3.3%, primarily driven by lower shipment
volume and higher promotional investments, partially offset by
higher pricing. Revenues net of excise taxes decreased 2.4%.
- Reported OCI was essentially unchanged as higher pricing, lower
costs (which include lower tobacco and health litigation items) and
higher NPM Adjustment Items were mostly offset by lower shipment
volume, higher promotional investments and higher per unit
settlement charges.
- Adjusted OCI decreased 1.3%, primarily driven by lower shipment
volume, higher promotional investments and higher per unit
settlement charges, partially offset by higher pricing and lower
costs. Adjusted OCI margins increased by 0.6 percentage points to
59.0%.
Full Year
- Net revenues decreased 3.2%, primarily driven by lower shipment
volume and higher promotional investments, partially offset by
higher pricing. Revenues net of excise taxes decreased 1.6%.
- Reported OCI decreased 0.2%, primarily driven by lower shipment
volume, higher promotional investments, higher per unit settlement
charges and lower NPM Adjustment Items, mostly offset by higher
pricing.
- Adjusted OCI was essentially unchanged as lower shipment
volume, higher promotional investment, higher per unit settlement
charges and higher costs were mostly offset by higher pricing.
Adjusted OCI margins increased by 0.9 percentage points to
59.9%.
Table 2 - Smokeable Products: Revenues
and OCI ($ in millions)
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Net revenues
$
5,274
$
5,456
(3.3)%
$
21,756
$
22,476
(3.2)%
Excise taxes
(924
)
(1,000
)
(3,869
)
(4,289
)
Revenues net of excise taxes
$
4,350
$
4,456
(2.4)%
$
17,887
$
18,187
(1.6)%
Reported OCI
$
2,578
$
2,576
0.1%
$
10,670
$
10,688
(0.2)%
NPM Adjustment Items
(14
)
(3
)
(29
)
(63
)
Tobacco and health and certain other
litigation items
4
30
69
101
Adjusted OCI
$
2,568
$
2,603
(1.3)%
$
10,710
$
10,726
(0.1)%
Reported OCI margins 1
59.3
%
57.8
%
1.5 pp
59.7
%
58.8
%
0.9 pp
Adjusted OCI margins 1
59.0
%
58.4
%
0.6 pp
59.9
%
59.0
%
0.9 pp
1 Reported and adjusted OCI margins are calculated as reported
and adjusted OCI, respectively, divided by revenues net of excise
taxes.
Shipment Volume
Fourth Quarter
- Smokeable products segment reported domestic cigarette shipment
volume decreased 7.6%, primarily driven by the industry’s decline
rate (impacted by macroeconomic pressures on ATC disposable income
and the growth of illicit e-vapor products) and retail share
losses, partially offset by trade inventory movements.
- When adjusted for trade inventory movements, smokeable products
segment domestic cigarette shipment volume decreased by an
estimated 9%.
- When adjusted for trade inventory movements and other factors,
total estimated domestic cigarette industry volume decreased by an
estimated 8%.
- Reported cigar shipment volume decreased 1.4%.
Full Year
- Smokeable products segment reported cigarette shipment volume
decreased 9.9%, primarily driven by the industry’s decline rate
(impacted by macroeconomic pressures on ATC disposable income and
the growth of illicit e-vapor products) and retail share losses,
partially offset by trade inventory movements.
- When adjusted for trade inventory movements, smokeable products
segment domestic cigarette shipment volume decreased by an
estimated 10%.
- When adjusted for trade inventory movements and other factors,
total estimated domestic cigarette industry volume decreased by an
estimated 8%.
- Reported cigar shipment volume increased 2.8%.
Table 3 - Smokeable Products: Reported
Shipment Volume (sticks in millions)
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Cigarettes:
Marlboro
16,462
17,597
(6.4)%
68,801
75,406
(8.8)%
Other premium
859
915
(6.1)%
3,533
3,866
(8.6)%
Discount
883
1,195
(26.1)%
4,002
5,406
(26.0)%
Total cigarettes
18,204
19,707
(7.6)%
76,336
84,678
(9.9)%
Cigars:
Black & Mild
418
424
(1.4)%
1,777
1,727
2.9%
Other
1
1
— %
3
4
(25.0)%
Total cigars
419
425
(1.4)%
1,780
1,731
2.8%
Total smokeable products
18,623
20,132
(7.5)%
78,116
86,409
(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%, unchanged versus the prior year. Marlboro retail share
decreased 0.1 share point from the third quarter of 2023.
Additionally, Marlboro share of the premium segment was 59.2%, an
increase of 0.8 share points versus the prior year and 0.3 share
points sequentially.
- The cigarette industry discount retail share was 28.6%, an
increase of 0.9 share points versus the prior year and 0.4 share
points sequentially primarily due to seasonal trends in the
discount segment and increased macroeconomic pressures on ATC
disposable income.
Full Year
- Marlboro retail share of the total cigarette category was
42.1%, a decrease of 0.4 share points versus the prior year
primarily due to increased macroeconomic pressures on ATC
disposable income and increased competitive activity.
- The cigarette industry discount retail share was 28.3%, an
increase of 1.4 share points versus the prior year due to the
increased macroeconomic pressures on ATC disposable income.
Table 4 - Smokeable Products:
Cigarettes Retail Share (percent)
Fourth Quarter
Full Year
2023
2022
Percentage
point
change
2023
2022
Percentage
point
change
Cigarettes:
Marlboro
42.2
%
42.2
%
—
42.1
%
42.5
%
(0.4)
Other premium
2.3
2.3
—
2.3
2.3
—
Discount
2.3
2.9
(0.6)
2.5
3.1
(0.6)
Total cigarettes
46.8
%
47.4
%
(0.6)
46.9
%
47.9
%
(1.0)
Note: Retail share results for cigarettes are based on data from
Circana, Inc. and Circana Group, L.P. (Circana) as well as, MSAi.
Circana was formed by the recent merger of IRI and NPD Group, Inc.
Circana maintains a blended retail service that uses a sample of
stores and certain wholesale shipments to project market share and
depict share trends. Similar to prior reporting, 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 through the Store Tracking Analytical
Reporting System (STARS), as provided by MSAi. This service is not
designed to capture sales through other channels, including the
internet, direct mail and some illicitly tax-advantaged outlets. It
is retail services’ standard practice to periodically refresh their
retail scan services, which could restate retail share results that
were previously released in these services.
ORAL TOBACCO PRODUCTS
Revenues and OCI
Fourth Quarter
- Net revenues increased 6.6%, primarily driven by higher pricing
and lower promotional investments, partially offset by lower MST
shipment volume and a higher percentage of on! shipment volume
relative to MST versus the prior year (mix change). Revenues net of
excise taxes increased 7.1%.
- Reported and adjusted OCI increased 10.3%, primarily driven by
higher pricing and lower promotional investments, partially offset
by lower MST shipment volume, mix change and higher costs. Adjusted
OCI margins increased by 1.8 percentage points to 63.1%.
Full Year
- Net revenues increased 3.4%, primarily driven by higher
pricing, partially offset by lower MST shipment volume and mix
change. Revenues net of excise taxes increased 3.8%.
- Reported and adjusted OCI increased 5.5%, primarily driven by
higher pricing and lower costs, partially offset by lower MST
shipment volume and mix change. Adjusted OCI margins increased by
1.1 percentage points to 67.4%.
Table 5 - Oral Tobacco Products:
Revenues and OCI ($ in millions)
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Net revenues
$
674
$
632
6.6%
$
2,667
$
2,580
3.4%
Excise taxes
(27
)
(28
)
(112
)
(119
)
Revenues net of excise taxes
$
647
$
604
7.1%
$
2,555
$
2,461
3.8%
Reported and adjusted OCI
$
408
$
370
10.3%
$
1,722
$
1,632
5.5%
Reported and adjusted OCI margins
1
63.1
%
61.3
%
1.8 pp
67.4
%
66.3
%
1.1 pp
1 Reported and adjusted OCI margins are calculated as reported
and adjusted OCI, respectively, divided by revenues net of excise
taxes.
Shipment Volume
Fourth Quarter
- Oral tobacco products segment reported domestic shipment volume
decreased 2.0%, primarily driven by retail share losses in MST,
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 2.5%.
Full Year
- Oral tobacco products segment reported domestic shipment volume
decreased 2.2%, primarily driven by retail share losses in MST,
partially offset by the industry’s growth rate, trade inventory
movements and other factors. When adjusted for trade inventory
movements and calendar differences, oral tobacco products segment
shipment volume decreased by an estimated 2.5%.
- Total oral tobacco industry volume increased by an estimated
7.5% for the six months ended December 31, 2023, primarily driven
by growth in oral nicotine pouches, partially offset by declines in
MST volumes.
Table 6 - Oral Tobacco Products:
Reported Shipment Volume (cans and packs in millions)
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Copenhagen
106.8
114.1
(6.4)%
440.1
470.6
(6.5)%
Skoal
39.8
43.3
(8.1)%
163.1
179.4
(9.1)%
on!
30.4
22.9
32.8%
114.3
82.5
38.5%
Other
16.1
16.8
(4.2)%
65.4
68.1
(4.0)%
Total oral tobacco products
193.1
197.1
(2.0)%
782.9
800.6
(2.2)%
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 40.1%, as share
declines for MST products were primarily driven by the category
share growth of oral nicotine pouches.
- Total U.S. oral tobacco category share for on! nicotine pouches
was 6.9%, an increase of 1.1 percentage points versus the prior
year and stable sequentially.
- The U.S. nicotine pouch category grew to 35.9% of the U.S. oral
tobacco category, an increase of 11.8 share points versus the prior
year. In addition, on!’s share of the nicotine pouch category was
19.3%.
Full Year
- Oral tobacco products segment retail share was 42.8%, as share
declines for MST products were primarily driven by the category
share growth of oral nicotine pouches.
- Total U.S. oral tobacco category share for on! nicotine pouches
was 6.8%, an increase of 1.8 percentage points.
- The U.S. nicotine pouch category grew to 31.0% of the U.S. oral
tobacco category, an increase of 9.4 share points versus the prior
year. In addition, on!’s share of the nicotine pouch category was
22.0%.
Table 7 - Oral Tobacco Products: Retail
Share (percent)
Fourth Quarter
Full Year
2023
2022
Percentage
point
change
2023
2022
Percentage
point
change
Copenhagen
21.7
%
26.2
%
(4.5)
23.6
%
27.1
%
(3.5)
Skoal
8.8
10.8
(2.0)
9.5
11.3
(1.8)
on!
6.9
5.8
1.1
6.8
5.0
1.8
Other
2.7
3.1
(0.4)
2.9
3.1
(0.2)
Total oral tobacco products
40.1
%
45.9
%
(5.8)
42.8
%
46.5
%
(3.7)
Note: Our oral tobacco products segment’s retail share results
exclude international volume. Retail share results for oral tobacco
products are based on data from Circana, 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
are defined by Circana 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 retail services’ standard practice to periodically
refresh their retail scan services, which could restate retail
share results that were previously released in these services.
Altria’s Profile
We have a leading portfolio of tobacco products for U.S. tobacco
consumers age 21+. Our Vision 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, Helix Innovations LLC
(Helix), a leading manufacturer of oral nicotine pouches, and NJOY,
LLC (NJOY), currently the only e-vapor manufacturer to receive
market authorizations from the U.S. Food and Drug Administration
(FDA) for a pod-based e-vapor product.
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, and Cronos Group Inc. (Cronos), a
leading Canadian cannabinoid company.
The brand portfolios of our operating companies include
Marlboro®, Black & Mild®, Copenhagen®, Skoal®, on!® and NJOY®.
Trademarks 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 X (formerly known
as 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 “2024 Full-Year Guidance.” In addition, our
management reviews the ratio of debt-to-Consolidated EBITDA, which
we use as a factor to determine our ability to access the capital
markets and make investments in pursuit of our Vision. Consolidated
EBITDA, as defined in our credit agreement, is calculated in
accordance with our credit agreement and includes certain
adjustments. 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
capital and other 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 accounted for our former 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. We have included results for
NJOY, Horizon, Helix rest-of-world, the IQOS Tobacco Heating
System® and Philip Morris Capital Corporation (prior to the
completion of its wind-down at the end of 2022) 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, 2022 and our Quarterly Reports on Form 10-Q.
These factors include the following:
- our inability to anticipate and respond to changes in adult
tobacco consumer preferences and purchase behavior;
- our inability to compete effectively;
- the growth of the e-vapor category, including illegal flavored
disposable e-vapor products, and other innovative tobacco products,
including oral nicotine pouches, contributing to reductions in
cigarette and MST consumption levels and shipment volume;
- our failure to commercialize innovative products, including
tobacco products that may reduce health risks relative to other
tobacco products and 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 or products, and
reductions in shipment volumes;
- unfavorable outcomes with respect to litigation proceedings or
any governmental investigations;
- the risks associated with significant federal, state and local
government actions, including FDA regulatory actions, and various
private sector actions;
- increases in tobacco product-related taxes;
- our failure to complete or manage successfully strategic
transactions, including acquisitions, dispositions, joint ventures
and investments in third parties, or realize the anticipated
benefits of such transactions;
- 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;
- our reliance on a few significant facilities and a small number
of key suppliers, distributors and distribution chain service
providers and the risks associated with an extended disruption at a
facility or in service by a supplier, distributor or distribution
chain service provider;
- the risk that we may be required to write down intangible
assets, including trademarks and goodwill, due to impairment;
- the risk that we could decide, or be required to, recall
products;
- the various risks related to health epidemics and pandemics,
and the measures that international, federal, state and local
governments, agencies, law enforcement and health authorities
implement to address them;
- our inability to attract and retain a highly skilled and
diverse workforce due to the decreasing social acceptance of
tobacco usage, tobacco control actions and other factors;
- the risks associated with the various U.S. and foreign laws and
regulations to which we are subject due to our international
business operations;
- the risks concerning a challenge to our tax positions, an
increase in the income tax rate or other changes to federal or
state tax laws;
- the risks associated with legal and regulatory requirements
related to climate change and other environmental sustainability
matters;
- disruption and uncertainty in the credit and capital markets,
including risk of losing access to these markets;
- a downgrade or potential downgrade of our credit ratings;
- our inability to attract investors due to increasing investor
expectations of our performance relating to corporate
responsibility factors;
- the failure of our, or our key service providers’ or key
suppliers’, information systems to function as intended, or
cyber-attacks or security breaches;
- our failure, or the failure of our key service providers or key
suppliers, to comply with personal data protection, privacy,
artificial intelligence and information security laws;
- the risk that the expected benefits of our investment in ABI
may not materialize in the expected manner or timeframe or at all,
including due to macroeconomic and geopolitical conditions; foreign
currency exchange rates; ABI’s business results; ABI’s share price;
impairment losses on the value of our investment; our incurrence of
additional tax liabilities related to our investment in ABI; and
potential reductions in the number of directors that we can have
appointed to the ABI board of directors; and
- the risks associated with our investment in Cronos, including
legal, regulatory and reputational risks and the risk that the
expected benefits of the transaction may not materialize in the
expected timeframe or at all.
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)
2023
2022
% Change
Net revenues
$
5,975
$
6,111
(2.2)%
Cost of sales 1
1,525
1,573
Excise taxes on products 1
951
1,028
Gross profit
3,499
3,510
(0.3)%
Marketing, administration and research
costs
570
573
Operating companies income
2,929
2,937
(0.3)%
Amortization of intangibles
41
19
General corporate expenses
92
100
Operating income
2,796
2,818
(0.8)%
Interest and other debt expense, net
231
226
Net periodic benefit income, excluding
service cost
(32
)
(47
)
(Income) losses from investments in equity
securities 1
(138
)
(66
)
Loss on Cronos-related financial
instruments
—
1
Earnings before income taxes
2,735
2,704
1.1%
Provision for income taxes
675
14
Net earnings
$
2,060
$
2,690
(23.4)%
Per share data:
Diluted earnings per share
$
1.16
$
1.50
(22.7)%
Weighted-average diluted shares
outstanding
1,767
1,790
(1.3)%
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
2023
$
5,274
$
674
$
27
$
5,975
2022
5,456
632
23
6,111
% Change
(3.3
)%
6.6
%
17.4
%
(2.2
)%
Reconciliation:
For the quarter ended December 31,
2022
$
5,456
$
632
$
23
$
6,111
Operations
(182
)
42
4
(136
)
For the quarter ended December 31,
2023
$
5,274
$
674
$
27
$
5,975
Operating Companies Income
(Loss)
Smokeable
Products
Oral
Tobacco
Products
All Other
Total
2023
$
2,578
$
408
$
(57
)
$
2,929
2022
2,576
370
(9
)
2,937
% Change
0.1
%
10.3
%
(100
%+)
(0.3
)%
Reconciliation:
For the quarter ended December 31,
2022
$
2,576
$
370
$
(9
)
$
2,937
NPM Adjustment Items - 2022
(3
)
—
—
(3
)
Tobacco and health and certain other
litigation items - 2022
30
—
—
30
27
—
—
27
NPM Adjustment Items - 2023
14
—
—
14
Tobacco and health and certain other
litigation items - 2023
(4
)
—
—
(4
)
10
—
—
10
Operations
(35
)
38
(48
)
(45
)
For the quarter ended December 31,
2023
$
2,578
$
408
$
(57
)
$
2,929
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)
2023
2022
% Change
Net revenues
$
24,483
$
25,096
(2.4)%
Cost of sales 1
6,218
6,442
Excise taxes on products 1
3,981
4,408
Gross profit
14,284
14,246
0.3%
Marketing, administration and research
costs
1,966
1,962
Operating companies income
12,318
12,284
0.3%
Amortization of intangibles
128
73
General corporate expenses
643
292
Operating income
11,547
11,919
(3.1)%
Interest and other debt expense, net
989
1,058
Net periodic benefit income, excluding
service cost
(127
)
(184
)
(Income) losses from investments in equity
securities 1
(243
)
3,641
Loss on Cronos-related financial
instruments
—
15
Earnings before income taxes
10,928
7,389
47.9%
Provision for income taxes
2,798
1,625
Net earnings
$
8,130
$
5,764
41.0%
Per share data2:
Diluted earnings per share
$
4.57
$
3.19
43.3%
Weighted-average diluted shares
outstanding
1,777
1,804
(1.5)%
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 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
All Other
Total
2023
$
21,756
$
2,667
$
60
$
24,483
2022
22,476
2,580
40
25,096
% Change
(3.2
)%
3.4
%
50.0
%
(2.4
)%
Reconciliation:
For the year ended December 31,
2022
$
22,476
$
2,580
$
40
$
25,096
Operations
(720
)
87
20
(613
)
For the year ended December 31,
2023
$
21,756
$
2,667
$
60
$
24,483
Operating Companies Income
(Loss)
Smokeable
Products
Oral
Tobacco
Products
All Other
Total
2023
$
10,670
$
1,722
$
(74
)
$
12,318
2022
10,688
1,632
(36
)
12,284
% Change
(0.2
)%
5.5
%
(100
%+)
0.3
%
Reconciliation:
For the year ended December 31,
2022
$
10,688
$
1,632
$
(36
)
$
12,284
NPM Adjustment Items - 2022
(63
)
—
—
(63
)
Tobacco and health and certain other
litigation items - 2022
101
—
—
101
38
—
—
38
NPM Adjustment Items - 2023
29
—
—
29
Tobacco and health and certain other
litigation items - 2023
(69
)
—
—
(69
)
(40
)
—
—
(40
)
Operations
(16
)
90
(38
)
36
For the year ended December 31,
2023
$
10,670
$
1,722
$
(74
)
$
12,318
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,
2023
2022
2023
2022
The segment detail of excise taxes on
products sold is as follows:
Smokeable products
$
924
$
1,000
$
3,869
$
4,289
Oral tobacco products
27
28
112
119
$
951
$
1,028
$
3,981
$
4,408
The segment detail of charges for
resolution expenses related to state settlement agreements included
in cost of sales is as follows:
Smokeable products
$
879
$
922
$
3,711
$
3,908
Oral tobacco products
1
3
4
10
$
880
$
925
$
3,715
$
3,918
The segment detail of FDA user fees
included in cost of sales is as follows:
Smokeable products
$
66
$
66
$
259
$
270
Oral tobacco products
1
1
5
5
$
67
$
67
$
264
$
275
The detail of (income) losses from
investments in equity securities is as follows:
ABI
$
(138
)
$
(182
)
$
(539
)
$
1,973
Cronos
—
16
46
213
JUUL
—
100
250
1,455
$
(138
)
$
(66
)
$
(243
)
$
3,641
Schedule 6
ALTRIA GROUP, INC.
and Subsidiaries
Net Earnings and Diluted Earnings
Per Share
For the Quarters Ended December
31,
(dollars in millions, except per
share data)
(Unaudited)
Net Earnings
Diluted EPS
2023 Net Earnings
$
2,060
$
1.16
2022 Net Earnings
$
2,690
$
1.50
% Change
(23.4
)%
(22.7
)%
Reconciliation:
2022 Net Earnings
$
2,690
$
1.50
2022 NPM Adjustment Items
(6
)
—
2022 Acquisition, disposition and
integration-related items
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
)
2023 NPM Adjustment Items
27
0.01
2023 Acquisition, disposition and
integration-related items
(16
)
(0.01
)
2023 Tobacco and health and certain other
litigation items
(5
)
—
2023 ABI-related special items
(27
)
(0.02
)
2023 Cronos-related special items
1
—
2023 Income tax items
(3
)
—
Subtotal 2023 special items
(23
)
(0.02
)
Fewer shares outstanding
—
0.01
Change in tax rate
12
0.01
Operations
(42
)
(0.02
)
2023 Net Earnings
$
2,060
$
1.16
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
Diluted
EPS
2023 Reported
$
2,735
$
675
$
2,060
$
1.16
NPM Adjustment Items
(35
)
(8
)
(27
)
(0.01
)
Acquisition, disposition and
integration-related items
21
5
16
0.01
Tobacco and health and certain other
litigation items
6
1
5
—
ABI-related special items
35
8
27
0.02
Cronos-related special items
(1
)
—
(1
)
—
Income tax items
—
(3
)
3
—
2023 Adjusted for Special Items
$
2,761
$
678
$
2,083
$
1.18
2022 Reported
$
2,704
$
14
$
2,690
$
1.50
NPM Adjustment Items
(8
)
(2
)
(6
)
—
Acquisition, disposition and
integration-related items
1
—
1
—
Tobacco and health and certain other
litigation items
30
8
22
0.01
JUUL changes in fair value
100
—
100
0.06
ABI-related special items
(16
)
(4
)
(12
)
—
Cronos-related special items
6
(8
)
14
—
Income tax items
—
696
(696
)
(0.39
)
2022 Adjusted for Special Items
$
2,817
$
704
$
2,113
$
1.18
2023 Reported Net Earnings
$
2,060
$
1.16
2022 Reported Net Earnings
$
2,690
$
1.50
% Change
(23.4
)%
(22.7
)%
2023 Net Earnings Adjusted for Special
Items
$
2,083
$
1.18
2022 Net Earnings Adjusted for Special
Items
$
2,113
$
1.18
% Change
(1.4
)%
—
%
Schedule 8
ALTRIA GROUP, INC.
and Subsidiaries
Net Earnings and Diluted Earnings
Per Share
For the Years Ended December
31,
(dollars in millions, except per
share data)
(Unaudited)
Net Earnings
Diluted EPS1
2023 Net Earnings
$
8,130
$
4.57
2022 Net Earnings
$
5,764
$
3.19
% Change
41.0
%
43.3
%
Reconciliation:
2022 Net Earnings
$
5,764
$
3.19
2022 NPM Adjustment Items
(51
)
(0.03
)
2022 Acquisition, disposition and
integration-related items
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
2023 NPM Adjustment Items
38
0.02
2023 Acquisition, disposition and
integration-related items
(26
)
(0.01
)
2023 Tobacco and health and certain other
litigation items
(323
)
(0.18
)
2023 Loss on disposition of JUUL equity
securities
(250
)
(0.14
)
2023 ABI-related special items
(70
)
(0.03
)
2023 Cronos-related special items
(29
)
(0.02
)
2023 Income tax items
(32
)
(0.02
)
Subtotal 2023 special items
(692
)
(0.38
)
Fewer shares outstanding
—
0.07
Change in tax rate
33
0.02
Operations
47
0.02
2023 Net Earnings
$
8,130
$
4.57
1 Diluted earnings per share 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
Diluted
EPS1
2023 Reported
$
10,928
$
2,798
$
8,130
$
4.57
NPM Adjustment Items
(50
)
(12
)
(38
)
(0.02
)
Acquisition, disposition and
integration-related items
35
9
26
0.01
Tobacco and health and certain other
litigation items
430
107
323
0.18
Loss on disposition of JUUL equity
securities
250
—
250
0.14
ABI-related special items
89
19
70
0.03
Cronos-related special items
29
—
29
0.02
Income tax items
—
(32
)
32
0.02
2023 Adjusted for Special Items
$
11,711
$
2,889
$
8,822
$
4.95
2022 Reported
$
7,389
$
1,625
$
5,764
$
3.19
NPM Adjustment Items
(68
)
(17
)
(51
)
(0.03
)
Acquisition, disposition and
integration-related items
11
2
9
—
Tobacco and health and certain other
litigation items
131
33
98
0.05
JUUL changes in fair value
1,455
—
1,455
0.81
ABI-related special items
2,544
534
2,010
1.12
Cronos-related special items
186
—
186
0.10
Income tax items
—
729
(729
)
(0.40
)
2022 Adjusted for Special Items
$
11,648
$
2,906
$
8,742
$
4.84
2023 Reported Net Earnings
$
8,130
$
4.57
2022 Reported Net Earnings
$
5,764
$
3.19
% Change
41.0
%
43.3
%
2023 Net Earnings Adjusted for Special
Items
$
8,822
$
4.95
2022 Net Earnings Adjusted for Special
Items
$
8,742
$
4.84
% Change
0.9
%
2.3
%
1 Diluted earnings per share 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, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
3,686
$
4,030
Receivable from the sale of IQOS System
commercialization rights
—
1,721
Inventories
1,215
1,180
Other current assets
684
289
Property, plant and equipment, net
1,652
1,608
Goodwill and other intangible assets,
net
20,477
17,561
Investments in equity securities
10,011
9,600
Other long-term assets
845
965
Total assets
$
38,570
$
36,954
Liabilities and
Stockholders’ Equity (Deficit)
Current portion of long-term debt
$
1,121
$
1,556
Accrued settlement charges
2,563
2,925
Deferred gain from the sale of IQOS System
commercialization rights (current)
2,700
—
Other current liabilities
4,935
4,135
Long-term debt
25,112
25,124
Deferred income taxes
2,799
2,897
Accrued pension costs
130
133
Accrued postretirement health care
costs
1,079
1,083
Deferred gain from the sale of IQOS System
commercialization rights (long-term)
—
2,700
Other long-term liabilities
1,621
324
Total liabilities
42,060
40,877
Total stockholders’ equity (deficit)
attributable to Altria
(3,540
)
(3,973
)
Noncontrolling interest
50
50
Total liabilities and stockholders’
equity (deficit)
$
38,570
$
36,954
Total debt
$
26,233
$
26,680
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
2023 Special Items - (Income)
Expense
NPM Adjustment Items
$
(14
)
$
—
$
—
$
(21
)
$
—
$
—
Acquisition, disposition and
integration-related items
—
—
21
—
—
—
Tobacco and health and certain other
litigation items
—
4
2
—
—
—
ABI-related special items
—
—
—
—
35
—
Cronos-related special items
—
—
—
—
(1
)
—
2022 Special Items - (Income)
Expense
NPM Adjustment Items
$
(3
)
$
—
$
—
$
(5
)
$
—
$
—
Acquisition, disposition and
integration-related items
—
—
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
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
(Income) losses
from
investments in
equity securities
Loss on
Cronos-related
financial
instruments
2023 Special Items - (Income)
Expense
NPM Adjustment Items
$
(29
)
$
—
$
—
$
(21
)
$
—
$
—
Acquisition, disposition and
integration-related items
—
—
80
(45
)
—
—
Tobacco and health and certain other
litigation items
—
69
350
11
—
—
Loss on disposition of JUUL equity
securities
—
—
—
—
250
—
ABI-related special items
—
—
—
—
89
—
Cronos-related special items
—
—
—
—
29
—
2022 Special Items - (Income)
Expense
NPM Adjustment Items
$
(63
)
$
—
$
—
$
(5
)
$
—
$
—
Acquisition, disposition and
integration-related items
—
—
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
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. This
schedule is not intended to provide, or reconcile, non-GAAP
financial measures.
Schedule 13
ALTRIA GROUP, INC.
and Subsidiaries
Calculation of Total Debt to
Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios
For the Twelve Months Ended
December 31, 2023 1
(dollars in millions)
(Unaudited)
Total
Consolidated Net Earnings
$
8,130
Interest and other debt expense, net
989
Provision for income taxes
2,798
Depreciation and amortization
272
EBITDA 2
12,189
(Income) loss from investments in equity
securities and noncontrolling interests, net
(243
)
Dividends from less than 50% owned
affiliates
163
Consolidated EBITDA 3
$
12,109
Current portion of long-term debt
$
1,121
Long-term debt
25,112
Total Debt 4
26,233
Cash and cash equivalents 5
3,686
Net Debt 6
$
22,547
Ratios:
Total Debt / Consolidated Net
Earnings
3.2
Total Debt / Consolidated
EBITDA
2.2
Net Debt / Consolidated EBITDA
1.9
1 Calculated as of the end of the
applicable quarter on a rolling four quarters basis.
2 Reflects earnings before interest, taxes, depreciation and
amortization (“EBITDA").
3 Reflects the term “Consolidated EBITDA”
as defined in Altria’s revolving credit agreement.
4 Reflects total debt as presented on
Altria’s Condensed Consolidated Balance Sheet at December 31, 2023.
See Schedule 10.
5 Reflects cash and cash equivalents as
presented on Altria’s Condensed Consolidated Balance Sheet at
December 31, 2023. See Schedule 10.
6 Reflects total debt, less cash and cash
equivalents at December 31, 2023.
Altria and Consolidated Subsidiaries,
Selected Financial Data
Schedule 14
($ in millions)
For the Year Ended December
31, 2023
Smokeable
Products
Oral Tobacco
Products
All Other
Total
Net revenues
$
21,756
$
2,667
$
60
$
24,483
Excise taxes
(3,869
)
(112
)
—
(3,981
)
Revenues net of excise taxes
$
17,887
$
2,555
$
60
$
20,502
Reported operating companies income
(OCI)
$
10,670
$
1,722
$
(74
)
$
12,318
NPM Adjustment Items
(29
)
—
—
(29
)
Tobacco and health and certain other
litigation items
69
—
—
69
Adjusted OCI
$
10,710
$
1,722
$
(74
)
$
12,358
Reported OCI margins 1
59.7
%
67.4
%
(100
+)%
60.1
%
Adjusted OCI margins 1
59.9
%
67.4
%
(100
+)%
60.3
%
1 Reported and adjusted OCI margins are
calculated as reported and adjusted OCI, respectively, divided by
revenues net of excise taxes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240131409305/en/
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