Summary
Altria Group, Inc.'s 2009 Form 10-K highlights a year marked by significant strategic acquisitions and ongoing challenges within the tobacco industry. The company completed the acquisition of UST LLC for approximately $11.7 billion, integrating its smokeless tobacco and wine businesses, which significantly diversified Altria's revenue streams and contributed to the newly formed smokeless products and wine segments. Despite a decline in cigarette shipment volumes, the core Marlboro brand maintained its leading market share in the U.S. premium cigarette segment. Altria also experienced a shift in its business segments' profitability contribution, with cigarettes decreasing and smokeless products and wine gaining importance. The company continued its commitment to shareholder returns by increasing its quarterly dividend. However, Altria faces persistent risks from ongoing tobacco-related litigation, increasing excise taxes, and evolving regulatory landscapes, including the new Family Smoking Prevention and Tobacco Control Act granting the FDA broad regulatory authority over tobacco products.
Financial Highlights
54 data points| Revenue | $23.56B |
| Cost of Revenue | $7.99B |
| Gross Profit | $8.83B |
| R&D Expenses | $177.00M |
| Operating Income | $5.46B |
| Interest Expense | $1.19B |
| Net Income | $3.21B |
| EPS (Basic) | $1.55 |
| EPS (Diluted) | $1.54 |
| Shares Outstanding (Basic) | 2.07B |
| Shares Outstanding (Diluted) | 2.07B |
Key Highlights
- 1Acquisition of UST LLC for $11.7 billion significantly expanded Altria's portfolio into smokeless products and wine.
- 2Cigarette shipment volumes declined by 12.2% in 2009, with the Marlboro brand volume decreasing by 10.6%.
- 3The cigarette segment's share of operating companies income decreased from 95.4% in 2008 to 85.3% in 2009, reflecting diversification.
- 4Smokeless products and wine segments, bolstered by the UST acquisition, became more significant contributors to operating income.
- 5Altria increased its quarterly dividend by 6.3% in Q3 2009 and announced a target to increase its dividend payout ratio to approximately 80% of adjusted diluted EPS.
- 6The company suspended its $4.0 billion share repurchase program in September 2009 to preserve financial flexibility.
- 7Altria faces ongoing risks related to tobacco litigation, increasing excise taxes, and new FDA regulations under the Family Smoking Prevention and Tobacco Control Act.