Summary
Altria Group, Inc.'s 2011 Form 10-K highlights a company focused on its core tobacco products, primarily cigarettes (Philip Morris USA) and smokeless products (U.S. Smokeless Tobacco Company), while also maintaining interests in wine (Ste. Michelle Wine Estates) and financial services (Philip Morris Capital Corporation). The company reported a decrease in cigarette shipment volume but maintained market leadership with its Marlboro brand. The smokeless products segment saw a slight increase in volume. Altria's financial services segment, PMCC, continued to manage its existing portfolio of finance leases. A significant portion of the filing details ongoing legal proceedings, particularly tobacco-related litigation, including smoking and health cases, health care cost recovery actions, and "Lights/Ultra Lights" cases. The company has achieved substantial success in managing litigation but acknowledges the inherent uncertainties and the potential for material impact on financial results. Regulatory environments, including FDA oversight under the Family Smoking Prevention and Tobacco Control Act, and excise taxes continue to be key factors influencing the tobacco industry. Altria also addressed a significant charge related to PMCC's leveraged lease transactions and ongoing tax matters with the IRS.
Financial Highlights
53 data points| Revenue | $23.80B |
| Cost of Revenue | $7.68B |
| Gross Profit | $8.94B |
| R&D Expenses | $128.00M |
| Operating Income | $6.07B |
| Interest Expense | $1.22B |
| Net Income | $3.39B |
| EPS (Basic) | $1.64 |
| EPS (Diluted) | $1.64 |
| Shares Outstanding (Basic) | 2.06B |
| Shares Outstanding (Diluted) | 2.06B |
Key Highlights
- 1Altria Group, Inc. operates through key segments including cigarettes (Philip Morris USA), smokeless products (U.S. Smokeless Tobacco Company), cigars (John Middleton Co.), wine (Ste. Michelle Wine Estates), and financial services (Philip Morris Capital Corporation).
- 2Philip Morris USA remains the largest cigarette company in the U.S., with Marlboro as its flagship brand, despite a 4.0% decrease in cigarette shipment volume for 2011.
- 3The smokeless products segment, led by Copenhagen and Skoal, experienced a 1.4% increase in shipment volume for 2011.
- 4The company incurred a $627 million charge related to the tax treatment of certain leveraged lease transactions by its financial services subsidiary, PMCC.
- 5Significant ongoing litigation, particularly tobacco-related, remains a material factor, with numerous cases concerning smoking and health, health care costs, and product labeling.
- 6Altria continues to manage its share repurchase program, authorizing a new $1.0 billion program in October 2011.
- 7The company is subject to increasing regulation from the FDA and faces ongoing excise tax pressures on its tobacco products.