8-KRegulation FDOther EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Regulation FD Disclosure (Aug 6, 2012)

Filed August 6, 2012For Securities:MO

Summary

Altria Group, Inc. (MO) announced on August 6, 2012, a significant debt management strategy involving both a cash tender offer for up to $2 billion of its senior unsecured notes and a concurrent offering of new senior unsecured notes. This move signals a proactive approach to optimizing its capital structure. Investors should note that the company anticipates a one-time pre-tax charge of approximately $1 billion, or $0.33 per share, in the third quarter of 2012, related to the early extinguishment of debt from the tender offer. As a result of this charge, Altria has revised its 2012 full-year reported diluted EPS guidance downwards to a range of $1.96 to $2.00, from the previous $2.29 to $2.33. However, the company also provided guidance for adjusted diluted EPS, excluding certain expenses. Excluding these items, Altria expects 7% to 9% growth in adjusted diluted EPS for the full year 2012 compared to 2011. Investors should pay close attention to the distinction between reported and adjusted EPS when evaluating the company's performance.

Key Highlights

  • 1Altria Group, Inc. is conducting a cash tender offer to repurchase up to $2 billion of its senior unsecured notes.
  • 2Concurrently, the company is launching an underwritten public offering of new senior unsecured notes.
  • 3A one-time pre-tax charge of approximately $1 billion ($0.33 per share) is expected in Q3 2012 due to the tender offer for debt extinguishment.
  • 4Full-year 2012 reported diluted EPS guidance has been lowered to $1.96-$2.00, down from $2.29-$2.33.
  • 5Full-year 2012 adjusted diluted EPS (excluding certain expenses) is projected to grow 7%-9% over 2011 levels.
  • 6The company is providing a detailed breakdown of expenses impacting reported EPS for 2012 and 2011.

Frequently Asked Questions

Altria is undertaking these actions to proactively manage its debt and optimize its capital structure. The tender offer aims to repurchase existing senior unsecured notes, while the new note offering provides an opportunity to potentially refinance debt at different terms or raise capital.

Altria expects to record a one-time pre-tax charge of approximately $1 billion, translating to about $0.33 per share, in the third quarter of 2012. This charge represents the estimated loss on the early extinguishment of debt associated with the tender offer.

The company has revised its 2012 full-year reported diluted EPS guidance to a range of $1.96 to $2.00 per share, down from the previously issued range of $2.29 to $2.33 per share, primarily due to the estimated charge from the debt extinguishment.

Altria provides adjusted diluted EPS, which excludes certain income and expense items that management believes are not reflective of underlying business operations. This non-GAAP measure is intended to offer a clearer view of the company's sustainable operational performance and facilitates year-over-year comparisons, showing an expected growth of 7%-9% for full-year 2012.