8-KRegulation FDOther EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Regulation FD Disclosure (Aug 20, 2012)

Filed August 20, 2012For Securities:MO

Summary

Altria Group, Inc. (MO) filed an 8-K on August 20, 2012, detailing the preliminary results and pricing of its cash tender offer for senior unsecured notes. The company announced it had accepted a significant portion of the tendered notes, resulting in an early extinguishment of debt. As a consequence of this debt tender offer, Altria has revised its 2012 full-year diluted EPS guidance. The company now anticipates a one-time pre-tax charge of approximately $875 million ($0.28 per share) related to the early debt extinguishment. Despite this charge, Altria has raised its reported diluted EPS guidance to a range of $2.01 to $2.05, compared to the previous $1.96 to $2.00. The company also provided updated information on its adjusted diluted EPS, projecting a 7%-9% growth rate over 2011, excluding certain non-operational expenses.

Key Highlights

  • 1Altria announced preliminary results for its cash tender offer to repurchase senior unsecured notes, seeking up to $2 billion in aggregate principal amount.
  • 2The company will incur a one-time pre-tax charge of approximately $875 million ($0.28 per share) due to the early extinguishment of debt related to the tender offer.
  • 3Altria has raised its 2012 full-year reported diluted EPS guidance to $2.01-$2.05 from $1.96-$2.00.
  • 4The revised EPS guidance reflects the estimated charge for the debt extinguishment.
  • 5The company expects its 2012 full-year adjusted diluted EPS to grow between 7% and 9% compared to 2011.
  • 6Adjusted diluted EPS is a non-GAAP measure used by management to provide insight into underlying business trends.

Frequently Asked Questions

This 8-K filing was primarily to announce the preliminary results and pricing of Altria's cash tender offer for its senior unsecured notes and to update its 2012 full-year EPS guidance due to the associated debt extinguishment charge.

The tender offer will result in a one-time pre-tax charge of approximately $875 million, or $0.28 per share, for the early extinguishment of debt in the third quarter of 2012.

Despite the significant charge from the debt extinguishment, Altria has raised its full-year reported diluted EPS guidance to a range of $2.01 to $2.05, up from the previously issued $1.96 to $2.00. This guidance range incorporates the estimated charge.

Adjusted diluted EPS is a non-GAAP financial measure that excludes certain income and expense items that management believes are not part of underlying operations, such as the loss on extinguishment of debt, restructuring charges, and other special items. Altria uses this measure to provide a more meaningful comparison of year-over-year results and insight into underlying business trends.