Summary
This 8-K filing from Altria Group, Inc. (MO) on March 5, 2015, primarily announces the expiration and pricing results of a cash tender offer for its 9.700% Senior Unsecured Notes due 2018. The company also disclosed a one-time, pre-tax charge of approximately $230 million ($0.07 per share) in the first quarter of 2015 related to the early extinguishment of this debt. Despite this charge, Altria reaffirmed its previously issued guidance for 2015 full-year adjusted diluted earnings per share (EPS) growth, expecting a range of 7% to 9% over 2014 full-year adjusted diluted EPS.
Key Highlights
- 1Altria Group announced the expiration of its cash tender offer for its 9.700% Senior Unsecured Notes due 2018.
- 2A one-time, pre-tax charge of approximately $230 million ($0.07 per share) will be recorded in Q1 2015 due to the loss on early extinguishment of debt.
- 3The company reaffirms its 2015 full-year adjusted diluted EPS growth guidance of 7% to 9% over 2014.
- 4The 2015 adjusted EPS guidance excludes various charges, including the debt extinguishment loss, asset impairment costs, tobacco and health litigation items, and NPM adjustment items.
- 5The filing includes press releases detailing the tender offer pricing and expiration.
- 6The company emphasizes that adjusted EPS is a non-GAAP measure and should be considered supplemental to GAAP results.
Frequently Asked Questions
The tender offer was a cash tender offer for any and all of Altria's outstanding 9.700% Senior Unsecured Notes due 2018. This is often done to refinance debt, potentially at a lower interest rate, or to manage the company's debt maturity profile.
Altria will record a one-time, pre-tax charge of approximately $230 million, or $0.07 per share, in the first quarter of 2015. This charge reduces reported earnings but is excluded from the company's adjusted EPS calculation.
Altria reaffirmed its guidance for 2015 full-year adjusted diluted EPS growth to be in the range of 7% to 9% over 2014. This guidance excludes the impact of various one-time or non-operational charges.
Altria's management uses adjusted EPS to better reflect the underlying, sustainable performance of its operations, excluding items they deem not part of ongoing business (like debt extinguishment costs or litigation expenses). Investors should view these adjusted figures as supplemental to GAAP earnings and understand that they are not directly comparable to GAAP measures. The company cannot provide a GAAP reconciliation for its forward-looking adjusted EPS guidance due to the unpredictable nature of these excluded items.