8-KFinancial EventsOther EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Exit or Disposal Costs (Jan 28, 2016)

Filed January 28, 2016For Securities:MO

Summary

Altria Group, Inc. (MO) announced a significant productivity initiative aimed at enhancing cost competitiveness and maintaining leadership across its operating companies. This initiative, approved by the Board of Directors on January 27, 2016, is projected to generate approximately $300 million in annualized savings by the end of 2017. The company anticipates total pre-tax restructuring charges of around $140 million, or $0.05 per share, with the majority of these charges expected to be recognized in the first quarter of 2016. These charges will primarily consist of employee separation costs and other associated expenses, with most of them resulting in cash expenditures. In addition to the restructuring, Altria also filed its consolidated financial statements for the years ended December 31, 2015 and 2014, along with related statements of earnings, comprehensive earnings, stockholders' equity, and cash flows. These financial statements, along with management's report on internal controls and the independent auditor's report, are also incorporated into Altria's upcoming Annual Report on Form 10-K. Investors should note that the estimated charges for the productivity initiative do not currently account for any non-cash impacts related to pension settlement and curtailment accounting.

Key Highlights

  • 1Altria's Board approved a productivity initiative to improve cost competitiveness and maintain leadership.
  • 2The initiative targets approximately $300 million in annualized savings by the end of 2017.
  • 3Estimated pre-tax restructuring charges are approximately $140 million, or $0.05 per share.
  • 4Substantially all restructuring charges are expected to be recorded in the first quarter of 2016.
  • 5Employee separation costs represent a significant portion of the estimated charges ($120 million).
  • 6The majority of the estimated charges are expected to result in cash expenditures.
  • 7Consolidated financial statements for 2015 and 2014, along with related financial reports, were filed.

Frequently Asked Questions

The primary goal of the initiative is to maintain Altria's operating companies' leadership and cost competitiveness by reducing spending on certain selling, general, and administrative infrastructure and implementing a leaner organizational structure.

Altria expects to achieve approximately $300 million in annualized productivity savings by the end of 2017.

Altria estimates total pre-tax restructuring charges of approximately $140 million, or $0.05 per share. Substantially all of these charges are expected to be recorded in the first quarter of 2016.

The estimated charges, substantially all of which will result in cash expenditures, primarily relate to employee separation costs and other associated costs. The estimate does not include potential non-cash impacts from pension settlement and curtailment accounting.