8-KRegulation FDOther EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Regulation FD Disclosure (Sep 20, 2016)

Filed September 20, 2016For Securities:MO

Summary

Altria Group, Inc. (MO) filed an 8-K on September 20, 2016, primarily to disclose details regarding the expiration of its cash tender offer for its 9.95% Senior Unsecured Notes due 2038 and 10.20% Senior Unsecured Notes due 2039. The tender offer expired on September 19, 2016. As a result of this debt extinguishment, Altria will record a one-time, pre-tax charge of approximately $825 million, or $0.28 per share, in the third quarter of 2016. Despite this charge, Altria reaffirmed its full-year 2016 adjusted diluted earnings per share (EPS) growth guidance, expecting it to remain in the range of 7.5% to 9.5% over 2015 full-year adjusted diluted EPS. The company also anticipates a slight increase in its full-year effective tax rate on operations, from approximately 35.3% to 35.4%, primarily due to reduced consolidated tax benefits resulting from the tender offer. Guidance excludes potential impacts from the proposed Anheuser-Busch InBev and SABMiller transaction.

Key Highlights

  • 1Altria completed its cash tender offer for its 2038 and 2039 senior unsecured notes.
  • 2A one-time, pre-tax charge of approximately $825 million ($0.28 per share) will be recognized in Q3 2016 due to the early extinguishment of debt.
  • 3Full-year 2016 adjusted diluted EPS growth guidance is reaffirmed at 7.5% to 9.5% over 2015.
  • 4The full-year effective tax rate on operations is expected to increase slightly to 35.3%-35.4%.
  • 5The charge and guidance adjustments exclude certain items such as NPM Adjustment Items, litigation, and SABMiller-related special items.
  • 6The reported guidance does not include potential impacts from the AB InBev and SABMiller business combination.

Frequently Asked Questions

The main purpose of this 8-K filing was to announce the expiration of Altria's cash tender offer for its 2038 and 2039 senior unsecured notes and to disclose the financial impact of this debt extinguishment, including a significant one-time charge against earnings.

Altria will record a one-time, pre-tax charge of approximately $825 million, or $0.28 per share, in the third quarter of 2016, representing the loss on early extinguishment of debt. This charge is excluded from the company's adjusted diluted EPS guidance.

Yes, Altria reaffirmed its full-year 2016 adjusted diluted EPS growth guidance, which is expected to be in the range of 7.5% to 9.5% over 2015. This guidance excludes the impact of the charge from the tender offer and other specific items.

Altria expects its full-year 2016 effective tax rate on operations to increase slightly, moving from approximately 35.3% to 35.4%, due to a reduction in certain consolidated tax benefits resulting from the debt tender offer.