Altria Group, Inc. (NYSE:MO) Q3 2023 Earnings Conference Call October 26, 2023 9:00 AM ET Company Participants Mac Livingston - Vice President, Investor Relations Billy Gifford - Chief Executive Officer Sal Mancuso - Executive Vice President and Chief Financial Officer Conference Call Participants Pamela Kaufman - Morgan Stanley Bonnie Herzog - Goldman Sachs Andrei Condrea - UBS Vivien Azer - TD Cowen Owen Bennett - Jefferies Matthew Smith - Stifel Gaurav Jain - Barclays Steven Marascia - Capital Securiti ...

Financial Performance and Targets - Adjusted diluted EPS growth target of mid-single digits on a compounded annual basis through 2028[113] - Net earnings for the nine months ended September 30, 2023, increased by 97.5% to $6.07 billion compared to $3.07 billion in 2022[119] - Adjusted net earnings for the nine months ended September 30, 2023, increased by 1.7% to $6.74 billion compared to $6.63 billion in 2022[119] - Adjusted diluted EPS for the nine months ended September 30, 2023, increased by 3.3% to $3.78 compared to $3.66 in 2022[119] - Net earnings for Q3 2023 increased to $2.166 billion, up from $224 million in Q3 2022, representing a 100%+ growth[121] - Adjusted diluted EPS for Q3 2023 was $1.28, slightly down by 1.1% compared to $1.28 in Q3 2022[121] - The company narrowed its 2023 full-year adjusted diluted EPS forecast to a range of $4.91 to $4.98, representing a growth rate of 1.5% to 3% from the 2022 base of $4.84[122] - The 2023 adjusted diluted EPS guidance includes planned investments in smoke-free product R&D, digital consumer engagement, and U.S. commercialization of NJOY ACE, as well as $50 million in amortization charges related to the NJOY Transaction[122] - The 2023 full-year adjusted effective tax rate is expected to be in the range of 24.5% to 25.5%[123] - Special items in 2023 included $11 million from NPM Adjustment Items, $(9) million from acquisition-related items, and $(65) million from ABI-related special items[121] - Adjusted net earnings for the nine months ended September 30, 2023, were $6,739 million, compared to $6,629 million in 2022[134] - Adjusted diluted EPS for the nine months ended September 30, 2023, was $3.78, compared to $3.66 in 2022[134] - Reported net earnings increased by $2,996 million (97.5%) to $6,070 million, driven by favorable equity securities investments and lower debt expenses[140] - Adjusted net earnings increased by $110 million (1.7%) to $6,739 million, with adjusted diluted EPS rising 3.3% to $3.78[140] - Net revenues decreased by $269 million (4.1%), primarily due to lower revenues in the smokeable products segment[140] - Cost of sales decreased by $137 million (8.0%), and excise taxes on products decreased by $134 million (11.8%), both due to lower shipment volumes in the smokeable products segment[140] - Net revenues for the Smokeable Products segment decreased by $538 million (3.2%) for the nine months ended September 30, 2023, primarily due to lower shipment volume[167] - Adjusted OCI for the Smokeable Products segment increased by $19 million (0.2%) for the nine months ended September 30, 2023, driven by higher pricing and promotional investments[167] - Net revenues for the Smokeable Products segment decreased by $310 million (5.3%) for the three months ended September 30, 2023, primarily due to lower shipment volume[169] - Adjusted OCI for the Smokeable Products segment decreased by $71 million (2.5%) for the three months ended September 30, 2023, primarily due to lower shipment volume and higher costs[169] - Net revenues for the oral tobacco products segment increased by $45 million (2.3%) for the nine months ended September 30, 2023, driven by higher pricing and promotional investments[178] - Reported and adjusted OCI for the oral tobacco products segment increased by $52 million (4.1%) for the nine months ended September 30, 2023, due to higher pricing and lower costs[178] - Reported and adjusted OCI margins for the oral tobacco products segment increased by 0.9 percentage points to 68.9% for the nine months ended September 30, 2023[179] - Net revenues for the nine months ended September 30, 2023, were $15,606 million for the Guarantor, with gross profit of $8,622 million[199] - Net earnings (losses) for the nine months ended September 30, 2023, included a loss of $11,300 million for the Parent and earnings of $5,743 million for the Guarantor[199] Smoke-Free Products and Innovation - U.S. smoke-free volumes to grow by at least 35% from 800 million units in 2022 to 1.08 billion units by 2028[113] - U.S. smoke-free net revenues to approximately double to $5 billion by 2028 from $2.6 billion in 2022[113] - Acquisition of NJOY Holdings for approximately $2.9 billion in June 2023[114] - The 2023 adjusted diluted EPS guidance includes planned investments in smoke-free product R&D, digital consumer engagement, and U.S. commercialization of NJOY ACE, as well as $50 million in amortization charges related to the NJOY Transaction[122] - NJOY ACE reported shipment volume of approximately 7.5 million pods in Q3 2023, with distribution expanding to 42,000 stores[143] - The company expects ACE distribution to reach 70,000 stores by the end of 2023, representing approximately 70% of e-vapor volume and 55% of cigarette volume sold in the U.S. multi-outlet and convenience channel[184] - The company's NJOY e-vapor business reported domestic shipment volume of approximately 7.5 million ACE pods for the three months ended September 30, 2023, with retail share remaining stable since the NJOY Transaction[184] - The company acquired NJOY Holdings for approximately $2.75 billion (net of cash acquired) on June 1, 2023, with potential additional payments of up to $500 million contingent on FDA authorizations[190] Regulatory and Legal Environment - FDA has resolved more than 99% of timely applications received for e-vapor products, with the majority resulting in denials[147] - Helix submitted PMTAs for on! oral nicotine pouches in May 2020, but as of October 23, 2023, no marketing order decisions have been issued[147] - Middleton has received market orders or exemptions covering over 99% of its cigar product volume as of October 23, 2023[147] - FDA authorized PMTAs for three new tobacco-flavored varieties of Marlboro HeatSticks in January 2023[147] - FDA issued a final rule in March 2020 requiring 11 textual warnings with color graphics on cigarette packaging and advertising, which was later blocked by a U.S. District Court in December 2022[148] - FDA plans to propose a product standard by December 2023 to establish a maximum nicotine level in cigarettes and other combustible tobacco products[149] - FDA issued two proposed product standards in April 2022: banning menthol in cigarettes and banning all characterizing flavors in cigars, with plans to complete rulemaking by August 2023[149] - FDA proposed a product standard for NNN levels in finished smokeless tobacco products in January 2017[149] - FDA issued a proposed rule in March 2023 setting forth requirements for tobacco product manufacturers regarding good manufacturing practices[149] - Compliance with FDA regulations could result in increased costs, including manufacturing, labeling, and packaging requirements, potentially impacting the company's business operations and financial position[150] - The company faces ongoing governmental investigations related to its former investment in JUUL, including inquiries from the FTC, SEC, and state attorneys general[158] - The company has filed a lawsuit in federal court in California against manufacturers of illegal e-vapor products in October 2023 to protect its lawful e-vapor product business[160] Market Share and Consumer Behavior - Cigarette retail share for the industry discount segment was up year-over-year but unchanged from the first half of 2023[115] - Domestic cigarette industry volume declined by 8% in Q3 2023 compared to Q3 2022, influenced by macroeconomic conditions and illegal flavored disposable e-vapor products[143] - Marlboro's market share increased by 0.3 share points to 42.3% in Q3 2023 compared to Q2 2023, but decreased by 0.3 share points year-over-year[143] - The U.S. nicotine pouch category grew to 32.3% of the oral tobacco category, up 9.8 share points year-over-year, with on! achieving 6.9% market share[143] - The discount share of the cigarette category remained at 28.2% in Q3 2023, with a 1.1 share point increase year-over-year[143] - Marlboro's retail share of the total cigarette category decreased by 0.6 percentage points to 42.1% for the nine months ended September 30, 2023, primarily due to macroeconomic pressures and increased competitive activity[173][174] - Total cigarettes industry discount segment retail share increased by 1.6 percentage points to 28.2% for the nine months ended September 30, 2023, driven by macroeconomic pressures and competitive activity[174] - The smokeable products segment's reported domestic cigarettes shipment volume decreased by 10.5% for the nine months ended September 30, 2023, with premium cigarettes accounting for 94.6% of the volume[174] - The company's oral tobacco products segment's retail share decreased to 43.7% for the nine months ended September 30, 2023, down from 46.7% in the same period in 2022, primarily due to share losses in MST products[181] - The U.S. nicotine pouch category grew to 32.3% of the U.S. oral tobacco category, an increase of 9.8 share points compared to the prior year, with the company's on! brand holding a 21.4% share of the nicotine pouch category[181] Operational and Supply Chain Risks - The company faces risks from illicit trade in tobacco products, including counterfeit products and untaxed sales, which could adversely affect its business[160] - The company is mitigating risks related to tobacco supply by maintaining inventory levels, sourcing from diverse geographic regions, and entering into long-term contracts with growers[161] - The company faces risks from its inability to anticipate and respond to changes in adult tobacco consumer preferences and purchase behavior[200] - Growth of the e-vapor category and other innovative tobacco products could reduce cigarette and MST consumption levels and shipment volumes[200] - The company may face challenges in commercializing innovative tobacco products that reduce health risks and appeal to adult consumers[200] - Macroeconomic and geopolitical conditions, including inflation, could shift adult tobacco consumer disposable income and purchasing behavior[200] - The company relies on a few significant facilities and a small number of key suppliers, distributors, and distribution chain service providers[200] - Risks include potential write-downs of intangible assets, such as trademarks and goodwill, due to impairment[200] - The company faces risks related to health epidemics and pandemics, such as COVID-19, and government measures to address them[200] Debt and Financial Position - Debt-to-Consolidated EBITDA ratio target of approximately 2.0x[113] - The company had $1.5 billion in cash and cash equivalents as of September 30, 2023, with access to a $3.0 billion senior unsecured 5-year revolving credit agreement for general corporate purposes[185] - Total long-term debt decreased to $25.1 billion as of September 30, 2023, from $26.7 billion at the end of 2022, with a weighted-average coupon interest rate of approximately 4.2%[188] - The company's debt-to-Consolidated EBITDA ratio was 2.1 as of September 30, 2023, with Consolidated EBITDA of $12.131 billion for the twelve months ended September 30, 2023[189] - The company estimates payments related to State Settlement Agreements and FDA user fees to average $3.9 billion annually over the next three years, excluding potential NPM Adjustment Items[189] - The company paid approximately $3.5 billion in fees for the nine months ended September 30, 2023, related to State Settlement Agreements and FDA user fees, with $3.0 billion recorded as charges to cost of sales[190] - The fair value of the company's long-term debt is $21.3 billion as of September 30, 2023, compared to $22.9 billion as of December 31, 2022[203] - A 1% increase in market interest rates would decrease the fair value of long-term debt by $1.6 billion as of September 30, 2023, and $1.7 billion as of December 31, 2022[203] - A 1% decrease in market interest rates would increase the fair value of long-term debt by $1.9 billion as of September 30, 2023, and $2.0 billion as of December 31, 2022[203] Taxes and Settlement Agreements - The weighted-average state cigarette excise tax increased from $0.36 to $1.90 per pack between 1998 and October 2023, with New York enacting a new excise tax increase effective September 2023[151] - 33 states, the District of Columbia, Puerto Rico, and several cities and counties have enacted legislation to tax e-vapor products, with 11 states and the District of Columbia taxing oral nicotine pouches as of October 2023[153] - The State Settlement Agreements require annual payments adjusted for factors like inflation, with a 6.5% inflation calculation based on CPI-U data as of December 2022, though the impact on financial position was not material[155] - The company estimates payments related to State Settlement Agreements and FDA user fees to average $3.9 billion annually over the next three years, excluding potential NPM Adjustment Items[189] - The company paid approximately $3.5 billion in fees for the nine months ended September 30, 2023, related to State Settlement Agreements and FDA user fees, with $3.0 billion recorded as charges to cost of sales[190] Shareholder Returns and Cash Flow - Dividends paid during the first nine months of 2023 increased by 2.7% to $5,040 million compared to $4,908 million in the same period of 2022[191] - The company declared a 4.3% increase in the quarterly dividend rate to $0.98 per share in August 2023, with an annualized dividend rate of $3.92 per share[191] - Net cash provided by operating activities increased to $6,060 million for the first nine months of 2023, up from $5,637 million in the same period of 2022, primarily due to lower payments for State Settlement Agreements and income taxes[192] - Net cash used in investing activities was $1,217 million for the first nine months of 2023, compared to $215 million in the same period of 2022, primarily due to the NJOY Transaction[193] - Net cash used in financing activities decreased to $7,353 million for the first nine months of 2023, compared to $7,476 million in the same period of 2022, primarily due to lower share repurchases[195] - The company recorded a $10.8 billion loss related to the cancellation of certain interests in a non-guarantor subsidiary for the nine months ended September 30, 2023[198] Product Performance and Shipment Volumes - Total cigarette shipment volume decreased by 10.5% for the nine months ended September 30, 2023, with Marlboro experiencing a 9.5% decline[171] - Cigars shipment volume increased by 4.2% for the nine months ended September 30, 2023, led by Black & Mild's 4.3% growth[171] - Shipment volume for Copenhagen decreased by 6.5% to 333.3 million cans and packs for the nine months ended September 30, 2023, while on! shipment volume increased by 40.8% to 83.9 million cans and packs[180] - Total oral tobacco products shipment volume decreased by 2.3% to 589.8 million cans and packs for the nine months ended September 30, 2023[180] - Adjusted domestic cigarette industry volume decreased by an estimated 8% for the nine months ended September 30, 2023, when adjusted for trade inventory movements and other factors[174] - Domestic shipment volume for the oral tobacco products segment decreased by 2.3% for the nine months ended September 30, 2023, with an adjusted decrease of 2.5% when accounting for calendar differences and trade inventory movements[181] Pricing and Cost Management - PM USA increased the list price of Marlboro, L&M, and Basic by $0.16 per pack effective July 23, 2023, and increased the list price of all other cigarette brands by $0.21 per pack[175] - Marketing, administration, and research costs increased by $399 million (24.4%) primarily due to higher general corporate expenses and acquisition-related costs[139] - Provision for income taxes increased by $512 million (31.8%) primarily due to lower pre-tax earnings in 2022 associated with the non-cash impairment of the investment in ABI[139] - Marketing, administration, and research costs increased by $25 million (4.3%) due to higher amortization from the NJOY Transaction[140] - The decrease of $39 million in operations for Q3 2023 was primarily due to lower OCI (Other Comprehensive Income)[121] - The company repurchased shares under its share repurchase programs, resulting in fewer shares outstanding and a $0.01 impact on diluted EPS[121] - Net revenues decreased by $477 million (2.5%) primarily due to lower revenues in the smokeable products segment[139] - Smokeable products segment revenues decreased to $16,482 million for the nine months ended September 30, 2023, compared to $17,020 million in 2022[131] - Operating income decreased by $350 million (3.8%) due to higher general corporate expenses and higher amortization of intangible assets[139] - Excise taxes on products decreased by $350 million (10.4%) due to lower shipment volume in the smokeable products segment[139] Intangible Assets and Impairment - The fair value of the Skoal trademark exceeded its carrying value of $3.9 billion by approximately 12% ($0.5 billion) as of December 31

Altria’s Second-Quarter and First-Half 2023 Earnings Conference Call August 1, 2023 ...

Altria Group, Inc. (NYSE:MO) Q2 2023 Earnings Conference Call August 1, 2023 9:00 AM ET Company Participants Billy Gifford - Chief Executive Officer Sal Mancuso - Chief Financial Officer Mac Livingston - Vice President of Investor Relations Conference Call Participants Pam Kaufman - Morgan Stanley Bonnie Herzog - Goldman Sachs Vivien Azer - TD Cowen Matt Smith - Stifel Andrei Condrea - UBS Gaurav Jain - Barclays Operator Good day, and welcome to the Altria Group 2023 Second Quarter and First Half Earnings C ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-08940 Altria Group, Inc. (Exact name of registrant as specified in its charter) Virginia 13-3260245 (State or other jurisdiction of ...

Altria Group, Inc. (NYSE:MO) Q1 2023 Results Conference Call April 26, 2023 9:00 AM ET Company Participants Mac Livingston - VP, IR Billy Gifford - CEO Sal Mancuso - CFO Conference Call Participants Bonnie Herzog - Goldman Sachs Vivien Azer - TD Cowen Pamela Kaufman - Morgan Stanley Andrei Condrea - UBS Matt Smith - Stifel Jennifer Maloney - Wall Street Journal Operator Good day, and welcome to the Altria Group 2023 First Quarter Earnings Conference Call. Today’s call is scheduled to last about one hour, in ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-08940 Altria Group, Inc. (Exact name of registrant as specified in its charter) Virginia 13-3260245 (State or other jurisdiction o ...

Shipment Volumes - Total smokeable products segment's cigarette shipment volume in the United States was 84.7 billion units in 2022, a decrease of 9.7% from 2021[10] - Total cigars shipment volume in the smokeable products segment was approximately 1.7 billion units in 2022, a decrease of 4.0% from 2021[10] - Total oral tobacco products segment's shipment volume was 800.6 million units in 2022, a decrease of 2.4% from 2021[10] Financial Performance - Net revenues for the year ended December 31, 2022, were $25,096 million, compared to $26,000 million in 2021, reflecting a decrease of approximately 3.5%[143] - Gross profit for 2022 was $14,246 million, resulting in a gross margin of approximately 56.7%[143] - Net earnings attributable to Altria for 2022 were $5,764 million, with basic and diluted earnings per share of $3.19[143] - Total revenue for the company decreased to $9,600 million in 2022 from $13,481 million in 2021, representing a decline of approximately 28%[175] - Operating income for 2022 increased to $11,919 million, up from $11,560 million in 2021, reflecting a growth of 3.1%[224] - Earnings before income taxes for 2022 were $7,389 million, significantly higher than $3,824 million in 2021, marking an increase of 93.3%[224] Assets and Liabilities - Total assets decreased from $39,523 million in 2021 to $36,954 million in 2022, a decline of approximately 6.5%[138] - Total liabilities increased from $40,877 million in 2021 to $40,877 million in 2022, remaining stable year-over-year[140] - Cash and cash equivalents decreased from $4,544 million in 2021 to $4,030 million in 2022, a decline of approximately 11.4%[138] - The carrying value of the company's total long-term debt was $26,680 million as of December 31, 2022, down from $28,044 million in 2021[188] Investments and Impairments - The company recognized losses from investments in equity securities amounting to $3,641 million in 2022, down from $5,979 million in 2021[148] - A non-cash, pre-tax impairment charge of $2.5 billion was recorded in Q3 2022 due to a decline in the fair value of the investment in ABI[181] - The carrying value of the investment in JUUL was $450 million as of June 30, 2022, which is less than 10% of its initial carrying value of $12.8 billion[181] - The company recorded a non-cash, pre-tax impairment charge of $205 million for its investment in Cronos for the year ended December 31, 2021, as the fair value was less than its carrying value by approximately 25%[186] Employee and Diversity Metrics - As of December 31, 2022, women represented 34% of vice president-level and 41% of director-level roles[12] - The company aims to have equal numbers of men and women among vice president and director-level employees[12] - The company employed approximately 6,300 people as of December 31, 2022[15] Legal and Regulatory Matters - In 2022, the company reported 162 individual smoking and health cases, a decrease from 176 in 2021, and an increase from 148 in 2020[260] - The company is currently involved in 57 class action lawsuits related to JUUL e-vapor products, with 3,830 individual lawsuits filed[260] - PM USA was ordered to pay $5 million in compensatory damages in January 2023, with $3 million specifically attributed to PM USA[264] - The company is currently under examination by the IRS for tax years 2017 through 2020, which may affect future tax provisions[214] Taxation - The provision for income taxes in 2022 was $1,625 million, compared to $1,349 million in 2021, indicating a rise of 20.4%[216] - The effective tax rate for 2022 was 22.0%, a decrease from 35.3% in 2021[216] - The investment in JUUL contributed $3,001 million to deferred income tax assets in 2022, an increase from $2,652 million in 2021[219] Shareholder Returns - Dividends paid on common stock in 2022 totaled $6,599 million, slightly higher than $6,446 million in 2021[150] - The quarterly dividend rate was increased by 4.4% to $0.94 per share, resulting in an annualized dividend rate of $3.76 per share[201] - The company repurchased $1,825 million of common stock in 2022, compared to $1,675 million in 2021[150] Pension and Employee Benefits - The accumulated benefit obligation for pension plans was $6.1 billion at December 31, 2022, down from $8.2 billion in 2021[231] - The actual return on plan assets for 2022 was a loss of $1,748 million, compared to a gain of $466 million in 2021, indicating a significant decline in asset performance[234] - Employer contributions to the pension plan were $20 million in 2022, down from $26 million in 2021[234] Environmental and Compliance Costs - Environmental compliance costs are not expected to have a material adverse effect on consolidated results, capital expenditures, or cash flows[160] - The company expects to continue making capital expenditures related to environmental laws and regulations, although compliance is not expected to materially affect financial results[281] Internal Controls and Governance - The company maintained effective internal control over financial reporting as of December 31, 2022, according to the independent auditor's opinion[285] - Management's assessment included evaluation of design and operational effectiveness of internal controls[298] - There are inherent limitations in internal control that may not prevent or detect misstatements[298]

Altria Group, Inc. (NYSE:MO) Q4 2022 Results Conference Call February 1, 2023 9:00 AM ET Company Participants Mac Livingston - VP, IR Altria Client Services Billy Gifford - CEO Sal Mancuso - CFO Conference Call Participants Vivien Azer - Cowen Pamela Kaufman - Morgan Stanley Bonnie Herzog - Goldman Sachs Callum Elliott - Bernstein Gaurav Jain - Barclays Chris Growe - Stifel Andrei Condrea - UBS Priya Ohri-Gupta - Barclays Jennifer Maloney - The Wall Street Journal Operator Good day, and welcome to the Altri ...

Altria Group, Inc. (NYSE:MO) Q3 2022 Results Conference Call October 27, 2022 9:00 AM ET Company Participants Mac Livingston - Vice President of Investor Relations Billy Gifford - CEO Sal Mancuso - CFO Conference Call Participants Bonnie Herzog - Goldman Sachs Pamela Kaufman - Morgan Stanley Chris Growe - Stifel Gaurav Jain - Barclays Vivien Azer - Cowen Oliver Brotman - JPMorgan Callum Elliott - Bernstein Operator Good day, and welcome to the Altria Group 2022 Third Quarter and Nine Months Earnings Confere ...