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SEC Filings

ALTRIA GROUP, INC. filed this Form 8-K on 02/01/2018
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distort underlying business trends and results. Altria’s management also reviews income tax rates on an adjusted basis.  Altria’s adjusted effective tax rate may exclude certain tax items from its reported effective tax rate. Altria’s management believes that adjusted financial measures provide useful additional insight into underlying business trends and results and provide a more meaningful comparison of year-over-year results. Altria’s management uses adjusted financial measures for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets. These adjusted financial measures are not consistent with GAAP and may not be calculated the same as similarly titled measures used by other companies. These adjusted financial measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. Reconciliations of historical adjusted financial measures to corresponding GAAP measures are provided in this release.
Altria uses the equity method of accounting for its investment in AB InBev and reports its share of AB InBev’s results using a one-quarter lag because AB InBev’s results are not available in time to record them in the concurrent period. The one-quarter reporting lag does not affect Altria’s cash flows, but does impact the year-over-year comparability of Altria’s equity earnings from its beer investment and reported and adjusted diluted EPS in the short term.
Altria’s reportable segments are smokeable products, manufactured and sold by PM USA, John Middleton Co. (Middleton) and Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman); smokeless products, manufactured and sold by U.S. Smokeless Tobacco Company LLC (USSTC); and wine, produced and/or distributed by Ste. Michelle Wine Estates Ltd. (Ste. Michelle).
Comparisons are to the corresponding prior-year period unless otherwise stated.
Altria’s 2017 fourth-quarter net revenues decreased 2.4% to $6.1 billion, primarily driven by lower net revenues in the smokeable products segment. Altria’s revenues net of excise taxes were essentially unchanged at $4.7 billion. For the full year, net revenues decreased 0.7% to $25.6 billion, and revenues net of excise taxes increased 0.8% to $19.5 billion.
Altria’s 2017 fourth-quarter reported diluted EPS decreased 50.7% to $2.60, primarily driven by the 2016 gain on the AB InBev/SABMiller business combination, partially offset by lower reported taxes, higher reported OCI in the smokeable and smokeless products segments and fewer shares outstanding. Altria’s fourth-quarter adjusted diluted EPS, which excludes the special items shown in Table 1, grew 33.8% to $0.91, primarily driven by higher equity earnings from Altria’s beer investment due to reporting AB InBev’s results on a one-quarter lag, higher adjusted OCI in the smokeable and smokeless products segments, a lower adjusted effective tax rate and fewer shares outstanding.