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SEC Filings

8-K
ALTRIA GROUP, INC. filed this Form 8-K on 02/01/2018
Entire Document
 

Altria Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
_________________________


Altria Group, Inc. Senior Notes: The notes of Altria Group, Inc. are senior unsecured obligations and rank equally in right of payment with all of Altria Group, Inc.’s existing and future senior unsecured indebtedness. Upon the occurrence of both (i) a change of control of Altria Group, Inc. and (ii) the notes ceasing to be rated investment grade by each of Moody’s, Standard & Poor’s and Fitch Ratings Ltd. within a specified time period, Altria Group, Inc. will be required to make an offer to purchase the notes at a price equal to 101% of the aggregate principal amount of such notes, plus accrued and unpaid interest to the date of repurchase as and to the extent set forth in the terms of the notes.
The obligations of Altria Group, Inc. under the notes are guaranteed by PM USA as further discussed in Note 19. Condensed Consolidating Financial Information.
Debt Tender Offers: During 2016 and 2015, Altria Group, Inc. completed debt tender offers to purchase for cash certain of its senior unsecured notes in aggregate principal amounts of $0.9 billion and $0.8 billion, respectively.
Details of these debt tender offers and the associated pre-tax losses on early extinguishment of debt recorded by Altria Group, Inc. were as follows:
(in millions)
2016

 
2015

Notes Purchased
 
 
 
9.95% Notes due 2038
$
441

 
$

10.20% Notes due 2039
492

 

9.70% Notes due 2018

 
793

Total
$
933

 
$
793

Pre-tax Loss on Early Extinguishment of Debt
Premiums and fees
$
809

 
$
226

Write-off of unamortized debt discounts and debt issuance costs
14

 
2

Total
$
823

 
$
228

 
Note 10. Capital Stock
At December 31, 2017, Altria Group, Inc. had 12 billion shares of authorized common stock; issued, repurchased and outstanding shares of common stock were as follows:
 
Shares Issued

 
Shares
Repurchased

 
Shares
Outstanding

Balances, December 31, 2014
2,805,961,317

 
(834,486,794
)
 
1,971,474,523

Stock award activity

 
(732,623
)
 
(732,623
)
Repurchases of
common stock

 
(10,682,419
)
 
(10,682,419
)
Balances, December 31, 2015
2,805,961,317

 
(845,901,836
)
 
1,960,059,481

Stock award activity

 
(566,256
)
 
(566,256
)
Repurchases of
common stock

 
(16,221,001
)
 
(16,221,001
)
Balances, December 31, 2016
2,805,961,317

 
(862,689,093
)
 
1,943,272,224

Stock award activity

 
(408,891
)
 
(408,891
)
Repurchases of
common stock

 
(41,604,141
)
 
(41,604,141
)
Balances, December 31, 2017
2,805,961,317

 
(904,702,125
)
 
1,901,259,192

At December 31, 2017, 41,688,666 shares of common stock were reserved for stock-based awards under Altria Group, Inc.’s stock plans, and 10 million shares of serial preferred stock, $1.00 par value, were authorized. No shares of serial preferred stock have been issued.
Dividends: During the third quarter of 2017, Altria Group, Inc.’s Board of Directors (the “Board of Directors”) approved an 8.2% increase in the quarterly dividend rate to $0.66 per share of Altria Group, Inc. common stock versus the previous rate of $0.61 per share. The current annualized dividend rate is $2.64 per share. Future dividend payments remain subject to the discretion of the Board of Directors.
Share Repurchases: In July 2014, the Board of Directors authorized a $1.0 billion share repurchase program (the “July 2014 share repurchase program”). During the third quarter of 2015, Altria Group, Inc. completed the July 2014 share repurchase program, under which Altria Group, Inc. repurchased a total of 20.4 million shares of its common stock at an average price of $48.90 per share.
In July 2015, the Board of Directors authorized a $1.0 billion share repurchase program that it expanded to $3.0 billion in October 2016 and to $4.0 billion in July 2017 (as expanded, the “July 2015 share repurchase program”). During 2017, 2016 and 2015, Altria Group, Inc. repurchased 41.6 million shares, 16.2 million shares, and 0.6 million shares, respectively, of its common stock (at an aggregate cost


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