Meeting of Shareholders May 14, 2014 Safe Harbor Statement - - PowerPoint PPT Presentation

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Meeting of Shareholders May 14, 2014 Safe Harbor Statement - - PowerPoint PPT Presentation

Apr 07, 2024 122 likes •740 views

Annual Meeting of Shareholders May 14, 2014 Safe Harbor Statement Statements, including earnings guidance, in this presentation that are not reported financial results or other historical information are forward - looking statements

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Annual Meeting of Shareholders

May 14, 2014

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Safe Harbor Statement

Statements, including earnings guidance, in this presentation that are not reported financial results or other historical information are “forward-looking statements” within the meaning of Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current plans, estimates and expectations, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in

  • r implied by the forward-looking statements. Altria undertakes no obligation to publicly update or

revise any forward-looking statement other than in the normal course of its public disclosure

  • bligations. The risks and uncertainties relating to the forward-looking statements in this

presentation include those described under “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2013 and under “Cautionary Factors That May Affect Future Results” in its Quarterly Report on Form 10-Q for the period ended March 31, 2014. Reconciliations of non-GAAP Financial measures included in this presentation to the most comparable GAAP measures are available on Altria’s website at altria.com.

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Business Update

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Four Core Strategies

Invest in Leadership Align with Society Satisfy Adult Consumers Create Substantial Value for Shareholders

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2013 Adjusted Diluted EPS*

$2.21 $2.38

2012 2013

+7.7%

Source: Altria company reports *For reconciliation of non-GAAP to GAAP measures visit altria.com

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Nu Mark Portfolio

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Reportable Segments Adjusted OCI* Growth

Source: Altria company reports *For reconciliation of non-GAAP to GAAP measures visit altria.com

$0 $1,200

2012 2013 +7.0%

($ in Millions)

Smokeless $959 $1,026 $104 $118

$0 $125

2012 2013 +13.5%

($ in Millions)

Wine

$0 $7,500

2012 2013 +2.4%

($ in Millions)

Smokeable $6,421 $6,271

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Annualized Productivity Savings

Completed 2013

10 Source: Altria company reports

$400 million

Note: Savings resulting from cost management program Q4 2011-Q4 2013

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2013 Dividend Growth

$1.76 $1.92

2012 2013 +9.1%

Note: Annualized rate Source: Altria company reports

We increased the dividend rate by 9.1% --

  • ur 47th increase in the last 44 years.

$3.4 $3.6

2012 2013

Dividend per Share Dividends Paid in Billions

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2013 Total Shareholder Return

28.6% 23.9%

Altria S&P Food, Beverage & Tobacco Index

Source: Bloomberg Daily Return (12.31.2012 – 12.31.2013) Note: Assumes reinvestment of dividends as of the ex-dividend date.

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Managing Litigation

  • Continued to achieve success in managing litigation, though

substantial challenges remain

  • Comprehensive tobacco-related litigation discussion in the

2014 Q1 Form 10-Q

  • Will continue to defend these cases vigorously
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Long-Term Financial Goals

  • Grow adjusted diluted EPS at average annual rate of 7% to 9%
  • Maintain a target dividend payout ratio of approximately 80% of

adjusted diluted EPS

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$2.05 $2.21 $2.38

2011 2012 2013

EPS and Dividend Growth

Adjusted Diluted EPS*

+7.8%

CAGR

Source: Altria company reports *For reconciliation of non-GAAP to GAAP measures visit altria.com

$1.64 $1.76 $1.92

2011 2012 2013 +8.1%

CAGR

Dividend Per Share

Note: Annualized dividend. Three-year CAGR based on 2010 dividend per share of $1.52 Note: Three-year compounded annual growth rate (CAGR) based on 2010 adjusted diluted EPS of $1.90 Source: Altria company reports

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Returning Value to Shareholders

Source: Altria company reports

Share Repurchases Dividends Paid

2011-2013 $10.2 billion

$3.0 billion $3.2 $3.4 $3.6

2011 2012 2013

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Current Program

($ in Billions)

Total Shareholder Return 2011–2013

17 For Investor Relations Purposes only - Barclays Back-To-School Consumer Conference, Sept 3, 2013

83% 57%

Altria S&P 500 Index

Source: Bloomberg Daily Return (12/31/10 – 12/31/13) Note: Assumes reinvestment of dividends as of the ex-dividend date.

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Invest in Leadership

We will invest in excellent people, leading brands and stakeholders important to

  • ur businesses’ success.
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Employee Engagement Survey

  • “I would recommend Altria as a great place to work.”
  • “I see a clear link between my work and Altria’s Mission and goals.”
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Key Opportunities

  • Enhancing our culture to support:
  • innovation
  • diversity and inclusion
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Our Values

Integrity, Trust & Respect Passion to Succeed Driving Creativity into Everything We Do Executing with Quality Sharing with Others

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Enhancing Our Culture

  • Emphasized innovation and

inclusion through our Values

  • Supplemented leadership

development programs

  • Adding training, communication,

and recognition programs

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  • Established an Executive Diversity Council
  • Expanded employee resource groups
  • Launched mentoring

Diversity & Inclusion Progress

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Investing in Communities

  • Positive youth development
  • Environment
  • Arts and culture
  • Civic initiatives
  • Veterans support
  • Emergency relief

Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.

~$1 billion in cash and in-kind contributions

  • ver the last 10 years
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2013 Contributions Highlights

Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.

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Altria Employee Involvement

  • ACECF awarded $3 million to ~140 organizations
  • Altria matched $1.2 million in employees’ charitable donations
  • Employees volunteered 34,000+ hours

Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.

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Align with Society

We will actively participate in resolving societal concerns that are relevant to our businesses.

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Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.

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In 2013, we invested more than $21 million in Success360°.

Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.

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Underage Tobacco Use

15.2% 8.6% 13.0% 6.6% 4.5% 2.6% 2.0% 2.1%

0.0% 17.0% 2002 2012 Tobacco Products Cigarettes Cigars Smokeless Tobacco

National Survey on Drug Use and Health

(% of 12 to 17 year olds reporting past 30-day tobacco use)

Source: http://www.samhsa.gov/data/NSDUH/2k11Results/NSDUHresults2011.pdf Source: Results from the 2012 National Survey on Drug Use and Health: Summary of National Findings, NSDUH Series H-46, HHS Publication No. (SMA) 13-4795 Findings. Rockville, MD: Substance Abuse and Mental Health Services Administration, 2013. (Among youth aged 12 to 17).

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Preventing Youth Access in E-Vapor

  • All tobacco and nicotine-containing products should have a

minimum purchase age of 18

  • Encouraged FDA and states to enact such requirements
  • FDA issued proposed regulations including minimum purchase

age of 18

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Environmental Stewardship

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  • Helped restore 1.3 billion gallons of water in river basins near
  • Ste. Michelle Wine Estates’ vineyards
  • Replacing boilers to reduce greenhouse gas emissions and costs
  • More than 500,000 adult smokers signed up to reduce cigarette litter

Reducing Environmental Impact

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Corporate Responsibility

We welcome the opportunity to work on issues relevant to

  • ur businesses.
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External Recognition

Ranked #30 among “most community-minded companies”

Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.

“Noteworthy Companies for Diversity” 2nd consecutive year 4th year on list

  • f 100 Best

Corporate Citizens

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Satisfy Adult Consumers

We will convert our deep understanding of adult tobacco and wine consumers into better and more creative products that satisfy their preferences.

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2013

Marlboro Long-Term Retail Share Growth

50 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009

43.7%

Source: Maxwell; MSAi Shipments; IRI/Capstone – Total Retail Panel; IRP IRI Group/Capstone Projected Retail Panel; IRI/MSAi

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50.7% 47.9%

2013 2010

Combined Retail Share Growth

Source: IRI InfoScan

+2.8pp

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  • Ste. Michelle Wine Estates 90+ Ratings

159 193 187 221

2010 2011 2012 2013

Source: Altria company reports

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Innovative Tobacco Products

We are focused on:

  • Meeting evolving preferences
  • Developing potentially lower-risk

products

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  • Launched MarkTen in Indiana and Arizona
  • MarkTen rolling national launch begins in June

Nu Mark’s long-term goal is to achieve leadership in the U.S. e-vapor category.

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  • Acquired Green Smoke
  • Adding significant e-vapor experience
  • Complementing Nu Mark’s portfolio
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Strategic Agreements with PMI

  • Licensed PMI exclusively to sell Nu Mark’s

e-vapor products internationally

  • Received an exclusive U.S. license to

commercialize two of PMI’s heated tobacco products

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Harm Reduction Engagement

  • Timely evaluation of potentially less

harmful products

  • Accurate and scientifically-grounded

consumer communication

Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.

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Compliance and Engagement with FDA

We will continue to build a long-term constructive relationship with FDA.

  • Facility inspections
  • Audits of marketing programs
  • Presentations
  • Submissions on proposed

regulations

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Our Mission is to own and develop financially disciplined businesses that are leaders in responsibly providing adult tobacco and wine consumers with superior branded products.

Invest in Leadership Align with Society Satisfy Adult Consumers Create Substantial Value for Shareholders

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Q1 2014 Highlights

$0.54 $0.57

Q1 2013 Q1 2014

  • Smokeable, Smokeless and Wine

segments grew key metrics in-line with their strategies:

  • Adjusted OCI
  • Adjusted OCI margins
  • Retail share

Source: Altria company reports * For reconciliations of non-GAAP to GAAP measures visit www.altria.com.

Adjusted Diluted EPS*

+5.6%

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Rewarding Shareholders

Dividend Yield

Source: Bloomberg

Altria paid $957 million in dividends and purchased $272 million in shares in Q1 2014.

Note: As of April 30, 2014

4.8% 2.6% 2.0%

Altria 10-yr UST S&P 500

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2014 Guidance

  • Altria reaffirms it expects its 2014 full-year adjusted diluted EPS* to

increase by 6% to 9% to a range of $2.52 to $2.59 from its 2013 adjusted diluted EPS base of $2.38 per share.

Source: Altria company reports *For reconciliation of non-GAAP to GAAP measures visit altria.com

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Proposals for Voting

  • Election of Altria’s Board of Directors
  • Ratification of PricewaterhouseCoopers LLP as Altria’s independent

registered public accounting firm

  • Business presentation
  • Advisory vote to approve the compensation of Altria’s named executive
  • fficers
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Executive Compensation

  • Executive compensation programs:
  • Contribute to business results and strong shareholder returns
  • Align with shareholder interests
  • Promote Altria’s Mission and business strategies
  • Reward achievement of corporate and individual performance goals

In 2013, more than 95% of the shares cast approved, on an advisory basis, the compensation of our named executive officers.

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Regulation G Disclosure

  • For reconciliations and

further explanations of non-GAAP financial measures, visit altria.com