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Altria Reports 2023 Second
RICHMOND, Va.--(BUSINESS WIRE)-- Altria Group, Inc. (NYSE: MO) today reports our 2023 second-quarter and first-half business results and reaffirms our guidance for 2023 full-year adjusted diluted earnings per share (EPS).
“We had a solid first half of the year and we continue on our exciting journey towards Moving Beyond Smoking,” said Billy Gifford, Altria’s Chief Executive Officer. “We completed our acquisition of NJOY and delivered strong business results, growing adjusted diluted EPS by 5% in the first half. And we returned $3.8 billion to shareholders while investing in pursuit of our Vision.”
“We look forward to executing our commercial plan for NJOY in the second half of the year, and we reaffirm our guidance to deliver 2023 full-year adjusted diluted EPS in a range of $4.89 to $5.03. This range represents an adjusted diluted EPS growth rate of 1% to 4% from a $4.84 base in 2022.”
Altria Headline Financials1
($ in millions, except per share data)
Q2 2023
Change vs. Q2 2022
First Half 2023
Change vs. First Half 2022
Net revenues
$6,508
(0.5)%
$12,227
(1.7)%
Revenues net of excise taxes
$5,438
1.2%
$10,201
0.1%
Reported tax rate
24.6%
(19.9) pp
26.1%
(7.3) pp
Adjusted tax rate
24.7%
(0.1) pp
24.8%
(0.1) pp
Reported diluted EPS2
$1.19
100%+
$2.18
38.9%
Adjusted diluted EPS2
$1.31
4.0%
$2.50
5.0%
1 “Adjusted” financial measures presented in this release exclude the impact of special items. See “Basis of Presentation” for more information. 2 “EPS” represents diluted earnings per share.
As previously announced, a conference call with the investment community and news media will be webcast on August 1, 2023 at 9:00 a.m. Eastern Time. Access to the webcast is available at www.altria.com/webcasts.
NJOY Transaction and Final Payment from Philip Morris International Inc. (PMI)
Cash Returns to Shareholders
Macroeconomic Conditions Impacting Our Businesses
Impact on Tobacco Business Operations
Impact on Adult Tobacco Consumers (ATCs)
Environmental, Social and Governance
Our Corporate Responsibility Focus Areas are: (i) reduce the harm of tobacco products, (ii) prevent underage use, (iii) protect the environment, (iv) drive responsibility through our value chain, (v) support our people and communities and (vi) engage and lead responsibly. Our corporate responsibility reports are available on the Responsibility section of www.altria.com.
2023 Full-Year Guidance
We reaffirm our guidance to deliver 2023 full-year adjusted diluted EPS in a range of $4.89 to $5.03, representing a growth rate of 1% to 4% from an adjusted diluted EPS base of $4.84 in 2022. Our 2023 full-year adjusted diluted EPS guidance range includes planned investments in support of our Vision, such as (i) continued smoke-free product research, development and regulatory preparation expenses, (ii) enhancement of our digital consumer engagement system and (iii) marketplace activities in support of our smoke-free products, including planned investments behind the U.S. commercialization of NJOYACE. Our guidance range also includes estimated amortization charges of approximately $50 million related to intangible assets acquired in the NJOY Transaction.
While the 2023 full-year adjusted diluted EPS guidance accounts for a range of scenarios, the external environment remains dynamic. We will continue to monitor conditions related to (i) the economy, including the impact of high inflation, rising interest rates and global supply chain disruptions, (ii) ATC dynamics, including disposable income, purchasing patterns and adoption of smoke-free products, and (iii) regulatory and legislative developments.
We continue to expect our 2023 full-year adjusted effective tax rate to be in a range of 24.5% to 25.5% and our 2023 capital expenditures to be between $175 million and $225 million. As a result of the NJOY Transaction, we revised our estimate for 2023 depreciation and amortization expenses to be approximately $280 million.
Our full-year adjusted diluted EPS guidance range and full-year forecast for our adjusted effective tax rate exclude the impact of certain income and expense items that our management believes are not part of underlying operations. These items may include, for example, loss on early extinguishment of debt, restructuring charges, asset impairment charges, acquisition and disposition-related items, equity investment-related special items (including any changes in fair value of our equity investment recorded at fair value and any changes in the fair value of related warrants and preemptive rights), certain income tax items, charges associated with tobacco and health and certain other litigation items, and resolutions of certain non-participating manufacturer (NPM) adjustment disputes under the MSA (NPM Adjustment Items). See Table 1 below for the income and expense items for the second quarter of 2023.
Our management cannot estimate on a forward-looking basis the impact of certain income and expense items, including those items noted in the preceding paragraph, on our reported diluted EPS or our effective tax rate because these items, which could be significant, may be unusual or infrequent, are difficult to predict and may be highly variable. As a result, we do not provide a corresponding U.S. generally accepted accounting principles (GAAP) measure for, or reconciliation to, our adjusted diluted EPS guidance or our adjusted effective tax rate forecast.
ALTRIA GROUP, INC.
See “Basis of Presentation” below for an explanation of financial measures and reporting segments discussed in this release.
Financial Performance
Second Quarter
First Half
Table 1 - Altria’s Adjusted Results
Second Quarter
Six Months Ended June 30,
2023
2022
Change
2023
2022
Change
Reported diluted EPS
$
1.19
$
0.49
100
%+
$
2.18
$
1.57
38.9
%
NPM Adjustment Items
—
—
—
(0.02
)
Tobacco and health and certain other litigation items
0.12
0.02
0.17
0.02
Loss on disposition and changes in fair value of JUUL equity securities
—
0.64
0.14
0.70
ABI-related special items
—
0.05
(0.01
)
0.02
Cronos-related special items
—
0.06
0.02
0.09
Adjusted diluted EPS
$
1.31
$
1.26
4.0
%
$
2.50
$
2.38
5.0
%
Note: For details of pre-tax, tax and after-tax amounts, see Schedules 7 and 9.
Special Items
The EPS impact of the following special items is shown in Table 1 and Schedules 6, 7, 8 and 9.
NPM Adjustment Items
Tobacco and Health and Certain Other Litigation Items
Loss on Disposition and Changes in Fair Value of JUUL Equity Securities
As previously disclosed, we exchanged our entire minority economic interest in JUUL for a non-exclusive, irrevocable global license to certain of JUUL’s heated tobacco intellectual property (2023 JUUL Transaction). We recorded non-cash, pre-tax losses from investments in equity securities as a result of the 2023 JUUL Transaction and changes in the estimated fair value of our former investment in JUUL in 2022. Amounts consisted of the following:
Second Quarter
Six Months Ended June 30,
($ in millions, except per share data)
2023
2022
2023
2022
(Income) losses from investments in equity securities
$
—
$
1,155
$
250
$
1,255
Losses per share
$
—
$
0.64
$
0.14
$
0.70
We recorded corresponding adjustments to the JUUL tax valuation allowance in 2023 and 2022.
ABI-Related Special Items
The ABI-related special items above include our respective share of the amounts recorded by ABI and additional adjustments related to (i) conversion from international financial reporting standards to GAAP and (ii) adjustments to our investment required under the equity method of accounting.
Cronos-Related Special Items
We recorded net pre-tax expense consisting of the following:
Second Quarter
Six Months Ended June 30,
($ in millions, except per share data)
2023
2022
2023
2022
Loss on Cronos-related financial instruments
$
—
$
4
$
—
$
14
(Income) losses from investments in equity securities 1
4
110
30
161
Total Cronos-related special items - (income) expense
$
4
$
114
$
30
$
175
Losses per share
$
—
$
0.06
$
0.02
$
0.09
1 Amounts include our share of special items recorded by Cronos and additional adjustments, if required under the equity method of accounting, related to our investment in Cronos including the $107 million non-cash pre-tax impairment of our investment in Cronos in the second quarter of 2022.
We recorded corresponding adjustments to the Cronos tax valuation allowance in 2023 and 2022 relating to the special items.
SMOKEABLE PRODUCTS
Revenues and OCI
Second Quarter
First Half
Table 2 - Smokeable Products: Revenues and OCI ($ in millions)
Second Quarter
Six Months Ended June 30,
2023
2022
Change
2023
2022
Change
Net revenues
$
5,820
$
5,873
(0.9
)%
$
10,910
$
11,138
(2.0
)%
Excise taxes
(1,041
)
(1,137
)
(1,969
)
(2,181
)
Revenues net of excise taxes
$
4,779
$
4,736
0.9
%
$
8,941
$
8,957
(0.2
)%
Reported OCI
$
2,846
$
2,762
3.0
%
$
5,349
$
5,321
0.5
%
NPM Adjustment Items
—
—
—
(60
)
Tobacco and health and certain other litigation items
40
38
52
50
Adjusted OCI
$
2,886
$
2,800
3.1
%
$
5,401
$
5,311
1.7
%
Reported OCI margins 1
59.6
%
58.3
%
1.3 pp
59.8
%
59.4
%
0.4 pp
Adjusted OCI margins 1
60.4
%
59.1
%
1.3 pp
60.4
%
59.3
%
1.1 pp
1 Reported and adjusted OCI margins are calculated as reported and adjusted OCI, respectively, divided by revenues net of excise taxes.
Shipment Volume
Second Quarter
First Half
Table 3 - Smokeable Products: Reported Shipment Volume (sticks in millions)
Second Quarter
Six Months Ended June 30,
2023
2022
Change
2023
2022
Change
Cigarettes:
Marlboro
18,506
20,035
(7.6
)%
34,902
38,325
(8.9
)%
Other premium
954
1,017
(6.2
)%
1,779
1,954
(9.0
)%
Discount
1,101
1,457
(24.4
)%
2,149
2,847
(24.5
)%
Total cigarettes
20,561
22,509
(8.7
)%
38,830
43,126
(10.0
)%
Cigars:
Black & Mild
465
432
7.6
%
908
865
5.0
%
Other
1
1
—
%
2
2
—
%
Total cigars
466
433
7.6
%
910
867
5.0
%
Total smokeable products
21,027
22,942
(8.3
)%
39,740
43,993
(9.7
)%
Note: Cigarettes volume includes units sold as well as promotional units but excludes units sold for distribution to Puerto Rico, U.S. Territories to overseas military and by Philip Morris Duty Free Inc., none of which, individually or in the aggregate, is material to our smokeable products segment.
Retail Share and Brand Activity
Second Quarter
First Half
Table 4 - Smokeable Products: Cigarettes Retail Share (percent)
Second Quarter
Six Months Ended June 30,
2023
2022
Percentagepointchange
2023
2022
Percentagepointchange
Cigarettes:
Marlboro
42.1
%
42.7
%
(0.6
)
42.0
%
42.7
%
(0.7
)
Other premium
2.3
2.3
—
2.3
2.3
—
Discount
2.5
3.2
(0.7
)
2.7
3.2
(0.5
)
Total cigarettes
46.9
%
48.2
%
(1.3
)
47.0
%
48.2
%
(1.2
)
Note: Retail share results for cigarettes are based on data from Circana, Inc. and Circana Group, L.P. (“Circana”) as well as, MSAi. Circana is a newly formed company reflecting the recent merger of IRI and NPD Group, Inc. Circana maintains a blended retail service that uses a sample of stores and certain wholesale shipments to project market share and depict share trends. Similar to prior reporting, this service tracks sales in the food, drug, mass merchandisers, convenience, military, dollar store and club trade classes. For other trade classes selling cigarettes, retail share is based on shipments from wholesalers to retailers through the Store Tracking Analytical Reporting System (“STARS”), as provided by MSAi. This service is not designed to capture sales through other channels, including the internet, direct mail and some illicitly tax-advantaged outlets. It is retail services’ standard practice to periodically refresh their retail scan services, which could restate retail share results that were previously released in these services.
ORAL TOBACCO PRODUCTS
Revenues and OCI
Second Quarter
First Half
Table 5 - Oral Tobacco Products: Revenues and OCI ($ in millions)
Second Quarter
Six Months Ended June 30,
2023
2022
Change
2023
2022
Change
Net revenues
$
680
$
665
2.3
%
$
1,308
$
1,278
2.3
%
Excise taxes
(29
)
(32
)
(57
)
(61
)
Revenues net of excise taxes
$
651
$
633
2.8
%
$
1,251
$
1,217
2.8
%
Reported and adjusted OCI
$
443
$
430
3.0
%
$
859
$
837
2.6
%
Reported and adjusted OCI margins 1
68.0
%
67.9
%
0.1 pp
68.7
%
68.8
%
(0.1) pp
1 Reported and adjusted OCI margins are calculated as reported and adjusted OCI, respectively, divided by revenues net of excise taxes.
Shipment Volume
Second Quarter
First Half
Table 6 - Oral Tobacco Products: Reported Shipment Volume (cans and packs in millions)
Second Quarter
Six Months Ended June 30,
2023
2022
Change
2023
2022
Change
Copenhagen
114.9
123.1
(6.7
)%
223.9
238.3
(6.0
)%
Skoal
42.6
46.9
(9.2
)%
82.9
90.8
(8.7
)%
on!
30.0
20.3
47.8
%
55.2
38.6
43.0
%
Other
16.9
17.7
(4.5
)%
33.0
34.4
(4.1
)%
Total oral tobacco products
204.4
208.0
(1.7
)%
395.0
402.1
(1.8
)%
Note: Volume includes cans and packs sold, as well as promotional units, but excludes international volume, which is currently not material to our oral tobacco products segment. New types of oral tobacco products, as well as new packaging configurations of existing oral tobacco products, may or may not be equivalent to existing MST products on a can-for-can basis. To calculate volumes of cans and packs shipped, one pack of snus or one can of oral nicotine pouches, irrespective of the number of pouches in the pack, is assumed to be equivalent to one can of MST.
Retail Share and Brand Activity
Second Quarter
First Half
Table 7 - Oral Tobacco Products: Retail Share (percent)
Second Quarter
Six Months Ended June 30,
2023
2022
Percentagepointchange
2023
2022
Percentagepointchange
Copenhagen
24.3
%
27.3
%
(3.0
)
24.8
%
27.7
%
(2.9
)
Skoal
9.9
11.5
(1.6
)
10.1
11.6
(1.5
)
on!
7.0
4.9
2.1
6.7
4.5
2.2
Other
2.8
3.1
(0.3
)
3.0
3.1
(0.1
)
Total oral tobacco products
44.0
%
46.8
%
(2.8
)
44.6
%
46.9
%
(2.3
)
Note: Our oral tobacco products segment’s retail share results exclude international volume. Retail share results for oral tobacco products are based on data from Circana, a tracking service that uses a sample of stores to project market share and depict share trends. This service tracks sales in the food, drug, mass merchandisers, convenience, military, dollar store and club trade classes on the number of cans and packs sold. Oral tobacco products are defined by Circana as moist smokeless, snus and oral nicotine pouches. New types of oral tobacco products, as well as new packaging configurations of existing oral tobacco products, may or may not be equivalent to existing MST products on a can-for-can basis. For example, one pack of snus or one can of oral nicotine pouches, irrespective of the number of pouches in the pack, is assumed to be equivalent to one can of MST. Because this service represents retail share performance only in key trade channels, it should not be considered a precise measurement of actual retail share. It is retail services’ standard practice to periodically refresh their retail scan services, which could restate retail share results that were previously released in these services.
Altria’s Profile
We have a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. Our Vision is to responsibly lead the transition of adult smokers to a smoke-free future (Vision). We are Moving Beyond Smoking™, leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices - believing it is a substantial opportunity for adult tobacco consumers, our businesses and society.
Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own Philip Morris USA Inc. (PM USA), the most profitable U.S. cigarette manufacturer, and John Middleton Co. (Middleton), a leading U.S. cigar manufacturer. Our smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Company LLC (USSTC), the leading global moist smokeless tobacco (MST) manufacturer, Helix Innovations LLC (Helix), a leading manufacturer of oral nicotine pouches, and NJOY, LLC (NJOY), currently the only e-vapor manufacturer to receive market authorizations from the U.S. Food and Drug Administration (FDA) for a pod-based e-vapor product.
Additionally, we have a majority-owned joint venture, Horizon Innovations LLC (Horizon), for the U.S. marketing and commercialization of heated tobacco stick products and, through a separate agreement, we have the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System® and Marlboro HeatSticks® through April 2024.
Our equity investments include Anheuser-Busch InBev SA/NV (ABI), the world’s largest brewer, and Cronos Group Inc. (Cronos), a leading Canadian cannabinoid company.
The brand portfolios of our tobacco operating companies include Marlboro®, Black & Mild®, Copenhagen®, Skoal®, on!® and NJOY®. Trademarks and service marks related to Altria referenced in this release are the property of Altria or our subsidiaries or are used with permission.
Learn more about Altria at www.altria.com and follow us on Twitter, Facebook and LinkedIn.
Basis of Presentation
We report our financial results in accordance with GAAP. Our management reviews OCI, which is defined as operating income before general corporate expenses and amortization of intangibles, to evaluate the performance of, and allocate resources to, our segments. Our management also reviews certain financial results, including OCI, OCI margins and diluted EPS, on an adjusted basis, which excludes certain income and expense items, including those items noted under “2023 Full-Year Guidance.” Our management does not view any of these special items to be part of our underlying results as they may be highly variable, may be unusual or infrequent, are difficult to predict and can distort underlying business trends and results. Our management also reviews income tax rates on an adjusted basis. Our adjusted effective tax rate may exclude certain income tax items from our reported effective tax rate. Our 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. Our 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 required by, or calculated in accordance 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. We provide reconciliations of historical adjusted financial measures to corresponding GAAP measures in this release.
We use the equity method of accounting for our investment in ABI and Cronos and report our share of ABI’s and Cronos’s results using a one-quarter lag because ABI’s and Cronos’s results are not available in time for us to record them in the concurrent period. The one-quarter reporting lag for ABI and Cronos does not affect our cash flows. We accounted for our former investment in the equity securities of JUUL at fair value.
Our reportable segments are (i) smokeable products, including combustible cigarettes and cigars manufactured and sold by PM USA and Middleton, respectively, and (ii) oral tobacco products, including MST and snus products manufactured and sold by USSTC, and oral nicotine pouches sold by Helix. We have included results for NJOY, Helix rest-of-world, the IQOS Tobacco Heating System® and Philip Morris Capital Corporation (prior to the completion of its wind-down at the end of 2022) in “All Other.” Comparisons are to the corresponding prior-year period unless otherwise stated.
Forward-Looking and Cautionary Statements
This release contains projections of future results and other forward-looking statements that are subject to a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Important factors that may cause actual results to differ materially from those contained in the forward-looking statements included in this release are described in our publicly filed reports, including our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Reports on Form 10-Q. These factors include the following:
You should understand that it is not possible to predict or identify all factors and risks. Consequently, you should not consider the foregoing list complete. We do not undertake to update any forward-looking statement that we may make from time to time except as required by applicable law. All subsequent written and oral forward-looking statements attributable to Altria or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements referenced above.
Schedule 1
ALTRIA GROUP, INC.
and Subsidiaries
Consolidated Statements of Earnings
For the Quarters Ended June 30,
(dollars in millions, except per share data)
(Unaudited)
2023
2022
% Change
Net revenues
$
6,508
$
6,543
(0.5
)%
Cost of sales 1
1,681
1,708
Excise taxes on products 1
1,070
1,169
Gross profit
3,757
3,666
2.5
%
Marketing, administration and research costs
472
489
Operating companies income
3,285
3,177
3.4
%
Amortization of intangibles
27
18
General corporate expenses
353
54
Operating income
2,905
3,105
(6.4
)%
Interest and other debt expense, net
257
280
Net periodic benefit income, excluding service cost
(31
)
(47
)
(Income) losses from investments in equity securities 1
(127
)
1,263
Loss on Cronos-related financial instruments
—
4
Earnings before income taxes
2,806
1,605
74.8
%
Provision for income taxes
689
714
Net earnings
$
2,117
$
891
100
%+
Per share data:
Diluted earnings per share
$
1.19
$
0.49
100
%+
Weighted-average diluted shares outstanding
1,782
1,809
(1.5
)%
1 Cost of sales includes charges for resolution expenses related to state settlement agreements and FDA user fees. Supplemental information concerning those items, excise taxes on products sold and (income) losses from investments in equity securities is shown in Schedule 5.
Schedule 2
ALTRIA GROUP, INC.
and Subsidiaries
Selected Financial Data
For the Quarters Ended June 30,
(dollars in millions)
(Unaudited)
Net Revenues
Smokeable
Products
Oral
Tobacco
Products
All Other
Total
2023
$
5,820
$
680
$
8
$
6,508
2022
5,873
665
5
6,543
% Change
(0.9
)%
2.3
%
60.0
%
(0.5
)%
Reconciliation:
For the quarter ended June 30, 2022
$
5,873
$
665
$
5
$
6,543
Operations
(53
)
15
3
(35
)
For the quarter ended June 30, 2023
$
5,820
$
680
$
8
$
6,508
Operating Companies Income (Loss)
Smokeable
Products
Oral
Tobacco
Products
All Other
Total
2023
$
2,846
$
443
$
(4
)
$
3,285
2022
2,762
430
(15
)
3,177
% Change
3.0
%
3.0
%
73.3
%
3.4
%
Reconciliation:
For the quarter ended June 30, 2022
$
2,762
$
430
$
(15
)
$
3,177
Tobacco and health and certain other litigation items - 2022
38
—
—
38
38
—
—
38
Tobacco and health and certain other litigation items - 2023
(40
)
—
—
(40
)
(40
)
—
—
(40
)
Operations
86
13
11
110
For the quarter ended June 30, 2023
$
2,846
$
443
$
(4
)
$
3,285
Schedule 3
ALTRIA GROUP, INC.
and Subsidiaries
Consolidated Statements of Earnings
For the Six Months Ended June 30,
(dollars in millions, except per share data)
(Unaudited)
2023
2022
% Change
Net revenues
$
12,227
$
12,435
(1.7
)%
Cost of sales 1
3,115
3,154
Excise taxes on products 1
2,026
2,242
Gross profit
7,086
7,039
0.7
%
Marketing, administration and research costs
891
901
Operating companies income
6,195
6,138
0.9
%
Amortization of intangibles
45
35
General corporate expenses
488
114
Operating income
5,662
5,989
(5.5
)%
Interest and other debt expense, net
486
561
Net periodic benefit income, excluding service cost
(62
)
(93
)
(Income) losses from investments in equity securities 1
(47
)
1,229
Loss on Cronos-related financial instruments
—
14
Earnings before income taxes
5,285
4,278
23.5
%
Provision for income taxes
1,381
1,428
Net earnings
$
3,904
$
2,850
37.0
%
Per share data2:
Diluted earnings per share
$
2.18
$
1.57
38.9
%
Weighted-average diluted shares outstanding
1,784
1,813
(1.6
)%
1
Cost of sales includes charges for resolution expenses related to state settlement agreements and FDA user fees. Supplemental information concerning those items, excise taxes on products sold and (income) losses from investments in equity securities is shown in Schedule 5.
2
Diluted earnings per share are computed independently for each period. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.
Schedule 4
ALTRIA GROUP, INC.
and Subsidiaries
Selected Financial Data
For the Six Months Ended June 30,
(dollars in millions)
(Unaudited)
Net Revenues
Smokeable
Products
Oral
Tobacco
Products
All Other
Total
2023
$
10,910
$
1,308
$
9
$
12,227
2022
11,138
1,278
19
12,435
% Change
(2.0
)%
2.3
%
(52.6
)%
(1.7
)%
Reconciliation:
For the six months ended June 30, 2022
$
11,138
$
1,278
$
19
$
12,435
Operations
(228
)
30
(10
)
(208
)
For the six months ended June 30, 2023
$
10,910
$
1,308
$
9
$
12,227
Operating Companies Income (Loss)
Smokeable
Products
Oral
Tobacco
Products
All Other
Total
2023
$
5,349
$
859
$
(13
)
$
6,195
2022
5,321
837
(20
)
6,138
% Change
0.5
%
2.6
%
35.0
%
0.9
%
Reconciliation:
For the six months ended June 30, 2022
$
5,321
$
837
$
(20
)
$
6,138
NPM Adjustment Items - 2022
(60
)
—
—
(60
)
Tobacco and health and certain other litigation items - 2022
50
—
—
50
(10
)
—
—
(10
)
Tobacco and health and certain other litigation items - 2023
(52
)
—
—
(52
)
(52
)
—
—
(52
)
Operations
90
22
7
119
For the six months ended June 30, 2023
$
5,349
$
859
$
(13
)
$
6,195
Schedule 5
ALTRIA GROUP, INC.
and Subsidiaries
Supplemental Financial Data
(dollars in millions)
(Unaudited)
For the Quarters
Ended June 30,
For the Six Months
Ended June 30,
2023
2022
2023
2022
The segment detail of excise taxes on products sold is as follows:
Smokeable products
$
1,041
$
1,137
$
1,969
$
2,181
Oral tobacco products
29
32
57
61
$
1,070
$
1,169
$
2,026
$
2,242
The segment detail of charges for resolution expenses related to state settlement agreements included in cost of sales is as follows:
Smokeable products
$
1,017
$
1,054
$
1,911
$
1,933
Oral tobacco products
—
3
3
5
$
1,017
$
1,057
$
1,914
$
1,938
The segment detail of FDA user fees included in cost of sales is as follows:
Smokeable products
$
67
$
69
$
130
$
137
Oral tobacco products
1
1
2
2
$
68
$
70
$
132
$
139
The detail of (income) losses from investments in equity securities is as follows:
ABI
$
(135
)
$
(12
)
$
(340
)
$
(212
)
Cronos
8
120
43
186
JUUL
—
1,155
250
1,255
$
(127
)
$
1,263
$
(47
)
$
1,229
Schedule 6
ALTRIA GROUP, INC.
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Quarters Ended June 30,
(dollars in millions, except per share data)
(Unaudited)
Net Earnings
Diluted EPS
2023 Net Earnings
$
2,117
$
1.19
2022 Net Earnings
$
891
$
0.49
% Change
100
%+
100
%+
Reconciliation:
2022 Net Earnings
$
891
$
0.49
2022 Acquisition and disposition-related items
2
—
2022 Tobacco and health and certain other litigation items
35
0.02
2022 JUUL changes in fair value
1,155
0.64
2022 ABI-related special items
89
0.05
2022 Cronos-related special items
106
0.06
2022 Income tax items
4
—
Subtotal 2022 special items
1,391
0.77
2023 Acquisition and disposition-related items
(13
)
—
2023 Tobacco and health and certain other litigation items
(217
)
(0.12
)
2023 ABI-related special items
2
—
2023 Cronos-related special items
(4
)
—
2023 Income tax items
3
—
Subtotal 2023 special items
(229
)
(0.12
)
Fewer shares outstanding
—
0.02
Change in tax rate
3
—
Operations
61
0.03
2023 Net Earnings
$
2,117
$
1.19
Schedule 7
ALTRIA GROUP, INC.
and Subsidiaries
Reconciliation of GAAP and non-GAAP Measures
For the Quarters Ended June 30,
(dollars in millions, except per share data)
(Unaudited)
Earnings
before Income
Taxes
Provision
for Income
Taxes
Net
Earnings
Diluted
EPS
2023 Reported
$
2,806
$
689
$
2,117
$
1.19
Acquisition and disposition-related items
18
5
13
—
Tobacco and health and certain other litigation items
290
73
217
0.12
ABI-related special items
(3
)
(1
)
(2
)
—
Cronos-related special items
4
—
4
—
Income tax items
—
3
(3
)
—
2023 Adjusted for Special Items
$
3,115
$
769
$
2,346
$
1.31
2022 Reported
$
1,605
$
714
$
891
$
0.49
Acquisition and disposition-related items
2
—
2
—
Tobacco and health and certain other litigation items
46
11
35
0.02
JUUL changes in fair value
1,155
—
1,155
0.64
ABI-related special items
112
23
89
0.05
Cronos-related special items
114
8
106
0.06
Income tax items
—
(4
)
4
—
2022 Adjusted for Special Items
$
3,034
$
752
$
2,282
$
1.26
2023 Reported Net Earnings
$
2,117
$
1.19
2022 Reported Net Earnings
$
891
$
0.49
% Change
100
%+
100
%+
2023 Net Earnings Adjusted for Special Items
$
2,346
$
1.31
2022 Net Earnings Adjusted for Special Items
$
2,282
$
1.26
% Change
2.8
%
4.0
%
Schedule 8
ALTRIA GROUP, INC.
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Six Months Ended June 30,
(dollars in millions, except per share data)
(Unaudited)
Net Earnings
Diluted EPS1
2023 Net Earnings
$
3,904
$
2.18
2022 Net Earnings
$
2,850
$
1.57
% Change
37.0
%
38.9
%
Reconciliation:
2022 Net Earnings
$
2,850
$
1.57
2022 NPM Adjustment Items
(45
)
(0.02
)
2022 Acquisition and disposition-related items
7
—
2022 Tobacco and health and certain other litigation items
44
0.02
2022 JUUL changes in fair value
1,255
0.70
2022 ABI-related special items
42
0.02
2022 Cronos-related special items
167
0.09
2022 Income tax items
9
—
Subtotal 2022 special items
1,479
0.81
2023 Acquisition and disposition-related items
(1
)
—
2023 Tobacco and health and certain other litigation items
(301
)
(0.17
)
2023 Loss on disposition of JUUL equity securities
(250
)
(0.14
)
2023 ABI-related special items
22
0.01
2023 Cronos-related special items
(30
)
(0.02
)
Subtotal 2023 special items
(560
)
(0.32
)
Fewer shares outstanding
—
0.04
Change in tax rate
7
—
Operations
128
0.08
2023 Net Earnings
$
3,904
$
2.18
1
Diluted earnings per share are computed independently for each period. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.
Schedule 9
ALTRIA GROUP, INC.
and Subsidiaries
Reconciliation of GAAP and non-GAAP Measures
For the Six Months Ended June 30,
(dollars in millions, except per share data)
(Unaudited)
Earnings
before
Income Taxes
Provision
for Income
Taxes
Net
Earnings
Diluted
EPS1
2023 Reported
$
5,285
$
1,381
$
3,904
$
2.18
Acquisition and disposition-related items
1
—
1
—
Tobacco and health and certain other litigation items
401
100
301
0.17
Loss on disposition of JUUL equity securities
250
—
250
0.14
ABI-related special items
(28
)
(6
)
(22
)
(0.01
)
Cronos-related special items
30
—
30
0.02
2023 Adjusted for Special Items
$
5,939
$
1,475
$
4,464
$
2.50
2022 Reported
$
4,278
$
1,428
$
2,850
$
1.57
NPM Adjustment Items
(60
)
(15
)
(45
)
(0.02
)
Acquisition and disposition-related items
9
2
7
—
Tobacco and health and certain other litigation items
58
14
44
0.02
JUUL changes in fair value
1,255
—
1,255
0.70
ABI-related special items
53
11
42
0.02
Cronos-related special items
175
8
167
0.09
Income tax items
—
(9
)
9
—
2022 Adjusted for Special Items
$
5,768
$
1,439
$
4,329
$
2.38
2023 Reported Net Earnings
$
3,904
$
2.18
2022 Reported Net Earnings
$
2,850
$
1.57
% Change
37.0
%
38.9
%
2023 Net Earnings Adjusted for Special Items
$
4,464
$
2.50
2022 Net Earnings Adjusted for Special Items
$
4,329
$
2.38
% Change
3.1
%
5.0
%
1
Diluted earnings per share are computed independently for each period. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.
Schedule 10
ALTRIA GROUP, INC.
and Subsidiaries
Reconciliation of GAAP and non-GAAP Measures
For the Year Ended December 31, 2022
(dollars in millions, except per share data)
(Unaudited)
Earnings
before Income
Taxes
Provision
for Income
Taxes
Net
Earnings
Diluted
EPS
2022 Reported
$
7,389
$
1,625
$
5,764
$
3.19
NPM Adjustment Items
(68
)
(17
)
(51
)
(0.03
)
Acquisition and disposition-related items
11
2
9
—
Tobacco and health and certain other litigation items
131
33
98
0.05
JUUL changes in fair value
1,455
—
1,455
0.81
ABI-related special items
2,544
534
2,010
1.12
Cronos-related special items
186
—
186
0.10
Income tax items
—
729
(729
)
(0.40
)
2022 Adjusted for Special Items
$
11,648
$
2,906
$
8,742
$
4.84
Schedule 11
ALTRIA GROUP, INC.
and Subsidiaries
Condensed Consolidated Balance Sheets
(dollars in millions)
(Unaudited)
June 30, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
874
$
4,030
Receivable from the sale of IQOS System commercialization rights
1,772
1,721
Inventories
1,191
1,180
Other current assets
501
289
Property, plant and equipment, net
1,626
1,608
Goodwill and other intangible assets, net
20,539
17,561
Investments in equity securities
9,643
9,600
Other long-term assets
1,005
965
Total assets
$
37,151
$
36,954
Liabilities and Stockholders’ Equity (Deficit)
Short-term borrowings
$
2,000
$
—
Current portion of long-term debt
1,121
1,556
Accrued settlement charges
1,562
2,925
Deferred gain from the sale of IQOS System commercialization rights (current)
2,700
—
Other current liabilities
4,281
4,135
Long-term debt
24,074
25,124
Deferred income taxes
2,646
2,897
Accrued pension costs
128
133
Accrued postretirement health care costs
1,092
1,083
Deferred gain from the sale of IQOS System commercialization rights (long-term)
—
2,700
Other long-term liabilities
1,324
324
Total liabilities
40,928
40,877
Total stockholders’ equity (deficit)
(3,827
)
(3,973
)
Noncontrolling interest
50
50
Total liabilities and stockholders’ equity (deficit)
$
37,151
$
36,954
Total debt
$
27,195
$
26,680
Schedule 12
ALTRIA GROUP, INC.
and Subsidiaries
Supplemental Financial Data for Special Items
For the Quarters Ended June 30,
(dollars in millions)
(Unaudited)
Marketing,
administration
and research
costs
General
corporate
expenses
Interest and
other debt
(income)
expense, net
(Income) losses
from
investments in
equity securities
Loss on
Cronos-related
financial
instruments
2023 Special Items - (Income) Expense
Acquisition and disposition-related items
$
—
$
41
$
(23
)
$
—
$
—
Tobacco and health and certain other litigation items
40
240
10
—
—
ABI-related special items
—
—
—
(3
)
—
Cronos-related special items
—
—
—
4
—
2022 Special Items - (Income) Expense
Acquisition and disposition-related items
$
—
$
2
$
—
$
—
$
—
Tobacco and health and certain other litigation items
38
7
1
—
—
JUUL changes in fair value
—
—
—
1,155
—
ABI-related special items
—
—
—
112
—
Cronos-related special items
—
—
—
110
4
Note: This schedule is intended to provide supplemental financial data for certain income and expense items that management believes are not part of underlying operations and their presentation in Altria’s consolidated statements of earnings. This schedule is not intended to provide, or reconcile, non-GAAP financial measures.
Schedule 13
ALTRIA GROUP, INC.
and Subsidiaries
Supplemental Financial Data for Special Items
For the Six Months Ended June 30,
(dollars in millions)
(Unaudited)
Cost of
Sales
Marketing,
administration
and research
costs
General
corporate
expenses
Interest and
other debt
(income)
expense, net
(Income) losses
from
investments in
equity securities
Loss on
Cronos-related
financial
instruments
2023 Special Items - (Income) Expense
Acquisition and disposition-related items
$
—
$
—
$
44
$
(43
)
$
—
$
—
Tobacco and health and certain other litigation items
—
52
338
11
—
—
Loss on disposition of JUUL equity securities
—
—
—
—
250
—
ABI-related special items
—
—
—
—
(28
)
—
Cronos-related special items
—
—
—
—
30
—
2022 Special Items - (Income) Expense
NPM Adjustment Items
$
(60
)
$
—
$
—
$
—
$
—
$
—
Acquisition and disposition-related items
—
—
9
—
—
—
Tobacco and health and certain other litigation items
—
50
7
1
—
—
JUUL changes in fair value
—
—
—
—
1,255
—
ABI-related special items
—
—
—
—
53
—
Cronos-related special items
—
—
—
—
161
14
Note: This schedule is intended to provide supplemental financial data for certain income and expense items that management believes are not part of underlying operations and their presentation in our consolidated statements of earnings (losses). This schedule is not intended to provide, or reconcile, non-GAAP financial measures.
Altria Group, Inc.Mac Livingston, Vice President of Investor Relations[email protected]
Altria Client ServicesInvestor Relations804-484-8222
Altria Client ServicesMedia Relations804-484-8897