Altria Group, Inc. · NYSE:MO
Altria — CAGNY Conference 2014
115 slides from Altria's conference presentation, Feb 19, 2014
Slide 1: 2014 CAGNY Investor Presentation
2014 CAGNY Investor Presentation February 19, 2014
Slide 2: Management Team Participants
Management Team Participants Howard Willard – EVP and Chief Dave Beran – President and Chief Financial Officer, Altria Group, Inc. Operating Officer, Altria Group, Inc. Jim Dillard – Sr. Vice President, Murray Garnick – Sr. Vice President Regulatory Affairs, ALCS and Associate General Counsel, ALCS
Slide 3: Safe Harbor Statement
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 bas
Slide 4: EPS and Dividend Growth
EPS and Dividend Growth Adjusted Diluted EPS* Dividend Per Share +7.9% +8.8% CAGR CAGR $2.38 $1.92 $1.51 $1.16 2007 2013 2007 2013 *For reconciliation of non-GAAP to GAAP measures visit altria.com Note: Annualized rate: 6-year CAGR assumes the post-PMI spin-off dividend of $0.29 per common share was
Slide 5: Six-Year Total Shareholder Return
Six-Year Total Shareholder Return 137% 44% Altria Group S&P 500 Note: Total shareholder return is simple price appreciation plus the reinvestment of the dividend as of the ex-dividend date (12/31/2007 to 12/31/2013). Source: Bloomberg Daily Return
Slide 6: Long-Term Financial Goals
Long-Term Financial Goals Grow adjusted diluted EPS at average annual rate of 7% to 9% Maintain a dividend payout ratio of approximately 80% of adjusted diluted EPS
Slide 7: Altria's Strategies
Altria’s Strategies Maximize income from core premium tobacco businesses over the long term Grow new income streams with innovative products Manage diverse income streams and strong balance sheet to deliver consistent financial performance
Slide 8: Altria Companies' Capabilities
Altria Companies’ Capabilities Deeply understanding adult tobacco consumers Building and sustaining premium brands Creating strong sales and distribution relationships Developing innovative products Managing external challenges facing our businesses
Slide 9: Agenda
Agenda Maximizing income from our core tobacco businesses Approach to innovation Diverse business model and strong balance sheet Regulatory capabilities Delivering shareholder returns
Slide 10: Tobacco Industry Manufacturers' Profit Pool
Tobacco Industry Manufacturers’ Profit Pool $ in Billions ~+5% $16 $14.5 CAGR $11.4 $0 2008 2013 Source: Altria company reports; ALCS S&BD estimates; other public company reports
Slide 11: Share of 2013 U.S. Tobacco Industry Profits by Category
Share of 2013 U.S. Tobacco Industry Profits by Category 80% 10% 6% 4% Cigarettes Smokeless Cigars Other Tobacco Source: Altria company reports; ALCS S&BD estimates; other public company reports
Slide 12: Cigarette Category Decline Rate Estimates
Cigarette Category Decline Rate Estimates Primarily due to FET increase (3.5)% (3.0)% (4.0)% (4.0)% (4.0)% (5.0)% (8.0)% 2007 2008 2009 2010 2011 2012 2013 Although cigarette volumes continue to decline, the rate of decline has held steady at 3 to 4% for many years. Source: ALCS MICR Estimates
Slide 13: Tobacco Categories' Volume – 2010 to 2013 CAGR
Tobacco Categories’ Volume – 2010 to 2013 CAGR ~5% ~3% ~(1)% ~(3.5)% Total Tobacco* Cigarettes Machine-made Smokeless Products Large Cigars * Total tobacco in pounds Source: ALCS MICR estimates based on TTB data through September 2013, cigarettes, small cigars based on 0.0325 oz/stick; ALCS MICR est
Slide 14: Largest Consumer Products Categories
Largest Consumer Products Categories 2013 U.S. Dollar Sales in Major Retail Channels $ in Billions $70 $66 $30 $28 $20 $0 Cigarettes Beer / Cider Carbonated Salty Beverages Snacks Note: Total US MOC is comprised of Food, Drug, Mass Merchandisers, Club, Dollar, DeCA, Convenience and Walmart classes o
Slide 15: Category Growth – 2009 to 2013 CAGR
Category Growth – 2009 to 2013 CAGR U.S. Dollar Sales in Major Retail Channels 7.2% 4.0% 3.2% (0.7)% Smokeless Beer/Cider Carbonated Salty Tobacco Beverages Snacks Note: Total US MOC is comprised of Food, Drug, Mass Merchandisers, Club, Dollar, DeCA, Convenience and Walmart classes of trade with ACV
Slide 16: Manufacturers' Share of the 2013 U.S. Tobacco Profit Pool
Manufacturers’ Share of the 2013 U.S. Tobacco Profit Pool 51% 22% 14% 13% Altria Reynolds American Lorillard Other Note: Altria’s Profit Pool share is calculated by combining the adjusted OCI* for Altria’s Smokeable & Smokeless Products segments divided by Total Profit Pool. *For reconciliation of n
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Slide 18: Marlboro – 2013 Retail Share
Marlboro – 2013 Retail Share 43.7% Next 10 Largest Brands = 42.2% Marlboro Source: IRI/MSAi
Slide 19: Smokeless – 2013 Retail Share
Smokeless – 2013 Retail Share This space is blank because brand images which appeared in the original presentation 50.7% have been removed. Copenhagen & Skoal Source: IRI InfoScan
Slide 20: Machine-Made Large Cigars – 2013 Retail Share
Machine-Made Large Cigars – 2013 Retail Share 29.2% This space is blank because brand images which appeared in the original presentation have been removed. Black Black & Mild & Competitive Brands Mild Source: IRI InfoScan
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Slide 22: Smokeable Products Companies' Strategy
Smokeable Products Companies’ Strategy Maximize income while maintaining modest share momentum on Marlboro and Black & Mild over time.
Slide 23: Cigarette Category Income Drivers
Cigarette Category Income Drivers • Pricing • Cost management This space is blank because • Retail share performance brand images which appeared • Equity-building activities in the original presentation • Product innovation have been removed.
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Slide 25: Marlboro Long-Term Retail Share Growth
Marlboro Long-Term Retail Share Growth 50 43.7% 0 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2013 Source: Maxwell; MSAi Shipments; IRI/Capstone – Total Retail Panel; IRP IRI Group/Capstone Projected Retail Panel; IRI/MSAi
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Slide 27: Marlboro Product Expansions
Marlboro Product Expansions This space is blank because brand images which appeared in the original presentation have been removed.
Slide 28: Marlboro Adult Smoker Engagement – Retail
Marlboro Adult Smoker Engagement – Retail This space is blank because brand images which appeared in the original presentation have been removed.
Slide 29: Marlboro Adult Smoker Engagement – Direct Mail
Marlboro Adult Smoker Engagement – Direct Mail This space is blank because brand images which appeared in the original presentation have been removed.
Slide 30: Marlboro Adult Smoker Engagement – Digital
Marlboro Adult Smoker Engagement – Digital This space is blank because brand images which appeared in the original presentation have been removed.
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Slide 32: Marlboro Black is growing share
Marlboro Black is growing share This space is blank because and building a brand images which appeared strong position, including with 21 in the original presentation to 29 year-old have been removed. smokers.
Slide 33: Marlboro Digital Engagement
Marlboro Digital Engagement Marlboro.com is among the largest CPG websites in This space is blank because the U.S. based on brand images which appeared average number of unique adult in the original presentation visitors age 21+. have been removed. comScore, 2013
Slide 34: Marlboro Adult Smoker Connections
Marlboro Adult Smoker Connections ~+50% This space is blank because brand images which appeared in the original presentation have been removed. 2011 2013 Source: PM USA
Slide 35: Marlboro's Modest Retail Share Momentum
Marlboro’s Modest Retail Share Momentum Average Annual Growth = ~0.2pp 42.9% 43.7% This space is blank because brand images which appeared in the original presentation have been removed. 2008 2013 Note: _____________________________________________________________________________ Source: ___________
Slide 36: Pricing Considerations
Pricing Considerations Economic conditions Price gaps Competitive dynamics PM USA carefully manages its pricing to deliver long-term income growth.
Slide 37: Pricing Considerations – Economic Conditions
Pricing Considerations – Economic Conditions Employment rates Housing starts Consumer confidence PM USA continuously monitors key indicators to understand the conditions of adult smokers.
Slide 38: Pricing Considerations – Price Gap
Pricing Considerations – Price Gap $6.50 Marlboro Net Price $5.86 Price Gap = ~35% $4.27 $4.38 Lowest Effective Price $3.04 $0.00 2009 2010 2011 2012 2013 Note: Marlboro excludes Marlboro 72mm Lowest = Actual Lowest Effective Pack Price (without PM USA Premium) Source: IRI/Capstone Pricing Database;
Slide 39: Pricing Considerations – Competitive Dynamics
Pricing Considerations – Competitive Dynamics Leading Premium Premium Cigarettes Segment Domestic Cigarette Brands 75% 75% 61.2% 63.8% 2009 2013 2009 2013 Source: IRI/MSAi Cigarettes 2013 – Total US Blended Share
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Slide 41: Middleton's Retail Share
Middleton’s Retail Share Average Annual Decline = ~0.6pp 31.7% 29.4% 2009 2013 In a competitive environment, Middleton has focused on income growth, while managing share performance. Note: The IRI InfoScan 2013 service was implemented to read market share in 2011 and beyond. Share in 2009-2010 refle
Slide 42: Smokeable Products Income Growth
Smokeable Products Income Growth Adjusted OCI* $ in Billions $7.5 +4.2% CAGR $6.4 $5.2 $0.0 2008 2013 *For reconciliation of non-GAAP to GAAP measures visit altria.com Source: Altria company reports
Slide 43: Smokeless Products Companies' Strategy
Smokeless Products Companies’ Strategy Increase income by growing volume at or ahead of the category growth rate, while maintaining modest share momentum on Copenhagen and Skoal combined
Slide 44: Smokeless Products Segment Performance
Smokeless Products Segment Performance Smokeless Products Copenhagen & Skoal Shipment Volume Combined Retail Share +5.1% ~+0.9pp/yr CAGR average 788 50.7% 47.3% 646 2009 2013 2009 2013 Note: Reported domestic shipment volume for USSTC and PM USA cans and Note: The IRI InfoScan 2013 service was imple
Slide 45: Copenhagen and Skoal Retail Share
Copenhagen and Skoal Retail Share 60% 50.7% 47.3% 40% 21.4% 24.8% 20% 29.3% 22.5% 0% 2009 2013 Copenhagen Skoal Note: The IRI InfoScan 2013 service was implemented to read market share in 2011 and beyond. Share in 2009-2010 reflects estimates based on share changes derived from 2009-2010 IRI InfoSca
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Slide 47: Copenhagen's Share of Natural Segment
Copenhagen’s Share of Natural Segment 100% 75% This space is blank because 50% brand images which appeared in the original presentation 25% have been removed. 0% Natural Segment Source: IRI Group InfoScan Smokeless Tobacco Database (FY 2012 – Retail Share) Source: IRI InfoScan Retail Share FY 2013
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Slide 49: Copenhagen Wintergreen Retail Share
Copenhagen Wintergreen Retail Share 10% This space is blank because 5% brand images which appeared in the original presentation have been removed. 0% 2009 2011 2013 Note: The IRI InfoScan 2013 service was implemented to read market share in 2011 and beyond. Share in 2009-2010 reflects estimates base
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Slide 51: Skoal Classic and X-TRA
Skoal Classic and X-TRA This space is blank because brand images which appeared in the original presentation have been removed.
Slide 52: Skoal Share Performance and Price Gap
Skoal Share Performance and Price Gap Skoal Retail Share 2013 Price Per Can 30% $6 55% price gap 24.8% 21.4% 20% $4 10% $2 0% $0 2009 2013 Classic Leading Discount Note: The IRI InfoScan 2013 service was implemented to read market share in 2011 and beyond. Share in 2009-2010 reflects estimates based
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Slide 54: "80 Days of Saturdays"
“80 Days of Saturdays” Website Direct Mail This space is blank because brand images which appeared in the original presentation have been removed.
Slide 55: Smokeless Products Adjusted OCI
Smokeless Products Adjusted OCI* $ in Millions $1,200 +12.9% CAGR $1,026 $632 $600 $0 2009 2013 *For reconciliation of non-GAAP to GAAP measures visit altria.com Source: Altria company reports
Slide 56: Altria's Tobacco Businesses
Altria’s Tobacco Businesses
Slide 57: Agenda
Agenda Maximizing income from our core tobacco businesses Approach to innovation Diverse business model and strong balance sheet Regulatory capabilities Delivering shareholder returns
Slide 58: Innovation approach: expertise, acquisitions, third-party agreements
Deep expertise and Altria service companies’ scale Acquire complementary products, technologies and capabilities Third-party agreements
Slide 59: U.S. E-Vapor Consumer Expenditures
U.S. E-Vapor Consumer Expenditures $ in Billions $1.5 +80% CAGR ~$1.0 $0.5 $0.3 $0.0 2011 2012 2013 Source: ALCS MICR estimates
Slide 60: E-Vapor Awareness and Trial
E-Vapor Awareness and Trial Awareness Trial* ~90% 63% 39% 28% November 2013 November May November 2012 2013 2013 Source: ALCS/MICR e-Cigarette Awareness & Usage Study among Adult Smokers 21-54 * Among Adult smokers aware of e-cigarettes
Slide 61: E-Vapor Category Growth
E-Vapor Category Growth Product innovation Regulation Taxation Many adult smokers and vapers are still looking for a product that meets their requirements and desires.
Slide 62: Nu Mark's Goal and Approach
Nu Mark’s Goal and Approach Launched MarkTen e-cigarettes in Indiana and Arizona Announced the agreement to acquire the e-vapor business of Green Smoke Signed agreements with Philip Morris International (PMI) Nu Mark’s goal is to achieve leadership in the U.S. e-vapor category.
Slide 63: MarkTen Expansion
MarkTen Expansion This space is blank because brand images which appeared in the original presentation have been removed. Nu Mark plans to expand MarkTen e-cigarettes nationally beginning in Q2 2014.
Slide 64: Creating a Path to E-Vapor Leadership
Creating a Path to E-Vapor Leadership Product superiority and innovation Premium brand building Distribution and customer partnerships Supply chain capability Regulatory and government affairs capability
Slide 65: MarkTen E-Cigarettes
MarkTen E-Cigarettes Indiana – August 2013 First MarkTen test market Arizona – December 2013 Improved flavor systems for Classic and Menthol USB charger added to single unit pack
Slide 66: MarkTen Distribution in Arizona
MarkTen Distribution in Arizona ~1,900 stores This space is blank because brand images which appeared in the original presentation have been removed. Note: As of January 28, 2014 Source: STARS Cigarette & e-Cigarette report ending 11/23/13; coverage represents YTD volume
Slide 67: MarkTen Test Market
MarkTen Test Market Retail Cartridge Share % 60 48% This space is blank because Arizona brand images which appeared in the original presentation 0 have been removed. Week 0 for MarkTen AZ - 12-15-13 Source: IRI InfoScan TDN Projected Retail Database ending 02/02/2014, (4-week moving average)
Slide 68: Green Smoke
Green Smoke Agreement to acquire the e-vapor business of Green Smoke, Inc. for ~$110 million Manufacturing and marketing high-quality, premium products since 2009 Expands Nu Mark’s product portfolio, including a larger product format and a new brand Expect the transaction to be completed by
Slide 69: Altria Strategic Agreements with PMI
Altria Strategic Agreements with PMI Exclusive license to PMI to commercialize e-vapor products internationally Cooperation on regulatory engagement Contract manufacturing arrangements
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Slide 71: Agreements on PMI Next Generation Products
Agreements on PMI Next Generation Products Exclusive U.S. license to Altria to sell two of PMI’s heated tobacco products Cooperation on regulatory engagement related to heated tobacco products Our agreements with PMI support Altria’s broader strategy to create a robust portfolio of innovative pr
Slide 72: Agenda
Agenda Maximizing income from our core tobacco businesses Approach to innovation Diverse business model and strong balance sheet Regulatory capabilities Delivering shareholder returns
Slide 73: Diverse Business Model Delivers Financial Objectives
Diverse Business Model Delivers Financial Objectives 27% Economic Interest Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.
Slide 74: Smokeable Products Segment Performance
Smokeable Products Segment Performance Net Revenue per 1000* Adjusted OCI * - $ in Billions Adjusted OCI Margins* +5.2% +4.2% +8.4pp CAGR CAGR $6.4 42.2% $116.60 $5.2 $90.46 33.8% 2008 2013 2008 2013 2008 2013 Note: Net of FET *For reconciliation of non-GAAP to GAAP measures visit altria.com Source:
Slide 75: Smokeless Products Segment Performance
Smokeless Products Segment Performance Smokeless Products Copenhagen & Skoal Shipment Volume Combined Retail Share Adjusted OCI* - $ in Millions +5.1% ~+0.9pp/yr +12.9% CAGR average CAGR 788 50.7% $1,026 646 47.3% $632 2009 2013 2009 2013 2009 2013 Note: Reported domestic shipment volume for USSTC a
Slide 76: Cost Management
Cost Management Altria delivered ~$2 billion in productivity savings PM USA has efficiently managed costs
Slide 77: Cost Management
Cost Management Smokeable Products Controllable Costs/1000* FETRA Expense - $ in Millions +0.6% CAGR ~$400 $27.81 $28.69 ~$300 $0 2008 2013 2013 2014 2015 * For reconciliations of non-GAAP to GAAP measures visit www.altria.com Note: FETRA refers to the Fair and Equitable Tobacco Reform Act of 2004 S
Slide 78: Altria's Alcohol Interests
Altria’s Alcohol Interests This space is blank because brand images which appeared in the original presentation have been removed. Note: Third party trademarks are the property of their respective owners and are included for informational purposes only. Note: Third party trademarks are the property
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Slide 80: SABMiller Delivers Strong Income Growth
SABMiller Delivers Strong Income Growth Equity Earnings - $ in Millions Market Value - $ in Billions +16.2% CAGR $991 $19.4 $467 $7.3 2008 2013 December 2008 January 2014 Source: Altria company reports Source: Bloomberg
Slide 81: Ste. Michelle Wine Estates 90+ Ratings
Ste. Michelle Wine Estates 90+ Ratings 221 193 187 159 “Winery of 2010 2011 2012 2013 the Year” for the 19th time Note: Third party trademarks are the property of their respective owners and are included for informational purposes only. Source: Altria company reports
Slide 82: Ste. Michelle Wine Estates
Ste. Michelle Wine Estates Adjusted OCI* - $ in Millions +12.8% CAGR $118 $73 2009 2013 * For reconciliations of non-GAAP to GAAP measures visit www.altria.com Source: Altria company reports
Slide 83: Progress Unwinding PMCC Business
Progress Unwinding PMCC Business Net Finance Receivable - $ in Billions $9.4 $5.7 $2.0 2002 2008 2013 Note: Net Finance Receivables reflects PMCC’s investments in finance leases excluding the allowance for losses. Source: Altria company reports
Slide 84: PMCC Income Contribution
PMCC Income Contribution Year-end Portfolio - # of Assets Adjusted OCI* - $ in Millions Lease Income, Other (Primarily net of expenses Gains from Asset Sales) $289 61 55 $238 49 38 $183 $157 $141 29 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 *For reconciliations of non-GAAP to GAAP measures v
Slide 85: Altria's Strong Balance Sheet
Altria’s Strong Balance Sheet Provides stability and liquidity Supports Altria’s investment grade credit rating Enhances ability to return cash to shareholders
Slide 86: 2012-2013 Capital Markets Activities
2012-2013 Capital Markets Activities Tendered for high-coupon debt Replaced with lower cost debt Improved debt maturity profile Lowered future interest expense
Slide 87: Reduced Weighted Average Coupon Rate
Reduced Weighted Average Coupon Rate (3.2)pp 9.1% 5.9% December 2009 December 2013 Source: ALCS Finance
Slide 88: Altria's Strong Dividend
Altria’s Strong Dividend Annualized Dividend Current Dividend Yield +8.8% CAGR 5.4% $1.92 $1.16 2.7% 2.1% 2007 2013 Altria 10-yr UST S&P 500 Note: Annualized rate: 6-year CAGR assumes the post-PMI spin-off dividend Note: As of February 14, 2014 of $0.29 per common share was the end of 2007 dividend
Slide 89: Share Repurchase Programs
Share Repurchase Programs ~$4.2 billion in shares repurchased since PMI spin-off ~$540 million in shares repurchased through end of 2013 Current $1 billion repurchase program Expect to complete program by end of Q3 2014 Timing of share repurchases depends upon marketplace conditions and ot
Slide 90: Diverse Business Model
Diverse Business Model 27% Economic Interest Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.
Slide 91: Altria's Consistent EPS Growth
Altria’s Consistent EPS Growth Adjusted Diluted EPS* - YOY % Change 9.3% 8.6% 7.9% 7.8% 7.7% 6.1% 2008 2009 2010 2011 2012 2013 * For reconciliation of non-GAAP to GAAP measures visit altria.com Source: Altria company reports
Slide 92: 2014 Guidance
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. * For reconciliation of non-GAAP to GAAP measures visit altria.com Source: Altria company reports
Slide 93: 2014 Guidance
2014 Guidance Core tobacco businesses are positioned to deliver strong income growth Benefit from lower interest expense, a lower effective tax rate and a reduction in shares from the current share repurchase program Plan to continue making investments to build Nu Mark’s e-vapor business Exp
Slide 94: Agenda
Agenda Maximizing income from our core tobacco businesses Approach to innovation Diverse business model and strong balance sheet Regulatory capabilities Delivering shareholder returns
Slide 95: Experience
Experience Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.
Slide 96: Strong Regulatory Capabilities
Strong Regulatory Capabilities Building a constructive and enduring relationship with FDA Compliance Engagement and advocacy
Slide 97: Altria's Engagement with FDA
Altria’s Engagement with FDA Docket submissions Meetings with FDA TPSAC Presentations Public workshops Published scientific papers Presentations at scientific conferences
Slide 98: Altria's Compliance Efforts
Altria’s Compliance Efforts Registering manufacturing facilities Listing of our companies’ tobacco products Submitting ingredient information Inspections of our registered facilities Hosting FDA at our facilities Conducting internal regulatory training
Slide 99: Regulatory Update – Substantial Equivalence
Regulatory Update – Substantial Equivalence FDA has said substantial equivalence is a priority Applications pending for in-market products and products not yet introduced
Slide 100: Regulatory Update – Menthol
Regulatory Update – Menthol Comments submitted to FDA - November 2013 Menthol cigarettes do not affect population harm differently than non- menthol cigarettes FDA is reviewing nearly 200,000 stakeholder comments “The science- and evidence-based information continues to demonstrate that regula
Slide 101: Regulatory Update – Deeming
Regulatory Update – Deeming According to the FDA, deeming regulations likely to be issued soon Being reviewed by OMB Altria met with FDA to discuss regulation of all tobacco products
Slide 102: Support for Deeming Regulation
Support for Deeming Regulation Framework to evaluate tobacco products that are potentially less harmful Clear principles for accurate and scientifically grounded communications We support FDA’s efforts to extend its regulatory authority to all tobacco products.
Slide 103: Deeming Regulation
Deeming Regulation Registration These “general Product listing controls” should help Ingredient listing establish common standards for all U.S. Good manufacturing practice requirements manufacturers and importers of deemed products. Note: _____________________________________________________
Slide 104: Harm Reduction Framework
Harm Reduction Framework Advance public health goals Recognize product differences Foster innovation Grounded in science and evidence
Slide 105: Anticipated FDA Developments in 2014
Anticipated FDA Developments in 2014 Deeming regulation Menthol Substantial equivalence TPSAC appointments Advertising and communications Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.
Slide 106: Altria's Regulatory Capabilities
Altria’s Regulatory Capabilities Building a constructive and enduring relationship with FDA Compliance Engagement and advocacy We’ve built strong capabilities to help our tobacco companies successfully compete under FDA regulation.
Slide 107: Agenda
Agenda Maximizing income from our core tobacco businesses Approach to innovation Diverse business model and strong balance sheet Regulatory capabilities Delivering shareholder returns
Slide 108: Altria's Strategies
Altria’s Strategies Maximize income from core premium tobacco businesses over the long term Grow new income streams with innovative products Manage diverse income streams and strong balance sheet to deliver consistent financial performance
Slide 109: Creating Shareholder Value
Creating Shareholder Value Altria Adjusted Diluted EPS* S&P 500 Operating EPS +7.9% +4.6% CAGR $2.38 CAGR $108.28 $82.54 $1.51 2007 2013 2007 2013E *For reconciliations of non-GAAP to GAAP measures visit www.altria.com Note: S&P 500 Operating EPS includes income from product (goods and services), bu
Slide 110: Dividend Yield
Dividend Yield 5.4% 2.1% Altria S&P 500 Source: Bloomberg
Slide 111: Six-Year Total Shareholder Return
Six-Year Total Shareholder Return 137% 91% 44% Altria Group S&P Food, Beverage S&P 500 and Tobacco Index Note: Total shareholder return is simple price appreciation plus the reinvestment of the dividend as of the ex-dividend date (12/31/2007 to 12/31/2013). Source: Bloomberg Daily Return
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Slide 114: Regulation G Disclosure
Regulation G Disclosure For reconciliations and further explanations of non-GAAP financial measures, visit: altria.com
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