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Form 8-K ALTRIA GROUP, INC. For: May 18

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May 18, 2017 2:56 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ________________________________________________________________________________________________________________
FORM 8-K
________________________________________________________________________________________________________________
 CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 18, 2017
________________________________________________________________________________________________________________
ALTRIA GROUP, INC.
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________________________________________
 
 
 
 
 
Virginia
 
1-08940
 
13-3260245
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)

 
 
6601 West Broad Street, Richmond, Virginia
23230
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (804) 274-2200
________________________________________________________________________________________________________________
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o




Item 5.07.         Submission of Matters to a Vote of Security Holders.
On May 18, 2017, Altria Group, Inc. (the “Company”) held its Annual Meeting of Shareholders (the “Annual Meeting”). There were 1,724,939,679 shares of common stock of the Company represented in person or by proxy at the meeting, constituting 89.11% of outstanding shares on March 27, 2017, the record date for the Annual Meeting. The matters voted upon at the Annual Meeting and the final voting results are set forth below:
Proposal 1:         To Elect Eleven Directors of the Company.
 
Name                                     
 
For
 
Against
 
Abstain
 
Broker Non-Vote
Gerald L. Baliles
 
1,251,985,836
 
41,273,208
 
4,385,345
 
427,295,224
Martin J. Barrington
 
1,267,138,248
 
20,797,879
 
9,708,328
 
427,295,224
John T. Casteen III
 
1,263,032,993
 
30,074,971
 
4,534,631
 
427,295,224
Dinyar S. Devitre
 
1,287,242,006
 
6,056,328
 
4,346,121
 
427,295,224
Thomas F. Farrell II
 
1,139,974,034
 
153,356,102
 
4,314,215
 
427,295,224
Debra J. Kelly-Ennis
 
1,272,052,172
 
21,406,657
 
4,185,522
 
427,295,224
W. Leo Kiely III
 
1,275,149,865
 
18,036,411
 
4,458,075
 
427,295,224
Kathryn B. McQuade
 
1,281,603,534
 
11,956,006
 
4,084,811
 
427,295,224
George Muñoz
 
1,246,931,270
 
44,354,752
 
6,357,091
 
427,295,224
Nabil Y. Sakkab
 
1,273,268,959
 
19,894,594
 
4,480,902
 
427,295,224
Virginia E. Shanks
 
1,283,223,975
 
9,988,985
 
4,431,495
 
427,295,224

All director nominees were duly elected.
Proposal 2: 
Ratification of the Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2017.
 
For
 
Against
 
Abstain
1,690,813,644
 
28,472,840
 
5,653,195
The selection of Independent Registered Public Accounting Firm was ratified.
Proposal 3:         Non-Binding Advisory Vote to Approve the Compensation of the Company’s Named Executive Officers.
 
For
 
Against
 
Abstain
 
Broker Non-Vote
1,196,847,694
 
91,601,776
 
9,194,985
 
427,295,224
The proposal was approved on an advisory basis.

Proposal 4:     Non-Binding Advisory Vote on the Frequency of Future Advisory Votes on the Compensation of the Company’s Named Executive Officers.
1 Year
 
2 Years
 
3 Years
 
Abstain
 
Broker Non-Vote
1,147,674,672
 
6,931,926
 
135,409,453
 
7,601,130
 
427,295,224

The shareholders voted, on an advisory basis, on the frequency of future advisory votes on the compensation of the Company’s named executive officers as set forth in the table above.


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Proposal 5:
Shareholder Proposal - Advertising in Minority/Low Income Neighborhoods.

For
 
Against
 
Abstain
 
Broker Non-Vote
31,445,032
 
1,196,688,771
 
69,510,652
 
427,295,224
The proposal was defeated.

Item 7.01.         Regulation FD Disclosure.
In connection with the Annual Meeting, the Company issued a press release on May 18, 2017, in which the Company, among other things, reaffirmed its adjusted diluted earnings per share guidance for 2017. A copy of the press release is attached as Exhibit 99.1 and is incorporated by reference in this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

Item 9.01.         Financial Statements and Exhibits.
 
(d)
Exhibits
 
 
99.1
Altria Group, Inc. Press Release, dated May 18, 2017 (furnished under Item 7.01)




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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
ALTRIA GROUP, INC.
 
 
 
 
By:  
/s/ W. HILDEBRANDT SURGNER, JR.
 
Name:  
W. Hildebrandt Surgner, Jr.
 
Title:  
Corporate Secretary and
Senior Assistant General Counsel
DATE: May 18, 2017


4



EXHIBIT INDEX
 
 
 
 
Exhibit No.
  
Description
99.1
  
Altria Group, Inc. Press Release, dated May 18, 2017 (furnished under Item 7.01)



5
Exhibit 99.1

altriamosaica01a03.jpg


ALTRIA HOLDS 2017 ANNUAL MEETING OF SHAREHOLDERS;
BOARD OF DIRECTORS DECLARES QUARTERLY DIVIDEND

•
Altria announces Annual Meeting voting results.
•
Altria declares regular quarterly dividend of $0.61 per share.

RICHMOND, Va. -- May 18, 2017 -- Altria Group, Inc. (Altria) (NYSE: MO) held its 2017 Annual Meeting of Shareholders (Annual Meeting) today. Altria’s Chairman, Chief Executive Officer and President, Marty Barrington, summarized Altria’s full-year 2016 and first-quarter 2017 operating and financial results, discussed Altria’s corporate responsibility initiatives and reaffirmed Altria’s guidance for 2017 full-year adjusted diluted earnings per share (EPS). A copy of Mr. Barrington’s prepared remarks and business presentation and a replay of the audio webcast of the Annual Meeting are available on altria.com and via the Altria Investor app.
Voting Results for Altria’s Annual Meeting
At the Annual Meeting, Altria’s shareholders elected to a one-year term each of the 11 nominees for director named in Altria’s proxy statement; ratified the selection of PricewaterhouseCoopers LLP as Altria’s independent registered public accounting firm for the fiscal year ending December 31, 2017; approved, on an advisory basis, the compensation of Altria’s named executive officers; approved, on an advisory basis, that future advisory votes on the compensation of Altria’s named executive officers should be held annually; and defeated one shareholder proposal. Final voting results will be reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission.
2017 Full-Year Guidance
During his remarks, Mr. Barrington reaffirmed Altria’s guidance for 2017 full-year adjusted diluted EPS, which excludes the 2017 special items shown in Schedule 1, to be in a range of $3.26 to $3.32. This range represents a growth rate of 7.5% to 9.5% from an adjusted diluted EPS base of $3.03 in 2016, as shown in
Schedule 1.    
Altria’s full-year adjusted diluted EPS guidance excludes the impact of certain income and expense items that management believes are not part of underlying operations. These items may include, for example, loss on early extinguishment of debt, restructuring charges, gain on Anheuser-Busch InBev SA/NV(AB InBev)/SABMiller plc (SABMiller) business combination, AB InBev/SABMiller special items, certain tax items, charges associated with tobacco and health litigation items, and settlements of, and determinations made in connection with, certain

6601 West Broad Street, Richmond, VA 23230

non-participating manufacturer (NPM) adjustment disputes under the Master Settlement Agreement (such settlements and determinations are referred to collectively as NPM Adjustment Items).
Altria’s 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 its reported diluted EPS because these items, which could be significant, may be infrequent, are difficult to predict and may be highly variable. As a result, Altria does not provide a corresponding U.S. generally accepted accounting principles (GAAP) measure for, or reconciliation to, its adjusted diluted EPS guidance.
The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to Altria’s forecast.
Regular Quarterly Dividend
Following the Annual Meeting, Altria’s Board of Directors declared a regular quarterly dividend of $0.61 per share, payable on July 10, 2017, to shareholders of record as of June 15, 2017. The ex-dividend date is June 13, 2017.
Altria’s Profile
Altria’s wholly-owned subsidiaries include Philip Morris USA Inc., USSTC, John Middleton Co., Sherman Group Holdings, LLC, Nu Mark LLC, Ste. Michelle Wine Estates Ltd. and Philip Morris Capital Corporation. Altria holds an equity investment in AB InBev.
The brand portfolios of Altria’s tobacco operating companies include Marlboro®, Black & Mild®, Copenhagen®, Skoal®, MarkTen® and Green Smoke®. Ste. Michelle produces and markets premium wines sold under various labels, including Chateau Ste. Michelle®, Columbia Crest®, 14 Hands® and Stag’s Leap Wine Cellars™, and it imports and markets Antinori®, Champagne Nicolas Feuillatte™, Torres® and Villa Maria Estate™ products in the United States. Trademarks and service marks related to Altria referenced in this release are the property of Altria or its subsidiaries or are used with permission. More information about Altria is available at altria.com and on the Altria Investor app.
Forward-Looking and Cautionary Statements
This press release contains projections of future results and other forward-looking statements that involve 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 and outcomes to differ materially from those contained in the projections and forward-looking statements included in this press release are described in Altria’s publicly filed reports, including its Annual Report on Form 10-K for the year ended December 31, 2016 and its Quarterly Report on Form 10-Q for the period ended March 31, 2017.
These factors include the following: significant competition; changes in adult consumer preferences and demand for Altria’s operating companies’ products; fluctuations in raw material availability, quality and price; reliance on key facilities and suppliers; reliance on critical information systems, many of which are managed by third-party service providers; fluctuations in levels of customer inventories; the effects of global, national and local economic and market conditions; changes to income tax laws; federal, state and local legislative activity, including

2



actual and potential federal and state excise tax increases; increasing marketing and regulatory restrictions; the effects of price increases related to excise tax increases and concluded tobacco litigation settlements, consumption rates and consumer preferences within price segments; health concerns relating to the use of tobacco products and exposure to environmental tobacco smoke; privately imposed smoking restrictions; and, from time to time, governmental investigations.
Furthermore, the results of Altria’s tobacco businesses are dependent upon their continued ability to promote brand equity successfully; to anticipate and respond to evolving adult consumer preferences; to develop, manufacture, market and distribute products that appeal to adult tobacco consumers (including, where appropriate, through arrangements with, and investments in, third parties); to improve productivity; and to protect or enhance margins through cost savings and price increases.
Altria and its tobacco businesses are also subject to federal, state and local government regulation, including by the U.S. Food and Drug Administration. Altria and its subsidiaries continue to be subject to litigation, including risks associated with adverse jury and judicial determinations, courts reaching conclusions at variance with the companies’ understanding of applicable law, bonding requirements in the limited number of jurisdictions that do not limit the dollar amount of appeal bonds and certain challenges to bond cap statutes.
In addition, the factors related to Altria’s investment in AB InBev include the following: AB InBev’s inability to achieve the contemplated synergies and value creation from its business combination with SABMiller; that Altria’s equity securities in AB InBev are subject to restrictions on transfer until October 10, 2021; that Altria’s reported earnings from and carrying value of its equity investment in AB InBev may be adversely affected by unfavorable foreign currency exchange rates and other factors, including the risks encountered by AB InBev in its business; the risk that the tax treatment of Altria’s transaction consideration from the AB InBev/SABMiller business combination and the accounting treatment of its equity investment are not guaranteed; and the risk that the tax treatment of the dividends Altria expects to receive from AB InBev may not be as favorable as Altria anticipates.
Altria cautions that the foregoing list of important factors is not complete and does not undertake to update any forward-looking statements that it may make except as required by applicable law. All subsequent written and oral forward-looking statements attributable to Altria or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements referenced above.

Source: Altria Group, Inc.
Altria Client Services
 
Altria Client Services
 
Investor Relations
 
Media Relations
 
804-484-8222    
 
804-484-8897
 

3




Schedule 1
ALTRIA GROUP, INC.
and Subsidiaries
Reconciliation of GAAP and non-GAAP Measures
(dollars in millions, except per share data)
(Unaudited)
Reconciliation of Altria’s First Quarter 2017 Adjusted Results
 
 
 
 
 
 
 
Earnings before Income Taxes
Provision for Income Taxes
Net Earnings
Net Earnings Attributable to Altria Group, Inc.
Diluted EPS
For the quarter ended March 31, 2017
 
 
 
 
 
2017 Reported
$
2,091

$
689

$
1,402

$
1,401

$
0.72

NPM Adjustment Items
(1
)
—

(1
)
(1
)
—

Tobacco and health litigation items
1

—

1

1

—

AB InBev special items
73

25

48

48

0.03

Asset impairment, exit, implementation and
    acquisition-related costs
30

11

19

19

0.01

Tax items
—

58

(58
)
(58
)
(0.03
)
2017 Adjusted for Special Items
$
2,194

$
783

$
1,411

$
1,410

$
0.73

Reconciliation of Altria’s Full Year 2016 Adjusted Results
 
 
 
 
 
 
 
Earnings before Income Taxes
Provision for Income Taxes
Net Earnings
Net Earnings Attributable to Altria Group, Inc.
Diluted EPS
For the year ended December 31, 2016
 
 
 
 
 
2016 Reported
$
21,852

$
7,608

$
14,244

$
14,239

$
7.28

NPM Adjustment Items
18

7

11

11

0.01

Tobacco and health litigation items
105

34

71

71

0.04

SABMiller special items
(89
)
(32
)
(57
)
(57
)
(0.03
)
Loss on early extinguishment of debt
823

282

541

541

0.28

Asset impairment, exit, implementation and
acquisition-related costs
206

71

135

135

0.07

Patent litigation settlement
21

8

13

13

0.01

Gain on AB InBev/SABMiller business
combination
(13,865
)
(4,864
)
(9,001
)
(9,001
)
(4.61
)
Tax items
—

30

(30
)
(30
)
(0.02
)
2016 Adjusted for Special Items
$
9,071

$
3,144

$
5,927

$
5,922

$
3.03


Altria reports its financial results in accordance with GAAP. Altria’s management reviews certain financial results, including diluted EPS, on an adjusted basis, which excludes certain income and expense items, including those items noted under “2017 Full-Year Guidance” above. Altria’s management does not view any of these special items to be part of Altria’s underlying results as they may be highly variable, may be infrequent, are difficult to predict and can distort underlying business trends and results. 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

4



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.


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