Altria Group, Inc. (Altria) (NYSE:MO) today announced that it has revised its guidance for 2013 full-year reported diluted earnings per share (EPS) from a range of $2.51 to $2.56 to a range of $2.57 to $2.62. The revised guidance reflects the impact of the September 11, 2013 decision by the arbitration panel presiding over the non-participating manufacturer adjustment (NPM Adjustment) dispute for 2003 that six out of 15 states failed to diligently enforce laws that require escrow payments from the cigarette manufacturers that have not signed the Master Settlement Agreement (Arbitration Panel Decision). As a result of the Arbitration Panel Decision, Philip Morris USA Inc. (PM USA) expects to receive a credit of approximately $145 million, plus interest, against its 2014 Master Settlement Agreement payment obligations and to record an increase of approximately $145 million in its reported pre-tax earnings for the third quarter of 2013. Additionally, the revised guidance reflects the reversal of tax accruals no longer required. Altria reaffirms its guidance for 2013 full-year adjusted diluted EPS, which excludes special items shown in the table below, to be in the range of $2.36 to $2.41, representing a growth rate of 7% to 9% from an adjusted diluted EPS base of $2.21 per share in 2012.
The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to this forecast. Reconciliations of full-year adjusted to reported diluted EPS are show in the table below.
|Altria’s Full-Year Earnings Per Share Guidance Excluding Special Items|
|Reported diluted EPS||$||2.57||to||$||2.62||$||2.06||25||%||to||27||%|
|Loss on early extinguishment of debt||—||0.28|
|NPM Adjustment Items*||(0.21||)||—|
|Asset impairment, exit and implementation costs||—||0.01|
|SABMiller special items||0.01||(0.08||)|
|PMCC leveraged lease benefit||—||(0.03||)|
|Adjusted diluted EPS||$||2.36||to||$||2.41||$||2.21||7||%||to||9||%|
|*Reflects the impact of PM USA’s settlement with certain states of the NPM Adjustment disputes for 2003-2012 ($0.16) and the Arbitration Panel Decision ($0.05).|
|**Excludes the tax impact of the Philip Morris Capital Corporation (PMCC) leveraged lease benefit.|
Altria directly or indirectly owns 100% of each of PM USA, U.S. Smokeless Tobacco Company LLC (USSTC), John Middleton Co. (Middleton), Nu Mark LLC (Nu Mark), Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and PMCC. Altria holds a continuing economic and voting interest in SABMiller plc (SABMiller).