Altria Group Inc. (NYSE:MO) Q4 2014 Earnings Conference Call - Final Transcript

Jan 30, 2015 • 09:00 am ET


Altria Group Inc. (NYSE:MO) Q4 2014 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Altria Group 2014 Fourth Quarter Earnings Conference Call. Today's call is scheduled to last about one hour including remarks by Altria's management and the question-and-answer session. [Operator Instructions] Representatives of the investment community and media on the call will be able to ask questions following the conclusion of the prepared remarks.

I would now like to turn the call over to Ms. Sarah Knakmuhs, Vice President, Investor Relations for Altria Client Services. Please go ahead ma'am.

Sarah Knakmuhs

Good morning and thank you for joining us. We are here this morning with Marty Barrington, Altria's Chairman and CEO; and Howard Willard, Altria's CFO to talk about Altria's 2014 business results for the fourth quarter and full year.

During our call today, unless otherwise stated, we're comparing results to the same period in 2013. Earlier today, we issued a press release regarding our fourth quarter and full year results. For a detailed review of Altria's business results, please review the earnings release on our website at or via the Altria investor app.

Our remarks contain forward-looking and cautionary statements and projections of future results. Please review the forward-looking and cautionary statement section at the end of today's earnings release for various factors that could cause actual results to differ materially from projections. Future dividend payments and share repurchases remain subject to the discretion of Altria's Board. The timing of share repurchases also depends on marketplace conditions and other factors. Altria reports financial result in accordance with US generally accepted accounting principles.

Today's call will contain various operating results on both a reported and adjusted basis, which excludes items that affect the comparability of reported results. Descriptions of these measures and reconciliations are included in today's earnings release, which is available on our website and via the Altria investor app.

Now I'll turn the call over to Marty.

Marty Barrington

Thanks, Sarah. Good morning, everyone, and thanks for joining our call.

Altria had another terrific year in 2014. For the full year, we again delivered against our two long term financial goals. We grew adjusted diluted EPS by 8% and we paid out approximately 80% of adjusted diluted EPS to shareholders and dividends, which totaled $3.9 billion. We also raised our dividend by 8.3%, marking the 48th increase in the last 45 years. We further rewarded shareholders by repurchasing nearly $1 billion in shares between the program we completed in 2014 and the new $1 billion program we announced in July.

And in 2014, Altria delivered total shareholder return of 34.5%, far outpacing both the S&P 500 and the Food, Beverage and Tobacco Index. We achieved these results by the clarity of our core strategies and our talented employees strong execution against them.

Here are some important segment highlights from the quarter and the full year. The smokable products segment produced outstanding results by consistently executing its strategy of maximizing income while maintaining modest share growth on Marlboro and Black & Mild over time. The segment grew adjusted operating company's