2015 Barclays Global Consumer Staples Conference Presentation September 9, 2015 For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 1
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 based on current plans, estimates and expectations, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Altria undertakes no obligation to publicly update or revise any forward-looking statement other than in the normal course of its public disclosure obligations. The risks and uncertainties relating to the forward-looking statements in this presentation include those described under “Risk Factors” in Altria’s Annual Report on Form 10-K for the year ended December 31, 2014 and under “Cautionary Factors That May Affect Future Results” in its Quarterly Report on Form 10-Q for the period ended June 30, 2015. Reconciliations of non-GAAP financial measures included in this presentation to the most comparable GAAP financial measures are available on Altria’s website at altria.com. For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 2
Agenda Goals and strategies Track record of consistent financial performance Questions and answers For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 3
Track Record of Value Creation FACT Altria’s 20.2% annualized shareholder return leads all companies named to each FORTUNE 500 list since 1955. Note: Third party trademarks are the property of their respective owners and are included for informational purposes only. Source: Fortune.com, June 9, 2015 For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 4
Altria’s Long -Term Financial Goals • Grow adjusted diluted EPS at an average annual rate of 7% to 9% • Maintain a target dividend payout ratio of approximately 80% of adjusted diluted EPS For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 5
Consistent Adjusted Diluted EPS* Growth +8.0% CAGR $2.57 $1.75 2009 2014 *For reconciliation of non-GAAP to GAAP measures visit altria.com Source: Altria company reports For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 6
Strong Dividend Growth +8.9% $2.50 CAGR $2.08 8.3% 9.1% 7.3% 7.9% 8.6% 2.9% $1.36 $0.00 2009 Feb-10 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 2014 In 2014, we paid shareholders $3.9 billion in dividends. Note: Year-end annualized rate: 5-year CAGR. Source: Altria company reports For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 7
Altria’s Performance Against Long -Term Goals Adjusted Diluted EPS* Performance Dividend per Share** +13.1% +8.7% $2.26 $1.38 $2.08 $1.22 1H 2014 1H 2015 Aug-14 Aug-15 Altria increased its dividend 49 times in the past 46 years. *For reconciliation of non-GAAP to GAAP measures visit altria.com ** Annualized dividend Source: Altria company reports For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 8
Reaffirms 2015 Guidance Altria reaffirms its guidance for 2015 full-year adjusted diluted EPS in the range of $2.76 to $2.81, representing a growth rate of 7.5% to 9.5% from an adjusted diluted EPS base of $2.57* in 2014. *For reconciliation of non-GAAP to GAAP measures visit altria.com Source: Altria company reports For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 9
Changing Industry Dynamics RJ Reynolds and Reynolds American Brown & Williamson Inc. acquires Tobacco merge Lorillard 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Master Settlement Federal Excise Tax Increase Agreement signed and FDA Regulation enacted For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 10
For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 11
Marlboro Long-Term Performance +6.9pp 50 43.8 36.9 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Camel Winston Newport Marlboro Note: IRI/MSAi was implemented to read market share in 2011. Share prior to that reflects estimates based on share changes derived from previous services. Source: MSAi Shipments; IRI/Capstone IRP and TRP; IRI/MSAi For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 12
Total Shareholder Return 1998-2014 1,081% 330% 190% Altria Group S&P 500 S&P Food, Beverage & Tobacco Note: Total shareholder return is simple price appreciation plus the reinvestment of the dividend as of the ex-dividend date. Excludes spin-offs. Source: Bloomberg 12/31/1997-12/31/2014 For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 13
Altria’s Strategies Maximize income from core premium tobacco businesses over the long term Grow new income streams with innovative tobacco products Manage diverse income streams and strong balance sheet to deliver consistent financial performance For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 14
Altria’s Strategies Maximize income from core premium tobacco businesses over the long term Grow new income streams with innovative tobacco products Manage diverse income streams and strong balance sheet to deliver consistent financial performance For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 15
Altria’s Strategies Maximize income from core premium tobacco businesses over the long term Grow new income streams with innovative tobacco products Manage diverse income streams and strong balance sheet to deliver consistent financial performance For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 16
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U. S. Tobacco Manufacturers’ Profits $ in Billions +5.5% CAGR $15.5 $11.8 2009 2014 Source: ALCS estimates; other public company reports For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 18
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Premium Segment Retail Share Performance 75.6% 75.1% 74.8% Q2 2013 Q2 2014 Q2 2015 Source: IRI/MSAi For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 20
Marlboro Retail Share Leadership 44.1% Next 10 Largest Cigarette Brands = 43.0% Marlboro Source: IRI/MSAi, Cigarettes ending 6/30/15 (1H 2015) For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 21
Unmatched Brand Equity Overall Equity Overall Opinion 70 70 0 0 Marlboro Camel Newport Marlboro Camel Newport Source: 2014 TNS Brand Equity Study (Age Group: 21 – 54), February 2015 For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 22
Cigarette Category Decline Rate Estimates (0.5)% (3.0)% (3.5)% (3.5)% (4.0)% (5.0)% 2010 2011 2012 2013 2014 1H 2015 Source: ALCS estimates For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 23
Smokeable Products Strategy For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 24
Smokeable Products Performance Marlboro’ s Retail Share Adjusted OCI* - $ in Billions Adjusted OCI* Margins +14.3% +2.9pp +0.3pp $3.8 47.0% 44.1% 43.8% 44.1% $3.3 1H 2014 1H 2015 1H 2014 1H 2015 1H 2014 1H 2015 *For reconciliation of non GAAP to GAAP measures visit altria.com Source: Altria company reports For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 25
Smokeable Products Segment Price Realization Net Revenues Net of Excise Taxes /1000 Units* +4.9% $127.08 $121.18 1H 2014 1H 2015 *For reconciliation of non-GAAP to GAAP measures visit altria.com Source: Altria company reports For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 26
This space is blank because brand images which appeared in the original presentation have been removed. For Investor Relations Purposes Only For Investor Purposes Only - Barclays Back-to-School Conference, Sept. 3, 2014
Marlboro Long-Term Retail Share Growth 44.1% 1H ‘15 1954 1964 1974 1984 1994 2004 Source: Maxwell; MSAi Shipments; IRI/Capstone – Total Retail Panel; IRP IRI Group/Capstone Projected Retail Panel; IRI/MSAi For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 28
This space is blank because brand images which appeared in the original presentation have been removed. For Investor Relations Purposes Only For Investor Purposes Only - Barclays Back-to-School Conference, Sept. 3, 2014
Active Digital Engagement with Adult Smokers This space is blank because brand images which appeared in the original presentation have been removed. For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 30
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