Altria Group, Inc. · NYSE:MO
Altria — Merger or Acquisition (September 2008)
21 slides from Altria's merger presentation, Sep 8, 2008
Slide 1: Altria Group, Inc. and UST Inc. Announce Agreement for Altria to Acquire UST Inc.
Altria Group, Inc. and UST Inc. Announce Agreement for Altria to Acquire UST Inc. September 8, 2008 Exhibit 99.2
Slide 2: Safe Harbor
Page 2 of 21 Safe Harbor Statements in this presentation that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current plans, es
Slide 3: Other Information
Page 3 of 21 Other Information In connection with the proposed acquisition, UST intends to file relevant materials with the SEC, including a proxy statement on Schedule 14A. INVESTORS AND SHAREHOLDERS ARE URGED TO READ UST’S PROXY STATEMENT AND ALL RELEVANT DOCUMENTS FILED WITH THE SEC (WHEN THEY BE
Slide 4: Other Information
Page 4 of 21 Other Information Altria and UST and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from UST’s shareholders in connection with the merger. Information about Altria’s directors and executive officers is set forth in Altri
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Slide 6: Altria & UST: Transaction Overview
Page 6 of 21 Altria & UST: Transaction Overview Altria agrees to acquire UST for $69.50 per share in cash 28.9% premium to three-month average UST share price $11.7 billion enterprise value for UST Includes assumption of $1.3 billion of debt EV / EBITDA multiple of 12.1x Subject to UST shareholder a
Slide 7: Altria & UST: Compelling Strategic Rationale
Page 7 of 21 Altria & UST: Compelling Strategic Rationale Expected to: Create total tobacco platform with premier tobacco brands including Marlboro , Copenhagen , Skoal and Black & Mild Generate annual synergies of approximately $250 million by 2011 Be accretive to Altria’s adjusted diluted earnings
Slide 8: Altria's Acquisition Criteria
Page 8 of 21 Altria’s Acquisition Criteria Fits with Altria’s mission of owning and developing businesses that responsibly provide superior branded products to adult tobacco consumers Enhances Altria’s ability to increase revenues and earnings growth rates over the long-term Exceeds Altria’s financi
Slide 9: Tobacco Category Dynamics
Page 9 of 21 Tobacco Category Dynamics MST Category Growth (Can Shipments - Yearly ) Tobacco Companies’ Profit Pools (2007 Estimates – in Billions) Other Mfrs Source: NSDUH 2006 (Adult users), Maxwell Reports (April 2007), ACNielsen, Swedish Match 2007 Annual Report, Altria internal estimates and *U
Slide 10: US Smokeless Tobacco's Operating Profile
Page 10 of 21 US Smokeless Tobacco’s Operating Profile Over 70% of category’s pre-tax profit pool (1) 56% adjusted operating margins (2) 58% share of the MST category (3) Copenhagen and Skoal have a combined category share of almost 50% (4) Source: (1) UST internal estimates for 2007; (2) UST Q4 200
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Slide 13: USSTC's Brands Lead the Smokeless Category
Page 13 of 21 USSTC’s Brands Lead the Smokeless Category Share of MST Category USSTC’s Brands • Copenhagen • Skoal • Red Seal • Husky Source: UST Q2 Earnings Press Release July 24, 2008
Slide 14: Altria's and UST's Common Philosophies
Page 14 of 21 Altria’s and UST’s Common Philosophies Responsibly marketing high quality premium-branded products Investing in brand-building equity programs Developing innovative new products Reducing costs through disciplined cost management Addressing societal concerns relevant to their respective
Slide 15: Expected Acquisition Benefits to UST
Page 15 of 21 Expected Acquisition Benefits to UST Combines experience and knowledge in managing highly profitable premium brands Provides access to more comprehensive infrastructure and resources of Altria’s companies Enhances efficiency and profitability
Slide 16: Expected Acquisition Benefits to Altria
Page 16 of 21 Expected Acquisition Benefits to Altria Accretive to Altria’s adjusted diluted earnings per share within twelve months of closing Generates an attractive double-digit economic return Grows and diversifies Altria’s revenues and operating income Leverages Altria’s strong balance sheet
Slide 17: Altria's Anticipated Cash Return to Shareholders
Page 17 of 21 Altria’s Anticipated Cash Return to Shareholders Modified three-year (2008-2010) $4.0 billion share repurchase program Spent $1.2 billion purchasing shares in 2008 Expect to resume purchasing shares in 2009 Altria anticipates a 75% dividend payout ratio post-transaction Current annuali
Slide 18: Altria & UST: Planning and Approvals
Page 18 of 21 Altria & UST: Planning and Approvals Transition planning by companies to occur over the coming months Transaction subject to UST shareholder and customary regulatory approvals which will be pursued promptly
Slide 19: Altria & UST: A Compelling Transaction
Page 19 of 21 Altria & UST: A Compelling Transaction Demonstrates Altria’s commitment to deliver superior shareholder return over the long-term Advances Altria’s mission to own and develop businesses that are leaders in responsibly providing adult tobacco consumers with superior branded products
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Slide 21: Regulation G Disclosure Reconciliation – Non-GAAP Financial Measures
Page 21 of 21 Regulation G Disclosure Reconciliation – Non-GAAP Financial Measures Source: UST Q4 2007 Press Release, reconciliation between GAAP and non-GAAP financial measures. ($ - Millions) 2007 Smokeless Tobacco GAAP Operating Profit 715.7 $ Other Items: Antitrust litigation 137.1 Restructuring
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