Altria

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Not to be confused with Altera, Nutria, or Altaria (disambiguation).
Altria Group, Inc.
Public
S&P 500 Component
Traded as NYSE: MO
Industry Tobacco
Founded 1985; 39 years ago (1985)
Founder Philip Morris, Kraft Foods Inc, Nabisco Holdings Corporation
Headquarters Henrico County, Virginia, U.S.
Area served
 Worldwide
Key people
 Martin Barrington
(Chairman) & (CEO)
Products Tobacco and wine
Revenue Increase US$ 24.5 Billion (2014)[1]
Increase US$ 7.06 Billion (2014)[1]
Increase US$ 5.05 Billion (2014)[1]
Total assets
  • Decrease US$ 34.475 billion (2014) [2]
  • Decrease US$ 35.329 billion (2012) [3]
Total equity Increase US$ 3.01 Billion (2014)[4]
Number of employees
 9,000 (2014)
Website Altria.com

Altria Group, Inc. (previously named Philip Morris Companies Inc.) is one of the world's largest tobacco and cigarette corporations. It is an American multinational corporation based in Henrico County, Virginia, United States of America; it is the parent company of Philip Morris USA, John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., Philip Morris Capital Corporation, and Chateau Ste. Michelle Wine Estates. Philip Morris International was spun off in 2008. In addition, Altria Group, Inc. has a 28.7% economic and voting interest in one of the world's largest brewing companies, UK based SABMiller plc, where it has 3 seats on the 11-person board of directors. It is a component of the S&P 500 and was a component of the Dow Jones Industrial Average until February 19, 2008. The company has its headquarters in an unincorporated area within Henrico County, less than five miles west of the city limits of Richmond and less than ten miles from its downtown Richmond buildings.

On January 27, 2003, Philip Morris Companies Inc. changed its name to Altria Group, Inc. On March 30, 2007, a spin-off of Kraft Foods Inc subsidiary (publicly traded since 2001) was concluded through distribution of the remaining stake of shares (88.1%) to Altria shareholders. As a result, Altria no longer holds any interest in Kraft Foods. On March 28, 2008, a similar spin-off of Philip Morris International was completed with 100% of shares being distributed to Altria shareholders.

On January 6, 2009, Altria Group, Inc. completed the acquisition of UST Inc., a smokeless tobacco manufacturer; UST owned Ste Michelle Wine Estates, a wine company.

History

Lua error in package.lua at line 80: module 'strict' not found. Altria emerged from Philip Morris. The onset of "rebranding" of Philip Morris Companies to Altria took place in 2003 (Philip Morris would later split, with PM USA remaining Altria's primary and only consistently held asset). Altria was created because Philip Morris wished to emphasize that its business portfolio had come to consist of more than Philip Morris USA and Philip Morris International; at the time, it owned an 84% stake in Kraft,[5] although that business has since been spun off.[6] The name "Altria" is claimed to come from the Latin word for "high" and was part of a trend of companies rebranding to names that previously did not exist, Accenture (previously Arthur Andersen) and Verizon being notable examples,[7] though linguist Steven Pinker suggests that in fact the name is an "egregious example" of phonesthesia — with the company attempting to "switch its image from bad people who sell addictive carcinogens to a place or state marked by altruism and other lofty values".[8]

The company's branding consultants, the Wirthlin Group, said: “The name change alternative offers the possibility of masking the negatives associated with the tobacco business,” thus enabling the company to improve its image and raise its profile without sacrificing tobacco profits.[9]

Philip Morris executives thought a name change would insulate the larger corporation and its other operating companies from the political pressures on tobacco.[9]

The rebranding took place amidst social, legal and financially troubled circumstances.[vague][10] In 2003 Altria was ranked Fortune number 11, and has steadily declined since. In 2010 Altria Group (MO) ranked at Fortune number 137, whereas its former asset, Philip Morris International, was ranked 94th.[11]

In 2007, Altria began selling all its shares of Philip Morris International to Altria stockholders. The company also began a move to purchase cigar manufacturer John Middleton Co. from Bradford Holdings, Inc., which went into effect in 2008. After Philip Morris International spun off, the foreign Philip Morris companies halted the purchase of tobacco from America, which was a major factor in the closing of a newly renovated plant in North Carolina, an approximately 50% reduction in manufacturing, large-scale layoffs, and induced early retirements.[12]

In 2008, Altria officially moved its headquarters to Richmond, Virginia. With a few exceptions, all blue collar, white collar, and executive employees had long been based at one of several Philip Morris buildings in Richmond and the greater Richmond area. The move of white collar operations to Richmond had taken place after Philip Morris sold its downtown offices in New York City a decade earlier. Aside from the Philip Morris/Altria headquarters, some of their other buildings included the Philip Morris Center for Research and Technology in downtown Richmond, their manufacturing center in South Richmond, and the adjacent operations center which began shutting down in 2007-2008, as a result of the loss of demand from PMI member companies. The layoffs beginning in 2007 affected thousands of Altria, Altria Client Services, Philip Morris USA, and contracted employees in Richmond and North Carolina.

In 2009, Altria finalized its purchase of UST Inc., whose products included smokeless tobacco (made by U.S. Smokeless Tobacco Company) and wine (made by Ste. Michelle Wine Estates).[13] This ended a short era of competition between the new Marlboro smokeless tobacco products such as snus, and those produced by UST Inc.

In 2015 the company was criticized for a number of active and possible lawsuits with countries such as Uruguay, Australia and Ireland over proposed changes to their cigarette packaging and anti-smoking laws.[14]

Holdings

Altria Group, Inc. owns 100 percent of Philip Morris USA, John Middleton, Inc. and Philip Morris Capital Corporation. It also owns 28.7% of SABMiller PLC.

Before the recent restructuring, the net revenue (and operating income) of Altria Group, Inc. came predominantly from its tobacco business, as is shown in the following table. Altria's share of SABMiller's revenue and profits is not included in the table below because its holding are too small to be consolidated in the group accounts.[15]

Activity Net revenue
in 2006
(millions USD)		 Net revenue
in 2006
(%)		 Operating
income
in 2006
(millions USD)		 Operating
income
in 2006
(%)
USA tobacco 18,474 18.2% 4,812 26.5%
International tobacco 48,260 47.6% 8,458 46.5%
North American food 23,118 22.8% 3,753 20.7%
International food 11,238 11.1% 964 5.3%
Financial services 317 0.3% 176 1.0%
Total 101,407 100% 18,163 100%

Brands

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Corporate governance

Board of directors

Members of the board of directors of Altria Group as/of February 2013 were:[16]

Headquarters

Prior to being based in Virginia, Philip Morris had its headquarters in Midtown Manhattan, New York City.[17] In 2003, Philip Morris announced that it would move its headquarters to Virginia. The company said that it planned to keep around 750 employees in its former headquarters. Brendan McCormick, a spokesperson for Philip Morris, said that the company estimated that the move would save the company over $60 million each year.[18] The company now has its head offices in an unincorporated area of Henrico County, Virginia, in Richmond.[19] In addition, the company has a 450,000-square-foot, $350 million Center for Research and Technology located in downtown Richmond at the Virginia BioTechnology Research Park that employs approximately 600 scientists, engineers and support staff.

Political influence

According to the Center for Public Integrity, Altria spent around $101 million on lobbying the United States government between 1998 and 2004, making it the second most active organization in the nation.[20][21]

Altria also funded The Advancement of Sound Science Coalition which lobbied against the scientific consensus on anthropogenic climate change.[22]

Daniel Smith, representing Altria, sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC).[23]

See also

References

  1. ↑ 1.0 1.1 1.2 Altria Group (MO) annual SEC income statement filing via Wikinvest
  2. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  3. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ Altria Group (MO) annual SEC balance sheet filing via Wikinvest
  5. ↑ Philip Morris completes its rebranding to Altria Group - PR Week
  6. ↑ Coca-Cola vs. Altria: Altria
  7. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  8. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ 9.0 9.1 http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1447789/
  10. ↑ US TOBACCO giant Philip Morris changed the name of its parent company to Altria last week but the rebranding failed to hide the weak state of its business.
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  13. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ US Securities and Exchange Commission, Altria Group, Inc. Annual report 2006
  16. ↑ "Board of Directors", Altria webpage; with associated bio pages. Retrieved 2013-02-26.
  17. ↑ "Contact Us." Philip Morris Companies. April 9, 2001. Retrieved on October 19, 2009.
  18. ↑ "Philip Morris to Move Headquarters from New York City to Richmond, Va.." New York Daily News. March 5, 2003. Retrieved on October 19, 2009.
  19. ↑ "Contact Us." Altria. Retrieved on October 19, 2009.
  20. ↑ The Center for Public Integrity: Altria Group, Inc.
  21. ↑ The Center for Public Integrity: Top 100 Companies and Organizations
  22. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  23. ↑ http://www.alec.org/about-alec/private-enterprise-board/

External links

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