Segment Reporting

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting:

The products of Altria Group, Inc.’s subsidiaries include smokeable products comprised of cigarettes manufactured and sold by PM USA and machine-made large cigars and pipe tobacco manufactured and sold by Middleton; smokeless products manufactured and sold by USSTC and PM USA; and wine produced and/or distributed by Ste. Michelle. The products and services of these subsidiaries constitute Altria Group, Inc.’s reportable segments of smokeable products, smokeless products and wine. The financial services and the alternative products businesses are included in all other.

Altria Group, Inc.’s chief operating decision maker reviews operating companies income to evaluate the performance of and allocate resources to the segments. Operating companies income for the segments excludes general corporate expenses and amortization of intangibles. Interest and other debt expense, net, and provision for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by Altria Group, Inc.’s chief operating decision maker.

Segment data were as follows:

	For the Three Months Ended March 31,
	2014			2013
	(in millions)
Net revenues:
Smokeable products	$	4,958		$	4,968
Smokeless products	415			390
Wine	129			126
All other	15			44
Net revenues	$	5,517		$	5,528
Earnings before income taxes:
Operating companies income:
Smokeable products	$	1,531		$	1,920
Smokeless products	239			222
Wine	22			20
All other	(1		)	50
Amortization of intangibles	(5		)	(5		)
General corporate expenses	(52		)	(55		)
Operating income	1,734			2,152
Interest and other debt expense, net	(153		)	(261		)
Earnings from equity investment in SABMiller	225			256
Earnings before income taxes	$	1,806		$	2,147

The comparability of operating companies income for the reportable segments was affected by the following item:

Non-Participating Manufacturer (“NPM”) Adjustment Settlement -For the three months ended March 31, 2013, PM USA recorded a reduction to cost of sales of $483 million, which increased operating companies income in the smokeable products segment. This reduction to cost of sales resulted from the settlement of disputes with certain states and territories related to the NPM adjustment provision under the 1998 Master Settlement Agreement (the “MSA”) for the years 2003 - 2012 discussed in detail under Health Care Cost Recovery Litigation - Possible Adjustments in MSA Payments for 2003 - 2013 in Note 9. Contingencies.