Segment Reporting

3 Months Ended

Mar. 31, 2015

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, substantially all of which are manufactured and sold by USSTC; 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 innovative tobacco 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 is defined as operating income before amortization of intangibles and general corporate expenses. 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,
	2015			2014
	(in millions)
Net revenues:
Smokeable products	$	5,221		$	4,958
Smokeless products	430			415
Wine	134			129
All other	19			15
Net revenues	$	5,804		$	5,517
Earnings before income taxes:
Operating companies income (loss):
Smokeable products	$	1,686		$	1,531
Smokeless products	251			239
Wine	27			22
All other	(41		)	(1		)
Amortization of intangibles	(5		)	(5		)
General corporate expenses	(53		)	(52		)
Operating income	1,865			1,734
Interest and other debt expense, net	(209		)	(153		)
Loss on early extinguishment of debt	(228		)	—
Earnings from equity investment in SABMiller	134			225
Earnings before income taxes	$	1,562		$	1,806

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

Tobacco and Health Litigation Items - For the three months endedMarch 31, 2015 and 2014, pre-tax charges related to certain tobacco and health litigation items were recorded in Altria Group, Inc.’s condensed consolidated statements of earnings as follows:

	For the Three Months Ended March 31,
	2015		2014
	(in millions)
Smokeable products segment	$	43	$	3
Interest and other debt expense, net	—		1
Total	$	43	$	4

During the first quarter of 2015, PM USA and certain other cigarette manufacturers reached a tentative agreement to resolve approximately 415 pending federal Engle progeny cases. As a result of the tentative agreement, during the three months ended March 31, 2015, PM USA recorded a pre-tax provision of approximately $43 million in marketing, administration and research costs. For further discussion, see Smoking and Health Litigation - Tentative Agreement to Resolve Federal Engle Progeny Cases in Note 9. Contingencies.