Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheets

September 30, 2016

(in millions of dollars)

	Altria Group, Inc.		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	2,239	$	1	$	58	$	—		$	2,298
Receivables	—		7		139		—			146
Inventories:
Leaf tobacco	—		510		334		—			844
Other raw materials	—		114		60		—			174
Work in process	—		6		404		—			410
Finished product	—		133		419		—			552
	—		763		1,217		—			1,980
Due from Altria Group, Inc. and subsidiaries	—		3,673		1,453		(5,126		)	—
Deferred income taxes	—		1,277		9		(98		)	1,188
Other current assets	573		238		50		(70		)	791
Total current assets	2,812		5,959		2,926		(5,294		)	6,403
Property, plant and equipment, at cost	—		2,983		1,837		—			4,820
Less accumulated depreciation	—		2,082		769		—			2,851
	—		901		1,068		—			1,969
Goodwill	—		—		5,285		—			5,285
Other intangible assets, net	—		2		12,040		—			12,042
Investment in SABMiller	5,826		—		—		—			5,826
Investment in consolidated subsidiaries	11,805		2,714		—		(14,519		)	—
Finance assets, net	—		—		1,046		—			1,046
Due from Altria Group, Inc. and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	18		537		144		(336		)	363
Total Assets	$	25,251	$	10,113	$	22,509	$	(24,939	)	$	32,934

Condensed Consolidating Balance Sheets (Continued)

September 30, 2016

(in millions of dollars)

	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Accounts payable	$	3		$	86		$	207		$	—		$	296
Accrued liabilities:
Marketing	—			681			116			—			797
Employment costs	80			7			129			—			216
Settlement charges	—			3,422			7			—			3,429
Other	301			517			314			(168		)	964
Dividends payable	1,193			—			—			—			1,193
Due to Altria Group, Inc. and subsidiaries	4,850			266			10			(5,126		)	—
Total current liabilities	6,427			4,979			783			(5,294		)	6,895
Long-term debt	13,878			—			—			—			13,878
Deferred income taxes	1,694			—			4,249			(336		)	5,607
Accrued pension costs	193			—			670			—			863
Accrued postretirement health care costs	—			1,459			837			—			2,296
Due to Altria Group, Inc. and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	115			164			133			—			412
Total liabilities	22,307			6,602			11,462			(10,420		)	29,951
Contingencies
Redeemable noncontrolling interest	—			—			36			—			36
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,864			3,310			11,585			(14,895		)	5,864
Earnings reinvested in the business	27,816			467			1,213			(1,680		)	27,816
Accumulated other comprehensive losses	(3,278		)	(266		)	(1,799		)	2,065			(3,278		)
Cost of repurchased stock	(28,393		)	—			—			—			(28,393		)
Total stockholders’ equity attributable to Altria Group, Inc.	2,944			3,511			11,008			(14,519		)	2,944
Noncontrolling interests	—			—			3			—			3
Total stockholders’ equity	2,944			3,511			11,011			(14,519		)	2,947
Total Liabilities and Stockholders’ Equity	$	25,251		$	10,113		$	22,509		$	(24,939	)	$	32,934

Condensed Consolidating Balance Sheets

December 31, 2015

(in millions of dollars)

	Altria Group, Inc.		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	2,313	$	—	$	56	$	—		$	2,369
Receivables	—		7		117		—			124
Inventories:
Leaf tobacco	—		562		395		—			957
Other raw materials	—		123		58		—			181
Work in process	—		5		439		—			444
Finished product	—		121		328		—			449
	—		811		1,220		—			2,031
Due from Altria Group, Inc. and subsidiaries	—		3,821		1,807		(5,628		)	—
Deferred income taxes	—		1,268		7		(100		)	1,175
Other current assets	284		65		112		(74		)	387
Total current assets	2,597		5,972		3,319		(5,802		)	6,086
Property, plant and equipment, at cost	—		3,102		1,775		—			4,877
Less accumulated depreciation	—		2,157		738		—			2,895
	—		945		1,037		—			1,982
Goodwill	—		—		5,285		—			5,285
Other intangible assets, net	—		2		12,026		—			12,028
Investment in SABMiller	5,483		—		—		—			5,483
Investment in consolidated subsidiaries	11,648		2,715		—		(14,363		)	—
Finance assets, net	—		—		1,239		—			1,239
Due from Altria Group, Inc. and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	20		536		131		(327		)	360
Total Assets	$	24,538	$	10,170	$	23,037	$	(25,282	)	$	32,463

Condensed Consolidating Balance Sheets (Continued)

December 31, 2015

(in millions of dollars)

	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Current portion of long-term debt	$	—		$	—		$	4		$	—		$	4
Accounts payable	3			104			293			—			400
Accrued liabilities:
Marketing	—			586			109			—			695
Employment costs	18			11			169			—			198
Settlement charges	—			3,585			5			—			3,590
Other	354			616			285			(174		)	1,081
Dividends payable	1,110			—			—			—			1,110
Due to Altria Group, Inc. and subsidiaries	5,427			191			10			(5,628		)	—
Total current liabilities	6,912			5,093			875			(5,802		)	7,078
Long-term debt	12,831			—			12			—			12,843
Deferred income taxes	1,547			—			4,443			(327		)	5,663
Accrued pension costs	215			—			1,062			—			1,277
Accrued postretirement health care costs	—			1,460			785			—			2,245
Due to Altria Group, Inc. and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	153			126			168			—			447
Total liabilities	21,658			6,679			12,135			(10,919		)	29,553
Contingencies
Redeemable noncontrolling interest	—			—			37			—			37
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,813			3,310			11,456			(14,766		)	5,813
Earnings reinvested in the business	27,257			436			1,099			(1,535		)	27,257
Accumulated other comprehensive losses	(3,280		)	(255		)	(1,692		)	1,947			(3,280		)
Cost of repurchased stock	(27,845		)	—			—			—			(27,845		)
Total stockholders’ equity attributable to Altria Group, Inc.	2,880			3,491			10,872			(14,363		)	2,880
Noncontrolling interests	—			—			(7		)	—			(7		)
Total stockholders’ equity	2,880			3,491			10,865			(14,363		)	2,873
Total Liabilities and Stockholders’ Equity	$	24,538		$	10,170		$	23,037		$	(25,282	)	$	32,463

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Nine Months Ended September 30, 2016

(in millions of dollars)

	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	16,874		$	2,646		$	(28	)	$	19,492
Cost of sales	—			5,084			785			(28		)	5,841
Excise taxes on products	—			4,723			165			—			4,888
Gross profit	—			7,067			1,696			—			8,763
Marketing, administration and research costs	113			1,435			323			—			1,871
Asset impairment and exit costs	5			96			22			—			123
Operating (expense) income	(118		)	5,536			1,351			—			6,769
Interest and other debt expense, net	393			13			165			—			571
Loss on early extinguishment of debt	823			—			—			—			823
Earnings from equity investment in SABMiller	(564		)	—			—			—			(564		)
Gain on derivative financial instruments	(205		)	—			—			—			(205		)
(Loss) earnings before income taxes and equity earnings of subsidiaries	(565		)	5,523			1,186			—			6,144
(Benefit) provision for income taxes	(269		)	2,023			424			—			2,178
Equity earnings of subsidiaries	4,259			217			—			(4,476		)	—
Net earnings	3,963			3,717			762			(4,476		)	3,966
Net earnings attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Net earnings attributable to Altria Group, Inc.	$	3,963		$	3,717		$	759		$	(4,476	)	$	3,963
Net earnings	$	3,963		$	3,717		$	762		$	(4,476	)	$	3,966
Other comprehensive earnings (losses), net of deferred income taxes	2			(11		)	(107		)	118			2
Comprehensive earnings	3,965			3,706			655			(4,358		)	3,968
Comprehensive earnings attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive earnings attributable to Altria Group, Inc.	$	3,965		$	3,706		$	652		$	(4,358	)	$	3,965

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Nine Months Ended September 30, 2015

(in millions of dollars)

	Altria Group, Inc.			PM USA		Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	16,743	$	2,405		$	(32	)	$	19,116
Cost of sales	—			4,983		782			(32		)	5,733
Excise taxes on products	—			4,834		157			—			4,991
Gross profit	—			6,926		1,466			—			8,392
Marketing, administration and research costs	135			1,511		305			—			1,951
Reduction of PMI tax-related receivable	41			—		—			—			41
Asset impairment and exit costs	—			—		4			—			4
Operating (expense) income	(176		)	5,415		1,157			—			6,396
Interest and other debt expense, net	430			11		168			—			609
Loss on early extinguishment of debt	228			—		—			—			228
Earnings from equity investment in SABMiller	(546		)	—		—			—			(546		)
(Loss) earnings before income taxes and equity earnings of subsidiaries	(288		)	5,404		989			—			6,105
(Benefit) provision for income taxes	(200		)	1,959		351			—			2,110
Equity earnings of subsidiaries	4,082			197		—			(4,279		)	—
Net earnings	3,994			3,642		638			(4,279		)	3,995
Net earnings attributable to noncontrolling interests	—			—		(1		)	—			(1		)
Net earnings attributable to Altria Group, Inc.	$	3,994		$	3,642	$	637		$	(4,279	)	$	3,994
Net earnings	$	3,994		$	3,642	$	638		$	(4,279	)	$	3,995
Other comprehensive (losses) earnings, net of deferred income taxes	(475		)	11		102			(113		)	(475		)
Comprehensive earnings	3,519			3,653		740			(4,392		)	3,520
Comprehensive earnings attributable to noncontrolling interests	—			—		(1		)	—			(1		)
Comprehensive earnings attributable to Altria Group, Inc.	$	3,519		$	3,653	$	739		$	(4,392	)	$	3,519

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended September 30, 2016

(in millions of dollars)

	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,964		$	950		$	(9	)	$	6,905
Cost of sales	—			1,767			285			(9		)	2,043
Excise taxes on products	—			1,654			58			—			1,712
Gross profit	—			2,543			607			—			3,150
Marketing, administration and research costs	40			607			119			—			766
Asset impairment and exit costs	—			1			1			—			2
Operating (expense) income	(40		)	1,935			487			—			2,382
Interest and other debt expense (income), net	129			(4		)	54			—			179
Loss on early extinguishment of debt	823			—			—			—			823
Earnings from equity investment in SABMiller	(299		)	—			—			—			(299		)
Gain on derivative financial instruments	(48		)	—			—			—			(48		)
(Loss) earnings before income taxes and equity earnings of subsidiaries	(645		)	1,939			433			—			1,727
(Benefit) provision for income taxes	(232		)	707			158			—			633
Equity earnings of subsidiaries	1,506			77			—			(1,583		)	—
Net earnings	1,093			1,309			275			(1,583		)	1,094
Net earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings attributable to Altria Group, Inc.	$	1,093		$	1,309		$	274		$	(1,583	)	$	1,093
Net earnings	$	1,093		$	1,309		$	275		$	(1,583	)	$	1,094
Other comprehensive earnings, net of deferred income taxes	62			4			22			(26		)	62
Comprehensive earnings	1,155			1,313			297			(1,609		)	1,156
Comprehensive earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings attributable to Altria Group, Inc.	$	1,155		$	1,313		$	296		$	(1,609	)	$	1,155

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended September 30, 2015

(in millions of dollars)

	Altria Group, Inc.			PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,865	$	845	$	(11	)	$	6,699
Cost of sales	—			1,671		272		(11		)	1,932
Excise taxes on products	—			1,670		51		—			1,721
Gross profit	—			2,524		522		—			3,046
Marketing, administration and research costs	46			552		100		—			698
Reduction of PMI tax-related receivable	41			—		—		—			41
Operating (expense) income	(87		)	1,972		422		—			2,307
Interest and other debt expense, net	138			11		56		—			205
Earnings from equity investment in SABMiller	(187		)	—		—		—			(187		)
(Loss) earnings before income taxes and equity earnings of subsidiaries	(38		)	1,961		366		—			2,289
(Benefit) provision for income taxes	(55		)	685		131		—			761
Equity earnings of subsidiaries	1,511			71		—		(1,582		)	—
Net earnings	1,528			1,347		235		(1,582		)	1,528
Net earnings attributable to noncontrolling interests	—			—		—		—			—
Net earnings attributable to Altria Group, Inc.	$	1,528		$	1,347	$	235	$	(1,582	)	$	1,528
Net earnings	$	1,528		$	1,347	$	235	$	(1,582	)	$	1,528
Other comprehensive (losses) earnings, net of deferred income taxes	(279		)	4		32		(36		)	(279		)
Comprehensive earnings	1,249			1,351		267		(1,618		)	1,249
Comprehensive earnings attributable to noncontrolling interests	—			—		—		—			—
Comprehensive earnings attributable to Altria Group, Inc.	$	1,249		$	1,351	$	267	$	(1,618	)	$	1,249

Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2016

(in millions of dollars)

	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	4,241		$	3,582		$	8		$	(4,331	)	$	3,500
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(23		)	(105		)	—			(128		)
Proceeds from finance assets	—			—			207			—			207
Other	(3		)	—			(41		)	—			(44		)
Net cash (used in) provided by investing activities	(3		)	(23		)	61			—			35
Cash Provided by (Used in) Financing Activities
Long-term debt issued	1,976			—			—			—			1,976
Long-term debt repaid	(933		)	—			—			—			(933		)
Repurchases of common stock	(512		)	—			—			—			(512		)
Dividends paid on common stock	(3,321		)	—			—			—			(3,321		)
Changes in amounts due to/from Altria Group, Inc. and subsidiaries	(715		)	128			587			—			—
Premiums and fees related to early extinguishment of debt	(809		)	—			—			—			(809		)
Cash dividends paid to parent	—			(3,686		)	(645		)	4,331			—
Other	2			—			(9		)	—			(7		)
Net cash used in financing activities	(4,312		)	(3,558		)	(67		)	4,331			(3,606		)
Cash and cash equivalents:
(Decrease) increase	(74		)	1			2			—			(71		)
Balance at beginning of period	2,313			—			56			—			2,369
Balance at end of period	$	2,239		$	1		$	58		$	—		$	2,298

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2015

(in millions of dollars)

	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	3,557		$	3,767		$	655		$	(3,889	)	$	4,090
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(37		)	(125		)	—			(162		)
Proceeds from finance assets	—			—			255			—			255
Other	—			10			(8		)	—			2
Net cash (used in) provided by investing activities	—			(27		)	122			—			95
Cash Provided by (Used in) Financing Activities
Long-term debt repaid	(1,793		)	—			—			—			(1,793		)
Repurchases of common stock	(518		)	—			—			—			(518		)
Dividends paid on common stock	(3,071		)	—			—			—			(3,071		)
Changes in amounts due to/from Altria Group, Inc. and subsidiaries	611			(492		)	(119		)	—			—
Premiums and fees related to early extinguishment of debt	(226		)	—			—			—			(226		)
Cash dividends paid to parent	—			(3,249		)	(640		)	3,889			—
Other	17			—			(8		)	—			9
Net cash used in financing activities	(4,980		)	(3,741		)	(767		)	3,889			(5,599		)
Cash and cash equivalents:
(Decrease) increase	(1,423		)	(1		)	10			—			(1,414		)
Balance at beginning of period	3,281			3			37			—			3,321
Balance at end of period	$	1,858		$	2		$	47		$	—		$	1,907