Virginia | 1-08940 | 13-3260245 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
6601 West Broad Street, Richmond, Virginia | 23230 |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company | o |
ALTRIA GROUP, INC. | ||
By: | /s/ W. HILDEBRANDT SURGNER, JR. | |
Name: | W. Hildebrandt Surgner, Jr. | |
Title: | Vice President, Corporate Secretary and | |
Associate General Counsel |
Altria Headline Financials1 |
($ in millions, except per share data) | Q4 2018 | Change vs. Q4 2017 | Full Year 2018 | Change vs. Full Year 2017 | |
Net revenues | $6,114 | 0.2% | $25,364 | (0.8)% | |
Revenues net of excise taxes | $4,786 | 1.5% | $19,627 | 0.7% | |
Reported tax rate | 26.8% | 154.4 pp | 25.4% | 29.5 pp | |
Adjusted tax rate | 23.1% | (3.9) pp | 23.1% | (10.3) pp | |
Reported diluted EPS | $0.66 | (74.6)% | $3.68 | (30.7)% | |
Adjusted diluted EPS | $0.95 | 4.4% | $3.99 | 17.7% |
Cash Returns to Shareholders |
• | Altria’s current annualized dividend rate is $3.20 per share, representing an annualized dividend yield of 7.2% as of January 25, 2019. |
• | Altria paid approximately $5.4 billion in dividends for the full year. |
• | Altria expects to maintain a dividend payout ratio target of approximately 80% of adjusted diluted EPS. Future dividend payments remain subject to the discretion of Altria’s Board of Directors (Board). |
• | Altria repurchased 27.9 million shares for the full year at an average price of $60.00 per share, for a cost of approximately $1.67 billion. |
• | As of December 31, 2018, Altria had approximately $345 million remaining in the current $2 billion share repurchase program, which Altria expects to complete by the end of the second quarter of 2019. The timing of share repurchases depends upon marketplace conditions and other factors, and this program remains subject to the discretion of the Board. |
Transactions |
• | Altria entered into an agreement to acquire newly issued shares in Cronos Group Inc. (Cronos Group), a leading global cannabinoid company, headquartered in Toronto, Canada. These shares represent a 45% equity stake for an investment of approximately $1.8 billion (approximately CAD $2.4 billion).1 The agreement includes a warrant, if exercised in full, to acquire an additional 10% equity stake in Cronos Group at an expected cost of approximately $1.0 billion (approximately CAD $1.4 billion).1 |
◦ | Altria submitted its application for regulatory review under the Investment Canada Act in late December. |
◦ | Cronos Group’s shareholder vote is scheduled for February 21, 2019. |
◦ | Altria still expects the transaction to close in the first half of 2019. |
• | Altria signed and closed a $12.8 billion investment in JUUL, the U.S. leader in e-vapor, representing a 35% economic interest. Altria intends to file its application for antitrust approval shortly. |
• | Altria financed the JUUL transaction through a $14.6 billion term loan facility arranged by JPMorgan Chase Bank, N.A. $1.8 billion of the facility remains undrawn and may be used by Altria to finance its investment in Cronos Group. Altria expects to access the credit and capital markets to refinance the debt prior to maturity. |
Innovation |
• | USSTC will present at the Tobacco Products Scientific Advisory Committee (TPSAC) meeting on February 6 and 7, 2019, related to its modified risk tobacco product application for Copenhagen Snuff. |
• | PM USA is ready to deploy its initial lead market plans for IQOS upon authorization by the U.S. Food and Drug Administration (FDA). |
Cost Reduction Program |
• | In December 2018, Altria announced a cost reduction program that it expects will deliver approximately $575 million in annualized cost savings by the end of 2019 (Cost Reduction Program). The program includes, among other things, third-party spending reductions across the business and workforce reductions. Altria recorded pre-tax charges of $121 million in the fourth quarter of 2018 related to the program. |
2019 Full-Year Guidance |
Financial Performance |
• | Net revenues were essentially unchanged at $6.1 billion. Revenues net of excise taxes increased 1.5% to $4.8 billion. |
• | Reported diluted EPS decreased 74.6% to $0.66, primarily driven by lower 2017 income taxes resulting from benefits from the Tax Reform Act and higher 2018 asset impairment, exit, implementation and acquisition-related costs. |
• | Adjusted diluted EPS increased 4.4% to $0.95, primarily driven by lower income taxes and fewer shares outstanding, partially offset by lower adjusted equity earnings from AB InBev. |
• | Net revenues declined 0.8% to $25.4 billion, as lower net revenues in the smokeable products segment were partially offset by higher net revenues in the smokeless products segment. Revenues net of excise taxes increased 0.7% to approximately $19.6 billion. |
• | Reported diluted EPS decreased 30.7% to $3.68, primarily driven by lower 2017 income taxes resulting from benefits from the Tax Reform Act; higher asset impairment, exit, implementation and acquisition-related costs; |
• | Adjusted diluted EPS increased 17.7% to $3.99, primarily driven by lower income taxes, fewer shares outstanding, higher adjusted equity earnings from AB InBev and higher adjusted operating companies income (OCI) in the smokeless products segment, partially offset by lower adjusted OCI in the smokeable products and wine segments and higher spending in the innovative tobacco products businesses. |
Table 1 - Altria’s Adjusted Results | |||||||||||||||||
Fourth Quarter | Full Year | ||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||
Reported diluted EPS | $ | 0.66 | $ | 2.60 | (74.6 | )% | $ | 3.68 | $ | 5.31 | (30.7 | )% | |||||
NPM Adjustment Items | — | — | (0.06 | ) | — | ||||||||||||
Asset impairment, exit, implementation and acquisition-related costs | 0.23 | — | 0.23 | 0.03 | |||||||||||||
Tobacco and health litigation items | — | 0.02 | 0.05 | 0.03 | |||||||||||||
AB InBev special items | 0.03 | 0.02 | (0.03 | ) | 0.05 | ||||||||||||
Loss (gain) on AB InBev/SABMiller business combination | — | — | 0.01 | (0.15 | ) | ||||||||||||
Settlement charge for lump sum pension payments | — | 0.03 | — | 0.03 | |||||||||||||
Tax items | 0.03 | (1.76 | ) | 0.11 | (1.91 | ) | |||||||||||
Adjusted diluted EPS | $ | 0.95 | $ | 0.91 | 4.4 | % | $ | 3.99 | $ | 3.39 | 17.7 | % |
Special Items |
• | For the full year 2018, Altria recorded pre-tax income of $145 million (or $0.06 per share) for NPM adjustment settlements with ten states. |
• | In the fourth quarter of 2018, Altria recorded pre-tax charges of $532 million (or $0.23 per share) related to Altria’s decision to refocus its innovative product efforts (which includes the discontinuation of production and distribution of all MarkTen and Green Smoke e-vapor products), the Cost Reduction Program, acquisition-related costs related to the JUUL transaction and the impairment of the Columbia Crest trademark. |
• | For the full year 2017, Altria recorded pre-tax charges of $89 million (or $0.03 per share), primarily related to the 2016 manufacturing facilities consolidation. |
• | For the full year 2018 and 2017, Altria recorded pre-tax charges of $131 million (or $0.05 per share) and $80 million (or $0.03 per share), respectively, for tobacco and health litigation items, including related interest costs. |
• | In the fourth quarter of 2018, equity earnings from AB InBev included net pre-tax charges of $69 million (or $0.03 per share), consisting primarily of Altria’s share of AB InBev’s mark-to-market losses on AB InBev’s derivative financial instruments used to hedge certain share commitments. |
• | For the full year 2018, equity earnings from AB InBev included net pre-tax income of $85 million (or $0.03 per share), consisting primarily of Altria’s share of AB InBev’s estimated effect of the Tax Reform Act and gains related to AB InBev’s merger and acquisition activities, partially offset by Altria’s share of AB |
• | In the fourth quarter of 2017, equity earnings from AB InBev included net pre-tax charges of $51 million (or $0.02 per share), consisting primarily of Altria’s share of a Brazilian tax item reported by AB InBev. |
• | For the full year 2017, equity earnings from AB InBev included net pre-tax charges of $160 million (or $0.05 per share), consisting primarily of Altria’s share of a Brazilian tax item reported by AB InBev and Altria’s share of AB InBev’s mark-to-market losses on AB InBev’s derivative financial instruments used to hedge certain share commitments. |
• | For the full year 2018, Altria recorded a pre-tax loss of $33 million (or $0.01 per share) related to AB InBev’s divestitures of certain SABMiller assets and businesses in connection with the AB InBev/SABMiller business combination. |
• | For the full year 2017, Altria recorded a pre-tax gain of $445 million (or $0.15 per share) related to AB InBev’s divestitures described above. |
• | In the fourth quarter of 2017, Altria recorded a one-time pre-tax settlement charge of $81 million (or $0.03 per share) related to lump sum payments made in connection with a voluntary, limited-time offer to former employees with vested benefits in the Altria Retirement Plan who had not commenced receiving benefit payments and met certain other conditions. |
• | In the fourth quarter of 2018, Altria recorded income tax charges of $45 million (or $0.03 per share) primarily related to a tax basis adjustment to Altria’s AB InBev investment and an adjustment to the provisional estimates for the repatriation tax. |
• | For the full year 2018, Altria recorded income tax charges $197 million (or $0.11 per share) primarily related to a tax basis adjustment to Altria’s AB InBev investment, a valuation allowance on foreign tax credit carryforwards that are not realizable and an adjustment to the provisional estimates for the repatriation tax. |
• | In the fourth quarter of 2017, Altria recorded income tax benefits of $3.4 billion (or $1.76 per share) primarily related to the Tax Reform Act. |
• | For the full year 2017, Altria recorded income tax benefits of $3.7 billion (or $1.91 per share) primarily related to the Tax Reform Act, the release of a valuation allowance on foreign tax credit carryforwards and a federal income tax audit closure. |
Revenues and OCI |
• | Net revenues increased 0.4%, as higher pricing and lower promotional investments were mostly offset by lower shipment volume. Revenues net of excise taxes increased 1.9%. |
• | Reported OCI was essentially unchanged, as higher pricing, lower tobacco and health litigation items and lower promotional investments were offset by higher costs (including investments in strategic initiatives and higher asset impairment, exit, implementation and acquisition-related costs) and lower shipment volume. |
• | Adjusted OCI increased 1.8%, as higher pricing and lower promotional investments were partially offset by lower shipment volume and higher costs (including investments in strategic initiatives). Adjusted OCI margins decreased 0.1 percentage point to 49.5%. |
• | Net revenues declined 1.5%, as lower shipment volume was partially offset by higher pricing and lower promotional investments. Revenues net of excise taxes were essentially unchanged. |
• | Reported OCI was essentially unchanged, as lower shipment volume, higher costs (including investments in strategic initiatives and higher asset impairment, exit, implementation and acquisition-related costs), higher resolution expenses and higher tobacco and health litigation items were offset by higher pricing, higher NPM Adjustment Items and lower promotional investments. |
• | Adjusted OCI declined 0.8%, primarily driven by lower shipment volume, higher costs (including investments in strategic initiatives) and higher resolution expenses, partially offset by higher pricing and lower promotional investments. Adjusted OCI margins decreased 0.4 percentage points to 50.6%. |
Table 2 - Smokeable Products: Revenues and OCI ($ in millions) | |||||||||||||||||
Fourth Quarter | Full Year | ||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||
Net revenues | $ | 5,302 | $ | 5,281 | 0.4 | % | $ | 22,297 | $ | 22,636 | (1.5 | )% | |||||
Excise taxes | (1,291 | ) | (1,346 | ) | (5,585 | ) | (5,927 | ) | |||||||||
Revenues net of excise taxes | $ | 4,011 | $ | 3,935 | 1.9 | % | $ | 16,712 | $ | 16,709 | — | % | |||||
Reported OCI | $ | 1,892 | $ | 1,890 | 0.1 | % | $ | 8,408 | $ | 8,426 | (0.2 | )% | |||||
NPM Adjustment Items | — | — | (145 | ) | (5 | ) | |||||||||||
Asset impairment, exit, implementation and acquisition-related costs | 86 | 6 | 83 | 28 | |||||||||||||
Tobacco and health litigation items | 9 | 56 | 103 | 72 | |||||||||||||
Adjusted OCI | $ | 1,987 | $ | 1,952 | 1.8 | % | $ | 8,449 | $ | 8,521 | (0.8 | )% | |||||
Adjusted OCI margins 1 | 49.5 | % | 49.6 | % | (0.1) pp | 50.6 | % | 51.0 | % | (0.4) pp |
Shipment Volume |
• | Smokeable products segment reported domestic cigarette shipment volume declined 4.4%, primarily driven by the industry’s rate of decline and retail share losses, partially offset by one extra shipping day and trade inventory movements. |
• | When adjusted for trade inventory movements and one extra shipping day, smokeable products segment domestic cigarette shipment volume decreased by an estimated 5.5%. |
• | Total domestic cigarette industry volumes declined by an estimated 5%. |
• | Reported cigar shipment volume increased 2.9%. |
• | Smokeable products segment reported domestic cigarette shipment volume declined 5.8%, primarily driven by the industry’s rate of decline, retail share losses and trade inventory movements, partially offset by one extra shipping day. |
• | When adjusted for trade inventory movements and one extra shipping day, smokeable products segment domestic cigarette shipment volume decreased by an estimated 5.5%. |
• | Total domestic cigarette industry volumes declined by an estimated 4.5%. |
• | Reported cigar shipment volume increased 3.8%. |
Table 3 - Smokeable Products: Shipment Volume (sticks in millions) | |||||||||||||
Fourth Quarter | Full Year | ||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||
Cigarettes: | |||||||||||||
Marlboro | 21,977 | 22,667 | (3.0 | )% | 94,770 | 99,974 | (5.2 | )% | |||||
Other premium | 1,266 | 1,400 | (9.6 | )% | 5,552 | 5,967 | (7.0 | )% | |||||
Discount | 2,062 | 2,415 | (14.6 | )% | 9,469 | 10,665 | (11.2 | )% | |||||
Total cigarettes | 25,305 | 26,482 | (4.4 | )% | 109,791 | 116,606 | (5.8 | )% | |||||
Cigars: | |||||||||||||
Black & Mild | 393 | 381 | 3.1 | % | 1,590 | 1,527 | 4.1 | % | |||||
Other | 2 | 3 | (33.3 | )% | 11 | 15 | (26.7 | )% | |||||
Total cigars | 395 | 384 | 2.9 | % | 1,601 | 1,542 | 3.8 | % | |||||
Total smokeable products | 25,700 | 26,866 | (4.3 | )% | 111,392 | 118,148 | (5.7 | )% |
Brand Activity and Retail Share |
• | PM USA expanded its innovative reseal pack technology to Marlboro Black Label, a non-menthol offering, in three states in the fourth quarter. |
• | PM USA launched Marlboro Rewards nationally in January 2019. |
• | PM USA successfully stabilized Marlboro in 2018 at a full-year share of 43.1 share points, unchanged compared to Marlboro’s share in the fourth quarter of 2017. |
• | Nat's fourth-quarter 2018 share was 0.3 share points in states selling the product. |
Table 4 - Smokeable Products: Cigarettes Retail Share (percent) | |||||||||||
Fourth Quarter | Full Year | ||||||||||
2018 | 2017 | Percentage point change | 2018 | 2017 | Percentage point change | ||||||
Cigarettes: | |||||||||||
Marlboro | 43.0 | % | 43.1 | % | (0.1) | 43.1 | % | 43.4 | % | (0.3) | |
Other premium | 2.6 | 2.6 | — | 2.6 | 2.7 | (0.1) | |||||
Discount | 4.2 | 4.7 | (0.5) | 4.4 | 4.6 | (0.2) | |||||
Total cigarettes | 49.8 | % | 50.4 | % | (0.6) | 50.1 | % | 50.7 | % | (0.6) |
Revenues and OCI |
• | Net revenues decreased 0.5%, primarily driven by lower shipment volume, partially offset by higher pricing. Revenues net of excise taxes decreased 0.2%. |
• | Reported OCI decreased 5.2%, primarily driven by higher costs (including asset impairment, exit and implementation costs and investments in strategic initiatives) and lower shipment volume, partially offset by higher pricing. |
• | Adjusted OCI decreased 2.4%, primarily driven by lower shipment volume and higher costs (including investments in strategic initiatives), partially offset by higher pricing. Adjusted OCI margins decreased 1.6 percentage points to 66.5%. |
• | Net revenues increased 5%, primarily driven by higher pricing and lower promotional investments, partially offset by lower shipment volume. Revenues net of excise taxes increased 5.3%. |
• | Reported OCI increased 9.6%, primarily driven by higher pricing, lower asset impairment, exit and implementation costs and lower promotional investments, partially offset by lower shipment volume and higher costs (including investments in strategic investments). |
• | Adjusted OCI increased 7.5%, primarily driven by higher pricing and lower promotional investments, partially offset by lower shipment volume and higher costs (including investments in strategic initiatives). Adjusted OCI margins increased 1.4 percentage points to 68.7%. |
Table 5 - Smokeless Products: Revenues and OCI ($ in millions) | |||||||||||||||||
Fourth Quarter | Full Year | ||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||
Net revenues | $ | 572 | $ | 575 | (0.5 | )% | $ | 2,262 | $ | 2,155 | 5.0 | % | |||||
Excise taxes | (31 | ) | (33 | ) | (131 | ) | (132 | ) | |||||||||
Revenues net of excise taxes | $ | 541 | $ | 542 | (0.2 | )% | $ | 2,131 | $ | 2,023 | 5.3 | % | |||||
Reported OCI | $ | 346 | $ | 365 | (5.2 | )% | $ | 1,431 | $ | 1,306 | 9.6 | % | |||||
Asset impairment, exit and implementation costs | 14 | 4 | 23 | 56 | |||||||||||||
Tobacco and health litigation items | — | — | 10 | — | |||||||||||||
Adjusted OCI | $ | 360 | $ | 369 | (2.4 | )% | $ | 1,464 | $ | 1,362 | 7.5 | % | |||||
Adjusted OCI margins 1 | 66.5 | % | 68.1 | % | (1.6) pp | 68.7 | % | 67.3 | % | 1.4 pp |
Shipment Volume |
• | Smokeless products segment reported domestic shipment volume declined 1.9%, primarily driven by the industry’s rate of decline. When adjusted for trade inventory movements and calendar differences, smokeless products segment shipment volume declined an estimated 2%. |
• | Smokeless products segment reported domestic shipment volume declined 1.0%, primarily driven by the industry’s rate of decline. When adjusted for trade inventory movements and calendar differences, smokeless products segment shipment volume declined an estimated 1%. |
• | Total smokeless industry volume declined by an estimated 1.5% over the past six months. |
Table 6 - Smokeless Products: Shipment Volume (cans and packs in millions) | |||||||||||||
Fourth Quarter | Full Year | ||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||
Copenhagen | 133.5 | 135.5 | (1.5 | )% | 531.7 | 531.6 | — | % | |||||
Skoal | 56.6 | 58.9 | (3.9 | )% | 231.1 | 241.9 | (4.5 | )% | |||||
Copenhagen and Skoal | 190.1 | 194.4 | (2.2 | )% | 762.8 | 773.5 | (1.4 | )% | |||||
Other | 17.7 | 17.5 | 1.1 | % | 69.8 | 67.8 | 2.9 | % | |||||
Total smokeless products | 207.8 | 211.9 | (1.9 | )% | 832.6 | 841.3 | (1.0 | )% |
Brand Activity and Retail Share |
• | USSTC announces plans to expand Skoal Long Cut Cool Spearmint nationally. |
• | Copenhagen full-year retail share grew 0.3 share points to 34.4% and Skoal retail share declined 0.1 share point to 16.2% compared to their share in the fourth quarter of 2017. |
Table 7 - Smokeless Products: Retail Share (percent) | |||||||||||
Fourth Quarter | Full Year | ||||||||||
2018 | 2017 | Percentage point change | 2018 | 2017 | Percentage point change | ||||||
Copenhagen | 34.7 | % | 34.1 | % | 0.6 | 34.4 | % | 34.0 | % | 0.4 | |
Skoal | 15.7 | 16.3 | (0.6) | 16.2 | 16.7 | (0.5) | |||||
Copenhagen and Skoal | 50.4 | 50.4 | — | 50.6 | 50.7 | (0.1) | |||||
Other | 3.4 | 3.4 | — | 3.4 | 3.3 | 0.1 | |||||
Total smokeless products | 53.8 | % | 53.8 | % | — | 54.0 | % | 54.0 | % | — |
Revenues, OCI and Shipment Volume |
• | Net revenues declined 11%, primarily driven by lower shipment volume, partially offset by favorable premium mix. |
• | Reported OCI decreased $87 million, primarily driven by the impairment of the Columbia Crest trademark, higher costs and lower shipment volume. |
• | Adjusted OCI decreased $33 million, primarily driven by higher costs and lower shipment volume. |
• | Reported wine shipment volume declined 15.1% to approximately 2.4 million cases. |
• | Net revenues declined 1.0%, primarily driven by lower shipment volume, partially offset by favorable premium mix. |
• | Reported OCI decreased $96 million, primarily driven by the impairment of the Columbia Crest trademark, higher costs and lower shipment volume, partially offset by favorable premium mix. |
• | Adjusted OCI decreased $42 million, primarily driven by higher costs and lower shipment volume, partially offset by favorable premium mix. |
• | Reported wine shipment volume declined 3.3% to approximately 8.2 million cases. |
Table 8 - Wine: Revenues and Operating Companies (Loss) Income ($ in millions) | |||||||||||||||||
Fourth Quarter | Full Year | ||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||
Net revenues | $ | 202 | $ | 227 | (11.0 | )% | $ | 691 | $ | 698 | (1.0 | )% | |||||
Excise taxes | (6 | ) | (8 | ) | (21 | ) | (23 | ) | |||||||||
Revenues net of excise taxes | $ | 196 | $ | 219 | (10.5 | )% | $ | 670 | $ | 675 | (0.7 | )% | |||||
Reported Operating Companies (Loss) Income | $ | (23 | ) | $ | 64 | (100.0)%+ | $ | 50 | $ | 146 | (65.8 | )% | |||||
Asset impairment costs | 54 | — | 54 | — | |||||||||||||
Adjusted OCI | $ | 31 | $ | 64 | (51.6 | )% | $ | 104 | $ | 146 | (28.8 | )% | |||||
Adjusted OCI margins 1 | 15.8 | % | 29.2 | % | (13.4) pp | 15.5 | % | 21.6 | % | (6.1) pp |
Altria's Profile |
Basis of Presentation |
Forward-Looking and Cautionary Statements |
Schedule 1 | ||
ALTRIA GROUP, INC. | ||
and Subsidiaries | ||
Consolidated Statements of Earnings | ||
For the Quarters Ended December 31, | ||
(dollars in millions, except per share data) | ||
(Unaudited) |
2018 | 2017 | % Change | ||||||||
Net revenues | $ | 6,114 | $ | 6,101 | 0.2 | % | ||||
Cost of sales 1 | 1,864 | 1,812 | ||||||||
Excise taxes on products 1 | 1,328 | 1,387 | ||||||||
Gross profit | 2,922 | 2,902 | 0.7 | % | ||||||
Marketing, administration and research costs | 626 | 595 | ||||||||
Asset impairment and exit costs | 381 | 8 | ||||||||
Operating companies income | 1,915 | 2,299 | (16.7 | )% | ||||||
Amortization of intangibles | 8 | 6 | ||||||||
General corporate expenses | 163 | 56 | ||||||||
Operating income | 1,744 | 2,237 | (22.0 | )% | ||||||
Interest and other debt expense, net | 162 | 180 | ||||||||
Net periodic benefit cost, excluding service cost | 3 | 74 | ||||||||
Earnings from equity investment in AB InBev | (131 | ) | (200 | ) | ||||||
Earnings before income taxes | 1,710 | 2,183 | (21.7 | )% | ||||||
Provision (benefit) for income taxes | 459 | (2,785 | ) | |||||||
Net earnings | 1,251 | 4,968 | (74.8 | )% | ||||||
Net earnings attributable to noncontrolling interests | (1 | ) | (2 | ) | ||||||
Net earnings attributable to Altria | $ | 1,250 | $ | 4,966 | (74.8 | )% | ||||
Per share data: | ||||||||||
Basic earnings per share attributable to Altria | $ | 0.67 | $ | 2.60 | (74.2 | )% | ||||
Diluted earnings per share attributable to Altria | $ | 0.66 | $ | 2.60 | (74.6 | )% | ||||
Weighted-average diluted shares outstanding | 1,877 | 1,905 | (1.5 | )% | ||||||
1 Cost of sales includes charges for resolution expenses related to state settlement agreements and FDA user fees. Supplemental information concerning those items and excise taxes on products sold is shown in Schedule 5. | ||||||||||
Note: As a result of the January 1, 2018 adoption of Accounting Standards Update (“ASU”) No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU No. 2017-07”), certain immaterial prior-year amounts have been reclassified to conform with the current period’s presentation. | ||||||||||
Schedule 2 | |||||||||||||||
ALTRIA GROUP, INC. | |||||||||||||||
and Subsidiaries | |||||||||||||||
Selected Financial Data | |||||||||||||||
For the Quarters Ended December 31, | |||||||||||||||
(dollars in millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Net Revenues | |||||||||||||||
Smokeable Products | Smokeless Products | Wine | All Other | Total | |||||||||||
2018 | $ | 5,302 | $ | 572 | $ | 202 | $ | 38 | $ | 6,114 | |||||
2017 | 5,281 | 575 | 227 | 18 | 6,101 | ||||||||||
% Change | 0.4 | % | (0.5 | )% | (11.0 | )% | 100%+ | 0.2 | % | ||||||
Reconciliation: | |||||||||||||||
For the quarter ended December 31, 2017 | $ | 5,281 | $ | 575 | $ | 227 | $ | 18 | $ | 6,101 | |||||
Operations | 21 | (3 | ) | (25 | ) | 20 | 13 | ||||||||
For the quarter ended December 31, 2018 | $ | 5,302 | $ | 572 | $ | 202 | $ | 38 | $ | 6,114 | |||||
Operating Companies Income (Loss) | |||||||||||||||
Smokeable Products | Smokeless Products | Wine | All Other | Total | |||||||||||
2018 | $ | 1,892 | $ | 346 | $ | (23 | ) | $ | (300 | ) | $ | 1,915 | |||
2017 | 1,890 | 365 | 64 | (20 | ) | 2,299 | |||||||||
% Change | 0.1 | % | (5.2 | )% | (100.0)%+ | (100.0)%+ | (16.7 | )% | |||||||
Reconciliation: | |||||||||||||||
For the quarter ended December 31, 2017 | $ | 1,890 | $ | 365 | $ | 64 | $ | (20 | ) | $ | 2,299 | ||||
Asset impairment, exit, implementation and acquisition-related costs - 2017 | 6 | 4 | — | — | 10 | ||||||||||
Tobacco and health litigation items - 2017 | 56 | — | — | — | 56 | ||||||||||
62 | 4 | — | — | 66 | |||||||||||
Asset impairment, exit and implementation costs - 2018 | (86 | ) | (14 | ) | (54 | ) | (290 | ) | (444 | ) | |||||
Tobacco and health litigation items - 2018 | (9 | ) | — | — | — | (9 | ) | ||||||||
(95 | ) | (14 | ) | (54 | ) | (290 | ) | (453 | ) | ||||||
Operations | 35 | (9 | ) | (33 | ) | 10 | 3 | ||||||||
For the quarter ended December 31, 2018 | $ | 1,892 | $ | 346 | $ | (23 | ) | $ | (300 | ) | $ | 1,915 | |||
Note: As a result of the January 1, 2018 adoption of ASU No. 2017-07, certain immaterial prior-year operating companies income (loss) amounts have been reclassified to conform with the current period’s presentation. |
Schedule 3 | ||||||||||
ALTRIA GROUP, INC. | ||||||||||
and Subsidiaries | ||||||||||
Consolidated Statements of Earnings | ||||||||||
For the Years Ended December 31, | ||||||||||
(dollars in millions, except per share data) | ||||||||||
(Unaudited) | ||||||||||
2018 | 2017 | % Change | ||||||||
Net revenues | $ | 25,364 | $ | 25,576 | (0.8 | )% | ||||
Cost of sales 1 | 7,373 | 7,531 | ||||||||
Excise taxes on products 1 | 5,737 | 6,082 | ||||||||
Gross profit | 12,254 | 11,963 | 2.4 | % | ||||||
Marketing, administration and research costs | 2,403 | 2,104 | ||||||||
Asset impairment and exit costs | 383 | 32 | ||||||||
Operating companies income | 9,468 | 9,827 | (3.7 | )% | ||||||
Amortization of intangibles | 38 | 21 | ||||||||
General corporate expenses | 315 | 213 | ||||||||
Operating income | 9,115 | 9,593 | (5.0 | )% | ||||||
Interest and other debt expense, net | 665 | 705 | ||||||||
Net periodic benefit (income) cost, excluding service cost | (34 | ) | 37 | |||||||
Earnings from equity investment in AB InBev | (890 | ) | (532 | ) | ||||||
Loss (gain) on AB InBev/SABMiller business combination | 33 | (445 | ) | |||||||
Earnings before income taxes | 9,341 | 9,828 | (5.0 | )% | ||||||
Provision (benefit) for income taxes | 2,374 | (399 | ) | |||||||
Net earnings | 6,967 | 10,227 | (31.9 | )% | ||||||
Net earnings attributable to noncontrolling interests | (4 | ) | (5 | ) | ||||||
Net earnings attributable to Altria | $ | 6,963 | $ | 10,222 | (31.9 | )% | ||||
Per share data: | ||||||||||
Basic earnings per share attributable to Altria | $ | 3.69 | $ | 5.31 | (30.5 | )% | ||||
Diluted earnings per share attributable to Altria | $ | 3.68 | $ | 5.31 | (30.7 | )% | ||||
Weighted-average basic shares outstanding | 1,887 | 1,921 | (1.8 | )% | ||||||
Weighted-average diluted shares outstanding | 1,888 | 1,921 | (1.7 | )% | ||||||
1 Cost of sales includes charges for resolution expenses related to state settlement agreements and FDA user fees. Supplemental information concerning those items and excise taxes on products sold is shown in Schedule 5. | ||||||||||
Note: As a result of the January 1, 2018 adoption of ASU No. 2017-07, certain immaterial prior-year amounts have been reclassified to conform with the current period’s presentation. |
Schedule 4 | |||||||||||||||
ALTRIA GROUP, INC. | |||||||||||||||
and Subsidiaries | |||||||||||||||
Selected Financial Data | |||||||||||||||
For the Years Ended December 31, | |||||||||||||||
(dollars in millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Net Revenues | |||||||||||||||
Smokeable Products | Smokeless Products | Wine | All Other | Total | |||||||||||
2018 | $ | 22,297 | $ | 2,262 | $ | 691 | $ | 114 | $ | 25,364 | |||||
2017 | 22,636 | 2,155 | 698 | 87 | 25,576 | ||||||||||
% Change | (1.5 | )% | 5.0 | % | (1.0 | )% | 31.0 | % | (0.8 | )% | |||||
Reconciliation: | |||||||||||||||
For the year ended December 31, 2017 | $ | 22,636 | $ | 2,155 | $ | 698 | $ | 87 | $ | 25,576 | |||||
Operations | (339 | ) | 107 | (7 | ) | 27 | (212 | ) | |||||||
For the year ended December 31, 2018 | $ | 22,297 | $ | 2,262 | $ | 691 | $ | 114 | $ | 25,364 | |||||
Operating Companies Income (Loss) | |||||||||||||||
Smokeable Products | Smokeless Products | Wine | All Other | Total | |||||||||||
2018 | $ | 8,408 | $ | 1,431 | $ | 50 | $ | (421 | ) | $ | 9,468 | ||||
2017 | 8,426 | 1,306 | 146 | (51 | ) | 9,827 | |||||||||
% Change | (0.2 | )% | 9.6 | % | (65.8 | )% | (100.0)%+ | (3.7 | )% | ||||||
Reconciliation: | |||||||||||||||
For the year ended December 31, 2017 | $ | 8,426 | $ | 1,306 | $ | 146 | $ | (51 | ) | $ | 9,827 | ||||
NPM Adjustment Items - 2017 | (5 | ) | — | — | — | (5 | ) | ||||||||
Asset impairment, exit, implementation and acquisition-related costs - 2017 | 28 | 56 | — | — | 84 | ||||||||||
Tobacco and health litigation items - 2017 | 72 | — | — | — | 72 | ||||||||||
95 | 56 | — | — | 151 | |||||||||||
NPM Adjustment Items - 2018 | 145 | — | — | — | 145 | ||||||||||
Asset impairment, exit and implementation costs - 2018 | (83 | ) | (23 | ) | (54 | ) | (290 | ) | (450 | ) | |||||
Tobacco and health litigation items - 2018 | (103 | ) | (10 | ) | — | — | (113 | ) | |||||||
(41 | ) | (33 | ) | (54 | ) | (290 | ) | (418 | ) | ||||||
Operations | (72 | ) | 102 | (42 | ) | (80 | ) | (92 | ) | ||||||
For the year ended December 31, 2018 | $ | 8,408 | $ | 1,431 | $ | 50 | $ | (421 | ) | $ | 9,468 |
Schedule 5 | |||||||||||||||
ALTRIA GROUP, INC. | |||||||||||||||
and Subsidiaries | |||||||||||||||
Supplemental Financial Data | |||||||||||||||
(dollars in millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
For the Quarters Ended December 31, | For the Years Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
The segment detail of excise taxes on products sold is as follows: | |||||||||||||||
Smokeable products | $ | 1,291 | $ | 1,346 | $ | 5,585 | $ | 5,927 | |||||||
Smokeless products | 31 | 33 | 131 | 132 | |||||||||||
Wine | 6 | 8 | 21 | 23 | |||||||||||
$ | 1,328 | $ | 1,387 | $ | 5,737 | $ | 6,082 | ||||||||
The segment detail of charges for resolution expenses related to state settlement agreements included in cost of sales is as follows: | |||||||||||||||
Smokeable products | $ | 991 | $ | 1,035 | $ | 4,190 | $ | 4,451 | |||||||
Smokeless products | 2 | 2 | 9 | 8 | |||||||||||
$ | 993 | $ | 1,037 | $ | 4,199 | $ | 4,459 | ||||||||
The segment detail of FDA user fees included in cost of sales is as follows: | |||||||||||||||
Smokeable products | $ | 74 | $ | 72 | $ | 286 | $ | 278 | |||||||
Smokeless products | 1 | 1 | 4 | 4 | |||||||||||
$ | 75 | $ | 73 | $ | 290 | $ | 282 | ||||||||
Schedule 6 | |||||||
ALTRIA GROUP, INC. | |||||||
and Subsidiaries | |||||||
Net Earnings and Diluted Earnings Per Share - Attributable to Altria Group, Inc. | |||||||
For the Quarters Ended December 31, | |||||||
(dollars in millions, except per share data) | |||||||
(Unaudited) | |||||||
Net Earnings | Diluted EPS | ||||||
2018 Net Earnings | $ | 1,250 | $ | 0.66 | |||
2017 Net Earnings | $ | 4,966 | $ | 2.60 | |||
% Change | (74.8 | )% | (74.6 | )% | |||
Reconciliation: | |||||||
2017 Net Earnings | $ | 4,966 | $ | 2.60 | |||
2017 AB InBev special items | 34 | 0.02 | |||||
2017 Asset impairment, exit, implementation and acquisition-related costs | 8 | — | |||||
2017 Tobacco and health litigation items | 38 | 0.02 | |||||
2017 Settlement charge for lump sum pension payments | 49 | 0.03 | |||||
2017 Tax items | (3,353 | ) | (1.76 | ) | |||
Subtotal 2017 special items | (3,224 | ) | (1.69 | ) | |||
2018 AB InBev special items | (54 | ) | (0.03 | ) | |||
2018 Asset impairment, exit, implementation and acquisition-related costs | (427 | ) | (0.23 | ) | |||
2018 Tobacco and health litigation items | (9 | ) | — | ||||
2018 Tax items | (45 | ) | (0.03 | ) | |||
Subtotal 2018 special items | (535 | ) | (0.29 | ) | |||
Fewer shares outstanding | — | 0.01 | |||||
Change in tax rate | 84 | 0.05 | |||||
Operations | (41 | ) | (0.02 | ) | |||
2018 Net Earnings | $ | 1,250 | $ | 0.66 |
Schedule 7 | |||||||||||||||
ALTRIA GROUP, INC. | |||||||||||||||
and Subsidiaries | |||||||||||||||
Reconciliation of GAAP and non-GAAP Measures | |||||||||||||||
For the Quarters Ended December 31, | |||||||||||||||
(dollars in millions, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Earnings before Income Taxes | Provision (Benefit) for Income Taxes | Net Earnings | Net Earnings Attributable to Altria | Diluted EPS | |||||||||||
2018 Reported | $ | 1,710 | $ | 459 | $ | 1,251 | $ | 1,250 | $ | 0.66 | |||||
AB InBev special items | 69 | 15 | 54 | 54 | 0.03 | ||||||||||
Asset impairment, exit, implementation and acquisition-related costs | 532 | 105 | 427 | 427 | 0.23 | ||||||||||
Tobacco and health litigation items | 12 | 3 | 9 | 9 | — | ||||||||||
Tax items | — | (45 | ) | 45 | 45 | 0.03 | |||||||||
2018 Adjusted for Special Items | $ | 2,323 | $ | 537 | $ | 1,786 | $ | 1,785 | $ | 0.95 | |||||
2017 Reported | $ | 2,183 | $ | (2,785 | ) | $ | 4,968 | $ | 4,966 | $ | 2.60 | ||||
Tobacco and health litigation items | 62 | 24 | 38 | 38 | 0.02 | ||||||||||
AB InBev special items | 51 | 17 | 34 | 34 | 0.02 | ||||||||||
Asset impairment, exit, implementation and acquisition-related costs | 12 | 4 | 8 | 8 | — | ||||||||||
Settlement charge for lump sum pension payments | 81 | 32 | 49 | 49 | 0.03 | ||||||||||
Tax items | — | 3,353 | (3,353 | ) | (3,353 | ) | (1.76 | ) | |||||||
2017 Adjusted for Special Items | $ | 2,389 | $ | 645 | $ | 1,744 | $ | 1,742 | $ | 0.91 | |||||
2018 Reported Net Earnings | $ | 1,250 | $ | 0.66 | |||||||||||
2017 Reported Net Earnings | $ | 4,966 | $ | 2.60 | |||||||||||
% Change | (74.8 | )% | (74.6 | )% | |||||||||||
2018 Net Earnings Adjusted for Special Items | $ | 1,785 | $ | 0.95 | |||||||||||
2017 Net Earnings Adjusted for Special Items | $ | 1,742 | $ | 0.91 | |||||||||||
% Change | 2.5 | % | 4.4 | % |
Schedule 8 | |||||||
ALTRIA GROUP, INC. | |||||||
and Subsidiaries | |||||||
Net Earnings and Diluted Earnings Per Share - Attributable to Altria Group, Inc. | |||||||
For the Years Ended December 31, | |||||||
(dollars in millions, except per share data) | |||||||
(Unaudited) | |||||||
Net Earnings | Diluted EPS | ||||||
2018 Net Earnings | $ | 6,963 | $ | 3.68 | |||
2017 Net Earnings | $ | 10,222 | $ | 5.31 | |||
% Change | (31.9 | )% | (30.7 | )% | |||
Reconciliation: | |||||||
2017 Net Earnings | $ | 10,222 | $ | 5.31 | |||
2017 NPM Adjustment Items | 2 | — | |||||
2017 Tobacco and health litigation items | 50 | 0.03 | |||||
2017 AB InBev special items | 105 | 0.05 | |||||
2017 Asset impairment, exit, implementation and acquisition-related costs | 55 | 0.03 | |||||
2017 Settlement charge for lump sum pension payments | 49 | 0.03 | |||||
2017 Gain on AB InBev/SABMiller business combination | (289 | ) | (0.15 | ) | |||
2017 Tax items | (3,674 | ) | (1.91 | ) | |||
Subtotal 2017 special items | (3,702 | ) | (1.92 | ) | |||
2018 NPM Adjustment Items | 109 | 0.06 | |||||
2018 Tobacco and health litigation items | (98 | ) | (0.05 | ) | |||
2018 AB InBev special items | 68 | 0.03 | |||||
2018 Asset impairment, exit, implementation and acquisition-related costs | (432 | ) | (0.23 | ) | |||
2018 Loss on AB InBev/SABMiller business combination | (26 | ) | (0.01 | ) | |||
2018 Tax items | (197 | ) | (0.11 | ) | |||
Subtotal 2018 special items | (576 | ) | (0.31 | ) | |||
Fewer shares outstanding | — | 0.07 | |||||
Change in tax rate | 1,007 | 0.53 | |||||
Operations | 12 | — | |||||
2018 Net Earnings | $ | 6,963 | $ | 3.68 | |||
Schedule 9 | |||||||||||||||
ALTRIA GROUP, INC. | |||||||||||||||
and Subsidiaries | |||||||||||||||
Reconciliation of GAAP and non-GAAP Measures | |||||||||||||||
For the Years Ended December 31, | |||||||||||||||
(dollars in millions, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Earnings before Income Taxes | Provision (Benefit) for Income Taxes | Net Earnings | Net Earnings Attributable to Altria | Diluted EPS | |||||||||||
2018 Reported | $ | 9,341 | $ | 2,374 | $ | 6,967 | $ | 6,963 | $ | 3.68 | |||||
NPM Adjustment Items | (145 | ) | (36 | ) | (109 | ) | (109 | ) | (0.06 | ) | |||||
Tobacco and health litigation items | 131 | 33 | 98 | 98 | 0.05 | ||||||||||
AB InBev special items | (85 | ) | (17 | ) | (68 | ) | (68 | ) | (0.03 | ) | |||||
Asset impairment, exit, implementation and acquisition-related costs | 538 | 106 | 432 | 432 | 0.23 | ||||||||||
Loss on AB InBev/SABMiller business combination | 33 | 7 | 26 | 26 | 0.01 | ||||||||||
Tax items | — | (197 | ) | 197 | 197 | 0.11 | |||||||||
2018 Adjusted for Special Items | $ | 9,813 | $ | 2,270 | $ | 7,543 | $ | 7,539 | $ | 3.99 | |||||
2017 Reported | $ | 9,828 | $ | (399 | ) | $ | 10,227 | $ | 10,222 | $ | 5.31 | ||||
NPM Adjustment Items | 4 | 2 | 2 | 2 | — | ||||||||||
Tobacco and health litigation items | 80 | 30 | 50 | 50 | 0.03 | ||||||||||
AB InBev special items | 160 | 55 | 105 | 105 | 0.05 | ||||||||||
Asset impairment, exit, implementation and acquisition-related costs | 89 | 34 | 55 | 55 | 0.03 | ||||||||||
Settlement charge for lump sum pension payments | 81 | 32 | 49 | 49 | 0.03 | ||||||||||
Gain on AB InBev/SABMiller business combination | (445 | ) | (156 | ) | (289 | ) | (289 | ) | (0.15 | ) | |||||
Tax items | — | 3,674 | (3,674 | ) | (3,674 | ) | (1.91 | ) | |||||||
2017 Adjusted for Special Items | $ | 9,797 | $ | 3,272 | $ | 6,525 | $ | 6,520 | $ | 3.39 | |||||
2018 Reported Net Earnings | $ | 6,963 | $ | 3.68 | |||||||||||
2017 Reported Net Earnings | $ | 10,222 | $ | 5.31 | |||||||||||
% Change | (31.9 | )% | (30.7 | )% | |||||||||||
2018 Net Earnings Adjusted for Special Items | $ | 7,539 | $ | 3.99 | |||||||||||
2017 Net Earnings Adjusted for Special Items | $ | 6,520 | $ | 3.39 | |||||||||||
% Change | 15.6 | % | 17.7 | % | |||||||||||
Schedule 10 | |||||||
ALTRIA GROUP, INC. | |||||||
and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(dollars in millions) | |||||||
(Unaudited) | |||||||
December 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 1,333 | $ | 1,253 | |||
Inventories | 2,331 | 2,225 | |||||
Other current assets | 635 | 866 | |||||
Property, plant and equipment, net | 1,938 | 1,914 | |||||
Goodwill and other intangible assets, net | 17,475 | 17,707 | |||||
Investment in AB InBev | 17,696 | 17,952 | |||||
Investment in JUUL | 12,800 | — | |||||
Other long-term assets | 1,430 | 1,285 | |||||
Total assets | $ | 55,638 | $ | 43,202 | |||
Liabilities and Stockholders’ Equity | |||||||
Short-term borrowings | $ | 12,704 | $ | — | |||
Current portion of long-term debt | 1,144 | 864 | |||||
Accrued settlement charges | 3,454 | 2,442 | |||||
Other current liabilities | 3,891 | 3,486 | |||||
Long-term debt | 11,898 | 13,030 | |||||
Deferred income taxes | 5,172 | 5,247 | |||||
Accrued postretirement health care costs | 1,749 | 1,987 | |||||
Accrued pension costs | 544 | 445 | |||||
Other long-term liabilities | 254 | 283 | |||||
Total liabilities | 40,810 | 27,784 | |||||
Redeemable noncontrolling interest | 39 | 38 | |||||
Total stockholders’ equity | 14,789 | 15,380 | |||||
Total liabilities and stockholders’ equity | $ | 55,638 | $ | 43,202 | |||
Total debt | $ | 25,746 | $ | 13,894 | |||
Schedule 11 | ||||
ALTRIA GROUP, INC. | ||||
and Subsidiaries | ||||
Ratio of Debt to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) | ||||
For the Twelve Months Ended December 31, 2018 | ||||
(dollars in millions) | ||||
(Unaudited) | ||||
Twelve Months Ended December 31, 2018 | ||||
Consolidated Net Earnings | $ | 6,967 | ||
Equity earnings and noncontrolling interests, net | (895 | ) | ||
Loss on AB InBev/SABMiller business combination | 33 | |||
Dividends from less than 50% owned affiliates | 657 | |||
Provision for income taxes | 2,374 | |||
Depreciation and amortization | 227 | |||
Asset impairment and exit costs | 383 | |||
Interest and other debt expense, net | 665 | |||
Consolidated EBITDA 1 | $ | 10,411 | ||
Short-term borrowings | $ | 12,704 | ||
Current portion of long-term debt | 1,144 | |||
Long-term debt | 11,898 | |||
Debt 2 | $ | 25,746 | ||
Debt / Consolidated EBITDA | 2.5 | |||
1 Reflects the term “Consolidated EBITDA” as defined in Altria’s senior unsecured revolving credit agreement and term loan agreement. | ||||
2 Reflects total debt as presented on Altria’s Condensed Consolidated Balance Sheet at December 31, 2018. See Schedule 10. |
Schedule 12 | |||||||||||||||||||||
ALTRIA GROUP, INC. | |||||||||||||||||||||
and Subsidiaries | |||||||||||||||||||||
Supplemental Financial Data for Special Items | |||||||||||||||||||||
For the Quarters Ended December 31, | |||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Cost of Sales | Marketing, administration and research costs | Asset impairment and exit costs | General corporate expenses | Interest and other debt expense, net | Net periodic benefit cost, excluding service cost | Earnings from equity investment in AB InBev | |||||||||||||||
2018 Special Items - (Income) Expense | |||||||||||||||||||||
AB InBev special items | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 69 | |||||||
Asset impairment, exit, implementation and acquisition-related costs | 63 | — | 381 | 82 | 3 | 3 | — | ||||||||||||||
Tobacco and health litigation items | — | 9 | — | — | 3 | — | — | ||||||||||||||
2017 Special Items - (Income) Expense | |||||||||||||||||||||
Tobacco and health litigation items | $ | — | $ | 56 | $ | — | $ | — | $ | 6 | $ | — | $ | — | |||||||
AB InBev special items | — | — | — | — | — | — | 51 | ||||||||||||||
Asset impairment, exit, implementation and acquisition-related costs | (2 | ) | 4 | 8 | 1 | — | 1 | — | |||||||||||||
Settlement charge for lump sum pension payments | — | — | — | — | — | 81 | — |
Schedule 13 | ||||||||||||||||||||||||
ALTRIA GROUP, INC. | ||||||||||||||||||||||||
and Subsidiaries | ||||||||||||||||||||||||
Supplemental Financial Data for Special Items | ||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Cost of Sales | Marketing, administration and research costs | Asset impairment and exit costs | General corporate expenses | Interest and other debt expense, net | Net periodic benefit (income) cost, excluding service cost | Earnings from equity investment in AB InBev | Loss (gain) on AB Inbev/SABMiller business combination | |||||||||||||||||
2018 Special Items - (Income) Expense | ||||||||||||||||||||||||
NPM Adjustment Items | $ | (145 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Tobacco and health litigation items | — | 113 | — | — | 18 | — | — | — | ||||||||||||||||
AB InBev special items | — | — | — | — | — | — | (85 | ) | — | |||||||||||||||
Asset impairment, exit, implementation, and acquisition-related costs | 67 | — | 383 | 82 | 3 | 3 | — | — | ||||||||||||||||
Loss on AB InBev/SABMiller business combination | — | — | — | — | — | — | — | 33 | ||||||||||||||||
2017 Special Items - (Income) Expense | ||||||||||||||||||||||||
NPM Adjustment Items | $ | (5 | ) | $ | — | $ | — | $ | — | $ | 9 | $ | — | $ | — | $ | — | |||||||
Tobacco and health litigation items | — | 72 | — | — | 8 | — | — | — | ||||||||||||||||
AB InBev special items | — | — | — | — | — | — | 160 | — | ||||||||||||||||
Asset impairment, exit, implementation and acquisition-related costs | 46 | 6 | 32 | 4 | — | 1 | — | — | ||||||||||||||||
Settlement charge for lump sum pension payments | — | — | — | — | — | 81 | — | — | ||||||||||||||||
Gain on AB InBev/SABMiller business combination | — | — | — | — | — | — | — | (445 | ) |