Condensed Consolidating Financial Information (Tables)

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheets

(in millions of dollars)

____________________________

at December 31, 2018	Altria		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	1,277	$	—	$	56	$	—		$	1,333
Receivables	—		18		124		—			142
Inventories:
Leaf tobacco	—		561		379		—			940
Other raw materials	—		123		63		—			186
Work in process	—		2		645		—			647
Finished product	—		128		430		—			558
	—		814		1,517		—			2,331
Due from Altria and subsidiaries	46		3,828		1,194		(5,068		)	—
Income taxes	100		94		—		(27		)	167
Other current assets	41		167		118		—			326
Total current assets	1,464		4,921		3,009		(5,095		)	4,299
Property, plant and equipment, at cost	—		2,928		2,022		—			4,950
Less accumulated depreciation	—		2,111		901		—			3,012
	—		817		1,121		—			1,938
Goodwill	—		—		5,196		—			5,196
Other intangible assets, net	—		2		12,277		—			12,279
Investment in AB InBev	17,696		—		—		—			17,696
Investment in JUUL	—		—		12,800		—			12,800
Investment in consolidated subsidiaries	25,996		2,825		—		(28,821		)	—
Due from Altria and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	193		955		952		(670		)	1,430
Total Assets	$	50,139	$	9,520	$	35,355	$	(39,376	)	$	55,638

Condensed Consolidating Balance Sheets (Continued)

(in millions of dollars)

____________________________

at December 31, 2018	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Short-term borrowings	$	12,704		$	—		$	—		$	—		$	12,704
Current portion of long-term debt	1,144			—			—			—			1,144
Accounts payable	1			91			307			—			399
Accrued liabilities:
Marketing	—			483			103			—			586
Employment costs	16			11			162			—			189
Settlement charges	—			3,448			6			—			3,454
Other	279			513			449			(27		)	1,214
Dividends payable	1,503			—			—			—			1,503
Due to Altria and subsidiaries	4,499			407			162			(5,068		)	—
Total current liabilities	20,146			4,953			1,189			(5,095		)	21,193
Long-term debt	11,898			—			—			—			11,898
Deferred income taxes	3,010			—			2,832			(670		)	5,172
Accrued pension costs	187			—			357			—			544
Accrued postretirement health care costs	—			1,072			677			—			1,749
Due to Altria and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	111			47			96			—			254
Total liabilities	35,352			6,072			9,941			(10,555		)	40,810
Contingencies
Redeemable noncontrolling interest	—			—			39			—			39
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,961			3,310			25,047			(28,357		)	5,961
Earnings reinvested in the business	43,962			359			2,201			(2,560		)	43,962
Accumulated other comprehensive losses	(2,547		)	(221		)	(1,884		)	2,105			(2,547		)
Cost of repurchased stock	(33,524		)	—			—			—			(33,524		)
Total stockholders’ equity attributable to Altria	14,787			3,448			25,373			(28,821		)	14,787
Noncontrolling interests	—			—			2			—			2
Total stockholders’ equity	14,787			3,448			25,375			(28,821		)	14,789
Total Liabilities and Stockholders’ Equity	$	50,139		$	9,520		$	35,355		$	(39,376	)	$	55,638

Condensed Consolidating Balance Sheets

(in millions of dollars)

____________________________

at December 31, 2017	Altria		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	1,203	$	1	$	49	$	—		$	1,253
Receivables	1		10		131		—			142
Inventories:
Leaf tobacco	—		579		362		—			941
Other raw materials	—		111		59		—			170
Work in process	—		5		555		—			560
Finished product	—		128		426		—			554
	—		823		1,402		—			2,225
Due from Altria and subsidiaries	2		2,413		1,022		(3,437		)	—
Income taxes	—		542		17		(98		)	461
Other current assets	11		147		105		—			263
Total current assets	1,217		3,936		2,726		(3,535		)	4,344
Property, plant and equipment, at cost	—		2,930		1,949		—			4,879
Less accumulated depreciation	—		2,086		879		—			2,965
	—		844		1,070		—			1,914
Goodwill	—		—		5,307		—			5,307
Other intangible assets, net	—		2		12,398		—			12,400
Investment in AB InBev	17,952		—		—		—			17,952
Investment in consolidated subsidiaries	13,111		2,818		—		(15,929		)	—
Due from Altria and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	34		671		1,056		(476		)	1,285
Total Assets	$	37,104	$	8,271	$	22,557	$	(24,730	)	$	43,202

Condensed Consolidating Balance Sheets (Continued)

(in millions of dollars)

____________________________

at December 31, 2017	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Current portion of long-term debt	$	864		$	—		$	—		$	—		$	864
Accounts payable	2			91			281			—			374
Accrued liabilities:
Marketing	—			578			117			—			695
Employment costs	21			14			153			—			188
Settlement charges	—			2,437			5			—			2,442
Other	389			433			247			(98		)	971
Dividends payable	1,258			—			—			—			1,258
Due to Altria and subsidiaries	3,040			317			80			(3,437		)	—
Total current liabilities	5,574			3,870			883			(3,535		)	6,792
Long-term debt	13,030			—			—			—			13,030
Deferred income taxes	2,809			—			2,914			(476		)	5,247
Accrued pension costs	206			—			239			—			445
Accrued postretirement health care costs	—			1,214			773			—			1,987
Due to Altria and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	108			49			126			—			283
Total liabilities	21,727			5,133			9,725			(8,801		)	27,784
Contingencies
Redeemable noncontrolling interest	—			—			38			—			38
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,952			3,310			12,045			(15,355		)	5,952
Earnings reinvested in the business	42,251			96			2,243			(2,339		)	42,251
Accumulated other comprehensive losses	(1,897		)	(268		)	(1,506		)	1,774			(1,897		)
Cost of repurchased stock	(31,864		)	—			—			—			(31,864		)
Total stockholders’ equity attributable to Altria	15,377			3,138			12,791			(15,929		)	15,377
Noncontrolling interests	—			—			3			—			3
Total stockholders’ equity	15,377			3,138			12,794			(15,929		)	15,380
Total Liabilities and Stockholders’ Equity	$	37,104		$	8,271		$	22,557		$	(24,730	)	$	43,202

Condensed Consolidating of Earnings and Comprehensive Earnings Income Statement

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

(in millions of dollars)

_____________________________

for the year ended December 31, 2018	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	21,422		$	3,980		$	(38	)	$	25,364
Cost of sales	—			6,153			1,258			(38		)	7,373
Excise taxes on products	—			5,517			220			—			5,737
Gross profit	—			9,752			2,502			—			12,254
Marketing, administration and research costs	219			1,892			645			—			2,756
Asset impairment and exit costs	—			81			302			—			383
Operating (expense) income	(219		)	7,779			1,555			—			9,115
Interest and other debt expense (income), net	511			(61		)	215			—			665
Net periodic benefit cost (income), excluding service cost	16			(41		)	(9		)	—			(34		)
Earnings from equity investment in AB InBev	(890		)	—			—			—			(890		)
Loss on AB InBev/SABMiller business combination	33			—			—			—			33
Earnings before income taxes and equity earnings of subsidiaries	111			7,881			1,349			—			9,341
Provision for income taxes	36			1,980			358			—			2,374
Equity earnings of subsidiaries	6,888			402			—			(7,290		)	—
Net earnings	6,963			6,303			991			(7,290		)	6,967
Net earnings attributable to noncontrolling interests	—			—			(4		)	—			(4		)
Net earnings attributable to Altria	$	6,963		$	6,303		$	987		$	(7,290	)	$	6,963
Net earnings	$	6,963		$	6,303		$	991		$	(7,290	)	$	6,967
Other comprehensive (losses) earnings, net of deferred income taxes	(242		)	104			(54		)	(50		)	(242		)
Comprehensive earnings	6,721			6,407			937			(7,340		)	6,725
Comprehensive earnings attributable to noncontrolling interests	—			—			(4		)	—			(4		)
Comprehensive earnings attributable to Altria	$	6,721		$	6,407		$	933		$	(7,340	)	$	6,721

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

(in millions of dollars)

_____________________________

for the year ended December 31, 2017	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	21,826		$	3,787		$	(37	)	$	25,576
Cost of sales	—			6,394			1,174			(37		)	7,531
Excise taxes on products	—			5,864			218			—			6,082
Gross profit	—			9,568			2,395			—			11,963
Marketing, administration and research costs	161			1,713			464			—			2,338
Asset impairment and exit costs	—			—			32			—			32
Operating (expense) income	(161		)	7,855			1,899			—			9,593
Interest and other debt expense (income), net	510			(20		)	215			—			705
Net periodic benefit cost, excluding service cost	12			18			7			—			37
Earnings from equity investment in AB InBev	(532		)	—			—			—			(532		)
Gain on AB InBev/SABMiller business combination	(445		)	—			—			—			(445		)
Earnings before income taxes and equity earnings of subsidiaries	294			7,857			1,677			—			9,828
(Benefit) provision for income taxes	(2,624		)	3,127			(902		)	—			(399		)
Equity earnings of subsidiaries	7,304			558			—			(7,862		)	—
Net earnings	10,222			5,288			2,579			(7,862		)	10,227
Net earnings attributable to noncontrolling interests	—			—			(5		)	—			(5		)
Net earnings attributable to Altria	$	10,222		$	5,288		$	2,574		$	(7,862	)	$	10,222
Net earnings	$	10,222		$	5,288		$	2,579		$	(7,862	)	$	10,227
Other comprehensive earnings, net of deferred income taxes	155			3			214			(217		)	155
Comprehensive earnings	10,377			5,291			2,793			(8,079		)	10,382
Comprehensive earnings attributable to noncontrolling interests	—			—			(5		)	—			(5		)
Comprehensive earnings attributable to Altria	$	10,377		$	5,291		$	2,788		$	(8,079	)	$	10,377

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

(in millions of dollars)

_____________________________

for the year ended December 31, 2016	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	22,146		$	3,633		$	(35	)	$	25,744
Cost of sales	—			6,641			1,159			(35		)	7,765
Excise taxes on products	—			6,187			220			—			6,407
Gross profit	—			9,318			2,254			—			11,572
Marketing, administration and research costs	160			2,009			493			—			2,662
Asset impairment and exit costs	5			77			67			—			149
Operating (expense) income	(165		)	7,232			1,694			—			8,761
Interest and other debt expense, net	519			10			218			—			747
Loss on early extinguishment of debt	823			—			—			—			823
Net periodic benefit cost (income), excluding service cost	5			(6		)	—			—			(1		)
Earnings from equity investment in SABMiller	(795		)	—			—			—			(795		)
Gain on AB InBev/SABMiller business combination	(13,865		)	—			—			—			(13,865		)
Earnings before income taxes and equity earnings of subsidiaries	13,148			7,228			1,476			—			21,852
Provision for income taxes	4,453			2,631			524			—			7,608
Equity earnings of subsidiaries	5,544			268			—			(5,812		)	—
Net earnings	14,239			4,865			952			(5,812		)	14,244
Net earnings attributable to noncontrolling interests	—			—			(5		)	—			(5		)
Net earnings attributable to Altria	$	14,239		$	4,865		$	947		$	(5,812	)	$	14,239
Net earnings	$	14,239		$	4,865		$	952		$	(5,812	)	$	14,244
Other comprehensive earnings (losses), net of deferred income taxes	1,228			(16		)	(28		)	44			1,228
Comprehensive earnings	15,467			4,849			924			(5,768		)	15,472
Comprehensive earnings attributable to noncontrolling interests	—			—			(5		)	—			(5		)
Comprehensive earnings attributable to Altria	$	15,467		$	4,849		$	919		$	(5,768	)	$	15,467

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statements of Cash Flows

(in millions of dollars)

_____________________________

for the year ended December 31, 2018	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	6,907		$	7,580		$	1,354		$	(7,450	)	$	8,391
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(57		)	(181		)	—			(238		)
Acquisitions of businesses and assets	—			—			(15		)	—			(15		)
Investment in JUUL	—			—			(12,800		)	—			(12,800		)
Proceeds from finance assets	—			—			37			—			37
Proceeds from derivative financial instruments	35			—			—			—			35
Investment in consolidated subsidiaries	(13,003		)	—			—			13,003			—
Other, net	—			—			(7		)	—			(7		)
Net cash provided by (used in) investing activities	(12,968		)	(57		)	(12,966		)	13,003			(12,988		)
Cash Provided by (Used in) Financing Activities
Proceeds from short-term borrowings	12,800			—			—			—			12,800
Long-term debt repaid	(864		)	—			—			—			(864		)
Repurchases of common stock	(1,673		)	—			—			—			(1,673		)
Dividends paid on common stock	(5,415		)	—			—			—			(5,415		)
Changes in amounts due to/from Altria and subsidiaries	1,415			(1,388		)	12,976			(13,003		)	—
Cash dividends paid to parent	—			(6,097		)	(1,353		)	7,450			—
Other	(128		)	—			(4		)	—			(132		)
Net cash (used in) provided by financing activities	6,135			(7,485		)	11,619			(5,553		)	4,716
Cash, cash equivalents and restricted cash (1):
Increase	74			38			7			—			119
Balance at beginning of year	1,203			62			49			—			1,314
Balance at end of year	$	1,277		$	100		$	56		$	—		$	1,433

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 19. Contingencies.

Condensed Consolidating Statements of Cash Flows

(in millions of dollars)

_____________________________

for the year ended December 31, 2017	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	6,910		$	4,028		$	841		$	(6,878	)	$	4,901
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(34		)	(165		)	—			(199		)
Acquisitions of businesses and assets	—			—			(415		)	—			(415		)
Proceeds from finance assets	—			—			133			—			133
Investment in consolidated subsidiaries	(460		)	—			—			460			—
Other, net	(5		)	4			15			—			14
Net cash used in investing activities	(465		)	(30		)	(432		)	460			(467		)
Cash Provided by (Used in) Financing Activities
Repurchases of common stock	(2,917		)	—			—			—			(2,917		)
Dividends paid on common stock	(4,807		)	—			—			—			(4,807		)
Changes in amounts due to/from Altria and subsidiaries	(1,999		)	1,410			1,049			(460		)	—
Cash dividends paid to parent	—			(5,429		)	(1,449		)	6,878			—
Other	(40		)	—			(7		)	—			(47		)
Net cash used in financing activities	(9,763		)	(4,019		)	(407		)	6,418			(7,771		)
Cash, cash equivalents and restricted cash (1):
(Decrease) increase	(3,318		)	(21		)	2			—			(3,337		)
Balance at beginning of year	4,521			83			47			—			4,651
Balance at end of year	$	1,203		$	62		$	49		$	—		$	1,314

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 19. Contingencies.

Condensed Consolidating Statements of Cash Flows

(in millions of dollars)

_____________________________

for the year ended December 31, 2016	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	4,356		$	5,143		$	319		$	(5,992	)	$	3,826
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(45		)	(144		)	—			(189		)
Acquisition of assets	—			—			(45		)	—			(45		)
Proceeds from finance assets	—			—			231			—			231
Proceeds from AB InBev/SABMiller business combination	4,773			—			—			—			4,773
Purchase of AB InBev ordinary shares	(1,578		)	—			—			—			(1,578		)
Proceeds from derivative financial instruments	510			—			—			—			510
Investment in consolidated subsidiaries	(138		)	—			—			138			—
Other, net	(3		)	—			9			—			6
Net cash provided by (used in) investing activities	3,564			(45		)	51			138			3,708
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	(1,030		)	—			—			—			(1,030		)
Dividends paid on common stock	(4,512		)	—			—			—			(4,512		)
Changes in amounts due to/from Altria and subsidiaries	(392		)	(28		)	558			(138		)	—
Premiums and fees related to early extinguishment of debt	(809		)	—			—			—			(809		)
Cash dividends paid to parent	—			(5,064		)	(928		)	5,992			—
Other, net	(12		)	—			(9		)	—			(21		)
Net cash used in financing activities	(5,712		)	(5,092		)	(379		)	5,854			(5,329		)
Cash, cash equivalents and restricted cash (1):
Increase (decrease)	2,208			6			(9		)	—			2,205
Balance at beginning of year	2,313			77			56			—			2,446
Balance at end of year	$	4,521		$	83		$	47		$	—		$	4,651

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 19. Contingencies.