Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheets

March 31, 2019

(in millions of dollars)

	Altria		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	3,318	$	—	$	34	$	—		$	3,352
Receivables	—		19		139		—			158
Inventories:
Leaf tobacco	—		544		386		—			930
Other raw materials	—		122		68		—			190
Work in process	—		10		641		—			651
Finished product	—		159		426		—			585
	—		835		1,521		—			2,356
Due from Altria and subsidiaries	82		4,574		1,166		(5,822		)	—
Income taxes	189		3		—		(189		)	3
Other current assets	62		225		106		—			393
Total current assets	3,651		5,656		2,966		(6,011		)	6,262
Property, plant and equipment, at cost	—		2,931		1,986		—			4,917
Less accumulated depreciation	—		2,128		867		—			2,995
	—		803		1,119		—			1,922
Goodwill	—		—		5,196		—			5,196
Other intangible assets, net	—		2		12,325		—			12,327
Investments in equity securities	17,476		—		14,539		—			32,015
Investment in consolidated subsidiaries	27,378		2,825		—		(30,203		)	—
Due from Altria and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	204		1,030		947		(670		)	1,511
Total Assets	$	53,499	$	10,316	$	37,092	$	(41,674	)	$	59,233

Condensed Consolidating Balance Sheets (Continued)

March 31, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Current portion of long-term debt	$	2,144		$	—		$	—		$	—		$	2,144
Accounts payable	1			66			138			—			205
Accrued liabilities:
Marketing	—			418			72			—			490
Settlement charges	—			4,359			8			—			4,367
Other	311			715			575			(189		)	1,412
Dividends payable	1,501			—			—			—			1,501
Due to Altria and subsidiaries	5,192			433			197			(5,822		)	—
Total current liabilities	9,149			5,991			990			(6,011		)	10,119
Long-term debt	27,024			—			—			—			27,024
Deferred income taxes	2,992			—			3,031			(670		)	5,353
Accrued pension costs	188			—			309			—			497
Accrued postretirement health care costs	—			1,074			690			—			1,764
Due to Altria and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	67			93			197			—			357
Total liabilities	39,420			7,158			10,007			(11,471		)	45,114
Contingencies
Redeemable noncontrolling interest	—			—			38			—			38
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,943			3,310			26,994			(30,304		)	5,943
Earnings reinvested in the business	43,582			64			1,903			(1,967		)	43,582
Accumulated other comprehensive losses	(2,717		)	(216		)	(1,861		)	2,077			(2,717		)
Cost of repurchased stock	(33,664		)	—			—			—			(33,664		)
Total stockholders’ equity attributable  to Altria	14,079			3,158			27,045			(30,203		)	14,079
Noncontrolling interests	—			—			2			—			2
Total stockholders’ equity	14,079			3,158			27,047			(30,203		)	14,081
Total Liabilities and Stockholders’ Equity	$	53,499		$	10,316		$	37,092		$	(41,674	)	$	59,233

Condensed Consolidating Balance Sheets

December 31, 2018

(in millions of dollars)

	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
Investments in equity securities	17,696		—		12,800		—			30,496
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)

December 31, 2018

(in millions of dollars)

	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
Settlement charges	—			3,448			6			—			3,454
Other	295			524			611			(27		)	1,403
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 Statements of Earnings and Comprehensive Earnings

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended March 31, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	4,725		$	913		$	(10	)	$	5,628
Cost of sales	—			1,340			248			(10		)	1,578
Excise taxes on products	—			1,185			54			—			1,239
Gross profit	—			2,200			611			—			2,811
Marketing, administration and research costs	35			384			114			—			533
Asset impairment and exit costs	1			35			4			—			40
Operating (expense) income	(36		)	1,781			493			—			2,238
Interest and other debt expense (income), net	355			(25		)	54			—			384
Net periodic benefit cost (income), excluding service cost	1			—			(2		)	—			(1		)
Earnings from equity investment in AB InBev	(86		)	—			—			—			(86		)
Loss on Cronos-related financial instruments	—			—			425			—			425
(Loss) earnings before income taxes and equity earnings of subsidiaries	(306		)	1,806			16			—			1,516
(Benefit) provision for income taxes	(75		)	459			11			—			395
Equity earnings of subsidiaries	1,351			95			—			(1,446		)	—
Net earnings	1,120			1,442			5			(1,446		)	1,121
Net earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings attributable to Altria	$	1,120		$	1,442		$	4		$	(1,446	)	$	1,120
Net earnings	$	1,120		$	1,442		$	5		$	(1,446	)	$	1,121
Other comprehensive (losses) earnings, net of deferred income taxes	(170		)	5			23			(28		)	(170		)
Comprehensive earnings	950			1,447			28			(1,474		)	951
Comprehensive earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings attributable to Altria	$	950		$	1,447		$	27		$	(1,474	)	$	950

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended March 31, 2018

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,214		$	904		$	(10	)	$	6,108
Cost of sales	—			1,487			257			(10		)	1,734
Excise taxes on products	—			1,383			55			—			1,438
Gross profit	—			2,344			592			—			2,936
Marketing, administration and research costs	38			449			131			—			618
Asset impairment and exit costs	—			—			2			—			2
Operating (expense) income	(38		)	1,895			459			—			2,316
Interest and other debt expense (income), net	122			(9		)	53			—			166
Net periodic benefit cost (income), excluding service cost	1			(6		)	(2		)	—			(7		)
Earnings from equity investment in AB InBev	(342		)	—			—			—			(342		)
Loss on AB InBev/SABMiller business combination	33			—			—			—			33
Earnings before income taxes and equity earnings of subsidiaries	148			1,910			408			—			2,466
(Benefit) provision for income taxes	(13		)	482			102			—			571
Equity earnings of subsidiaries	1,733			89			—			(1,822		)	—
Net earnings	1,894			1,517			306			(1,822		)	1,895
Net earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings attributable to Altria	$	1,894		$	1,517		$	305		$	(1,822	)	$	1,894
Net earnings	$	1,894		$	1,517		$	306		$	(1,822	)	$	1,895
Other comprehensive (losses) earnings, net of deferred income taxes	(30		)	4			39			(43		)	(30		)
Comprehensive earnings	1,864			1,521			345			(1,865		)	1,865
Comprehensive earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings attributable to Altria	$	1,864		$	1,521		$	344		$	(1,865	)	$	1,864

Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

For the Three Months Ended March 31, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	1,642		$	2,520		$	166		$	(2,039	)	$	2,289
Cash Used in Investing Activities
Capital expenditures	—			(9		)	(29		)	—			(38		)
Investment in Cronos	—			—			(1,831		)	—			(1,831		)
Investment in consolidated subsidiaries	(1,947		)	—			—			1,947			—
Other, net	(3		)	—			(78		)	—			(81		)
Net cash used in investing activities	(1,950		)	(9		)	(1,938		)	1,947			(1,950		)
Cash Provided by (Used in) Financing Activities
Repayment of short-term borrowings	(12,800		)	—			—			—			(12,800		)
Long-term debt issued	16,265			—			—			—			16,265
Repurchases of common stock	(151		)	—			—			—			(151		)
Dividends paid on common stock	(1,502		)	—			—			—			(1,502		)
Changes in amounts due to/from Altria and subsidiaries	657			(771		)	2,061			(1,947		)	—
Cash dividends paid to parent	—			(1,737		)	(302		)	2,039			—
Other	(120		)	—			(9		)	—			(129		)
Net cash provided by (used in) financing activities	2,349			(2,508		)	1,750			92			1,683
Cash, cash equivalents and restricted cash (1):
Increase (decrease)	2,041			3			(22		)	—			2,022
Balance at beginning of period	1,277			100			56			—			1,433
Balance at end of period	$	3,318		$	103		$	34		$	—		$	3,455

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 12. Contingencies.

Condensed Consolidating Statements of Cash Flows

For the Three Months Ended March 31, 2018

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	648		$	2,923		$	189		$	(951	)	$	2,809
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(1		)	(33		)	—			(34		)
Other	—			—			(7		)	—			(7		)
Net cash used in investing activities	—			(1		)	(40		)	—			(41		)
Cash Provided by (Used in) Financing Activities
Repurchases of common stock	(513		)	—			—			—			(513		)
Dividends paid on common stock	(1,257		)	—			—			—			(1,257		)
Changes in amounts due to/from Altria and subsidiaries	2,091			(2,439		)	348			—			—
Cash dividends paid to parent	—			(446		)	(505		)	951			—
Other	(20		)	—			(3		)	—			(23		)
Net cash provided by (used in) financing activities	301			(2,885		)	(160		)	951			(1,793		)
Cash, cash equivalents and restricted cash (1):
Increase (decrease)	949			37			(11		)	—			975
Balance at beginning of period	1,203			62			49			—			1,314
Balance at end of period	$	2,152		$	99		$	38		$	—		$	2,289

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 12. Contingencies.