Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheets

September 30, 2019

(in millions of dollars)

	Altria		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	1,541	$	—	$	63	$	—		$	1,604
Receivables	—		16		149		—			165
Inventories:
Leaf tobacco	—		466		354		—			820
Other raw materials	—		130		71		—			201
Work in process	—		8		590		—			598
Finished product	—		105		464		—			569
	—		709		1,479		—			2,188
Due from Altria and subsidiaries	85		3,825		1,331		(5,241		)	—
Income taxes	47		27		44		(103		)	15
Other current assets	83		193		43		—			319
Total current assets	1,756		4,770		3,109		(5,344		)	4,291
Property, plant and equipment, at cost	—		2,940		2,069		—			5,009
Less accumulated depreciation	—		2,153		894		—			3,047
	—		787		1,175		—			1,962
Goodwill	—		—		5,262		—			5,262
Other intangible assets, net	—		2		12,686		—			12,688
Investments in equity securities	17,950		—		9,396		—			27,346
Investment in consolidated subsidiaries	23,608		2,861		—		(26,469		)	—
Due from Altria and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	107		1,031		897		(671		)	1,364
Total Assets	$	48,211	$	9,451	$	32,525	$	(37,274	)	$	52,913

Condensed Consolidating Balance Sheets (Continued)

September 30, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Current portion of long-term debt	$	1,000		$	—		$	—		$	—		$	1,000
Accounts payable	1			82			163			—			246
Accrued liabilities:
Marketing	—			481			73			—			554
Settlement charges	—			3,086			8			—			3,094
Other	346			432			520			(103		)	1,195
Dividends payable	1,573			—			—			—			1,573
Due to Altria and subsidiaries	4,540			499			202			(5,241		)	—
Total current liabilities	7,460			4,580			966			(5,344		)	7,662
Long-term debt	26,903			—			—			—			26,903
Deferred income taxes	3,098			—			2,813			(671		)	5,240
Accrued pension costs	146			—			206			—			352
Accrued postretirement health care costs	—			1,073			691			—			1,764
Due to Altria and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	59			88			169			—			316
Total liabilities	37,666			5,741			9,635			(10,805		)	42,237
Contingencies
Redeemable noncontrolling interest	—			—			39			—			39
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,960			3,310			27,493			(30,803		)	5,960
Earnings reinvested in the business	39,910			611			(2,937		)	2,326			39,910
Accumulated other comprehensive losses	(2,402		)	(211		)	(1,806		)	2,017			(2,402		)
Cost of repurchased stock	(33,858		)	—			—			—			(33,858		)
Total stockholders’ equity attributable  to Altria	10,545			3,710			22,759			(26,469		)	10,545
Noncontrolling interests	—			—			92			—			92
Total stockholders’ equity	10,545			3,710			22,851			(26,469		)	10,637
Total Liabilities and Stockholders’ Equity	$	48,211		$	9,451		$	32,525		$	(37,274	)	$	52,913

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 Nine Months Ended September 30, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	16,140		$	2,991		$	(28	)	$	19,103
Cost of sales	—			4,594			801			(28		)	5,367
Excise taxes on products	—			3,949			160			—			4,109
Gross profit	—			7,597			2,030			—			9,627
Marketing, administration and research costs	125			1,181			348			—			1,654
Asset impairment and exit costs	1			38			35			—			74
Operating income (expense)	(126		)	6,378			1,647			—			7,899
Interest and other debt expense (income), net	892			(64		)	161			—			989
Net periodic benefit (income) cost, excluding service cost	1			(32		)	(9		)	—			(40		)
Earnings from equity investments	(640		)	—			(226		)	—			(866		)
Impairment of JUUL equity securities	—			—			4,500			—			4,500
Loss on Cronos-related financial instruments	—			—			1,327			—			1,327
Earnings (losses) before income taxes and equity earnings of subsidiaries	(379		)	6,474			(4,106		)	—			1,989
Provision (benefit) for income taxes	(180		)	1,610			43			—			1,473
Equity earnings of subsidiaries	715			326			—			(1,041		)	—
Net earnings (losses)	516			5,190			(4,149		)	(1,041		)	516
Net (earnings) losses attributable to noncontrolling interests	—			—			—			—			—
Net earnings (losses) attributable to Altria	$	516		$	5,190		$	(4,149	)	$	(1,041	)	$	516
Net earnings (losses)	$	516		$	5,190		$	(4,149	)	$	(1,041	)	$	516
Other comprehensive earnings (losses), net of deferred income taxes	145			10			78			(88		)	145
Comprehensive earnings (losses)	661			5,200			(4,071		)	(1,129		)	661
Comprehensive (earnings) losses attributable to noncontrolling interests	—			—			—			—			—
Comprehensive earnings (losses) attributable to Altria	$	661		$	5,200		$	(4,071	)	$	(1,129	)	$	661

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Nine Months Ended September 30, 2018

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	16,339		$	2,938		$	(27	)	$	19,250
Cost of sales	—			4,666			870			(27		)	5,509
Excise taxes on products	—			4,245			164			—			4,409
Gross profit	—			7,428			1,904			—			9,332
Marketing, administration and research costs	122			1,400			437			—			1,959
Asset impairment and exit costs	—			—			2			—			2
Operating income (expense)	(122		)	6,028			1,465			—			7,371
Interest and other debt expense (income), net	378			(37		)	162			—			503
Net periodic benefit (income) cost, excluding service cost	3			(33		)	(7		)	—			(37		)
Earnings from equity investments	(759		)	—			—			—			(759		)
Loss on ABI/SABMiller business combination	33			—			—			—			33
Earnings (losses) before income taxes and equity earnings of subsidiaries	223			6,098			1,310			—			7,631
Provision (benefit) for income taxes	67			1,537			311			—			1,915
Equity earnings of subsidiaries	5,557			310			—			(5,867		)	—
Net earnings (losses)	5,713			4,871			999			(5,867		)	5,716
Net (earnings) losses attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Net earnings (losses) attributable to Altria	$	5,713		$	4,871		$	996		$	(5,867	)	$	5,713
Net earnings (losses)	$	5,713		$	4,871		$	999		$	(5,867	)	$	5,716
Other comprehensive earnings (losses), net of deferred income taxes	(137		)	10			109			(119		)	(137		)
Comprehensive earnings (losses)	5,576			4,881			1,108			(5,986		)	5,579
Comprehensive (earnings) losses attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive earnings (losses) attributable to Altria	$	5,576		$	4,881		$	1,105		$	(5,986	)	$	5,576

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended September 30, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,804		$	1,062		$	(10	)	$	6,856
Cost of sales	—			1,644			281			(10		)	1,915
Excise taxes on products	—			1,391			53			—			1,444
Gross profit	—			2,769			728			—			3,497
Marketing, administration and research costs	41			392			119			—			552
Asset impairment and exit costs	—			—			1			—			1
Operating income (expense)	(41		)	2,377			608			—			2,944
Interest and other debt expense (income), net	258			(20		)	55			—			293
Net periodic benefit (income) cost, excluding service cost	—			(19		)	(5		)	—			(24		)
Earnings from equity investments	(252		)	—			(81		)	—			(333		)
Impairment of JUUL equity securities	—			—			4,500			—			4,500
Loss on Cronos-related financial instruments	—			—			636			—			636
Earnings (losses) before income taxes and equity earnings of subsidiaries	(47		)	2,416			(4,497		)	—			(2,128		)
Provision (benefit) for income taxes	(93		)	590			(23		)	—			474
Equity earnings of subsidiaries	(2,646		)	117			—			2,529			—
Net earnings (losses)	(2,600		)	1,943			(4,474		)	2,529			(2,602		)
Net (earnings) losses attributable to noncontrolling interests	—			—			2			—			2
Net earnings (losses) attributable to Altria	$	(2,600	)	$	1,943		$	(4,472	)	$	2,529		$	(2,600	)
Net earnings (losses)	$	(2,600	)	$	1,943		$	(4,474	)	$	2,529		$	(2,602	)
Other comprehensive earnings (losses), net of deferred income taxes	244			1			20			(21		)	244
Comprehensive earnings (losses)	(2,356		)	1,944			(4,454		)	2,508			(2,358		)
Comprehensive (earnings) losses attributable to noncontrolling interests	—			—			2			—			2
Comprehensive earnings (losses) attributable to Altria	$	(2,356	)	$	1,944		$	(4,452	)	$	2,508		$	(2,356	)

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended September 30, 2018

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,811		$	1,035		$	(9	)	$	6,837
Cost of sales	—			1,736			310			(9		)	2,037
Excise taxes on products	—			1,491			54			—			1,545
Gross profit	—			2,584			671			—			3,255
Marketing, administration and research costs	45			491			164			—			700
Asset impairment and exit costs	—			—			(2		)	—			(2		)
Operating income (expense)	(45		)	2,093			509			—			2,557
Interest and other debt expense (income), net	127			(20		)	52			—			159
Net periodic benefit (income) cost, excluding service cost	1			(18		)	(4		)	—			(21		)
Earnings from equity investments	(189		)	—			—			—			(189		)
Earnings (losses) before income taxes and equity earnings of subsidiaries	16			2,131			461			—			2,608
Provision (benefit) for income taxes	21			539			104			—			664
Equity earnings of subsidiaries	1,948			119			—			(2,067		)	—
Net earnings (losses)	1,943			1,711			357			(2,067		)	1,944
Net (earnings) losses attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings (losses) attributable to Altria	$	1,943		$	1,711		$	356		$	(2,067	)	$	1,943
Net earnings (losses)	$	1,943		$	1,711		$	357		$	(2,067	)	$	1,944
Other comprehensive earnings (losses), net of deferred income taxes	(382		)	2			36			(38		)	(382		)
Comprehensive earnings (losses)	1,561			1,713			393			(2,105		)	1,562
Comprehensive (earnings) losses attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings (losses) attributable to Altria	$	1,561		$	1,713		$	392		$	(2,105	)	$	1,561

Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by (Used In) Operating Activities
Net cash provided by (used in) operating activities	$	5,330		$	4,862		$	1,009		$	(5,927	)	$	5,274
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(26		)	(134		)	—			(160		)
Investment in Cronos	—			—			(1,863		)	—			(1,863		)
Acquisition of businesses and assets	—			—			(421		)	—			(421		)
Investment in consolidated subsidiaries	(2,446		)	—			—			2,446			—
Other, net	22			1			9			—			32
Net cash provided by (used in) investing activities	(2,424		)	(25		)	(2,409		)	2,446			(2,412		)
Cash Provided by (Used in) Financing Activities
Repayment of short-term borrowings	(12,800		)	—			—			—			(12,800		)
Long-term debt issued	16,265			—			—			—			16,265
Long-term debt repaid	(1,144		)	—			—			—			(1,144		)
Repurchases of common stock	(346		)	—			—			—			(346		)
Dividends paid on common stock	(4,498		)	—			—			—			(4,498		)
Changes in amounts due to/from Altria and subsidiaries	3			42			2,401			(2,446		)	—
Cash dividends paid to parent	—			(4,938		)	(989		)	5,927			—
Other, net	(122		)	—			(5		)	—			(127		)
Net cash provided by (used in) financing activities	(2,642		)	(4,896		)	1,407			3,481			(2,650		)
Cash, cash equivalents and restricted cash (1):
Increase (decrease)	264			(59		)	7			—			212
Balance at beginning of period	1,277			100			56			—			1,433
Balance at end of period	$	1,541		$	41		$	63		$	—		$	1,645

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 13. Contingencies.

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2018

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by (Used In) Operating Activities
Net cash provided by (used in) operating activities	$	4,806		$	5,801		$	1,123		$	(5,164	)	$	6,566
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(33		)	(99		)	—			(132		)
Acquisition of businesses and assets	—			—			(15		)	—			(15		)
Investment in consolidated subsidiaries	(191		)	—			—			191			—
Other, net	8			—			2			—			10
Net cash provided by (used in) investing activities	(183		)	(33		)	(112		)	191			(137		)
Cash Provided by (Used in) Financing Activities
Repurchases of common stock	(1,317		)	—			—			—			(1,317		)
Dividends paid on common stock	(3,909		)	—			—			—			(3,909		)
Changes in amounts due to/from Altria and subsidiaries	1,767			(1,565		)	(11		)	(191		)	—
Cash dividends paid to parent	—			(4,166		)	(998		)	5,164			—
Other	(21		)	—			(4		)	—			(25		)
Net cash provided by (used in) financing activities	(3,480		)	(5,731		)	(1,013		)	4,973			(5,251		)
Cash, cash equivalents and restricted cash (1):
Increase (decrease)	1,143			37			(2		)	—			1,178
Balance at beginning of period	1,203			62			49			—			1,314
Balance at end of period	$	2,346		$	99		$	47		$	—		$	2,492

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 13. Contingencies.