Segment Reporting

3 Months Ended

Mar. 31, 2020

Segment Reporting:

In the first quarter of 2020, Altria renamed its smokeless products segment as the oral tobacco products segment.

The products of Altria’s subsidiaries include smokeable tobacco products, consisting of combustible cigarettes manufactured and sold by PM USA and Nat Sherman, machine-made large cigars and pipe tobacco manufactured and sold by Middleton and premium cigars sold by Nat Sherman; oral tobacco products, consisting of MST and snus products manufactured and sold by USSTC and oral nicotine pouches manufactured and sold by Helix; and wine produced and/or distributed by Ste. Michelle. The products and services of these subsidiaries constitute Altria’s reportable segments of smokeable products, oral tobacco products (formerly smokeless products) and wine. The financial services and the innovative tobacco products businesses are included in all other.

Altria’s chief operating decision maker (the “CODM”) reviews operating companies income to evaluate the performance of, and allocate resources to, the segments. Operating companies income for the segments is defined as operating income before general corporate expenses and amortization of intangibles. Interest and other debt expense, net, net periodic benefit income/cost, excluding service cost, and provision for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by the CODM.

Segment data were as follows:



	For the Three Months Ended March 31,
	2020			2019
	(in millions)
Net revenues:
Smokeable products	$	5,606		$	4,935
Oral tobacco products	601			540
Wine	146			151
All other	6			2
Net revenues	$	6,359		$	5,628
Earnings before income taxes:
Operating companies income (loss):
Smokeable products	$	2,370		$	1,932
Oral tobacco products	414			358
Wine	(379		)	15
All other	(5		)	(12		)
Amortization of intangibles	(19		)	(8		)
General corporate expenses	(45		)	(46		)
Corporate asset impairment and exit costs	—			(1		)
Operating income	2,336			2,238
Interest and other debt expense, net	(275		)	(384		)
Net periodic benefit income, excluding service cost	27			1
Earnings from equity investments	157			86
Loss on Cronos-related financial instruments	(137		)	(425		)
Earnings before income taxes	$	2,108		$	1,516

The comparability of operating companies income for the reportable segments was affected by the following:

Tobacco and Health Litigation Items - Pre-tax charges related to certain tobacco and health litigation items were recorded in Altria’s condensed consolidated statements of earnings as follows:



	For the Three Months Ended March 31,
	2020		2019
	(in millions)
Smokeable products segment	$	22	$	15
Interest and other debt expense, net	2		2
Total	$	24	$	17

The amounts shown in the table above for the smokeable products segment were recorded in marketing, administration and research costs. For further discussion, see Note 11. Contingencies.

Asset Impairment, Exit and Implementation Costs - See Note 3. Asset Impairment, Exit and Implementation Costs for a breakdown of these costs by segment.