Segment Reporting

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The products of Altria Group, Inc.'s consumer products subsidiaries include smokeable products comprised of cigarettes manufactured and sold by PM USA, and machine-made large cigars and pipe tobacco manufactured and sold by Middleton; smokeless products manufactured and sold by or on behalf of USSTC and PM USA; and wine produced and/or distributed by Ste. Michelle. Another subsidiary of Altria Group, Inc., PMCC, maintains a portfolio of leveraged and direct finance leases. The products and services of these subsidiaries constitute Altria Group, Inc.'s 2012 reportable segments of smokeable products, smokeless products, wine and financial services.

As discussed in Note 1. Background and Basis of Presentation, beginning with the first quarter of 2012, Altria Group, Inc. revised its reportable segments. Prior-period segment data have been recast to conform with the current-period segment presentation.

Altria Group, Inc.'s chief operating decision maker reviews operating companies income to evaluate the performance of and allocate resources to the segments. Operating companies income for the segments excludes general corporate expenses and amortization of intangibles. Interest and other debt expense, net (consumer products), 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 Altria Group, Inc.'s chief operating decision maker. Information about total assets by segment is not disclosed because such information is not reported to or used by Altria Group, Inc.'s chief operating decision maker. Segment goodwill and other intangible assets, net, are disclosed in Note 3. Goodwill and Other Intangible Assets, net. The accounting policies of the segments are the same as those described in Note 2. Summary of Significant Accounting Policies.

Segment data were as follows:

	For the Years Ended December 31,
(in millions)	2012			2011			2010
Net revenues:
Smokeable products	$	22,216		$	21,970		$	22,191
Smokeless products	1,691			1,627			1,552
Wine	561			516			459
Financial services	150			(313		)	161
Net revenues	$	24,618		$	23,800		$	24,363
Earnings before income taxes:
Operating companies income (loss):
Smokeable products	$	6,239		$	5,737		$	5,618
Smokeless products	931			859			803
Wine	104			91			61
Financial services	176			(349		)	157
Amortization of intangibles	(20		)	(20		)	(20		)
General corporate expenses	(228		)	(256		)	(216		)
Changes to Mondelēz and
PMI tax-related receivables	52			14			(169		)
Corporate asset impairment
and exit costs	(1		)	(8		)	(6		)
Operating income	7,253			6,068			6,228
Interest and other debt
expense, net	(1,126		)	(1,216		)	(1,133		)
Loss on early
extinguishment of debt	(874		)	—			—
Earnings from equity
investment in SABMiller	1,224			730			628
Earnings before income taxes	$	6,477		$	5,582		$	5,723

The smokeable products segment included net revenues of $21,615 million, $21,403 million and $21,631 million for the years ended December 31, 2012, 2011 and 2010, respectively, related to cigarettes and net revenues of $601 million, $567 million and $560 million for the years ended December 31, 2012, 2011 and 2010, respectively, related to cigars.

PM USA, USSTC and Middleton's largest customer, McLane Company, Inc., accounted for approximately 27% of Altria Group, Inc.'s consolidated net revenues for each of the years ended December 31, 2012, 2011 and 2010. These net revenues were reported in the smokeable products and smokeless products segments. Sales to three distributors accounted for approximately 66%, 66% and 65% of net revenues for the wine segment for the years ended December 31, 2012, 2011 and 2010, respectively.

Items affecting the comparability of net revenues and/or operating companies income (loss) for the segments were as follows:

▪PMCC Leveraged Lease Benefit/Charge: During 2012, Altria Group, Inc. entered into the Closing Agreement with the IRS, which included a pre-tax charge of $7 million that was recorded as a decrease to PMCC's net revenues and operating companies income. During 2011, Altria Group, Inc. recorded the 2011 PMCC Leveraged Lease Charge, which included a pre-tax charge of $490 million that was recorded as a decrease to PMCC's net revenues and operating companies income. See Note 7. Finance Assets, net, Note 14. Income Taxes and Note 18. Contingencies for further discussion of this matter.

▪PMCC Recoveries and Allowance for Losses: During 2012, PMCC recorded pre-tax income of $34 million primarily related to recoveries from the sale of bankruptcy claims on, as well as the sale of aircraft under, its leases to American. In addition, during 2012, PMCC decreased its allowance for losses by $10 million, which was recorded as an increase to operating companies income. During 2011, PMCC increased its allowance for losses by $25 million, which was recorded as a decrease to operating companies income. See Note 7. Finance Assets, net.

▪Tobacco and Health Judgments: During 2012, 2011 and 2010, pre-tax charges, excluding accrued interest of $1 million, $64 million and $5 million, respectively, related to certain tobacco and health judgments, were recorded in operating companies income as follows:

	For the Years Ended December 31,
(in millions)	2012		2011		2010
Smokeable products	$	4	$	98	$	11
Smokeless products	—		—		5
Total	$	4	$	98	$	16

The pre-tax charges in 2011 related to the Williams, Bullock and Scott cases. The pre-tax charges in 2010 included a settlement of $5 million. See Note 18. Contingencies for further discussion.

▪Asset Impairment, Exit, Implementation and Integration Costs: See Note 4. Asset Impairment, Exit, Implementation and Integration Costs for a breakdown of these costs by segment.

	For the Years Ended December 31,
(in millions)	2012		2011		2010
Depreciation expense:
Smokeable products	$	125	$	145	$	167
Smokeless products	26		31		32
Wine	27		25		23
Corporate	27		32		34
Total depreciation expense	$	205	$	233	$	256
Capital expenditures:
Smokeable products	$	48	$	46	$	70
Smokeless products	36		24		19
Wine	30		25		22
Corporate	10		10		57
Total capital expenditures	$	124	$	105	$	168

Effective with the first quarter of 2013, Altria Group, Inc.'s reportable segments will be smokeable products, smokeless products and wine. In connection with this revision, results of the financial services business and the alternative products business will be combined in an All Other category. Altria Group, Inc. is making these changes due to the continued reduction of the lease portfolio of PMCC and the relative financial contribution of Altria Group, Inc's alternative products business to its consolidated results. Altria Group, Inc. will begin reporting the All Other category and presenting comparable results for prior periods with its 2013 first-quarter results.