Condensed Consolidating Financial Information (Tables)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheets

(in millions of dollars)

____________________________

at December 31, 2017	Altria Group, Inc.		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 Group, Inc. 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		)	—
Finance assets, net	—		—		899		—			899
Due from Altria Group, Inc. and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	34		671		157		(476		)	386
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 Group, Inc.			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 Group, Inc. 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 Group, Inc. 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 Group, Inc.	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 Balance Sheets

(in millions of dollars)

____________________________

at December 31, 2016	Altria Group, Inc.		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	4,521	$	1	$	47	$	—		$	4,569
Receivables	—		8		143		—			151
Inventories:
Leaf tobacco	—		541		351		—			892
Other raw materials	—		111		53		—			164
Work in process	—		3		509		—			512
Finished product	—		112		371		—			483
	—		767		1,284		—			2,051
Due from Altria Group, Inc. and subsidiaries	—		3,797		1,511		(5,308		)	—
Income taxes	167		10		92		—			269
Other current assets	3		108		109		—			220
Total current assets	4,691		4,691		3,186		(5,308		)	7,260
Property, plant and equipment, at cost	—		2,971		1,864		—			4,835
Less accumulated depreciation	—		2,073		804		—			2,877
	—		898		1,060		—			1,958
Goodwill	—		—		5,285		—			5,285
Other intangible assets, net	—		2		12,034		—			12,036
Investment in AB InBev	17,852		—		—		—			17,852
Investment in consolidated subsidiaries	11,636		2,632		—		(14,268		)	—
Finance assets, net	—		—		1,028		—			1,028
Due from Altria Group, Inc. and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	18		1,748		131		(1,384		)	513
Total Assets	$	38,987	$	9,971	$	22,724	$	(25,750	)	$	45,932

Condensed Consolidating Balance Sheets (Continued)

(in millions of dollars)

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at December 31, 2016	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Accounts payable	$	1		$	92		$	332		$	—		$	425
Accrued liabilities:
Marketing	—			619			128			—			747
Employment costs	104			14			171			—			289
Settlement charges	—			3,696			5			—			3,701
Other	261			438			326			—			1,025
Dividends payable	1,188			—			—			—			1,188
Due to Altria Group, Inc. and subsidiaries	5,030			237			41			(5,308		)	—
Total current liabilities	6,584			5,096			1,003			(5,308		)	7,375
Long-term debt	13,881			—			—			—			13,881
Deferred income taxes	5,424			—			4,376			(1,384		)	8,416
Accrued pension costs	207			—			598			—			805
Accrued postretirement health care costs	—			1,453			764			—			2,217
Due to Altria Group, Inc. and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	121			146			160			—			427
Total liabilities	26,217			6,695			11,691			(11,482		)	33,121
Contingencies
Redeemable noncontrolling interest	—			—			38			—			38
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,893			3,310			11,585			(14,895		)	5,893
Earnings reinvested in the business	36,906			237			1,118			(1,355		)	36,906
Accumulated other comprehensive losses	(2,052		)	(271		)	(1,720		)	1,991			(2,052		)
Cost of repurchased stock	(28,912		)	—			—			—			(28,912		)
Total stockholders’ equity attributable to Altria Group, Inc.	12,770			3,276			10,992			(14,268		)	12,770
Noncontrolling interests	—			—			3			—			3
Total stockholders’ equity	12,770			3,276			10,995			(14,268		)	12,773
Total Liabilities and Stockholders’ Equity	$	38,987		$	9,971		$	22,724		$	(25,750	)	$	45,932

Condensed Consolidating of Earnings and Comprehensive Earnings Income Statement

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

(in millions of dollars)

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for the year ended December 31, 2017	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	21,826		$	3,787		$	(37	)	$	25,576
Cost of sales	—			6,414			1,166			(37		)	7,543
Excise taxes on products	—			5,864			218			—			6,082
Gross profit	—			9,548			2,403			—			11,951
Marketing, administration and research costs	173			1,710			479			—			2,362
Asset impairment and exit costs	—			1			32			—			33
Operating (expense) income	(173		)	7,837			1,892			—			9,556
Interest and other debt expense (income), net	510			(20		)	215			—			705
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 Group, Inc.	$	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 Group, Inc.	$	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 Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	22,146		$	3,633		$	(35	)	$	25,744
Cost of sales	—			6,628			1,153			(35		)	7,746
Excise taxes on products	—			6,187			220			—			6,407
Gross profit	—			9,331			2,260			—			11,591
Marketing, administration and research costs	165			1,996			489			—			2,650
Asset impairment and exit costs	5			97			77			—			179
Operating (expense) income	(170		)	7,238			1,694			—			8,762
Interest and other debt expense, net	519			10			218			—			747
Loss on early extinguishment of debt	823			—			—			—			823
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 Group, Inc.	$	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 Group, Inc.	$	15,467		$	4,849		$	919		$	(5,768	)	$	15,467

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

(in millions of dollars)

_____________________________

for the year ended December 31, 2015	Altria Group, Inc.			PM USA		Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	22,133	$	3,342		$	(41	)	$	25,434
Cost of sales	—			6,664		1,117			(41		)	7,740
Excise taxes on products	—			6,369		211			—			6,580
Gross profit	—			9,100		2,014			—			11,114
Marketing, administration and research costs	189			2,094		425			—			2,708
Reduction of PMI tax-related receivable	41			—		—			—			41
Asset impairment and exit costs	—			—		4			—			4
Operating (expense) income	(230		)	7,006		1,585			—			8,361
Interest and other debt expense, net	560			33		224			—			817
Loss on early extinguishment of debt	228			—		—			—			228
Earnings from equity investment in SABMiller	(757		)	—		—			—			(757		)
Gain on AB InBev/SABMiller business combination	(5		)	—		—			—			(5		)
(Loss) earnings before income taxes and equity earnings of subsidiaries	(256		)	6,973		1,361			—			8,078
(Benefit) provision for income taxes	(184		)	2,536		483			—			2,835
Equity earnings of subsidiaries	5,313			268		—			(5,581		)	—
Net earnings	5,241			4,705		878			(5,581		)	5,243
Net earnings attributable to noncontrolling interests	—			—		(2		)	—			(2		)
Net earnings attributable to Altria Group, Inc.	$	5,241		$	4,705	$	876		$	(5,581	)	$	5,241
Net earnings	$	5,241		$	4,705	$	878		$	(5,581	)	$	5,243
Other comprehensive (losses) earnings, net of deferred income taxes	(598		)	86		(69		)	(17		)	(598		)
Comprehensive earnings	4,643			4,791		809			(5,598		)	4,645
Comprehensive earnings attributable to noncontrolling interests	—			—		(2		)	—			(2		)
Comprehensive earnings attributable to Altria Group, Inc.	$	4,643		$	4,791	$	807		$	(5,598	)	$	4,643

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statements of Cash Flows

(in millions of dollars)

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for the year ended December 31, 2017	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	6,910		$	4,049		$	841		$	(6,878	)	$	4,922
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
Payment for derivative financial instruments	(5		)	—			—			—			(5		)
Other	—			4			15			—			19
Net cash used in investing activities	(5		)	(30		)	(432		)	—			(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 Group, Inc. and subsidiaries	(2,459		)	1,410			1,049			—			—
Cash dividends paid to parent	—			(5,429		)	(1,449		)	6,878			—
Other	(40		)	—			(7		)	—			(47		)
Net cash used in financing activities	(10,223		)	(4,019		)	(407		)	6,878			(7,771		)
Cash and cash equivalents:
(Decrease) increase	(3,318		)	—			2			—			(3,316		)
Balance at beginning of year	4,521			1			47			—			4,569
Balance at end of year	$	1,203		$	1		$	49		$	—		$	1,253

Condensed Consolidating Statements of Cash Flows

(in millions of dollars)

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for the year ended December 31, 2016	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	4,356		$	5,138		$	319		$	(5,992	)	$	3,821
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		)
Payment for derivative financial instrument	(3		)	—			—			—			(3		)
Proceeds from derivative financial instruments	510			—			—			—			510
Other	—			—			9			—			9
Net cash provided by (used in) investing activities	3,702			(45		)	51			—			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 Group, Inc. and subsidiaries	(530		)	(28		)	558			—			—
Premiums and fees related to early extinguishment of debt	(809		)	—			—			—			(809		)
Cash dividends paid to parent	—			(5,064		)	(928		)	5,992			—
Other	(12		)	—			(9		)	—			(21		)
Net cash used in financing activities	(5,850		)	(5,092		)	(379		)	5,992			(5,329		)
Cash and cash equivalents:
Increase (decrease)	2,208			1			(9		)	—			2,200
Balance at beginning of year	2,313			—			56			—			2,369
Balance at end of year	$	4,521		$	1		$	47		$	—		$	4,569

Condensed Consolidating Statements of Cash Flows

(in millions of dollars)

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for the year ended December 31, 2015	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by Operating Activities
Net cash provided by operating activities	$	5,118		$	5,204		$	961		$	(5,440	)	$	5,843
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(51		)	(178		)	—			(229		)
Proceeds from finance assets	—			—			354			—			354
Payment for derivative financial instrument	(132		)	—			—			—			(132		)
Other	—			10			(18		)	—			(8		)
Net cash (used in) provided by investing activities	(132		)	(41		)	158			—			(15		)
Cash Provided by (Used in) Financing Activities
Long-term debt repaid	(1,793		)	—			—			—			(1,793		)
Repurchases of common stock	(554		)	—			—			—			(554		)
Dividends paid on common stock	(4,179		)	—			—			—			(4,179		)
Changes in amounts due to/from Altria Group, Inc. and subsidiaries	814			(495		)	(319		)	—			—
Premiums and fees related to early extinguishment of debt	(226		)	—			—			—			(226		)
Cash dividends paid to parent	—			(4,671		)	(769		)	5,440			—
Other	(16		)	—			(12		)	—			(28		)
Net cash used in financing activities	(5,954		)	(5,166		)	(1,100		)	5,440			(6,780		)
Cash and cash equivalents:
(Decrease) increase	(968		)	(3		)	19			—			(952		)
Balance at beginning of year	3,281			3			37			—			3,321
Balance at end of year	$	2,313		$	—		$	56		$	—		$	2,369