Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheets

September 30, 2018

(in millions of dollars)



	Altria		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	2,346	$	—	$	47	$	—		$	2,393
Receivables	—		14		173		—			187
Inventories:
Leaf tobacco	—		465		329		—			794
Other raw materials	—		114		74		—			188
Work in process	—		4		502		—			506
Finished product	—		117		472		—			589
	—		700		1,377		—			2,077
Due from Altria and subsidiaries	7		4,085		1,233		(5,325		)	—
Income taxes	—		223		—		(139		)	84
Other current assets	56		334		34		—			424
Total current assets	2,409		5,356		2,864		(5,464		)	5,165
Property, plant and equipment, at cost	—		2,910		1,951		—			4,861
Less accumulated depreciation	—		2,100		870		—			2,970
	—		810		1,081		—			1,891
Goodwill	—		—		5,307		—			5,307
Other intangible assets, net	—		2		12,383		—			12,385
Investment in AB InBev	17,825		—		—		—			17,825
Investment in consolidated subsidiaries	14,081		2,861		—		(16,942		)	—
Finance assets, net	—		—		848		—			848
Due from Altria and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	159		717		144		(488		)	532
Total Assets	$	39,264	$	9,746	$	22,627	$	(27,684	)	$	43,953

Condensed Consolidating Balance Sheets (Continued)

September 30, 2018

(in millions of dollars)



	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Current portion of long-term debt	$	2,007		$	—		$	—		$	—		$	2,007
Accounts payable	—			78			211			—			289
Accrued liabilities:
Marketing	—			578			112			—			690
Employment costs	14			11			122			—			147
Settlement charges	—			3,222			8			—			3,230
Other	277			335			302			(139		)	775
Dividends payable	1,508			—			—			—			1,508
Due to Altria and subsidiaries	4,814			426			85			(5,325		)	—
Total current liabilities	8,620			4,650			840			(5,464		)	8,646
Long-term debt	11,896			—			—			—			11,896
Deferred income taxes	2,963			—			2,952			(488		)	5,427
Accrued pension costs	197			—			63			—			260
Accrued postretirement health care costs	—			1,213			770			—			1,983
Due to Altria and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	94			30			83			—			207
Total liabilities	23,770			5,893			9,498			(10,742		)	28,419
Contingencies
Redeemable noncontrolling interest	—			—			38			—			38
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,959			3,310			12,236			(15,546		)	5,959
Earnings reinvested in the business	43,805			801			2,241			(3,042		)	43,805
Accumulated other comprehensive losses	(2,034		)	(258		)	(1,397		)	1,655			(2,034		)
Cost of repurchased stock	(33,171		)	—			—			—			(33,171		)
Total stockholders’ equity attributable to Altria	15,494			3,853			13,089			(16,942		)	15,494
Noncontrolling interests	—			—			2			—			2
Total stockholders’ equity	15,494			3,853			13,091			(16,942		)	15,496
Total Liabilities and Stockholders’ Equity	$	39,264		$	9,746		$	22,627		$	(27,684	)	$	43,953

Condensed Consolidating Balance Sheets

December 31, 2017

(in millions of dollars)



	Altria		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 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 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)

December 31, 2017

(in millions of dollars)



	Altria			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 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 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	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 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 (expense) income	(122		)	6,028			1,465			—			7,371
Interest and other debt expense (income), net	378			(37		)	162			—			503
Net periodic benefit cost (income), excluding service cost	3			(33		)	(7		)	—			(37		)
Earnings from equity investment in AB InBev	(759		)	—			—			—			(759		)
Loss on AB InBev/SABMiller business combination	33			—			—			—			33
Earnings before income taxes and equity earnings of subsidiaries	223			6,098			1,310			—			7,631
Provision for income taxes	67			1,537			311			—			1,915
Equity earnings of subsidiaries	5,557			310			—			(5,867		)	—
Net earnings	5,713			4,871			999			(5,867		)	5,716
Net earnings attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Net earnings attributable to Altria	$	5,713		$	4,871		$	996		$	(5,867	)	$	5,713


Net earnings	$	5,713		$	4,871		$	999		$	(5,867	)	$	5,716
Other comprehensive (losses) earnings, net of deferred income taxes	(137		)	10			109			(119		)	(137		)
Comprehensive earnings	5,576			4,881			1,108			(5,986		)	5,579
Comprehensive earnings attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive earnings attributable to Altria	$	5,576		$	4,881		$	1,105		$	(5,986	)	$	5,576

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Nine Months Ended September 30, 2017

(in millions of dollars)



	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	16,748		$	2,754		$	(27	)	$	19,475
Cost of sales	—			4,888			858			(27		)	5,719
Excise taxes on products	—			4,533			162			—			4,695
Gross profit	—			7,327			1,734			—			9,061
Marketing, administration and research costs	125			1,223			333			—			1,681
Asset impairment and exit costs	—			—			24			—			24
Operating (expense) income	(125		)	6,104			1,377			—			7,356
Interest and other debt expense (income), net	375			(12		)	162			—			525
Net periodic benefit cost (income), excluding service cost	1			(28		)	(10		)	—			(37		)
Earnings from equity investment in AB InBev	(332		)	—			—			—			(332		)
Gain on AB InBev/SABMiller business combination	(445		)	—			—			—			(445		)
Earnings before income taxes and equity earnings of subsidiaries	276			6,144			1,225			—			7,645
(Benefit) provision for income taxes	(207		)	2,173			420			—			2,386
Equity earnings of subsidiaries	4,773			234			—			(5,007		)	—
Net earnings	5,256			4,205			805			(5,007		)	5,259
Net earnings attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Net earnings attributable to Altria	$	5,256		$	4,205		$	802		$	(5,007	)	$	5,256


Net earnings	$	5,256		$	4,205		$	805		$	(5,007	)	$	5,259
Other comprehensive earnings, net of deferred income taxes	106			10			83			(93		)	106
Comprehensive earnings	5,362			4,215			888			(5,100		)	5,365
Comprehensive earnings attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive earnings attributable to Altria	$	5,362		$	4,215		$	885		$	(5,100	)	$	5,362

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 (expense) income	(45		)	2,093			509			—			2,557
Interest and other debt expense (income), net	127			(20		)	52			—			159
Net periodic benefit cost (income), excluding service cost	1			(18		)	(4		)	—			(21		)
Earnings from equity investment in AB InBev	(189		)	—			—			—			(189		)
Earnings before income taxes and equity earnings of subsidiaries	16			2,131			461			—			2,608
Provision for income taxes	21			539			104			—			664
Equity earnings of subsidiaries	1,948			119			—			(2,067		)	—
Net earnings	1,943			1,711			357			(2,067		)	1,944
Net earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings attributable to Altria	$	1,943		$	1,711		$	356		$	(2,067	)	$	1,943


Net earnings	$	1,943		$	1,711		$	357		$	(2,067	)	$	1,944
Other comprehensive (losses) earnings, net of deferred income taxes	(382		)	2			36			(38		)	(382		)
Comprehensive earnings	1,561			1,713			393			(2,105		)	1,562
Comprehensive earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings attributable to Altria	$	1,561		$	1,713		$	392		$	(2,105	)	$	1,561

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended September 30, 2017

(in millions of dollars)



	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,764		$	974		$	(9	)	$	6,729
Cost of sales	—			1,668			293			(9		)	1,952
Excise taxes on products	—			1,551			55			—			1,606
Gross profit	—			2,545			626			—			3,171
Marketing, administration and research costs	46			422			106			—			574
Asset impairment and exit costs	—			—			8			—			8
Operating (expense) income	(46		)	2,123			512			—			2,589
Interest and other debt expense (income), net	122			(6		)	53			—			169
Net periodic benefit cost (income), excluding service cost	—			(14		)	(4		)	—			(18		)
Earnings from equity investment in AB InBev	(169		)	—			—			—			(169		)
Gain on AB InBev/SABMiller business combination	(37		)	—			—			—			(37		)
Earnings before income taxes and equity earnings of subsidiaries	38			2,143			463			—			2,644
(Benefit) provision for income taxes	(167		)	776			168			—			777
Equity earnings of subsidiaries	1,661			82			—			(1,743		)	—
Net earnings	1,866			1,449			295			(1,743		)	1,867
Net earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings attributable to Altria	$	1,866		$	1,449		$	294		$	(1,743	)	$	1,866


Net earnings	$	1,866		$	1,449		$	295		$	(1,743	)	$	1,867
Other comprehensive (losses) earnings, net of deferred income taxes	(108		)	3			27			(30		)	(108		)
Comprehensive earnings	1,758			1,452			322			(1,773		)	1,759
Comprehensive earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings attributable to Altria	$	1,758		$	1,452		$	321		$	(1,773	)	$	1,758

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 Operating Activities
Net cash provided by operating activities	$	4,806		$	5,801		$	1,123		$	(5,164	)	$	6,566
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(33		)	(99		)	—			(132		)
Other	8			—			(13		)	—			(5		)
Net cash provided by (used in) investing activities	8			(33		)	(112		)	—			(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	1,576			(1,565		)	(11		)	—			—
Cash dividends paid to parent	—			(4,166		)	(998		)	5,164			—
Other	(21		)	—			(4		)	—			(25		)
Net cash used in financing activities	(3,671		)	(5,731		)	(1,013		)	5,164			(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 10. Contingencies.

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2017

(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	$	4,777		$	3,664		$	639		$	(4,936	)	$	4,144
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(21		)	(130		)	—			(151		)
Proceeds from finance assets	—			—			133			—			133
Other	(4		)	2			(182		)	—			(184		)
Net cash used in investing activities	(4		)	(19		)	(179		)	—			(202		)
Cash Provided by (Used in) Financing Activities
Repurchases of common stock	(2,359		)	—			—			—			(2,359		)
Dividends paid on common stock	(3,544		)	—			—			—			(3,544		)
Changes in amounts due to/from Altria and subsidiaries	(813		)	182			631			—			—
Cash dividends paid to parent	—			(3,849		)	(1,087		)	4,936			—
Other	(40		)	—			(7		)	—			(47		)
Net cash used in financing activities	(6,756		)	(3,667		)	(463		)	4,936			(5,950		)
Cash, cash equivalents and restricted cash ⁽¹⁾:
Decrease	(1,983		)	(22		)	(3		)	—			(2,008		)
Balance at beginning of period	4,521			83			47			—			4,651
Balance at end of period	$	2,538		$	61		$	44		$	—		$	2,643

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 10. Contingencies.