Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheets

June 30, 2019

(in millions of dollars)

	Altria		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	1,764	$	—	$	32	$	—		$	1,796
Receivables	—		15		148		—			163
Inventories:
Leaf tobacco	—		464		373		—			837
Other raw materials	—		127		67		—			194
Work in process	—		4		599		—			603
Finished product	—		150		451		—			601
	—		745		1,490		—			2,235
Due from Altria and subsidiaries	83		2,555		1,142		(3,780		)	—
Income taxes	121		2		—		(44		)	79
Other current assets	50		82		78		—			210
Total current assets	2,018		3,399		2,890		(3,824		)	4,483
Property, plant and equipment, at cost	—		2,940		1,993		—			4,933
Less accumulated depreciation	—		2,144		872		—			3,016
	—		796		1,121		—			1,917
Goodwill	—		—		5,196		—			5,196
Other intangible assets, net	—		2		12,329		—			12,331
Investments in equity securities	17,669		—		14,425		—			32,094
Investment in consolidated subsidiaries	27,559		2,844		—		(30,403		)	—
Due from Altria and subsidiaries	4,790		—		—		(4,790		)	—
Other assets	209		1,024		915		(668		)	1,480
Total Assets	$	52,245	$	8,065	$	36,876	$	(39,685	)	$	57,501

Condensed Consolidating Balance Sheets (Continued)

June 30, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Current portion of long-term debt	$	2,144		$	—		$	—		$	—		$	2,144
Accounts payable	—			76			148			—			224
Accrued liabilities:
Marketing	—			494			82			—			576
Settlement charges	—			2,011			8			—			2,019
Other	572			531			432			(44		)	1,491
Dividends payable	1,498			—			—			—			1,498
Due to Altria and subsidiaries	3,124			457			199			(3,780		)	—
Total current liabilities	7,338			3,569			869			(3,824		)	7,952
Long-term debt	27,096			—			—			—			27,096
Deferred income taxes	3,085			—			2,961			(668		)	5,378
Accrued pension costs	179			—			260			—			439
Accrued postretirement health care costs	—			1,075			693			—			1,768
Due to Altria and subsidiaries	—			—			4,790			(4,790		)	—
Other liabilities	83			105			176			—			364
Total liabilities	37,781			4,749			9,749			(9,282		)	42,997
Contingencies
Redeemable noncontrolling interest	—			—			38			—			38
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,953			3,310			26,998			(30,308		)	5,953
Earnings reinvested in the business	44,081			218			1,906			(2,124		)	44,081
Accumulated other comprehensive losses	(2,646		)	(212		)	(1,826		)	2,038			(2,646		)
Cost of repurchased stock	(33,859		)	—			—			—			(33,859		)
Total stockholders’ equity attributable  to Altria	14,464			3,316			27,087			(30,403		)	14,464
Noncontrolling interests	—			—			2			—			2
Total stockholders’ equity	14,464			3,316			27,089			(30,403		)	14,466
Total Liabilities and Stockholders’ Equity	$	52,245		$	8,065		$	36,876		$	(39,685	)	$	57,501

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 Six Months Ended June 30, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	10,336		$	1,929		$	(18	)	$	12,247
Cost of sales	—			2,950			520			(18		)	3,452
Excise taxes on products	—			2,558			107			—			2,665
Gross profit	—			4,828			1,302			—			6,130
Marketing, administration and research costs	84			789			229			—			1,102
Asset impairment and exit costs	1			38			34			—			73
Operating income (expense)	(85		)	4,001			1,039			—			4,955
Interest and other debt expense (income), net	634			(44		)	106			—			696
Net periodic benefit (income) cost, excluding service cost	1			(13		)	(4		)	—			(16		)
Earnings from equity investments	(388		)	—			(145		)	—			(533		)
Loss on Cronos-related financial instruments	—			—			691			—			691
Earnings (losses) before income taxes and equity earnings of subsidiaries	(332		)	4,058			391			—			4,117
Provision (benefit) for income taxes	(87		)	1,020			66			—			999
Equity earnings of subsidiaries	3,361			209			—			(3,570		)	—
Net earnings	3,116			3,247			325			(3,570		)	3,118
Net earnings attributable to noncontrolling interests	—			—			(2		)	—			(2		)
Net earnings attributable to Altria	$	3,116		$	3,247		$	323		$	(3,570	)	$	3,116
Net earnings	$	3,116		$	3,247		$	325		$	(3,570	)	$	3,118
Other comprehensive earnings (losses), net of deferred income taxes	(99		)	9			58			(67		)	(99		)
Comprehensive earnings	3,017			3,256			383			(3,637		)	3,019
Comprehensive earnings attributable to noncontrolling interests	—			—			(2		)	—			(2		)
Comprehensive earnings attributable to Altria	$	3,017		$	3,256		$	381		$	(3,637	)	$	3,017

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Six Months Ended June 30, 2018

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	10,528		$	1,903		$	(18	)	$	12,413
Cost of sales	—			2,930			560			(18		)	3,472
Excise taxes on products	—			2,754			110			—			2,864
Gross profit	—			4,844			1,233			—			6,077
Marketing, administration and research costs	77			909			273			—			1,259
Asset impairment and exit costs	—			—			4			—			4
Operating income (expense)	(77		)	3,935			956			—			4,814
Interest and other debt expense (income), net	251			(17		)	110			—			344
Net periodic benefit (income) cost, excluding service cost	2			(15		)	(3		)	—			(16		)
Earnings from equity investments	(570		)	—			—			—			(570		)
Loss on ABI/SABMiller business combination	33			—			—			—			33
Earnings (losses) before income taxes and equity earnings of subsidiaries	207			3,967			849			—			5,023
Provision (benefit) for income taxes	46			998			207			—			1,251
Equity earnings of subsidiaries	3,609			191			—			(3,800		)	—
Net earnings	3,770			3,160			642			(3,800		)	3,772
Net earnings attributable to noncontrolling interests	—			—			(2		)	—			(2		)
Net earnings attributable to Altria	$	3,770		$	3,160		$	640		$	(3,800	)	$	3,770
Net earnings	$	3,770		$	3,160		$	642		$	(3,800	)	$	3,772
Other comprehensive earnings (losses), net of deferred income taxes	245			8			73			(81		)	245
Comprehensive earnings	4,015			3,168			715			(3,881		)	4,017
Comprehensive earnings attributable to noncontrolling interests	—			—			(2		)	—			(2		)
Comprehensive earnings attributable to Altria	$	4,015		$	3,168		$	713		$	(3,881	)	$	4,015

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended June 30, 2019

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,611		$	1,016		$	(8	)	$	6,619
Cost of sales	—			1,610			272			(8		)	1,874
Excise taxes on products	—			1,373			53			—			1,426
Gross profit	—			2,628			691			—			3,319
Marketing, administration and research costs	49			405			115			—			569
Asset impairment and exit costs	—			3			30			—			33
Operating income (expense)	(49		)	2,220			546			—			2,717
Interest and other debt expense (income), net	279			(19		)	52			—			312
Net periodic benefit (income) cost, excluding service cost	—			(13		)	(2		)	—			(15		)
Earnings from equity investments	(302		)	—			(145		)	—			(447		)
Loss on Cronos-related financial instruments	—			—			266			—			266
Earnings (losses) before income taxes and equity earnings of subsidiaries	(26		)	2,252			375			—			2,601
Provision (benefit) for income taxes	(12		)	561			55			—			604
Equity earnings of subsidiaries	2,010			114			—			(2,124		)	—
Net earnings	1,996			1,805			320			(2,124		)	1,997
Net earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings attributable to Altria	$	1,996		$	1,805		$	319		$	(2,124	)	$	1,996
Net earnings	$	1,996		$	1,805		$	320		$	(2,124	)	$	1,997
Other comprehensive earnings (losses), net of deferred income taxes	71			4			35			(39		)	71
Comprehensive earnings	2,067			1,809			355			(2,163		)	2,068
Comprehensive earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings attributable to Altria	$	2,067		$	1,809		$	354		$	(2,163	)	$	2,067

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended June 30, 2018

(in millions of dollars)

	Altria			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,314		$	999		$	(8	)	$	6,305
Cost of sales	—			1,443			303			(8		)	1,738
Excise taxes on products	—			1,371			55			—			1,426
Gross profit	—			2,500			641			—			3,141
Marketing, administration and research costs	39			460			142			—			641
Asset impairment and exit costs	—			—			2			—			2
Operating income (expense)	(39		)	2,040			497			—			2,498
Interest and other debt expense (income), net	129			(8		)	57			—			178
Net periodic benefit (income) cost, excluding service cost	1			(9		)	(1		)	—			(9		)
Earnings from equity investments	(228		)	—			—			—			(228		)
Earnings (losses) before income taxes and equity earnings of subsidiaries	59			2,057			441			—			2,557
Provision (benefit) for income taxes	59			516			105			—			680
Equity earnings of subsidiaries	1,876			102			—			(1,978		)	—
Net earnings	1,876			1,643			336			(1,978		)	1,877
Net earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings attributable to Altria	$	1,876		$	1,643		$	335		$	(1,978	)	$	1,876
Net earnings	$	1,876		$	1,643		$	336		$	(1,978	)	$	1,877
Other comprehensive earnings (losses), net of deferred income taxes	275			4			34			(38		)	275
Comprehensive earnings	2,151			1,647			370			(2,016		)	2,152
Comprehensive earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings attributable to Altria	$	2,151		$	1,647		$	369		$	(2,016	)	$	2,151

Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 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	$	3,829		$	2,078		$	491		$	(4,006	)	$	2,392
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(20		)	(59		)	—			(79		)
Investment in Cronos	—			—			(1,832		)	—			(1,832		)
Investment in consolidated subsidiaries	(1,951		)	—			—			1,951			—
Other, net	22			1			(88		)	—			(65		)
Net cash provided by (used in) investing activities	(1,929		)	(19		)	(1,979		)	1,951			(1,976		)
Cash Provided by (Used in) Financing Activities
Repayment of short-term borrowings	(12,800		)	—			—			—			(12,800		)
Long-term debt issued	16,265			—			—			—			16,265
Repurchases of common stock	(346		)	—			—			—			(346		)
Dividends paid on common stock	(3,001		)	—			—			—			(3,001		)
Changes in amounts due to/from Altria and subsidiaries	(1,410		)	1,269			2,092			(1,951		)	—
Cash dividends paid to parent	—			(3,388		)	(618		)	4,006			—
Other	(121		)	—			(10		)	—			(131		)
Net cash provided by (used in) financing activities	(1,413		)	(2,119		)	1,464			2,055			(13		)
Cash, cash equivalents and restricted cash (1):
Increase (decrease)	487			(60		)	(24		)	—			403
Balance at beginning of period	1,277			100			56			—			1,433
Balance at end of period	$	1,764		$	40		$	32		$	—		$	1,836

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 12. Contingencies.

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 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	$	2,681		$	3,549		$	595		$	(2,975	)	$	3,850
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(10		)	(62		)	—			(72		)
Investment in consolidated subsidiaries	(176		)	—			—			176			—
Other, net	8			—			(17		)	—			(9		)
Net cash provided by (used in) investing activities	(168		)	(10		)	(79		)	176			(81		)
Cash Provided by (Used in) Financing Activities
Repurchases of common stock	(950		)	—			—			—			(950		)
Dividends paid on common stock	(2,585		)	—			—			—			(2,585		)
Changes in amounts due to/from Altria and subsidiaries	1,233			(1,209		)	152			(176		)	—
Cash dividends paid to parent	—			(2,298		)	(677		)	2,975			—
Other	(21		)	—			(4		)	—			(25		)
Net cash provided by (used in) financing activities	(2,323		)	(3,507		)	(529		)	2,799			(3,560		)
Cash, cash equivalents and restricted cash (1):
Increase (decrease)	190			32			(13		)	—			209
Balance at beginning of period	1,203			62			49			—			1,314
Balance at end of period	$	1,393		$	94		$	36		$	—		$	1,523

⁽¹⁾ Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 12. Contingencies.