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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                    
Commission File Number 1-08940
Altria Group, Inc.
(Exact name of registrant as specified in its charter)
Virginia 13-3260245
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
Identification No.)
6601 West Broad Street,Richmond,Virginia23230
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (804) 274-2200 
 Former name, former address and former fiscal year, if changed since last report
Securities registered pursuant to Section 12(b) of the Act:
               Title of each class               
Trading SymbolsName of each exchange on which registered
Common Stock, $0.33 1/3 par value
MONew York Stock Exchange
1.000% Notes due 2023
MO23ANew York Stock Exchange
1.700% Notes due 2025
MO25New York Stock Exchange
2.200% Notes due 2027
MO27New York Stock Exchange
3.125% Notes due 2031
MO31New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   þ     No   ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes   þ    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þAccelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes    No   þ
At July 20, 2021, there were 1,844,077,897 shares outstanding of the registrant’s common stock, par value $0.33 1/3 per share.


Table of Contents    


ALTRIA GROUP, INC.
TABLE OF CONTENTS
 
  Page No.
PART I -FINANCIAL INFORMATION
Item 1.Financial Statements (Unaudited)
Item 2.
Item 3.
Item 4.
PART II -OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 6.
Signature

2

Table of Contents    
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of dollars)
(Unaudited)
______________________________
 
June 30, 2021December 31, 2020
Assets
Cash and cash equivalents$1,877 $4,945 
Receivables132 137 
Inventories:
Leaf tobacco642 844 
Other raw materials177 200 
Work in process450 502 
Finished product525 420 
1,794 1,966 
Other current assets381 69 
Total current assets4,184 7,117 
Property, plant and equipment, at cost5,103 5,150 
Less accumulated depreciation3,170 3,138 
1,933 2,012 
Goodwill5,177 5,177 
Other intangible assets, net12,580 12,615 
Investments in equity securities ($1,775 million and $1,868 million at June 30, 2021 and December 31, 2020, respectively, measured at fair value)
19,831 19,529 
Other assets683 964 
Total Assets$44,388 $47,414 
 
See notes to condensed consolidated financial statements.
3

Table of Contents    
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)
(in millions of dollars, except share and per share data)
(Unaudited)
________________________________________________
 
June 30, 2021December 31, 2020
Liabilities
Current portion of long-term debt$ $1,500 
Accounts payable260 380 
Accrued liabilities:
Marketing684 523 
Settlement charges1,980 3,564 
Other1,266 1,494 
Dividends payable1,593 1,602 
Total current liabilities5,783 9,063 
Long-term debt28,241 27,971 
Deferred income taxes4,779 4,532 
Accrued pension costs413 551 
Accrued postretirement health care costs1,515 1,951 
Other liabilities357 381 
Total liabilities41,088 44,449 
Contingencies (Note 11)
Redeemable noncontrolling interest41 40 
Stockholders’ Equity
Common stock, par value $0.33 1/3 per share
(2,805,961,317 shares issued)
935 935 
Additional paid-in capital5,840 5,910 
Earnings reinvested in the business35,065 34,679 
Accumulated other comprehensive losses(3,602)(4,341)
Cost of repurchased stock
(960,673,950 shares at June 30, 2021 and
947,542,152 shares at December 31, 2020)
(34,981)(34,344)
Total stockholders’ equity attributable to Altria
3,257 2,839 
Noncontrolling interests2 86 
Total stockholders’ equity
3,259 2,925 
Total Liabilities and Stockholders’ Equity
$44,388 $47,414 
See notes to condensed consolidated financial statements.

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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of dollars, except per share data)
(Unaudited)
_____________________________________ 
For the Six Months Ended June 30,For the Three Months Ended June 30,
2021202020212020
Net revenues$12,972 $12,726 $6,936 $6,367 
Cost of sales3,490 3,948 1,882 1,775 
Excise taxes on products2,478 2,618 1,322 1,305 
Gross profit7,004 6,160 3,732 3,287 
Marketing, administration and research costs1,128 1,028 546 491 
Operating income5,876 5,132 3,186 2,796 
Interest and other debt expense, net603 583 295 308 
Loss on early extinguishment of debt649    
Net periodic benefit income, excluding service cost(89)(55)(46)(28)
(Income) losses from equity investments(126)(166)(75)(9)
(Gain) loss on Cronos-related financial instruments(7)97 103 (40)
Earnings before income taxes4,846 4,673 2,909 2,565 
Provision for income taxes1,275 1,185 759 627 
Net earnings3,571 3,488 2,150 1,938 
Net (earnings) losses attributable to noncontrolling interests2 7 (1)5 
Net earnings attributable to Altria$3,573 $3,495 $2,149 $1,943 
Per share data:
Basic and diluted earnings per share attributable to Altria$1.93 $1.88 $1.16 $1.04 
See notes to condensed consolidated financial statements.

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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Earnings
(in millions of dollars)
(Unaudited)
_____________________
For the Six Months Ended June 30,For the Three Months Ended June 30,
2021202020212020
Net earnings$3,571 $3,488 $2,150 $1,938 
Other comprehensive earnings (losses), net of deferred income taxes:
Benefit plans377 42 349 21 
ABI334 (913)(183)(1,211)
Currency translation adjustments and other28 (39)6 (51)
Other comprehensive earnings (losses), net of deferred
income taxes
739 (910)172 (1,241)
Comprehensive earnings (losses)4,310 2,578 2,322 697 
Comprehensive (earnings) losses attributable to noncontrolling interests2 7 (1)5 
Comprehensive earnings (losses) attributable to Altria$4,312 $2,585 $2,321 $702 
See notes to condensed consolidated financial statements.
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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
for the Six Months Ended June 30, 2021 and 2020
(in millions of dollars, except per share data)
(Unaudited)
_______________________________________
 
 Attributable to Altria  
 Common
Stock
Additional
Paid-in
Capital
Earnings
Reinvested
in the
Business
Accumulated
Other
Comprehensive
Losses
Cost of
Repurchased
Stock
Non-
controlling
Interests
Total
Stockholders’
Equity
Balances, December 31, 2020$935 $5,910 $34,679 $(4,341)$(34,344)$86 $2,925 
Net earnings (losses) (1)
  3,573   (4)3,569 
Other comprehensive earnings (losses), net of deferred income taxes
   739   739 
Stock award activity 7   13  20 
Cash dividends declared ($1.72 per share)
  (3,187)   (3,187)
Repurchases of common stock    (650) (650)
Other (2)
 (77)   (80)(157)
Balances, June 30, 2021$935 $5,840 $35,065 $(3,602)$(34,981)$2 $3,259 


 Attributable to Altria  
 Common
Stock
Additional
Paid-in
Capital
Earnings
Reinvested
in the
Business
Accumulated
Other
Comprehensive
Losses
Cost of
Repurchased
Stock
Non-
controlling
Interests
Total
Stockholders’
Equity
Balances, December 31, 2019$935 $5,970 $36,539 $(2,864)$(34,358)$97 $6,319 
Net earnings (losses) (1)
— — 3,495 — — (8)3,487 
Other comprehensive earnings (losses), net of deferred income taxes
— — — (910)— — (910)
Stock award activity
— (6)— — 13 — 7 
Cash dividends declared ($1.68 per share)
— — (3,126)— — — (3,126)
Other— — — — — 9 9 
Balances, June 30, 2020$935 $5,964 $36,908 $(3,774)$(34,345)$98 $5,786 

(1)Amounts attributable to noncontrolling interests for the six months ended June 30, 2021 and 2020 exclude net earnings of $2 million and $1 million, respectively, due to the redeemable noncontrolling interest related to Stag’s Leap Wine Cellars, which is reported in the mezzanine equity section on the condensed consolidated balance sheets.
(2) Represents the purchase of the remaining noncontrolling interests in Helix. For additional information, see Note 1. Background and Basis of Presentation.


See notes to condensed consolidated financial statements.


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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
for the Three Months Ended June 30, 2021 and 2020
(in millions of dollars, except per share data)
(Unaudited)
_______________________________________ 

 Attributable to Altria  
 Common
Stock
Additional
Paid-in
Capital
Earnings
Reinvested
in the
Business
Accumulated
Other
Comprehensive
Losses
Cost of
Repurchased
Stock
Non-
controlling
Interests
Total
Stockholders’
Equity
Balances, March 31, 2021$935 $5,905 $34,507 $(3,774)$(34,660)$82 $2,995 
Net earnings (losses) (1)
  2,149    2,149 
Other comprehensive earnings (losses), net of deferred income taxes
   172   172 
Stock award activity
 12   4  16 
Cash dividends declared $0.86 per share)
  (1,591)   (1,591)
Repurchases of common stock    (325) (325)
Other (2)
 (77)   (80)(157)
Balances, June 30, 2021
$935 $5,840 $35,065 $(3,602)$(34,981)$2 $3,259 


 Attributable to Altria  
 Common
Stock
Additional
Paid-in
Capital
Earnings
Reinvested
in the
Business
Accumulated
Other
Comprehensive
Losses
Cost of
Repurchased
Stock
Non-
controlling
Interests
Total
Stockholders’
Equity
Balances, March 31, 2020$935 $5,959 $36,528 $(2,533)$(34,346)$94 $6,637 
Net earnings (losses)— — 1,943 — — (5)1,938 
Other comprehensive earnings (losses), net of deferred income taxes
— — — (1,241)— — (1,241)
Stock award activity
— 5 — — 1 — 6 
Cash dividends declared ($0.84 per share)
— — (1,563)— — — (1,563)
Other— — — — — 9 9 
Balances, June 30, 2020$935 $5,964 $36,908 $(3,774)$(34,345)$98 $5,786 

(1) Amounts attributable to noncontrolling interests for the three months ended June 30, 2021 exclude net earnings of $1 million due to the redeemable noncontrolling interest related to Stag’s Leap Wine Cellars, which is reported in the mezzanine equity section on the condensed consolidated balance sheets.
(2) Represents the purchase of the remaining noncontrolling interests in Helix. For additional information, see Note 1. Background and Basis of Presentation.

See notes to condensed consolidated financial statements.


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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions of dollars)
(Unaudited)
_____________________
For the Six Months Ended June 30,20212020
Cash Provided by (Used in) Operating Activities
Net earnings$3,571 $3,488 
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization128 130 
Deferred income tax provision (benefit)64 (4)
(Income) losses from equity investments(126)(166)
Dividends from ABI119 108 
(Gain) loss on Cronos-related financial instruments(7)97 
Loss on early extinguishment of debt649  
Cash effects of changes:
Receivables5 12 
Inventories172 87 
Accounts payable(113)(47)
Income taxes(171)1,049 
Accrued liabilities and other current assets3 1,028 
Accrued settlement charges(1,584)(1,275)
Pension plan contributions(6)(11)
Pension provisions and postretirement, net(73)(38)
Other, net (1)
48 488 
Net cash provided by (used in) operating activities2,679 4,946 
Cash Provided by (Used in) Investing Activities
Capital expenditures(53)(106)
Other, net44 43 
Net cash provided by (used in) investing activities$(9)$(63)
(1) 2020 primarily reflects inventory-related amounts associated with the Wine Business Strategic Reset. For further discussion, see Note 8. Segment Reporting.
See notes to condensed consolidated financial statements.

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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(in millions of dollars)
(Unaudited)
_____________________
For the Six Months Ended June 30,20212020
Cash Provided by (Used in) Financing Activities
Proceeds from short-term borrowings$ $3,000 
Repayment of short-term borrowings (3,000)
Long-term debt issued5,472 1,993 
Long-term debt repaid(6,542)(1,000)
Repurchases of common stock(650) 
Dividends paid on common stock(3,196)(3,126)
Premiums and fees related to early extinguishment of debt(623) 
Other, net(210)(16)
Net cash provided by (used in) financing activities(5,749)(2,149)
Cash, cash equivalents and restricted cash:
Increase (decrease)(3,079)2,734 
Balance at beginning of period5,006 2,160 
Balance at end of period$1,927 $4,894 
The following table provides a reconciliation of cash, cash equivalents and restricted cash to the amounts reported on Altria’s condensed consolidated balance sheets:
At June 30, 2021At December 31, 2020
Cash and cash equivalents$1,877 $4,945 
Restricted cash included in other current assets (1)
5 1 
Restricted cash included in other assets (1)
45 60 
Cash, cash equivalents and restricted cash$1,927 $5,006 
(1)Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 11. Contingencies.

See notes to condensed consolidated financial statements.
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Altria Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1. Background and Basis of Presentation
When used in these notes, the term Altria,” refers to Altria Group, Inc. and its subsidiaries, unless the context requires otherwise.
Background: At June 30, 2021, Altria’s wholly owned subsidiaries included Philip Morris USA Inc. (“PM USA”), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. (“Middleton”), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly owned subsidiary of PM USA; UST LLC (“UST”), which through its wholly owned subsidiaries, including U.S. Smokeless Tobacco Company LLC (“USSTC”) and Ste. Michelle Wine Estates Ltd. (“Ste. Michelle”), is engaged in the manufacture and sale of moist smokeless tobacco products (“MST”), snus products and wine; Helix Innovations LLC (“Helix”), which operates in the United States and Canada, and Helix Innovations GmbH and its subsidiaries (“Helix ROW”), which operate internationally in the rest-of-world, are engaged in the manufacture and sale of on! oral nicotine pouches; and Philip Morris Capital Corporation (“PMCC”), which maintains a portfolio of finance assets, substantially all of which are leveraged leases.
Altria owns 100% of the global on! business as a result of transactions in December 2020 and April 2021 to purchase the remaining 20% interest in (i) Helix ROW and (ii) Helix, respectively. The total purchase price of the December 2020 and April 2021 transactions was approximately $250 million.
Other Altria wholly owned subsidiaries included Altria Group Distribution Company, which provides sales and distribution services to certain Altria operating subsidiaries, and Altria Client Services LLC, which provides various support services in areas such as legal, regulatory, consumer engagement, finance, human resources and external affairs to Altria and its subsidiaries. Altria’s access to the operating cash flows of its wholly owned subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans by its subsidiaries. At June 30, 2021, Altria’s significant wholly owned subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to their equity interests.
At June 30, 2021, Altria’s investments in equity securities consisted of Anheuser-Busch InBev SA/NV (“ABI”), Cronos Group Inc. (“Cronos”) and JUUL Labs, Inc. (“JUUL”). Altria accounts for its investments in ABI and Cronos under the equity method of accounting using a one-quarter lag. Altria accounts for its equity investment in JUUL under the fair value option.
For further discussion of Altria’s investments in equity securities, see Note 3. Investments in Equity Securities.
On July 8, 2021, UST entered into a Share Purchase Agreement pursuant to which UST agreed to sell its subsidiary, International Wine & Spirits Ltd. (“IWS”), which includes Ste. Michelle. For further discussion, see Note 13. Subsequent Event.
Share Repurchases: In July 2019, Altria’s Board of Directors (the “Board of Directors” or “Board”) authorized a $1.0 billion share repurchase program. In April 2020, the Board rescinded the $500 million remaining in this program as part of Altria’s efforts to enhance its liquidity position in response to the COVID-19 pandemic. Altria did not repurchase any shares in 2020.
In January 2021, the Board authorized a new $2.0 billion share repurchase program. At June 30, 2021, Altria had $1,350 million remaining in this program. The timing of share repurchases under this program depends upon marketplace conditions and other factors, and the program remains subject to the discretion of the Board.
Altria’s share repurchase activity for the six and three months ended June 30, 2021 was as follows:
(in millions, except per share data)For the Six Months Ended June 30, 2021For the Three Months Ended June 30, 2021
Total number of shares repurchased
13.5 6.6 
Aggregate cost of shares repurchased
$650 $325 
Average price per share of shares repurchased
$48.09 $49.21 
Basis of Presentation: The interim condensed consolidated financial statements of Altria are unaudited. It is the opinion of Altria’s management that all adjustments necessary for a fair statement of the interim results presented have been reflected in the interim condensed consolidated financial statements. All such adjustments were of a normal recurring nature. Net revenues and net earnings for any interim period are not necessarily indicative of results that may be expected for the entire year.
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Certain immaterial prior year amounts have been reclassified to conform with the current year’s presentation.
These statements should be read in conjunction with Altria’s audited consolidated financial statements and related notes, which appear in Altria’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”).
On January 1, 2021, Altria adopted Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”). This guidance removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. The adoption of ASU No. 2019-12 did not have a material impact on Altria’s condensed consolidated financial statements.
Additionally, on January 1, 2021, Altria adopted ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (“ASU No. 2020-01”). This guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The adoption of ASU No. 2020-01 did not have a material impact on Altria’s condensed consolidated financial statements.
For a description of issued accounting guidance applicable to, but not yet adopted by, Altria, see Note 12. New Accounting Guidance Not Yet Adopted.

Note 2. Revenues from Contracts with Customers
Altria disaggregates net revenues based on product type. For further discussion, see Note 8. Segment Reporting.
A majority of Altria’s businesses offer cash discounts to customers for prompt payment and calculate cash discounts as a percentage of the list price based on historical experience and agreed-upon payment terms. Beginning in the first quarter of 2021, USSTC began calculating cash discounts as a flat rate per unit, based on agreed-upon payment terms. Altria’s businesses record receivables net of the cash discounts on Altria’s condensed consolidated balance sheets.
Altria’s businesses that receive payments in advance of product shipment record such payments as deferred revenue. These payments are included in other accrued liabilities on Altria’s condensed consolidated balance sheets until control of such products is obtained by the customer. Deferred revenue was $339 million and $301 million at June 30, 2021 and December 31, 2020, respectively. When cash is received in advance of product shipment, Altria’s businesses satisfy their performance obligations within three days of receiving payment. At June 30, 2021 and December 31, 2020, there were no differences between amounts recorded as deferred revenue and amounts subsequently recognized as revenue.
Receivables were $132 million and $137 million at June 30, 2021 and December 31, 2020, respectively. At June 30, 2021 and December 31, 2020, there were no expected differences between amounts recorded and subsequently received, and Altria’s busin