Condensed Consolidating Financial Information | Condensed Consolidating Financial Information: PM USA, which is a 100% owned subsidiary of Altria, has guaranteed Altria’s obligations under its outstanding debt securities, borrowings under its Credit Agreement and amounts outstanding under its commercial paper program (the “Guarantees”). Pursuant to the Guarantees, PM USA fully and unconditionally guarantees, as primary obligor, the payment and performance of Altria’s obligations under the guaranteed debt instruments (the “Obligations”), subject to release under certain customary circumstances as noted below. The Guarantees provide that PM USA guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of the Obligations. The liability of PM USA under the Guarantees is absolute and unconditional irrespective of: any lack of validity, enforceability or genuineness of any provision of any agreement or instrument relating thereto; any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from any agreement or instrument relating thereto; any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the Obligations; or any other circumstance that might otherwise constitute a defense available to, or a discharge of, Altria or PM USA. The obligations of PM USA under the Guarantees are limited to the maximum amount as will not result in PM USA’s obligations under the Guarantees constituting a fraudulent transfer or conveyance, after giving effect to such maximum amount and all other contingent and fixed liabilities of PM USA that are relevant under Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the Guarantees. For this purpose, “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors. PM USA will be unconditionally released and discharged from the Obligations upon the earliest to occur of: ▪ the date, if any, on which PM USA consolidates with or merges into Altria or any successor; ▪ the date, if any, on which Altria or any successor consolidates with or merges into PM USA; ▪ the payment in full of the Obligations pertaining to such Guarantees; and ▪ the rating of Altria’s long-term senior unsecured debt by Standard & Poor’s Ratings Services of A or higher. At March 31, 2019 , the respective principal 100% owned subsidiaries of Altria and PM USA were not limited by long-term debt or other agreements in their ability to pay cash dividends or make other distributions with respect to their equity interests. The following sets forth the condensed consolidating balance sheets as of March 31, 2019 and December 31, 2018 , condensed consolidating statements of earnings and comprehensive earnings for the three months ended March 31, 2019 and 2018 , and condensed consolidating statements of cash flows for the three months ended March 31, 2019 and 2018 for Altria, PM USA and, collectively, Altria’s other subsidiaries that are not guarantors of Altria’s debt instruments (the “Non-Guarantor Subsidiaries”). March 31, 2019 (in millions of dollars) Altria PM USA Non- Guarantor Subsidiaries Total Consolidating Adjustments Consolidated Assets Cash and cash equivalents $ 3,318 $ — $ 34 $ — $ 3,352 Receivables — 19 139 — 158 Inventories: Leaf tobacco — 544 386 — 930 Other raw materials — 122 68 — 190 Work in process — 10 641 — 651 Finished product — 159 426 — 585 — 835 1,521 — 2,356 Due from Altria and subsidiaries 82 4,574 1,166 (5,822 ) — Income taxes 189 3 — (189 ) 3 Other current assets 62 225 106 — 393 Total current assets 3,651 5,656 2,966 (6,011 ) 6,262 Property, plant and equipment, at cost — 2,931 1,986 — 4,917 Less accumulated depreciation — 2,128 867 — 2,995 — 803 1,119 — 1,922 Goodwill — — 5,196 — 5,196 Other intangible assets, net — 2 12,325 — 12,327 Investments in equity securities 17,476 — 14,539 — 32,015 Investment in consolidated subsidiaries 27,378 2,825 — (30,203 ) — Due from Altria and subsidiaries 4,790 — — (4,790 ) — Other assets 204 1,030 947 (670 ) 1,511 Total Assets $ 53,499 $ 10,316 $ 37,092 $ (41,674 ) $ 59,233 Condensed Consolidating Balance Sheets (Continued) March 31, 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 1 66 138 — 205 Accrued liabilities: Marketing — 418 72 — 490 Settlement charges — 4,359 8 — 4,367 Other 311 715 575 (189 ) 1,412 Dividends payable 1,501 — — — 1,501 Due to Altria and subsidiaries 5,192 433 197 (5,822 ) — Total current liabilities 9,149 5,991 990 (6,011 ) 10,119 Long-term debt 27,024 — — — 27,024 Deferred income taxes 2,992 — 3,031 (670 ) 5,353 Accrued pension costs 188 — 309 — 497 Accrued postretirement health care costs — 1,074 690 — 1,764 Due to Altria and subsidiaries — — 4,790 (4,790 ) — Other liabilities 67 93 197 — 357 Total liabilities 39,420 7,158 10,007 (11,471 ) 45,114 Contingencies Redeemable noncontrolling interest — — 38 — 38 Stockholders’ Equity Common stock 935 — 9 (9 ) 935 Additional paid-in capital 5,943 3,310 26,994 (30,304 ) 5,943 Earnings reinvested in the business 43,582 64 1,903 (1,967 ) 43,582 Accumulated other comprehensive losses (2,717 ) (216 ) (1,861 ) 2,077 (2,717 ) Cost of repurchased stock (33,664 ) — — — (33,664 ) Total stockholders’ equity attributable to Altria 14,079 3,158 27,045 (30,203 ) 14,079 Noncontrolling interests — — 2 — 2 Total stockholders’ equity 14,079 3,158 27,047 (30,203 ) 14,081 Total Liabilities and Stockholders’ Equity $ 53,499 $ 10,316 $ 37,092 $ (41,674 ) $ 59,233 Condensed Consolidating Balance Sheets December 31, 2018 (in millions of dollars) Altria PM USA Non- Total 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- Total 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 For the Three Months Ended March 31, 2019 (in millions of dollars) Altria PM USA Non- Total Consolidated Net revenues $ — $ 4,725 $ 913 $ (10 ) $ 5,628 Cost of sales — 1,340 248 (10 ) 1,578 Excise taxes on products — 1,185 54 — 1,239 Gross profit — 2,200 611 — 2,811 Marketing, administration and research costs 35 384 114 — 533 Asset impairment and exit costs 1 35 4 — 40 Operating (expense) income (36 ) 1,781 493 — 2,238 Interest and other debt expense (income), net 355 (25 ) 54 — 384 Net periodic benefit cost (income), excluding service cost 1 — (2 ) — (1 ) Earnings from equity investment in AB InBev (86 ) — — — (86 ) Loss on Cronos-related financial instruments — — 425 — 425 (Loss) earnings before income taxes and equity earnings of subsidiaries (306 ) 1,806 16 — 1,516 (Benefit) provision for income taxes (75 ) 459 11 — 395 Equity earnings of subsidiaries 1,351 95 — (1,446 ) — Net earnings 1,120 1,442 5 (1,446 ) 1,121 Net earnings attributable to noncontrolling interests — — (1 ) — (1 ) Net earnings attributable to Altria $ 1,120 $ 1,442 $ 4 $ (1,446 ) $ 1,120 Net earnings $ 1,120 $ 1,442 $ 5 $ (1,446 ) $ 1,121 Other comprehensive (losses) earnings, net of deferred income taxes (170 ) 5 23 (28 ) (170 ) Comprehensive earnings 950 1,447 28 (1,474 ) 951 Comprehensive earnings attributable to noncontrolling interests — — (1 ) — (1 ) Comprehensive earnings attributable to Altria $ 950 $ 1,447 $ 27 $ (1,474 ) $ 950 Condensed Consolidating Statements of Earnings and Comprehensive Earnings For the Three Months Ended March 31, 2018 (in millions of dollars) Altria PM USA Non- Guarantor Subsidiaries Total Consolidating Adjustments Consolidated Net revenues $ — $ 5,214 $ 904 $ (10 ) $ 6,108 Cost of sales — 1,487 257 (10 ) 1,734 Excise taxes on products — 1,383 55 — 1,438 Gross profit — 2,344 592 — 2,936 Marketing, administration and research costs 38 449 131 — 618 Asset impairment and exit costs — — 2 — 2 Operating (expense) income (38 ) 1,895 459 — 2,316 Interest and other debt expense (income), net 122 (9 ) 53 — 166 Net periodic benefit cost (income), excluding service cost 1 (6 ) (2 ) — (7 ) Earnings from equity investment in AB InBev (342 ) — — — (342 ) Loss on AB InBev/SABMiller business combination 33 — — — 33 Earnings before income taxes and equity earnings of subsidiaries 148 1,910 408 — 2,466 (Benefit) provision for income taxes (13 ) 482 102 — 571 Equity earnings of subsidiaries 1,733 89 — (1,822 ) — Net earnings 1,894 1,517 306 (1,822 ) 1,895 Net earnings attributable to noncontrolling interests — — (1 ) — (1 ) Net earnings attributable to Altria $ 1,894 $ 1,517 $ 305 $ (1,822 ) $ 1,894 Net earnings $ 1,894 $ 1,517 $ 306 $ (1,822 ) $ 1,895 Other comprehensive (losses) earnings, net of deferred income taxes (30 ) 4 39 (43 ) (30 ) Comprehensive earnings 1,864 1,521 345 (1,865 ) 1,865 Comprehensive earnings attributable to noncontrolling interests — — (1 ) — (1 ) Comprehensive earnings attributable to Altria $ 1,864 $ 1,521 $ 344 $ (1,865 ) $ 1,864 For the Three Months Ended March 31, 2019 (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 $ 1,642 $ 2,520 $ 166 $ (2,039 ) $ 2,289 Cash Used in Investing Activities Capital expenditures — (9 ) (29 ) — (38 ) Investment in Cronos — — (1,831 ) — (1,831 ) Investment in consolidated subsidiaries (1,947 ) — — 1,947 — Other, net (3 ) — (78 ) — (81 ) Net cash used in investing activities (1,950 ) (9 ) (1,938 ) 1,947 (1,950 ) 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 (151 ) — — — (151 ) Dividends paid on common stock (1,502 ) — — — (1,502 ) Changes in amounts due to/from Altria and subsidiaries 657 (771 ) 2,061 (1,947 ) — Cash dividends paid to parent — (1,737 ) (302 ) 2,039 — Other (120 ) — (9 ) — (129 ) Net cash provided by (used in) financing activities 2,349 (2,508 ) 1,750 92 1,683 Cash, cash equivalents and restricted cash (1) : Increase (decrease) 2,041 3 (22 ) — 2,022 Balance at beginning of period 1,277 100 56 — 1,433 Balance at end of period $ 3,318 $ 103 $ 34 $ — $ 3,455 (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 Three Months Ended March 31, 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 $ 648 $ 2,923 $ 189 $ (951 ) $ 2,809 Cash Provided by (Used in) Investing Activities Capital expenditures — (1 ) (33 ) — (34 ) Other — — (7 ) — (7 ) Net cash used in investing activities — (1 ) (40 ) — (41 ) Cash Provided by (Used in) Financing Activities Repurchases of common stock (513 ) — — — (513 ) Dividends paid on common stock (1,257 ) — — — (1,257 ) Changes in amounts due to/from Altria and subsidiaries 2,091 (2,439 ) 348 — — Cash dividends paid to parent — (446 ) (505 ) 951 — Other (20 ) — (3 ) — (23 ) Net cash provided by (used in) financing activities 301 (2,885 ) (160 ) 951 (1,793 ) Cash, cash equivalents and restricted cash (1) : Increase (decrease) 949 37 (11 ) — 975 Balance at beginning of period 1,203 62 49 — 1,314 Balance at end of period $ 2,152 $ 99 $ 38 $ — $ 2,289 (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 |