XML 82 R26.htm IDEA: XBRL DOCUMENT
v3.20.1

Financial Instruments (Tables) | 3 Months Ended
--- | ---
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Fair Value Measurement Inputs and Valuation Techniques | The fair values of the Fixed-price Preemptive Rights and Cronos warrant are estimated using Black-Scholes option-pricing models, adjusted for observable inputs (which are classified in Level 1 of the fair value hierarchy), including share price, and unobservable inputs, including probability factors and weighting of expected life, volatility levels and risk-free interest rates (which are classified in Level 3 of the fair value hierarchy) based on the following assumptions at:
|  | March 31, 2020 |  | December 31, 2019 |  | March 31, 2020 |  | December 31, 2019
|  | Fixed-price Preemptive Rights |  | Cronos Warrant
Share price (1) |  | C$7.99 |  | C$9.97 |  | C$7.99 |  | C$9.97
Expected life (2) |  | 1.60 years |  | 1.67 years |  | 2.93 years |  | 3.18 years
Expected volatility (3) |  | 79.97% |  | 81.61% |  | 79.97% |  | 81.61%
Risk-free interest rate (4)(5) |  | 0.38% |  | 1.71% |  | 0.49% |  | 1.69%
Expected dividend yield (6) |  | —% |  | —% |  | —% |  | —%
(1) Based on the closing market price for Cronos common stock on the Toronto Stock Exchange on the date indicated. (2) Based on the weighted-average expected life of the Fixed-price Preemptive Rights (with a range from approximately 0.25 year to 6 years at March 31, 2020 and December 31, 2019) and the March 8, 2023 expiration date of the Cronos warrant. (3) Based on a blend of historical volatility levels of the underlying equity security and peer companies. (4) Based on the implied yield currently available on Canadian Treasury zero coupon issues (with a range from approximately 0.21% to 0.62% at March 31, 2020 and 1.66% to 1.74% at December 31, 2019) weighted for the remaining expected life of the Fixed-price Preemptive Rights. (5) Based on the implied yield currently available on Canadian Treasury zero coupon issues and the expected life of the Cronos warrant. (6) Based on Cronos’s expected dividend payments.
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of the beginning and ending balance of the Fixed-price Preemptive Rights and Cronos warrant, which are classified in Level 3 of the fair value hierarchy:
|  | (in millions)
Balance at December 31, 2019 |  | $ | 303 |
Pre-tax earnings (losses) recognized in net earnings |  | (137 | )
Balance at March 31, 2020 |  | $ | 166 |
Schedule of Derivative Liabilities at Fair Value | The fair values of Altria’s derivative financial instruments on a gross basis included on the condensed consolidated balance sheets were as follows:
| Fair Value of Assets |  | Fair Value of Liabilities
| Balance Sheet Classification |  | March 31, 2020 |  | December 31, 2019 |  | Balance Sheet Classification | March 31, 2020 |  | December 31, 2019
Derivatives designated as hedging instruments: | (in millions)
Foreign currency contracts | Other current assets |  | $ | 55 |  |  | $ | 46 |  |  | Other accrued liabilities | $ | — |  |  | $ | 7 |
Foreign currency contracts | Other assets |  | 19 |  |  | — |  |  | Other liabilities | — |  |  | 21 |
Total |  | $ | 74 |  |  | $ | 46 |  |  |  | $ | — |  |  | $ | 28 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Cronos warrant | Investments in equity securities |  | $ | 132 |  |  | $ | 234 |  |  |  |  |  |
Fixed-price Preemptive Rights | Investments in equity securities |  | 34 |  |  | 69 |  |  |  |  |  |
Total |  |  | $ | 166 |  |  | $ | 303 |  |  |  |  |  |
Total derivatives |  |  | $ | 240 |  |  | $ | 349 |  |  |  | $ | — |  |  | $ | 28 |
Pre-tax Effects of Net Investment Hedges on Accumulated Other Comprehensive Losses | The pre-tax effects of Altria’s net investment hedges on accumulated other comprehensive losses and the condensed consolidated statements of earnings were as follows:
|  | Gain (Loss) Recognized in Accumulated Other Comprehensive Losses |  | Gain (Loss) Recognized in Net Earnings (1)
|  | For the Three Months Ended March 31,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
|  | (in millions)
Foreign currency contracts |  | $ | 56 |  |  | $ | 23 |  |  | $ | 14 |  |  | $ | 9 |
Foreign currency denominated debt |  | 77 |  |  | 33 |  |  | — |  |  | — |
Total |  | $ | 133 |  |  | $ | 56 |  |  | $ | 14 |  |  | $ | 9 |
(1) Related to amounts excluded from effectiveness testing. For the three months ended March 31, 2020 and 2019, Altria recognized pre-tax unrealized losses, representing the changes in the fair values of the Fixed-price Preemptive Rights and Cronos warrant, as follows:
| For the Three Months Ended March 31,
| 2020 |  | 2019
| (in millions)
Fixed-price Preemptive Rights | $ | (35 | ) |  | $ | (132 | )
Cronos warrant | (102 | ) |  | (262 | )
| (137 | ) |  | (394 | )

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of financial instrument classified as a derivative asset (liability) after deduction of derivative liability (asset) using recurring unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19279-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the location and amount of derivative instruments and nonderivative instruments designated as hedging instruments reported before netting adjustments, and the amount of gain (loss) on derivative instruments and nonderivative instruments designated and qualified as hedging instruments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5624181-113959 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5618551-113959 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5624171-113959 + Details
Name: | us-gaap_ScheduleOfDerivativeInstrumentsGainLossInStatementOfFinancialPerformanceTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure for net investment hedges of (a) the location and amount of gains and losses reported in the statement of financial performance and (b) the location and fair value amounts of the instruments reported in the statement of financial position. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5624171-113959 + Details
Name: | us-gaap_ScheduleOfNetInvestmentHedgesStatementsOfFinancialPerformanceAndFinancialPositionLocationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration