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Segment Reporting
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
In the first quarter of 2020, Altria renamed its smokeless products segment as the oral tobacco products segment.
The products of Altria’s subsidiaries include smokeable tobacco products, consisting of combustible cigarettes manufactured and sold by PM USA (including super premium cigarettes previously manufactured and sold by Nat Sherman), machine-made large cigars and pipe tobacco manufactured and sold by Middleton; oral tobacco products, consisting of MST and snus products manufactured and sold by USSTC, and oral nicotine pouches manufactured and sold by Helix; and wine produced and/or distributed by Ste. Michelle. The products and services of these subsidiaries constitute Altria’s reportable segments of smokeable products, oral tobacco products (formerly smokeless products) and wine. The financial services and the innovative tobacco products businesses are included in all other.
Altria’s chief operating decision maker (the “CODM”) reviews operating companies income (loss) (“OCI”) to evaluate the performance of, and allocate resources to, the segments. OCI for the segments is defined as operating income before general corporate expenses and amortization of intangibles. Interest and other debt expense, net, net periodic benefit income/cost, excluding service cost, and provision for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by the CODM. Information about total assets by segment is not disclosed because such information is not reported to or used by the CODM. Substantially all of Altria’s long-lived assets are located in the United States. Segment goodwill and other intangible assets, net, are disclosed in Note 4. Goodwill and Other Intangible Assets, net. The accounting policies of the segments are the same as those described in Note 2. Summary of Significant Accounting Policies.
Segment data were as follows:
 For the Years Ended December 31,
(in millions)202020192018
Net revenues:
Smokeable products$23,089 $21,996 $22,297 
Oral tobacco products2,533 2,367 2,262 
Wine614 689 691 
All other(83)58 114 
Net revenues$26,153 $25,110 $25,364 
Earnings before income taxes:
Operating companies income (loss):
Smokeable products$9,985 $9,009 $8,408 
Oral tobacco products1,718 1,580 1,431 
Wine(360)(3)50 
All other(172)(16)(421)
Amortization of intangibles(72)(44)(38)
General corporate expenses(227)(199)(315)
Corporate asset impairment and exit costs
1 (1)— 
Operating income10,873 10,326 9,115 
Interest and other debt expense, net
(1,209)(1,280)(665)
Net periodic benefit income, excluding service cost 77 37 34 
Income (losses) from equity investments(111)1,725 890 
Impairment of JUUL equity securities
(2,600)(8,600)— 
Loss on Cronos-related financial instruments
(140)(1,442)— 
Loss on ABI/SABMiller business combination— — (33)
Earnings before income taxes$6,890 $766 $9,341 
The smokeable products segment included net revenues of $22,135 million, $21,158 million and $21,506 million for the years ended December 31, 2020, 2019 and 2018, respectively, related to cigarettes and net revenues of $954 million, $838 million and $791 million for the years ended December 31, 2020, 2019 and 2018, respectively, related to cigars.
Substantially all of Altria’s net revenues are from sales generated in the United States for the years ended December 31, 2020, 2019 and 2018. PM USA, USSTC, Helix and Middleton’s largest customer, McLane Company, Inc., accounted for approximately 26%, 25% and 27% of Altria’s consolidated net revenues for the years ended December 31, 2020, 2019 and 2018, respectively. In addition, Core-Mark Holding Company, Inc. accounted for approximately 17%, 15% and 14% of Altria’s consolidated net revenues for the years ended December 31, 2020, 2019 and 2018, respectively. Substantially all of these net revenues were reported in the smokeable products and
oral tobacco products segments. Sales to two distributors accounted for approximately 68%, 67% and 64% of net revenues for the wine segment for the years ended December 31, 2020, 2019 and 2018 respectively.
Details of Altria’s depreciation expense and capital expenditures were as follows:
 For the Years Ended December 31,
(in millions)202020192018
Depreciation expense:
Smokeable products$81 $88 $90 
Oral tobacco products32 27 28 
Wine40 41 40 
General corporate and other32 26 31 
Total depreciation expense$185 $182 $189 
Capital expenditures:
Smokeable products$49 $61 $81 
Oral tobacco products67 44 73 
Wine31 63 40 
General corporate and other84 78 44 
Total capital expenditures$231 $246 $238 
The comparability of OCI for the reportable segments and the all other category was affected by the following:
▪Non-Participating Manufacturer (“NPM”) Adjustment Items: For the years ended December 31, 2020 and 2018, pre-tax expense (income) for NPM adjustment items of $4 million and $(145) million, respectively, was recorded to cost of sales in the smokeable products segment. No NPM adjustment items were recorded for 2019. NPM adjustment items result from the resolutions of certain disputes with states and territories related to the NPM adjustment provision under the 1998 Master Settlement Agreement (such dispute resolutions are referred to as “NPM Adjustment Items” and are more fully described in Health Care Cost Recovery Litigation - NPM Adjustment Disputes in Note 18. Contingencies).
▪Tobacco and Health Litigation Items: For the years ended December 31, 2020, 2019 and 2018, pre-tax charges related to certain tobacco and health litigation items were recorded in Altria’s consolidated statements of earnings (losses) as follows:
(in millions)202020192018
Smokeable products segment
$79 $72 $103 
Oral tobacco products segment— — 10 
Interest and other debt expense, net
4 5 18 
Total$83 $77 $131 
The amounts shown in the table above for the smokeable and oral tobacco products segments were recorded in marketing, administration and research costs. For further discussion, see Note 18. Contingencies.
▪COVID-19 Special Items: Net pre-tax charges of $50 million ($41 million in the smokeable products segment and $9 million in the oral tobacco products segment) related to the COVID-19 pandemic were recorded in Altria’s consolidated statement of earnings (losses) for the year ended December 31, 2020. The net pre-tax charges, which were directly related to disruptions caused by or efforts to mitigate the impact of the COVID-19 pandemic, were all recorded in costs of sales and included premium pay, personal protective equipment and health screenings, which were partially offset by certain employment tax credits. The COVID-19 special items do not include the inventory-related implementation costs associated with the wine business strategic reset, which are included in asset impairment, exit and implementation costs. These implementation costs were due to increased inventory levels, which were further negatively impacted by the COVID-19 pandemic, including economic uncertainty and government restrictions.
▪Asset Impairment, Exit and Implementation Costs: See Note 5. Asset Impairment, Exit and Implementation Costs for a breakdown of these costs by segment.
▪PMCC Residual Value Adjustments: For the year ended December 31, 2020, PMCC recorded pre-tax charges of $125 million (as a reduction to net revenues in the all other category) related to the decrease in unguaranteed residual values of certain leased assets. There were no such adjustments in 2019 or 2018.