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Segment Reporting | 9 Months Ended
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Sep. 30, 2021
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting The products of Altria’s subsidiaries include smokeable tobacco products, consisting of combustible cigarettes manufactured and sold by PM USA, and 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 and wine. The financial services and the innovative tobacco products businesses, which include the heated tobacco business and Helix ROW, 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, along with net periodic benefit income/cost, excluding service cost, and provision (benefit) 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. Segment data were as follows:
|  | For the Nine Months Ended September 30, |  | For the Three Months Ended September 30,
(in millions) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Net revenues: |  |  |  |  |  |  |  |
Smokeable products |  | $ | 17,275 |  |  | $ | 17,522 |  |  | $ | 5,975 |  |  | $ | 6,313 |
Oral tobacco products |  | 1,945 |  |  | 1,901 |  |  | 626 |  |  | 640 |
Wine |  | 494 |  |  | 434 |  |  | 177 |  |  | 157 |
All other |  | 44 |  |  | (8) |  |  | 8 |  |  | 13 |
Net revenues |  | $ | 19,758 |  |  | $ | 19,849 |  |  | $ | 6,786 |  |  | $ | 7,123 |
Earnings (losses) before income taxes: |  |  |  |  |  |  |  |
OCI: |  |  |  |  |  |  |  |
Smokeable products |  | $ | 7,901 |  |  | $ | 7,609 |  |  | $ | 2,753 |  |  | $ | 2,789 |
Oral tobacco products |  | 1,269 |  |  | 1,297 |  |  | 405 |  |  | 436 |
Wine |  | 21 |  |  | (347) |  |  | (24) |  |  | 19 |
All other |  | (56) |  |  | (63) |  |  | (30) |  |  | (7) |
Amortization of intangibles |  | (53) |  |  | (54) |  |  | (18) |  |  | (17) |
General corporate expenses |  | (255) |  |  | (150) |  |  | (135) |  |  | (60) |
Operating income |  | 8,827 |  |  | 8,292 |  |  | 2,951 |  |  | 3,160 |
Interest and other debt expense, net |  | (869) |  |  | (893) |  |  | (266) |  |  | (310) |
Loss on early extinguishment of debt |  | (649) |  |  | — |  |  | — |  |  | — |
Net periodic benefit income, excluding service cost |  | 152 |  |  | 58 |  |  | 63 |  |  | 3 |
Income (losses) from equity investments |  | (5,789) |  |  | (306) |  |  | (5,915) |  |  | (472) |
Impairment of JUUL equity securities |  | — |  |  | (2,600) |  |  | — |  |  | (2,600) |
Gain (loss) on Cronos-related financial instruments |  | (128) |  |  | (202) |  |  | (135) |  |  | (105) |
Earnings (losses) before income taxes |  | $ | 1,544 |  |  | $ | 4,349 |  |  | $ | (3,302) |  |  | $ | (324) |
The comparability of OCI for the reportable segments was affected by the following: ▪Non-Participating Manufacturer (“NPM”) Adjustment Items: Pre-tax (income) for NPM adjustment items was recorded to Altria’s condensed consolidated statements of earnings (losses) as follows:
|  | For the Nine Months Ended September 30, |  | For the Three Months Ended September 30,
(in millions) |  | 2021 |  | 2021
Smokeable products segment |  | $ | (53) |  |  | $ | (21) |
Interest and other debt expense, net |  | (23) |  |  | (23) |
Total |  | $ | (76) |  |  | $ | (44) |
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 in Note 12. Contingencies). The amounts shown in the table above for the smokeable products segment were recorded as reductions to cost of sales, which increased OCI in the smokeable products segment. ▪Tobacco and Health and Certain Other Litigation Items: Pre-tax charges related to tobacco and health and certain other litigation items were recorded in Altria’s condensed consolidated statements of earnings (losses) as follows:
|  | For the Nine Months Ended September 30, |  | For the Three Months Ended September 30,
(in millions) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Smokeable products segment |  | $ | 72 |  |  | $ | 73 |  |  | $ | 29 |  |  | $ | 34 |
General corporate |  | 70 |  |  | — |  |  | 70 |  |  | — |
Interest and other debt expense, net |  | 6 |  |  | 3 |  |  | 6 |  |  | — |
Total |  | $ | 148 |  |  | $ | 76 |  |  | $ | 105 |  |  | $ | 34 |
The amounts shown in the table above for the smokeable products segment and general corporate were recorded in marketing, administration and research costs. For further discussion, see Note 12. 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 condensed consolidated statements of earnings (losses) for the nine months ended September 30, 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 discussed below. 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. ▪Implementation, Acquisition and Disposition-Related Costs: Ste. Michelle Transaction: For the nine and three months ended September 30, 2021, pre-tax disposition-related costs of $51 million were recorded in the wine segment, which consisted of a pre-tax charge of $41 million to record the assets and liabilities associated with the Ste. Michelle Transaction at their fair value less costs to sell and $10 million of other disposition-related costs. For further discussion, see Note 3. Assets Held for Sale. Wine Business Strategic Reset: During the nine months ended September 30, 2020, Ste. Michelle recorded pre-tax implementation costs of $395 million associated with a strategic reset initiated in the first quarter of 2020 to maximize Ste. Michelle’s profitability and achieve improved long-term cash flow generation. Substantially all of the charges consisted of the following: (i) write-off of inventory ($292 million) as Ste. Michelle no longer believed that the benefit of the blending and production plans for its inventory outweighed inventory carrying cost given the reduced product volume demand; and (ii) estimated losses on future non-cancelable grape purchase commitments that Ste. Michelle believed no longer had a future economic benefit ($100 million). These charges were included in cost of sales in Altria’s condensed consolidated statements of earnings (losses). Acquisition-Related Costs: For the nine months ended September 30, 2021, Altria recorded pre-tax acquisition-related costs of $37 million in the oral tobacco products segment primarily for the settlement of an arbitration related to the 2019 on! transaction. These costs were included in marketing, administration and research costs in Altria’s condensed consolidated statements of earnings (losses).

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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