mo-20240630false2024Q2000076418012/310.33330.3333http://fasb.org/us-gaap/2024#SecuredOvernightFinancingRateSofrMember143xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:puremo:productmo:board_membermo:contractmo:periodmo:statemo:claimmo:casemo:lawsuitmo:plantiffmo:manufacturermo:rulingiso4217:CADmo:courtmo:thirdPartyClaimutr:Dmo:patentmo:complaint00007641802024-01-012024-06-300000764180mo:CommonStock0.3313ParValueMember2024-01-012024-06-300000764180mo:CommonStock1.700NotesDue2025Member2024-01-012024-06-300000764180mo:CommonStock2.200NotesDue2027Member2024-01-012024-06-300000764180mo:CommonStock3.125NotesDue2031Member2024-01-012024-06-3000007641802024-07-2400007641802024-06-3000007641802023-12-3100007641802023-01-012023-06-3000007641802024-04-012024-06-3000007641802023-04-012023-06-300000764180us-gaap:CommonStockMember2023-12-310000764180us-gaap:AdditionalPaidInCapitalMember2023-12-310000764180us-gaap:RetainedEarningsMember2023-12-310000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310000764180us-gaap:TreasuryStockCommonMember2023-12-310000764180us-gaap:NoncontrollingInterestMember2023-12-310000764180us-gaap:RetainedEarningsMember2024-01-012024-06-300000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-06-300000764180us-gaap:AdditionalPaidInCapitalMember2024-01-012024-06-300000764180us-gaap:TreasuryStockCommonMember2024-01-012024-06-300000764180us-gaap:CommonStockMember2024-06-300000764180us-gaap:AdditionalPaidInCapitalMember2024-06-300000764180us-gaap:RetainedEarningsMember2024-06-300000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300000764180us-gaap:TreasuryStockCommonMember2024-06-300000764180us-gaap:NoncontrollingInterestMember2024-06-300000764180us-gaap:CommonStockMember2022-12-310000764180us-gaap:AdditionalPaidInCapitalMember2022-12-310000764180us-gaap:RetainedEarningsMember2022-12-310000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000764180us-gaap:TreasuryStockCommonMember2022-12-310000764180us-gaap:NoncontrollingInterestMember2022-12-3100007641802022-12-310000764180us-gaap:RetainedEarningsMember2023-01-012023-06-300000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300000764180us-gaap:AdditionalPaidInCapitalMember2023-01-012023-06-300000764180us-gaap:TreasuryStockCommonMember2023-01-012023-06-300000764180us-gaap:CommonStockMember2023-06-300000764180us-gaap:AdditionalPaidInCapitalMember2023-06-300000764180us-gaap:RetainedEarningsMember2023-06-300000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300000764180us-gaap:TreasuryStockCommonMember2023-06-300000764180us-gaap:NoncontrollingInterestMember2023-06-3000007641802023-06-300000764180us-gaap:CommonStockMember2024-03-310000764180us-gaap:AdditionalPaidInCapitalMember2024-03-310000764180us-gaap:RetainedEarningsMember2024-03-310000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310000764180us-gaap:TreasuryStockCommonMember2024-03-310000764180us-gaap:NoncontrollingInterestMember2024-03-3100007641802024-03-310000764180us-gaap:RetainedEarningsMember2024-04-012024-06-300000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300000764180us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300000764180us-gaap:TreasuryStockCommonMember2024-04-012024-06-300000764180us-gaap:CommonStockMember2023-03-310000764180us-gaap:AdditionalPaidInCapitalMember2023-03-310000764180us-gaap:RetainedEarningsMember2023-03-310000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310000764180us-gaap:TreasuryStockCommonMember2023-03-310000764180us-gaap:NoncontrollingInterestMember2023-03-3100007641802023-03-310000764180us-gaap:RetainedEarningsMember2023-04-012023-06-300000764180us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000764180us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300000764180us-gaap:TreasuryStockCommonMember2023-04-012023-06-300000764180mo:HorizonMembermo:PhilipMorrisUSAMember2024-06-300000764180mo:JTIUHMembermo:HorizonMember2024-06-300000764180mo:January2023ShareRepurchaseProgramMember2023-01-310000764180mo:January2024ShareRepurchaseProgramMember2024-01-310000764180mo:January2024ShareRepurchaseProgramMember2024-03-310000764180mo:ASRAgreementsMember2024-03-310000764180mo:ASRAgreementsMember2024-01-012024-03-310000764180mo:ASRAgreementsMember2024-06-300000764180mo:ASRAgreementsMember2024-04-012024-06-300000764180mo:January2024ShareRepurchaseProgramMember2024-06-300000764180mo:January2024ShareRepurchaseProgramMember2024-01-012024-06-300000764180mo:January2023ShareRepurchaseProgramMember2023-01-012023-06-300000764180mo:January2024ShareRepurchaseProgramMember2024-04-012024-06-300000764180mo:January2023ShareRepurchaseProgramMember2023-04-012023-06-300000764180mo:ASRAgreementsMember2024-01-012024-06-300000764180mo:NJOYHoldingsIncMember2023-06-012023-06-010000764180mo:NJOYHoldingsIncMember2023-06-010000764180mo:NJOYHoldingsIncMembermo:MentholPodMember2023-06-010000764180mo:NJOYHoldingsIncMembermo:BlueberryPodMember2023-06-010000764180mo:WatermelonPodMembermo:NJOYHoldingsIncMember2023-06-010000764180mo:NJOYHoldingsIncMember2023-12-310000764180mo:NJOYHoldingsIncMember2024-03-310000764180mo:NJOYHoldingsIncMember2024-06-210000764180mo:NJOYHoldingsIncMemberus-gaap:SubsequentEventMember2024-07-012024-07-310000764180mo:NJOYHoldingsIncMember2024-04-012024-06-300000764180mo:NJOYHoldingsIncMember2024-01-012024-06-300000764180mo:NJOYHoldingsIncMember2024-06-300000764180mo:NJOYHoldingsIncMember2023-01-012023-06-300000764180mo:NJOYHoldingsIncMember2023-04-012023-06-300000764180mo:TermLoanMember2023-06-010000764180us-gaap:DevelopedTechnologyRightsMembermo:NJOYHoldingsIncMember2023-06-010000764180us-gaap:DevelopedTechnologyRightsMembermo:NJOYHoldingsIncMember2024-06-300000764180mo:NJOYHoldingsIncMemberus-gaap:TrademarksMember2023-06-010000764180mo:NJOYHoldingsIncMemberus-gaap:TrademarksMember2024-01-012024-06-300000764180mo:NJOYHoldingsIncMemberus-gaap:TrademarksMember2024-06-300000764180mo:NJOYHoldingsIncMembermo:SupplierAgreementsMember2023-06-010000764180mo:NJOYHoldingsIncMembermo:SupplierAgreementsMember2024-01-012024-06-300000764180mo:NJOYHoldingsIncMembermo:SupplierAgreementsMember2024-06-300000764180mo:NJOYHoldingsIncMember2024-06-302024-06-3000007641802023-06-010000764180mo:NJOYHoldingsIncMembersrt:WeightedAverageMember2023-06-012023-06-010000764180mo:SmokeableProductsSegmentMember2024-06-300000764180mo:SmokeableProductsSegmentMember2023-12-310000764180mo:OralTobaccoSegmentMember2024-06-300000764180mo:OralTobaccoSegmentMember2023-12-310000764180us-gaap:AllOtherSegmentsMember2024-06-300000764180us-gaap:AllOtherSegmentsMember2023-12-310000764180mo:MSTAndSnusMember2024-06-300000764180mo:CopenhagenMembermo:MSTAndSnusMember2024-06-300000764180mo:MSTAndSnusMembermo:SkoalMember2024-06-300000764180mo:MSTAndSnusMembermo:OtherMember2024-06-300000764180mo:MiddletonMember2024-06-300000764180srt:WeightedAverageMember2024-06-300000764180mo:IQOSTobaccoHeatingSystemMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2024-04-300000764180mo:IQOSTobaccoHeatingSystemMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2022-12-310000764180mo:IQOSTobaccoHeatingSystemMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2023-09-300000764180mo:IQOSTobaccoHeatingSystemMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2023-12-310000764180mo:IQOSTobaccoHeatingSystemMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2024-01-012024-06-300000764180mo:IQOSTobaccoHeatingSystemMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2024-04-012024-06-3000007641802023-01-012023-12-310000764180mo:SkoalMember2023-12-310000764180mo:SkoalMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2024-06-300000764180mo:SkoalMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2023-10-010000764180mo:SkoalMemberus-gaap:MeasurementInputDiscountRateMember2024-06-300000764180mo:SkoalMemberus-gaap:MeasurementInputDiscountRateMember2023-10-010000764180mo:SkoalMember2024-04-012024-06-300000764180mo:SkoalMember2024-01-012024-06-300000764180mo:SkoalMember2024-06-300000764180mo:ABInBevMember2024-06-300000764180mo:ABInBevMember2023-12-310000764180mo:CronosGroupInc.Member2024-06-300000764180mo:CronosGroupInc.Member2023-12-310000764180mo:ABInBevMember2024-01-012024-06-300000764180mo:ABInBevMember2023-01-012023-06-300000764180mo:ABInBevMember2024-04-012024-06-300000764180mo:ABInBevMember2023-04-012023-06-300000764180mo:CronosGroupInc.Member2024-01-012024-06-300000764180mo:CronosGroupInc.Member2023-01-012023-06-300000764180mo:CronosGroupInc.Member2024-04-012024-06-300000764180mo:CronosGroupInc.Member2023-04-012023-06-300000764180mo:JUULMember2024-01-012024-06-300000764180mo:JUULMember2023-01-012023-06-300000764180mo:JUULMember2024-04-012024-06-300000764180mo:JUULMember2023-04-012023-06-300000764180mo:ABInBevMember2024-03-130000764180mo:ABInBevMember2024-03-142024-03-1400007641802024-03-142024-03-140000764180mo:ABInBevMembermo:SecondaryOfferingMember2024-03-012024-03-310000764180mo:ABInBevMembermo:SecondaryOfferingMember2024-03-310000764180mo:ABInBevMemberus-gaap:OverAllotmentOptionMember2024-03-012024-03-310000764180mo:ABInBevMemberus-gaap:PrivatePlacementMember2024-03-012024-03-310000764180mo:ABInBevMembermo:MarketingAdministrationAndResearchCostsMember2024-01-012024-06-300000764180mo:ABInBevMembermo:InterestIncomeExpenseNetMember2024-01-012024-06-300000764180mo:ABInBevMembermo:SecondaryOfferingMember2024-03-192024-03-190000764180mo:ABInBevMemberus-gaap:FairValueInputsLevel1Member2024-06-300000764180mo:ABInBevMemberus-gaap:FairValueInputsLevel1Member2023-12-310000764180mo:ForeignCurrencyDenominatedDebtMember2024-06-300000764180mo:ForeignCurrencyDenominatedDebtMember2023-12-310000764180mo:ForeignCurrencyDenominatedDebtMemberus-gaap:NetInvestmentHedgingMember2024-01-012024-06-300000764180mo:ForeignCurrencyDenominatedDebtMemberus-gaap:NetInvestmentHedgingMember2023-01-012023-06-300000764180mo:ForeignCurrencyDenominatedDebtMemberus-gaap:NetInvestmentHedgingMember2024-04-012024-06-300000764180mo:ForeignCurrencyDenominatedDebtMemberus-gaap:NetInvestmentHedgingMember2023-04-012023-06-300000764180us-gaap:PensionPlansDefinedBenefitMember2024-01-012024-06-300000764180us-gaap:PensionPlansDefinedBenefitMember2023-01-012023-06-300000764180us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2024-01-012024-06-300000764180us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2023-01-012023-06-300000764180us-gaap:PensionPlansDefinedBenefitMember2024-04-012024-06-300000764180us-gaap:PensionPlansDefinedBenefitMember2023-04-012023-06-300000764180us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2024-04-012024-06-300000764180us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2023-04-012023-06-300000764180srt:MaximumMemberus-gaap:PensionPlansDefinedBenefitMember2024-06-300000764180srt:MaximumMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-310000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2023-12-310000764180us-gaap:AccumulatedTranslationAdjustmentMember2023-12-310000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-01-012024-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2024-01-012024-06-300000764180us-gaap:AccumulatedTranslationAdjustmentMember2024-01-012024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2024-06-300000764180us-gaap:AccumulatedTranslationAdjustmentMember2024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-310000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2024-03-310000764180us-gaap:AccumulatedTranslationAdjustmentMember2024-03-310000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-04-012024-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2024-04-012024-06-300000764180us-gaap:AccumulatedTranslationAdjustmentMember2024-04-012024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-310000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2022-12-310000764180us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2023-01-012023-06-300000764180us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2023-06-300000764180us-gaap:AccumulatedTranslationAdjustmentMember2023-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-03-310000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2023-03-310000764180us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-04-012023-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMember2023-04-012023-06-300000764180us-gaap:AccumulatedTranslationAdjustmentMember2023-04-012023-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300000764180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300000764180mo:AccumulatedEquityMethodInvestmentsAttributableToParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000764180us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-06-300000764180us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300000764180us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300000764180us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000764180mo:SmokeableProductsSegmentMember2024-01-012024-06-300000764180mo:SmokeableProductsSegmentMember2023-01-012023-06-300000764180mo:SmokeableProductsSegmentMember2024-04-012024-06-300000764180mo:SmokeableProductsSegmentMember2023-04-012023-06-300000764180mo:OralTobaccoSegmentMember2024-01-012024-06-300000764180mo:OralTobaccoSegmentMember2023-01-012023-06-300000764180mo:OralTobaccoSegmentMember2024-04-012024-06-300000764180mo:OralTobaccoSegmentMember2023-04-012023-06-300000764180us-gaap:AllOtherSegmentsMember2024-01-012024-06-300000764180us-gaap:AllOtherSegmentsMember2023-01-012023-06-300000764180us-gaap:AllOtherSegmentsMember2024-04-012024-06-300000764180us-gaap:AllOtherSegmentsMember2023-04-012023-06-300000764180us-gaap:OperatingSegmentsMembermo:SmokeableProductsSegmentMember2024-01-012024-06-300000764180us-gaap:OperatingSegmentsMembermo:SmokeableProductsSegmentMember2023-01-012023-06-300000764180us-gaap:OperatingSegmentsMembermo:SmokeableProductsSegmentMember2024-04-012024-06-300000764180us-gaap:OperatingSegmentsMembermo:SmokeableProductsSegmentMember2023-04-012023-06-300000764180us-gaap:OperatingSegmentsMembermo:OralTobaccoSegmentMember2024-01-012024-06-300000764180us-gaap:OperatingSegmentsMembermo:OralTobaccoSegmentMember2023-01-012023-06-300000764180us-gaap:OperatingSegmentsMembermo:OralTobaccoSegmentMember2024-04-012024-06-300000764180us-gaap:OperatingSegmentsMembermo:OralTobaccoSegmentMember2023-04-012023-06-300000764180us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-01-012024-06-300000764180us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-01-012023-06-300000764180us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-04-012024-06-300000764180us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-04-012023-06-300000764180us-gaap:CorporateNonSegmentMember2024-01-012024-06-300000764180us-gaap:CorporateNonSegmentMember2023-01-012023-06-300000764180us-gaap:CorporateNonSegmentMember2024-04-012024-06-300000764180us-gaap:CorporateNonSegmentMember2023-04-012023-06-300000764180mo:TobaccoandHealthLitigationCasesMemberus-gaap:OperatingSegmentsMembermo:PhilipMorrisUSAMembermo:SmokeableProductsSegmentMembermo:MarketingAdministrationAndResearchCostsMember2024-01-012024-06-300000764180mo:TobaccoandHealthLitigationCasesMemberus-gaap:OperatingSegmentsMembermo:PhilipMorrisUSAMembermo:SmokeableProductsSegmentMembermo:MarketingAdministrationAndResearchCostsMember2023-01-012023-06-300000764180mo:TobaccoandHealthLitigationCasesMemberus-gaap:OperatingSegmentsMembermo:PhilipMorrisUSAMembermo:SmokeableProductsSegmentMembermo:MarketingAdministrationAndResearchCostsMember2024-04-012024-06-300000764180mo:TobaccoandHealthLitigationCasesMemberus-gaap:OperatingSegmentsMembermo:PhilipMorrisUSAMembermo:SmokeableProductsSegmentMembermo:MarketingAdministrationAndResearchCostsMember2023-04-012023-06-300000764180mo:TobaccoandHealthLitigationCasesMemberus-gaap:CorporateNonSegmentMember2024-01-012024-06-300000764180mo:TobaccoandHealthLitigationCasesMemberus-gaap:CorporateNonSegmentMember2023-01-012023-06-300000764180mo:TobaccoandHealthLitigationCasesMemberus-gaap:CorporateNonSegmentMember2024-04-012024-06-300000764180mo:TobaccoandHealthLitigationCasesMemberus-gaap:CorporateNonSegmentMember2023-04-012023-06-300000764180mo:TobaccoandHealthLitigationCasesMembermo:InterestAndOtherDebtExpenseNetMemberus-gaap:MaterialReconcilingItemsMember2024-01-012024-06-300000764180mo:TobaccoandHealthLitigationCasesMembermo:InterestAndOtherDebtExpenseNetMemberus-gaap:MaterialReconcilingItemsMember2023-01-012023-06-300000764180mo:TobaccoandHealthLitigationCasesMembermo:InterestAndOtherDebtExpenseNetMemberus-gaap:MaterialReconcilingItemsMember2024-04-012024-06-300000764180mo:TobaccoandHealthLitigationCasesMembermo:InterestAndOtherDebtExpenseNetMemberus-gaap:MaterialReconcilingItemsMember2023-04-012023-06-300000764180mo:TobaccoandHealthLitigationCasesMember2024-01-012024-06-300000764180mo:TobaccoandHealthLitigationCasesMember2023-01-012023-06-300000764180mo:TobaccoandHealthLitigationCasesMember2024-04-012024-06-300000764180mo:TobaccoandHealthLitigationCasesMember2023-04-012023-06-300000764180mo:TermLoanMember2023-06-300000764180mo:IQOSTobaccoHeatingSystemMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2023-07-310000764180us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembermo:RevolvingCreditFacilityDueOctober242028Member2024-06-300000764180us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembermo:RevolvingCreditFacilityDueOctober242028Member2024-01-012024-06-300000764180us-gaap:SeniorNotesMembermo:USDNotes4000MaturingJanuary2024Member2024-01-310000764180us-gaap:SeniorNotesMembermo:USDNotes3.800MaturingFeburary2024Member2024-02-280000764180us-gaap:SeniorNotesMembermo:USDNotes4000MaturingJanuary2024Member2024-01-012024-01-310000764180us-gaap:SeniorNotesMembermo:USDNotes3.800MaturingFeburary2024Member2024-02-012024-02-280000764180mo:LitigationCasesResultsMembermo:TobaccoandHealthJudgmentMember2024-01-012024-06-300000764180mo:LitigationCasesResultsMembermo:TobaccoandHealthJudgmentMember2023-01-012023-06-300000764180mo:LitigationCasesResultsMembermo:TobaccoandHealthJudgmentMember2024-04-012024-06-300000764180mo:LitigationCasesResultsMembermo:TobaccoandHealthJudgmentMember2023-04-012023-06-300000764180mo:LitigationCasesResultsMembermo:AgreementToResolveShareholderClassActionMember2024-01-012024-06-300000764180mo:LitigationCasesResultsMembermo:AgreementToResolveShareholderClassActionMember2023-01-012023-06-300000764180mo:LitigationCasesResultsMembermo:AgreementToResolveShareholderClassActionMember2024-04-012024-06-300000764180mo:LitigationCasesResultsMembermo:AgreementToResolveShareholderClassActionMember2023-04-012023-06-300000764180mo:LitigationCasesResultsMembermo:JUULMember2024-01-012024-06-300000764180mo:LitigationCasesResultsMembermo:JUULMember2023-01-012023-06-300000764180mo:LitigationCasesResultsMembermo:JUULMember2024-04-012024-06-300000764180mo:LitigationCasesResultsMembermo:JUULMember2023-04-012023-06-300000764180mo:InterestExpenseRelatedToLitigationMember2024-01-012024-06-300000764180mo:InterestExpenseRelatedToLitigationMember2023-01-012023-06-300000764180mo:InterestExpenseRelatedToLitigationMember2024-04-012024-06-300000764180mo:InterestExpenseRelatedToLitigationMember2023-04-012023-06-300000764180mo:TobaccoandHealthJudgmentMember2004-10-012024-06-300000764180mo:EngleProgenyCasesMember2004-10-012024-06-300000764180us-gaap:AssetsMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2024-06-300000764180us-gaap:SubsequentEventMembermo:IndividualSmokingAndHealthCasesMember2024-07-290000764180mo:IndividualSmokingAndHealthCasesMember2023-07-270000764180mo:IndividualSmokingAndHealthCasesMember2022-07-250000764180mo:HealthCareCostRecoveryActionsMemberus-gaap:SubsequentEventMember2024-07-290000764180mo:HealthCareCostRecoveryActionsMember2023-07-270000764180mo:HealthCareCostRecoveryActionsMember2022-07-250000764180mo:EvaporLitigationMemberus-gaap:SubsequentEventMember2024-07-290000764180mo:EvaporLitigationMember2023-07-270000764180mo:EvaporLitigationMember2022-07-250000764180us-gaap:SubsequentEventMembermo:OtherTabaccoRelatedCasesMember2024-07-290000764180mo:OtherTabaccoRelatedCasesMember2023-07-270000764180mo:OtherTabaccoRelatedCasesMember2022-07-250000764180us-gaap:SubsequentEventMemberus-gaap:PendingLitigationMembermo:IndividualSmokingAndHealthCasesMemberstpr:IL2024-07-290000764180us-gaap:SubsequentEventMemberus-gaap:PendingLitigationMembermo:IndividualSmokingAndHealthCasesMemberstpr:NM2024-07-290000764180us-gaap:SubsequentEventMemberus-gaap:PendingLitigationMembermo:IndividualSmokingAndHealthCasesMemberstpr:MA2024-07-290000764180stpr:ORus-gaap:SubsequentEventMemberus-gaap:PendingLitigationMembermo:IndividualSmokingAndHealthCasesMember2024-07-290000764180us-gaap:SubsequentEventMemberus-gaap:PendingLitigationMembermo:IndividualSmokingAndHealthCasesMemberstpr:HI2024-07-290000764180stpr:FLus-gaap:SubsequentEventMemberus-gaap:PendingLitigationMembermo:IndividualSmokingAndHealthCasesMember2024-07-290000764180us-gaap:SubsequentEventMemberus-gaap:PendingLitigationMembermo:ETSSmokingandHealthCaseFlightAttendantsMember2024-07-292024-07-290000764180us-gaap:SubsequentEventMembermo:OptedOutOfSettlementMember2024-07-292024-07-290000764180mo:EvaporLitigationMemberus-gaap:SubsequentEventMembercountry:CA2024-07-290000764180mo:EvaporLitigationMembermo:ParticipatingInSettlementButPendingDismissalMemberus-gaap:SubsequentEventMember2024-07-290000764180mo:EvaporLitigationMembermo:PendingIndividualLawsuitsMemberus-gaap:SubsequentEventMember2024-07-290000764180mo:EvaporLitigationMembermo:SubjectToSeparateSettlementMemberus-gaap:SubsequentEventMember2024-07-292024-07-290000764180mo:HealthCareCostRecoveryActionsMemberus-gaap:SubsequentEventMembermo:PhilipMorrisUSAMembercountry:CA2024-07-290000764180mo:HealthCareCostRecoveryActionsMembermo:PhilipMorrisUSAandAltriaGroupMemberus-gaap:SubsequentEventMembercountry:CA2024-07-290000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAandAltriaGroupMemberus-gaap:SubsequentEventMembercountry:CA2024-07-290000764180us-gaap:SubsequentEventMembermo:PhilipMorrisUSAMembermo:EngleProgenyCasesMember2024-07-290000764180us-gaap:SubsequentEventMembermo:PhilipMorrisUSAMembermo:IndividualSmokingAndHealthCasesMember2024-07-290000764180mo:EvaporLitigationMemberus-gaap:SubsequentEventMembermo:PhilipMorrisUSAMember2024-07-290000764180mo:NonEngleProgenyCasesMemberus-gaap:SubsequentEventMembermo:PhilipMorrisUSAMember1999-01-012024-07-290000764180mo:NonEngleProgenySmokingAndHealthCaseTaylorMembermo:PhilipMorrisUSAMember2024-04-300000764180mo:PhilipMorrisUSAMembermo:NonEngleProgenySmokingAndHealthCaseRoachMember2023-12-310000764180mo:NonEngleProgenySmokingAndHealthCaseRicaporHallMembermo:PhilipMorrisUSAMember2023-08-310000764180mo:NonEngleProgenySmokingAndHealthCaseRicaporHallMembermo:PhilipMorrisUSAMember2023-10-012023-10-310000764180mo:NonEngleProgenySmokingAndHealthCaseRicaporHallMembermo:PhilipMorrisUSAMember2023-10-310000764180mo:PhilipMorrisUSAMembermo:NonEngleProgenySmokingAndHealthCaseDeswertMember2023-05-310000764180mo:NonEngleProgenySmokingAndHealthCaseWoodleyMembermo:PhilipMorrisUSAMember2023-02-280000764180mo:PhilipMorrisUSAMembermo:NonEngleProgenySmokingAndHealthCaseFontaineMember2022-09-300000764180mo:NonEngleProgenySmokingAndHealthCaseFontaineMember2023-09-300000764180mo:PhilipMorrisUSAMembermo:NonEngleProgenySmokingAndHealthCaseFontaineMember2023-12-310000764180mo:NonEngleProgenySmokingandHealthCaseGreeneMembermo:PhilipMorrisUSAMember2019-09-300000764180mo:NonEngleProgenySmokingandHealthCaseGreeneMembermo:PhilipMorrisUSAMember2020-05-310000764180mo:NonEngleProgenySmokingandHealthCaseGreeneMembermo:PhilipMorrisUSAMember2021-02-280000764180mo:NonEngleProgenySmokingandHealthCaseGreeneMembermo:PhilipMorrisUSAMember2023-04-012023-06-300000764180mo:EngleProgenyCasesMember2008-01-310000764180us-gaap:SubsequentEventMembermo:EngleProgenyCasesStateMember2024-07-290000764180us-gaap:SubsequentEventMembermo:EngleProgenyCasesStateMember2024-07-292024-07-290000764180us-gaap:SubsequentEventMembermo:EngleProgenyCasesMember2024-07-292024-07-290000764180us-gaap:SubsequentEventMembermo:PhilipMorrisUSAMembermo:EngleProgenyCasesMember2024-07-292024-07-290000764180mo:EngleProgenyCasesGarciaMemberus-gaap:PendingLitigationMember2024-06-300000764180mo:EngleProgenyCasesGarciaMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2024-06-300000764180us-gaap:PendingLitigationMembermo:EngleProgenyCasesChaconMember2023-10-310000764180us-gaap:PendingLitigationMembermo:PhilipMorrisUSAMembermo:EngleProgenyCasesChaconMember2023-10-310000764180mo:EngleProgenyCasesSchertzerMemberus-gaap:PendingLitigationMember2022-04-300000764180mo:EngleProgenyCasesSchertzerMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2022-04-300000764180mo:EngleProgenyCasesLippMemberus-gaap:PendingLitigationMember2021-09-300000764180mo:EngleProgenyCasesLippMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2021-09-300000764180mo:EngleProgenyCasesMcCallMemberus-gaap:PendingLitigationMember2019-03-310000764180us-gaap:PendingLitigationMembermo:EngleProgenyCasesMcCallMembermo:PhilipMorrisUSAMember2019-03-310000764180us-gaap:PendingLitigationMembermo:EngleProgenyCasesChadwellMember2018-09-300000764180us-gaap:PendingLitigationMembermo:PhilipMorrisUSAMembermo:EngleProgenyCasesChadwellMember2018-09-300000764180mo:EngleProgenyCasesKaplanMcLauighlinMemberus-gaap:PendingLitigationMember2018-07-310000764180mo:EngleProgenyCasesKaplanMcLauighlinMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2018-07-310000764180us-gaap:PendingLitigationMembermo:EngleProgenyCasesCooperMember2015-09-300000764180us-gaap:PendingLitigationMembermo:PhilipMorrisUSAMembermo:EngleProgenyCasesCooperMember2015-09-300000764180mo:EngleProgenyCasesSchertzerMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2022-04-012022-04-300000764180us-gaap:SettledLitigationMembermo:EngleProgenyCasesHoffmanMember2023-07-012024-06-300000764180us-gaap:SettledLitigationMembermo:EngleProgenyCasesLevineMember2023-07-012024-06-300000764180us-gaap:SettledLitigationMembermo:EngleProgenyCasesDuignanMember2023-07-012024-06-300000764180us-gaap:SettledLitigationMembermo:EngleProgenyCasesFerraiuoloMember2023-07-012024-06-300000764180mo:EngleProgenyCasesGarciaMemberus-gaap:SettledLitigationMember2023-07-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMemberstpr:AR1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:CAmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:DEmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:DCmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180stpr:FLmo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMemberstpr:IL1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:IAmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:KSmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180stpr:LAmo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMemberstpr:MD1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMemberstpr:MI1996-05-012024-06-300000764180stpr:MNmo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMemberstpr:NV1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:NJmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:NYmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:OHmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMemberstpr:OK1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:ORmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:PAmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembercountry:PRmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:SCmo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAMemberstpr:TX1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMemberstpr:WImo:PhilipMorrisUSAMember1996-05-012024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAandAltriaGroupMemberus-gaap:SubsequentEventMembermo:BritishColumbiaSaskatchewanMember2024-07-290000764180mo:SmokingAndHealthClassActionsMembermo:CanadianTobaccoManufacturersMembercountry:CA2019-03-310000764180mo:SmokingAndHealthClassActionsMembermo:AltriaGroupMembercountry:CA2019-03-310000764180mo:SmokingAndHealthClassActionsMembermo:CanadianTobaccoManufacturersMembercountry:CA2019-03-012019-03-310000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAandAltriaGroupMemberus-gaap:SubsequentEventMembercountry:US2024-07-290000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAandAltriaGroupMemberus-gaap:SubsequentEventMembercountry:US2024-07-012024-07-310000764180mo:SmokingAndHealthClassActionsMembermo:PhilipMorrisUSAandAltriaGroupMembercountry:US2024-04-012024-06-300000764180mo:HealthCareCostRecoveryActionsMember2024-06-300000764180mo:HealthCareCostRecoveryActionsMemberus-gaap:ThreatenedLitigationMembercountry:CA2024-06-300000764180mo:SmokingAndHealthClassActionsMembermo:CanadianTobaccoManufacturersMembercountry:CA2024-06-300000764180mo:HealthCareCostRecoveryActionsMember1998-11-011998-11-300000764180mo:HealthCareCostRecoveryActionsMember1998-11-300000764180mo:HealthCareCostRecoveryActionsMember2024-04-012024-06-300000764180mo:HealthCareCostRecoveryActionsMember2023-04-012023-06-300000764180mo:HealthCareCostRecoveryActionsMember2024-01-012024-06-300000764180mo:HealthCareCostRecoveryActionsMember2023-01-012023-06-300000764180us-gaap:SettledLitigationMembermo:HealthCareCostRecoveryActionsMembermo:PhilipMorrisUSAMember2022-01-012022-01-310000764180mo:HealthCareCostRecoveryActionsMembermo:PhilipMorrisUSAMember1998-01-012024-06-300000764180mo:PhilipMorrisUSAMemberstpr:IL2022-01-012022-03-310000764180us-gaap:SettledLitigationMembermo:PhilipMorrisUSAMemberstpr:ILmo:HealthCareCostRecoveryActionsTransitionYears20192021Member2022-01-012022-03-310000764180mo:HealthCareCostRecoveryActionsTransitionYears20052022Memberus-gaap:PendingLitigationMemberstpr:IAmo:PhilipMorrisUSAMember2023-08-012023-08-310000764180us-gaap:PendingLitigationMemberstpr:IAmo:PhilipMorrisUSAMembermo:HealthCareCostRecoveryActionsTransitionYears20202022Member2023-08-012023-08-310000764180stpr:IAmo:PhilipMorrisUSAMember2023-07-012023-09-300000764180mo:HealthCareCostRecoveryActionsTransitionYears20052022Memberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMemberstpr:ID2024-02-012024-02-280000764180mo:HealthCareCostRecoveryActionsTransitionYears20212023Memberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMemberstpr:ID2024-02-012024-02-280000764180mo:PhilipMorrisUSAMemberstpr:ID2024-01-012024-03-310000764180mo:HealthCareCostRecoveryActionsMembermo:PhilipMorrisUSAMember2014-01-012024-06-300000764180us-gaap:SettledLitigationMembermo:HealthCareCostRecoveryActionsMemberstpr:NYmo:PhilipMorrisUSAMember2015-01-012015-12-310000764180us-gaap:PendingLitigationMembermo:PhilipMorrisUSAMembermo:HealthCareCostRecoveryActions2004NPMAdjustmentMember2024-01-012024-06-300000764180us-gaap:PendingLitigationMembermo:PhilipMorrisUSAMembermo:HealthCareCostRecoveryActions2004NPMAdjustmentMember2023-04-012023-04-300000764180us-gaap:PendingLitigationMembermo:PhilipMorrisUSAMembermo:HealthCareCostRecoveryActions2004NPMAdjustmentMember2021-07-012021-09-300000764180us-gaap:PendingLitigationMembermo:PhilipMorrisUSAMembermo:HealthCareCostRecoveryActions2004NPMAdjustmentMember2022-10-012022-12-310000764180mo:HealthCareCostRecoveryActions20052007NPMAdjustmentMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2024-01-012024-06-300000764180mo:PeriodOneMembermo:HealthCareCostRecoveryActions20052007NPMAdjustmentMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2024-01-012024-06-300000764180mo:PeriodTwoMembermo:HealthCareCostRecoveryActions20052007NPMAdjustmentMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2024-01-012024-06-300000764180mo:PeriodOneMembermo:HealthCareCostRecoveryActions20052007NPMAdjustmentMemberus-gaap:SubsequentEventMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2024-07-292024-07-290000764180mo:HealthCareCostRecoveryActions20052007NPMAdjustmentMemberus-gaap:PendingLitigationMembermo:PhilipMorrisUSAMember2023-10-012023-12-310000764180mo:PhilipMorrisUSAMembermo:OtherDisputesUndertheStateSettlementAgreementsMember2021-01-012021-01-310000764180mo:FederalGovernmentsLawsuitMember2017-10-012017-12-310000764180mo:FederalGovernmentsLawsuitMember2018-10-012018-12-310000764180mo:FederalGovernmentsLawsuitMembermo:ImplementationofCorrectiveCommunicationsMember2022-01-012022-12-310000764180mo:FederalGovernmentsLawsuitMembermo:ImplementationofCorrectiveCommunicationsMember2024-01-012024-03-310000764180mo:EvaporLitigationMember2023-05-012023-05-310000764180mo:EvaporLitigationMember2024-04-012024-06-300000764180mo:EvaporLitigationMember2023-08-012023-08-310000764180mo:EvaporLitigationMember2023-10-012023-12-310000764180mo:EvaporLitigationMember2023-06-012023-06-300000764180mo:EvaporLitigationMember2024-06-012024-06-300000764180mo:IQOSMember2022-09-012022-09-300000764180mo:IQOSMember2023-01-310000764180mo:JUULMember2020-04-300000764180us-gaap:SubsequentEventMember2024-07-2900007641802020-11-3000007641802022-03-012022-03-3100007641802021-01-012021-12-3100007641802022-01-012022-01-310000764180mo:FederalAndStateShareholderDerivativeLawsuitsMember2023-05-012023-05-310000764180mo:FederalAndStateShareholderDerivativeLawsuitsMember2022-01-012022-12-310000764180mo:FederalAndStateShareholderDerivativeLawsuitsMember2023-03-310000764180mo:FederalAndStateShareholderDerivativeLawsuitsMember2023-04-012023-04-300000764180mo:LightsMemberus-gaap:SubsequentEventMembermo:PhilipMorrisUSAMember2024-07-290000764180mo:LightsMemberus-gaap:SubsequentEventMember2024-07-290000764180mo:SmokingAndHealthClassActionsMemberus-gaap:SubsequentEventMember2024-07-290000764180mo:PendingIndividualLawsuitsMemberus-gaap:SubsequentEventMembermo:USTLitigationMember2024-07-290000764180us-gaap:LetterOfCreditMember2024-06-300000764180mo:CreditAgreementMembermo:RevolvingCreditFacilityDueOctober242028Member2024-06-300000764180mo:ImplementationofCorrectiveCommunicationsMember2018-10-012018-12-31
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, 2024
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, | Virginia | 23230 | |
(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 Symbols | Name of each exchange on which registered |
Common Stock, $0.33 1/3 par value | MO | New York Stock Exchange |
1.700% Notes due 2025 | MO25 | New York Stock Exchange |
2.200% Notes due 2027 | MO27 | New York Stock Exchange |
3.125% Notes due 2031 | MO31 | New 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 | | þ | | Accelerated 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 24, 2024, there were 1,706,224,328 shares outstanding of the registrant’s common stock, par value $0.33 1/3 per share.
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 5. | | | |
| | | |
| | | |
Item 6. | | | |
| | | |
Signature | | | |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of dollars)
(Unaudited)
______________________________
| | | | | | | | | | | | | | |
| | June 30, 2024 | | December 31, 2023 |
Assets | | | | |
Cash and cash equivalents | | $ | 1,799 | | | $ | 3,686 | |
Receivables | | 72 | | | 71 | |
Inventories: | | | | |
Leaf tobacco | | 562 | | | 649 | |
Other raw materials | | 199 | | | 204 | |
Work in process | | 25 | | | 22 | |
Finished product | | 388 | | | 340 | |
| | 1,174 | | | 1,215 | |
Income taxes | | 316 | | | 496 | |
Other current assets | | 179 | | | 117 | |
Total current assets | | 3,540 | | | 5,585 | |
| | | | |
Property, plant and equipment, at cost | | 4,507 | | | 4,582 | |
Less accumulated depreciation | | 2,887 | | | 2,930 | |
| | 1,620 | | | 1,652 | |
| | | | |
Goodwill | | 6,945 | | | 6,791 | |
Other intangible assets, net | | 13,048 | | | 13,686 | |
Investments in equity securities | | 8,335 | | | 10,011 | |
Other assets | | 899 | | | 845 | |
Total Assets | | $ | 34,387 | | | $ | 38,570 | |
See notes to condensed consolidated financial statements.
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)
(in millions of dollars, except share and per share data)
(Unaudited)
________________________________________________
| | | | | | | | | | | | | | |
| | June 30, 2024 | | December 31, 2023 |
Liabilities | | | | |
Current portion of long-term debt | | $ | 1,553 | | | $ | 1,121 | |
Accounts payable | | 556 | | | 582 | |
Accrued liabilities: | | | | |
Marketing | | 763 | | | 716 | |
Settlement charges | | 1,320 | | | 2,563 | |
Other | | 1,900 | | | 1,902 | |
Deferred gain from the sale of IQOS System commercialization rights | | — | | | 2,700 | |
Dividends payable | | 1,690 | | | 1,735 | |
Total current liabilities | | 7,782 | | | 11,319 | |
| | | | |
Long-term debt | | 23,470 | | | 25,112 | |
Deferred income taxes | | 3,281 | | | 2,799 | |
Accrued pension costs | | 127 | | | 130 | |
Accrued postretirement health care costs | | 1,086 | | | 1,079 | |
Other liabilities | | 1,607 | | | 1,621 | |
Total liabilities | | 37,353 | | | 42,060 | |
Contingencies (Note 14) | | | | |
Stockholders’ Equity (Deficit) | | | | |
Common stock, par value $0.33 1/3 per share (2,805,961,317 shares issued) | | 935 | | | 935 | |
Additional paid-in capital | | 5,876 | | | 5,906 | |
Earnings reinvested in the business | | 33,651 | | | 31,094 | |
Accumulated other comprehensive losses | | (2,283) | | | (2,673) | |
Cost of repurchased stock (1,095,982,189 shares at June 30, 2024 and 1,042,499,542 shares at December 31, 2023) | | (41,195) | | | (38,802) | |
Total stockholders’ equity (deficit) attributable to Altria | | (3,016) | | | (3,540) | |
Noncontrolling interests | | 50 | | | 50 | |
Total stockholders’ equity (deficit) | | (2,966) | | | (3,490) | |
Total Liabilities and Stockholders’ Equity (Deficit) | | $ | 34,387 | | | $ | 38,570 | |
See notes to condensed consolidated financial statements.
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, |
| | 2024 | | | 2023 | | 2024 | | 2023 |
Net revenues | | $ | 11,785 | | | | $ | 12,227 | | | $ | 6,209 | | | $ | 6,508 | |
Cost of sales | | 3,039 | | | | 3,115 | | | 1,602 | | | 1,681 | |
Excise taxes on products | | 1,791 | | | | 2,026 | | | 932 | | | 1,070 | |
Gross profit | | 6,955 | | | | 7,086 | | | 3,675 | | | 3,757 | |
Marketing, administration and research costs | | 1,394 | | | | 1,424 | | | 788 | | | 852 | |
Asset impairment | | 354 | | | | — | | | 354 | | | — | |
Operating income | | 5,207 | | | | 5,662 | | | 2,533 | | | 2,905 | |
Interest and other debt expense, net | | 515 | | | | 486 | | | 261 | | | 257 | |
Net periodic benefit income, excluding service cost | | (49) | | | | (62) | | | (25) | | | (31) | |
(Income) losses from investments in equity securities | | (414) | | | | (47) | | | (119) | | | (127) | |
Gain on the sale of IQOS System commercialization rights | | (2,700) | | | | — | | | (2,700) | | | — | |
Earnings before income taxes | | 7,855 | | | | 5,285 | | | 5,116 | | | 2,806 | |
Provision for income taxes | | 1,923 | | | | 1,381 | | | 1,313 | | | 689 | |
| | | | | | | | | |
| | | | | | | | | |
Net earnings | | $ | 5,932 | | | | $ | 3,904 | | | $ | 3,803 | | | $ | 2,117 | |
Per share data: | | | | | | | | | |
Basic and diluted earnings per share | | $ | 3.41 | | | | $ | 2.18 | | | $ | 2.21 | | | $ | 1.19 | |
See notes to condensed consolidated financial statements.
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, |
| | 2024 | | 2023 | | 2024 | | 2023 |
Net earnings | | $ | 5,932 | | | $ | 3,904 | | | $ | 3,803 | | | $ | 2,117 | |
Other comprehensive earnings (losses), net of deferred income taxes: | | | | | | | | |
Benefit plans | | (2) | | | (11) | | | (1) | | | (5) | |
ABI | | 394 | | | 66 | | | (8) | | | 78 | |
Currency translation adjustments and other | | (2) | | | 7 | | | (8) | | | (3) | |
Other comprehensive earnings (losses), net of deferred income taxes | | 390 | | | 62 | | | (17) | | | 70 | |
Comprehensive earnings | | $ | 6,322 | | | $ | 3,966 | | | $ | 3,786 | | | $ | 2,187 | |
See notes to condensed consolidated financial statements.
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
for the Six Months Ended June 30, 2024 and 2023
(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 (Deficit) |
Balances, December 31, 2023 | | $ | 935 | | | $ | 5,906 | | | $ | 31,094 | | | $ | (2,673) | | | $ | (38,802) | | | $ | 50 | | | $ | (3,490) | |
Net earnings | | — | | | — | | | 5,932 | | | — | | | — | | | — | | | 5,932 | |
Other comprehensive earnings (losses), net of deferred income taxes | | — | | | — | | | — | | | 390 | | | — | | | — | | | 390 | |
Stock award activity | | — | | | (12) | | | — | | | — | | | 23 | | | — | | | 11 | |
Cash dividends declared ($1.96 per share) | | — | | | — | | | (3,375) | | | — | | | — | | | — | | | (3,375) | |
Repurchases of common stock | | — | | | (18) | | | — | | | — | | | (2,392) | | | — | | | (2,410) | |
| | | | | | | | | | | | | | |
Other | | — | | | — | | | — | | | — | | | (24) | | | — | | | (24) | |
Balances, June 30, 2024 | | $ | 935 | | | $ | 5,876 | | | $ | 33,651 | | | $ | (2,283) | | | $ | (41,195) | | | $ | 50 | | | $ | (2,966) | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | |
Balances, December 31, 2022 | | $ | 935 | | | $ | 5,887 | | | $ | 29,792 | | | $ | (2,771) | | | $ | (37,816) | | | $ | 50 | | | $ | (3,923) | |
Net earnings | | — | | | — | | | 3,904 | | | — | | | — | | | — | | | 3,904 | |
Other comprehensive earnings (losses), net of deferred income taxes | | — | | | — | | | — | | | 62 | | | — | | | — | | | 62 | |
Stock award activity | | — | | | (7) | | | — | | | — | | | 20 | | | — | | | 13 | |
Cash dividends declared ($1.88 per share) | | — | | | — | | | (3,356) | | | — | | | — | | | — | | | (3,356) | |
Repurchases of common stock | | — | | | — | | | — | | | — | | | (472) | | | — | | | (472) | |
Other | | — | | | — | | | — | | | — | | | (5) | | | — | | | (5) | |
Balances, June 30, 2023 | | $ | 935 | | | $ | 5,880 | | | $ | 30,340 | | | $ | (2,709) | | | $ | (38,273) | | | $ | 50 | | | $ | (3,777) | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
See notes to condensed consolidated financial statements.
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
for the Three Months Ended June 30, 2024 and 2023
(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 (Deficit) |
Balances, March 31, 2024 | | $ | 935 | | | $ | 5,521 | | | $ | 31,535 | | | $ | (2,266) | | | $ | (40,839) | | | $ | 50 | | | $ | (5,064) | |
Net earnings | | — | | | — | | | 3,803 | | | — | | | — | | | — | | | 3,803 | |
Other comprehensive earnings (losses), net of deferred income taxes | | — | | | — | | | — | | | (17) | | | — | | | — | | | (17) | |
Stock award activity | | — | | | 13 | | | — | | | — | | | — | | | — | | | 13 | |
Cash dividends declared ($0.98 per share) | | — | | | — | | | (1,687) | | | — | | | — | | | — | | | (1,687) | |
Repurchases of common stock | | — | | | 342 | | (1) | — | | | — | | | (352) | | | — | | | (10) | |
Other | | — | | | — | | | — | | | — | | | (4) | | | — | | | (4) | |
Balances, June 30, 2024 | | $ | 935 | | | $ | 5,876 | | | $ | 33,651 | | | $ | (2,283) | | | $ | (41,195) | | | $ | 50 | | | $ | (2,966) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balances, March 31, 2023 | | $ | 935 | | | $ | 5,866 | | | $ | 29,898 | | | $ | (2,779) | | | $ | (37,796) | | | $ | 50 | | | $ | (3,826) | |
Net earnings | | — | | | — | | | 2,117 | | | — | | | — | | | — | | | 2,117 | |
Other comprehensive earnings (losses), net of deferred income taxes | | — | | | — | | | — | | | 70 | | | — | | | — | | | 70 | |
Stock award activity | | — | | | 14 | | | — | | | — | | | — | | | — | | | 14 | |
Cash dividends declared ($0.94 per share) | | — | | | — | | | (1,675) | | | — | | | — | | | — | | | (1,675) | |
Repurchases of common stock | | — | | | — | | | — | | | — | | | (472) | | | — | | | (472) | |
Other | | — | | | — | | | — | | | — | | | (5) | | | — | | | (5) | |
Balances, June 30, 2023 | | $ | 935 | | | $ | 5,880 | | | $ | 30,340 | | | $ | (2,709) | | | $ | (38,273) | | | $ | 50 | | | $ | (3,777) | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
(1) Represents the fair value of the shares received at final settlement of the ASR Agreements that were transferred to cost of repurchased stock. For further discussion, see Note 1. Background and Basis of Presentation.
See notes to condensed consolidated financial statements.
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions of dollars)
(Unaudited)
_____________________
| | | | | | | | | | | | | | |
For the Six Months Ended June 30, | | 2024 | | 2023 |
Cash Provided by (Used in) Operating Activities | | | | |
Net earnings | | $ | 5,932 | | | $ | 3,904 | |
Adjustments to reconcile net earnings to operating cash flows: | | | | |
Depreciation and amortization | | 139 | | | 114 | |
Deferred income tax provision (benefit) (1) | | 444 | | | (180) | |
Unrecognized tax benefit (1) | | 88 | | | 550 | |
Fair value adjustment for NJOY Transaction contingent payments | | 140 | | | — | |
(Income) losses from investments in equity securities | | (414) | | | (47) | |
Gain on the sale of IQOS System commercialization rights | | (2,700) | | | — | |
Dividends from ABI | | 139 | | | 163 | |
Asset impairment | | 354 | | | — | |
Cash effects of changes: (2) | | | | |
Receivables | | (1) | | | (58) | |
Inventories | | 41 | | | 9 | |
Accounts payable | | (16) | | | (82) | |
Income taxes | | 177 | | | (191) | |
Accrued liabilities and other current assets | | (351) | | | 187 | |
Accrued settlement charges | | (1,243) | | | (1,363) | |
Pension plan contributions | | (9) | | | (11) | |
Pension and postretirement, net | | (50) | | | (63) | |
Other, net (1) | | 132 | | | 176 | |
Net cash provided by (used in) operating activities | | 2,802 | | | 3,108 | |
Cash Provided by (Used in) Investing Activities | | | | |
Capital expenditures | | (64) | | | (103) | |
Proceeds from the ABI Transaction (3) | | 2,353 | | | — | |
| | | | |
Acquisition of NJOY, net of cash acquired | | — | | | (2,750) | |
Other, net | | (10) | | | (5) | |
Net cash provided by (used in) investing activities | | $ | 2,279 | | | $ | (2,858) | |
(1) 2023 relates to unrecognized tax benefit from the ordinary loss for cash tax purposes with respect to a portion of our tax basis associated with our former investment in JUUL, partially offset by our estimated corporate alternative minimum tax credit carryforward. 2023 amounts have been reclassified to conform to the current year presentation.
(2) 2023 amounts are net of the effects from the NJOY Transaction. For further details see Note 2. Acquisition of NJOY.
(3) For further discussion of the ABI Transaction, see Note 6. Investments in Equity Securities.
See notes to condensed consolidated financial statements.
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(in millions of dollars)
(Unaudited)
_____________________
| | | | | | | | | | | | | | |
For the Six Months Ended June 30, | | 2024 | | 2023 |
Cash Provided by (Used in) Financing Activities | | | | |
| | | | |
Proceeds from short-term borrowings | | $ | — | | | $ | 2,000 | |
| | | | |
Long-term debt repaid | | (1,121) | | | (1,566) | |
Repurchases of common stock | | (2,410) | | | (472) | |
Dividends paid on common stock | | (3,420) | | | (3,365) | |
| | | | |
Other, net | | (15) | | | (15) | |
Net cash provided by (used in) financing activities | | (6,966) | | | (3,418) | |
Cash, cash equivalents and restricted cash: | | | | |
Increase (decrease) | | (1,885) | | | (3,168) | |
Balance at beginning of period | | 3,721 | | | 4,091 | |
Balance at end of period | | $ | 1,836 | | | $ | 923 | |
| | | | |
The following table provides a reconciliation of cash, cash equivalents and restricted cash (1) to the amounts reported on our condensed consolidated balance sheets: |
| | At June 30, 2024 | | At December 31, 2023 |
Cash and cash equivalents | | $ | 1,799 | | | $ | 3,686 | |
Restricted cash included in other current assets | | 9 | | | 5 | |
Restricted cash included in other assets | | 28 | | | 30 | |
| | | | |
Cash, cash equivalents and restricted cash | | $ | 1,836 | | | $ | 3,721 | |
(1) Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 14. Contingencies.
See notes to condensed consolidated financial statements.
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 terms “Altria,” “we,” “us” and “our” refer to either (i) Altria Group, Inc. and its consolidated subsidiaries or (ii) Altria Group, Inc. only and not its consolidated subsidiaries, as appropriate in the context.
▪Background: At June 30, 2024, our 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 is a wholly owned subsidiary of PM USA; UST LLC (“UST”), which, through its wholly owned subsidiary U.S. Smokeless Tobacco Company LLC (“USSTC”), is engaged in the manufacture and sale of moist smokeless tobacco products (“MST”) and snus products; Helix Innovations LLC (“Helix”), which operates in the United States and Canada, and Helix Innovations GmbH and its affiliates (“Helix International”), which operate internationally in the rest-of-world, are engaged in the manufacture and sale of oral nicotine pouches; and NJOY, LLC (“NJOY”), which is engaged in the manufacture and sale of e-vapor products. Other wholly owned subsidiaries included Altria Group Distribution Company (“AGDC”), which provides sales and distribution services to our domestic operating companies; and Altria Client Services LLC (“ALCS”), which provides various support services to our companies in areas such as legal, regulatory, research and product development, consumer engagement, finance, human resources and external affairs. Our access to the operating cash flows of our subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans by our subsidiaries. At June 30, 2024, our significant 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, 2024, we also owned a 75% economic interest in Horizon Innovations LLC (“Horizon”), a joint venture with JTI (US) Holding, Inc., a subsidiary of Japan Tobacco Inc., which owned the remaining 25% economic interest. Horizon is responsible for the U.S. marketing and commercialization of heated tobacco stick products owned by either party.
At June 30, 2024, we had investments in Anheuser-Busch InBev SA/NV (“ABI”) and Cronos Group Inc. (“Cronos”). In March 2024, we sold a portion of our investment in ABI (“ABI Transaction”). For further discussion of our investments in equity securities and the ABI Transaction, see Note 6. Investments in Equity Securities.
▪Share Repurchases: In January 2023, our Board of Directors (“Board of Directors” or “Board”) authorized a $1.0 billion share repurchase program (“January 2023 share repurchase program”), which we completed in December 2023.
In January 2024, our Board of Directors authorized a new $1.0 billion share repurchase program that it increased to $3.4 billion in March 2024 (as increased, “January 2024 share repurchase program”). We entered into accelerated share repurchase (“ASR”) transactions under two separate agreements with bank counterparties (collectively, “ASR Agreements”) to repurchase shares of our common stock having an aggregate value of $2.4 billion (“Repurchase Price”). In the first quarter of 2024, we paid the Repurchase Price and received 46.5 million shares of our common stock, which represented approximately 85% of the Repurchase Price, or $2,040 million, based on the closing price per share of our common stock on the date we entered into the ASR Agreements. In the second quarter of 2024, we received approximately 7.4 million additional shares of our common stock upon the final settlement of the ASR Agreements. The total number of shares repurchased under the ASR Agreements was based on volume-weighted average prices of our common stock during the term of the ASR transactions, less a discount. We funded the ASR transactions with proceeds from the ABI Transaction. The ASR transactions were accounted for as equity transactions and included in cost of repurchased stock on our condensed consolidated balance sheet when the shares were received. At June 30, 2024, we had $990 million remaining under the January 2024 share repurchase program. The timing of share repurchases depends upon marketplace conditions and other factors, and the program remains subject to the discretion of our Board.
Our share repurchase activity was as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| For the Six Months Ended June 30, | | For the Three Months Ended June 30, |
(in millions, except per share data) | 2024 | (1) | 2023 | | 2024 | (1) | 2023 |
Total number of shares repurchased | 54.1 | | | 10.4 | | | 7.6 | | | 10.4 | |
Aggregate cost of shares repurchased | $ | 2,410 | | | $ | 472 | | | $ | 370 | | | $ | 472 | |
Average price per share of shares repurchased | $ | 44.50 | | | $ | 45.37 | | | $ | 48.36 | | | $ | 45.37 | |
(1) Includes 53.9 million and 7.4 million shares repurchased under the ASR Agreements at an average price per share of $44.50 and $48.44 for the six and three months ended June 30, 2024, respectively.
▪Basis of Presentation: Our interim condensed consolidated financial statements are unaudited. Our management believes that all adjustments necessary for a fair statement of the interim results presented have been reflected in our 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.
These statements should be read in conjunction with our audited consolidated financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2023.
On January 1, 2024, we adopted Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU No. 2022-03”). This guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This guidance also specifies required disclosures for equity securities subject to contractual sale restrictions. We applied ASU No. 2022-03 for the fair value disclosure of our investment in ABI. For further discussion, see Note 6. Investments in Equity Securities.
For a description of issued accounting guidance applicable to, but not yet adopted by, us, see Note 15. New Accounting Guidance Not Yet Adopted.
Note 2. Acquisition of NJOY
On June 1, 2023, we acquired NJOY Holdings (“NJOY Transaction”), which provided us with full global ownership of NJOY’s e-vapor product portfolio, including NJOY ACE. The total consideration for the NJOY Transaction of approximately $2.9 billion consisted of approximately $2.75 billion in cash payments (net of cash acquired) plus the fair value of up to $500 million in additional cash payments contingent on receipt of U.S. Food and Drug Administration (“FDA”) authorizations with respect to NJOY’s menthol ($250 million), blueberry ($125 million) and watermelon ($125 million) pod products. The fair value of these contingent payments at March 31, 2024, December 31, 2023 and on the acquisition date was approximately $130 million, which was included in the total consideration.
On June 21, 2024, the FDA issued marketing granted orders for four NJOY menthol e-vapor products. As a result, we became obligated to make cash payments totaling $250 million under the acquisition agreement, which payments occurred in July 2024. Additionally, we recorded a pre-tax charge of approximately $140 million for the change in the fair value of contingent payments for the six and three months ended June 30, 2024, as an acquisition-related cost in marketing, administration and research costs in our condensed consolidated statement of earnings. At June 30, 2024, the fair value of total contingent payments was approximately $270 million after recording the fair value adjustment.
Contingent payments related to the NJOY Transaction were recognized at their estimated fair value as of the acquisition date. Subsequent changes to the fair value of the liability resulting from contingent payments are recognized in earnings until the contingency is resolved. In determining the estimated fair value of contingent payments, we made certain judgments, estimates and assumptions, the most significant of which was the likelihood of certain potential regulatory outcomes. Contingent payments are classified in Level 3 of the fair value hierarchy.
Costs incurred for the NJOY Transaction are recognized as expenses in the period in which the costs are incurred. For the six and three months ended June 30, 2023, we incurred $49 million and $41 million, respectively, for acquisition-related costs, consisting primarily of transaction costs and financing fees, which were included in marketing, administration and research costs and interest and other debt expense, net, respectively, in our condensed consolidated statements of earnings.
We funded the initial NJOY Transaction cash payments at closing through a combination of borrowings under a $2.0 billion term loan facility, the issuance of commercial paper and available cash. For further discussion regarding the term loan facility, see Note 12. Debt.
We accounted for this acquisition as a business combination. On June 1, 2024, we finalized our purchase price allocation for the NJOY Transaction. The amounts in the table below represent the final purchase price allocation to assets acquired and liabilities assumed in the NJOY Transaction, including measurement period adjustments made during the three months ended March 31, 2024. We recorded no measurement period adjustments in 2023 or during the three months ended June 30, 2024.
| | | | | | | | | | | |
(in millions) | Preliminary Purchase Price Allocation | Measurement Period Adjustments | Final Purchase Price Allocation |
Cash and cash equivalents | $ | 22 | | $ | — | | $ | 22 | |
Receivables | 7 | | — | | 7 | |
Inventories | 19 | | — | | 19 | |
Other assets | 7 | | — | | 7 | |
Property, plant and equipment | 16 | | — | | 16 | |
Other intangible assets: | | | |
Developed technology (amortizable) | 1,000 | | — | | 1,000 | |
Trademarks (amortizable) | 230 | | (40) | | 190 | |
Supplier agreements (amortizable) | 180 | | (180) | | — | |
Accounts payable | (7) | | — | | (7) | |
Accrued liabilities | (20) | | — | | (20) | |
Deferred income taxes | (167) | | 66 | | (101) | |
Total identifiable net assets | 1,287 | | (154) | | 1,133 | |
Total consideration | 2,901 | | — | | 2,901 | |
Goodwill | $ | 1,614 | | $ | 154 | | $ | 1,768 | |
The excess of the total consideration over the identifiable net assets acquired in the NJOY Transaction primarily reflects the value of future growth opportunities in the e-vapor category. None of the goodwill or other intangible assets is deductible for tax purposes.
The significant assumptions used in determining the fair values of the identifiable intangible assets included volume growth rates, operating margins, the assessment of acquired technology life cycles, discount rates, as well as other factors. We determined the fair values of the identifiable intangible assets using an income approach. The fair value measurements were primarily based on significant inputs that are not observable in the market, such as discounted cash flow analyses, and thus are classified in Level 3 of the fair value hierarchy. We amortize these intangible assets over a weighted-average period of approximately 18 years.
Note 3. Revenues from Contracts with Customers
We disaggregate net revenues based on product type. For further discussion, see Note 11. Segment Reporting.
In 2023, substantially all cash discounts, offered in contracts with our customers for prompt payment, were based on a flat rate per unit based on agreed-upon payment terms. Beginning in the first quarter of 2024 for PM USA and USSTC, cash discounts in contracts with our customers were based on a percentage of the list price based on agreed-upon payment terms. We record receivables net of the cash discounts on our condensed consolidated balance sheets.
We record payments received by our businesses in advance of product shipment as deferred revenue. These payments are included in other accrued liabilities on our condensed consolidated balance sheets until control of such products is obtained by the customer. Deferred revenue from contracts with customers was $310 million and $258 million at June 30, 2024 and December 31, 2023, respectively. When cash is received in advance of product shipment, our companies satisfy their performance obligations within three days of receiving payment. At June 30, 2024 and December 31, 2023, there were no differences between amounts recorded as deferred revenue from contracts with customers and amounts subsequently recognized as revenue.
Receivables were $72 million and $71 million at June 30, 2024 and December 31, 2023, respectively. At June 30, 2024 and December 31, 2023, there were no expected differences between amounts recorded and subsequently received, and we did not record an allowance for credit losses against these receivables.
We record an allowance for returned goods, which is included in other accrued liabilities on our condensed consolidated balance sheets. It is USSTC’s policy to accept authorized sales returns from its customers for products that have passed the freshness date printed on product packaging due to the limited shelf life of USSTC’s MST and snus products. We record estimated sales returns, which are based principally on historical volume and return rates, as a reduction to revenues. Actual sales returns will differ from estimated sales returns to the extent actual results differ from estimated assumptions. We reflect differences between actual and estimated sales returns in the period in which the actual amounts become known. These differences, if any, have not had a material impact on our condensed consolidated financial statements. All returned goods are
destroyed upon return and not included in inventory. Consequently, we do not record an asset for USSTC’s right to recover goods from customers upon return.
Sales incentives include variable payments related to goods sold by our businesses. We include estimates of variable consideration as a reduction to revenues upon shipment of goods to customers. The sales incentives that require significant estimates and judgments are as follows:
▪Price promotion payments- We make price promotion payments, substantially all of which are made to our retail partners to incent the promotion of certain product offerings in select geographic areas.
▪Wholesale and retail participation payments- We make payments to our wholesale and retail partners to incent merchandising and sharing of sales data in accordance with our trade agreements.
These estimates primarily include estimated wholesale to retail sales volume and historical acceptance rates. Actual payments will differ from estimated payments to the extent actual results differ from estimated assumptions. Differences between actual and estimated payments are reflected in the period such information becomes available. These differences, if any, have not had a material impact on our condensed consolidated financial statements.
Note 4. Supplier Financing
We facilitate a voluntary supplier financing program through a third-party intermediary under which participating suppliers may elect to sell receivables due from us to participating third-party financial institutions at the sole discretion of both the suppliers and the financial institutions (“Program”). Our responsibility is limited to making payment on the terms originally negotiated with our supplier, regardless of whether our supplier sells its receivable to a financial institution. We pay the third-party intermediary a nominal fee to administer the Program. Under the terms of the agreement with our third-party intermediary, ALCS has a direct obligation to pay the participating financial institutions or the participating suppliers when payment obligations are due, unless such obligations are satisfied by the applicable ALCS affiliate. Additionally, Altria guarantees the obligations of ALCS to those parties. We do not enter into agreements with any of the participating financial institutions in connection with the Program. The range of payment terms we negotiate with our suppliers (up to 120 days) is consistent irrespective of whether a supplier participates in the Program.
We have no economic interest in a supplier’s sale of a receivable. Once a qualifying supplier elects to participate in the Program and reaches an agreement with a participating third-party financial institution, the qualifying supplier elects which individual invoices it sells to the financial institution.
All outstanding balances under the Program are recorded in accounts payable on our condensed consolidated balance sheets, and the associated payments are included in operating activities within our condensed consolidated statements of cash flows.
At June 30, 2024 and December 31, 2023, confirmed outstanding obligations under the Program were $125 million and $119 million, respectively.
Note 5. Goodwill and Other Intangible Assets, net
Goodwill and other intangible assets, net, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | Other Intangible Assets, net |
(in millions) | June 30, 2024 | | December 31, 2023 | | June 30, 2024 | | December 31, 2023 |
Smokeable products segment | $ | 99 | | | $ | 99 | | | $ | 2,951 | | | $ | 2,963 | |
Oral tobacco products segment | 5,078 | | | 5,078 | | | 8,695 | | | 9,065 | |
Other | 1,768 | | | 1,614 | | | 1,402 | | | 1,658 | |
Total | $ | 6,945 | | | $ | 6,791 | | | $ | 13,048 | | | $ | 13,686 | |
Other intangible assets consisted of the following:
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
(in millions) | Gross Carrying Amount | | Accumulated Amortization | | Gross Carrying Amount | | Accumulated Amortization |
Indefinite-lived intangible assets | $ | 11,089 | | | $ | — | | | $ | 11,443 | | | $ | — | |
Definite-lived intangible assets | 2,621 | | | 662 | | | 2,841 | | | 598 | |
Total other intangible assets | $ | 13,710 | | | $ | 662 | | | $ | 14,284 | | | $ | 598 | |
At June 30, 2024, substantially all of our indefinite-lived intangible assets consisted of (i) MST and snus trademarks of $8.5 billion, which consists of Copenhagen, Skoal and other MST and snus trademarks of $4.0 billion, $3.6 billion and $0.9 billion, respectively, from our 2009 acquisition of UST, and (ii) cigar trademarks of $2.6 billion from our 2007 acquisition of
Middleton. Definite-lived intangible assets, consisting primarily of intellectual property (which includes developed technology), certain cigarette trademarks, e-vapor trademarks and customer relationships, are amortized over a weighted-average period of approximately 19 years. Pre-tax amortization expense for definite-lived intangible assets was $64 million and $45 million for the six months ended June 30, 2024 and 2023, respectively, and $37 million and $27 million for the three months ended June 30, 2024 and 2023, respectively. We estimate our annualized amortization expense, which includes the impact of the NJOY Transaction and related measurement period adjustments, for each of the next five years to be approximately $150 million, assuming no additional transactions occur that require the amortization of intangible assets.
On April 30, 2024, we assigned the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System (“IQOS System”) to Philip Morris International Inc. (“PMI”) pursuant to the terms of a purchase agreement entered into with PMI in October 2022. In exchange for the assignment of the U.S. commercialization rights to the IQOS System, we received total cash payments of approximately $2.8 billion ($1.0 billion in 2022 and $1.8 billion, including interest, in the third quarter of 2023), $2.7 billion of which was classified as a deferred gain on our condensed consolidated balance sheet at December 31, 2023. Upon the assignment of the U.S. commercialization rights to the IQOS System, we recorded a pre-tax gain of $2.7 billion for the six and three months ended June 30, 2024 in our condensed consolidated statements of earnings.
The changes in goodwill and net carrying amount of intangible assets were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| For the Six Months Ended | | For the Year Ended |
| June 30, 2024 | | December 31, 2023 |
(in millions) | Goodwill | | Other Intangible Assets, net | | Goodwill | | Other Intangible Assets, net |
Balance at January 1 | $ | 6,791 | | | $ | 13,686 | | | $ | 5,177 | | | $ | 12,384 | |
Changes due to: | | | | | | | |
Acquisitions (1) | 154 | | | (220) | | | 1,614 | | | 1,430 | |
Asset impairment | — | | | (354) | | | — | | | — | |
Amortization | — | | | (64) | | | — | | | (128) | |
Balance at end of period | $ | 6,945 | | | $ | 13,048 | | | $ | 6,791 | | | $ | 13,686 | |
(1) Substantially all of the 2023 amounts are attributable to the NJOY Transaction. The 2024 amount represents the measurement period adjustments made during the three months ended March 31, 2024 related to the NJOY Transaction. For additional information regarding the NJOY Transaction, see Note 2. Acquisition of NJOY.
We conduct a required annual review of goodwill and indefinite-lived intangibles for potential impairment, and more frequently if an event occurs or circumstances change that would require us to perform an interim quantitative impairment assessment. Apart from the factors leading us to perform a quantitative assessment for the Skoal intangible asset as discussed below, there have been no events or changes in circumstances that indicate an interim quantitative impairment assessment was required as of June 30, 2024. We will perform our annual impairment testing during the fourth quarter of 2024.
At December 31, 2023, the estimated fair value of the Skoal trademark exceeded its carrying value of $3.9 billion by approximately 6% ($0.2 billion). Sales volumes of MST products, including Skoal, have continued to be negatively impacted due in part to evolving adult tobacco consumer preferences, which has resulted in consumers increasingly moving across tobacco categories. In connection with the preparation of our financial statements for the period ended June 30, 2024, we evaluated the accelerated growth of innovative tobacco products, including oral nicotine pouches, and the related increase in competitive activity among tobacco categories, which have continued to contribute to reductions in sales volumes for MST products, including Skoal. We concluded that the expected impact from the sales volume declines on the Skoal trademark represented a triggering event, and as a result of this conclusion, we performed an interim impairment assessment as of June 30, 2024. As a result of (i) lower projected revenue and income due to lower volume assumptions, (ii) a decrease in the perpetual growth rate to 0% (1% at October 1, 2023 valuation) and (iii) an increase in the discount rate to 11.5% (11.0% at October 1, 2023 valuation), we determined the estimated fair value of the Skoal trademark as of June 30, 2024, was below its carrying value and recorded a non-cash, pre-tax impairment of $354 million for the six and three months ended June 30, 2024 in our condensed consolidated statements of earnings. Our estimate of the fair value and carrying value of the Skoal trademark at June 30, 2024 was $3.6 billion, after recording the impairment.
We used an income approach to estimate the fair value of the Skoal trademark. The income approach reflects the discounting of expected future cash flows at a rate of return that incorporates the risk-free rate for the use of those funds, the expected rate of inflation and the risks associated with realizing expected future cash flows. In performing the discounted cash flow analysis, we made various judgments, estimates and assumptions, the most significant of which were volume, revenue, income, operating margins, perpetual growth rate and discount rate. All significant inputs used in the valuation are classified in Level 3 of the fair value hierarchy.
Our annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2023 resulted in no impairment charges. At June 30, 2024 and December 31, 2023, there were no accumulated impairment losses related to goodwill.
Note 6. Investments in Equity Securities
The carrying amount of our investments consisted of the following:
| | | | | | | | | | | | | | |
(in millions) | | June 30, 2024 | | December 31, 2023 |
ABI | | $ | 8,020 | | | $ | 9,676 | |
Cronos | | 315 | | | 335 | |
| | | | |
Total | | $ | 8,335 | | | $ | 10,011 | |
(Income) losses from our current and former investments in equity securities consisted of the following:
| | | | | | | | | | | | | | | | | | | | | | | | |
| For the Six Months Ended June 30, | | For the Three Months Ended June 30, | |
(in millions) | 2024 | 2023 | 2024 | 2023 |
ABI (1) | $ | (434) | | (2) | $ | (340) | | | $ | (121) | | | $ | (135) | | |
Cronos (1) | 20 | | | 43 | | | 2 | | | 8 | | |
(Income) losses from investments under equity method of accounting | (414) | | | (297) | | | (119) | | | (127) | | |
JUUL | — | | | 250 | | (3) | — | | | — | | |
(Income) losses from investments in equity securities | $ | (414) | | | $ | (47) | | | $ | (119) | | | $ | (127) | | |
(1) Includes our share of amounts recorded by our investees and additional adjustments, if required, related to (i) the conversion from international financial reporting standards to United States generally accepted accounting principles (“GAAP”) and (ii) adjustments to our investments required under the equity method of accounting.
(2) Includes $165 million of the total pre-tax gain on the ABI Transaction discussed below.
(3) Represents loss as a result of the disposition of our JUUL equity securities discussed below.
Investment in ABI
Prior to March 14, 2024, we had an approximate 10% ownership interest in ABI, consisting of approximately 185 million restricted shares of ABI (“Restricted Shares”) and approximately 12 million ordinary shares of ABI. Our Restricted Shares:
▪are unlisted and not admitted to trading on any stock exchange;
▪are convertible by us into ordinary shares of ABI on a one-for-one basis;
▪rank equally with ordinary shares of ABI with regards to dividends and voting rights; and
▪have director nomination rights with respect to ABI.
On March 14, 2024, we converted 60 million shares of our Restricted Shares to ordinary shares of ABI. In March 2024, we completed the ABI Transaction, which consisted of the following:
▪We sold 35 million ordinary shares of ABI in a global secondary offering for gross proceeds of approximately $2.2 billion (“Secondary Offering”). In connection with the Secondary Offering, we (i) agreed to a 180-day lockup with the lead underwriter with respect to our remaining approximately 159 million ABI shares (ending September 10, 2024) and (ii) granted the underwriters an option to purchase up to an additional 5.25 million ordinary shares of ABI, which the underwriters did not exercise prior to its expiration.
▪We sold $200 million of our ABI ordinary shares (approximately 3.3 million ordinary shares) to ABI in a private transaction.
At June 30, 2024, we had an approximate 8.1% ownership interest in ABI, consisting of approximately 125 million Restricted Shares and approximately 34 million ordinary shares of ABI. As a result of the ABI Transaction, in the first quarter of 2024, we received pre-tax cash proceeds totaling approximately $2.4 billion and incurred transaction costs of approximately $62 million. In conjunction with the ABI Transaction, we entered into the ASR Agreements. For further discussion of the ASR Agreements, see Note 1. Background and Basis of Presentation.
As a result of the ABI Transaction, we recorded the following pre-tax amounts in our condensed consolidated statement of earnings:
| | | | | | | | | | | |
(in millions) | For the Six Months Ended June 30, 2024 | | |
Gain on partial sale of our investment | $ | 165 | | | | | | | |
Transaction costs | (62) | | | | | | | |
Total pre-tax gain on ABI Transaction | $ | 103 | | | | | | | |
▪The pre-tax gain on the partial sale of our investment was recorded in (income) losses from investments in equity securities and includes a $408 million gain representing the excess of the selling price of the ABI shares sold over the carrying value of those shares, partially offset by a $243 million reclassification of the proportionate share of our pre-tax accumulated other comprehensive losses directly attributable to ABI and our designated net investment hedges related to our investment in ABI (see Note 7. Financial Instruments and Note 10. Other Comprehensive Earnings/Losses).
▪The pre-tax transaction costs were approximately $62 million ($59 million in marketing, administration and research costs and $3 million in interest and other debt expense, net), substantially all of which were underwriter fees.
In addition, in conjunction with the ABI Transaction, we recorded an income tax benefit from the partial release of a valuation allowance of approximately $94 million in provision for income taxes in our condensed consolidated statement of earnings for the six months ended June 30, 2024. For further discussion, see Note 13. Income Taxes.
We expect to maintain two seats on ABI’s board of directors through ABI’s 2025 annual general meeting. Following that meeting, as a result of our reduced ownership interest in ABI following the ABI Transaction, we expect to have one seat on ABI’s board of directors, in accordance with our rights as a holder of Restricted Shares. We will continue to account for our investment in ABI under the equity method of accounting because we have active representation on ABI’s board of directors and certain ABI board committees. Through this representation, we have the ability to exercise significant influence over the operating and financial policies of ABI and participate in ABI’s policy making processes.
We report our share of ABI’s results using a one-quarter lag because ABI’s results are not available in time for us to record them in the concurrent period.
The fair value of our investment in ABI was based on (i) unadjusted quoted prices in active markets for ABI’s ordinary shares and was classified in Level 1 of the fair value hierarchy and (ii) observable inputs other than Level 1 prices, such as quoted prices for similar assets for the Restricted Shares and was classified in Level 2 of the fair value hierarchy. We can convert our Restricted Shares to ordinary shares at our discretion after the expiration of the 180-day lockup period. The fair value of each Restricted Share is based on the value of an ordinary share.
The fair value of our investment in ABI at June 30, 2024 and December 31, 2023 was $9.2 billion and $12.7 billion, respectively, which exceeded its carrying value of $8.0 billion and $9.7 billion, respectively, by approximately 15% and 32%, respectively.
At June 30, 2024, the carrying value of our investment in ABI exceeded its share of ABI’s net assets attributable to equity holders of ABI by approximately $1.9 billion. Substantially all of this difference is comprised of goodwill and other indefinite-lived intangible assets (consisting primarily of trademarks). This difference represents a $0.6 billion reduction from December 31, 2023, primarily due to the ABI Transaction.
Investment in Cronos
At June 30, 2024, we had a 41.0% ownership interest in Cronos, consisting of approximately 157 million shares, which we account for under the equity method of accounting. We report our share of Cronos’s results using a one-quarter lag because Cronos’s results are not available in time for us to record them in the concurrent period.
The fair value of our investment in Cronos was based on unadjusted quoted prices in active markets for Cronos’s common shares and was classified in Level 1 of the fair value hierarchy. At June 30, 2024, the fair value of our investment in Cronos exceeded its carrying value by approximately $50 million or approximately 16%. At December 31, 2023, the fair value of our investment in Cronos was less than its carrying value by $8 million or approximately 2%.
Former Investment in JUUL Labs, Inc. (“JUUL”)
In March 2023, we entered into a stock transfer agreement with JUUL under which we transferred to JUUL all of our beneficially owned JUUL equity securities and, in exchange, received a non-exclusive, irrevocable global license to certain of JUUL’s heated tobacco intellectual property. In addition, all other agreements between us and JUUL were terminated or we were removed as parties thereto, other than certain litigation-related agreements and a license agreement relating to our non-trademark licensable intellectual property rights in the e-vapor field, which remain in force solely with respect to our e-vapor
intellectual property as of or prior to March 3, 2023. As a result of the stock transfer agreement, for the six months ended June 30, 2023, we recorded a non-cash, pre-tax loss of $250 million on the disposition of our JUUL equity securities in (income) losses from investments in equity securities in our condensed consolidated statement of earnings.
Note 7. Financial Instruments
We enter into derivative financial instruments to mitigate the potential impact of certain market risks, including foreign currency exchange rate risk. We use various types of derivative financial instruments, including forward contracts, options and swaps. We do not enter into or hold derivative financial instruments for trading or speculative purposes.
Our investment in ABI, whose functional currency is the Euro, exposes us to foreign currency exchange risk on the carrying value of our investment. To manage this risk, we may designate certain foreign exchange contracts, including cross-currency swap contracts and forward contracts (collectively, “foreign currency contracts”), and Euro denominated unsecured long-term notes (“foreign currency denominated debt”) as net investment hedges of our investment in ABI.
At June 30, 2024 and December 31, 2023, we had no outstanding foreign currency contracts. When we have foreign currency contracts in effect, counterparties are domestic and international financial institutions. Under these contracts, we are exposed to potential losses in the event of non-performance by these counterparties. We manage our credit risk by entering into transactions with counterparties that have investment grade credit ratings, limiting the amount of exposure we have with each counterparty and monitoring the financial condition of each counterparty. The counterparty agreements contain provisions that require us to maintain an investment grade credit rating. In the event our credit rating falls below investment grade, counterparties to our foreign currency contracts can require us to post collateral.
The aggregate carrying value and fair value of our total long-term debt were as follows:
| | | | | | | | | | | |
(in millions) | June 30, 2024 | | December 31, 2023 |
Carrying value | $ | 25,023 | | | $ | 26,233 | |
Fair value | 22,675 | | | 24,373 | |
Foreign currency denominated debt included in long-term debt: | | | |
Carrying value | 3,206 | | | 3,303 | |
Fair value | 3,062 | | | 3,125 | |
Our estimate of the fair value of our total long-term debt is based on observable market information derived from a third-party pricing source and is classified in Level 2 of the fair value hierarchy.
Net Investment Hedging
We recognize changes in the carrying value of the foreign currency denominated debt due to changes in the Euro to U.S. dollar exchange rate in accumulated other comprehensive losses related to ABI.
We recognized pre-tax (gains) losses of our net investment hedges of $(98) million and $69 million for the six months ended June 30, 2024 and 2023, respectively, and $(23) million and $21 million for the three months ended June 30, 2024 and 2023, respectively, in accumulated other comprehensive losses.
In addition, as a result of the ABI Transaction, for the six months ended June 30, 2024, we reclassified $42 million of pre-tax gains from our designated net investments hedges included in accumulated other comprehensive losses to (income) losses from investments in equity securities in our condensed consolidated statement of earnings. For further discussion of the ABI Transaction and reclassification of accumulated other comprehensive losses, see Note 6. Investments in Equity Securities and Note 10. Other Comprehensive Earnings/Losses.
Note 8. Benefit Plans
Components of Net Periodic Benefit Cost (Income)
Net periodic benefit cost (income) consisted of the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pension | | Postretirement | | Pension | | Postretirement |
| For the Six Months Ended June 30, | | For the Three Months Ended June 30, |
(in millions) | 2024 | | 2023 | | 2024 | | 2023 | | 2024 | | 2023 | | 2024 | | 2023 |
Service cost | $ | 21 | | | $ | 20 | | | $ | 8 | | | $ | 8 | | | $ | 12 | | | $ | 11 | | | $ | 4 | | | $ | 4 | |
Interest cost | 161 | | | 166 | | | 32 | | | 34 | | | 81 | | | 83 | | | 16 | | | 17 | |
Expected return on plan assets | (233) | | | (243) | | | (3) | | | (4) | | | (117) | | | (122) | | | (2) | | | (2) | |
Amortization: | | | | | | | | | | | | | | | |
Net loss (gain) | 13 | | | 2 | | | (2) | | | — | | | 6 | | | 1 | | | (1) | | | — | |
Prior service cost (credit) | 3 | | | 3 | | | (20) | | | (20) | | | 2 | | | 2 | | | (10) | | | (10) | |
| | | | | | | | | | | | | | | |
Net periodic benefit cost (income) | $ | (35) | | | $ | (52) | | | $ | 15 | | | $ | 18 | | | $ | (16) | | | $ | (25) | | | $ | 7 | | | $ | 9 | |
Employer Contributions
We make contributions to our pension plans to the extent that the contributions are tax deductible and pay benefits that relate to plans for salaried employees that cannot be funded under Internal Revenue Service regulations. We made employer contributions of $9 million to our pension plans and did not make any contributions to our postretirement plans during the six months ended June 30, 2024. Currently, we anticipate making additional employer contributions of up to approximately $20 million to our pension plans and contributions of up to approximately $30 million to our postretirement plans in 2024. However, the foregoing estimates of 2024 contributions to our pension and postretirement plans are subject to change as a result of changes in tax and other benefit laws, changes in interest rates and asset performance significantly above or below the assumed long-term rate of return for each respective plan.
Note 9. Earnings per Share
We calculated basic and diluted earnings per share (“EPS”) using the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Six Months Ended June 30, | | For the Three Months Ended June 30, |
(in millions) | | 2024 | | 2023 | | 2024 | | 2023 |
Net earnings | | $ | 5,932 | | | $ | 3,904 | | | $ | 3,803 | | | $ | 2,117 | |
Less: Distributed and undistributed earnings attributable to share-based awards | | ( |