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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 September 30, 2022
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
1.000% Notes due 2023
MO23A 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 October 18, 2022, there were 1,792,172,618 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)
3
5
6
7
8
9
Item 2.
Item 3.
Item 4.
PART II - OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 6.
Signature

2

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of dollars)
(Unaudited)
______________________________
 
September 30, 2022 December 31, 2021
Assets
Cash and cash equivalents $ 2,483  $ 4,544 
Receivables 52  47 
Inventories:
Leaf tobacco 609  744 
Other raw materials 189  166 
Work in process 27  23 
Finished product 281  261 
1,106  1,194 
Other current assets 379  298 
Total current assets 4,020  6,083 
Property, plant and equipment, at cost 4,409  4,432 
Less accumulated depreciation 2,822  2,879 
1,587  1,553 
Goodwill 5,177  5,177 
Other intangible assets, net 12,353  12,306 
Investments in equity securities ($351 million and $1,720 million at September 30, 2022 and December 31, 2021, respectively, measured at fair value)
9,814  13,481 
Other assets 1,002  923 
Total Assets $ 33,953  $ 39,523 
 
See notes to condensed consolidated financial statements.
3

Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)
(in millions of dollars, except share and per share data)
(Unaudited)
________________________________________________
 
September 30, 2022 December 31, 2021
Liabilities
Current portion of long-term debt $ 1,443  $ 1,105 
Accounts payable 417  449 
Accrued liabilities:
Marketing 691  664 
Settlement charges 2,731  3,349 
Other 1,122  1,365 
Dividends payable 1,693  1,647 
Total current liabilities 8,097  8,579 
Long-term debt 24,848  26,939 
Deferred income taxes 3,330  3,692 
Accrued pension costs 196  200 
Accrued postretirement health care costs 1,436  1,436 
Other liabilities 278  283 
Total liabilities 38,185  41,129 
Contingencies (Note 11)
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 5,873  5,857 
Earnings reinvested in the business 28,785  30,664 
Accumulated other comprehensive losses (2,383) (3,056)
Cost of repurchased stock
(1,012,146,048 shares at September 30, 2022 and
982,785,699 shares at December 31, 2021)
(37,442) (36,006)
Total stockholders’ equity (deficit) (4,232) (1,606)
Total Liabilities and Stockholders’ Equity (Deficit) $ 33,953  $ 39,523 

See notes to condensed consolidated financial statements.

4

Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (Losses)
(in millions of dollars, except per share data)
(Unaudited)
_____________________________________ 
For the Nine Months Ended September 30, For the Three Months Ended September 30,
2022 2021 2022 2021
Net revenues $ 18,985  $ 19,758  $ 6,550  $ 6,786 
Cost of sales 4,869  5,348  1,715  1,858 
Excise taxes on products 3,380  3,733  1,138  1,255 
Gross profit 10,736  10,677  3,697  3,673 
Marketing, administration and research costs 1,635  1,850  585  722 
Operating income 9,101  8,827  3,112  2,951 
Interest and other debt expense, net 832  869  271  266 
Loss on early extinguishment of debt   649    — 
Net periodic benefit income, excluding service cost (137) (152) (44) (63)
(Income) losses from investments in equity securities 3,707  5,789  2,478  5,915 
(Gain) loss on Cronos-related financial instruments 14  128    135
Earnings (losses) before income taxes 4,685  1,544  407  (3,302)
Provision (benefit) for income taxes 1,611  693  183  (582)
Net earnings (losses) 3,074  851  224  (2,720)
Net (earnings) losses attributable to noncontrolling interests   —    (2)
Net earnings (losses) attributable to Altria $ 3,074  $ 851  $ 224  $ (2,722)
Per share data:
Basic and diluted earnings (losses) per share attributable to Altria $ 1.69  $ 0.46  $ 0.12  $ (1.48)

See notes to condensed consolidated financial statements.

5

Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Earnings (Losses)
(in millions of dollars)
(Unaudited)
_____________________
For the Nine Months Ended September 30, For the Three Months Ended September 30,
2022 2021 2022 2021
Net earnings (losses) $ 3,074  $ 851  $ 224  $ (2,720)
Other comprehensive earnings (losses), net of deferred income taxes:
Benefit plans 48  383  17 
ABI 637  495  (6) 161 
Currency translation adjustments and other (12) 33  (17)
Other comprehensive earnings (losses), net of deferred
income taxes
673  911  (6) 172 
Comprehensive earnings (losses) 3,747  1,762  218  (2,548)
Comprehensive (earnings) losses attributable to noncontrolling interests   —    (2)
Comprehensive earnings (losses) attributable to Altria $ 3,747  $ 1,762  $ 218  $ (2,550)

See notes to condensed consolidated financial statements.
6

Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
for the Nine Months Ended September 30, 2022 and 2021
(in millions of dollars, except per share data)
(Unaudited)
_______________________________________
 
  Common
Stock
Additional
Paid-in
Capital
Earnings
Reinvested
in the
Business
Accumulated
Other
Comprehensive
Losses
Cost of
Repurchased
Stock
Total
Stockholders’
Equity (Deficit)
Balances, December 31, 2021 $ 935  $ 5,857  $ 30,664  $ (3,056) $ (36,006) $ (1,606)
Net earnings (losses)     3,074      3,074 
Other comprehensive earnings (losses), net of deferred income taxes       673    673 
Stock award activity   16      15  31 
Cash dividends declared ($2.74 per share)
    (4,953)     (4,953)
Repurchases of common stock         (1,451) (1,451)
Balances, September 30, 2022
$ 935  $ 5,873  $ 28,785  $ (2,383) $ (37,442) $ (4,232)


  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, 2020 $ 935  $ 5,910  $ 34,679  $ (4,341) $ (34,344) $ 86  $ 2,925 
Net earnings (losses) —  —  851  —  —  (4) 847 
Other comprehensive earnings (losses), net of deferred income taxes
—  —  —  911  —  —  911 
Stock award activity
—  13  —  —  13  —  26 
Cash dividends declared ($2.62 per share)
—  —  (4,845) —  —  —  (4,845)
Repurchases of common stock —  —  —  —  (972) —  (972)
Other (1)
—  (77) —  —  —  (80) (157)
Balances, September 30, 2021
$ 935  $ 5,846  $ 30,685  $ (3,430) $ (35,303) $ $ (1,265)
(1) Represents the purchase of the remaining noncontrolling interests in Helix in the second quarter of 2021.

See notes to condensed consolidated financial statements.


7

Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
for the Three Months Ended September 30, 2022 and 2021
(in millions of dollars, except per share data)
(Unaudited)
_______________________________________ 

  Common
Stock
Additional
Paid-in
Capital
Earnings
Reinvested
in the
Business
Accumulated
Other
Comprehensive
Losses
Cost of
Repurchased
Stock
Total
Stockholders’
Equity (Deficit)
Balances, June 30, 2022 $ 935  $ 5,861  $ 30,252  $ (2,377) $ (37,074) $ (2,403)
Net earnings (losses)     224      224 
Other comprehensive earnings (losses), net of deferred income taxes
      (6)   (6)
Stock award activity
  12        12 
Cash dividends declared ($0.94 per share)
    (1,691)   —  (1,691)
Repurchases of common stock         (368) (368)
Balances, September 30, 2022
$ 935  $ 5,873  $ 28,785  $ (2,383) $ (37,442) $ (4,232)


  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, June 30, 2021 $ 935  $ 5,840  $ 35,065  $ (3,602) $ (34,981) $ $ 3,259 
Net earnings (losses) —  —  (2,722) —  —  —  (2,722)
Other comprehensive earnings (losses), net of deferred income taxes
—  —  —  172  —  —  172 
Stock award activity
—  —  —  —  — 
Cash dividends declared ($0.90 per share)
—  —  (1,658) —  —  —  (1,658)
Repurchases of common stock —  —  —  —  (322) —  (322)
Balances, September 30, 2021
$ 935  $ 5,846  $ 30,685  $ (3,430) $ (35,303) $ $ (1,265)

See notes to condensed consolidated financial statements.


8

Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions of dollars)
(Unaudited)
_____________________
For the Nine Months Ended September 30, 2022 2021
Cash Provided by (Used in) Operating Activities
Net earnings (losses) $ 3,074  $ 851 
Adjustments to reconcile net earnings (losses) to operating cash flows:
Depreciation and amortization 163  190 
Deferred income tax provision (benefit) (550) (1,180)
(Income) losses from investments in equity securities 3,707  5,789 
Dividends from ABI 104  119 
(Gain) loss on Cronos-related financial instruments 14  128 
Loss on early extinguishment of debt   649 
Cash effects of changes:
Receivables (5) (7)
Inventories 88  118 
Accounts payable (27)
Income taxes 49  (200)
Accrued liabilities and other current assets (382) (104)
Accrued settlement charges (618) (568)
Pension plan contributions (11) (23)
Pension and postretirement (income) cost, net (110) (127)
Other, net 141  104 
Net cash provided by (used in) operating activities 5,637  5,742 
Cash Provided by (Used in) Investing Activities
Capital expenditures (147) (102)
Other, net (68) 60 
Net cash provided by (used in) investing activities $ (215) $ (42)

See notes to condensed consolidated financial statements.

9

Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(in millions of dollars)
(Unaudited)
_____________________
For the Nine Months Ended September 30, 2022 2021
Cash Provided by (Used in) Financing Activities
Long-term debt issued $   $ 5,472 
Long-term debt repaid (1,105) (6,542)
Repurchases of common stock (1,451) (972)
Dividends paid on common stock (4,908) (4,787)
Premiums and fees related to early extinguishment of debt   (623)
Other, net (12) (216)
Net cash provided by (used in) financing activities (7,476) (7,668)
Cash, cash equivalents and restricted cash:
Increase (decrease) (2,054) (1,968)
Balance at beginning of period 4,594  5,006 
Balance at end of period $ 2,540  $ 3,038 
The following table provides a reconciliation of cash, cash equivalents and restricted cash (1) to the amounts reported on Altria’s condensed consolidated balance sheets:
At September 30, 2022 At December 31, 2021
Cash and cash equivalents $ 2,483  $ 4,544 
Restricted cash included in other current assets 15  — 
Restricted cash included in other assets 42  50 
Cash, cash equivalents and restricted cash $ 2,540  $ 4,594 
(1) Restricted cash consisted primarily of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 11. Contingencies.

See notes to condensed consolidated financial statements.
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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 September 30, 2022, 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 pipe tobacco 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 ROW”), which operate internationally in the rest-of-world, are engaged in the manufacture and sale of oral nicotine pouches; and Philip Morris Capital Corporation, which has one leveraged lease remaining. Other wholly owned subsidiaries included Altria Group Distribution Company, which provides sales and distribution services to our domestic tobacco operating companies, and Altria Client Services LLC (“ALCS”), which provides various support services to our companies in areas such as legal, regulatory, consumer engagement, finance, human resources and external affairs. Altria’s access to the operating cash flows of our wholly owned subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans by our subsidiaries. At September 30, 2022, our significant wholly owned subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to their equity interests.
On October 1, 2021, UST sold its subsidiary, International Wine & Spirits Ltd., which included Ste. Michelle Wine Estates Ltd. (“Ste. Michelle”).
At September 30, 2022, we had investments in the following equity securities: Anheuser-Busch InBev SA/NV (“ABI”), Cronos Group Inc. (“Cronos”) and JUUL Labs, Inc. (“JUUL”). We account for our investments in ABI and Cronos under the equity method of accounting using a one-quarter lag. We account for our investment in JUUL at fair value.
For further discussion of our investments in equity securities, see Note 3. Investments in Equity Securities.
Dividends and Share Repurchases: In August 2022, our Board of Directors (“Board of Directors” or “Board”) approved a 4.4% increase in the quarterly dividend rate to $0.94 per share of our common stock versus the previous rate of $0.90 per share. The current annualized dividend rate is $3.76. Future dividend payments remain subject to the discretion of our Board.
In January 2021, our Board of Directors authorized a $2.0 billion share repurchase program that it expanded to $3.5 billion in October 2021 (as expanded, the “January 2021 share repurchase program”). At September 30, 2022, we had $374 million remaining in the January 2021 share repurchase program. The timing of share repurchases under this program 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 Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions, except per share data) 2022 2021 2022 2021
Total number of shares repurchased
29.9  20.2  8.5  6.7 
Aggregate cost of shares repurchased
$ 1,451  $ 972  $ 368  $ 322 
Average price per share of shares repurchased
$ 48.60  $ 48.17  $ 43.68  $ 48.35 
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, 2021.
On January 1, 2022, we adopted Accounting Standards Update (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU No. 2020-06”). This guidance simplifies the accounting for certain financial
11

instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Our adoption of ASU No. 2020-06 did not have a material impact on our condensed consolidated financial statements.
For a description of issued accounting guidance applicable to, but not yet adopted by, us, see Note 12. New Accounting Guidance Not Yet Adopted.

Note 2. Revenues from Contracts with Customers
We disaggregate net revenues based on product type. For further discussion, see Note 8. Segment Reporting.
We calculate substantially all cash discounts, offered to customers for prompt payment, as a flat rate per unit based on agreed-upon payment terms. Prior to the first quarter of 2021 for USSTC and the third quarter of 2021 for PM USA, cash discounts were calculated as a percentage of the list price based on historical experience and agreed-upon payment terms. We record receivables net of the cash discounts on our condensed consolidated balance sheets.
We record payments received 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 was $310 million and $287 million at September 30, 2022 and December 31, 2021, respectively. When cash is received in advance of product shipment, we satisfy our performance obligations within three days of receiving payment. At September 30, 2022 and December 31, 2021, there were no differences between amounts recorded as deferred revenue and amounts subsequently recognized as revenue.
Receivables were $52 million and $47 million at September 30, 2022 and December 31, 2021, respectively. At September 30, 2022 and December 31, 2021, 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. 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.

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Note 3. Investments in Equity Securities
The carrying amount of our investments consisted of the following:
(in millions) September 30, 2022 December 31, 2021
ABI $ 9,048  $ 11,144 
JUUL
350  1,705 
Cronos (1)
416  632 
Total
$ 9,814  $ 13,481 
(1) Our investment in Cronos at September 30, 2022 and December 31, 2021 consisted of our equity method investment in Cronos of $415 million and $617 million, respectively, and also included the Cronos warrant and the Fixed-price Preemptive Rights, which are measured at fair value (collectively, “Investment in Cronos”). See below for further discussion.
(Income) losses from investments in equity securities consisted of the following:
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
ABI (1)
$ 2,155  $ 5,644  $ 2,367  $ 6,036 
Cronos (1)
197  145  11  (21)
(Income) losses from investments under equity method of accounting 2,352  5,789  $ 2,378  $ 6,015 
JUUL (2)
1,355  —  100  (100)
(Income) losses from investments in equity securities $ 3,707  $ 5,789  $ 2,478  $ 5,915 
(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 investment required under the equity method of accounting.
(2) Investment in JUUL is accounted for as an investment in an equity security measured at fair value. See below for further discussion of the change from equity method of accounting in the third quarter of 2022.
Investment in ABI
At September 30, 2022, we had an approximate 10% ownership interest in ABI, consisting of 185 million restricted shares of ABI (the “Restricted Shares”) and 12 million ordinary shares of ABI. The 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.
The Restricted Shares were subject to a five-year lock-up period that ended October 10, 2021. As of this filing, we have not elected to convert our Restricted Shares into ordinary shares of ABI.
We account for our investment in ABI under the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of ABI, including having active representation on ABI’s board of directors and certain ABI board committees. Through this representation, we 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 equity investment in ABI is 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 the Restricted Shares to ordinary shares at our discretion. Therefore, the fair value of each Restricted Share is based on the value of an ordinary share.
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At December 31, 2021, the fair value of our equity investment in ABI was $11.9 billion (carrying value of $11.1 billion), which exceeded its carrying value by $0.8 billion or approximately 7%. In May 2022, the fair value of our equity investment in ABI declined below its carrying value and has not recovered. At June 30, 2022, the fair value of our equity investment in ABI was below its carrying value by $1.1 billion or approximately 9%. Accounting guidance requires the evaluation of the following factors when determining if the decline in fair value is other than temporary: (i) the duration and magnitude of the fair value decline; (ii) the financial condition and near-term prospects of the investee; and (iii) the investor’s intent and ability to hold its equity investment until recovery. In preparing our financial statements for the period ended June 30, 2022, we evaluated these factors and concluded that the decline in fair value of our equity investment in ABI at June 30, 2022 below its carrying value was temporary and, therefore, no impairment was recorded at that time.
In preparing our financial statements for the period ended September 30, 2022, we considered the same accounting guidance described above to determine if the decline in fair value is other than temporary. We evaluated the factors related to the fair value decline, including the macroeconomic and geopolitical factors that have significantly impacted certain foreign exchange rates and global equity markets. We concluded that the decline in fair value of our equity investment in ABI at September 30, 2022 was other than temporary as we now anticipate that the full recovery to the carrying value will take longer than previously expected. As a result, we recorded a non-cash, pre-tax impairment charge of $2.5 billion for the nine and three months ended September 30, 2022, which was recorded to (income) losses from investments in equity securities in our condensed consolidated statements of earnings (losses). This impairment charge reflects the difference between the fair value of our equity investment in ABI using ABI’s share price at September 30, 2022 and the carrying value of our equity investment in ABI at September 30, 2022. At September 30, 2022, prior to recording the impairment charge, the fair value of our equity investment in ABI was below its carrying value by approximately 22%. After recording the impairment charge, each of the fair value and carrying value of our equity investment in ABI at September 30, 2022 was $9.0 billion.
At September 30, 2022, the carrying value of our equity investment in ABI exceeded its share of ABI’s net assets attributable to equity holders of ABI by approximately $2.5 billion. Substantially all of this difference is comprised of goodwill and other indefinite-lived intangible assets (consisting primarily of trademarks).
At September 30, 2021, the fair value of our equity investment in ABI had declined below its carrying value by $6.2 billion. We considered the same accounting guidance described above to determine if the decline in fair value was other than temporary. In preparing our financial statements for the period ended September 30, 2021, we concluded that the decline in fair value of our equity investment in ABI at September 30, 2021 was other than temporary. As a result, we recorded a non-cash, pre-tax impairment charge of $6.2 billion for the nine and three months ended September 30, 2021, which was recorded to (income) losses from investments in equity securities in our condensed consolidated statements of earnings (losses). This impairment charge reflected the difference between the fair value of our equity investment in ABI using ABI’s share price at September 30, 2021 and the carrying value of our equity investment in ABI at September 30, 2021.
Investment in JUUL
In December 2018, we made an investment in JUUL for $12.8 billion and received a 35% economic interest in JUUL through non-voting shares, which were converted at our election into voting shares in November 2020 (“Share Conversion”), and a security convertible into additional non-voting or voting shares, as applicable, upon settlement or exercise of certain JUUL convertible securities (the “JUUL Transaction”). At September 30, 2022, we had a 35% economic ownership interest in JUUL, consisting of 42 million voting shares.
We are subject to a standstill restriction under which we may not acquire additional JUUL shares above our 35% interest and agreed not to sell or transfer any of our JUUL shares until December 20, 2024. Furthermore, at the time of the investment, we agreed to non-competition obligations generally requiring that we participate in the e-vapor business only through JUUL. In January 2020, we amended certain JUUL Transaction agreements and entered into a new cooperation agreement. One of the provisions was the option to be released from our non-compete obligation under certain circumstances, including if the carrying value of our investment in JUUL was not more than 10% of its initial carrying value of $12.8 billion. At June 30, 2022, the carrying value of our investment in JUUL was $450 million, which was less than 10% of our initial carrying value of $12.8 billion. As a result, in September 2022, we exercised our option to be released from our JUUL non-competition obligations, resulting in (i) the permanent termination of our non-competition obligations to JUUL, (ii) the loss of our JUUL board designation rights (other than the right to appoint one independent director so long as our ownership continues to be at least 10%), our preemptive rights, our consent rights and certain other rights with respect to our investment in JUUL and (iii) the conversion of our JUUL shares to single vote common stock, significantly reducing our voting power. We do not currently intend to exercise our remaining governance rights or to vote our JUUL shares other than as a passive investor.
Additionally, as part of the amendment to certain JUUL Transaction agreements in January 2020, we agreed not to pursue any claims against JUUL for indemnification or reimbursement except for any non-contractual claims for contribution or indemnity where a judgment has been entered against us and JUUL with respect to certain litigation in which we and JUUL are both defendants against third-party plaintiffs.
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In April 2020, the U.S. Federal Trade Commission (“FTC”) issued an administrative complaint challenging our investment in JUUL. In February 2022, the administrative law judge dismissed the FTC’s complaint. FTC complaint counsel appealed that decision to the FTC, which appeal remains pending. For further discussion, see Note 11. Contingencies - Antitrust Litigation.
In June 2022, the U.S. Food and Drug Administration (“FDA”) issued marketing denial orders (“MDOs”) to JUUL ordering all of JUUL’s products currently marketed in the United States off the market. In July 2022, the FDA administratively stayed the MDOs on a temporary basis, citing its determination that there are scientific issues unique to the JUUL pre-market tobacco applications that warrant additional review. This administrative stay temporarily suspends the MDOs and JUUL’s products currently remain on the market.
Following Share Conversion in the fourth quarter of 2020, we elected to account for our equity method investment in JUUL under the fair value option. In making this election, we believed measuring our investment at fair value provided quarterly transparency to investors as to the fair market value of our investment in JUUL, given the changes and volatility in the e-vapor category since our initial investment, as well as the lack of publicly available information regarding JUUL’s business or a market-derived valuation. As a result of our loss of certain rights due to our exercise of our option to be released from our JUUL non-competition obligations in the third quarter of 2022, we no longer have the ability to exercise significant influence over the operating and financial policies of JUUL. Therefore, we are no longer able to account for our investment in JUUL as an equity method investment. As of September 30, 2022, we accounted for our investment in JUUL as an investment in an equity security. We will continue to measure our investment in JUUL at fair value, in accordance with GAAP. Our condensed consolidated statements of earnings (losses) include any cash dividends received from our investment in JUUL and any changes in the estimated fair value of our investment, which is calculated quarterly.
We use an income approach to estimate the fair value of our investment in JUUL. The income approach reflects the discounting of future cash flows for the United States and international markets 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 future cash flows.
In determining the estimated fair value of our investment in JUUL, at September 30, 2022 and December 31, 2021, we made certain judgments, estimates and assumptions, the most significant of which were likelihood of certain potential regulatory and liquidity outcomes, sales volume, operating margins, discount rates and perpetual growth rates. All significant inputs used in the valuation are classified in Level 3 of the fair value hierarchy. Additionally, in determining these significant assumptions, we made judgments regarding the (i) likelihood of certain potential regulatory actions impacting the e-vapor category and specifically whether the FDA will ultimately authorize JUUL’s products, which have received MDOs and are now under additional administrative review; (ii) likelihood of JUUL maintaining adequate liquidity to fund projected cash needs, the absence of which could result in JUUL seeking protection under bankruptcy or other insolvency laws; (iii) risk created by the number and types of legal cases pending against JUUL; (iv) expectations for the future state of the e-vapor category, including competitive dynamics; and (v) timing of international expansion plans. Due to these uncertainties, our future cash flow projections of JUUL are based on a range of scenarios that consider certain potential regulatory, liquidity and market outcomes.
The following table provides a reconciliation of the beginning and ending balance of our investment in JUUL, which is classified in Level 3 of the fair value hierarchy:
Investment
(in millions) Balance
Balance at December 31, 2020 $ 1,705 
Unrealized gains (losses) included in (income) losses from investments in equity securities — 
Balance at December 31, 2021 $ 1,705 
Unrealized gains (losses) included in (income) losses from investments in equity securities (1,355)
Balance at September 30, 2022
$ 350 
For the nine months ended September 30, 2022, we recorded non-cash, pre-tax unrealized losses of $1,355 million as a result of changes in the estimated fair value of our investment in JUUL. The decrease in the estimated fair value was primarily driven by (i) a decrease in the likelihood of a favorable outcome from the FDA for JUUL’s products that are currently marketed in the United States, which have received MDOs and are now under additional administrative review, (ii) a decrease in the likelihood of JUUL maintaining adequate liquidity to fund projected cash needs, which could result in JUUL seeking protection under bankruptcy or other insolvency law, (iii) projections of higher operating expenses resulting in lower long-term operating margins and (iv) an increase in the discount rate due to changes in market factors, partially offset by the effect of passage of time on the projected cash flows.
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For the three months ended September 30, 2022, we recorded a non-cash, pre-tax unrealized loss of $100 million as a result of changes in the estimated fair value of our investment in JUUL. The decrease in the estimated fair value was primarily driven by an increase in the discount rate due to changes in market factors, partially offset by the effect of passage of time on the projected cash flows.
For the three months ended September 30, 2021, we recorded a non-cash, pre-tax unrealized gain of $100 million as a result of changes in the estimated fair value of our investment in JUUL. There were no material changes to the significant assumptions used in the valuations, as described above, during the nine and three months ended September 30, 2021, compared to the assumptions used for the December 31, 2020 valuation.
Investment in Cronos
At September 30, 2022, we had a 41.4% ownership interest in Cronos, consisting of 156.6 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 equity method investment in Cronos is based on unadjusted quoted prices in active markets for Cronos’s common shares and was classified in Level 1 of the fair value hierarchy. The fair value and carrying value of our equity method investment in Cronos at December 31, 2021 was $617 million.
In the second quarter of 2022, the fair value of our equity method investment in Cronos declined below its carrying value and had not recovered as of June 30, 2022. Accounting guidance requires the evaluation of the following factors when determining if the decline in fair value is other than temporary: (i) the duration and magnitude of the fair value decline; (ii) the financial condition and near-term prospects of the investee; and (iii) the investor’s intent and ability to hold its equity method investment until recovery. In preparing our financial statements for the period ended June 30, 2022, we evaluated these factors and concluded that the decline in fair value of our equity investment in Cronos below its carrying value at June 30, 2022 was other than temporary. As a result, we recorded a non-cash, pre-tax impairment charge of $107 million in the second quarter of 2022, which was recorded to (income) losses from investments in equity securities in our condensed consolidated statements of earnings (losses). The impairment charge reflects the difference between the fair value of our equity method investment in Cronos using Cronos’s share price and the Canadian dollar (“CAD”) to U.S. dollar exchange rate at June 30, 2022 and the carrying value of our equity method investment in Cronos at June 30, 2022. At June 30, 2022, prior to recording the impairment charge, the fair value of our equity method investment in Cronos was less than its carrying value by approximately 20%. After recording the impairment charge, each of the fair value and carrying value of our equity method investment in Cronos at June 30, 2022 was $437 million. At September 30, 2022, the fair value of our equity method investment in Cronos exceeded its carrying value by $22 million or approximately 5%.
As part of our Investment in Cronos, at September 30, 2022, we also owned:
anti-dilution protections to purchase Cronos common shares, exercisable each quarter upon dilution, to maintain our ownership percentage. Certain of the anti-dilution protections provide us the ability to purchase additional Cronos common shares at a per share exercise price of CAD $16.25 upon the occurrence of specified events (“Fixed-price Preemptive Rights”). Based on our assumptions as of September 30, 2022, we estimate the Fixed-price Preemptive Rights allows us to purchase up to an additional approximately 8 million common shares of Cronos; and
a warrant providing us the ability to purchase an additional approximate 10% of common shares of Cronos (approximately 84 million common shares at September 30, 2022) at a per share exercise price of CAD $19.00, which expires on March 8, 2023.
If exercised in full, the exercise prices for the warrant and Fixed-price Preemptive Rights would be approximately CAD $1.6 billion and CAD $0.1 billion, respectively (approximately U.S. dollar $1.2 billion and $0.1 billion, respectively, based on the CAD to U.S. dollar exchange rate on October 24, 2022). At September 30, 2022, upon full exercise of the Fixed-price Preemptive Rights, to the extent such rights become available, and the warrant, we would own approximately 52% of the outstanding common shares of Cronos.
The Fixed-price Preemptive Rights and Cronos warrant are derivative financial instruments, which are required to be recorded at fair value. The fair values of the Fixed-price Preemptive Rights and Cronos warrant are estimated using Black-Scholes option-pricing models, adjusted for observable inputs (which are classified in Level 1 of the fair value hierarchy), including share price, and unobservable inputs, including probability factors and weighting of expected life, volatility levels and risk-free interest rates (which are classified in Level 3 of the fair value hierarchy). We elect to record the gross assets and liabilities of derivative financial instruments executed with the same counterparty on our condensed consolidated balance sheets in investments in equity securities.
We record in our condensed consolidated statements of earnings (losses) any changes in the fair values of the Fixed-price Preemptive Rights and Cronos warrant as gains or losses on Cronos-related financial instruments in the periods in which the changes occur.
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We recorded non-cash, pre-tax unrealized (gains) losses, representing the changes in the fair values of the Fixed-price Preemptive Rights and Cronos warrant, as follows:
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
Fixed-price Preemptive Rights $ 1  $ 21  $   $ 17 
Cronos warrant 13  107    118 
Total $ 14  $ 128  $   $ 135 

Note 4. 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.
In May 2021, all outstanding foreign currency contracts matured and, at September 30, 2022 and December 31, 2021, 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 following table provides the aggregate carrying value and fair value of our total long-term debt:
(in millions) September 30, 2022 December 31, 2021
Carrying value $ 26,291  $ 28,044 
Fair value 21,614  30,459 
Foreign currency denominated debt included in long-term debt above:
Carrying value 4,156  4,817 
Fair value 3,780  5,114 
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.
The decrease in the fair value of our long-term debt was primarily driven by (i) rising interest rates in 2022, (ii) the August 2022 $1.1 billion repayment at maturity of senior unsecured notes and (iii) changes in Euro denominated debt resulting from the strengthening of the U.S. dollar versus the Euro during the first nine months of 2022.
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Net Investment Hedging
The pre-tax effects of our net investment hedges on accumulated other comprehensive losses and our condensed consolidated statements of earnings (losses) were as follows:
(Gain) Loss Recognized in Accumulated Other Comprehensive Losses (Gain) Loss Recognized in
Net Earnings (Losses)
(Gain) Loss Recognized in Accumulated Other Comprehensive Losses
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021 2022 2021
Foreign currency contracts $   $ (16) $   $ (7) $   $ — 
Foreign currency denominated debt (664) (270)   —  (289) (118)
Total $ (664) $ (286) $   $ (7) $ (289) $ (118)
We recognized changes in the fair value of the foreign currency contracts and 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 gains on the foreign currency contracts arising from components excluded from effectiveness testing in interest and other debt expense, net in our condensed consolidated statements of earnings (losses) based on an amortization approach.

Note 5. Benefit Plans
Components of Net Periodic Benefit (Income) Cost
Net periodic benefit (income) cost consisted of the following:
Pension Postretirement Pension Postretirement
For the Nine Months Ended
September 30,
For the Three Months Ended
September 30,
 (in millions) 2022 2021 2022 2021 2022 2021 2022 2021
Service cost $ 48  $ 51  $ 17  $ 15  $ 16  $ 17  $ 7  $
Interest cost 155  139  31  29  51  46  11 
Expected return on plan assets
(370) (393) (10) (10) (123) (131) (4) (2)
Amortization:
Net loss 72  99  14  16  24  33  6 
Prior service cost (credit)
5  (34) (35) 2  (11) (20)
Net periodic benefit (income) cost $ (90) $ (101) $ 18  $ 15  $ (30) $ (34) $ 9  $ (7)
Employer Contributions
We make contributions to our pension plans to the extent that the contributions are tax deductible and pays benefits that relate to plans for salaried employees that cannot be funded under Internal Revenue Service regulations. We made employer contributions of $11 million to our pension plans and did not make any contributions to our postretirement plans during the nine months ended September 30, 2022. Currently, we anticipate making additional employer contributions of approximately $10 million to our pension plans and no additional contributions to our postretirement plans in 2022. However, the foregoing estimates of 2022 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, as well as asset performance significantly above or below the assumed long-term rate of return for each respective plan.
Plan amendments to our postretirement plans for the year ended December 31, 2021 included several plan changes announced in the second quarter of 2021 to our salaried retiree healthcare plans, primarily changing post-age 65 coverage to a private medicare marketplace. These amendments triggered a plan remeasurement in the second quarter of 2021, resulting in a reduction of $432 million (including discount rate impact and other changes) to our postretirement obligation in the second quarter of 2021 and a corresponding reduction to accumulated other comprehensive losses.

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Note 6. Earnings (Losses) per Share
We calculated basic and diluted earnings (losses) per share (“EPS”) using the following:
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
Net earnings (losses) attributable to Altria $ 3,074  $ 851  $ 224  $ (2,722)
Less: Distributed and undistributed earnings attributable to share-based awards (9) (8) (3) (2)
Earnings (losses) for basic and diluted EPS $ 3,065  $ 843  $ 221  $ (2,724)
Weighted-average shares for basic and diluted EPS 1,808  1,849  1,799  1,842 

Note 7. Other Comprehensive Earnings/Losses
The following tables set forth the changes in each component of accumulated other comprehensive losses, net of deferred income taxes, attributable to Altria:
  For the Nine Months Ended September 30, 2022
(in millions) Benefit Plans ABI Currency
Translation
Adjustments and Other
Accumulated
Other
Comprehensive
Losses
Balances, December 31, 2021 $ (1,612) $ (1,512) $ 68  $ (3,056)
Other comprehensive earnings (losses) before reclassifications
  902  (11) 891 
Deferred income taxes   (206)   (206)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes
  696  (11) 685 
Amounts reclassified to net earnings (losses) 65  (74) (1) (10)
Deferred income taxes (17) 15    (2)
Amounts reclassified to net earnings (losses), net of deferred income taxes 48  (59) (1) (12)
Other comprehensive earnings (losses), net of deferred income taxes
48  637 
(1)
(12) 673 
Balances, September 30, 2022 $ (1,564) $ (875) $ 56  $ (2,383)

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For the Three Months Ended September 30, 2022
(in millions) Benefit Plans ABI Currency
Translation
Adjustments and Other
Accumulated
Other
Comprehensive
Losses
Balances, June 30, 2022
$ (1,581) $ (869) $ 73  $ (2,377)
Other comprehensive earnings (losses) before reclassifications
 

18  (16) 2 
Deferred income taxes   (11)   (11)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes
  7  (16) (9)
Amounts reclassified to net earnings (losses) 24  (16) (1) 7 
Deferred income taxes (7) 3    (4)
Amounts reclassified to net earnings (losses), net of deferred income taxes 17  (13) (1) 3 
Other comprehensive earnings (losses), net of deferred income taxes
17  (6)
(1)
(17) (6)
Balances, September 30, 2022 $ (1,564) $ (875) $ 56  $ (2,383)

For the Nine Months Ended September 30, 2021
(in millions) Benefit Plans ABI Currency
Translation
Adjustments and Other
Accumulated
Other
Comprehensive
Losses
Balances, December 31, 2020 $ (2,420) $ (1,938) $ 17  $ (4,341)
Other comprehensive earnings (losses) before reclassifications
432 
(2)
685  35  1,152 
Deferred income taxes (118) (151) —  (269)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes
314  534  35  883 
Amounts reclassified to net earnings (losses) 92  (49) (2) 41 
Deferred income taxes (23) 10  —  (13)
Amounts reclassified to net earnings (losses), net of deferred income taxes 69  (39) (2) 28 
Other comprehensive earnings (losses), net of deferred income taxes
383  495 
(1)
33  911 
Balances, September 30, 2021 $ (2,037) $ (1,443) $ 50  $ (3,430)

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For the Three Months Ended September 30, 2021
(in millions) Benefit Plans ABI Currency
Translation
Adjustments and Other
Accumulated
Other
Comprehensive
Losses
Balances, June 30, 2021
$ (2,043) $ (1,604) $ 45  $ (3,602)
Other comprehensive earnings (losses) before reclassifications
—  215  221 
Deferred income taxes (9) (48) —  (57)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes
(9) 167  164 
Amounts reclassified to net earnings (losses) 20  (7) (1) 12 
Deferred income taxes (5) —  (4)
Amounts reclassified to net earnings (losses), net of deferred income taxes 15  (6) (1)
Other comprehensive earnings (losses), net of deferred income taxes
161 
(1)
172 
Balances, September 30, 2021 $ (2,037) $ (1,443) $ 50  $ (3,430)
(1) Primarily reflects our share of ABI’s currency translation adjustments and the impact of our designated net investment hedges related to our equity investment in ABI. For further discussion of designated net investment hedges, see Note 4. Financial Instruments.
(2) Reflects the remeasurement impact of salaried retiree healthcare plan amendments. For further discussion, see Note 5. Benefit Plans.
The following table sets forth pre-tax amounts by component, reclassified from accumulated other comprehensive losses to net earnings (losses):
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
Benefit Plans: (1)
Net loss $ 94  $ 124  $ 33  $ 39 
Prior service cost/credit (29) (32) (9) (19)
65  92  24  20 
ABI (2)
(74) (49) (16) (7)
Currency Translation Adjustments and Other (2)
(1) (2) (1) (1)
Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings (losses) $ (10) $ 41  $ 7  $ 12 
(1) Amounts are included in net defined benefit plan costs. For further details, see Note 5. Benefit Plans.
(2) Amounts are included in (income) losses from investments in equity securities. For further information, see Note 3. Investments in Equity Securities.

Note 8. Segment Reporting
Our products include smokeable tobacco products, consisting of combustible cigarettes manufactured and sold by PM USA, and machine-made large cigars and pipe tobacco manufactured and sold by Middleton; and oral tobacco products, consisting of MST and snus products manufactured and sold by USSTC, and oral nicotine pouches manufactured and sold by Helix. These products constitute our reportable segments of smokeable products and oral tobacco products at September 30, 2022. The financial services and the innovative tobacco products businesses, which include the heated tobacco business and Helix ROW, are included in all other.
Prior to the sale of our wine business on October 1, 2021, wine produced and/or sold by Ste. Michelle was a reportable segment.
Our chief operating decision maker (“CODM”) reviews operating companies income (loss) (“OCI”) to evaluate the performance of, and allocate resources to, our segments. OCI for our segments is defined as operating income before general corporate expenses and amortization of intangibles. Interest and other debt expense, net, along with net periodic benefit
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income/cost, excluding service cost, and provision (benefit) for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by our CODM.
Segment data were as follows:
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
Net Revenues:
Smokeable products $ 17,020  $ 17,275  $ 5,882  $ 5,975 
Oral tobacco products 1,948  1,945  670  626 
Wine   494    177 
All other 17  44  (2)
Net revenues $ 18,985  $ 19,758  $ 6,550  $ 6,786 
Earnings (losses) before Income Taxes:
OCI:
Smokeable products $ 8,112  $ 7,901  $ 2,791  $ 2,753 
Oral tobacco products 1,262  1,269  425  405 
Wine   21    (24)
All other (27) (56) (7) (30)
Amortization of intangibles (54) (53) (19) (18)
General corporate expenses (192) (255) (78) (135)
Operating income 9,101  8,827  3,112  2,951 
Interest and other debt expense, net 832  869  271  266 
Loss on early extinguishment of debt   649    — 
Net periodic benefit income, excluding service cost (137) (152) (44) (63)
(Income) losses from investments in equity securities 3,707  5,789  2,478  5,915 
(Gain) loss on Cronos-related financial instruments 14  128    135 
Earnings (losses) before income taxes $ 4,685  $ 1,544  $ 407  $ (3,302)
The comparability of OCI for our reportable segments was affected by the following:
Non-Participating Manufacturer (“NPM”) Adjustment Items: We recorded pre-tax (income) for NPM adjustment items as follows:
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
Smokeable products segment $ (60) $ (53) $   $ (21)
Interest and other debt expense, net   (23)   (23)
Total $ (60) $ (76) $   $ (44)
We recorded the amounts in the table shown above for the smokeable products segment as reductions in cost of sales in our condensed consolidated statements of earnings (losses), which increased OCI in our smokeable products segment. NPM adjustment items result from the resolutions of certain disputes with states and territories related to the NPM adjustment provision under the Master Settlement Agreement (such dispute resolutions are referred to as “NPM Adjustment Items” and are more fully described in Health Care Cost Recovery Litigation in Note 11. Contingencies).
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Tobacco and Health and Certain Other Litigation Items: We recorded pre-tax charges related to tobacco and health and certain other litigation items as follows:
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
Smokeable products segment $ 71  $ 72  $ 21  $ 29 
General corporate expenses 27  70  20  70 
Interest and other debt expense, net 3  2 
Total $ 101  $ 148  $ 43  $ 105 
We recorded the amounts shown in the table above for the smokeable products segment and general corporate expenses in marketing, administration and research costs in our condensed consolidated statements of earnings (losses). For further discussion, see Note 11. Contingencies.
Acquisition and Disposition-Related Costs:
Disposition-Related Costs: We recorded pre-tax disposition-related costs of $51 million for the nine and three months ended September 30, 2021 in our former wine segment, which consisted of a pre-tax charge of $41 million to record the assets and liabilities associated with UST’s sale of its subsidiary, International Wine & Spirits Ltd. (which included Ste. Michelle), at their fair value less costs to sell and $10 million of other disposition-related costs. We included these costs in marketing, administration and research costs in our consolidated statements of earnings (losses).
Acquisition-Related Costs: We recorded pre-tax acquisition-related costs of $37 million for the nine months ended September 30, 2021 in our oral tobacco products segment primarily for the settlement of an arbitration related to the 2019 on! transaction. We included these costs in marketing, administration and research costs in our condensed consolidated statements of earnings (losses).

Note 9. Debt
Short-term Borrowings and Borrowing Arrangements
At September 30, 2022 and December 31, 2021, we had no short-term borrowings.
In August 2022, we entered into an extension and amendment (the “Extension and Amendment”) to our $3.0 billion senior unsecured 5-year revolving credit agreement (as amended, the “Credit Agreement”). The Extension and Amendment (i) extended the maturity date of the Credit Agreement from August 1, 2024 to August 1, 2025 and (ii) amended the Credit Agreement to update the benchmark interest rate to a rate based on the Term Secured Overnight Financing Rate (“Term SOFR”) and make certain other market updates. All other terms and conditions of the Credit Agreement remain in full force and effect. The Credit Agreement is used for general corporate purposes.
At September 30, 2022, we had availability under the Credit Agreement for borrowings of up to an aggregate principal amount of $3.0 billion.
Pricing for interest and fees under the Credit Agreement may be modified in the event of a change in the rating of our long-term senior unsecured debt. We expect interest rates on borrowings under the Credit Agreement to be based on the Term SOFR plus a percentage based on the higher of the ratings of our long-term senior unsecured debt from Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Financial Services LLC (“S&P”). The applicable percentage for borrowings under the Credit Agreement at September 30, 2022 was 1.0% based on our long-term senior unsecured debt ratings on that date. The Credit Agreement does not include any other rating triggers or any provisions that could require the posting of collateral.
The Credit Agreement includes various covenants, one of which requires us to maintain a ratio of consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) to Consolidated Interest Expense of not less than 4.0 to 1.0, calculated as of the end of the applicable quarter on a rolling four quarters basis. At September 30, 2022, the ratio of consolidated EBITDA to Consolidated Interest Expense, calculated in accordance with the Credit Agreement, was 10.9 to 1.0. At September 30, 2022, we were in compliance with our covenants in the Credit Agreement. The terms “Consolidated EBITDA” and “Consolidated Interest Expense,” each as defined in the Credit Agreement, include certain adjustments.
Any commercial paper issued by us and borrowings under the Credit Agreement are guaranteed by PM USA.
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Long-term Debt
The aggregate carrying value of our total long-term debt at September 30, 2022 and December 31, 2021 was $26.3 billion and $28.0 billion, respectively.
In August 2022, we repaid in full our 2.85% senior unsecured notes in the aggregate principal amount of $1.1 billion at maturity.
During the first quarter of 2021, we issued long-term senior unsecured notes in the aggregate principal amount of $5.5 billion. We used the net proceeds from these notes (i) to fund the purchase and redemption of certain unsecured notes and payment of related fees and expenses, as described below, and (ii) for other general corporate purposes.
During the first quarter of 2021, we completed debt tender offers to purchase for cash certain of our long-term senior unsecured notes in an aggregate principal amount of $4,042 million and also redeemed all of our outstanding 3.490% notes due 2022 in an aggregate principal amount of $1.0 billion.
As a result of the debt tender offers and redemption, during the first quarter of 2021, we recorded pre-tax losses on early extinguishment of debt of $649 million, which included premiums and fees of $623 million and the write-off of unamortized debt discounts and debt issuance costs of $26 million.
At September 30, 2022 and December 31, 2021, accrued interest on long-term debt of $196 million and $429 million, respectively, was included in other accrued liabilities on our condensed consolidated balance sheets.
For a discussion of the fair value of our long-term debt and the designation of our Euro denominated senior unsecured notes as a net investment hedge of our investment in ABI, see Note 4. Financial Instruments.

Note 10. Income Taxes
In August 2022, the U.S. Government enacted legislation commonly referred to as the Inflation Reduction Act. The main provisions of the Inflation Reduction Act that we anticipate may impact us are: (i) a 15% corporate alternative minimum tax (“Corporate AMT”) and (ii) a 1% excise tax on share repurchases, which we expect to record in equity on our consolidated statements of stockholders’ equity (deficit), in each case, effective for tax years beginning after December 31, 2022.
We will be considered an “applicable corporation” for purposes of the new Corporate AMT. We anticipate our regular federal income tax liability will generally exceed our Corporate AMT liability in future years.
Earnings (losses) before income taxes, provision (benefit) for income taxes and income tax rates consisted of the following:
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
Earnings (losses) before income taxes $ 4,685 $ 1,544 $ 407 $ (3,302)
Provision (benefit) for income taxes 1,611 693 183 (582)
Income tax rate 34.4  % 44.9  % 45.0  % 17.6  %
Our income tax rate for the nine and three months ended September 30, 2022 differs from the U.S. federal statutory rate of 21%, due primarily to state tax expense, including the state tax treatment of the impairment charge on our equity investment in ABI, and a valuation allowance recorded against a deferred tax asset related to the decrease in the estimated fair value of our investment in JUUL, partially offset by the release of a valuation allowance related to our Cronos warrant and tax accruals no longer required.
Our income tax rates for the nine and three months ended September 30, 2021 differ from the U.S. federal statutory rate of 21%, due primarily to the state tax treatment of the impairment charge on our equity investment in ABI.
For further information on the changes in the estimated fair value of our investment in JUUL and the impairment of our equity investment in ABI, see Note 3. Investments in Equity Securities.
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The following chart provides a reconciliation of the beginning and ending valuation allowances for the period ended September 30, 2022:
(in millions)
Balance at beginning of year $ 3,097 
Additions to valuation allowance charged to income tax expense 395 
Releases to valuation allowance credited to income tax benefit (65)
Foreign currency translation  
Balance at end of period $ 3,427 
We determine the realizability of deferred tax assets based on the weight of available evidence, that it is more-likely-than-not that the deferred tax asset will not be realized. In reaching this determination, we consider all available positive and negative evidence, including the character of the loss, carryback and carryforward considerations, future reversals of temporary differences and available tax planning strategies.
The additions in valuation allowances for the nine months ended September 30, 2022 were due primarily to deferred tax assets recorded in connection with decreases in the estimated fair value of our investment in JUUL. The releases in valuation allowances for the nine months ended September 30, 2022 were due to realizability of anticipated capital losses related to our Cronos warrant. The cumulative valuation allowance at September 30, 2022 was primarily attributable to deferred tax assets recorded in connection with our investment in JUUL and our Investment in Cronos.

Note 11. Contingencies
Legal proceedings covering a wide range of matters are pending or threatened in various United States and foreign jurisdictions against Altria and certain of our subsidiaries, including PM USA and USSTC, as well as our indemnitees and investees. Various types of claims may be raised in these proceedings, including product liability, unfair trade practices, antitrust, income tax liability, contraband shipments, patent infringement, employment matters, claims alleging violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), claims for contribution and claims of competitors, shareholders or distributors. Legislative action, such as changes to tort law, also may expand the types of claims and remedies available to plaintiffs.
Litigation is subject to uncertainty and it is possible that there could be adverse developments in pending or future cases. An unfavorable outcome or settlement of pending tobacco-related or other litigation could encourage the commencement of additional litigation. Damages claimed in some tobacco-related and other litigation are or can be significant and, in certain cases, have ranged in the billions of dollars. The variability in pleadings in multiple jurisdictions, together with the actual experience of management in litigating claims, demonstrate that the monetary relief that may be specified in a lawsuit bears little relevance to the ultimate outcome. In certain cases, plaintiffs claim that defendants’ liability is joint and several. In such cases, we may face the risk that one or more co-defendants decline or otherwise fail to participate in the bonding required for an appeal or to pay their proportionate or jury-allocated share of a judgment. As a result, under certain circumstances, we may have to pay more than our proportionate share of any bonding- or judgment-related amounts. Furthermore, in those cases where plaintiffs are successful, we also may be required to pay interest and attorneys’ fees.
Although PM USA has historically been able to obtain required bonds or relief from bonding requirements in order to prevent plaintiffs from seeking to collect judgments while adverse verdicts have been appealed, there remains a risk that such relief may not be obtainable in all cases. This risk has been substantially reduced given that 47 states and Puerto Rico limit the dollar amount of bonds or require no bond at all. As discussed below, however, tobacco litigation plaintiffs have challenged the constitutionality of Florida’s bond cap statute in several cases and plaintiffs may challenge state bond cap statutes in other jurisdictions as well. Such challenges may include the applicability of state bond caps in federal court. States, including Florida, also may seek to repeal or alter bond cap statutes through legislation. Although we cannot predict the outcome of such challenges, it is possible that our consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome of one or more such challenges.
We record provisions in our condensed consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, while it is reasonably possible that an unfavorable outcome in a case may occur, except to the extent discussed elsewhere in this Note 11. Contingencies: (i) management has concluded that it is not probable that a loss has been incurred in any of the pending cases; (ii) management is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in any of the pending cases; and (iii) accordingly, management has not provided any amounts in our condensed consolidated financial statements for unfavorable outcomes, if any. Litigation defense costs are expensed as incurred.
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We have achieved substantial success in managing litigation. Nevertheless, litigation is subject to uncertainty and significant challenges remain. It is possible that our consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation. We believe, and have been so advised by counsel handling the respective cases, that we have valid defenses to the litigation pending against us, as well as valid bases for appeal of adverse verdicts. We have defended, and will continue to defend, vigorously against litigation challenges. However, we may enter into settlement discussions in particular cases if we believe it is in our best interests to do so.
Judgments Paid and Provisions for Tobacco and Health (Including Engle Progeny Litigation) and Certain Other Litigation Items: The changes in our accrued liability for tobacco and health and certain other litigation items, including related interest costs, for the periods specified below are as follows:
For the Nine Months Ended September 30, For the Three Months Ended September 30,
(in millions) 2022 2021 2022 2021
Accrued liability for tobacco and health and certain other litigation items at beginning of period $ 91  $ $ 25  $ — 
Pre-tax charges for:
Tobacco and health and certain other litigation (1)
98 

142  41  99 
Related interest costs 3 
Payments (137)

(60) (13) (8)
Accrued liability for tobacco and health and certain other litigation items at end of period $ 55  $ 97  $ 55  $ 97 
(1) Includes judgments, settlements and fee disputes associated with tobacco and health and certain other litigation. See Shareholder Class Action and Shareholder Derivative Lawsuits below for discussions of the shareholder class action case and related settlement and the proposed settlement of the federal and state shareholder derivative lawsuits.
The accrued liability for tobacco and health and certain other litigation items, including related interest costs, was included in accrued liabilities on our condensed consolidated balance sheets. Pre-tax charges for tobacco and health and certain other litigation were included in marketing, administration and research costs on our condensed consolidated statements of earnings (losses). Pre-tax charges for related interest costs were included in interest and other debt expense, net on our condensed consolidated statements of earnings (losses).
After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation, since October 2004, PM USA has paid judgments and settlements (including related costs and fees) totaling approximately $941 million and interest totaling approximately $230 million as of September 30, 2022. These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $432 million and related interest totaling approximately $59 million.
Security for Judgments: To obtain stays of judgments pending appeal, PM USA has posted various forms of security. As of October 24, 2022, PM USA has posted appeal bonds totaling approximately $42 million, which have been collateralized with restricted cash that are included in assets on our condensed consolidated balance sheets.
Overview of Tobacco-Related Litigation
Types and Number of U.S. Cases: Claims related to tobacco products generally fall within the following categories: (i) smoking and health cases alleging personal injury brought on behalf of individual plaintiffs; (ii) health care cost recovery cases brought by governmental (both domestic and foreign) plaintiffs seeking reimbursement for health care expenditures allegedly caused by cigarette smoking and/or disgorgement of profits; (iii) e-vapor cases alleging violation of RICO, fraud, failure to warn, design defect, negligence, antitrust and unfair trade practices; and (iv) other tobacco-related litigation described below. Plaintiffs’ theories of recovery and the defenses raised in tobacco-related litigation are discussed below.
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The table below lists the number of certain tobacco-related cases pending in the United States against us as of:
October 24, 2022 October 25, 2021
Individual Smoking and Health Cases (1)
161 179
Health Care Cost Recovery Actions (2)
1 1
E-vapor Cases (3)
4,351 2,951
Other Tobacco-Related Cases (4)
3 3
(1) Includes as of October 24, 2022, 18 cases filed in Illinois, 18 cases filed in New Mexico, 35 cases filed in Massachusetts and 54 non-Engle cases filed in Florida. Does not include individual smoking and health cases brought by or on behalf of plaintiffs in Florida state and federal courts following the decertification of the Engle case (these Engle progeny cases are discussed below in Smoking and Health Litigation - Engle Class Action). Also does not include 1,395 cases brought by flight attendants seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke (“ETS”). The flight attendants allege that they are members of an ETS smoking and health class action in Florida, which was settled in 1997 (Broin). The terms of the court-approved settlement in that case allowed class members to file individual lawsuits seeking compensatory damages, but prohibited them from seeking punitive damages. Class members were prohibited from filing individual lawsuits after 2000 under the court-approved settlement.
(2) See Health Care Cost Recovery Litigation - Federal Government’s Lawsuit below.
(3) Includes as of October 24, 2022, 58 class action lawsuits, 3,119 individual lawsuits and 1,174 “third party” lawsuits relating to JUUL e-vapor products, which include school districts, state and local government, tribal and healthcare organization lawsuits. JUUL is an additional named defendant in each of these lawsuits. The 58 class action lawsuits include 32 cases in the Northern District of California (“Multidistrict Litigation” or “MDL”) involving plaintiffs whose claims were previously included in other class action complaints but were refiled as separate stand-alone class actions for procedural and other reasons.
(4) Includes as of October 24, 2022, one inactive smoking and health case alleging personal injury and purporting to be brought on behalf of a class of individual plaintiffs and two inactive class action lawsuits alleging that use of the terms “Lights” and “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment, breach of warranty or violations of RICO.
International Tobacco-Related Cases: As of October 24, 2022, (i) Altria is named as a defendant in two e-vapor class action lawsuits in Canada; (ii) PM USA is a named defendant in 10 health care cost recovery actions in Canada, eight of which also name Altria as a defendant; and (iii) PM USA and Altria are named as defendants in seven smoking and health class actions filed in various Canadian provinces. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement (defined below) between Altria and Philip Morris International Inc. (“PMI”) that provides for indemnities for certain liabilities concerning tobacco products.
Tobacco-Related Cases Set for Trial: As of October 24, 2022, two Engle progeny cases, one individual smoking and health case and one e-vapor case are set for trial through December 31, 2022. Trial dates are subject to change.
Trial Results: Since January 1999, excluding the Engle progeny cases (separately discussed below), verdicts have been returned in 72 tobacco-related cases in which PM USA was a defendant. Verdicts in favor of PM USA and other defendants were returned in 45 of the 72 cases. These 45 cases were tried in Alaska (1), California (7), Connecticut (1), Florida (10), Louisiana (1), Massachusetts (5), Mississippi (1), Missouri (4), New Hampshire (1), New Jersey (1), New York (5), Ohio (2), Pennsylvania (1), Rhode Island (1), Tennessee (2) and West Virginia (2). One case in Massachusetts, Main, where the verdict was initially returned in favor of PM USA, was reversed on appeal and remanded for a new trial.
Of the 27 non-Engle progeny cases in which verdicts were returned in favor of plaintiffs, 23 have reached final resolution.
See Smoking and Health Litigation - Engle Progeny Trial Results below for a discussion of verdicts in state and federal Engle progeny cases involving PM USA as of October 24, 2022.
Smoking and Health Litigation
Overview: Plaintiffs’ allegations of liability in smoking and health cases are based on various theories of recovery, including negligence, gross negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, nuisance, breach of express and implied warranties, breach of special duty, conspiracy, concert of action, violations of unfair trade practice laws and consumer protection statutes, and claims under the federal and state anti-racketeering statutes. Plaintiffs in the smoking and health cases seek various forms of relief, including compensatory and punitive damages, treble/multiple damages and other statutory damages and penalties, creation of medical monitoring and smoking cessation funds, disgorgement of profits, and injunctive and equitable relief. Defenses raised in these cases include lack of proximate cause, assumption of the risk, comparative fault and/or contributory negligence, statutes of limitations and preemption by the Federal Cigarette Labeling and Advertising Act.
Non-Engle Progeny Litigation: Summarized below are the non-Engle progeny smoking and health cases pending during 2022 (or recently concluded) in which a verdict was returned in favor of plaintiff and against PM USA. Charts listing certain verdicts for plaintiffs in the Engle progeny cases can be found in Smoking and Health Litigation - Engle Progeny Trial Results below.
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Mendez: In September 2022, a jury in a Florida state court returned a verdict in favor of plaintiff and against PM USA and R.J. Reynolds Tobacco Company awarding approximately $4.5 million in compensatory damages and allocating 13% of the fault to PM USA. After applying comparative fault, PM USA’s portion of the compensatory damages is less than $1 million. There was no claim for punitive damages. PM USA’s post-trial motions are pending.
Fontaine: In September 2022, a jury in a Massachusetts state court returned a verdict in favor of plaintiff and against PM USA, awarding approximately $8 million in compensatory damages and $1 billion in punitive damages. We intend to file post-trial motions challenging the award and, if necessary, an appeal.
Principe: In February 2020, a jury in a Florida state court returned a verdict in favor of plaintiff and against PM USA, awarding approximately $11 million in compensatory damages. There was no claim for punitive damages. PM USA appealed the trial court verdict to the Third District Court of Appeal and, in September 2021, the appellate court reversed the trial court’s decision and found in favor of PM USA. Plaintiff moved for a rehearing before the Third District Court of Appeal, which the court denied in March 2022. In April 2022, plaintiff filed a notice to invoke the discretionary jurisdiction of the Florida Supreme Court. In July 2022, the Florida Supreme Court denied plaintiff’s motion for discretionary review.
Greene: In September 2019, a jury in a Massachusetts state court returned a verdict in favor of plaintiffs and against PM USA, awarding approximately $10 million in compensatory damages. In May 2020, the court ruled on plaintiffs’ remaining claim and trebled the compensatory damages award to approximately $30 million. In February 2021, the trial court awarded plaintiffs attorneys’ fees and costs in the amount of approximately $2.3 million. In July 2021, following denial of PM USA’s post-trial motions, PM USA appealed the judgment to the Appeals Court of Massachusetts. In September 2022, the Massachusetts Supreme Judicial Court issued an order taking jurisdiction over the appeal, which remains pending.
Laramie: In August 2019, a jury in a Massachusetts state court returned a verdict in f