Altria(MO) - 2024 Q4 - Annual Report

Shipment Volumes - Total smokeable products segment's cigarette shipment volume in the United States was 68.6 billion units in 2024, a decrease of 10.2% from 2023[22]. - Total smokeable products segment's cigars shipment volume was approximately 1.8 billion units in 2024, a decrease of 1.5% from 2023[23]. - Total oral tobacco products segment's shipment volume was 774.7 million units in 2024, a decrease of 1.0% from 2023[24]. Financial Performance - Net revenues for 2024 were $24,018 million, a decrease of 1.9% from$ 24,483 million in 2023[419]. - Gross profit for 2024 was $14,367 million, slightly up from$ 14,284 million in 2023[419]. - Net earnings increased to $11,264 million in 2024, compared to$ 8,130 million in 2023, representing a growth of 38.5%[419]. - Basic and diluted earnings per share rose to $6.54 in 2024, up from$ 4.57 in 2023, marking an increase of 43.2%[419]. - Total assets decreased to $35,177 million in 2024 from$ 38,570 million in 2023, a decline of 8.5%[413]. - Total liabilities decreased to $37,365 million in 2024 from$ 42,060 million in 2023, a reduction of 11.1%[416]. - Cash and cash equivalents were $3,127 million in 2024, down from$ 3,686 million in 2023, a decrease of 15.1%[413]. - The fair value of long-term debt was $22.7 billion in 2024, down from$ 24.4 billion in 2023[411]. - Cash provided by operating activities was $8,753 million in 2024, compared to$ 9,287 million in 2023, a decrease of 5.7%[425]. - For the year ended December 31, 2024, net cash used in financing activities was $11,491 million, an increase of 37.8% compared to$ 8,374 million in 2023[428]. - The balance of cash, cash equivalents, and restricted cash at the end of 2024 was $3,158 million, down from$ 3,721 million in 2023, representing a decrease of 15.1%[428]. - Cash dividends declared per share increased to $4.00 in 2024 from$ 3.84 in 2023, reflecting a 4.2% increase[432]. - The company repurchased $3,400 million of common stock in 2024, significantly higher than the$ 1,000 million repurchased in 2023, marking a 240% increase[432]. Acquisitions and Investments - The acquisition of NJOY Holdings, completed on June 1, 2023, resulted in NJOY becoming a wholly owned subsidiary of Altria[436]. - The company assigned exclusive U.S. commercialization rights to the IQOS Tobacco Heating System to Philip Morris International Inc. on April 30, 2024[27]. - Altria entered a joint venture with JTI for the U.S. marketing of heated tobacco products, owning a 75% economic interest in the venture as of December 31, 2024[437]. - The company acquired NJOY Holdings for approximately $2.9 billion, consisting of$ 2.75 billion in cash and up to $500 million in contingent payments based on FDA authorizations[472]. - The fair value of contingent payments related to the NJOY acquisition was approximately$ 130 million at the acquisition date, with a remaining fair value of $20 million as of December 31, 2024[473][474]. - The company recorded a pre-tax gain of$ 2.7 billion in 2024 from the assignment of U.S. commercialization rights to the IQOS System, with total cash payments received amounting to approximately $2.8 billion[491]. Workforce and Diversity - As of December 31, 2024, the company employed approximately 6,200 people, with 26% being hourly manufacturing employees who are members of labor unions[49]. - The company recognizes the importance of a diverse workforce and aims to enhance diversity within its organization and leadership teams[36]. Safety and Health - The Occupational Safety and Health Administration recordable injury rate for 2024 was 1.8%, an increase from 1.2% in 2023[48]. Tax and Compliance - The provision for income taxes in 2024 was$ 2,394 million, a decrease of 14.5% compared to $2,798 million in 2023[565]. - The balance of unrecognized tax benefits at the end of 2024 was$ 282 million, down from $1,608 million at the end of 2023[566]. - The company recorded a tax benefit of$ 887 million in 2024 due to the reversal of an unrecognized tax benefit related to a $6.4 billion ordinary loss recognized in 2023[567]. Goodwill and Intangible Assets - Goodwill increased to$ 6.9 billion in 2024 from $6.8 billion in 2023, primarily due to adjustments related to the NJOY Transaction[490]. - The estimated fair value of the Skoal trademark was determined to be$ 3.6 billion after a non-cash, pre-tax impairment of $354 million was recorded in 2024 due to declining sales volumes[493]. - The company amortizes intangible assets over a weighted-average period of approximately 18 years, with estimated annual amortization expense for the next five years projected at$ 150 million[478]. - The annual impairment test for goodwill and indefinite-lived intangible assets resulted in no impairment charges for 2024, 2023, and 2022, with the e-vapor reporting unit and Skoal trademark exceeding their carrying values by approximately 28% ( $0.3 billion) and 7% ($ 0.3 billion), respectively[494]. Financial Instruments and Risk Management - The company uses various types of derivative financial instruments to mitigate market risks, including foreign currency exchange rate risk[449]. - The company recognizes a liability for the fair value of obligations from qualifying guarantee activities, with further details provided in the financial statements[456]. Restructuring and Initiatives - The company is implementing a multi-phase Optimize & Accelerate initiative to increase organizational speed, efficiency, and effectiveness[47]. - The company expects total pre-tax charges for the Optimize & Accelerate initiative's initial phases to be approximately $100 million to$ 125 million, with $68 million incurred in 2024[500]. - Restructuring liabilities related to the Optimize & Accelerate initiative were$ 35 million at December 31, 2024, all of which were severance liabilities[501]. - The company expects to complete the design and detailed plans for all phases of the Optimize & Accelerate initiative by early 2026[499].