Consolidated Balance Consolidated Balance Sheets - USD

Dec. 31, 2019 Dec. 31, 2018

Sheets - USD ($) ($)

Assets Assets
Cash and cash equivalents $ 2,117,000,000 $ 1,333,000,000 Cash and cash equivalents

Receivables 152,000,000 142,000,000 Receivables

Inventories: Inventories:

Leaf tobacco 874,000,000 940,000,000 Leaf tobacco

Other raw materials 192,000,000 186,000,000 Other raw materials

Work in process 696,000,000 647,000,000 Work in process

Finished product 531,000,000 558,000,000 Finished product

Inventory, net 2,293,000,000 2,331,000,000 Inventory, net

Income taxes 116,000,000 167,000,000 Income taxes

Other current assets 146,000,000 326,000,000 Other current assets

Total current assets 4,824,000,000 4,299,000,000 Total current assets

Property, plant and Property, plant and equipment, at

equipment, at cost: cost:

Land and land 353,000,000 309,000,000 Land and land improvements

improvements

Buildings and building 1,461,000,000 1,442,000,000 Buildings and building equipment

equipment
Machinery and equipment 2,998,000,000 2,981,000,000 Machinery and equipment

Construction in progress 262,000,000 218,000,000 Construction in progress

Property, plant and 5,074,000,000 4,950,000,000 Property, plant and equipment, at

equipment, at cost cost

Less accumulated 3,075,000,000 3,012,000,000 Less accumulated depreciation

depreciation

Property, plant and 1,999,000,000 1,938,000,000 Property, plant and equipment, net
equipment, net

Goodwill 5,177,000,000 5,196,000,000 Goodwill

Other intangible assets, net 12,687,000,000 12,279,000,000 Other intangible assets, net

Investments in equity 23,581,000,000 30,496,000,000 Investment in AB InBev

securities
Other assets 1,003,000,000 1,251,000,000 Investment in JUUL

Total Assets 49,271,000,000 55,459,000,000 Other assets

Liabilities Total Assets

Short-term borrowings 0 12,704,000,000 Liabilities

Current portion of long- 1,000,000,000 1,144,000,000 Short-term borrowings

term debt
Accounts payable 325,000,000 399,000,000 Current portion of long-term debt

Accrued liabilities: Accounts payable

Marketing 393,000,000 586,000,000 Accrued liabilities:

Settlement charges 3,346,000,000 3,454,000,000 Marketing

Other 1,545,000,000 1,403,000,000 Employment costs

Dividends payable 1,565,000,000 1,503,000,000 Settlement charges

Total current liabilities 8,174,000,000 21,193,000,000 Other

Long-term debt 27,042,000,000 11,898,000,000 Dividends payable

Deferred income taxes 5,083,000,000 4,993,000,000 Total current liabilities

Accrued pension costs 473,000,000 544,000,000 Long-term debt

Accrued postretirement 1,797,000,000 1,749,000,000 Deferred income taxes

health care costs

Other liabilities 345,000,000 254,000,000 Accrued pension costs

Total liabilities 42,914,000,000 40,631,000,000 Accrued postretirement health care

costs
Contingencies (Note 19) Other liabilities

Redeemable noncontrolling 38,000,000 39,000,000 Total liabilities

interest
Stockholders' Equity Contingencies

Common stock, par value 935,000,000 935,000,000 Redeemable noncontrolling interest

$0.33 1/3 per share
(2,805,961,317 shares
issued)

Additional paid-in capital 5,970,000,000 5,961,000,000 Stockholders' Equity

Earnings reinvested in the 36,539,000,000 43,962,000,000 Common stock, par value $0.33 1/3
business per share (2,805,961,317 shares
issued)

Accumulated other (2,864,000,000) (2,547,000,000) Additional paid-in capital

comprehensive losses

Cost of repurchased stock (34,358,000,000) (33,524,000,000) Earnings reinvested in the business

(947,979,763 shares at
December 31, 2019 and
931,903,722 shares at
December 31, 2018)
Total stockholders’ equity 6,222 14,787 Accumulated other comprehensive
attributable to Altria losses

Noncontrolling interests 97 2,000,000 Cost of repurchased stock

(931,903,722 shares at December 31,
2018 and 904,702,125 shares at
December 31, 2017)

Total stockholders’ equity 6,319 14,789,000,000 Total stockholders’ equity attributable

to Altria

Total Liabilities and $ 49,271,000,000 $ 55,459,000,000 Noncontrolling interests

Stockholders’ Equity

Total stockholders’ equity

Total Liabilities and Stockholders’

Equity
 Consolidate Consolidate
d Balance d Balance
Dec. 31, Dec. 31,
Dec. 31, 2017 Sheets - Sheets -
USD ($) $ in 2016 USD ($) $ in 2015
Millions Millions
Assets Assets
$ 1,253,000,000 Cash and $ 4,569 Cash and $ 2,369
cash cash
equivalents equivalents

142,000,000 Receivables 151 Receivables 124

Inventories: Inventories:

941,000,000 Leaf tobacco 892 Leaf tobacco 957

170,000,000 Other raw 164 Other raw 181

materials materials
560,000,000 Work in 512 Work in 444
process process
554,000,000 Finished 483 Finished 449
product product
2,225,000,000 Inventory, 2,051 Inventory, 2,031
net net
461,000,000 Income 269 Other 387
taxes current
assets

263,000,000 Other 220 Total 4,911

current current
assets assets

4,344,000,000 Total 7,260 Property,

current plant and
assets equipment,
at cost:

Property, Land and 295

plant and land
equipment, improveme
at cost: nts

302,000,000 Land and 316 Buildings 1,406

land and building
improveme equipment
nts

1,437,000,000 Buildings 1,481 Machinery 2,969

and building and
equipment equipment
 2,975,000,000 Machinery 2,917 Constructio 207
and n in
equipment progress

165,000,000 Constructio 121 Property, 4,877

n in plant and
progress equipment,
at cost

4,879,000,000 Property, 4,835 Less 2,895

plant and accumulate
equipment, d
at cost depreciation

2,965,000,000 Less 2,877 Property, 1,982

accumulate plant and
d equipment,
depreciation net

1,914,000,000 Property, 1,958 Goodwill 5,285

plant and
equipment,
net

5,307,000,000 Goodwill 5,285 Other 12,028

intangible
assets, net

12,400,000,000 Other 12,036 Investment 5,483

intangible in AB
assets, net InBev/SABM
iller

17,952,000,000 Investment 17,852 Finance 1,239

in AB InBev assets, net
0 Finance 1,028 Other assets 531
assets, net
1,285,000,000 Other assets 513 Total Assets 31,459

43,202,000,000 Total Assets 45,932 Liabilities

Liabilities Current 4
portion of
long-term
debt

0 Current 0 Accounts 400

portion of payable
long-term
debt
 864,000,000 Accounts 425 Accrued
payable liabilities:
374,000,000 Accrued Marketing 695
liabilities:
Marketing 747 Employment 198
costs
695,000,000 Employment 289 Settlement 3,590
costs charges
188,000,000 Settlement 3,701 Other 1,073
charges
2,442,000,000 Other 1,025 Dividends 1,110
payable
971,000,000 Dividends 1,188 Total 7,070
payable current
liabilities

1,258,000,000 Total 7,375 Long-term 12,843

current debt
liabilities

6,792,000,000 Long-term 13,881 Deferred 4,667

debt income
taxes

13,030,000,000 Deferred 8,416 Accrued 1,277

income pension
taxes costs

5,247,000,000 Accrued 805 Accrued 2,245

pension postretirem
costs ent health
care costs

445,000,000 Accrued 2,217 Other 447

postretirem liabilities
ent health
care costs

1,987,000,000 Other 427 Total 28,549

liabilities liabilities
283,000,000 Total 33,121 Contingenci
liabilities es (Note 19)

27,784,000,000 Contingenci Redeemable 37

es (Note 18) noncontrolli
ng interest
 Redeemable 38 Stockholder
noncontrolli s' Equity
ng interest

38,000,000 Stockholder Common 935

s' Equity stock, par
value $0.33
1/3 per
share
(2,805,961,3
17 shares
issued)

Common 935 Additional 5,813

stock, par paid-in
value $0.33 capital
1/3 per
share
(2,805,961,3
17 shares
issued)

935,000,000 Additional 5,893 Earnings 27,257

paid-in reinvested
capital in the
business

5,952,000,000 Earnings 36,906 Accumulate (3,280)

reinvested d other
in the comprehens
business ive losses

42,251,000,000 Accumulate (2,052) Cost of (27,845)

d other repurchased
comprehens stock
ive losses (862,689,09
3 shares at
December
31, 2016
and
845,901,836
shares at
December
31, 2015)
 (1,897,000,000) Cost of (28,912) Total 2,880
repurchased stockholders
stock ’ equity
(904,702,12 attributable
5 shares at to Altria
December Group, Inc.
31, 2017
and
862,689,093
shares at
December
31, 2016)

(31,864,000,000) Total 12,770 Noncontrolli (7)

stockholders ng interests
’ equity
attributable
to Altria
Group, Inc.

15,377,000,000 Noncontrolli 3 Total 2,873

ng interests stockholders
’ equity

3,000,000 Total 12,773 Total $ 31,459

stockholders Liabilities
’ equity and
Stockholder
s’ Equity

15,380,000,000 Total $ 45,932

Liabilities
and
Stockholder
s’ Equity

$ 43,202,000,000
 $ 2,117 $ 1,333 $ 1,253 $ 4,569 $ 2,369
CASH AND CE

2,031 2,051 2,225 2,331 2,293

INVENTORIES

124 151 142 142 152

TR

CL
 400 425 374,000,000 399,000,000 325,000,000
CL

42,914 40,631 27,784 33,121 28,549

 12 Months Ended
Consolidated Statements of Cash Flows - USD ($) $ in Millions Dec. 31, Dec. 31, Dec. 31,
2019 2018 2017
Cash Provided by (Used in) Operating Activities

Net earnings (losses) $ (1,298) $ 6,967 $ 10,227

Adjustments to reconcile net earnings (losses) to operating cash

flows:

Depreciation and amortization 226 227 209

Deferred income tax provision (benefit) (95) (57) (3,126)

Earnings from equity investments (1,725) (890) (532)

(Gain) loss on ABI/SABMiller business combination 0 33 (445)

Dividends from ABI 396 657 806

Loss on Cronos-related financial instruments 1,442 0 0

Impairment of JUUL equity securities 8,600 0 0

Asset impairment and exit costs, net of cash paid 41 354 (38)

Cash effects of changes:

Receivables (8) 0 10

Inventories 42 (129) (171)

Accounts payable (79) 27 (55)

Income taxes 89 218 (294)

Accrued liabilities and other current assets 11 (21) (85)

Accrued settlement charges (108) 980 (1,259)

Pension and postretirement plans contributions (56) (41) (294)

Pension provisions and postretirement, net (52) (13) (11)

Other, net 411 79 (41)

Net cash provided by (used in) operating activities 7,837 8,391 4,901

Cash Provided by (Used in) Investing Activities

Capital expenditures (246) (238) (199)

Acquisitions of businesses and assets (421) (15) (415)

Investment in JUUL (5) (12,800) 0

Investment in Cronos (1,899) 0 0

Other, net 173 65 147

Net cash (used in) provided by investing activities (2,398) (12,988) (467)

Cash Provided by (Used in) Financing Activities

Proceeds from short-term borrowings 0 12,800 0

Repayment of short-term borrowings (12,800) 0 0

Long-term debt issued 16,265 0 0

Long-term debt repaid (1,144) (864) 0

Repurchases of common stock (845) (1,673) (2,917)

Dividends paid on common stock (6,069) (5,415) (4,807)

Other, net (119) (132) (47)

Net cash used in financing activities (4,712) 4,716 (7,771)

Cash, cash equivalents and restricted cash:

Increase (decrease) 727 119 (3,337)

Balance at beginning of year 1,433 1,314 4,651

Balance at end of year 2,160 1,433 1,314

Cash paid: Interest 1,102 704 696

Cash Paid: Income taxes 1,977 2,307 3,036

Cash, cash equivalents and restricted cash $ 2,160 $ 1,314 $ 1,314

 Consolidated Statements of Cash Flows - USD ($) $ in Millions Dec. 31, Dec. 31,
2016 2015
Cash Provided by (Used in) Operating Activities

Net earnings $ 14,244 $ 5,243

Adjustments to reconcile net earnings to operating cash flows:

Depreciation and amortization 204 225

Deferred income tax (benefit) provision 3,119 (132)

Earnings from equity investment in AB InBev/SABMiller (795) (757)

Gain on AB InBev/SABMiller business combination (13,865) (5)

Dividends from AB InBev/SABMiller 739 495

Asset impairment and exit costs, net of cash paid 106 1

Loss on early extinguishment of debt 823 228

Cash effects of changes:

Receivables (27) 3

Inventories (34) (33)

Accounts payable 24 26
Income taxes (231) (12)

Accrued liabilities and other current assets (113) 184

Accrued settlement charges 111 90

Pension and postretirement plans contributions (531) (28)

Pension provisions and postretirement, net (73) 114

Other 120 201

Net cash provided by operating activities 3,821 5,843

Cash Provided by (Used in) Investing Activities

Capital expenditures (189) (229)

Acquisitions of businesses and assets (45) 0

Proceeds from finance assets 231 354

Proceeds from AB InBev/SABMiller business combination 4,773 0

Purchase of AB InBev ordinary shares (1,578) 0

Payment for derivative financial instruments (3) (132)

Proceeds from derivative financial instruments 510 0

Other 9 (8)

Net cash (used in) provided by investing activities 3,708 (15)

Cash Provided by (Used in) Financing Activities

Long-term debt issued 1,976 0

Long-term debt repaid (933) (1,793)

Repurchases of common stock (1,030) (554)

Dividends paid on common stock (4,512) (4,179)

Premiums and fees related to early extinguishment of debt (809) (226)

Other (21) (28)

Net cash used in financing activities (5,329) (6,780)

Cash and cash equivalents:

(Decrease) increase 2,200 (952)

Balance at beginning of year 2,369 3,321

Balance at end of year 4,569 2,369

Cash Paid: Interest 775 776

Cash Paid: Income taxes $ 4,664 $ 3,029

 (229) (189) (199) (238) (246)

0 (45) (415) (15) (421)

ST

LT
 (845) (1,673) (2,917) (1,030) (554)

Buybacks
(6,069) (5,415) (4,807) (4,512) (4,179)

DIVD
 2015 2016 2017 2018 2019
DEBT $ 28,549 $ 33,121 $ 27,784 $ 40,631 $ 42,914
CASH AND EQUIVALENTS $ 2,369 $ 4,569 $ 1,253 $ 1,333 $ 2,117

no preferred stock!!

2015 2016 2017 2018 2019

OP. INCOME $ 10,326.00
NI 5,241 14,239 10,222 6,963 (1,293)
NET CAPEX 246
CHANGES WK 22 216 81 46
CHANGES ISSUANCE DEBT -1793 1043 0 11936 2321
FCFE 3,448 15,260 10,006 18,818 736
REINVESTMENT NEEDS 292
FCFF 10,034.00

2015 2016 2017 2018 2019

FCFE
DIVIDENDS & BUYBACKS $ 4,733 $ 5,542 $ 7,724 $ 7,088 $ 6,914

2015
Buybacks (845) (1,673) (2,917) (1,030) (554)
DIVD (6,069) (5,415) (4,807) (4,512) (4,179)
6,914 7,088 7,724 5,542 4,733

2015 2016 2017 2018 2019

 $ 5,241 $ 14,239 $ 10,222 $ 6,963 $ (1,293)

NI

Traditional Capex
R&D + Adv capex

Acquisitions capex
$ 50,000
$ 45,000
$ 40,000
$ 35,000
$ 30,000
$ 25,000 Debt
Cash and CE
$ 20,000
$ 15,000
$ 10,000
$ 5,000
$0
2015 2016 2017 2018 2019

2016 2017 2018 2019

5,542 7,724 7,088 6,914

15
25Y
 2015 2016 2017 2018
WORKING CAPITAL 1,755 1,777 1,993 2,074

CHANGES WK 22 216 81

2015 2016 2017 2018

ACQ BUSS/ASS 0 (45) (415) (15)
INV. JUUL (5)
INV. CRONOS
TOTAL M&A 0 45 415 20

(LONG-TERM EXP) 2015 2016 2017 2018

"CAPEX" BASELINE $ 229 $ 189 $ 199 $ 238
ACQUISITIONS 0 45 415 20
R&D 186 203 241 252
ADS 25 27 29 37
LITIGATION 57 190 21 125
R&D+ADS+LIT 268 420 291 414
TOTAL CAPEX 497 654 905 672

2015 2016 2017 2018

CAPEX
DEPR 0 0 0 0
NET CAPEX
0 0 0 0
AMORT INTANGIBLES
21 38

IMPAIRMENTS, EXIT, ACQ-RELATED COSTS

89 538
 REESTRUCT
URING: 121;
DISCONTIN
UATION
NUMARK;
MOVING MOVING
FACILITIES FACILITIES
TO TO
STREAMLIN STREAMLIN
E: 78 E: 6

PRODUCTIVITY INITIATIVE SINCE 2016

COST REDUCTION PROGRAM (WORKFORCE &
3RD PARTY SPENDING) 300 50

ADVISORY FEES (IN SGA)

GW 2015 2016 2017 2018

INT ASSETS 5196
INT ASS ACC AMORT 12279
INT ASS AMORT 221
INDEFINITIVE-LIVED AMORT: (UST 9B 2009 ACQ AND 2007 2,6B MIDDLETON ACQ) 38

DEFINITIVE-LIVED INTANG ASSETS:

IP, CUSTOMERS RELATIONSHIPS, TRADEMARKS

WA 20Y

DEFINITIVE AMORT
21 38
 2019 2015 2016
2,120 INV 2,031 2,051
TR 124 151
46 CA 2,155 2,202
NON Debt CL (AP) 400 425

QUARTERLY
108
2019 BURGER SOHNE HOLDING (ON!)
(421) 353 80% HELIX
(12,800)
(1,899)
15,120

Net Capex = Capex - Depr.

2019
$ 246
15,120
168
33
175
376
15,742

2019

44

331
COST
REDUCTION
(REESTRUCTURIN
G: 133)
&REFOCUS
INNOVATIVE
PRODUCT, WINE
IMPAIRMENT

600

85

2019
5177
12687
264
43

70
44 70 70 70
EST EST EST
 2017 2018 2019
2,225 2,331 2,293
142 142 152
2,367 2,473 2,445
374 399 325
 70 70
EST EST
Cash
Provided by
(Used in)
Financing
Activities

Proceeds 0
from short-
term
borrowings

Repayment (12,800)
of short-
term
borrowings

Long-term 16,265
debt issued

Long-term (1,144)
debt repaid
Other, net (119)

Net cash (4,712)

used in
financing
activities

Liabilities
Short-term 0
borrowings
Current 1,000
portion of
long-term
debt

Accounts 325
payable
Accrued
liabilities:
Marketing 393,000,000
Settlement 3,346,000,000
charges
Other 1,545,000,000
Dividends 1,565,000,000
payable
Total 8,174,000,000
current
liabilities

Long-term 27,042
debt
Deferred 5,083,000,000
income
taxes

Accrued 473,000,000
pension
costs

Accrued 1,797,000,000
postretirem
ent health
care costs

Other 345,000,000
liabilities
Total 42,914,000,000
liabilities
Contingenci
es (Note 19)

Redeemable 38,000,000
noncontrolli
ng interest

28,042
0.0115897582198

Minority Holdings
20% Helix
12,800

(864)

(132)

4,716

12,704
 1,144

399

586,000,000
3,454,000,000

1,403,000,000
1,503,000,000

21,193,000,000

11,898

4,993,000,000

544,000,000

1,749,000,000

254,000,000

40,631,000,000

39,000,000

25,746

Purchase obligations are cancelable wo a penalty and sith short notice (30d) so shan't be included as debt
OP. LEASES CAPITALIZED NOW SINCE 2019
 Cash
Provided by
(Used in)
Financing
Activities

2015 2016
0 Long-term 1,976 0 0
debt issued

Debt Issuanc 1976

0 Long-term (933) (1,793) 0
debt repaid

Issuance ST 0
0 Premiums (809) (226)
and fees
related to
early
extinguishm
ent of debt

Debt repayme 1793 933

0 Other (21) (28)
Repayment S 0 0
(47) Net cash (5,329) (6,780)
used in
financing
activities
Net Borrowin (1,793) 1,043
(7,771)

OP. LEASES 2020 2021 2022 2023 2024 2025

53 36 36 14 14 43
 2017 2018 2019

0 0 16265

0 12800 0

0 864 1144

0 0 12800

0 11,936 2,321

and after
 12 Months Ended
Consolidated Statements of Earnings (Losses) -
USD ($) $ in Millions Dec. 31, Dec. 31, Dec. 31,
2019 2018 2017
Income Statement [Abstract]
Net revenues $ 25,110 $ 25,364 $ 25,576
Cost of sales 7,085 7,373 7,531
Excise taxes on products 5,314 5,737 6,082
Gross profit 12,711 12,254 11,963
Marketing, administration and research costs 2,226 2,756 2,338
Asset Impairment and Exit Costs 159 383 32
Operating (expense) income 10,326 9,115 9,593
Interest and other debt expense, net 1,280 665 705
Net periodic benefit (income) cost, excluding (37) (34) 37
service cost
Earnings from equity investments (1,725) (890) (532)
Impairment of JUUL equity securities 8,600 0 0
Loss on Cronos-related financial instruments 1,442 0 0
(Gain) loss on ABI/SABMiller business combination 0 33 (445)

Earnings (losses) before income taxes 766 9,341 9,828

Provision (benefit) for income taxes 2,064 2,374 (399)
Net earnings (losses) (1,298) 6,967 10,227
Net (earnings) losses attributable to noncontrolling 5 (4) (5)
interests
Net earnings (losses) attributable to Altria $ (1,293) $ 6,963 $ 10,222
Per share data:

Basic earnings (losses) per share attributable to $ (0.70) $ 3.69 $ 5.31

Altria (in usd per share)
Diluted earnings (losses) per share attributable to $ (0.70) $ 3.68 $ 5.31
Altria (in usd per share)

21.16% 22.62% 23.78%

 Consolidated Statements of Earnings - USD ($) $ in Millions Dec. 31, Dec. 31,
2016 2015
Income Statement [Abstract]
Net revenues $ 25,744 $ 25,434
Cost of sales 7,746 7,740
Excise taxes on products 6,407 6,580
Gross profit 11,591 11,114
Marketing, administration and research costs 2,650 2,708
Reduction of PMI tax-related receivable 0 41
Asset impairment and exit costs 179 4
Operating (expense) income 8,762 8,361
Interest and other debt expense, net 747 817

Loss on early extinguishment of debt 823 228

Earnings from equity investment in AB InBev/SABMiller (795) (757)
Gain on AB InBev/SABMiller business combination (13,865) (5)
Earnings before income taxes 21,852 8,078

(Benefit) provision for income taxes 7,608 2,835

Net earnings 14,244 5,243
Net earnings attributable to noncontrolling interests (5) (2)
Net earnings attributable to Altria Group, Inc. $ 14,239 $ 5,241

Per share data:

Basic and diluted earnings per share attributable to Altria Group, $ 7.28 $ 2.67
Inc. (usd per share)

#VALUE! 24.89% 25.87%

$ 25,110 $ 25,364 $ 25,576 $ 25,744 $ 25,434

$ 5,241 $ 14,239 $ 10,222 $ 6,963 $ (1,293)

 Capex: unadjusted capex+current capex
2019
Expense in year (LONG-TERM EXP)
Amortization Already capitalized Accounting CAPEX
Adjusted Capex Acquisitions
R&D
Advertisement
TOTAL CAPEX
R&D+Advert

5y amort acc capex

R&D + ADV
Year Expense Unamortized portion Unamortized portion
2019 Current 201 1 201
2018 -1 289 0.8 231.2
2017 -2 270 0.6 162
2016 -3 230 0.4 92
2015 -4 211 0.2 42.2
2014 -5 197 0 0

Acquisitions
Year Expense Unamortized portion Unamortized portion
2019 Current 15120 1 15120
2018 -1 20 0.8 16
2017 -2 415 0.6 249
2016 -3 45 0.4 18
2015 -4 0 0.2 0
2014 -5 102 0 0

Table summ
Purchase Method (purcPrice paid Year

AS R AND MARGINS ARE THE VITAL BASELINE NUMBERS, CAPITALIZING'S MAIN PURPOSE IS TO GIVE A DIFFERENT PAINT OF
ALSO, TO GET TO THE REINVESTMENT NEEDS (CAPEX, WC, ETC) WHICH IS SUBSTRACTED FROM NI/EBI TO GET TO FCF
 Green smoke
2014 2015 2016 2017 2018 2019
163 229 189 199 238 246
102 0 45 415 20 15120 10-15y
167 186 203 241 252 168 5y
30 25 27 29 37 33 5y
440 464 884 547 15567
197 211 230 270 289 201

Amortization exp. of asset

Amortization this year 239.4
Value of asset
57.8 728.4
54
46 Increase in OP INC Current operating exp. -Capex
42.2 -38.4
39.4

Amortization this year Total amortization of asset

116.4
4 Value of asset
83 15403
9 Increase in OP INC
0 15003.6
20.4

N PURPOSE IS TO GIVE A DIFFERENT PAINT OF CURRENT OP. INCOME

TRACTED FROM NI/EBI TO GET TO FCF
JUUL ABI CRONOS

2019 2018 2017

Goodwill 5,177,000,000 5,196,000,000 Goodwill 5,307,000,000

Other intangible assets, net 12,687,000,000 12,279,000,000 Other 12,400,000,000
intangible
assets, net

Investments in equity 23,581 30,496 Investment 17,952,000,000

securities in AB InBev

Earnings from equity (1,725) (890)

investments
Impairment of JUUL equity 8,600 0
securities
Loss on Cronos-related 1,442 0
financial instruments
(Gain) loss on 0 33
ABI/SABMiller business
combination

AVERAGE MATURITY DEBT

2020 1000 0.035

2021 1500 0.053
2022 2900 0.103
2023 1752 0.062
2024 2400 0.085

Threreafter 18723

28275
3q 4q

Lower volumes Higher disc. Rates due to more litigation

8,6 impairment charges 3Q y 4Q

 2011 2012 2013 2014 2015 2016
Revenue Growth $ 23,800 $ 24,620 $ 24,470 $ 24,520 $ 25,434 $ 25,744
3.3% -0.6% 0.2% 3.6% 1.2%
2012 2013 2014 2015 2016
Op. Income 6,068 7,253 8,084 7,620 8,361 8,762
16.3% 10.3% -6.1% 8.9% 4.6%

2011 2012 2013 2014 2015 2016

Operating Margins 25.50% 29.46% 33.04% 31.08% 32.87% 34.04%
13.5% 10.8% -6.3% 5.5% 3.4%

Final Value 25489

Initial Value 25110 Revenu
4.0%
Years 6
3.0%
CAGR 0.25%
2.0%

1.0%

0.0%
2012 2013 2014 2015 2016 2
-1.0%

-2.0%

2011 2012 2013 2014 2015 2016

Revenues $ 23,800 $ 24,620 $ 24,470 $ 24,520 $ 25,434 $ 25,744
Cost of sales 7,740 7,746
Excise taxes on 5,314 5,737 6,082 6,580 6,407
products
Gross profit 12,711 12,254 11,963
Marketing, 2,226 2,756 2,338
administration and
research costs

Asset Impairment 159 383 32

and Exit Costs
Operating (expense) 10,326 9,115 9,593
income
0.25870881 0.24887352

Cost sales hovering

around 28%

Excise taxes: has gone from 26% of S to 21 in 5y. Why? Because it's based on volume (specific tax) not on value (ad valorem)
1,01 per pack

Lower revenues in 2020 bc of disruptions crisis

Can raise price (low among countries)
Capture 1.25 through IQOS Revenue Increase
Cross category movement: decline rate 2%

Price 5% 5%
Volume expectations -4% minus 2% volume from higher prices permanent

Revenues $ 25,110

Elasticity
-0.4

Elasticity= %change Q/ % change p

% Change in Q = -0,4/5
-2
 5,5 volume decline
2017 2018 2019 2020 2021 2022 2023 2024
$ 25,576 $ 25,364 $ 25,110 25172.775 25235.7069 25298.7962 25362.0432 25425.4483
-0.7% -0.8% -1.0% 0.2% 0.2% 0.2% 0.2% 0.2%
2017 2018 2019
9,593 9,115 10,326
8.7% -5.2% 11.7%
Op. Income
20.0%

2017 2018 2019 15.0%

37.51% 35.94% 41.12%
10.0%
9.3% -4.4% 12.6%
5.0%

0.0%
2012 2013 2014 2015 2016 2017 2018
-5.0%
Revenue Growth
-10.0%
4.0%

3.0%

2.0%
Revenue Growth 45.00%
1.0% 40.00%

0.0% 35.00%
2012 2013 2014 2015 2016 2017 2018 2019 30.00%
1.0% 25.00%

2.0% 20.00%
15.00%
10.00%
2017 2018 2019 5.00%
$ 25,576 $ 25,364 $ 25,110
7,531 7,373 7,085 0.00%
2011 2012 2013 2
6,082 5,737 5,314
 0.23780106 0.22618672 0.211628833134209

cific tax) not on value (ad valorem) Baja 1% al año

er prices permanent minus 3

 2025 2026
25489.0119
0.2%

Op. Income

Op. Income

5 2016 2017 2018 2019

Operating Margins
45.00%
40.00%
35.00%
30.00%
25.00% Operating Margins

20.00%
15.00%
10.00%
5.00%
0.00%
2011 2012 2013 2014 2015 2016 2017 2018 2019
JUUL'S Especulation
 Base year 1 2 3
Revenue growth rate 1.00% 1.00% 1.00%
Revenues $ 25,110.00 $ 25,361.10 $ 25,614.71 $ 25,870.86
Operating Growth Rate $ 10,326.00 $ 10,584.15 $ 10,790.77 $ 11,000.47
EBIT (Operating) margin 41.12% 41.51% 41.90% 42.29%
EBIT (Operating income) $ 10,326.00 $ 10,527.58 $ 10,732.17 $ 10,939.79
Tax rate 25.00% 25.00% 25.00% 25.00%
EBIT(1-t) $ 7,744.50 $ 7,895.69 $ 8,049.12 $ 8,204.84
- Reinvestment $ 321.47 $ 324.68 $ 327.93
FCFF $ 7,574.22 $ 7,724.44 $ 7,876.91
NOL $ - $ - $ - $ -

Cost of capital 10.73% 10.73% 10.73%

Cumulated discount factor 0.9031 0.8156 0.7365
PV(FCFF) $ 6,840.13 $ 6,299.71 $ 5,801.45

Terminal cash flow $ 8,832.24

Terminal cost of capital 6.63%
Terminal value $ 147,203.99
PV(Terminal value) $ 59,445.82
PV (CF over next 10 years) $ 49,558.84
Sum of PV $ 109,004.66
Probability of failure = 0.00%
Proceeds if firm fails = $50,699.49
Value of operating assets = $ 109,004.66
- Debt $ 28,042.00
- Minority interests $ 97.00
+ Cash $ 2,117.00
+ Non-operating assets $ 23,581.00
Value of equity $ 106,563.66
- Value of options $0.00
Value of equity in common stock $ 106,563.66
Number of shares 1,858.37
Estimated value /share $ 57.34
Price $ 36.22
Price as % of value 63.16%
 4 5 6 7 8 9 10
1.00% 1.00% 0.92% 0.85% 0.77% 0.70% 0.62%
$ 26,129.57 $ 26,390.86 $ 26,634.71 $ 26,860.58 $ 27,067.94 $ 27,256.33 $ 27,425.32
$ 11,213.28 $ 11,429.25 $ 11,648.42 $ 11,861.89 $ 12,069.22 $ 12,269.96 $ 12,463.67
42.67% 43.06% 43.45% 43.84% 44.22% 44.61% 45.00%
$ 11,150.49 $ 11,364.31 $ 11,572.58 $ 11,774.85 $ 11,970.69 $ 12,159.68 $ 12,341.39
25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
$ 8,362.87 $ 8,523.23 $ 8,679.43 $ 8,831.14 $ 8,978.02 $ 9,119.76 $ 9,256.05
$ 331.21 $ 334.52 $ 312.19 $ 289.16 $ 265.48 $ 241.19 $ 216.35
$ 8,031.66 $ 8,188.71 $ 8,367.24 $ 8,541.98 $ 8,712.54 $ 8,878.57 $ 9,039.70
$ - $ - $ - $ - $ - $ - $ -

10.73% 10.73% 9.91% 9.09% 8.27% 7.45% 6.63%

0.6651 0.6007 0.5465 0.5010 0.4627 0.4306 0.4038
$ 5,342.10 $ 4,918.69 $ 4,572.70 $ 4,279.16 $ 4,031.20 $ 3,823.17 $ 3,650.53
Terminal year
0.62%
$ 27,595.36

45.00%
$ 12,417.91
25.00%
$ 9,313.43
$ 481.19
$ 8,832.24
$ -

6.63%
 Revenue CAGR
Operating Mg -1.00%
25% 6214.725
30%
35%
40%
45%

Terminal cash flow $ -

PV(Terminal value)
PV (CF over next 10 years)
Sum of PV
- Debt
- Minority interests
+ Cash
+ Non-operating assets
Value of equity
- Value of options
Value of equity in common stock
Number of shares
Estimated value /share
$ -
$ -
$ -
$ 25,746.00
$ 2.00
$ 1,333.00
$ 30,496.00
$ 6,081.00
$0.00
$ 6,081.00
1,858.37
$ 3.27

Terminal CF/cost k-rf

Base year 1
Revenue growth rate 1.00%
Revenues $ 25,110.00 $ 25,361.10

EBIT (Operating) margin 41.12% 41.51%

EBIT (Operating income) $ 10,326.00 $ 10,429.26
Tax rate 25.00% 25.00%
EBIT(1-t) $ 7,744.50 $ 7,821.95
- Reinvestment $ 321.47
FCFF $ 7,500.48
NOL $ - $ -

Cost of capital 0.00%

Cumulated discount factor 1.0000
PV(FCFF) $ 7,500.48

Terminal cash flow $ 8,832.24

Terminal cost of capital 4.50%
Terminal value $ 196,271.99
PV(Terminal value) $ 196,271.99
PV (CF over next 10 years) $ 82,713.26
Sum of PV $ 278,985.25
Probability of failure = 0.00%
Proceeds if firm fails = $0.00
Value of operating assets = $ 278,985.25
- Debt $ 250.00
- Minority interests $ -
+ Cash $ -
+ Non-operating assets $ -
Value of equity $ 278,735.25
- Value of options $0.00
Value of equity in common stock $ 278,735.25
Number of shares -
Estimated value /share #DIV/0!
Price $ -
Price as % of value #DIV/0!
 -0.50% 0.00% 0.50% 1.00%

Terminal CF/cost k-perpetual g

2 3 4 5 6
1.00% 1.00% 1.00% 1.00% 0.92%
$ 25,614.71 $ 25,870.86 $ 26,129.57 $ 26,390.86 $ 26,634.71

41.90% 42.29% 42.67% 43.06% 43.45%

$ 10,533.55 $ 10,939.79 $ 11,150.49 $ 11,364.31 $ 11,572.58
25.00% 25.00% 25.00% 25.00% 25.00%
$ 7,900.16 $ 8,204.84 $ 8,362.87 $ 8,523.23 $ 8,679.43
$ 324.68 $ 327.93 $ 331.21 $ 334.52 $ 312.19
$ 7,575.48 $ 7,876.91 $ 8,031.66 $ 8,188.71 $ 8,367.24
$ - $ - $ - $ - $ -

0.00% 0.00% 0.00% 0.00% 0.00%

1.0000 1.0000 1.0000 1.0000 1.0000
$ 7,575.48 $ 7,876.91 $ 8,031.66 $ 8,188.71 $ 8,367.24
 7 8 9 10 Terminal year
0.85% 0.77% 0.70% 0.62% 0.62%
$ 26,860.58 $ 27,067.94 $ 27,256.33 $ 27,425.32 $ 27,595.36

43.84% 44.22% 44.61% 45.00% 45.00%

$ 11,774.85 $ 11,970.69 $ 12,159.68 $ 12,341.39 $ 12,417.91
25.00% 25.00% 25.00% 25.00% 25.00%
$ 8,831.14 $ 8,978.02 $ 9,119.76 $ 9,256.05 $ 9,313.43
$ 289.16 $ 265.48 $ 241.19 $ 216.35 $ 481.19
$ 8,541.98 $ 8,712.54 $ 8,878.57 $ 9,039.70 $ 8,832.24
$ - $ - $ - $ - $ -

0.00% 0.00% 0.00% 0.00% 4.50%

1.0000 1.0000 1.0000 1.0000
$ 8,541.98 $ 8,712.54 $ 8,878.57 $ 9,039.70
 Base year 1 2 3
Revenue growth rate 0.00% 0.00% 0.00%
Revenues $ 25,110.00 $ 25,110.00 $ 25,110.00 $ 25,110.00
EBIT (Operating) margin 41.12% 41.31% 41.50% 41.69%
EBIT (Operating income) $ 10,326.00 $ 10,373.13 $ 10,420.26 $ 10,467.39
Tax rate 25.00% 25.00% 25.00% 25.00%
EBIT(1-t) $ 7,744.50 $ 7,779.85 $ 7,815.20 $ 7,850.54
- Reinvestment $ - $ - $ -
FCFF $ 7,779.85 $ 7,815.20 $ 7,850.54
NOL $ - $ - $ - $ -

Cost of capital 10.73% 10.73% 10.73%

Cumulated discount factor 0.9031 0.8156 0.7365
PV(FCFF) $ 7,025.83 $ 6,373.73 $ 5,782.03

Terminal cash flow $ 8,252.12

Terminal cost of capital 6.63%
Terminal value $ 137,535.39
PV(Terminal value) $ 55,541.32
PV (CF over next 10 years) $ 47,875.47
Sum of PV $ 103,416.79
Value of operating assets = $ 103,416.79
- Debt $ 28,042.00
- Minority interests $ 97.00
+ Cash $ 2,117.00
+ Non-operating assets $ 23,581.00
Value of equity $ 100,975.79
- Value of options $0.00
Value of equity in common stock $ 100,975.79
Number of shares 1,858.37
Estimated value /share $ 54.34
Price $ 36.22
Price as % of value 66.66%

Implied variables
Sales to capital ratio 0.78 0.78 0.78
Invested capital $ 32,147 $ 32,147 $ 32,147 $ 32,147
ROIC 24.09% 24.20% 24.31% 24.42%
 4 5 6 7 8 9 10
0.00% 0.00% 0.13% 0.25% 0.38% 0.50% 0.63%
$ 25,110.00 $ 25,110.00 $ 25,141.64 $ 25,205.00 $ 25,300.27 $ 25,427.78 $ 25,587.98
41.87% 42.06% 42.25% 42.44% 42.62% 42.81% 43.00%
$ 10,514.52 $ 10,561.65 $ 10,622.15 $ 10,696.22 $ 10,784.14 $ 10,886.22 $ 11,002.83
25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
$ 7,885.89 $ 7,921.24 $ 7,966.61 $ 8,022.17 $ 8,088.11 $ 8,164.67 $ 8,252.12
$ - $ - $ 40.51 $ 81.11 $ 121.98 $ 163.25 $ 205.09
$ 7,885.89 $ 7,921.24 $ 7,926.11 $ 7,941.05 $ 7,966.13 $ 8,001.42 $ 8,047.03
$ - $ - $ - $ - $ - $ - $ -

10.73% 10.73% 9.91% 9.09% 8.27% 7.45% 6.63%

0.6651 0.6007 0.5465 0.5010 0.4627 0.4306 0.4038
$ 5,245.15 $ 4,758.03 $ 4,331.62 $ 3,978.13 $ 3,685.84 $ 3,445.47 $ 3,249.66

0.78 0.78 0.78 0.78 0.78 0.78 0.78

$ 32,147 $ 32,147 $ 32,188 $ 32,269 $ 32,391 $ 32,554 $ 32,759
24.53% 24.64% 24.75% 24.86% 24.97% 25.08% 25.19%
Terminal year
0.00%
$ 25,587.98
43.00%
$ 11,002.83
25.00%
$ 8,252.12
$ -
$ 8,252.12
$ -

6.63%

After year 10

6.63%
ROIC
2019 2018 2017 2016 2015
20.02% 14.53% 21.40% 24.79% 39.14%

EPS
2019 2018 2017 2016 2015
-0.7 3.69 53.31 7.28 2.67