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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Altria Group Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	8,681)	5,753)	2,233)	5,245)	(482)
Cost of capital²	8.70%	8.92%	8.70%	8.34%	8.49%
Invested capital³	28,647)	28,802)	33,524)	41,498)	42,624)

Economic profit⁴	6,188)	3,184)	(684)	1,784)	(4,100)

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 8,681 – 8.70% × 28,647 = 6,188

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Altria Group Inc. economic profit increased from 2021 to 2022 and from 2022 to 2023.

Altria Group Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net earnings (losses) attributable to Altria	8,130)	5,764)	2,475)	4,467)	(1,293)
Deferred income tax expense (benefit)¹	(230)	(947)	(1,160)	(164)	(95)
Increase (decrease) in LIFO reserve²	—)	100)	—)	—)	(100)
Increase (decrease) in equity equivalents³	(230)	(847)	(1,160)	(164)	(195)
Interest expense	1,149)	1,128)	1,188)	1,223)	1,322)
Adjusted interest expense	1,149)	1,128)	1,188)	1,223)	1,322)
Tax benefit of interest expense⁴	(241)	(237)	(249)	(257)	(278)
Adjusted interest expense, after taxes⁵	908)	891)	939)	966)	1,044)
Interest income	(160)	(70)	(26)	(14)	(42)
Investment income, before taxes	(160)	(70)	(26)	(14)	(42)
Tax expense (benefit) of investment income⁶	34)	15)	5)	3)	9)
Investment income, after taxes⁷	(126)	(55)	(21)	(11)	(33)
Net income (loss) attributable to noncontrolling interest	—)	—)	—)	(13)	(5)
Net operating profit after taxes (NOPAT)	8,681)	5,753)	2,233)	5,245)	(482)

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in LIFO reserve. See details »

³ Addition of increase (decrease) in equity equivalents to net earnings (losses) attributable to Altria.

⁴ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,149 × 21.00% = 241

⁵ Addition of after taxes interest expense to net earnings (losses) attributable to Altria.

⁶ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 160 × 21.00% = 34

⁷ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Altria Group Inc. NOPAT increased from 2021 to 2022 and from 2022 to 2023.

Altria Group Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Provision (benefit) for income taxes	2,798)	1,625)	1,349)	2,436)	2,064)
Less: Deferred income tax expense (benefit)	(230)	(947)	(1,160)	(164)	(95)
Add: Tax savings from interest expense	241)	237)	249)	257)	278)
Less: Tax imposed on investment income	34)	15)	5)	3)	9)
Cash operating taxes	3,236)	2,794)	2,753)	2,854)	2,428)

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Altria Group Inc. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

Altria Group Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Current portion of long-term debt	1,121)	1,556)	1,105)	1,500)	1,000)
Long-term debt, excluding current portion	25,112)	25,124)	26,939)	27,971)	27,042)
Total reported debt & leases	26,233)	26,680)	28,044)	29,471)	28,042)
Stockholders’ equity (deficit) attributable to Altria	(3,540)	(3,973)	(1,606)	2,839)	6,222)
Net deferred tax (assets) liabilities¹	2,771)	2,822)	3,665)	4,433)	5,023)
LIFO reserve²	700)	700)	600)	600)	600)
Equity equivalents³	3,471)	3,522)	4,265)	5,033)	5,623)
Accumulated other comprehensive (income) loss, net of tax⁴	2,673)	2,771)	3,056)	4,341)	2,864)
Redeemable noncontrolling interest	—)	—)	—)	40)	38)
Noncontrolling interests	50)	50)	—)	86)	97)
Adjusted stockholders’ equity (deficit) attributable to Altria	2,654)	2,370)	5,715)	12,339)	14,844)
Construction in progress⁵	(240)	(248)	(235)	(312)	(262)
Invested capital	28,647)	28,802)	33,524)	41,498)	42,624)

¹ Elimination of deferred taxes from assets and liabilities. See details »

² Addition of LIFO reserve. See details »

³ Addition of equity equivalents to stockholders’ equity (deficit) attributable to Altria.

⁴ Removal of accumulated other comprehensive income.

⁵ Subtraction of construction in progress.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Altria Group Inc. invested capital decreased from 2021 to 2022 and from 2022 to 2023.

Altria Group Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	72,126)	72,126)	÷	96,499)	=	0.75	0.75	×	10.51%	=	7.85%
Long-term debt, including current portion³	24,373)	24,373)	÷	96,499)	=	0.25	0.25	×	4.25% × (1 – 21.00%)	=	0.85%
Total:	96,499)					1.00					8.70%

¹ US$ in millions