Item 1A. Risk Factors

Information regarding Risk Factors appears in Part I, Item 1A. Risk Factors of our 2020 Form 10-K and in Part II, Item 1A. Risk Factors of our Second Quarter 2021 Form 10-Q. Except as set forth below, there have been no material changes to the risk factors previously disclosed in our 2020 Form 10-K and in our Second Quarter 2021 Form 10-Q.

Risks Related to Litigation, Legislative or Regulatory Action

A challenge to our tax positions, an increase in the income tax rate or other changes to federal or state tax laws could adversely affect our earnings or cash flow.

Tax laws and regulations, such as the 2017 Tax Cuts and Jobs Act, are complex and subject to varying interpretations. A successful challenge to one or more of Altria’s tax positions (which could give rise to additional liabilities, including interest and potential penalties), an increase in the corporate income tax rate or other changes to federal or state tax laws, including changes in how foreign investments are taxed, could adversely affect our earnings or cash flow.

Risks Related to Our Investments

Altria recorded an impairment charge of $6.2 billion on its investment in ABI for the nine and three months ended September 30, 2021. If the carrying value of our investment in ABI exceeds its fair value and the loss in value is other than temporary, the investment is considered impaired, which would result in additional impairment losses.

As discussed in Note 4, since October 2019, the carrying value of our investment in ABI has exceeded the fair value of our equity investment in ABI. In preparing our financial statements for the period ended September 30, 2021, we concluded that the decline in fair value of our investment in ABI below its carrying value was other than temporary at September 30, 2021. 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 to income (losses) from equity investments in Altria’s condensed consolidated statements of earnings (losses). This impairment charge reflects the difference between the fair value of our investment in ABI using ABI’s share price at September 30, 2021 and the carrying value of Altria’s equity investment in ABI at September 30, 2021. Additionally, if ABI is unable to successfully execute its business plans and strategies and the fair value of our investment in ABI continues to decrease, it could result in additional impairment losses, which could have a material adverse effect on our consolidated financial position or earnings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In January 2021, the Board of Directors authorized a new $2.0 billion share repurchase program, which it expanded to $3.5 billion in October 2021. Altria expects to complete the expanded program by December 31, 2022. The timing of share repurchases under this program depends upon marketplace conditions and other factors, and the program remains subject to the discretion of the Board.

Altria’s share repurchase activity for each of the three months in the period ended September 30, was as follows:

(1) The total number of shares purchased includes (a) shares purchased under the January 2021 share repurchase program (which totaled 2,088,922 shares in July, 2,373,425 shares in August and 2,205,774 shares in September) and (b) shares withheld by Altria in an amount equal to the statutory withholding taxes for vested stock-based awards previously granted to eligible employees (which totaled 8,073 shares in August and 893 shares in September).

(2) This chart provides information for each of the three months in the period ended September 30. 2021; therefore, it does not reflect the October 2021 expansion of Altria’s share repurchase program discussed above.