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Altria Reports 2013 Third-Quarter and Nine-Month Results; Reaffirms 2013 Full-Year EPS Guidance



  Altria Reports 2013 Third-Quarter and Nine-Month Results; Reaffirms 2013
  Full-Year EPS Guidance

  * Altria’s 2013 third-quarter reported diluted earnings per share (EPS)
    increased over 100% to $0.70, as comparisons were impacted by special
    items.
  * Altria’s 2013 third-quarter adjusted diluted EPS, which excludes the
    impact of special items, increased 12.1% to $0.65.
  * Altria’s 2013 nine-month reported diluted EPS increased 33.8% to $2.02, as
    comparisons were impacted by special items.
  * Altria’s 2013 nine-month adjusted diluted EPS, which excludes the impact
    of special items, increased 9.0% to $1.81.
  * Altria reaffirms its guidance for 2013 full-year reported diluted EPS to
    be in a range of $2.57 to $2.62.
  * Altria reaffirms its guidance for 2013 full-year adjusted diluted EPS to
    be in a range of $2.36 to $2.41, representing a growth rate of 7% to 9%
    from an adjusted diluted EPS base of $2.21 in 2012.

Business Wire

RICHMOND, Va. -- October 24, 2013

Altria Group, Inc. (Altria) (NYSE: MO) today announced its 2013 third-quarter
and nine-month business results, and reaffirmed its guidance for 2013
full-year reported and adjusted diluted EPS.

“During both the quarter and the first nine months, our strategies and diverse
business model continued to produce strong results,” said Marty Barrington,
Chairman and Chief Executive Officer of Altria. “Our businesses are on-track
against their full-year plans, and Altria remains focused on creating
long-term value for shareholders.”

“In addition to producing strong results in our core businesses, we’re
developing innovative tobacco products for adult tobacco consumers,” said Mr.
Barrington. “We’re pleased with Nu Mark’s lead market launch in Indiana of its
MarkTen e-vapor products. Further, Nu Mark plans to expand distribution of
MarkTen to Arizona in December.”

Conference Call

As previously announced, a conference call with the investment community and
news media will be webcast on October 24, 2013 at 9:00 a.m. Eastern Time.
Access to the webcast is available at altria.com.

Cost Management

Altria’s current cost reduction program for its tobacco and service company
subsidiaries remains on-track and is expected to deliver $400 million in
annualized savings versus previously planned spending by the end of 2013.

Cash Returns to Shareholders - Dividends

In August 2013, Altria’s Board of Directors (Board) increased the regular
quarterly dividend by 9.1% to $0.48 per common share versus the previous rate
of $0.44 per common share. The current annualized dividend rate is $1.92 per
common share. As of October 21, 2013, Altria’s annualized dividend yield was
5.3%.

Altria expects to continue to return a large amount of cash to shareholders in
the form of dividends by maintaining a dividend payout ratio target of
approximately 80% of its adjusted diluted EPS. Future dividend payments remain
subject to the discretion of the Board.

Cash Returns to Shareholders - Share Repurchase Program

In August 2013, the Board authorized a $700 million expansion of Altria’s
April 2013 share repurchase program from $300 million to $1 billion. During
the third quarter of 2013, Altria repurchased approximately 4.5 million shares
of its common stock at an average price of $34.75 for a total cost of
approximately $156 million. As of the end of the third quarter of 2013, Altria
had approximately $709 million remaining in the expanded program, which it
expects to complete by the end of the third quarter of 2014. The timing of
share repurchases depends upon marketplace conditions and other factors. The
program remains subject to the discretion of the Board.

NPM Arbitration Panel Decision

As previously announced, on September 11, 2013, the arbitration panel
presiding over the non-participating manufacturer adjustment (NPM Adjustment)
dispute for 2003 determined that six of 15 states failed to diligently enforce
laws that require escrow payments from the cigarette manufacturers that have
not signed the Master Settlement Agreement (NPM Arbitration Panel Decision).
As a result of this decision, Philip Morris USA Inc. (PM USA) expects to
receive a credit of approximately $145 million, plus interest, against its
2014 Master Settlement Agreement payment obligation. PM USA recorded an
increase of approximately $145 million in its reported pre-tax earnings for
the third quarter of 2013.

2013 Full-Year Guidance

Altria reaffirms its guidance for 2013 full-year reported diluted EPS to be in
a range of $2.57 to $2.62. Altria also reaffirms its guidance for 2013
full-year adjusted diluted EPS, which excludes the special items shown in
Table 1, to be in a range of $2.36 to $2.41, representing a growth rate of 7%
to 9% from an adjusted diluted EPS base of $2.21 in 2012.

The factors described in the Forward-Looking and Cautionary Statements section
of this release represent continuing risks to this forecast. Reconciliations
of full-year adjusted to reported diluted EPS are shown in Table 1.

 
Table 1 - Altria’s Full-Year Earnings Per Share Guidance
                                 Full Year
                                 2013 Guidance                        2012               Change
Reported                         $     2.57   to   $     2.62         $     2.06         25 %     to   27 %
diluted EPS
NPM Adjustment                                     (0.21      )       —
Items ^1
Asset
impairment,
exit and                                           —                  0.01
implementation
costs
SABMiller                                          0.01               (0.08      )
special items
PMCC leveraged                                     —                  (0.03      )
lease benefit
Loss on early
extinguishment                                     —                  0.28
of debt
Tax items ^2                                       (0.01      )       (0.03      )
Adjusted                         $     2.36   to   $     2.41         $     2.21         7    %   to   9  %
diluted EPS
                                                                                                           

^1 Reflects the impact of the NPM Adjustment Settlement ($0.16) and the NPM
Arbitration Panel Decision ($0.05).

^2 Excludes the tax impact of the Philip Morris Capital Corporation (PMCC)
leveraged lease benefit.

                              ALTRIA GROUP, INC.

Altria reports its financial results, including diluted EPS, in accordance
with U.S. generally accepted accounting principles (GAAP). Altria’s management
reviews operating companies income (OCI), which is defined as operating income
before corporate expenses and amortization of intangibles, to evaluate segment
performance and allocate resources. Altria’s management also reviews OCI,
operating margins and EPS on an adjusted basis, which excludes certain income
and expense items that management believes are not part of underlying
operations. These items may include, for example, loss on early extinguishment
of debt, restructuring charges, SABMiller plc (SABMiller) special items,
certain PMCC leveraged lease items, certain tax items, tobacco and health
judgments, and settlements of, and determinations made in, certain NPM
Adjustment disputes. Altria’s management does not view any of these special
items to be part of Altria’s sustainable results as they may be highly
variable and difficult to predict and can distort underlying business trends
and results. Altria’s management also reviews income tax rates on an adjusted
basis. Altria’s effective tax rate on operations may exclude certain tax items
from its reported effective tax rate. Altria’s management believes that
adjusted measures for OCI, operating margins and EPS, as well as the effective
tax rate on operations, provide useful insight into underlying business trends
and results and provide a more meaningful comparison of year-over-year
results. Altria’s management uses adjusted measures internally for planning,
forecasting and evaluating business and financial performance, including
allocating resources and evaluating results relative to employee compensation
targets. These adjusted financial measures are not consistent with GAAP, and
should thus be considered as supplemental in nature and not considered in
isolation or as a substitute for the related financial information prepared in
accordance with GAAP. Reconciliations of adjusted measures to corresponding
GAAP measures are provided in the release. Comparisons are to the
corresponding prior-year period unless otherwise stated.

Effective January 1, 2013, Altria’s reportable segments are smokeable
products, manufactured and sold by PM USA and John Middleton Co. (Middleton);
smokeless products, manufactured and sold by or on behalf of U.S. Smokeless
Tobacco Company LLC (USSTC) and PM USA; and wine, produced and/or distributed
by Ste. Michelle Wine Estates Ltd. (Ste. Michelle). Prior-period segment data
have been recast to conform with the current-period segment presentation.

Altria’s net revenues increased 5.0% to $6.6 billion for the third quarter
primarily due to higher net revenues from the smokeable and smokeless products
segments, and higher gains on asset sales in the financial services business.
For the first nine months, Altria’s net revenues were essentially unchanged at
$18.4 billion, primarily due to higher net revenues from the smokeless
products and wine segments, and higher gains on asset sales in the financial
services business, offset by lower net revenues in the smokeable products
segment. Altria’s revenues net of excise taxes increased 6.6% to $4.8 billion
for the third quarter and 1.7% to $13.3 billion for the first nine months of
2013.

Altria’s 2013 third-quarter reported diluted EPS increased over 100% to $0.70
primarily due to the 2012 loss on early extinguishment of debt and higher
reported OCI in the smokeable products segment, including the impact of the
NPM Arbitration Panel Decision. Higher reported OCI in the smokeless products
segment, a lower income tax rate, higher earnings from Altria’s equity
investment in SABMiller and fewer shares outstanding also contributed to
reported diluted EPS growth for the period. Altria’s third-quarter adjusted
diluted EPS, which excludes the impact of the special items shown in Table 2,
grew 12.1% to $0.65 primarily due to higher OCI in the smokeable and smokeless
products segments, a lower income tax rate, higher earnings from Altria’s
equity investment in SABMiller and fewer shares outstanding. The lower income
tax rate reflects the reduction of certain consolidated tax benefits in 2012
resulting from the debt tender offer in the third quarter of 2012.

For the first nine months of 2013, Altria’s reported diluted EPS increased
33.8% primarily due to the 2012 loss on early extinguishment of debt and
higher reported OCI in the smokeable products segment. Higher reported OCI in
the smokeable products segment was driven primarily by PM USA’s settlement
with certain states of the NPM Adjustment disputes for 2003-2012 (NPM
Adjustment Settlement) and the NPM Arbitration Panel Decision (the NPM
Adjustment Settlement and the NPM Arbitration Panel Decision are collectively
referred to as the NPM Adjustment Items). Higher reported OCI in the smokeless
products segment, lower interest and other debt expense and fewer shares
outstanding also contributed to reported diluted EPS growth for the period.
These factors were partially offset by lower earnings from Altria’s equity
investment in SABMiller, primarily due to gains from SABMiller’s strategic
alliance transactions in the first quarter of 2012. Altria’s adjusted diluted
EPS, which excludes the special items shown in Table 2, increased 9.0% for the
first nine months of 2013 primarily due to higher OCI in the smokeable and
smokeless products segments, a lower income tax rate, lower interest and other
debt expense, higher earnings from Altria’s equity investment in SABMiller and
fewer shares outstanding.

 
Table 2 - Altria’s Adjusted Results
                
                   Third Quarter                                 Nine Months Ended
                                                                 September 30,
                   2013               2012             Change    2013         2012         Change
Reported           $     0.70         $     0.32       100  %+   $     2.02   $     1.51   33.8 %
diluted EPS
NPM Adjustment     (0.05      )       —                          (0.21      ) —
Items ^1
Asset
impairment,
exit and           —                  —                          —            0.01
implementation
costs
SABMiller          0.01               0.01                       0.01         (0.08      )
special items
Loss on early
extinguishment     —                  0.28                       —            0.28
of debt
PMCC leveraged     —                  —                          —            (0.03      )
lease benefit
Tax items ^ 2      (0.01      )       (0.03      )               (0.01      ) (0.03      )
Adjusted           $     0.65         $     0.58       12.1 %    $     1.81   $     1.66   9.0  %
diluted EPS
                                                                                                 

^1 Includes the NPM Arbitration Panel Decision (third quarter and nine months)
and the NPM Adjustment Settlement (nine months only).

^2 Excludes the tax impact of the PMCC leveraged lease benefit (nine months
only).

NPM Adjustment Items

Comparisons of Altria’s third-quarter and nine-month reported diluted EPS were
impacted by the NPM Arbitration Panel Decision discussed above. As a result of
the decision, PM USA recorded a $145 million reduction to cost of sales for
the third quarter of 2013.

The comparison of Altria’s nine-month reported diluted EPS also was impacted
by the NPM Adjustment Settlement. As a result of the settlement, PM USA
recorded a $519 million reduction to cost of sales for the first nine months.
The EPS impact of the NPM Adjustment Items is shown in Table 2 and Schedules 6
and 7.

SABMiller Special Items

Special items related to Altria’s equity investment in SABMiller impacted
comparisons of Altria’s third-quarter and nine-month reported diluted EPS.
Special items for the third quarter and first nine months of 2013 included
costs related to SABMiller’s “business capability programme” and its economic
and social development program in South Africa, partially offset by gains
related to divestitures. For the first nine months of 2013, special items also
included asset impairment charges.

Special items for the third quarter of 2012 included costs related to
SABMiller’s “business capability programme” and its acquisition of Foster’s
Group Limited (Foster’s). For the first nine months of 2012, special items
included gains resulting from SABMiller’s strategic alliance transactions with
Anadolu Efes and Castel, partially offset by costs related to SABMiller’s
“business capability programme,” its acquisition of Foster’s and its economic
and social development program in South Africa. The EPS impact of these
special items is shown in Table 2 and Schedules 6 and 7.

2012 Loss on Early Extinguishment of Debt

Comparisons of Altria’s third-quarter and nine-month reported diluted EPS were
impacted by a loss on early extinguishment of debt resulting from the
third-quarter 2012 debt tender offer. Altria recorded a pre-tax charge of $874
million against 2012 third-quarter earnings, representing the loss on early
extinguishment of debt. This charge is reflected in Schedules 1 and 3, and the
EPS impacts are shown in Table 2 and Schedules 6 and 7.

2012 Restructuring Charges

The comparison of Altria’s nine-month reported diluted EPS was impacted by
restructuring charges. Altria’s operating companies recorded 2012 nine-month
net pre-tax charges totaling $40 million related to the current cost reduction
program. These charges are reflected in Schedule 4, and the EPS impacts are
shown in Table 2 and Schedule 7.

2012 PMCC Leveraged Lease Benefit

The comparison of Altria’s nine-month reported diluted EPS was impacted by a
closing agreement (Closing Agreement) that Altria entered into with the
Internal Revenue Service (IRS) in the second quarter of 2012 that conclusively
resolved the federal income tax treatment for all prior and future tax years
of certain leveraged lease transactions entered into by PMCC. As a result of
the Closing Agreement, Altria recorded a one-time net earnings benefit of $68
million during the second quarter of 2012 due primarily to lower than
estimated interest on tax underpayments. The net benefit was recorded as a
decrease of $75 million to the provision for income taxes and was partially
offset by a reduction to cumulative lease earnings of $7 million against net
revenues. The EPS impact of this one-time benefit is shown in Table 2 and
Schedule 7.

Tax Items

Altria’s reported diluted EPS comparisons for the third quarter and first nine
months of 2013 were impacted by tax items. For the third quarter and first
nine months of 2013, Altria recorded tax items primarily due to the reversal
of tax accruals no longer required. For the third quarter and first nine
months of 2012, Altria recorded tax items primarily related to the reversal of
tax reserves and associated interest following the closure of the 2004-2006
IRS tax audit of Altria and its consolidated subsidiaries. The 2013 and 2012
tax items are reflected in Schedules 1 and 3, “Provision for income taxes,”
and the EPS impacts are shown in Table 2 and Schedules 6 and 7.

Altria anticipates that its 2013 full-year effective tax rate on operations
will be approximately 35.7%. A reconciliation between the reported effective
tax rate and the effective tax rate on operations for the third quarter and
first nine months of 2013 is shown in the table below.

                                                              
Table 3 - Altria’s 2013 Tax Rates                           
                                                              
                                                             Nine Months Ended
                                         Third Quarter      
                                                             September 30
Reported effective tax rate ^1           34.1%               35.0%
Tax benefit from Mondelēz tax            0.7                 0.3
matters ^2
Other tax benefits primarily due to
the reversal of tax accruals no          1.2                 0.4
longer required
Effective tax rate on operations         36.0%               35.7%
                                                              

^1 Reported effective tax rate is calculated as “Provision for income taxes”
divided by “Earnings before income taxes” from Schedules 1 and 3.

^2 This tax benefit is fully offset by changes to a corresponding payable to
Mondelēz International, Inc. (Mondelēz), which is reflected in Schedules 1 and
3. Due to this offset, Mondelēz tax matters had no impact on Altria’s net
earnings and reported and adjusted diluted EPS for the third quarter and first
nine months of 2013.

                              SMOKEABLE PRODUCTS

The smokeable products segment grew adjusted OCI for the third quarter and
first nine months of 2013 primarily through higher pricing. PM USA grew its
total cigarette retail share versus both prior-year periods.

For the third quarter of 2013, the smokeable products segment’s net revenues
increased 3.4% primarily due to higher pricing and higher reported shipment
volume, partially offset by higher promotional investments. For the first nine
months of 2013, the smokeable products segment’s net revenues decreased 1.0%
primarily due to lower reported shipment volume, partially offset by higher
pricing. Revenues net of excise taxes for the third quarter and first nine
months of 2013 increased 4.6% and 0.5%, respectively.

The smokeable products segment’s 2013 third-quarter reported OCI increased
11.5% primarily due to higher pricing, the NPM Arbitration Panel Decision and
higher reported shipment volume. These factors were partially offset by higher
promotional investments, higher resolution expense and higher selling, general
and administrative expenses due to the timing of spending. For the first nine
months of 2013, the smokeable products segment’s reported OCI increased 16.0%
primarily due to the NPM Adjustment Items and higher pricing. These factors
were partially offset by lower reported shipment volume and higher resolution
expense. Adjusted OCI, which is calculated excluding the special items
identified in Table 4, grew 3.1% for the third quarter and 2.0% for first nine
months of 2013.

Adjusted OCI margin for the smokeable products segment decreased 0.6
percentage points to 41.8% for the third quarter of 2013 and increased 0.6
percentage points to 42.2% for the first nine months of 2013. Revenues and OCI
for the smokeable products segment are summarized in Table 4.

 
Table 4 - Smokeable Products: Revenues and OCI ($ in millions)
                                                                                                           
                                                                      Nine Months Ended
                     Third Quarter                                                                                
                                                                      September 30,
                     2013              2012              Change       2013               2012               Change
Net revenues         $     5,802       $     5,613       3.4  %       $     16,448       $     16,616       (1.0 )%
Excise taxes         (1,751      )     (1,742      )                  (5,016       )     (5,239       )
Revenues net
of excise            $     4,051       $     3,871       4.6  %       $     11,432       $     11,377       0.5  %
taxes
                                                                                                             
Reported OCI         $     1,825       $     1,637       11.5 %       $     5,471        $     4,716        16.0 %
NPM Adjustment       (145        )     —                              (664         )     —
Items ^1
Asset
impairment,
exit and             —                 2                              2                  13

implementation
costs, net
Tobacco and
health               13                3                              18                 4             
judgments
Adjusted OCI         $     1,693       $     1,642       3.1  %       $     4,827        $     4,733        2.0  %
Adjusted OCI         41.8        %     42.4        %     (0.6)        42.2         %     41.6         %     0.6 pp
margins ^2                                               pp
                                                                                                             

^1 Includes the NPM Arbitration Panel Decision (third quarter and nine months)
and the NPM Adjustment Settlement (nine months only).

^2 Adjusted OCI margins are calculated as adjusted OCI divided by revenues net
of excise taxes.

PM USA’s 2013 third-quarter reported domestic cigarettes shipment volume
increased 1.2% primarily due to one extra shipping day, changes in trade
inventories and retail share gains, partially offset by the industry’s rate of
decline. After adjusting for calendar differences and changes in trade
inventories, PM USA estimates that its third-quarter 2013 domestic cigarettes
shipment volume was down approximately 3% and that total cigarette category
volume declined approximately 3.5% in the same period. PM USA’s cigarette
volume performance for the third quarter of 2013 is summarized in Table 5.

PM USA’s 2013 nine-month reported domestic cigarettes shipment volume
decreased 3.6% primarily due to the industry’s rate of decline and changes in
trade inventories, partially offset by retail share gains. After adjusting for
changes in trade inventories, PM USA estimates that its 2013 nine-month
domestic cigarettes shipment volume was down approximately 4%, in line with
the estimated decline rate for total cigarette category volume for the same
period. PM USA’s cigarette volume performance for the first nine months of
2013 is summarized in Table 5.

Middleton’s 2013 third-quarter reported cigars shipment volume increased 6.0%.
For the first nine months of 2013, Middleton’s reported shipment volume
decreased 6.6% primarily due to changes in wholesale inventories and retail
share losses. Middleton’s volume performance for machine-made large cigars is
summarized in Table 5.

 
Table 5 - Smokeable Products: Shipment Volume (sticks in millions)
               
                                                  Nine Months Ended
                Third Quarter                    
                                                  September 30,
                2013       2012       Change      2013       2012        Change
Cigarettes:                                                             
Marlboro        29,399     28,954     1.5  %      83,953     87,248      (3.8  )%
Other           2,016      2,177      (7.4 )%     5,838      6,503       (10.2 )%
premium
Discount        2,702      2,571      5.1  %      7,646      7,290       4.9   %
Total           34,117     33,702     1.2  %      97,437     101,041     (3.6  )%
cigarettes
                                                                          
Cigars:
Black &         311        298        4.4  %      874        940         (7.0  )%
Mild
Other           9          4          100  %+     17         14          21.4  %
Total           320        302        6.0  %      891        954         (6.6  )%
cigars
                                                              
Total
smokeable       34,437     34,004     1.3  %      98,328     101,995     (3.6  )%
products
                                                                                

Note: Cigarettes volume includes units sold as well as promotional units, but
excludes units sold in Puerto Rico and U.S. Territories, to Overseas Military
and by Philip Morris Duty Free Inc., none of which, individually or in
aggregate, is material to the smokeable products segment.

Marlboro’s retail share for the third quarter and first nine months of 2013
was unchanged versus both prior-year periods. Later this month, PM USA will
expand Marlboro Edge distribution nationally. Marlboro Edge, part of the
Marlboro Black family, offers adult smokers bold, smooth flavor.

PM USA’s total retail share for the third quarter and first nine months of
2013 increased 0.2 and 0.3 share points, respectively, due to retail share
gains by L&M in Discount, partially offset by share losses on other portfolio
brands. PM USA’s cigarette retail share performance is summarized in Table 6.

In the machine-made large cigars category, Black & Mild’s retail share for the
third quarter and first nine months of 2013 decreased 1.1 and 1.6 share
points, respectively. Middleton’s retail share performance is summarized in
Table 6.

 
Table 6 - Smokeable Products: Retail Share (percent)
              
                                                  Nine Months Ended
               Third Quarter                     
                                                  September 30,
                                 Percentage                         Percentage

               2013     2012     point            2013     2012     point

                                 change                             change
Cigarettes:                                                        
Marlboro       43.7 %   43.7 %   —                43.6 %   43.6 %   —
Other          3.1      3.2      (0.1)            3.1      3.3      (0.2)
premium
Discount       3.9      3.6      0.3              3.9      3.4      0.5
Total          50.7 %   50.5 %   0.2              50.6 %   50.3 %   0.3
cigarettes
                                                                     
Cigars:
Black & Mild   29.5 %   30.6 %   (1.1)            29.2 %   30.8 %   (1.6)
Other          0.2      0.2      —                0.2      0.2      —
Total cigars   29.7 %   30.8 %   (1.1)            29.4 %   31.0 %   (1.6)
                                                                     

Note: Retail share results for cigarettes are based on data from IRI/MSAi, a
tracking service that uses a sample of stores and certain wholesale shipments
to project market share and depict share trends. Retail share results for
cigars are based on data from IRI InfoScan, a tracking service that uses a
sample of stores to project market share and depict share trends. Both
services track sales in the Food, Drug and Mass Merchandisers (including
Wal-Mart), Convenience, Military, Dollar Store and Club trade classes. For
other trade classes selling cigarettes, retail share is based on shipments
from wholesalers to retailers (STARS). These services are not designed to
capture sales through other channels, including the internet, direct mail and
some illicitly tax-advantaged outlets. Retail share results for cigars are
based on data for machine-made large cigars. Middleton defines machine-made
large cigars as cigars, made by machine, that weigh greater than three pounds
per thousand, except cigars sold at retail in packages of 20 cigars. Because
the cigars service represents retail share performance only in key trade
channels, it should not be considered a precise measurement of actual retail
share. It is IRI’s standard practice to periodically refresh its services,
which could restate retail share results that were previously released in
these services.

                              SMOKELESS PRODUCTS

The smokeless products segment grew its adjusted OCI for the third quarter and
first nine months of 2013 primarily through higher pricing and higher volume.
USSTC grew Copenhagen and Skoal’s  combined volume and retail share in both
periods.

The smokeless products segment’s 2013 third-quarter net revenues increased
11.0% primarily due to higher volume and higher pricing, partially offset by
higher promotional investments. For the first nine months, the segment’s net
revenues increased 7.2% primarily due to higher volume and higher pricing,
partially offset by higher promotional investments and unfavorable mix due to
growth in products introduced in recent years at a lower, popular price. For
the third quarter and first nine months of 2013, the smokeless products
segment’s revenues net of excise taxes increased 9.8% and 6.6%, respectively.

The smokeless products segment’s reported OCI for the third quarter increased
12.6% primarily due to higher volume, higher pricing and 2012 restructuring
charges related to the current cost reduction program. These factors were
partially offset by higher promotional investments and higher selling, general
and administrative expenses. For the first nine months, the segment’s reported
OCI increased 13.4% primarily due to higher pricing, higher volume and 2012
restructuring charges related to the current cost reduction program. These
factors were partially offset by higher promotional investments and
unfavorable mix. Adjusted OCI for the smokeless products segment, which is
calculated excluding the special items identified in Table 7, grew 9.1% for
both the third quarter and first nine months of 2013. Adjusted OCI margin for
the smokeless products segment decreased 0.5 percentage points to 61.8% for
the third quarter of 2013 and increased 1.4 percentage points to 62.2% for the
first nine months of 2013. Revenues and OCI for the smokeless products segment
are summarized in Table 7.

 
Table 7 - Smokeless Products: Revenues and OCI ($ in millions)
                
                                                                 Nine Months Ended
                   Third Quarter                                                                           
                                                                 September 30,
                   2013            2012            Change        2013              2012              Change
Net revenues       $     485       $     437       11.0 %        $     1,333       $     1,243       7.2  %
Excise taxes       (37       )     (29       )                   (96         )     (83         )
Revenues net
of excise          $     448       $     408       9.8  %        $     1,237       $     1,160       6.6  %
taxes
                                                                                                      
Reported OCI       $     277       $     246       12.6 %        $     769         $     678         13.4 %
Asset
impairment,
exit and           —               8                             —                 27           
implementation
costs, net
Adjusted OCI       $     277       $     254       9.1  %        $     769         $     705         9.1  %
Adjusted OCI       61.8      %     62.3      %     (0.5 )        62.2        %     60.8        %     1.4 pp
margins ^1                                              pp
                                                                                                      

^1 Adjusted OCI margins are calculated as adjusted OCI divided by revenues net
of excise taxes.

For the third quarter of 2013, USSTC and PM USA’s combined reported domestic
smokeless products shipment volume increased 9.5% primarily due to one extra
shipping day and volume growth for Copenhagen and Skoal. For the first nine
months of 2013, USSTC and PM USA’s combined reported domestic smokeless
products shipment volume increased 6.0% due to volume growth for Copenhagen
and Skoal,  partially offset by declines for Other portfolio brands.

Copenhagen and Skoal’s combined reported shipment volume increased 10.5% for
the third quarter and 7.2% for the first nine months of 2013. Copenhagen’s
volume grew 15.4% for the third quarter and 11.1% for the first nine months of
2013, as the brand continued to benefit from products introduced in recent
years. Skoal’s volume increased 3.7% for the third quarter and 1.8% for the
first nine months of 2013.

After adjusting for an extra shipping day, trade inventory changes and other
factors, USSTC and PM USA estimate that their combined domestic smokeless
products shipment volume grew approximately 4% for the third quarter of 2013.
After adjusting for trade inventory changes and other factors, USSTC and PM
USA estimate that their combined domestic smokeless products shipment volume
grew approximately 5% for the first nine months of 2013, in line with
estimated volume growth for the smokeless products category over the 12 months
ending September 30, 2013.

USSTC and PM USA’s combined volume performance for smokeless products is
summarized in Table 8.

 
Table 8 - Smokeless Products: Shipment Volume (cans and packs in millions)
                                                                         
                                                  Nine Months Ended
             Third Quarter                 
                                                  September 30,
             2013        2012        Change       2013        2012        Change
                                                                           
Copenhagen   116.4       100.9       15.4 %       316.6       284.9       11.1 %
Skoal        75.6        72.9        3.7  %       213.8       210.0       1.8  %
Copenhagen   192.0       173.8       10.5 %       530.4       494.9       7.2  %
and Skoal
Other        20.8        20.5        1.5  %       58.6        61.0        (3.9 )%
Total
smokeless    212.8       194.3       9.5  %       589.0       555.9       6.0  %
products
                                                                                

Note: Other includes certain USSTC and PM USA smokeless products. Volume
includes cans and packs sold, as well as promotional units, but excludes
international volume, which is not material to the smokeless products segment.
New types of smokeless products, as well as new packaging configurations of
existing smokeless products, may or may not be equivalent to existing moist
smokeless tobacco (MST) products on a can for can basis. To calculate volumes
of cans and packs shipped, USSTC and PM USA have assumed that one pack of
snus, irrespective of the number of pouches in the pack, is equivalent to one
can of MST.

For the third quarter and first nine months of 2013, Copenhagen and Skoal’s
combined retail share increased 0.1 and 0.4 share points, respectively.
Copenhagen’s retail share grew 1.3 share points for the third quarter of 2013
and 1.4 share points for the first nine months of 2013, as the brand continued
to benefit from products introduced over the past several years. Skoal’s 2013
third-quarter and nine-months retail share declined 1.2 and 1.0 share points,
respectively, primarily due to competitive activity and Copenhagen’s strong
performance.

USSTC and PM USA’s combined retail share for the third quarter and first nine
months of 2013 decreased 0.3 and 0.2 share points, respectively, as retail
share losses for Skoal and Other portfolio brands were mostly offset by retail
share gains for Copenhagen. USSTC and PM USA’s combined smokeless products
retail share performance is summarized in Table 9.

 
Table 9 - Smokeless Products: Retail Share (percent)
 
                                                    Nine Months Ended
               Third Quarter                       
                                                    September 30,
                                   Percentage                           Percentage

               2013       2012     point            2013       2012     point

                                   change                               change
                                                                       
Copenhagen     29.6 %     28.3 %   1.3              29.1 %     27.7 %   1.4
Skoal          21.2       22.4     (1.2)            21.6       22.6     (1.0)
Copenhagen     50.8       50.7     0.1              50.7       50.3     0.4
and Skoal
Other          4.3        4.7      (0.4)            4.3        4.9      (0.6)
Total
smokeless      55.1 %     55.4 %   (0.3)            55.0 %     55.2 %   (0.2)
products
                                                                         

Note: Retail share results for smokeless products are based on data from IRI
InfoScan, a tracking service that uses a sample of stores to project market
share and depict share trends. The service tracks sales in the Food, Drug and
Mass Merchandisers (including Wal-Mart), Convenience, Military, Dollar Store
and Club trade classes on the number of cans and packs sold. Smokeless
products is defined by IRI as moist smokeless and spit-free tobacco products.
Other includes certain USSTC and PM USA smokeless products. New types of
smokeless products, as well as new packaging configuration of existing
smokeless products, may or may not be equivalent to existing MST products on a
can for can basis. USSTC and PM USA have assumed that one pack of snus,
irrespective of the number of pouches in the pack, is equivalent to one can of
MST. All other products are considered to be equivalent on a can for can
basis. Because this service represents retail share performance only in key
trade channels, it should not be considered a precise measurement of actual
retail share. It is IRI’s standard practice to periodically refresh its
InfoScan services, which could restate retail share results that were
previously released in this service.

                                     WINE

Ste. Michelle delivered solid OCI growth for the third-quarter of 2013 and
excellent OCI growth for the first nine months of 2013.

Ste. Michelle grew net revenues for the third quarter of 2013 by 5.7% due to
improved premium mix and higher pricing, partially offset by lower shipment
volume. For the first nine months of 2013, Ste. Michelle grew net revenues by
7.9% due to higher shipment volume, improved premium mix and higher pricing.
Revenues net of excise taxes grew 5.9% for the third quarter and 7.9% for the
first nine months of 2013.

Ste. Michelle increased OCI for the third quarter of 2013 by 7.7% due to
improved premium mix and higher pricing, partially offset by higher selling,
general and administrative expenses and lower shipment volume. For the first
nine months of 2013, Ste. Michelle grew OCI by 15.9% due to higher shipment
volume, improved premium mix and higher pricing, partially offset by higher
selling, general and administrative expenses. Ste. Michelle expanded OCI
margins by 0.3 percentage points for the third quarter and 1.2 percentage
points for the first nine months of 2013. Revenues and OCI for the wine
segment are summarized in Table 10.

 
Table 10 - Wine: Revenues and OCI ($ in millions)
                                                                                     
                                                              Nine Months Ended
                 Third Quarter                                                              
                                                              September 30,
                 2013            2012            Change       2013        2012        Change
Net              $     148       $     140       5.7  %       $ 411       $ 381       7.9  %
revenues
Excise           (5        )     (5        )                  (15   )     (14   )
taxes
Revenues
net of           $     143       $     135       5.9  %       $ 396       $ 367       7.9  %
excise
taxes
                                                                                       
Reported
and              $     28        $     26        7.7  %       $ 73        $ 63        15.9 %
Adjusted
OCI
Reported
and
Adjusted         19.6      %     19.3      %     0.3 pp       18.4  %     17.2  %     1.2 pp
OCI
margins
^1
                                                                                       

^1 Adjusted OCI margins are calculated as adjusted OCI divided by revenues net
of excise taxes.

Ste. Michelle’s 2013 third-quarter reported wine shipment volume decreased
2.0% primarily due to changes in trade inventories. For the first nine months
of 2013, Ste. Michelle’s reported wine shipment volume increased 4.7%
primarily due to increased distribution of 14 Hands. Ste. Michelle’s reported
shipment volume performance for wine is summarized in Table 11.

 
Table 11 - Wine: Shipment Volume (cases in thousands)
                                                                            
                                                     Nine Months Ended
               Third Quarter                 
                                                     September 30,
               2013        2012        Change        2013        2012        Change
                                                                              
Chateau
Ste.           680         704         (3.4 )%       1,864       1,860       0.2  %
Michelle
Columbia       404         440         (8.2 )%       1,202       1,193       0.8  %
Crest
14 Hands       296         270         9.6  %        949         710         33.7 %
Other          492         496         (0.8 )%       1,393       1,403       (0.7 )%
Total          1,872       1,910       (2.0 )%       5,408       5,166       4.7  %
Wine
                                                                                   

Altria’s Profile

Altria directly or indirectly owns 100% of each of PM USA, USSTC, Middleton,
Nu Mark LLC (Nu Mark), Ste. Michelle and PMCC. Altria holds a continuing
economic and voting interest in SABMiller.

The brand portfolios of Altria’s tobacco operating companies include
Marlboro^®, Black & Mild^®, Copenhagen^®, Skoal^®  and MarkTen^™. Ste.
Michelle produces and markets premium wines sold under various labels,
including Chateau Ste. Michelle^®, Columbia Crest^®, 14 Hands^®  and Stag’s
Leap Wine Cellars^®, and it imports and markets Antinori^®, Champagne Nicolas
Feuillatte^™ and Villa Maria Estate^™ products in the United States.
Trademarks and service marks related to Altria referenced in this release are
the property of Altria or its subsidiaries or are used with permission. More
information about Altria is available at altria.com.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and other
forward-looking statements that involve a number of risks and uncertainties
and are made pursuant to the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995.

Important factors that may cause actual results and outcomes to differ
materially from those contained in the projections and forward-looking
statements included in this press release are described in Altria’s publicly
filed reports, including its Annual Report on Form 10-K for the year ended
December 31, 2012 and its Quarterly Report on Form 10-Q for the period ended
June 30, 2013.

These factors include the following: Altria’s tobacco businesses (including PM
USA, USSTC, Middleton and Nu Mark) being subject to significant competition;
changes in adult tobacco consumer preferences and demand for their products;
fluctuations in raw material availability, quality and price; reliance on key
facilities and suppliers; reliance on critical information systems, many of
which are managed by third-party service providers; fluctuations in levels of
customer inventories; the effects of global, national and local economic and
market conditions; changes to income tax laws; federal, state and local
legislative activity, including actual and potential federal and state excise
tax increases; increasing marketing and regulatory restrictions; the effects
of price increases related to excise tax increases and concluded tobacco
litigation settlements on trade inventories, consumption rates and consumer
preferences within price segments; health concerns relating to the use of
tobacco products and exposure to environmental tobacco smoke; privately
imposed smoking restrictions; and, from time to time, governmental
investigations.

Furthermore, the results of Altria’s tobacco businesses are dependent upon
their continued ability to promote brand equity successfully; to anticipate
and respond to evolving adult consumer preferences; to develop, manufacture,
market and distribute products that appeal to adult tobacco consumers
(including, where appropriate, through arrangements with third parties); to
improve productivity; and to protect or enhance margins through cost savings
and price increases.

Altria and its tobacco businesses are also subject to federal, state and local
government regulation, including broad-based regulation of PM USA and USSTC by
the U.S. Food and Drug Administration (FDA). Altria and its subsidiaries
continue to be subject to litigation, including risks associated with adverse
jury and judicial determinations, courts reaching conclusions at variance with
the companies’ understanding of applicable law, bonding requirements in the
limited number of jurisdictions that do not limit the dollar amount of appeal
bonds and certain challenges to bond cap statutes.

Altria cautions that the foregoing list of important factors is not complete
and does not undertake to update any forward-looking statements that it may
make except as required by applicable law. All subsequent written and oral
forward-looking statements attributable to Altria or any person acting on its
behalf are expressly qualified in their entirety by the cautionary statements
referenced above.

                                                  Schedule 1
ALTRIA GROUP, INC.
and Subsidiaries
Consolidated Statements of Earnings
For the Quarters Ended September 30,
(dollars in millions, except per share data)
(Unaudited)
                                                                     
                                                                       
                              2013                2012                % Change
                                                                       
Net revenues                  $     6,553         $     6,242         5.0   %
Cost of sales ^1              1,939               1,982
Excise taxes on products ^1   1,793               1,776        
Gross profit                  2,821               2,484               13.6  %
Marketing, administration     599                 487
and research costs
Asset impairment and exit     —                   9            
costs
Operating companies income    2,222               1,988               11.8  %
Amortization of intangibles   5                   5
General corporate expenses    60                  61
Changes to Mondelēz and PMI
tax-related                   25                  (48         )
receivables/payables
Corporate asset impairment    —                   1            
and exit costs
Operating income              2,132               1,969               8.3   %
Interest and other debt       269                 282
expense, net
Loss on early                 —                   874
extinguishment of debt
Earnings from equity          (255        )       (230        )
investment in SABMiller
Earnings before income        2,118               1,043               100%+
taxes
Provision for income taxes    722                 386          
Net earnings                  1,396               657                 100%+
Net earnings attributable     —                   —            
to noncontrolling interests
Net earnings attributable     $     1,396         $     657           100%+
to Altria Group, Inc.
                                                                       
Per share data:
Basic and diluted earnings
per share attributable to     $     0.70          $     0.32          100%+

Altria Group, Inc.
                                                                       
Weighted-average diluted      1,998               2,024               (1.3  )%
shares outstanding
                                                                       

^1 Cost of sales includes charges for resolution expenses related to state
settlement and other tobacco agreements, and FDA user fees. Supplemental
information concerning those items and excise taxes on products sold is shown
in Schedule 5.

Schedule 2
ALTRIA GROUP, INC.
and Subsidiaries
Selected Financial Data by Segment
For the Quarters Ended September 30,
(dollars in millions)
(Unaudited)
                                                                                      
                  Net Revenues ^1
                  Smokeable         Smokeless
                                                    Wine            All Other          Total
                  Products          Products
2013              $     5,802       $     485       $     148       $     118          $     6,553
2012              5,613             437             140             52                 6,242
% Change          3.4         %     11.0      %     5.7       %     100         %+     5.0         %
                                                                                        
Reconciliation:
For the quarter
ended September   $     5,613       $     437       $     140       $     52           $     6,242
30, 2012
Operations        189               48              8               66                 311          
For the quarter
ended September   $     5,802       $     485       $     148       $     118          $     6,553  
30, 2013
                                                                                        
                  Operating Companies Income ^1
                  Smokeable         Smokeless
                                                    Wine            All Other          Total
                  Products          Products
2013              $     1,825       $     277       $     28        $     92           $     2,222
2012              1,637             246             26              79                 1,988
% Change          11.5        %     12.6      %     7.7       %     16.5      %        11.8        %
                                                                                        
Reconciliation:
For the quarter
ended September   $     1,637       $     246       $     26        $     79           $     1,988
30, 2012
Asset
impairment and    1                 8               —               —                  9
exit costs -
2012
Implementation    1                 —               —               —                  1
costs - 2012
Tobacco and
health            3                 —               —               —                  3            
judgments -
2012
                  5                 8               —               —                  13           
                                                                                        
NPM Adjustment    145               —               —               —                  145
Items - 2013
Tobacco and
health            (13         )     —               —               —                  (13         )
judgments -
2013
                  132               —               —               —                  132          
Operations        51                23              2               13                 89           
For the quarter
ended September   $     1,825       $     277       $     28        $     92           $     2,222  
30, 2013
                                                                                        
 

^1 Prior-period segment data have been recast to conform with the
current-period segment presentation.

Schedule 3
ALTRIA GROUP, INC.
and Subsidiaries
Consolidated Statements of Earnings
For the Nine Months Ended September 30,
(dollars in millions, except per share data)
(Unaudited)
                                                                     
                            2013                 2012                 % Change
                                                                       
Net revenues                $     18,386         $     18,376         0.1   %
Cost of sales ^1            5,210                5,860
Excise taxes on products    5,127                5,336         
^1
Gross profit                8,049                7,180                12.1  %
Marketing, administration   1,550                1,511
and research costs
Asset impairment and exit   1                    46            
costs
Operating companies         6,498                5,623                15.6  %
income
Amortization of             15                   15
intangibles
General corporate           173                  167
expenses
Changes to Mondelēz and
PMI tax-related             25                   (48          )
receivables/payables
Corporate asset             —                    1             
impairment and exit costs
Operating income            6,285                5,488                14.5  %
Interest and other debt     794                  868
expense, net
Loss on early               —                    874
extinguishment of debt
Earnings from equity        (738         )       (973         )
investment in SABMiller
Earnings before income      6,229                4,719                32.0  %
taxes
Provision for income        2,182                1,641         
taxes
Net earnings                4,047                3,078                31.5  %
Net earnings attributable
to noncontrolling           —                    (1           )
interests
Net earnings attributable   $     4,047          $     3,077          31.5  %
to Altria Group, Inc.
                                                                       
Per share data:
Basic and diluted
earnings per share
attributable to             $     2.02           $     1.51           33.8  %

Altria Group, Inc.
                                                                       
Weighted-average diluted    2,001                2,028                (1.3  )%
shares outstanding
                                                                       

^1 Cost of sales includes charges for resolution expenses related to state
settlement and other tobacco agreements, and FDA user fees. Supplemental
information concerning those items and excise taxes on products sold is shown
in Schedule 5.

Schedule 4
ALTRIA GROUP, INC.
and Subsidiaries
Selected Financial Data by Segment
For the Nine Months Ended September 30,
(dollars in millions)
(Unaudited)
                                                                                         
                    Net Revenues ^1
                    Smokeable           Smokeless
                                                          Wine            All Other       Total
                    Products            Products
2013                $     16,448        $     1,333       $     411       $     194       $     18,386
2012                16,616              1,243             381             136             18,376
% Change            (1.0         )%     7.2         %     7.9       %     42.6      %     0.1          %
                                                                                           
Reconciliation:
For the nine
months ended        $     16,616        $     1,243       $     381       $     136       $     18,376
September 30,
2012
PMCC leveraged
lease charge -      —                   —                 —               7               7
2012
Operations          (168         )      90                30              51              3             
For the nine
months ended        $     16,448        $     1,333       $     411       $     194       $     18,386  
September 30,
2013
                                                                                           
                    Operating Companies Income ^1
                    Smokeable           Smokeless
                                                          Wine            All Other       Total
                    Products            Products
2013                $     5,471         $     769         $     73        $     185       $     6,498
2012                4,716               678               63              166             5,623
% Change            16.0         %      13.4        %     15.9      %     11.4      %     15.6         %
                                                                                           
Reconciliation:
For the nine
months ended        $     4,716         $     678         $     63        $     166       $     5,623
September 30,
2012
Asset
impairment and      24                  22                —               —               46
exit costs -
2012
Implementation
(gain) costs -      (11          )      5                 —               —               (6           )
2012
PMCC leveraged
lease charge -      —                   —                 —               7               7
2012
Tobacco and
health              4                   —                 —               —               4             
judgments -
2012
                    17                  27                —               7               51            
                                                                                           
NPM Adjustment      664                 —                 —               —               664
Items - 2013
Asset
impairment and      (1           )      —                 —               —               (1           )
exit costs -
2013
Implementation      (1           )      —                 —               —               (1           )
costs - 2013
Tobacco and
health              (18          )      —                 —               —               (18          )
judgments -
2013
                    644                 —                 —               —               644           
Operations          94                  64                10              12              180           
For the nine
months ended        $     5,471         $     769         $     73        $     185       $     6,498   
September 30,
2013
                                                                                           
 

^1 Prior-period segment data have been recast to conform with the
current-period segment presentation.

Schedule 5
ALTRIA GROUP, INC.
and Subsidiaries
Supplemental Financial Data by Segment
(dollars in millions)
(Unaudited)
                                                                        
                                                                          
             For the                                 For the

             Quarters Ended                          Nine Months Ended
             September 30,
                                                     September 30,
             2013                2012                2013                2012
The
segment
detail of
excise
taxes on
products
sold is as
follows:
                                                                          
Smokeable    $     1,751         $     1,742         $     5,016         $     5,239
products
Smokeless    37                  29                  96                  83
products
Wine         5                   5                   15                  14
             $     1,793         $     1,776         $     5,127         $     5,336
                                                                          
                                                                          
The
segment
detail of
charges
for
resolution
expenses
related to
state

settlement
and other
tobacco
agreements
included
in cost of
sales

is as
follows:
                                                                          
Smokeable
products     $     1,133         $     1,223         $     2,969         $     3,657
^1
Smokeless    3                   3                   9                   8
products
             $     1,136         $     1,226         $     2,978         $     3,665
                                                                          
                                                                          
The
segment
detail of
FDA user
fees
included
in cost of
sales is

as
follows:
                                                                          
Smokeable    $     59            $     56            $     176           $     165
products
Smokeless    1                   1                   2                   2
products
             $     60            $     57            $     178           $     167
                                                                          
 

^1 Amounts include a pre-tax credit of $145 million and $664 million for the
quarter and nine months ended September 30, 2013, respectively, related to the
NPM Adjustment Items.

Schedule 6
ALTRIA GROUP, INC.
and Subsidiaries
Net Earnings and Diluted Earnings Per Share - Attributable to Altria Group,
Inc.
For the Quarters Ended September 30,
(dollars in millions, except per share data)
(Unaudited)
                                                              
                                                                
                                        Net Earnings           Diluted EPS
2013 Net Earnings                       $     1,396            $     0.70
2012 Net Earnings                       $     657              $     0.32
% Change                                100           %+       100          %+
                                                                
Reconciliation:
2012 Net Earnings                       $     657              $     0.32
                                                                
2012 Asset impairment, exit and         7                      —
implementation costs
2012 Tobacco and health judgments       2                      —
2012 SABMiller special items            12                     0.01
2012 Loss on early extinguishment       559                    0.28
of debt
2012 Tax items                          (62         )          (0.03      )  
Subtotal 2012 special items             518                    0.26        
                                                                
2013 NPM Adjustment Items               93                     0.05
2013 Tobacco and health judgments       (10         )          —
2013 SABMiller special items            (9          )          (0.01      )
2013 Tax items                          25                     0.01        
Subtotal 2013 special items             99                     0.05        
                                                                
Fewer shares outstanding                —                      0.01
Change in tax rate                      44                     0.02
Operations                              78                     0.04        
2013 Net Earnings                       $     1,396            $     0.70  
                                                                
2013 Net Earnings Adjusted For          $     1,297            $     0.65
Special Items
2012 Net Earnings Adjusted For          $     1,175            $     0.58
Special Items
% Change                                10.4        %          12.1       %

Schedule 7
ALTRIA GROUP, INC.
and Subsidiaries
Net Earnings and Diluted Earnings Per Share - Attributable to Altria Group,
Inc.
For the Nine Months Ended September 30,
(dollars in millions, except per share data)
(Unaudited)
                                                                 
                                                                   
                                              Net Earnings        Diluted EPS
2013 Net Earnings                             $     4,047         $     2.02
2012 Net Earnings                             $     3,077         $     1.51
% Change                                      31.5        %       33.8       %
                                                                   
Reconciliation:
2012 Net Earnings                             $     3,077         $     1.51
                                                                   
2012 Asset impairment, exit and               25                  0.01
implementation costs
2012 Tobacco and health judgments             3                   —
2012 SABMiller special items                  (172        )       (0.08      )
2012 Loss on early extinguishment of debt     559                 0.28
2012 PMCC leveraged lease benefit             (68         )       (0.03      )
2012 Tax items ^1                             (51         )       (0.03      )
Subtotal 2012 special items                   296                 0.15        
                                                                   
2013 NPM Adjustment Items                     427                 0.21
2013 Asset impairment, exit and               (1          )       —
implementation costs
2013 Tobacco and health judgments             (14         )       —
2013 SABMiller special items                  (16         )       (0.01      )
2013 Tax items                                25                  0.01        
Subtotal 2013 special items                   421                 0.21        
                                                                   
Fewer shares outstanding                      —                   0.02
Change in tax rate                            58                  0.03
Operations                                    195                 0.10        
2013 Net Earnings                             $     4,047         $     2.02  
                                                                   
2013 Net Earnings Adjusted For Special        $     3,626         $     1.81
Items
2012 Net Earnings Adjusted For Special        $     3,373         $     1.66
Items
% Change                                      7.5         %       9.0        %
                                                                   

^1 Excludes the tax impact included in the PMCC leveraged lease benefit.

Schedule 8
ALTRIA GROUP, INC.
and Subsidiaries
Condensed Consolidated Balance Sheets
(dollars in millions)
(Unaudited)
                                                            
                                    September 30, 2013       December 31, 2012
Assets
Cash and cash equivalents           $        4,211           $         2,900
Inventories                         1,718                    1,746
Deferred income taxes               1,218                    1,216
Other current assets                402                      453
Property, plant and equipment,      2,041                    2,102
net
Goodwill and other intangible       17,237                   17,252
assets, net
Investment in SABMiller             6,520                    6,637
Finance assets, net                 2,153                    2,581
Other long-term assets              450                      442
Total assets                        $        35,950          $         35,329
                                                              
Liabilities and Stockholders’
Equity
Current portion of long-term        $        1,984           $         1,459
debt
Accrued settlement charges          3,047                    3,616
Other current liabilities           3,306                    3,184
Long-term debt                      12,892                   12,419
Deferred income taxes               6,466                    6,652
Accrued postretirement health       2,492                    2,504
care costs
Accrued pension costs               1,243                    1,735
Other long-term liabilities         505                      556
Total liabilities                   31,935                   32,125
Redeemable noncontrolling           34                       34
interest
Total stockholders’ equity          3,981                    3,170
Total liabilities and               $        35,950          $         35,329
stockholders’ equity
                                                              
Total debt                          $        14,876          $         13,878

Contact:

Altria Client Services
Investor Relations
804-484-8222
or
Altria Client Services
Media Relations
804-484-8897
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