altria group, inc. 120 park avenue news release (917) 663-2759€¦ · 30.09.2006  · adversely...

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Altria Group, Inc. 120 Park Avenue New York, NY 10017 NEWS RELEASE Contact: Nicholas M. Rolli (917) 663-3460 Timothy R. Kellogg (917) 663-2759 ALTRIA GROUP, INC. REPORTS 2006 THIRD-QUARTER RESULTS Reported Diluted Earnings Per Share Down 1.4% to $1.36 vs. $1.38 in Year-Ago Quarter Excluding Items Detailed in Table Below, Diluted Earnings Per Share Up 1.5% to $1.39 vs. $1.37 in Year-Ago Quarter Company Projects 2006 Full-Year Diluted Earnings Per Share From Continuing Operations in a Range of $5.48 to $5.53 NEW YORK, October 25, 2006 – Altria Group, Inc. (NYSE: MO) today announced third-quarter 2006 reported diluted earnings per share of $1.36, including items detailed on the attached Schedule 7, versus $1.38 in the year-ago period. Comparison of results for the third quarter of 2006 versus the same period a year ago was impacted by a number of items in both years. Absent those items, diluted earnings per share were up 1.5% to $1.39, as detailed in the table below. “Our third-quarter results were in line with our internal expectations and we remain on track to meet our earnings target for the full year,” said Louis C. Camilleri, chairman and chief executive officer of Altria Group, Inc. “Our income performance during the third quarter was adversely affected by Philip Morris International’s continued challenges in Spain and the anticipated inventory depletion in Japan following the July 2006 price increase.” “In our domestic tobacco business, Marlboro continued to gain share of both the total cigarette market and the growing premium segment,” Mr. Camilleri said.

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  • Altria Group, Inc. 120 Park Avenue New York, NY 10017

    NEWS RELEASE

    Contact: Nicholas M. Rolli (917) 663-3460 Timothy R. Kellogg (917) 663-2759

    ALTRIA GROUP, INC. REPORTS

    2006 THIRD-QUARTER RESULTS

    Reported Diluted Earnings Per Share

    Down 1.4% to $1.36 vs. $1.38 in Year-Ago Quarter

    Excluding Items Detailed in Table Below, Diluted Earnings Per Share

    Up 1.5% to $1.39 vs. $1.37 in Year-Ago Quarter

    Company Projects 2006 Full-Year Diluted Earnings Per Share

    From Continuing Operations in a Range of $5.48 to $5.53

    NEW YORK, October 25, 2006 – Altria Group, Inc. (NYSE: MO) today announced

    third-quarter 2006 reported diluted earnings per share of $1.36, including items detailed on the

    attached Schedule 7, versus $1.38 in the year-ago period. Comparison of results for the third

    quarter of 2006 versus the same period a year ago was impacted by a number of items in both

    years. Absent those items, diluted earnings per share were up 1.5% to $1.39, as detailed in the

    table below.

    “Our third-quarter results were in line with our internal expectations and we remain on

    track to meet our earnings target for the full year,” said Louis C. Camilleri, chairman and chief

    executive officer of Altria Group, Inc. “Our income performance during the third quarter was

    adversely affected by Philip Morris International’s continued challenges in Spain and the

    anticipated inventory depletion in Japan following the July 2006 price increase.”

    “In our domestic tobacco business, Marlboro continued to gain share of both the total

    cigarette market and the growing premium segment,” Mr. Camilleri said.

  • 2

    “Kraft posted solid earnings gains. However, achieving its goals for stronger top-line

    growth and sustainable earnings momentum will require continued investment in innovation and

    brand-building initiatives,” Mr. Camilleri said.

    The 1.5% increase in diluted earnings per share to $1.39, after excluding the items shown

    in the table below, was due primarily to favorable operating results at Philip Morris USA (PM

    USA) and Kraft, as well as favorable net interest expense and better results from Philip Morris

    Capital Corporation (PMCC). These were partially offset by lower operating results at Philip

    Morris International (PMI) and a higher tax rate.

    Q3 2006 Q3 2005 Change Reported diluted EPS from continuing operations $1.36 $1.38 (1.4)% (Gain) on redemption of United Biscuits investment, net of minority interest impact (0.06) -- Loss on sales of businesses, net of minority interest impact 0.02 -- Asset impairment and exit costs, net of minority interest impact 0.06 0.02 Net charges for loss on U.S. tobacco pool and tobacco quota buy-out -- 0.01 Provision for airline industry exposure -- 0.06 Tax items, net of minority interest impact 0.01 (0.10) Diluted EPS, excluding above items $1.39 $1.37 1.5%

    As shown on Schedule 7, the 1.4% decline in reported diluted earnings per share was due

    primarily to lower results from international tobacco operations and higher Kraft restructuring

    charges for the third quarter of 2006 versus 2005, which were partially offset by Kraft’s gain on

    the redemption of its interest in United Biscuits (UB) described below. The year-ago period

    included $204 million in tax benefits, primarily related to the American Jobs Creation Act

    (AJCA), offset by an increase of $200 million ($129 million after tax) in the provision for airline

    industry exposure at PMCC and $23 million in net charges ($15 million after tax) at PM USA

    related to tobacco quota buy-out legislation.

  • 3

    Acquisitions and Divestitures

    In July 2006, Kraft announced an agreement with United Biscuits to acquire the Spanish

    and Portuguese operations of UB, and rights to all Nabisco trademarks in the European Union,

    Eastern Europe, the Middle East and Africa for a total cost of $1.07 billion. The acquisition was

    financed by Kraft’s assumption of $541 million of debt issued by the acquired business

    immediately prior to the acquisition, as well as $530 million of value for the redemption of

    Kraft’s outstanding investment in UB. The redemption of Kraft’s interest in UB resulted in a

    $251 million pre-tax gain on closing, benefiting Altria Group, Inc. by $0.06 per diluted share.

    Kraft also completed the sale of its Milk Bone pet snacks brand and assets in July 2006

    for $580 million and recorded additional taxes of $59 million related to the sale. This sale and

    the additional taxes were recorded in the third quarter of 2006.

    In addition, on July 27, Kraft announced that it had agreed to sell its Minute Rice brand

    and related assets for approximately $280 million. The transaction, which is expected to close in

    the fourth quarter, will result in a gain to Altria Group, Inc. of approximately $140 million or

    $0.07 per diluted share, after taxes and minority interest.

    2006 Full-Year Forecast

    Altria projects 2006 full-year diluted earnings per share from continuing operations in a

    range of $5.48 to $5.53, versus a previously disclosed range of $5.40 to $5.50. The company’s

    revised forecast includes Kraft’s gain on the Minute Rice sale (positively impacting Altria by

    approximately $0.07 per share). It also reflects revisions for Kraft’s gain on the redemption of

    its interest in UB (positively impacting Altria by approximately $0.06 per share versus $0.09 per

    share in previous guidance). It does not include the impact of any potential future acquisitions or

    divestitures. The factors described in the Forward-Looking and Cautionary Statements section

    of this release represent continuing risks to this projection.

    Debt Rating Upgrade

    On October 24, 2006, Moody’s Investors Service upgraded the long-term senior

    unsecured debt rating of Altria Group, Inc. and subsidiaries to Baa1 from Baa2 and affirmed the

    company’s short-term commercial paper rating of Prime-2.

    Conference Call

    A conference call with members of the investment community and news media will be

    Webcast at 2:00 p.m. Eastern Time on October 25, 2006. Access is available at www.altria.com.

    http://www.altria.com/

  • 4

    ALTRIA GROUP, INC.

    As described in “Note 15. Segment Reporting” of Altria Group, Inc.’s 2005 Annual Report,

    management reviews operating companies income, which is defined as operating income before

    corporate expenses and amortization of intangibles, to evaluate segment performance and

    allocate resources. Management believes it is appropriate to disclose this measure to help

    investors analyze business performance and trends. For a reconciliation of operating companies

    income to operating income, see the Condensed Statements of Earnings contained in this release.

    All references in this news release are to continuing operations, unless otherwise noted.

    References to international tobacco market share are PMI estimates based on a number of

    industry sources.

    2006 Third-Quarter Results

    Net revenues for the third quarter of 2006 increased 3.7% versus 2005 to $25.9 billion,

    including favorable currency of $281 million.

    Operating income increased 9.2% to $4.7 billion, reflecting the items described in the

    attached reconciliation on Schedule 3, including Kraft’s $251 million gain on the redemption of

    its interest in UB, favorable currency of $25 million and higher results from operations of $73

    million, partially offset by charges for asset impairment, exit and implementation costs, which

    were $139 million higher in the third quarter of 2006 versus the year-earlier period, primarily at

    Kraft. The operating income comparison also benefited from charges recorded in the year-ago

    period for airline industry exposure at PMCC and net charges at PM USA related to tobacco

    quota buy-out legislation.

    Net earnings decreased 0.3% to $2.9 billion, reflecting the factors mentioned above and

    favorable tax items in the third quarter of 2005 of $204 million, or $0.10 per share, due primarily

    to the repatriation of earnings under provisions of the AJCA. The company’s effective tax rate

    was 35.4% in the third quarter of 2006, compared to 27.4% for the same period in 2005.

    Diluted earnings per share, as detailed on Schedule 1, decreased 1.4% to $1.36, driven by

    the factors mentioned above.

    During the third quarter of 2006, Altria Group, Inc. increased its regular quarterly

    dividend by 7.5% to $0.86 per common share, which represents an annualized rate of $3.44 per

    common share.

  • 5

    DOMESTIC TOBACCO

    2006 Third-Quarter Results

    For the third quarter of 2006, Philip Morris USA (PM USA), Altria Group, Inc.’s

    domestic tobacco business, delivered strong share performance, driven by Marlboro.

    Operating companies income increased 5.7% to $1.3 billion, primarily driven by lower

    wholesale promotional allowance rates and a favorable comparison with items in the third

    quarter of 2005, partially offset by lower volume and spending for various excise tax ballot

    initiatives. Results for the third quarter of 2005 included the previously mentioned net charges at

    PM USA related to tobacco quota buy-out legislation and a pre-tax provision of $56 million for

    the Boeken individual smoking case.

    Shipment volume of 47.6 billion units was down 0.6% from the previous year, reflecting

    changes in wholesale and retail trade inventory levels, the timing of 4th of July trade purchases

    and one less shipping day versus the year-ago period. Adjusting for those factors, PM USA

    estimates that shipment volume declined approximately 2% in the third quarter of 2006 versus

    the year-ago period, and was down approximately 1.5% for the first nine months of 2006 versus

    the same period in 2005. Premium mix for PM USA increased by 0.3 percentage points to

    92.0% in the third quarter of 2006.

    As shown in the following table, PM USA’s total retail share increased to 50.4% in the

    third quarter of 2006, driven by Marlboro.

    Philip Morris USA Quarterly Retail Share*

    Q3 2006 Q3 2005 ChangeMarlboro 40.6% 40.1% 0.5 ppParliament 1.8% 1.8% 0.0 ppVirginia Slims 2.3% 2.3% 0.0 ppBasic 4.2% 4.2% 0.0 ppFocus Brands 48.9% 48.4% 0.5 ppOther PM USA 1.5% 1.7% -0.2 ppTotal PM USA 50.4% 50.1% 0.3 pp * IRI/Capstone Total Retail Panel was developed to measure market share in retail stores selling cigarettes. It is not designed to capture Internet or direct mail sales.

    PM USA’s share of the premium category was down 0.1 share point versus the year-

    earlier period to 62.1%, as the gain by Marlboro was more than offset by segment share losses

    incurred by other PM USA non-focus premium brands. PM USA’s share of the discount

  • 6

    category grew 0.1 share point to 16.3%. The total industry’s premium category share increased

    0.7 points to 74.3% in the third quarter of 2006, while the discount category share

    correspondingly declined to 25.7%. Within the discount category, share of the deep discount

    segment (which includes both major manufacturers’ private label brands and all other

    manufacturers’ discount brands) declined 0.2 points to 11.7% versus the year-ago period.

    INTERNATIONAL TOBACCO

    2006 Third-Quarter Results

    At Philip Morris International (PMI), Altria Group, Inc.’s international tobacco business,

    results in the third quarter of 2006 were adversely impacted by performance in Japan and Spain.

    However, PMI projects that it will achieve strong growth in the fourth quarter of 2006.

    In the third quarter of 2006, cigarette shipment volume for PMI declined 0.5% to 215.9

    billion units. Continuing challenges in Spain, lower volume in Turkey, Portugal and Romania

    and trade inventory depletion in Japan after the July 2006 price increase were largely offset by

    gains in Indonesia, Italy, Poland, Russia, Ukraine, Mexico and Argentina. PMI’s total tobacco

    volume, which included 2.3 billion cigarette equivalent units of other tobacco products (OTPs),

    declined 0.4% to 218.2 billion units.

    Operating companies income was down 3.8% to $2.1 billion, and down 2.3% excluding

    asset impairment and exit costs. The decline was due primarily to unfavorable volume/mix in

    Japan and lower pricing in Spain, partially offset by higher pricing elsewhere in PMI. Spain and

    Japan together contributed approximately eight percentage points to the decline in third-quarter

    2006 operating companies income.

    PMI’s market share in the third quarter of 2006 advanced in many countries, with gains

    in Argentina, Austria, Belgium, Egypt, Finland, France, Hungary, Indonesia, Italy, Japan, Korea,

    Lithuania, Mexico, Netherlands, the Philippines, Poland, Serbia and Ukraine.

    Total Marlboro cigarette shipments of 80.5 billion units were down 2.1%, due mainly to

    Germany, Argentina and Japan. However, Marlboro market shares were up in Belgium, France,

    Italy, Japan, Korea, Mexico, Netherlands, the Philippines, Poland, Romania, Russia, Saudi

    Arabia, Serbia and Ukraine.

    In the European Union (EU) region, PMI’s cigarette shipments were down 0.9%, as

    declines in Spain, Germany and Portugal were partially offset by gains in Italy, Poland and

    Hungary. PMI’s cigarette market share in the EU region was flat at 39.6%. Importantly, PMI’s

    share of total tobacco consumption (cigarettes and OTPs) in the EU was up 0.4 points to 35.9%.

  • 7

    In Germany, total tobacco consumption declined 9.5%. However, adjusted for one less

    selling day in the quarter this year, consumption was down 8.1%, mainly attributable to a

    significant decline in tobacco portions, with inventories of these products now essentially

    exhausted. PMI’s total tobacco shipments were down 0.6%, but its share of total tobacco

    consumption increased 2.8 points to 31.5%. The total cigarette market declined 1.8%, while

    PMI’s cigarette volume and market share declined by 2.2% and 0.1 points to 36.5%,

    respectively.

    In Italy, the total cigarette market rose 0.7%. PMI’s shipment volume was up 4.2% and

    market share rose 1.2 points to 54.1%. Marlboro share increased 0.5 points to 23.0%, while

    share for Diana was also higher, up 0.5 points to 13.6%.

    In France, the total market was essentially unchanged versus the prior-year quarter.

    PMI’s shipments were down 2.0% due to timing of trade purchases. Market share continued to

    grow, rising 0.8 points to 42.5% on the strength of Marlboro and the Philip Morris brand.

    In Spain, the total cigarette market declined 7.9%, due mainly to an unfavorable

    comparison with the third quarter of 2005, which benefited from trade purchases as a result of an

    anticipated industry price increase that did not occur, as well as the tobacco legislation in force

    since January 1, 2006. PMI’s cigarette shipments were down 12.4% in the third quarter of 2006

    versus the year-ago period, and market share declined 3.1 points to 32.2%, primarily due to

    L&M and Chesterfield. Sequentially, PMI’s market share was up 0.6 points versus the second

    quarter of 2006 and share for Marlboro was up 0.7 points to 17.4% in the third quarter of 2006

    versus the previous quarter, demonstrating its continued resilience.

    In Eastern Europe, the Middle East and Africa, PMI’s shipments declined 0.7% due to

    Turkey and Romania, largely offset by strong gains in Russia, Ukraine, Israel and Egypt. In

    Turkey, shipments were down 12.2%, due mainly to the decline of low-price Bond Street,

    partially offset by gains of higher-margin brands Parliament and Muratti. Market share in

    Turkey declined 0.7 points to 41.9%. However, overall mix continued to improve, driven by

    gains of Parliament. In Romania, shipments were down 31.4% and share declined 2.5 points to

    31.0%, mainly due to L&M. However, Marlboro share was up 2.0 points to 12.2%. In Russia,

    shipments rose 3.3%, driven by Marlboro, Muratti and Parliament. Although share was down

    0.5 points, this primarily reflected declines of PMI’s low-price brands and L&M. Combined

    market share in Russia for PMI’s higher-margin brands, including Marlboro and Parliament,

    was up 0.4 points versus the prior-year period. In Ukraine, shipments grew 8.8% and share

    advanced 1.2 points to 33.4% as consumers continued to trade up to higher priced Marlboro,

    Parliament and Chesterfield.

  • 8

    In Asia, volume was down 1.5%, due primarily to a difficult comparison with the prior-

    year quarter in Japan, partially offset by gains in Indonesia, Korea and Thailand.

    In Japan, PMI’s shipments were down 1.8 billion units or 10.4%, due mainly to a 22.7%

    total market decline, partially offset by the favorable timing of shipments. The industry

    contraction in the third quarter reflects trade inventory depletion after the tax-driven price

    increase on July 1, 2006. PMI’s in-market sales were down 22.5% and market share was up 0.1

    points to 25.0%. Marlboro’s share rose 0.3 points to 10.2%.

    In Indonesia, PMI’s shipment volume rose 9.1% and market share increased 1.5 points to

    28.2%, demonstrating the continued strength of its brand portfolio, led by A Hijau, A Mild and

    Dji Sam Soe.

    PMI’s volume in Latin America increased 4.4%, due mainly to gains in Argentina and

    Mexico, partially offset by Colombia, which was negatively impacted by the timing of

    shipments. The total market in Argentina was up 7.8%, while PMI’s shipments grew 18.2% and

    share was up 5.9 points to 66.9%, due primarily to the continued growth of the Philip Morris

    brand. In Mexico, PMI shipments advanced 5.8% and market share rose 1.9 points to 63.8%,

    reflecting the continued momentum of Marlboro, which rose 2.2 share points to 48.1%.

    FOOD

    2006 Third-Quarter Results

    Kraft Foods Inc. (Kraft) reported 2006 third-quarter results on October 23, 2006. Kraft’s

    net revenues were up 2.3% to $8.2 billion, driven by North American convenient meals, cheese,

    snacks, cereals and powdered beverages, as well as Latin America and Eastern Europe and

    favorable currency of $125 million, partially offset by the impact of divestitures.

    Ongoing volume declined 1.9%, due primarily to the impact of product item pruning and

    the discontinuation of select product lines, primarily in the North American Foodservice and

    Canadian ready-to-drink beverage businesses, as well as weakness in several beverage and

    grocery franchises. Partially offsetting those factors were strong gains achieved across numerous

    products, including Oscar Mayer meats, Post cereals, Kraft natural cheese, DiGiorno pizza and

    Wheat Thins snack crackers.

    Operating income increased 18.2% to $1.4 billion for the third quarter, benefiting from

    the gain on the redemption of Kraft’s interest in UB and also from lower dairy costs, improved

    product mix and ongoing manufacturing efficiencies and cost savings, partially offset by higher

    marketing spending to support brand equity, higher asset impairment, exit and implementation

  • 9

    costs, and higher energy and packaging costs. Excluding the asset impairment, exit and

    implementation costs and gains/losses on the sale of businesses, operating income increased

    5.6% and the resulting operating income margin increased to 15.2% from 14.8% recorded in the

    corresponding prior-year period.

    NORTH AMERICAN FOOD

    2006 Third-Quarter Results

    For the third quarter 2006, Kraft North America Commercial (KNAC) net revenues were

    up 0.7% to $5.6 billion versus the prior-year quarter, reflecting increases in Beverages,

    Convenient Meals and Snacks & Cereals and favorable currency of $52 million, partially offset

    by declines in Cheese & Foodservice and Grocery. Ongoing volume decreased 2.1% due to

    decreases in Beverages, Cheese & Foodservice and Grocery, partially offset by increases in

    Convenient Meals and Snacks & Cereals. Operating companies income decreased 1.9% to $930

    million, with higher asset impairment, exit and implementation costs only partially offset by

    productivity and restructuring savings, positive mix, and favorable currency of $12 million.

    INTERNATIONAL FOOD

    2006 Third-Quarter Results

    For the third quarter 2006, net revenues for Kraft International Commercial (KIC)

    increased 5.8% to $2.7 billion versus the prior-year quarter, reflecting increases in the European

    Union and Developing Markets, Oceania & North Asia, and favorable currency of $73 million.

    Ongoing volume was down 1.4%, due primarily to declines in grocery and cheese. Operating

    companies income increased 86.1% to $469 million, due primarily to a $251 million gain on

    redemption of Kraft’s interest in UB, as well as positive mix, price increases and favorable

    currency of $8 million, partially offset by lower volume and higher asset impairment, exit and

    implementation costs.

    FINANCIAL SERVICES

    2006 Third-Quarter Results

    Philip Morris Capital Corporation (PMCC) reported operating companies income of $101

    million for the third quarter of 2006, versus an operating companies loss of $121 million for the

  • 10

    third quarter of 2005. Results for the third quarter of 2006 were significantly above the

    comparable period in 2005 due to gains from asset sales and a $200 million loss provision taken

    in the third quarter of 2005 related to the airline industry.

    Consistent with its strategic shift in 2003, PMCC is focused on managing its existing

    portfolio of finance assets in order to maximize gains and generate cash flow from asset sales

    and related activities. PMCC is no longer making new investments and expects that its operating

    companies income will fluctuate over time as investments mature or are sold.

    Altria Group, Inc. Profile

    As of September 30, 2006, Altria Group, Inc. owned approximately 88.6% of the

    outstanding common shares of Kraft Foods Inc. and 100% of the outstanding common shares of

    Philip Morris International Inc., Philip Morris USA Inc. and Philip Morris Capital Corporation.

    In addition, Altria Group, Inc. owned approximately 28.7% of SABMiller plc. The brand

    portfolio of Altria Group, Inc.’s consumer packaged goods companies includes such well-known

    names as Kraft, Jacobs, L&M, Marlboro, Maxwell House, Nabisco, Oreo, Oscar Mayer,

    Parliament, Philadelphia, Post and Virginia Slims. Altria Group, Inc. recorded 2005 net

    revenues of $97.9 billion.

    Trademarks and service marks mentioned in this release are the registered property of, or

    licensed by, the subsidiaries of Altria Group, Inc.

    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. The following important factors could cause actual

    results and outcomes to differ materially from those contained in such forward-looking statements.

    Altria Group, Inc.’s consumer products subsidiaries are subject to changing prices for raw

    materials; intense price competition; changes in consumer preferences and demand for their products;

    fluctuations in levels of customer inventories; the effects of foreign economies and local economic and

    market conditions; unfavorable currency movements and changes to income tax laws. Their results are

    dependent upon their continued ability to promote brand equity successfully; to anticipate and respond

    to new consumer trends; to develop new products and markets and to broaden brand portfolios in order

    to compete effectively with lower-priced products; to improve productivity; and to respond effectively

    to changing prices for raw materials.

  • 11

    Altria Group, Inc.’s tobacco subsidiaries (Philip Morris USA and Philip Morris International)

    continue to be subject to litigation, including risks associated with adverse jury and judicial

    determinations, and courts reaching conclusions at variance with the company’s understanding of

    applicable law and bonding requirements in the limited number of jurisdictions that do not limit the

    dollar amount of appeal bonds; legislation, including actual and potential excise tax increases;

    discriminatory excise tax structures; increasing marketing and regulatory restrictions; the effects of price

    increases related to excise tax increases and concluded tobacco litigation settlements on consumption

    rates and consumer preferences within price segments; health concerns relating to the use of tobacco

    products and exposure to environmental tobacco smoke; governmental regulation; privately imposed

    smoking restrictions; and governmental and grand jury investigations.

    Altria Group, Inc. and its subsidiaries are subject to other risks detailed from time to time

    in its publicly filed documents, including its Quarterly Report on Form 10-Q for the period ended

    June 30, 2006. Altria Group, Inc. 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.

    # # #

  • ALTRIA GROUP, INC. and SubsidiariesCondensed Statements of Earnings For the Quarters Ended September 30

    (Unaudited) - Schedule 1(in millions, except per share data)

    Quarter Ended Quarter EndedSeptember 30,

    2006September 30,

    2005

    Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,885$ 24,962$Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,265 9,082Excise taxes on products (*) . . . . . . . . . . . . . . . . . . . . . . 8,229 7,656

    Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,391 8,224Marketing, administration and research costs . . . . . . . . . . 3,560 3,459Domestic tobacco loss on U.S. tobacco pool . . . . . . . . . . . - 138Domestic tobacco quota buy-out . . . . . . . . . . . . . . . . . . . - (115)Asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . 190 59Gain on redemption of United Biscuits investment . . . . . . . (251) -(Gains) losses on sales of businesses, net . . . . . . . . . . . . . 3 -Provision for airline industry exposure . . . . . . . . . . . . . . . - 200

    Operating companies income . . . . . . . . . . . . . . . . . . . . . . 4,889 4,483Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . 7 6General corporate expenses . . . . . . . . . . . . . . . . . . . . . . 166 160Asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . 3 2

    Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,713 4,315Interest and other debt expense, net . . . . . . . . . . . . . . . . 193 306

    Earnings before income taxes, minority interest, and equityearnings, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,520 4,009

    Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . 1,598 1,098

    Earnings before minority interest, and equity earnings, net . 2,922 2,911Minority interest in earnings, and equity earnings, net . . . . 47 28

    Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,875$ 2,883$

    12

  • Per share data(**):Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . 1.38$ 1.39$

    Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . 1.36$ 1.38$

    Weighted average number of shares outstanding - Basic . . 2,090 2,072Weighted average number of shares outstanding - Diluted . 2,107 2,092

    (*) The detail of excise taxes on products sold is asfollows:

    Domestic tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 938$ 945$International tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,291 6,711

    Total excise taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,229$ 7,656$

    Currency increased international tobacco excise taxes by . . 96$ -$

    (**) Basic and diluted earnings per share are computed for each of the periods presented. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.

    13

  • ALTRIA GROUP, INC. and SubsidiariesSelected Financial Data by Business Segment For the Quarters Ended September 30

    (Unaudited) - Schedule 2(in millions)

    DomesticTobacco

    Internat'lTobacco

    NorthAmericanFood

    Internat'lFood

    FinancialServices Total

    2006 Net Revenues . . . . . 4,830$ 12,703$ 5,591$ 2,652$ 109$ 25,885$2005 Net Revenues . . . . . 4,731 12,075 5,551 2,506 99 24,962

    Reconciliation:2005 Net Revenues . . . . . 4,731$ 12,075$ 5,551$ 2,506$ 99$ 24,962$Divested businesses -2005 . . . . . . . . . . . . . . - - (106) (5) - (111)

    Divested businesses -2006 . . . . . . . . . . . . . . - - - - - -

    Implementation - 2006 . . - - - - - -Acquired businesses . . . . . - - - - - -Currency . . . . . . . . . . . . - 156 52 73 - 281Operations . . . . . . . . . . . 99 472 94 78 10 753

    2006 Net Revenues . . . . . 4,830$ 12,703$ 5,591$ 2,652$ 109$ 25,885$

    14

  • ALTRIA GROUP, INC. and SubsidiariesSelected Financial Data by Business Segment For the Quarters Ended September 30

    (Unaudited) - Schedule 3(in millions)

    DomesticTobacco

    Internat'lTobacco

    NorthAmericanFood

    Internat'lFood

    FinancialServices Total

    2006 Operating Companies Income . . . . . . 1,270$ 2,119$ 930$ 469$ 101$ 4,889$2005 Operating Companies Income . . . . . . 1,202 2,202 948 252 (121) 4,483

    Reconciliation:2005 Operating Companies Income . . . . . . 1,202$ 2,202$ 948$ 252$ (121$ ) 4,483$Divested businesses - 2005 . . . . . . . . . . . - - (25) - - (25)Domestic tobacco loss on U.S. tobacco pool- 2005 . . . . . . . . . . . . . . . . . . . . . . . . . 138 - - - - 138

    Domestic tobacco quota buy-out - 2005 . . . (115) - - - - (115)Asset impairment and exit costs - 2005 . . . - 33 2 24 - 59Implementation costs - 2005 . . . . . . . . . . - - 11 5 - 16Provision for airline industry exposure -2005 . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - 200 200

    23 33 (12) 29 200 273

    Divested businesses - 2006 . . . . . . . . . . . - - - - - -Asset impairment and exit costs - 2006 . . . - (65) (62) (63) - (190)Gain on redemption of United Biscuitsinvestment - 2006 . . . . . . . . . . . . . . . . . - - - 251 - 251

    (Losses) gains on sales of businesses -2006 . . . . . . . . . . . . . . . . . . . . . . . . . . - - (3) - - (3)

    Implementation costs - 2006 . . . . . . . . . . - - (21) (2) - (23)

    - (65) (86) 186 - 35

    Acquired businesses . . . . . . . . . . . . . . . . - - - - - -Currency . . . . . . . . . . . . . . . . . . . . . . . . - 5 12 8 - 25Operations . . . . . . . . . . . . . . . . . . . . . . . 45 (56) 68 (6) 22 73

    2006 Operating Companies Income . . . . . . 1,270$ 2,119$ 930$ 469$ 101$ 4,889$

    15

  • ALTRIA GROUP, INC. and SubsidiariesCondensed Statements of Earnings For the Nine Months Ended September 30

    (Unaudited) - Schedule 4(in millions, except per share data)

    9 Months Ended 9 Months EndedSeptember 30,

    2006September 30,

    2005

    Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,009$ 73,364$Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,573 26,887Excise taxes on products (*) . . . . . . . . . . . . . . . . . . . . . . 23,670 22,271

    Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,766 24,206Marketing, administration and research costs . . . . . . . . . . 10,463 10,333Domestic tobacco headquarters relocation charges . . . . . . - 3Domestic tobacco loss on U.S. tobacco pool . . . . . . . . . . . - 138Domestic tobacco quota buy-out . . . . . . . . . . . . . . . . . . . - (115)Italian antitrust charge . . . . . . . . . . . . . . . . . . . . . . . . . . 61 -Asset impairment and exit costs . . . . . . . . . . . . . . . . . . . 641 262Gain on redemption of United Biscuits investment . . . . . . . (251) -(Gains) losses on sales of businesses, net . . . . . . . . . . . . . 14 (115)Provision for airline industry exposure . . . . . . . . . . . . . . . 103 200

    Operating companies income . . . . . . . . . . . . . . . . . . . . . 13,735 13,500Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . 23 14General corporate expenses . . . . . . . . . . . . . . . . . . . . . . 482 484Asset impairment and exit costs . . . . . . . . . . . . . . . . . . . 35 40

    Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,195 12,962Interest and other debt expense, net . . . . . . . . . . . . . . . . 702 907

    Earnings from continuing operations before income taxes,minority interest, and equity earnings, net . . . . . . . . . . . 12,493 12,055

    Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . 3,275 3,581

    Earnings from continuing operations before minorityinterest, and equity earnings, net . . . . . . . . . . . . . . . . . 9,218 8,474

    Minority interest in earnings from continuing operations,and equity earnings, net . . . . . . . . . . . . . . . . . . . . . . . . 155 95

    Earnings from continuing operations . . . . . . . . . . . . . . . . 9,063 8,379Loss from discontinued operations, net of income taxes andminority interest (**) . . . . . . . . . . . . . . . . . . . . . . . . . . - (233)

    Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,063$ 8,146$

    16

  • Per share data (***):Basic earnings per share from continuing operations . . . . . 4.34$ 4.05$Basic earnings per share from discontinued operations . . . . -$ (0.11$ )

    Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . 4.34$ 3.94$

    Diluted earnings per share from continuing operations . . . . 4.31$ 4.01$Diluted earnings per share from discontinued operations . . -$ (0.11$ )

    Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . 4.31$ 3.90$

    Weighted average number of shares outstanding - Basic . . 2,086 2,067Weighted average number of shares outstanding - Diluted . 2,104 2,087

    (*) The detail of excise taxes on products sold is asfollows:

    Domestic tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,724$ 2,761$International tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,946 19,510

    Total excise taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,670$ 22,271$

    Currency decreased international tobacco excise taxes by . 493$ -$

    (**) Discontinued operations in 2005 includes $(255) from loss on sale and $22 of earnings, net of minority interest impact.

    (***) Basic and diluted earnings per share are computed for each of the periods presented. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.

    17

  • ALTRIA GROUP, INC. and SubsidiariesSelected Financial Data by Business Segment For the Nine Months Ended September 30

    (Unaudited) - Schedule 5(in millions)

    DomesticTobacco

    Internat'lTobacco

    NorthAmericanFood

    Internat'lFood

    FinancialServices Total

    2006 Net Revenues . . . . . 13,938$ 36,814$ 17,179$ 7,806$ 272$ 76,009$2005 Net Revenues . . . . . 13,667 34,985 16,855 7,595 262 73,364

    Reconciliation:2005 Net Revenues . . . . . 13,667$ 34,985$ 16,855$ 7,595$ 262$ 73,364$Divested businesses -2005 . . . . . . . . . . . . . . - - (402) (27) - (429)

    Divested businesses -2006 . . . . . . . . . . . . . . - - 105 - - 105

    Implementation - 2005 . . - - 1 - - 1Implementation - 2006 . . - - - - - -Acquired businesses . . . . . - 1,192 - - - 1,192Currency . . . . . . . . . . . . - (916) 124 (126) - (918)Operations . . . . . . . . . . . 271 1,553 496 364 10 2,694

    2006 Net Revenues . . . . . 13,938$ 36,814$ 17,179$ 7,806$ 272$ 76,009$

    18

  • ALTRIA GROUP, INC. and SubsidiariesSelected Financial Data by Business Segment For the Nine Months Ended September 30

    (Unaudited) - Schedule 6(in millions)

    DomesticTobacco

    Internat'lTobacco

    NorthAmericanFood

    Internat'lFood

    FinancialServices Total

    2006 Operating Companies Income . . . . . . 3,687$ 6,225$ 2,868$ 817$ 138$ 13,735$2005 Operating Companies Income . . . . . . 3,501 6,301 2,916 792 (10) 13,500

    Reconciliation:2005 Operating Companies Income . . . . . . 3,501$ 6,301$ 2,916$ 792$ (10$ ) 13,500$Divested businesses - 2005 . . . . . . . . . . . . - - (63) (3) - (66)Domestic tobacco headquarters relocationcharges - 2005 . . . . . . . . . . . . . . . . . . . 3 - - - - 3

    Domestic tobacco loss on U.S. tobacco pool- 2005 . . . . . . . . . . . . . . . . . . . . . . . . . 138 - - - - 138

    Domestic tobacco quota buy-out - 2005 . . . (115) - - - - (115)Asset impairment and exit costs - 2005 . . . - 57 124 81 - 262Losses (gains) on sales of businesses - 2005 - - 1 (116) - (115)Implementation costs - 2005 . . . . . . . . . . . - - 43 18 - 61Provision for airline industry exposure -2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - 200 200

    26 57 105 (20) 200 368

    Divested businesses - 2006 . . . . . . . . . . . . - - 34 - - 34Italian antitrust charge - 2006 . . . . . . . . . . - (61) - - - (61)Asset impairment and exit costs - 2006 . . . - (88) (316) (237) - (641)Gain on redemption of United Biscuitsinvestment - 2006 . . . . . . . . . . . . . . . . . - - - 251 - 251

    (Losses) gains on sales of businesses - 2006 - - (14) - - (14)Implementation costs - 2006 . . . . . . . . . . . - - (38) (15) - (53)Provision for airline industry exposure -2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - (103) (103)

    - (149) (334) (1) (103) (587)

    Acquired businesses . . . . . . . . . . . . . . . . . - 227 - - - 227Currency . . . . . . . . . . . . . . . . . . . . . . . . . - (219) 25 (11) - (205)Operations . . . . . . . . . . . . . . . . . . . . . . . 160 8 156 57 51 432

    2006 Operating Companies Income . . . . . . 3,687$ 6,225$ 2,868$ 817$ 138$ 13,735$

    19

  • ALTRIA GROUP, INC. and SubsidiariesNet Earnings For the Quarters Ended September 30

    (Unaudited) - Schedule 7(in millions)

    Net Earnings

    2006 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,875$2005 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,883$

    Reconciliation:2005 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,883$2005 Domestic tobacco loss on U.S. tobacco pool . . . . . . . . . . . . . . . . . . . . . . . . . 872005 Domestic tobacco quota buy-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (72)2005 Asset impairment, exit and implementation costs, net of minority interestimpact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

    2005 Corporate asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . . . . . . 22005 Provision for airline industry exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1292005 Tax items, net of minority interest impact . . . . . . . . . . . . . . . . . . . . . . . . . . (204)

    (7)

    2006 Asset impairment, exit and implementation costs, net of minority interestimpact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (125)

    2006 Gain on redemption of United Biscuits investment, net of minority interestimpact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

    2006 Gains (losses) on sales of businesses, net of minority interest impact . . . . . . . (53)2006 Corporate asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . . . . . . (2)2006 Tax items, net of minority interest impact . . . . . . . . . . . . . . . . . . . . . . . . . . (11)

    (60)

    Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Change in shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -Change in tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40)Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

    2006 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,875$

    20

  • ALTRIA GROUP, INC. and SubsidiariesDiluted Earnings Per Share For the Quarters Ended September 30

    (Unaudited) - Schedule 7(Dollars per share)

    Diluted E.P.S. (*)

    2006 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.36$2005 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.38$

    Reconciliation:2005 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.38$2005 Domestic tobacco loss on U.S. tobacco pool . . . . . . . . . . . . . . . . . . . . . . . . . . 0.042005 Domestic tobacco quota buy-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.03)2005 Asset impairment, exit and implementation costs, net of minority interest impact 0.022005 Corporate asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . -2005 Provision for airline industry exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.062005 Tax items, net of minority interest impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.10)

    (0.01)

    2006 Asset impairment, exit and implementation costs, net of minority interest impact (0.06)2006 Gain on redemption of United Biscuits investment, net of minority interest impact 0.062006 Gains (losses) on sales of businesses, net of minority interest impact . . . . . . . . . (0.02)2006 Corporate asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . -2006 Tax items, net of minority interest impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01)

    (0.03)

    Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.01Change in shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01)Change in tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.02)Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.04

    2006 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.36$

    (*) Basic and diluted earnings per share are computed for each of the periods presented. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.

    21

  • ALTRIA GROUP, INC. and SubsidiariesNet Earnings For the Nine Months Ended September 30

    (Unaudited) - Schedule 8(in millions)

    Net Earnings

    2006 Continuing Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,063$2005 Continuing Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,379$

    Reconciliation:2005 Continuing Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,379$2005 Domestic tobacco headquarters relocation charges . . . . . . . . . . . . . . . . . . . . 22005 Domestic tobacco loss on U.S. tobacco pool . . . . . . . . . . . . . . . . . . . . . . . . . 872005 Domestic tobacco quota buy-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (72)2005 Asset impairment, exit and implementation costs, net of minority interestimpact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195

    2005 Gains on sales of businesses, net of minority interest impact . . . . . . . . . . . . . (64)2005 Corporate asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . . . . . . 272005 Provision for airline industry exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1292005 Tax items, net of minority interest impact . . . . . . . . . . . . . . . . . . . . . . . . . . (470)

    (166)

    2006 Italian antitrust charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (61)2006 Asset impairment, exit and implementation costs, net of minority interestimpact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (409)

    2006 Gain on redemption of United Biscuits investment, net of minority interestimpact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

    2006 Gains (losses) on sales of businesses, net of minority interest impact . . . . . . . (59)2006 Corporate asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . . . . . . (23)2006 Provision for airline industry exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (66)2006 Tax items, net of minority interest impact . . . . . . . . . . . . . . . . . . . . . . . . . . 954

    467

    Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (134)Change in shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -Change in tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490

    2006 Continuing Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,063$2006 Discontinued Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -$

    2006 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,063$

    22

  • ALTRIA GROUP, INC. and SubsidiariesDiluted Earnings Per Share For the Nine Months Ended September 30

    (Unaudited) - Schedule 8(Dollars per share)

    Diluted E.P.S. (*)

    2006 Continuing Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.31$2005 Continuing Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01$

    Reconciliation:2005 Continuing Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01$2005 Domestic tobacco headquarters relocation charges . . . . . . . . . . . . . . . . . . . . . . 0.002005 Domestic tobacco loss on U.S. tobacco pool . . . . . . . . . . . . . . . . . . . . . . . . . . 0.042005 Domestic tobacco quota buy-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.03)2005 Asset impairment, exit and implementation costs, net of minority interest impact 0.112005 Gains on sales of businesses, net of minority interest impact . . . . . . . . . . . . . . . (0.03)2005 Corporate asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.012005 Provision for airline industry exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.062005 Tax items, net of minority interest impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.23)

    (0.07)

    2006 Italian antitrust charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.03)2006 Asset impairment, exit and implementation costs, net of minority interest impact (0.19)2006 Gain on redemption of United Biscuits investment, net of minority interest impact 0.062006 Gains (losses) on sales of businesses, net of minority interest impact . . . . . . . . . (0.03)2006 Corporate asset impairment and exit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01)2006 Provision for airline industry exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.03)2006 Tax items, net of minority interest impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.45

    0.22

    Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.07)Change in shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.03)Change in tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.01Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.24

    2006 Continuing Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.31$2006 Discontinued Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -$

    2006 Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.31$

    (*) Basic and diluted earnings per share are computed for each of the periods presented. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.

    23

  • ALTRIA GROUP, INC. and SubsidiariesCondensed Balance Sheets (Unaudited) - Schedule 9(in millions, except ratios)

    September 30,2006

    December 31,2005

    AssetsCash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,695$ 6,258$All other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,504 19,523Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . 17,043 16,678Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,142 31,219Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,868 12,196Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,768 14,667

    Total consumer products assets . . . . . . . . . . . . . . . . . . . . . . . . . 101,020 100,541Total financial services assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,759 7,408

    Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,779$ 107,949$

    Liabilities and Stockholders' EquityShort-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,172$ 2,836$Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 3,243 3,430Accrued settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,351 3,503All other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,555 16,389Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,117 15,653Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,618 8,492Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,717 13,813

    Total consumer products liabilities . . . . . . . . . . . . . . . . . . . . . . . 59,773 64,116Total financial services liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 6,816 8,126

    Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,589 72,242Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,190 35,707

    Total liabilities and stockholders' equity . . . . . . . . . . . . . . . . . . . . 107,779$ 107,949$

    Total consumer products debt . . . . . . . . . . . . . . . . . . . . . . . . . . 18,532$ 21,919$Debt/equity ratio - consumer products . . . . . . . . . . . . . . . . . . . . 0.45 0.61Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,636$ 23,933$Total debt/equity ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.48 0.67

    24

  • This is an Intelligent Financial Statement™ by CoreFiling. The Intelligent Financial Statement™ embeds XBRL financial data in aviewable and printable document. By moving your mouse over the displayed data, pop-up CoreFiling TagTips™ will show you how thedata is internally expressed as XBRL. (Please note that TagTips™ require Adobe® Reader® 7.0 or later.) To obtain the embedded XBRL report and any XBRL extension taxonomies, double-click or right-click the paperclip icon or icons below. For more information on the Intelligent Financial Statement™ or XBRL, please see http://www.corefiling.com.

    XBRL report mo-20060930.xml

    XBRL taxonomy schema mo-20060930.xsd

    XBRL taxonomylinkbase mo-20060930_pre.xml

    XBRL taxonomylinkbase mo-20060930_cal.xml

    XBRL taxonomylinkbase mo-20060930_lab.xml

    25

    MO 2006-07-01 2006-09-30 MO 2006-07-01 2006-09-30 MO 2006-07-01 2006-09-30 MO 2005-07-01 2005-09-30 MO 2005-07-01 2005-09-30 MO 2005-07-01 2005-09-30 MO 2006-07-01 2006-09-30 MO 2005-07-01 2005-09-30 MO 2006-07-01 2006-09-30 MO 2005-07-01 2005-09-30 MO 2006-07-01 2006-09-30 MO 2005-07-01 2005-09-30 MO 2006-09-30 MO 2006-09-30 MO 2006-09-30 MO 2006-09-30 MO 2006-09-30 MO 2006-09-30 MO 2006-01-01 2006-09-30 MO 2006-01-01 2006-09-30 MO 2006-01-01 2006-09-30 MO 2005-01-01 2005-09-30 MO 2005-01-01 2005-09-30 MO 2005-01-01 2005-09-30 MO 2006-01-01 2006-09-30 MO 2005-01-01 2005-09-30 MO 2006-01-01 2006-09-30 MO 2005-01-01 2005-09-30 MO 2006-01-01 2006-09-30 MO 2005-01-01 2005-09-30 MO 2005-12-31 iso4217:USD iso4217:USD xbrli:shares xbrli:shares 25885000000 9265000000 8229000000 8391000000 3560000000 0 0 190000000 -251000000 3000000 0 4889000000 7000000 166000000 3000000 4713000000 193000000 4520000000 1598000000 2922000000 47000000 2875000000 1.38 1.36 2090000000 2107000000 938000000 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    The XBRL 2.1 instance document.Double click to open, or right click for menu.

    Condensed Statement Earnings link:presentationLink link:calculationLink Revenue By Business Segment link:presentationLink Revenue By Business Segment link:presentationLink Operating Companies Income By Business Segment link:presentationLink Balance Sheets link:presentationLink link:calculationLink Net Earnings link:presentationLink Diluted Earnings Per Share link:presentationLink

    An extension taxonomy schema.Double click to open, or right click for menu.

    An extension taxonomy linkbase.Double click to open, or right click for menu.

    An extension taxonomy linkbase.Double click to open, or right click for menu.

    Accrued Settlement Charges Acquired Businesses, Operating Companies Income Acquired Businesses, Net Revenue Acquired Businesses, Operating Revenue Asset Impairment, Exit and Implementation Costs, Net Minority Interest Impact Balance Sheet Basic Earnings Per Share, Continuing Operations Change in Shares, Continuing Earnings Change in Tax Rate, Continuing Earnings Asset Impairment and Exit Costs, Operating Companies Income Operating Expenses, Companies Operating Companies Income Companies Operating Profit Reconciliation Consumer Products Assets, Total Consumer Products Liabilities, Total Continuing Earnings Reconciliation Asset Impairment and Exit Costs, Corporate Asset Impairment and Exit Costs, Companies Asset Impairment and Exit Costs, Continuing Earnings General Expenses, Corporate Operating Expenses, Corporate Currency, Operating Companies Income Currency, Continuing Earnings Currency, Net Revenues Diluted Earnings Per Share, Continuing Operations Diluted Earnings Per Share, Discontinued Operations Divested Businesses, Net Revenue Divested Businesses, Operating Companies Income Excise Taxes on Products Financial Services Assets, Total Financial Services Liabilities, Total Domestic Tobacco Headquarters Relocation Charges Domestic Tobacco Headquarters Relocation Charges, Continuing Earnings Implementation Costs, Operating Companies Income Implementation, Net Revenue Income/(Loss) from Continuing Operations After Minority Interest Income (Loss) Continuing Operations After Minority Interest Reconciliation, Total Earnings before income taxes, minority interest, and equity earnings, net International Agreements International Agreements Income (Loss) Continuing Operations After Minority Interest Investment Impairment, Net Minority Interest Impact Investment Impairment, Operating Companies Income Italian Antitrust Charge Italian Antitrust Charge, Operating Companies Income Long Term Deferred Income Taxes Liability Losses (Gains) on Sales of Businesses, Net Losses on Sales of Businesses, Operating Companies Income Loss on Sales of Businesses, Net of Minority Interest Impact Loss on Sales of Businesses, Net of Minority Interest Impact, Diluted EPS Gains on Sales of Businesses, Operating Companies Income Gain on Sales of Businesses, Net of Minority Interest Impact Gain on Sales of Businesses, Net of Minority Interest Impact, Diluted EPS Marketing, Administration and Research Costs Minority Interest in Earnings from Continuing Operations, and Equity Earnings, Net Operations, Operating Companies Income Operations, Continuing Earnings Operations, Net Revenues Other Intangible Assets Excluding Goodwill, Net Provision for Airline Industry Exposure Provision Airline Industry Exposure, Continuing Earnings Domestic Tobacco Quota Buy-Out Revenue Reconciliation Tax Items, Net Minority Interest Impact Tobacco Pool Companies Operating Profit Reconciliation, Total Basic Earnings Per Share, Discontinued Operations Asset Impairment, Exit and Implementation Costs, Net Minority Interest Impact, Diluted EPS Change in Shares, Continuing Earnings, Diluted EPS Change in Tax rate, Continuing Earnings, Diluted EPS Total consumer products debt Asset Impairment and Exit Costs, Continuing Earnings, Diluted EPS Currency, Continuing Earnings, Diluted EPS Debt/equity ratio - consumer products Total debt/equity ratio Total debt Domestic Tobacco Headquarters Relocation Charges, Continuing Earnings, Diluted EPS Income/ (Loss) from Continuing Operations After Minority Interest, Diluted EPS Income/ (Loss) Continuing Operations After Minority Interest, Reconciliation Total, Diluted EPS Income/ (Loss) Discontinued Operations, Net Tax Effect, Diluted EPS Italian Antitrust Charge, Diluted EPS Net Income, Diluted EPS Operations, Continuing Earnings, Diluted EPS Tax Items, Net Minority Interest Impact, Diluted EPS Currency Decreased International Tobacco Excise Taxes Domestic Tobacco Headquarters Relocation Charges, Operating Companies Income Italian Antitrust Charge, Continuing Earnings Provision for Airline Industry Exposure, Operating Companies Income Provision for airline industry exposure, Diluted EPS Domestic Tobacco Loss on U.S. Tobacco Pool Domestic Tobacco Loss on U.S Tobacco Pool, Operating Companies Income Domestic Tobacco Quota Buy-Out, Operating Companies Income

    Domestic Tobacco Loss on U.S. Tobacco Pool , Continuing Earnings Domestic Tobacco Quota Buy-Out, Continuing Earnings Gains (Losses) on Sales of Businesses, Net of Minority Interest Impact Domestic Tobacco Loss on U.S. Tobacco Pool, Diluted EPS

    Domestic Tobacco Quota Buy-Out, Diluted EPS

    Gain on Redemption of United Biscuits Investment, Net of Minority Interest Impact, Diluted EPS

    Gain on redemption of United Biscuits Investment, Operating Companies Income Gain on redemption of United Biscuits investment

    An extension taxonomy linkbase.Double click to open, or right click for menu.

    2006 Q3 Altria Release_1.pdfmo-20060930.pdfCondensed Statements of Earnings For the Quarters Ended September 30Net revenuesCost of salesExcise taxes on products (*)Gross profitMarketing, administration and research costsDomestic tobacco loss on U.S. tobacco poolDomestic tobacco quota buy-outAsset impairment and exit costsGain on redemption of United Biscuits investment(Gains) losses on sales of businesses, netProvision for airline industry exposureOperating companies incomeAmortization of intangiblesGeneral corporate expensesAsset impairment and exit costsOperating incomeInterest and other debt expense, netEarnings before income taxes, minority interest, and equity earnings, netProvision for income taxesEarnings before minority interest, and equity earnings, netMinority interest in earnings, and equity earnings, netNet earningsPer share data(**):Basic earnings per shareDiluted earnings per shareWeighted average number of shares outstanding - BasicWeighted average number of shares outstanding - Diluted(*) The detail of excise taxes on products sold is as follows:Domestic tobaccoInternational tobaccoTotal excise taxesCurrency increased international tobacco excise taxes by(**) Basic and diluted earnings per share are computed for each of the periods presented. Accordingly, the sum ofthe quarterly earnings per share amounts may not agree to the year-to-date amounts.

    Selected Financial Data by Business Segment For the Quarters Ended September 302006 Net Revenues2005 Net RevenuesReconciliation:2005 Net RevenuesDivested businesses - 2005Divested businesses - 2006Implementation - 2006Acquired businessesCurrencyOperations2006 Net Revenues

    Selected Financial Data by Business Segment For the Quarters Ended September 302006 Operating Companies Income2005 Operating Companies IncomeReconciliation:2005 Operating Companies IncomeDivested businesses - 2005Domestic tobacco loss on U.S. tobacco pool - 2005Domestic tobacco quota buy-out - 2005Asset impairment and exit costs - 2005Implementation costs - 2005Provision for airline industry exposure -2005Divested businesses - 2006Asset impairment and exit costs - 2006Gain on redemption of United Biscuits investment - 2006(Losses) gains on sales of businesses - 2006Implementation costs - 2006Acquired businessesCurrencyOperations2006 Operating Companies Income

    Condensed Statements of Earnings For the Nine Months Ended September 30Net revenuesCost of salesExcise taxes on products (*)Gross profitMarketing, administration and research costsDomestic tobacco headquarters relocation chargesDomestic tobacco loss on U.S. tobacco poolDomestic tobacco quota buy-outItalian antitrust chargeAsset impairment and exit costsGain on redemption of United Biscuits investment(Gains) losses on sales of businesses, netProvision for airline industry exposureOperating companies incomeAmortization of intangiblesGeneral corporate expensesAsset impairment and exit costsOperating incomeInterest and other debt expense, netEarnings from continuing operations before income taxes, minority interest, and equity earnings, netProvision for income taxesEarnings from continuing operations before minority interest, and equity earnings, netMinority interest in earnings from continuing operations, and equity earnings, netEarnings from continuing operationsLoss from discontinued operations, net of income taxes and minority interest (**)Net earningsPer share data (***):Basic earnings per share from continuing operationsBasic earnings per share from discontinued operationsBasic earnings per shareDiluted earnings per share from continuing operationsDiluted earnings per share from discontinued operationsDiluted earnings per shareWeighted average number of shares outstanding - BasicWeighted average number of shares outstanding - Diluted(*) The detail of excise taxes on products sold is as follows:Domestic tobaccoInternational tobaccoTotal excise taxesCurrency decreased international tobacco excise taxes by(**) Discontinued operations in 2005 includes $(255) from loss on sale, and $22 of earnings, net of minority interest impact(***) Basic and diluted earnings per share are computed for each of the periods presented. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.

    Selected Financial Data by Business Segment For the Nine Months Ended September 302006 Net Revenues2005 Net RevenuesReconciliation:2005 Net RevenuesDivested businesses - 2005Divested businesses - 2006Implementation - 2005Implementation - 2006Acquired businessesCurrencyOperations2006 Net Revenues

    Selected Financial Data by Business Segment For the Nine Months Ended September 302006 Operating Companies Income2005 Operating Companies IncomeReconciliation:2005 Operating Companies IncomeDivested businesses - 2005Domestic tobacco headquarters relocation charges - 2005Domestic tobacco loss on U.S. tobacco pool - 2005Domestic tobacco quota buy-out - 2005Asset impairment and exit costs - 2005Losses (gains) on sales of businesses - 2005Implementation costs - 2005Provision for airline industry exposure - 2005Divested businesses - 2006Italian antitrust charge - 2006Asset impairment and exit costs - 2006Gain on redemption of United Biscuits investment - 2006(Losses) gains on sales of businesses - 2006Implementation costs - 2006Provision for airline industry exposure - 2006Acquired businessesCurrencyOperations2006 Operating Companies Income

    Net Earnings For the Quarters Ended September 302006 Net Earnings2005 Net EarningsReconciliation:2005 Net Earnings2005 Domestic tobacco loss on U.S. tobacco pool2005 Domestic tobacco quota buy-out2005 Asset impairment, exit and implementation costs, net of minority interest impact2005 Corporate asset impairment and exit costs2005 Provision for airline industry exposure2005 Tax items, net of minority interest impact2006 Asset impairment, exit and implementation costs, net of minority interest impact2006 Gain on redemption of United Biscuits investment, net of minority interest impact2006 Gains (losses) on sales of businesses, net of minority interest impact2006 Corporate asset impairment and exit costs2006 Tax items, net of minority interest impactCurrencyChange in sharesChange in tax rateOperations2006 Net Earnings

    Diluted Earnings Per Share For the Quarters Ended September 302006 Net Earnings2005 Net EarningsReconciliation:2005 Net Earnings2005 Domestic tobacco loss on U.S. tobacco pool2005 Domestic tobacco quota buy-out2005 Asset impairment, exit and implementation costs, net of minority interest impact2005 Corporate asset impairment and exit costs2005 Provision for airline industry exposure2005 Tax items, net of minority interest impact2006 Asset impairment, exit and implementation costs, net of minority interest impact2006 Gain on redemption of United Biscuits investment, net of minority interest impact2006 Gains (losses) on sales of businesses, net of minority interest impact2006 Corporate asset impairment and exit costs2006 Tax items, net of minority interest impactCurrencyChange in sharesChange in tax rateOperations2006 Net Earnings(*) Basic and diluted earnings per share are computed for each of the periods presented. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.

    Net Earnings For the Nine Months Ended September 302006 Continuing Earnings2005 Continuing EarningsReconciliation:2005 Continuing Earnings2005 Domestic tobacco headquarters relocation charges2005 Domestic tobacco loss on U.S. tobacco pool2005 Domestic tobacco quota buy-out2005 Asset impairment, exit and implementation costs, net of minority interest impact2005 Gains on sales of businesses, net of minority interest impact2005 Corporate asset impairment and exit costs2005 Provision for airline industry exposure2005 Tax items, net of minority interest impact2006 Italian antitrust charge2006 Asset impairment, exit and implementation costs, net of minority interest impact2006 Gain on redemption of United Biscuits investment, net of minority interest impact2006 Gains (losses) on sales of businesses, net of minority interest impact2006 Corporate asset impairment and exit costs2006 Provision for airline industry exposure2006 Tax items, net of minority interest impactCurrencyChange in sharesChange in tax rateOperations2006 Continuing Earnings2006 Discontinued Earnings2006 Net Earnings

    Diluted Earnings Per Share For the Nine Months Ended September 302006 Continuing Earnings2005 Continuing EarningsReconciliation:2005 Continuing Earnings2005 Domestic tobacco headquarters relocation charges2005 Domestic tobacco loss on U.S. tobacco pool2005 Domestic tobacco quota buy-out2005 Asset impairment, exit and implementation costs, net of minority interest impact2005 Gains on sales of businesses, net of minority interest impact2005 Corporate asset impairment and exit costs2005 Provision for airline industry exposure2005 Tax items, net of minority interest impact2006 Italian antitrust charge2006 Asset impairment, exit and implementation costs, net of minority interest impact2006 Gain on redemption of United Biscuits investment, net of minority interest impact2006 Gains (losses) on sales of businesses, net of minority interest impact2006 Corporate asset impairment and exit costs2006 Provision for airline industry exposure2006 Tax items, net of minority interest impactCurrencyChange in sharesChange in tax rateOperations2006 Continuing Earnings2006 Discontinued Earnings2006 Net Earnings(*) Basic and diluted earnings per share are computed for each of the periods presented. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the year-to-date amounts.

    Condensed Balance SheetsAssetsCash and cash equivalentsAll other current assetsProperty, plant and equipment, netGoodwillOther intangible assets, netOther assetsTotal consumer products assetsTotal financial services assetsTotal assetsLiabilities and Stockholders' EquityShort-term borrowingsCurrent portion of long-term debtAccrued settlement chargesAll other current liabilitiesLong-term debtDeferred income taxesOther long-term liabilitiesTotal consumer products liabilitiesTotal financial services liabilitiesTotal liabilitiesTotal stockholders' equityTotal liabilities and stockholders' equityTotal consumer products debtDebt/equity ratio - consumer productsTotal debtTotal debt/equity ratio

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button465: button466: button467: button468: button469: button470: button471: button472: button473: button474: button475: button476: button477: button478: button479: button480: button481: button482: button483: button484: button485: button486: button487: button488: button489: button490: button491: button492: button493: button494: button495: button496: button497: button498: button499: button500: button501: button502: button503: button504: button505: button506: button507: button508: button509: button510: button511: button512: button513: button514: button515: button516: button517: button518: button519: button520: button521: button522: button523: button524: button525: button526: button527: button528: button529: button530: button531: button532: button533: button534: button535: button536: button537: button538: button539: button540: button541: button542: button543: button544: button545: button546: button547: button548: button549: button550: button551: button552: button553: button554: button555: button556: button557: button558: button559: button560: button561: button562: button563: button564: button565: button566: button567: button568: button569: button570: button571: button572: button573: button574: button575: button576: button577: button578: button579: button580: button581: button582: button583: button584: button585: button586: button587: button588: button589: button590: button591: button592: button593: button594: button595: button596: button597: button598: button599: button600: button601: button602: button603: button604: button605: button606: button607: button608: button609: button610: button611: button612: button613: button614: button615: button616: button617: button618: button619: button620: button621: button622: button623: button624: button625: button626: button627: button628: button629: button630: button631: button632: button633: button634: button635: button636: button637: button638: button639: button640: button641: button642: button643: button644: button645: button646: button647: button648: button649: button650: button651: button652: button653: button654: button655: button656: button657: bu