Benefit Plans:

Subsidiaries of Altria Group, Inc. sponsor noncontributory defined benefit pension plans covering the majority of all employees of Altria Group, Inc. However, employees hired on or after a date specific to their employee group are not eligible to participate in these noncontributory defined benefit pension plans but are instead eligible to participate in a defined contribution plan with enhanced benefits. This transition for new hires occurred from October 1, 2006 to January 1, 2008. In addition, effective January 1, 2010, certain employees of UST and Middleton who were participants in noncontributory defined benefit pension plans ceased to earn additional benefit service under those plans and became eligible to participate in a defined contribution plan with enhanced benefits. Altria Group, Inc. and its subsidiaries also provide health care and other benefits to the majority of retired employees.

Pension Plans

Components of Net Periodic Benefit Cost

Net periodic pension cost consisted of the following:



	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
	2012			2011			2012			2011
	(in millions)
Service cost	$	59		$	56		$	19		$	18
Interest cost	258			263			86			88
Expected return on plan assets	(331		)	(317		)	(110		)	(106		)
Amortization:
Net loss	168			129			56			43
Prior service cost	8			10			3			3
Net periodic pension cost	$	162		$	141		$	54		$	46

Employer Contributions

Altria Group, Inc. makes contributions to the extent that they are tax deductible and pays benefits that relate to plans for salaried employees that cannot be funded under Internal Revenue Service ("IRS") regulations. On January 3, 2012, Altria Group, Inc. made a voluntary $500 million contribution to its pension plans. Additional employer contributions of $38 million were made to Altria Group, Inc.'s pension plans during the nine months ended September 30, 2012. Currently, Altria Group, Inc. anticipates making additional employer contributions to its pension plans during the remainder of 2012 of up to approximately $20 million, based on current tax law. However, this estimate is subject to change as a result of changes in tax and other benefit laws, as well as asset performance significantly above or below the assumed long-term rate of return on pension assets, or changes in interest rates.

Postretirement Benefit Plans

Net postretirement health care costs consisted of the following:



	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
	2012			2011			2012			2011
	(in millions)
Service cost	$	16		$	25		$	5		$	8
Interest cost	87			104			27			35
Amortization:
Net loss	34			30			10			11
Prior service credit	(32		)	(16		)	(9		)	(5		)
Curtailment gain	(26		)	—			—			—
Net postretirement health care costs	$	79		$	143		$	33		$	49

The curtailment gain included in the table above is related to the 2011 Cost Reduction Program. For further information on this program, see Note 2. Asset Impairment, Exit, Implementation and Integration Costs.