Condensed Consolidating Financial Information:

PM USA, which is a wholly-owned subsidiary of Altria Group, Inc., has issued guarantees relating to Altria Group, Inc.’s obligations under its outstanding debt securities, borrowings under its Credit Agreement and amounts outstanding under its commercial paper program (the “Guarantees”). Pursuant to the Guarantees, PM USA fully and unconditionally guarantees, as primary obligor, the payment and performance of Altria Group, Inc.’s obligations under the guaranteed debt instruments (the “Obligations”), subject to release under certain customary circumstances as noted below.

The Guarantees provide that PM USA guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of the Obligations. The liability of PM USA under the Guarantees is absolute and unconditional irrespective of: any lack of validity, enforceability or genuineness of any provision of any agreement or instrument relating thereto; any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from any agreement or instrument relating thereto; any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the Obligations; or any other circumstance that might otherwise constitute a defense available to, or a discharge of, Altria Group, Inc. or PM USA.

The obligations of PM USA under the Guarantees are limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of PM USA that are relevant under Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the Guarantees, result in PM USA’s obligations under the Guarantees not constituting a fraudulent transfer or conveyance. For this purpose, “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

PM USA will be unconditionally released and discharged from the Obligations upon the earliest to occur of:


•	the date, if any, on which PM USA consolidates with or merges into Altria Group, Inc. or any successor;


•	the date, if any, on which Altria Group, Inc. or any successor consolidates with or merges into PM USA;


•	the payment in full of the Obligations pertaining to such Guarantees; and


•	the rating of Altria Group, Inc.’s long-term senior unsecured debt by Standard & Poor’s of A or higher.

At June 30, 2013, the respective principal wholly-owned subsidiaries of Altria Group, Inc. and PM USA were not limited by long-term debt or other agreements in their ability to pay cash dividends or make other distributions with respect to their common stock.

The following sets forth the condensed consolidating balance sheets as of June 30, 2013 and December 31, 2012, condensed consolidating statements of earnings and comprehensive earnings for the six and three months ended June 30, 2013 and 2012, and condensed consolidating statements of cash flows for the six months ended June 30, 2013 and 2012 for Altria Group, Inc., PM USA and Altria Group, Inc.’s other subsidiaries that are not guarantors of Altria Group, Inc.’s debt instruments (the “Non-Guarantor Subsidiaries”). The financial information is based on Altria Group, Inc.’s understanding of the Securities and Exchange Commission (“SEC”) interpretation and application of Rule 3-10 of SEC Regulation S-X.

The financial information may not necessarily be indicative of results of operations or financial position had PM USA and the Non-Guarantor Subsidiaries operated as independent entities. Altria Group, Inc. and PM USA account for investments in their subsidiaries under the equity method of accounting.

Condensed Consolidating Balance Sheets

June 30, 2013

(in millions of dollars)



	Altria Group, Inc.		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	2,536	$	1	$	34	$	—		$	2,571
Receivables	21		7		86		—			114
Inventories:
Leaf tobacco	—		403		356		—			759
Other raw materials	—		132		50		—			182
Work in process	—		4		307		—			311
Finished product	—		201		248		—			449
	—		740		961		—			1,701
Due from Altria Group, Inc. and subsidiaries	5,568		1,994		1,351		(8,913		)	—
Deferred income taxes	—		1,246		17		(46		)	1,217
Other current assets	187		166		82		(178		)	257
Total current assets	8,312		4,154		2,531		(9,137		)	5,860
Property, plant and equipment, at cost	2		3,258		1,516		—			4,776
Less accumulated depreciation	2		2,126		608		—			2,736
	—		1,132		908		—			2,040
Goodwill	—		—		5,174		—			5,174
Other intangible assets, net	—		2		12,066		—			12,068
Investment in SABMiller	6,502		—		—		—			6,502
Investment in consolidated subsidiaries	9,628		3,006		—		(12,634		)	—
Finance assets, net	—		—		2,345		—			2,345
Other assets	150		538		130		(367		)	451
Total Assets	$	24,592	$	8,832	$	23,154	$	(22,138	)	$	34,440

Continued

Condensed Consolidating Balance Sheets (Continued)

June 30, 2013

(in millions of dollars)



	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Current portion of long-term debt	$	1,984		$	—		$	—		$	—		$	1,984
Accounts payable	1			131			143			—			275
Accrued liabilities:
Marketing	—			496			17			—			513
Employment costs	81			8			80			—			169
Settlement charges	—			2,082			6			—			2,088
Other	339			783			258			(224		)	1,156
Dividends payable	885			—			—			—			885
Due to Altria Group, Inc. and subsidiaries	2,737			420			5,756			(8,913		)	—
Total current liabilities	6,027			3,920			6,260			(9,137		)	7,070
Long-term debt	12,591			—			299			—			12,890
Deferred income taxes	1,999			—			4,928			(367		)	6,560
Accrued pension costs	227			—			1,066			—			1,293
Accrued postretirement health care costs	—			1,735			763			—			2,498
Other liabilities	183			192			155			—			530
Total liabilities	21,027			5,847			13,471			(9,504		)	30,841
Contingencies
Redeemable noncontrolling interest	—			—			33			—			33
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,670			3,321			10,272			(13,593		)	5,670
Earnings reinvested in the business	25,201			81			1,161			(1,242		)	25,201
Accumulated other comprehensive losses	(2,330		)	(417		)	(1,793		)	2,210			(2,330		)
Cost of repurchased stock	(25,911		)	—			—			—			(25,911		)
Total stockholders’ equity attributable to Altria Group, Inc.	3,565			2,985			9,649			(12,634		)	3,565
Noncontrolling interests	—			—			1			—			1
Total stockholders’ equity	3,565			2,985			9,650			(12,634		)	3,566
Total Liabilities and Stockholders’ Equity	$	24,592		$	8,832		$	23,154		$	(22,138	)	$	34,440

Condensed Consolidating Balance Sheets

December 31, 2012

(in millions of dollars)



	Altria Group, Inc.		PM USA		Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	2,862	$	—	$	38	$	—		$	2,900
Receivables	101		7		85		—			193
Inventories:
Leaf tobacco	—		512		364		—			876
Other raw materials	—		127		46		—			173
Work in process	—		3		346		—			349
Finished product	—		117		231		—			348
	—		759		987		—			1,746
Due from Altria Group, Inc. and subsidiaries	834		3,424		1,171		(5,429		)	—
Deferred income taxes	—		1,246		16		(46		)	1,216
Other current assets	—		193		175		(108		)	260
Total current assets	3,797		5,629		2,472		(5,583		)	6,315
Property, plant and equipment, at cost	2		3,253		1,495		—			4,750
Less accumulated depreciation	2		2,073		573		—			2,648
	—		1,180		922		—			2,102
Goodwill	—		—		5,174		—			5,174
Other intangible assets, net	—		2		12,076		—			12,078
Investment in SABMiller	6,637		—		—		—			6,637
Investment in consolidated subsidiaries	9,521		3,018		—		(12,539		)	—
Finance assets, net	—		—		2,581		—			2,581
Due from Altria Group, Inc. and subsidiaries	4,500		—		—		(4,500		)	—
Other assets	136		530		141		(365		)	442
Total Assets	$	24,591	$	10,359	$	23,366	$	(22,987	)	$	35,329

Continued

Condensed Consolidating Balance Sheets (Continued)

December 31, 2012

(in millions of dollars)



	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Liabilities
Current portion of long-term debt	$	1,459		$	—		$	—		$	—		$	1,459
Accounts payable	4			155			292			—			451
Accrued liabilities:
Marketing	—			526			42			—			568
Employment costs	27			10			147			—			184
Settlement charges	—			3,610			6			—			3,616
Other	469			506			272			(154		)	1,093
Dividends payable	888			—			—			—			888
Due to Altria Group, Inc. and subsidiaries	3,965			409			1,055			(5,429		)	—
Total current liabilities	6,812			5,216			1,814			(5,583		)	8,259
Long-term debt	12,120			—			299			—			12,419
Deferred income taxes	2,034			—			4,983			(365		)	6,652
Accrued pension costs	235			—			1,500			—			1,735
Accrued postretirement health care costs	—			1,759			745			—			2,504
Due to Altria Group, Inc. and subsidiaries	—			—			4,500			(4,500		)	—
Other liabilities	222			178			156			—			556
Total liabilities	21,423			7,153			13,997			(10,448		)	32,125
Contingencies
Redeemable noncontrolling interest	—			—			34			—			34
Stockholders’ Equity
Common stock	935			—			9			(9		)	935
Additional paid-in capital	5,688			3,321			10,272			(13,593		)	5,688
Earnings reinvested in the business	24,316			314			943			(1,257		)	24,316
Accumulated other comprehensive losses	(2,040		)	(429		)	(1,891		)	2,320			(2,040		)
Cost of repurchased stock	(25,731		)	—			—			—			(25,731		)
Total stockholders’ equity attributable to Altria Group, Inc.	3,168			3,206			9,333			(12,539		)	3,168
Noncontrolling interests	—			—			2			—			2
Total stockholders’ equity	3,168			3,206			9,335			(12,539		)	3,170
Total Liabilities and Stockholders’ Equity	$	24,591		$	10,359		$	23,366		$	(22,987	)	$	35,329

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Six Months Ended June 30, 2013

(in millions of dollars)



	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	10,340		$	1,504	$	(11	)	$	11,833
Cost of sales	—			2,852			430		(11		)	3,271
Excise taxes on products	—			3,208			126		—			3,334
Gross profit	—			4,280			948		—			5,228
Marketing, administration and research costs	95			867			102		—			1,064
Asset impairment and exit costs	—			1			—		—			1
Amortization of intangibles	—			—			10		—			10
Operating (expense) income	(95		)	3,412			836		—			4,153
Interest and other debt expense (income), net	324			(1		)	202		—			525
Earnings from equity investment in SABMiller	(483		)	—			—		—			(483		)
Earnings before income taxes and equity earnings of subsidiaries	64			3,413			634		—			4,111
(Benefit) provision for income taxes	(26		)	1,262			224		—			1,460
Equity earnings of subsidiaries	2,561			102			—		(2,663		)	—
Net earnings	2,651			2,253			410		(2,663		)	2,651
Net earnings attributable to noncontrolling interests	—			—			—		—			—
Net earnings attributable to Altria Group, Inc.	$	2,651		$	2,253		$	410	$	(2,663	)	$	2,651


Net earnings	$	2,651		$	2,253		$	410	$	(2,663	)	$	2,651
Other comprehensive (losses) earnings, net of deferred income taxes	(290		)	12			98		(110		)	(290		)
Comprehensive earnings	2,361			2,265			508		(2,773		)	2,361
Comprehensive earnings attributable to noncontrolling interests	—			—			—		—			—
Comprehensive earnings attributable to Altria Group, Inc.	$	2,361		$	2,265		$	508	$	(2,773	)	$	2,361

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Six Months Ended June 30, 2012

(in millions of dollars)



	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	10,646		$	1,500		$	(12	)	$	12,134
Cost of sales	—			3,475			415			(12		)	3,878
Excise taxes on products	—			3,411			149			—			3,560
Gross profit	—			3,760			936			—			4,696
Marketing, administration and research costs	87			918			125			—			1,130
Asset impairment and exit costs	—			36			1			—			37
Amortization of intangibles	—			—			10			—			10
Operating (expense) income	(87		)	2,806			800			—			3,519
Interest and other debt expense (income), net	367			(1		)	220			—			586
Earnings from equity investment in SABMiller	(743		)	—			—			—			(743		)
Earnings before income taxes and equity earnings of subsidiaries	289			2,807			580			—			3,676
Provision for income taxes	55			1,040			160			—			1,255
Equity earnings of subsidiaries	2,186			107			—			(2,293		)	—
Net earnings	2,420			1,874			420			(2,293		)	2,421
Net earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Net earnings attributable to Altria Group, Inc.	$	2,420		$	1,874		$	419		$	(2,293	)	$	2,420


Net earnings	$	2,420		$	1,874		$	420		$	(2,293	)	$	2,421
Other comprehensive earnings, net of deferred income taxes	213			6			51			(57		)	213
Comprehensive earnings	2,633			1,880			471			(2,350		)	2,634
Comprehensive earnings attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive earnings attributable to Altria Group, Inc.	$	2,633		$	1,880		$	470		$	(2,350	)	$	2,633

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended June 30, 2013

(in millions of dollars)



	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries		Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,518		$	793	$	(6	)	$	6,305
Cost of sales	—			1,753			225		(6		)	1,972
Excise taxes on products	—			1,713			66		—			1,779
Gross profit	—			2,052			502		—			2,554
Marketing, administration and research costs	49			448			50		—			547
Asset impairment and exit costs	—			1			—		—			1
Amortization of intangibles	—			—			5		—			5
Operating (expense) income	(49		)	1,603			447		—			2,001
Interest and other debt expense (income), net	163			(1		)	102		—			264
Earnings from equity investment in SABMiller	(227		)	—			—		—			(227		)
Earnings before income taxes and equity earnings of subsidiaries	15			1,604			345		—			1,964
(Benefit) provision for income taxes	(17		)	595			120		—			698
Equity earnings of subsidiaries	1,234			58			—		(1,292		)	—
Net earnings	1,266			1,067			225		(1,292		)	1,266
Net earnings attributable to noncontrolling interests	—			—			—		—			—
Net earnings attributable to Altria Group, Inc.	$	1,266		$	1,067		$	225	$	(1,292	)	$	1,266


Net earnings	$	1,266		$	1,067		$	225	$	(1,292	)	$	1,266
Other comprehensive (losses) earnings, net of deferred income taxes	(262		)	4			39		(43		)	(262		)
Comprehensive earnings	1,004			1,071			264		(1,335		)	1,004
Comprehensive earnings attributable to noncontrolling interests	—			—			—		—			—
Comprehensive earnings attributable to Altria Group, Inc.	$	1,004		$	1,071		$	264	$	(1,335	)	$	1,004

Condensed Consolidating Statements of Earnings and Comprehensive Earnings

For the Three Months Ended June 30, 2012

(in millions of dollars)



	Altria Group, Inc.			PM USA		Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Net revenues	$	—		$	5,724	$	769		$	(6	)	$	6,487
Cost of sales	—			1,876		216			(6		)	2,086
Excise taxes on products	—			1,834		73			—			1,907
Gross profit	—			2,014		480			—			2,494
Marketing, administration and research costs	53			487		56			—			596
Asset impairment and exit costs	—			16		—			—			16
Amortization of intangibles	—			—		5			—			5
Operating (expense) income	(53		)	1,511		419			—			1,877
Interest and other debt expense, net	182			—		111			—			293
Earnings from equity investment in SABMiller	(223		)	—		—			—			(223		)
(Loss) earnings before income taxes and equity earnings of subsidiaries	(12		)	1,511		308			—			1,807
(Benefit) provision for income taxes	(29		)	558		52			—			581
Equity earnings of subsidiaries	1,208			58		—			(1,266		)	—
Net earnings	1,225			1,011		256			(1,266		)	1,226
Net earnings attributable to noncontrolling interests	—			—		(1		)	—			(1		)
Net earnings attributable to Altria Group, Inc.	$	1,225		$	1,011	$	255		$	(1,266	)	$	1,225


Net earnings	$	1,225		$	1,011	$	256		$	(1,266	)	$	1,226
Other comprehensive earnings, net of deferred income taxes	11			7		30			(37		)	11
Comprehensive earnings	1,236			1,018		286			(1,303		)	1,237
Comprehensive earnings attributable to noncontrolling interests	—			—		(1		)	—			(1		)
Comprehensive earnings attributable to Altria Group, Inc.	$	1,236		$	1,018	$	285		$	(1,303	)	$	1,236

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2013

(in millions of dollars)



	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities	$	2,145		$	1,096		$	5		$	(2,676	)	$	570
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(9		)	(32		)	—			(41		)
Proceeds from finance assets	—			—			274			—			274
Other	—			—			6			—			6
Net cash (used in) provided by investing activities	—			(9		)	248			—			239
Cash Provided by (Used in) Financing Activities
Long-term debt issued	996			—			—			—			996
Repurchases of common stock	(226		)	—			—			—			(226		)
Dividends paid on common stock	(1,769		)	—			—			—			(1,769		)
Changes in amounts due to/from Altria Group, Inc. and subsidiaries	(1,463		)	1,443			20			—			—
Financing fees and debt issuance costs	(8		)	—			—			—			(8		)
Cash dividends paid to parent	—			(2,486		)	(190		)	2,676			—
Other	(1		)	(43		)	(87		)	—			(131		)
Net cash used in financing activities	(2,471		)	(1,086		)	(257		)	2,676			(1,138		)
Cash and cash equivalents:
(Decrease) increase	(326		)	1			(4		)	—			(329		)
Balance at beginning of period	2,862			—			38			—			2,900
Balance at end of period	$	2,536		$	1		$	34		$	—		$	2,571

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2012

(in millions of dollars)



	Altria Group, Inc.			PM USA			Non- Guarantor Subsidiaries			Total Consolidating Adjustments			Consolidated
Cash Provided by (Used in) Operating Activities
Net cash provided by (used in) operating activities	$	714		$	935		$	229		$	(1,963	)	$	(85	)
Cash Provided by (Used in) Investing Activities
Capital expenditures	—			(11		)	(28		)	—			(39		)
Proceeds from finance assets	—			—			552			—			552
Other	—			—			(3		)	—			(3		)
Net cash (used in) provided by investing activities	—			(11		)	521			—			510
Cash Provided by (Used in) Financing Activities
Long-term debt issued	—			—			—			—			—
Repurchases of common stock	(360		)	—			—			—			(360		)
Dividends paid on common stock	(1,674		)	—			—			—			(1,674		)
Changes in amounts due to/from Altria Group, Inc. and subsidiaries	(424		)	960			(536		)	—			—
Financing fees and debt issuance costs	—			—			—			—			—
Cash dividends paid to parent	—			(1,845		)	(118		)	1,963			—
Other	1			(39		)	(95		)	—			(133		)
Net cash used in financing activities	(2,457		)	(924		)	(749		)	1,963			(2,167		)
Cash and cash equivalents:
(Decrease) increase	(1,743		)	—			1			—			(1,742		)
Balance at beginning of period	3,245			—			25			—			3,270
Balance at end of period	$	1,502		$	—		$	26		$	—		$	1,528