8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 30, 2007

ALTRIA GROUP, INC.

(Exact name of registrant as specified in its charter)

Virginia	1-8940	13-3260245
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

120 Park Avenue, New York, New York	10017-5592
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (917) 663-4000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01. Completion of Disposition of Assets.

On March 30, 2007, Altria Group, Inc. (“Altria”) completed the spin-off of Kraft Foods Inc. (“Kraft”) to Altria stockholders. The distribution of the approximately 88.9% of Kraft’s outstanding shares owned by Altria was made on March 30, 2007, to Altria stockholders of record as of 5:00 p.m. Eastern Time on March 16, 2007, the record date. Each Altria stockholder received 0.692024 of a share of Kraft for each share of Altria common stock held as of the record date. Altria stockholders will receive cash in lieu of fractional shares for amounts of less than one Kraft share.

In the aggregate, Altria distributed 1,455,000,000 shares of Kraft Class A common stock to Altria stockholders. Based on the closing price for Kraft Class A common stock on the New York Stock Exchange on March 30, 2007 of $31.66 per share, the aggregate market value of the shares distributed was approximately $46.1 billion. The distribution was structured to be tax free to Altria stockholders for U.S. federal income tax purposes, except to the extent of cash received in lieu of fractional shares.

Kraft, through its subsidiaries, manufactures and markets packaged food and beverage products, consisting principally of beverages, cheese, snacks, convenient meals and various packaged grocery products.

Item 9.01. Financial Statements and Exhibits.

(b) Pro forma financial information

Included as Exhibit 99.1 are (i) unaudited pro forma condensed consolidated statements of earnings for the years ended December 31, 2006, 2005 and 2004, that treat the spin-off of Kraft as if the distribution and related transactions occurred on January 1, 2004 and (ii) an unaudited pro forma condensed consolidated balance sheet as of December 31, 2006 that gives effect to the spin-off of Kraft as if the distribution and related transactions occurred on December 31, 2006.

These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the separation of Kraft been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with Altria’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2006, and Management’s Discussion and Analysis included in Altria’s Annual Report on Form 10-K for the year ended December 31, 2006.

(d) Exhibits

99.1 Unaudited Pro Forma Financial Statements including:

(i) Unaudited Pro Forma Condensed Consolidated Statements of Earnings for the Years Ended December 31, 2006, 2005 and 2004; and

(ii) Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ALTRIA GROUP, INC.
	By:	/S/ JOSEPH A. TIESI
		Name:	Joseph A. Tiesi
		Title:	Vice President and Controller
DATE: April 5, 2007

EXHIBIT INDEX

Exhibit No.	Description
99.1	Unaudited Pro Forma Financial Statements including:
	(i)     Unaudited Pro Forma Condensed Consolidated Statements of Earnings for the Years Ended December 31, 2006, 2005 and 2004; and
	(ii)    Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2006.

EX-99.1

Exhibit 99.1 Pro Forma Condensed Consolidated Financial Information

Introduction

On March 30, 2007 (the “Distribution Date”), Altria Group, Inc. (“Altria”) completed the spin-off of Kraft Foods Inc. (“Kraft”) to Altria stockholders. The distribution of the approximately 88.9% of Kraft’s outstanding shares owned by Altria was made on March 30, 2007, to Altria stockholders of record as of 5:00 p.m. Eastern Time on March 16, 2007, the record date. Each Altria stockholder received 0.692024 of a share of Kraft for each share of Altria common stock held as of the record date. Altria stockholders will receive cash in lieu of fractional shares for amounts of less than one Kraft share.

Holders of Altria stock options were treated in the same manner as stockholders and, accordingly, had their stock awards split into the following two instruments, which, immediately after the spin-off, had an aggregate intrinsic value equal to the intrinsic value of the Altria options immediately before the spin-off:

• a new Kraft option to acquire the number of shares of Kraft Class A common stock equal to the product of (a) the number of Altria options held by such person on the Distribution Date and (b) the distribution ratio of 0.692024; and

• an adjusted Altria option for the same number of shares of Altria common stock with a reduced exercise price.

Holders of Altria restricted stock or stock rights, awarded prior to January 31, 2007, retained their existing awards and received restricted stock or stock rights of Kraft Class A common stock, calculated using the same formula set forth above with respect to new Kraft options. All of the restricted stock and stock rights will vest in accordance with the original restriction period (typically, three years from the date of the original grant). Recipients of Altria stock rights awarded on January 31, 2007 (other than those employees who transferred to Kraft prior to the Distribution Date), did not receive stock rights of Kraft. Rather, they received additional stock rights of Altria to preserve the intrinsic value of the original award.

To the extent that employees of the remaining Altria received Kraft stock options, Altria will reimburse Kraft in cash for the Black-Scholes fair value of the stock options received. To the extent that Kraft employees hold Altria stock options, Kraft will reimburse Altria in cash for the Black-Scholes fair value of the stock options. To the extent that holders of Altria stock rights received Kraft stock rights, Altria will reimburse Kraft in cash for the market value of the Kraft stock on the Distribution Date less the value of projected forfeitures. Based upon the number of Altria stock awards outstanding at December 31, 2006, the net amount of these reimbursements would be a payment of approximately $133 million from Kraft to Altria.

Kraft was included in the Altria consolidated federal income tax return, and federal income tax contingencies are recorded as liabilities on the balance sheet of ALG (the parent company). ALG will reimburse Kraft in cash for these liabilities, which are approximately $300 million, plus interest.

A subsidiary of ALG provided Kraft with certain services at cost plus a 5% management fee. After the Distribution Date, Kraft will undertake these activities, and services provided to Kraft will cease in 2007. All intercompany accounts will be settled in cash.

Altria currently estimates that, if the distribution had occurred on December 31, 2006, it would have resulted in a net decrease to Altria’s stockholders’ equity of approximately $27 billion.

The unaudited pro forma condensed consolidated statements of earnings for the years ended December 31, 2006, 2005 and 2004, treat the spin-off of Kraft as if the distribution and related transactions occurred on January 1, 2004. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2006 gives effect to the spin-off of Kraft as if the distribution and related transactions occurred on December 31, 2006. The unaudited pro forma condensed consolidated financial statements are subject to the assumptions and adjustments set forth in the accompanying notes. Management believes that the assumptions used and adjustments made are reasonable under the circumstances and given the information available.

These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the spin-off of Kraft been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with Altria’s consolidated financial statements and accompanying notes as of and for the year ended December 31, 2006 and Management’s Discussion and Analysis included in Altria’s Annual Report on Form 10-K for the year ended December 31, 2006.

Altria Group, Inc. and Subsidiaries

Pro Forma Condensed Consolidated Statement of Earnings

For the Year Ended December 31, 2006

(Unaudited)

(in millions, except per share data)	Historical Altria (a)			Spin-off of Kraft (b)			Adjustments			Pro Forma Altria
Net revenues	$	101,407		$	(34,356	)				$	67,051
Cost of sales		37,480			(21,940	)					15,540
Excise taxes on products		31,083									31,083
Gross profit		32,844			(12,416	)		—			20,428
Marketing, administration and research costs		14,913			(7,249	)					7,664
International tobacco Italian antitrust charge		61									61
Asset impairment and exit costs		1,180			(1,002	)					178
Gain on redemption of United Biscuits investment		(251	)		251						—
Gains on sales of businesses, net		(605	)		117						(488	)
Provision for airline industry exposure		103									103
Amortization of intangibles		30			(7	)					23
Operating income		17,413			(4,526	)		—			12,887
Interest and other debt expense, net		877			(510	)					367
Earnings from continuing operations before income taxes, minority interest, and equity earnings, net		16,536			(4,016	)		—			12,520
Provision for income taxes		4,351			(951	)					3,400
Earnings from continuing operations before minority interest, and equity earnings, net		12,185			(3,065	)		—			9,120
Equity earnings and minority interest in earnings from continuing operations, net		163			(5	)		(367	)(c)		(209	)
Earnings from continuing operations	$	12,022		$	(3,060	)	$	367		$	9,329
Per share data
Basic earnings per share	$	5.76								$	4.47
Diluted earnings per share	$	5.71								$	4.43
Weighted average shares outstanding:
Basic		2,087									2,087
Diluted		2,105									2,105

See introduction and accompanying notes.

Altria Group, Inc. and Subsidiaries

Pro Forma Condensed Consolidated Statement of Earnings

For the Year Ended December 31, 2005

(Unaudited)

(in millions, except per share data)	Historical Altria (a)			Spin-off of Kraft (b)			Adjustments			Pro Forma Altria
Net revenues	$	97,854		$	(34,113	)				$	63,741
Cost of sales		36,764			(21,845	)					14,919
Excise taxes on products		28,934									28,934
Gross profit		32,156			(12,268	)		—			19,888
Marketing, administration and research costs		14,799			(7,135	)					7,664
Domestic tobacco headquarters relocation charges		4									4
Domestic tobacco loss on U.S. tobacco pool		138									138
Domestic tobacco quota buy-out		(115	)								(115	)
Asset impairment and exit costs		618			(479	)					139
Gains on sales of businesses, net		(108	)		108						—
Provision for airline industry exposure		200									200
Amortization of intangibles		28			(10	)					18
Operating income		16,592			(4,752	)		—			11,840
Interest and other debt expense, net		1,157			(636	)					521
Earnings from continuing operations before income taxes, minority interest, and equity earnings, net		15,435			(4,116	)		—			11,319
Provision for income taxes		4,618			(1,209	)					3,409
Earnings from continuing operations before minority interest, and equity earnings, net		10,817			(2,907	)		—			7,910
Equity earnings and minority interest in earnings from continuing operations, net		149			(3	)		(406	)(c)		(260	)
Earnings from continuing operations	$	10,668		$	(2,904	)	$	406		$	8,170
Per share data
Basic earnings per share	$	5.15								$	3.95
Diluted earnings per share	$	5.10								$	3.91
Weighted average shares outstanding:
Basic		2,070									2,070
Diluted		2,090									2,090

See introduction and accompanying notes.

Altria Group, Inc. and Subsidiaries

Pro Forma Condensed Consolidated Statement of Earnings

For the Year Ended December 31, 2004

(Unaudited)

(in millions, except per share data)	Historical Altria (a)		Spin-off of Kraft (b)			Adjustments			Pro Forma Altria
Net revenues	$	89,610	$	(32,168	)				$	57,442
Cost of sales		33,959		(20,281	)					13,678
Excise taxes on products		25,647								25,647
Gross profit		30,004		(11,887	)		—			18,117
Marketing, administration and research costs		13,665		(6,658	)					7,007
Domestic tobacco headquarters relocation charges		31								31
International tobacco E.C. agreement		250								250
Asset impairment and exit costs		718		(603	)					115
Losses on sales of businesses, net		3		(3	)					—
Provision for airline industry exposure		140								140
Amortization of intangibles		17		(11	)					6
Operating income		15,180		(4,612	)		—			10,568
Interest and other debt expense, net		1,176		(666	)					510
Earnings from continuing operations before income taxes, minority interest, and equity earnings, net		14,004		(3,946	)		—			10,058
Provision for income taxes		4,540		(1,274	)					3,266
Earnings from continuing operations before minority interest, and equity earnings, net		9,464		(2,672	)		—			6,792
Equity earnings and minority interest in earnings from continuing operations, net		44		(3	)		(402	)(c)		(361	)
Earnings from continuing operations	$	9,420	$	(2,669	)	$	402		$	7,153
Per share data
Basic earnings per share	$	4.60							$	3.49
Diluted earnings per share	$	4.57							$	3.47
Weighted average shares outstanding:
Basic		2,047								2,047
Diluted		2,063								2,063

See introduction and accompanying notes.

Altria Group, Inc. and Subsidiaries

Pro Forma Condensed Consolidated Balance Sheet

As of December 31, 2006

(Unaudited)

(in millions)
Assets	Historical Altria (a)		Spin-off of Kraft (d)			Adjustments			Pro Forma Altria
Cash and cash equivalents	$	5,020	$	(239	)	$	369	(e,f,g)	$	5,150
Receivables, net		6,070		(3,869	)					2,201
Inventories		12,186		(3,506	)					8,680
Other current assets		2,876		(640	)					2,236
Total current assets		26,152		(8,254	)		369			18,267
Property, plant and equipment, net		17,274		(9,693	)					7,581
Goodwill		33,235		(25,553	)		(1,485	)(h)		6,197
Other intangible assets, net		12,085		(10,177	)					1,908
Other assets		8,734		(1,897	)		305	(f)		7,142
Total consumer products assets		97,480		(55,574	)		(811	)		41,095
Financial services assets		6,790		—						6,790
Total assets	$	104,270	$	(55,574	)	$	(811	)	$	47,885
Liabilities
Short-term borrowings	$	2,135	$	(1,715	)				$	420
Current portion of long-term debt		2,066		(1,418	)					648
Due to Altria Group, Inc. and affiliates		—		(607	)		607	(g)		—
Accounts payable		4,016		(2,602	)					1,414
Accrued liabilities:
Marketing		2,450		(1,626	)					824
Taxes, except income taxes		3,696		(76	)					3,620
Employment costs		1,599		(750	)					849
Settlement charges		3,552		—						3,552
Other		3,169		(1,528	)					1,641
Income taxes payable		933		(151	)		(24	)(f)		758
Dividends payable		1,811		—						1,811
Total current liabilities		25,427		(10,473	)		583			15,537
Long-term debt		13,379		(7,081	)					6,298
Deferred income taxes		5,321		(3,930	)					1,391
Accrued pension costs		1,563		(1,022	)					541
Accrued postretirement health care costs		5,023		(3,014	)					2,009
Minority interest		3,528		(26	)		(3,083	)(h)		419
Other liabilities		3,712		(1,473	)		—			2,239
Total consumer products liabilities		57,953		(27,019	)		(2,500	)		28,434
Financial services liabilities		6,698		—						6,698
Total liabilities		64,651		(27,019	)		(2,500	)		35,132
Stockholders' Equity		39,619		(28,555	)		1,689	(e,f,h)		12,753
Total liabilities and stockholders' equity	$	104,270	$	(55,574	)	$	(811	)	$	47,885

See introduction and accompanying notes.

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a) These columns reflect the historical consolidated statement of earnings and consolidated balance sheet of Altria, as appropriate.

(b) These columns reflect the removal of Kraft’s consolidated statement of earnings from the Altria historical consolidated financial statements.

(c) Represents the adjustment to remove the minority interest in Kraft’s earnings from continuing operations in the Altria historical consolidated statement of earnings.

(d) This column reflects the removal of Kraft’s consolidated balance sheet from the Altria historical consolidated balance sheet.

(e) Represents the adjustment to record the pro forma cash payment by Kraft to Altria of $133 million as a result of the modifications to the existing stock awards that were described in the introduction to the pro forma condensed consolidated financial statements. This cash receipt is reflected as a capital transaction in the Altria pro forma condensed consolidated balance sheet.

(f) Represents the adjustment to record the pro forma cash payment by Altria to Kraft for tax contingencies of $305 million and the related accrued pre-tax interest of $66 million, ($42 million after tax). This entry also reflects the recognition of a long-term receivable from Kraft on the pro forma condensed consolidated balance sheet. This receivable arises from the Tax Sharing Agreement between Altria and Kraft, whereby Kraft will reimburse Altria for Kraft’s portion of tax contingencies that existed prior to the spin-off that may be paid to the taxing authorities in the future. The Altria pro forma condensed consolidated balance sheet contains a corresponding liability to the taxing authorities for the period prior to the spin-off under consolidated tax return regulations.

(g) Represents the cash settlement of the $607 million payable to Altria recorded by Kraft in its historical balance sheet.

(h) Represents an adjustment to the dividend of Kraft stock to Altria stockholders for the removal of the minority interest liability ($3,083 million) recorded in the historical balance sheet of Altria, partially offset by the removal of the goodwill ($1,485 million) recorded by Altria as a result of Kraft share repurchases. The total dividend to stockholders of $26,957 million reflects the removal of Kraft’s net equity of $28,555 million, partially offset by these adjustments.