Segment Reporting

6 Months Ended

Jun. 30, 2011

Segment Reporting

Segment Reporting

Note 7. Segment Reporting:

The products of Altria Group, Inc.'s consumer products subsidiaries include cigarettes manufactured and sold by PM USA, smokeless products manufactured and sold by or on behalf of USSTC and PM USA, machine-made large cigars and pipe tobacco manufactured and sold by Middleton, and wine produced and/or distributed by Ste. Michelle. Another subsidiary of Altria Group, Inc., PMCC, maintains a portfolio of leveraged and direct finance leases. The products and services of these subsidiaries constitute Altria Group, Inc.'s reportable segments of cigarettes, smokeless products, cigars, wine and financial services.

Altria Group, Inc.'s chief operating decision maker reviews operating companies income to evaluate segment performance and allocate resources. Operating companies income for the segments excludes general corporate expenses and amortization of intangibles. Interest and other debt expense, net (consumer products), and provision for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by Altria Group, Inc.'s chief operating decision maker.

Segment data were as follows:

	For the Six Months Ended June 30,						For the Three Months Ended June 30,
	2011			2010			2011			2010
	(in millions)
Net revenues:
Cigarettes	$	10,735		$	10,712		$	5,709		$	5,589
Smokeless products		783			771			404			390
Cigars		266			290			149			155
Wine		217			201			116			106
Financial services		(438	)		60			(458	)		34
Net revenues	$	11,563		$	12,034		$	5,920		$	6,274
Earnings before income taxes:
Operating companies income (loss):
Cigarettes	$	2,883		$	2,680		$	1,536		$	1,450
Smokeless products		415			376			222			198
Cigars		69			103			47			56
Wine		31			19			19			12
Financial services		(442	)		60			(463	)		39
Amortization of intangibles		(11	)		(10	)		(5	)		(4	)
General corporate expenses		(111	)		(99	)		(61	)		(52	)
Reduction of Kraft and PMI tax-related receivables					(169	)					(169	)
Corporate exit costs					(1	)					(1	)
Operating income		2,834			2,959			1,295			1,529
Interest and other debt expense, net		(572	)		(577	)		(294	)		(290	)
Earnings from equity investment in SABMiller		344			251			155			113
Earnings before income taxes	$	2,606		$	2,633		$	1,156		$	1,352

Items affecting the comparability of net revenues and/or operating companies income (loss) for the segments were as follows:

PMCC Leveraged Lease Charge – During the second quarter of 2011, Altria Group, Inc. recorded a one-time charge of $627 million related to the tax treatment of certain leveraged lease transactions entered into by PMCC ("PMCC Leveraged Lease Charge"). Included in this charge was a pre-tax charge of $490 million that was recorded as a decrease to PMCC's net revenues and operating companies income (see Note 8. Finance Assets, net, Note 10. Income Taxes and Note 11. Contingencies for further discussion of matters related to this charge).

Asset Impairment, Exit, Implementation and Integration Costs - See Note 2. Asset Impairment, Exit, Implementation and Integration Costs for a breakdown of asset impairment, exit, implementation and integration costs by segment.