Altria Resolves Tax Dispute with IRS Regarding Philip Morris Capital Corporation Leases; Reaffirms Guidance

Altria expects to pay approximately $500 million in federal and state income taxes and related estimated interest as a result of the resolution of previously disclosed tax dispute pertaining to certain leveraged lease transactions Altria expects to record a one-time benefit of approximately $0.03 per share to its 2012 second-quarter reported earnings, resulting in an increase to Altria's 2012 full-year guidance for reported diluted earnings per share (EPS) from a range of $2.25 to $2.31 to a range of $2.28 to $2.34 Altria reaffirms 2012 full-year guidance for adjusted diluted EPS in a range of $2.17 to $2.23, representing a growth rate of 6% to 9% from an adjusted diluted EPS base of $2.05 in 2011 Altria Group, Inc. (Altria)

today announced that it has executed a Closing Agreement (Agreement) with the Internal Revenue Service (IRS) that, subject to court approval, resolves the federal income tax treatment for all prior tax years of certain leveraged lease transactions (referred to by the IRS as lease-in/lease-out (LILO) and sale-in/lease-out (SILO) transactions) entered into by Altria's wholly-owned subsidiary, Philip Morris Capital Corporation (PMCC). Altria expects to pay approximately $500 million in federal and state income taxes and related estimated interest as a result of the Agreement. Of this amount, Altria expects to pay approximately $450 million in federal income taxes and related estimated interest with respect to the 2000 through 2010 tax years by the end of the second quarter of 2012. The payment is net of federal income taxes that Altria paid on gains associated with sales of assets leased in the LILO and SILO transactions from January 1, 2008 through December 31, 2011. Of the $500 million, Altria also expects to pay approximately $50 million of state taxes and related estimated interest. The tax component of these payments represents an acceleration of federal and state income taxes that Altria would have otherwise paid over the lease terms of the LILO and SILO transactions.