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Altria Reports 2012 Third-Quarter And Nine-Month Results; Reaffirms 2012 EPS Guidance; Expands Share Repurchase Program By $500 Million

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Altria's 2012 third-quarter reported diluted EPS decreased 43.9% primarily due to the loss on early extinguishment of debt discussed below, partially offset by higher OCI in smokeable products, higher earnings from Altria's equity investment in SABMiller and fewer shares outstanding.

For the first nine months of 2012, Altria's reported diluted EPS increased 22.8% primarily due to special items related to certain PMCC leveraged lease transactions in 2011, higher earnings from Altria's equity investment in SABMiller, including net gains from SABMiller special items discussed below, higher OCI in smokeable products and fewer shares outstanding. These favorable factors were partially offset by the loss on early extinguishment of debt discussed below.

Altria's adjusted diluted EPS, which excludes special items that are discussed below, increased 3.6% to $0.58 for the third quarter of 2012, and increased 7.8% to $1.66 for the first nine months of 2012 as shown in Table 2.

Table 2 - Altria's Adjusted Results Excluding Special Items
Third Quarter

Nine Months Ended September 30,

2012   2011   Change 2012   2011   Change
Reported diluted EPS $   0.32   $   0.57   (43.9)% $   1.51   $   1.23   22.8%
Loss on early extinguishment of debt 0.28 0.28
Asset impairment, exit, integration and implementation costs 0.01
SABMiller special items 0.01 (0.08 ) 0.01
PMCC leveraged lease (benefit) charge (0.03 ) 0.30
Tobacco and health judgments 0.01
Tax Items* (0.03 )   (0.01 ) (0.03 )   (0.01 )
Adjusted diluted EPS $   0.58     $   0.56   3.6% $   1.66     $   1.54   7.8%

* Excludes the tax impact of the PMCC leveraged lease (benefit) charge.

Loss on Early Extinguishment of Debt

Comparisons of Altria's third-quarter and nine-month reported diluted EPS were impacted by a loss on early extinguishment of debt resulting from the previously announced third-quarter 2012 debt tender offer. Altria recorded a charge of $0.28 per share against 2012 third-quarter earnings, representing the loss on early extinguishment of debt. This charge is reflected in Schedules 1 and 3, and the EPS impacts are shown in Table 2 and Schedules 6 and 7.

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