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Altria Reports 2012 Fourth-Quarter And Full-Year Results; Delivers 2012 Full-Year Adjusted EPS Growth Of 7.8%

Altria's 2012 fourth-quarter reported diluted EPS increased 34.1% primarily due to lower asset impairment, exit, integration and implementation costs and lower tobacco and health judgments. Reported diluted EPS also benefited from higher OCI in both the smokeable products and smokeless products segments, higher earnings from Altria's equity investment in SABMiller and fewer shares outstanding. Altria's fourth-quarter adjusted diluted EPS, which excludes the impact of special items, grew 10.0% to $0.55 as shown in Table 2.

For the full year of 2012, Altria's reported diluted EPS increased 25.6% primarily due to special items related to PMCC leveraged lease transactions, higher earnings from Altria's equity investment in SABMiller, including net gains from SABMiller special items, higher OCI in the smokeable products segment, including lower charges related to restructuring and lower tobacco and health judgments, and fewer shares outstanding. These favorable factors were partially offset by the loss on early extinguishment of debt as discussed below. Altria's full-year 2012 adjusted diluted EPS, which excludes special items, increased 7.8% to $2.21 as shown in Table 2.

Table 2 - Altria's Adjusted Results Excluding Special Items
Fourth Quarter Full Year
2012             2011             Change 2012             2011             Change
Reported diluted EPS $   0.55             $   0.41             34.1 % $   2.06             $   1.64             25.6 %
Loss on early extinguishment of debt 0.28
Asset impairment, exit, integration and implementation costs 0.07 0.01 0.07
SABMiller special items 0.01 (0.08 ) 0.03
PMCC leveraged lease (benefit) charge (0.03 ) 0.30
Tobacco and health judgments 0.04 0.05
Tax Items*               (0.03 ) (0.03 )             (0.04 )
Adjusted diluted EPS $   0.55               $   0.50   10.0 % $   2.21               $   2.05   7.8 %

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

Loss on Early Extinguishment of Debt

Comparisons of Altria's full-year reported diluted EPS were impacted by a charge resulting from the 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 Schedule 3, and the EPS impacts are shown in Table 2 and Schedule 7.

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