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Altria Announces Cash Tender Offer For A Portion Of Its Long-Term Debt

Altria revises its guidance for 2013 full-year reported diluted EPS from a range of $2.57 to $2.62 to a range of $2.22 to $2.27, reflecting the Estimated Charge and the other special items detailed in Table 1 below.

Altria reaffirms its guidance for 2013 full-year adjusted diluted EPS, which excludes the special items shown in Table 1 below, to be in the range of $2.36 to $2.41, representing a growth rate of 7% to 9% from an adjusted diluted EPS base of $2.21 per share in 2012. Altria’s reaffirmation of the 2013 full-year adjusted diluted EPS guidance includes an increase in Altria’s 2013 full-year effective tax rate on operations that Altria expects to result from the tender offer, as discussed below.

The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to this forecast. Reconciliations of full-year adjusted to reported diluted EPS are shown in Table 1 below.

Table 1 - Altria’s Full-Year Earnings Per Share Guidance Excluding Special Items  
  Full Year
2013 Guidance   2012   Change
Reported diluted EPS $

2.22

to $

2.27

$ 2.06

8

% to 10 %
NPM Adjustment items 1 (0.21 ) -
Asset impairment, exit and implementation costs - 0.01
SABMiller special items 0.01 (0.08 )
PMCC leveraged lease benefit - (0.03 )
Loss on early extinguishment of debt

0.35

0.28
Tax items 2       (0.01 )   (0.03 )      
Adjusted diluted EPS   $ 2.36 to $ 2.41   $ 2.21   7 % to 9 %
1 Reflects the impact of Philip Morris USA Inc.’s (PM USA) settlement with certain states of the non-participating manufacturer adjustment (NPM Adjustment) disputes for 2003-2012 (NPM Adjustment Settlement) ($0.16) and the diligent enforcement rulings of the arbitration panel presiding over the NPM Adjustment dispute for 2003 (NPM Arbitration Panel Decision) ($0.05).
2 Excludes the tax impact of the Philip Morris Capital Corporation (PMCC) leveraged lease benefit.

2013 Full-Year Tax Rate Guidance

Altria anticipates that its 2013 full-year effective tax rate on operations will increase by half of one percent to approximately 36.2% due to a reduction in certain consolidated tax benefits resulting from the tender offer. The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to this forecast. Reconciliations of 2013 full-year effective tax rate on operations to reported effective tax rate are shown in Table 2 below.

Table 2 - Altria’s 2013 Tax Rates    
Full Year
2013 Guidance
Reported effective tax rate 35.6 %
Tax benefit from Mondelēz International, Inc. tax matters 0.2 %
Other tax benefits primarily due to the reversal of tax accruals no longer required
0.4 %
Effective tax rate on operations   36.2 %

Dividend and Share Repurchase Program

Altria does not expect the tender for the Notes or the issuance of the New Notes to impact Altria’s dividend payout ratio target of approximately 80% of its adjusted diluted EPS or its current $1.0 billion share repurchase program. Future dividend payments and the share repurchase program remain subject to the discretion of Altria’s Board of Directors.

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