Altria estimates total net pre-tax restructuring charges in connection with this program of approximately $300 million, substantially all of which will result in cash expenditures, consisting primarily of employee separation costs of approximately $220 million and other associated net costs of $80 million. Other associated net costs include lease termination and asset impairment charges, partially offset by a curtailment gain related to a post-retirement benefit plan.

Altria recorded net pre-tax restructuring charges totaling $264 million over the past four quarters, including restructuring charges of $11 million in the third quarter of 2012. Altria expects to incur the remaining pre-tax restructuring charges in the fourth quarter of 2012.

Cash Returns to Shareholders - Dividends

In August 2012, Altria announced that its Board of Directors (Board) voted to increase the regular quarterly dividend by 7.3% to $0.44 per common share versus the previous rate of $0.41 per common share. The current annualized dividend rate is $1.76 per common share. As of October 23, 2012, Altria's annualized dividend yield was 5.4%.

Altria expects to continue to return a large amount of cash to shareholders in the form of dividends by maintaining a dividend payout ratio target of approximately 80% of its adjusted diluted EPS. Future dividend payments remain subject to the discretion of the Board.

Cash Returns to Shareholders - Share Repurchase Program

Altria repurchased 7.7 million shares of its common stock at an average price of $34.25 for a total cost of approximately $262 million during the third quarter of 2012.

On October 23, 2012, Altria's Board authorized the expansion of the current share repurchase program from $1.0 billion to $1.5 billion. Altria has approximately $550 million remaining in the expanded program, which it expects to complete by the end of the second quarter of 2013. The timing of share repurchases depends upon marketplace conditions and other factors and the program remains subject to the discretion of the Board.

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