Altria Group, Inc.


    --  Philip Morris International (PMI) to replace U.S.-sourced cigarettes
        with increased production at European facilities by third quarter of
        2008

    --  Philip Morris USA (PM USA) to consolidate cigarette manufacturing in
        Richmond, VA and close Cabarrus, NC manufacturing facility by end of
        2010

    --  Program expected to generate total annual pre-tax cost savings of
        approximately $335 million by 2011, with cumulative total expenses of
        approximately $670 million, of which $440 million will be paid in cash

    --  PM USA to take initial pre-tax charge related to program of
        approximately $325 million or $0.10 per Altria share in second quarter
        of 2007

Altria Group, Inc. (NYSE: MO) today announced plans by its tobacco subsidiaries
to optimize worldwide cigarette production by moving U.S.-based cigarette
production for non-U.S. markets to PMI facilities in Europe. Due to declining
U.S. cigarette volume, as well as PMI's decision to re-source its production, PM
USA will close its Cabarrus, NC manufacturing facility and consolidate
manufacturing for the U.S. market at its Richmond, VA Manufacturing Center.

Altria Group, Inc. said that it expects PM USA to record an initial pre-tax
charge of approximately $325 million or $0.10 per Altria share in the second
quarter of 2007 for costs related to the program, primarily for employee
separation, with additional estimated charges of approximately $50 million for
the remainder of 2007.

The program is expected to generate pre-tax cost savings beginning in 2008, with
total estimated annual cost savings of approximately $335 million by 2011, of
which $179 million will be realized by PMI and $156 million by PM USA.
Cumulative total expenses through 2011 are estimated at approximately $670
million, all of which will be at PM USA. Expenses are summarized in the
following table:

                Summary of Estimated Expenses by 2011
                             ($ millions)
----------------------------------------------------------------------
Accelerated depreciation                         $143
Employee separation                              353
Other*                                           174
                                 -------------------------------------
Total**                                          $670
*Includes employee relocation costs and relocation of equipment and
 installation costs, partially offset by estimated gains on sales of
 land and buildings.

**Approximately 66% of the total expenses or $440 million will be paid
 in cash. In addition, the program will entail capital expenditures of
 approximately $230 million at PM USA and $50 million at PMI.

PMI is expected to shift sourcing of approximately 57 billion cigarettes from
Cabarrus to PMI facilities in Europe by the third quarter of 2008, and PM USA
will close its Cabarrus manufacturing facility by the end of 2010. The Cabarrus
facility currently employs approximately 2,500 people. PM USA and PMI are
significant purchasers of U.S. leaf tobacco and will continue to purchase U.S.
tobacco for future production. Looking ahead, PM USA said that it plans to
source its production of cigarettes sold in the U.S. from its manufacturing
facility in Richmond.

"PM USA recognizes the profound impact the closing of the Cabarrus cigarette
manufacturing facility has on employees and their families. As the company works
to reduce manufacturing overcapacity, it will address the adverse impact on
employees by relocating as many as possible to jobs in Richmond and offering
separation benefits to those it cannot relocate," said Mike Szymanczyk, chairman
and chief executive officer of PM USA. "It is my hope that the majority of
employees at Cabarrus will be able to relocate to Richmond."

As a result of increased production requirements at its operations in Richmond,
coupled with ongoing retirements of current Richmond-based employees, PM USA
expects to be able to offer positions in Richmond to most North Carolina-based
hourly employees and many salaried employees. PM USA employees who are displaced
by the changes will be eligible for three to twenty months of severance pay and
benefits, depending on length of service, as well as job outplacement
counseling.

Altria Group, Inc. Profile

As of March 31, 2007, Altria Group, Inc. owned 100% of Philip Morris
International Inc., Philip Morris USA Inc. and Philip Morris Capital
Corporation, and approximately 28.6% of SABMiller plc. The brand portfolio of
Altria Group, Inc.'s tobacco operating companies includes such well-known names
as Marlboro, L&M, Parliament and Virginia Slims. Altria Group, Inc. recorded
2006 net revenues (ex-Kraft) from continuing operations of $67.1 billion.

Trademarks and service marks mentioned in this release are the registered
property of, or licensed by, the subsidiaries of Altria Group, Inc.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and other
forward-looking statements that involve a number of risks and uncertainties and
are made pursuant to the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. The following important factors could cause
actual results and outcomes to differ materially from those contained in such
forward-looking statements.

Altria Group, Inc.'s tobacco subsidiaries (Philip Morris USA and Philip Morris
International) are subject to intense price competition; changes in consumer
preferences and demand for their products; fluctuations in levels of customer
inventories; the effects of foreign economies and local economic and market
conditions; unfavorable currency movements and changes to income tax laws. Their
results are dependent upon their continued ability to promote brand equity
successfully; to anticipate and respond to new consumer trends; to develop new
products and markets and to broaden brand portfolios in order to compete
effectively with lower-priced products; and to improve productivity.

Altria Group, Inc.'s tobacco subsidiaries continue to be subject to litigation,
including risks associated with adverse jury and judicial determinations, and
courts reaching conclusions at variance with the company's understanding of
applicable law and bonding requirements in the limited number of jurisdictions
that do not limit the dollar amount of appeal bonds; legislation, including
actual and potential excise tax increases; discriminatory excise tax structures;
increasing marketing and regulatory restrictions; the effects of price increases
related to excise tax increases and concluded tobacco litigation settlements on
consumption rates and consumer preferences within price segments; health
concerns relating to the use of tobacco products and exposure to environmental
tobacco smoke; governmental regulation; privately imposed smoking restrictions;
and governmental and grand jury investigations.

Altria Group, Inc. and its subsidiaries are subject to other risks detailed from
time to time in its publicly filed documents, including its Quarterly Report on
Form 10-Q for the period ended March 31, 2007. Altria Group, Inc. cautions that
the foregoing list of important factors is not complete and does not undertake
to update any forward-looking statements that it may make.

Altria Group, Inc.
Nicholas M. Rolli, 917-663-3460
or
Timothy R. Kellogg, 917-663-2759
or
Philip Morris USA
Media Center
804-484-8897
or
Philip Morris International
Press Center
41 (58) 242-4500
Altria Group (LSE:ALA)
Historical Stock Chart
From Jun 2024 to Jul 2024 Click Here for more Altria Group Charts.
Altria Group (LSE:ALA)
Historical Stock Chart
From Jul 2023 to Jul 2024 Click Here for more Altria Group Charts.