Altria Group, Inc. 2013 Annual Report altria.com Altria’s Operating Companies Philip Morris USA Inc. (PM USA) Philip Morris USA is the largest tobacco company in the U.S. and has about half of the U.S. cigarette market’s retail share. Altria Group, Inc. U.S. Smokeless Tobacco Company LLC (USSTC) U.S. Smokeless Tobacco Company is the n an Altria Company largest producer and marketer of moist Annual Report 2013 smokeless tobacco, one of the fastest growing tobacco segments in the U.S. John Middleton Co. (Middleton) John Middleton is a leading manufacturer of machine-made large cigars and pipe tobacco. Ste. Michelle Wine Estates Ltd. (Ste. Michelle) Ste. Michelle Wine Estates ranks among the top-ten producers of premium wines in the U.S. Nu Mark LLC (Nu Mark) Nu Mark is focused on responsibly developing and marketing innovative tobacco products for adult tobacco consumers. Philip Morris Capital Corporation (PMCC) Philip Morris Capital Corporation manages an existing portfolio of leveraged and direct finance lease investments. Altria Group, Inc. 6601 W. Broad Street Richmond, VA 23230-1723 Our Mission is to own and develop financially disciplined Shareholder Information businesses that are leaders in responsibly providing adult tobacco and wine consumers with superior branded products. Shareholder Response Center: Direct Stock Purchase and If you do not have Internet Stock Computershare Trust Company, Dividend Reinvestment Plan: access, you may call: Exchange Listing: N.A. (Computershare), our trans- Altria Group, Inc. offers a Direct 1-804-484-8222 The principal stock fer agent, will be happy to answer Stock Purchase and Dividend exchange on which questions about your accounts, Reinvestment Plan, administered Internet Access Altria Group, Inc.’s certificates, dividends or the by Computershare. For more Helps Reduce Costs: common stock (par value 1 Our Direct Stock Purchase and information, or to purchase As a convenience to shareholders $0.33 ⁄3 per share) is listed, is n Create Dividend Reinvestment Plan. shares directly through the Plan, and an important cost-reduction the New York Stock Exchange please contact Computershare. and environmentally friendly mea- (ticker symbol: MO). As of n n n Strategies Invest In Align With Satisfy Adult Substantial Within the U.S. and Canada, sure, you can register to receive January 31, 2014, there were support our Leadership Society Consumers Value For shareholders may call toll-free: Shareholder Publications: future shareholder materials approximately 78,000 holders Shareholders 1-800-442-0077 Altria Group, Inc. makes a variety (i.e., Annual Report and proxy of record of Altria Group, Inc.’s of publications and reports avail- statement) electronically. Share- common stock. Mission. From outside the U.S. or Canada, able. 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Form 10-K, 10-Q and 8-K) with the Meeting of Shareholders will be we pursue our Mission and E-mail address: U.S. Securities and held at 9:00 a.m. ET on Wednes- Trademarks and service marks in [email protected] Exchange Commission (SEC). day, May 14, 2014, at The Greater this report are the registered prop- our business strategies. Richmond Convention Center, 403 erty of or licensed by Altria Group, To eliminate duplicate mailings, For copies, please visit our web- North Third Street, Richmond, VA Inc. or its subsidiaries. please contact Computershare (if site at: 23219. For further information, you are a registered shareholder) www.altria.com/SECfilings call: 1-804-484-8838. or your broker (if you hold your stock through a brokerage firm). n Driving n Passion To Creativity Into n Integrity, Trust n Executing n Sharing Succeed Everything And Respect With Quality With Others We Do Mailing Addresses Altria Group, Inc. John Middleton Co. Philip Morris Independent Auditors: 6601 W. Broad Street 6601 W. Broad Street Capital Corporation Richmond, VA 23230-1723 Richmond, VA 23230-1723 225 High Ridge Road PricewaterhouseCoopers LLP altria.com johnmiddletonco.com Suite 300 West 1021 E. Cary St., Suite 1250 Stamford, CT 06905-3000 Richmond, VA 23219 Philip Morris USA Inc. Ste. Michelle Wine philipmorriscapitalcorp.com P.O. Box 26603 Estates Ltd. Transfer Agent and Registrar: Richmond, VA 23261-6603 P.O. Box 1976 Nu Mark LLC philipmorrisusa.com Woodinville, WA 98072-1976 6603 West Broad Street Computershare Trust smwe.com Richmond, VA 23230-1723 Company, N.A. U.S. Smokeless Tobacco nu-mark.com P.O. Box 43078 Company LLC Providence, RI 02940-3078 P.O. Box 85107 Richmond, VA 23285-5107 ussmokeless.com The 2013 annual report was printed on FSC® Design: RWI rwidesign.com certified paper. The FSC® is an independent, Photography: Casey Templeton, Doug Buerlein, Leo Burnett, non-governmental, not-for-profit global Richmond CenterStage organization established to promote the Printer: Stephenson Printing Inc. responsible management of the world’s forests. © Copyright 2013 Altria Group, Inc. Financial Highlights Consolidated Results (dollars in millions, except per share data) 2013 2012 Change Net revenues $ 24,466 $ 24,618 (0.6) % Operating income 8,084 7,253 11.5% Net earnings 4,535 4,183 8.4 % Net earnings attributable to Altria Group, Inc. 4,535 4,180 8.5% Basic and diluted earnings per share attributable to Altria Group, Inc. 2.26 2.06 9.7 % Cash dividends declared per share 1.84 1.70 8.2% Results by Reportable Segment 2013 2012 Change Smokeable Products Net revenues $ 21,868 $ 22,216 (1.6) % Operating companies income 7,063 6,239 13.2 % Smokeless Products Net revenues $ 1,778 $ 1,691 5.1 % Operating companies income 1,023 931 9.9 % Wine Net revenues $ 609 $ 561 8.6 % Operating companies income 118 104 13.5 % The chief operating decision maker of Altria Group, Inc. (Altria) reviews operating companies income (OCI) to evaluate the performance of and allocate resources to the segments. OCI for the segments is defined as operating income before amortization of intangibles and general corporate expenses. Management believes it is appropriate to disclose this measure to help investors analyze the business performance and trends of the various segments. For a reconciliation of OCI to operating income, see Note 15. Segment Reporting to the consolidated financial statements in Item 8 of the enclosed Annual Report on Form 10-K. 11 Dear Shareholder Our tobacco operating companies own the leading premium brands in the largest and most profitable domestic tobacco categories: cigarettes, smokeless tobacco and machine-made large cigars. I am pleased to report that Altria delivered Strengthening another year of strong results and returns Our Core Business for our shareholders in 2013. Altria grew its In the smokeable products segment, full-year 2013 adjusted diluted earnings per Philip Morris USA Inc. (PM USA) and share (EPS) by 7.7%. Our total shareholder John Middleton Co. (Middleton) focused return of 28.6% for the full year outper- on their strategy of maximizing income formed the S&P 500’s Food, Beverage while maintaining modest share momentum Martin J. Barrington and Tobacco sector. on Marlboro and Black & Mild over time. In 2012, PM USA rolled out a new brand Our results were driven by our employees’ architecture for Marlboro, enabling PM continued focus on our Mission to own and USA to expand the brand’s reach among develop financially disciplined businesses adult smokers. Through this architecture that are leaders in responsibly providing each of Marlboro’s four flavor families, adult tobacco and wine consumers with Red, Gold, Green and Black, expresses the superior branded products. How we conduct brand’s essence and values in unique ways, business is as important as the results we allowing Marlboro to expand the breadth and achieve. Our people work each day to deliver relevance of its equity-building programs. results with integrity, passion, creativity In 2013, PM USA continued to invest in the and quality execution that is visible in our architecture and expanded distribution of companies’ premium brands. Marlboro, Marlboro NXT and Marlboro Edge for the Black & Mild, Copenhagen and Skoal Black family and Marlboro Southern Cut for continue to be market leaders in the the Gold family. In the cigar space, Middleton tobacco industry. expanded Black & Mild Jazz nationally in 2013, helping strengthen Black & Mild’s Our tobacco operating companies own the position in the category. leading premium brands in the largest and most profitable domestic tobacco categories: In the smokeless products segment, cigarettes, smokeless tobacco and machine- U.S. Smokeless Tobacco Company LLC’s made large cigars. In 2013, our core tobacco (USSTC) strategy is to increase income companies grew their operating companies by growing its volume at or ahead of the income (OCI) and maintained market lead- category growth rate, while maintaining ership in their respective categories, while modest share momentum on Copenhagen building a foundation for future growth in and Skoal combined. For 2013, USSTC innovative tobacco products. grew volume and OCI, led by the strong performance of Copenhagen. Altria made significant progress in 2013 against our four core strategies to Invest in Ste.