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Philip Morris International Announces Reorganization of Its Business in the Dominican Republic

Posted on: Thursday, 16 November 2006, 15:00 CST

Philip Morris International Inc. (PMI), the international tobacco business of Altria Group, Inc. (NYSE: MO), today announced that it is reorganizing its tobacco and beer equity holdings in the Dominican Republic.

Currently, a subsidiary of PMI holds a 47.5% interest in E. León Jimenes, C. por. A. (ELJ), which has equity holdings in tobacco and beer operations in the Dominican Republic. PMI said its subsidiary will exchange its 47.5% interest in ELJ, which represents a 40% indirect interest in ELJ's beer subsidiary, Cerveceria Nacional Dominicana, C. por. A., for 100% ownership of ELJ's cigarette subsidiary, Industria de Tabaco León Jimenes, S.A. (ITLJ) and approximately $427 million of cash, which will be contributed to ITLJ prior to the transaction. When the transaction is completed, PMI will own 100% of the cigarette business and will no longer hold an interest in ELJ's beer business. The reorganization is expected to close later this month.

The transaction is expected to increase Altria's 2006 consolidated net earnings by $0.15 per share. As a result, Altria said that it is increasing its forecast for full-year 2006 diluted earnings per share from continuing operations to a range of $5.63 to $5.68, versus a previously disclosed range of $5.48 to $5.53.

Altria Group, Inc. Profile

As of September 30, 2006, Altria Group, Inc. owned approximately 88.6% of the outstanding common shares of Kraft Foods Inc. and 100% of the outstanding common shares of Philip Morris International Inc., Philip Morris USA Inc. and Philip Morris Capital Corporation. In addition, Altria Group, Inc. owned approximately 28.7% of SABMiller plc. The brand portfolio of Altria Group, Inc.'s consumer packaged goods companies includes such well-known names as Kraft, Jacobs, L&M, Marlboro, Maxwell House, Nabisco, Oreo, Oscar Mayer, Parliament, Philadelphia, Post and Virginia Slims. Altria Group, Inc. recorded 2005 net revenues of $97.9 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 consumer products subsidiaries are subject to changing prices for raw materials; 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; to improve productivity; and to respond effectively to changing prices for raw materials.

Altria Group, Inc.'s tobacco subsidiaries (Philip Morris USA and Philip Morris International) 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 September 30, 2006. 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.

Source: Business Wire

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