Philip Morris Capital Corporation

Philip Morris Capital Corporation (PMCC) is a wholly-owned subsidiary of Altria Group.  The company's portfolio consists primarily of leveraged and direct finance lease investments leased to predominately investment grade credits.  The portfolio of assets generates operating companies' income, cash flow and tax deferral for Altria.

PMCC was formed in 1982. Over the years, the company has built a diversified portfolio of assets by providing the equity portion of lease financing of domestic and international assets such as aircraft, manufacturing facilities, power generation assets and real estate. PMCC closely monitors the business fundamentals within the market segments represented by its leasing portfolio as well as the long-term trends that affect lessees and portfolio assets.

PMCC is currently focused on managing its portfolio of leased assets in order to maximize gains and cash flow from earning assets, as well as asset sales and terminations.

Performance and Financial Strength*

PMCC reported operating companies income of $30 million for the second-quarter of 2008 versus $139 million for the prior-year period. Operating companies income was lower due to a 2007 cash recovery of $78 million from assets that had been previously written down, as well as lower asset management gains and lease revenues in 2008.

PMCC remains focused on managing its portfolio of leased assets to maximize gains and cash flows from income generating assets, as well as asset sales and related activities. PMCC is not making new investments and expects that its operating companies income will vary over time as investments mature or are sold.

*Altria Group has revised its reporting segments to reflect the PMI spin-off and the December 2007 acquisition of John Middleton. Altria Group's reporting segments are Cigarettes and Other Tobacco Products, manufactured and sold by Philip Morris USA; Cigars, manufactured and sold by John Middleton; and Financial Services, provided by Philip Morris Capital Corporation.

Contact Information

Philip Morris Capital Corporation
225 High Ridge Road, Suite 300
West Stamford, CT 06905
Tel: 203-348-1350