(Continued)

International Tobacco

Philip Morris International generated strong income growth for the full year 2007, buoyed by currency, and registered encouraging volume performance, with improved trends in 17 of its top 25 volume markets in the fourth quarter of 2007 compared with the previous nine months.

Revenues net of excise taxes were up 9.6% to $22.8 billion, while cigarette shipment volume increased a solid 2.2% versus 2006, including the acquisition of Lakson in Pakistan.

Operating companies income increased 5.5% to $8.9 billion for the full year 2007, but was up 12.5% when adjusted for the 2006 Dominican Republic transaction and the 2006 Italian antitrust charge, as well as asset impairment and exit costs.

PMI’s full-year 2007 market share performance improved in many markets. However, share performance in Japan cast a shadow on an otherwise very strong year, due mainly to a share decline for Lark. I am confident that PMI has a number of exciting plans and innovative products to enhance its market share fortunes in Japan in 2008 and beyond.

For 2008, PMI is projecting a robust earnings performance, driven by pricing, cost reductions and continued currency favorability at prevailing rates. Volume, however, is anticipated to be essentially flat or slightly down this year, reflecting continued total cigarette consumption erosion in several markets. Nevertheless, PMI anticipates that its product mix will continue to improve sequentially.

Over the long term, I am of the firm belief that as an independent company, PMI has an outstanding opportunity to enhance its growth rates through sharper focus, speed to market and execution.

Improving Litigation Environment

Over the last several years, greater clarity has emerged in the litigation environment as the result of favorable developments in both trial and appellate courts. Such developments continued in 2007 and in the year-to-date in 2008, and are fully discussed in Note 19 to the Consolidated Financial Statements in this report.

We remain confident that the strength of our defenses, along with the developing law, will provide for further success in the litigation faced by the company into the future.

Outlook

Altria enters 2008 a very different company than it was just one year ago. There is no doubt that the U.S. tobacco business will continue to face a fiercely competitive environment, but I believe that the company’s principal subsidiary, PM USA, is superbly prepared to successfully manage its challenges and to take full advantage of the opportunities ahead.

Finally, I want to take this opportunity to salute the immensely talented and dedicated employees of Altria, PM USA and PMI. They have shown remarkable loyalty and determination in difficult and challenging circumstances. Without them, we would not have been able to complete the restructuring of the company in a seamless manner, to the benefit of our shareholders, and I thank them individually and collectively from the bottom of my heart.

Louis C. Camilleri
Former Chairman of the Board and
Chief Executive Officer
March 31, 2008