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Revenues, net of excise taxes, of $22.8 billion were up 9.6% in 2007 for PMI, Altria’s international tobacco business. Operating companies income increased 5.5% to $8.9 billion for the full year 2007, due primarily to higher pricing, favorable currency of $471 million and productivity and cost savings, partially offset by the impact of the 2006 gain on the Dominican Republic transaction and higher marketing and R&D.

Operating companies income grew 12.5% in 2007 when adjusted for the impact of the Dominican Republic transaction and other items shown in the table below.

Cigarette shipment volume increased 2.2%, or 18.6 billion units, to 850.0 billion units in 2007, due to the acquisition of Lakson in Pakistan. Excluding Lakson and the acquisition of local trademarks in Mexico effective November 1, 2007, cigarette shipments were down 0.7% or 5.6 billion units, due mainly to lower shipments in Germany and Poland and the unfavorable impact of timing and trade inventory movements, primarily in Japan and Mexico. Partially offsetting the decline were strong gains in Argentina, Egypt, Indonesia, Korea and Ukraine, as well as favorable timing in Italy. Absent acquisitions and the net impact of unfavorable timing and inventory movements, PMI shipments were essentially flat in 2007.

Marlboro cigarette shipment volume of 311.2 billion units was down 1.5% in 2007, due mainly to timing in Mexico and unfavorable distributor inventory movements in Japan, partially offset by gains in Argentina, Bulgaria, Indonesia, Korea and Russia. Absent timing and inventory distortions in Japan, Mexico and other markets, Marlboro shipments were down slightly by 0.2% in 2007. Marlboro market share was up in Argentina, Brazil, Egypt, Greece, Hungary, Indonesia, Israel, Korea, the Philippines, Poland, Russia and Ukraine.

Shipment volume for PMI’s other international brands grew by 1.5%, or 4.8 billion units, to 327 billion units for the full year 2007, driven by gains in Parliament, Virginia Slims, the Philip Morris brand, Merit, Chesterfield, Bond Street and Muratti, partially offset by lower volume for L&M and Lark.