2016 barclays global consumer staples conference altria

September 9, 2015

2015 Barclays Global Consumer Staples Conference Presentation

1 For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015

Safe Harbor Statement

Statements, including earnings guidance, in this presentation that are not reported

financial results or other historical information are “forward-looking statements” within

the meaning of Private Securities Litigation Reform Act of 1995. Such forward-

looking statements are based on current plans, estimates and expectations, and are

not guarantees of future performance. They are based on management’s

expectations that involve a number of business risks and uncertainties, any of which

could cause actual results to differ materially from those expressed in or implied by

the forward-looking statements. Altria undertakes no obligation to publicly update or

revise any forward-looking statement other than in the normal course of its public

disclosure obligations. The risks and uncertainties relating to the forward-looking

statements in this presentation include those described under “Risk Factors” in Altria’s

Annual Report on Form 10-K for the year ended December 31, 2014 and under

“Cautionary Factors That May Affect Future Results” in its Quarterly Report on Form

10-Q for the period ended June 30, 2015.

Reconciliations of non-GAAP financial measures included in this presentation to the

most comparable GAAP financial measures are available on Altria’s website at

altria.com.


Agenda

Goals and strategies

Track record of consistent

financial performance

Questions and answers


Track Record of Value Creation

FACT

Altria’s 20.2% annualized shareholder

return leads all companies named to

each FORTUNE 500 list since 1955.

4

Note: Third party trademarks are the property of their respective owners and are included for informational purposes only.

Source: Fortune.com, June 9, 2015

For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015

Altria’s Long-Term Financial Goals

• Grow adjusted diluted EPS at an average

annual rate of 7% to 9%

• Maintain a target dividend payout ratio of

approximately 80% of adjusted diluted EPS


Consistent Adjusted Diluted EPS* Growth

Source: Altria company reports

*For reconciliation of non-GAAP to GAAP measures visit altria.com

$1.75

$2.57

2009 2014

+8.0% CAGR


$1.36

$2.08

2.9% 8.6%

7.9% 7.3%

9.1% 8.3%

$0.00

$2.50

2009 Feb-10 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 2014

Strong Dividend Growth

Note: Year-end annualized rate: 5-year CAGR.


+8.9% CAGR

In 2014, we paid shareholders $3.9 billion in dividends.


Altria’s Performance Against Long-Term Goals

$1.22 $1.38

1H 2014 1H 2015



** Annualized dividend

Altria increased its dividend 49 times in the past 46 years.

+13.1%

Adjusted Diluted EPS* Performance

$2.08 $2.26

Aug-14 Aug-15

+8.7%

Dividend per Share**


Reaffirms 2015 Guidance

Altria reaffirms its guidance for 2015 full-year adjusted diluted EPS in the range

of $2.76 to $2.81, representing a growth rate of 7.5% to 9.5% from an adjusted

diluted EPS base of $2.57* in 2014.




1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Changing Industry Dynamics

Reynolds American

Inc. acquires

Lorillard

RJ Reynolds and

Brown & Williamson

Tobacco merge

Master Settlement

Agreement signed

Federal Excise Tax Increase

and FDA Regulation enacted



36.9

43.8

0

50

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Marlboro Camel Winston Newport

Marlboro Long-Term Performance

+6.9pp

Source: MSAi Shipments; IRI/Capstone IRP and TRP; IRI/MSAi

Note: IRI/MSAi was implemented to read market share in 2011. Share prior to that reflects estimates based on share changes derived from previous services.


1,081%

190%

330%

Altria Group S&P 500 S&P Food, Beverage &Tobacco

Total Shareholder Return 1998-2014

Source: Bloomberg 12/31/1997-12/31/2014

Note: Total shareholder return is simple price appreciation plus the reinvestment of the dividend as of the ex-dividend date. Excludes spin-offs.


Altria’s Strategies

Grow new income streams with innovative

tobacco products

Maximize income from core premium

tobacco businesses over the long term

Manage diverse income streams and

strong balance sheet to deliver consistent





tobacco products









tobacco products







For Investor Relations Purposes Only For Investor Purposes Only - Barclays Back-to-School Conference, Sept. 3, 2014

This space is blank because brand

images which appeared in the original

presentation have been removed.

U. S. Tobacco Manufacturers’ Profits

$11.8

$15.5

2009 2014

+5.5%

CAGR

Source: ALCS estimates; other public company reports

$ in Billions






74.8% 75.1% 75.6%

Q2 2013 Q2 2014 Q2 2015

Premium Segment Retail Share Performance

Source: IRI/MSAi


44.1%

Marlboro

Marlboro Retail Share Leadership

Source: IRI/MSAi, Cigarettes ending 6/30/15 (1H 2015)

Next 10 Largest Cigarette Brands = 43.0%


Unmatched Brand Equity

0

70

Camel NewportMarlboro 0

70

Camel NewportMarlboro

Source: 2014 TNS Brand Equity Study (Age Group: 21 – 54), February 2015

Overall Equity Overall Opinion


Cigarette Category Decline Rate Estimates

(5.0)%

(3.5)% (3.0)%

(4.0)% (3.5)%

(0.5)%

2010 2011 2012 2013 2014 1H 2015

Source: ALCS estimates


Smokeable Products Strategy


$3.3

$3.8

1H 2014 1H 2015

Smokeable Products Performance

Adjusted OCI* - $ in Billions


*For reconciliation of non GAAP to GAAP measures visit altria.com

+14.3%

1H 2014 1H 2015

Adjusted OCI* Margins

+2.9pp

44.1% 47.0%

Marlboro’s Retail Share

+0.3pp

1H 2014 1H 2015

43.8% 44.1%


$121.18 $127.08

1H 2014 1H 2015

Smokeable Products Segment Price Realization



Net Revenues Net of Excise Taxes /1000 Units*

+4.9%






1954 1964 1974 1984 1994 2004

Marlboro Long-Term Retail Share Growth

Source: Maxwell; MSAi Shipments; IRI/Capstone – Total Retail Panel; IRP IRI Group/Capstone Projected Retail Panel; IRI/MSAi

44.1%

1H ‘15






Active Digital Engagement with Adult Smokers









Marlboro Retail Share Among Adult Smokers

35%

45%

AS 21-29Total Marlboro

Source: CATTS 6mm May'15






Marlboro App: Convenient Adult Smoker Interaction





Increased Mobile Engagement

Mobile Logins - in Millions

0

10

2011 2014

~+1,000%

Note: Total mobile interactions (Adult Smokers 21+)

Source: PM USA


Marlboro’s Mobile Presence

Marlboro.com is among

the leading CPG mobile

websites.

Source: comScore, 1H 2015






Smokeless Products Category Adjusted Volume Growth

0

2,000

2009 2014

Source: IRI InfoScan, ALCS Estimate

~+5%

CAGR

Note: Volume adjusted for trade inventory changes, calendar differences and product discontinuation.

Cans in Millions

As of June 30th, USSTC estimates that smokeless category

volumes have grown ~3% on a trailing 12-month basis.


Smokeless Products Strategy


389.9 400.1

1H 2014 1H 2015

Smokeless Products Shipment Volume Performance


+2.6%

Note: Other includes Red Seal, Husky, Weyman’s Best and Marlboro Snus.

Reported Shipment Volume

40

352.2

37.7

364.7

35.4

Copenhagen & Skoal Other

1H 2014 1H 2015 1H 2014 1H 2015

+3.5% (6.1)%

Copenhagen & Skoal

Cans in Millions


64.5% 64.9%

1H 2014 1H 2015

$524 $548

1H 2014 1H 2015

Smokeless Products Income Growth


+4.6%


Adjusted OCI* - $ in Millions Adjusted OCI* Margins

+0.4pp


Copenhagen & Skoal Combined Retail Share

50.8% 51.1%

1H 2014 1H 2015

Source: IRI InfoScan

+0.3pp


Smokeless Products Segment Performance

Source: Altria company reports as of Q2 2015

The two leading premium brands

with over 51% combined retail share

for the first half of 2015






Copenhagen Retail Share Strength

26.0%

30.7%

2011 2014

Source: IRI Group InfoScan Smokeless Tobacco Database (FY 2012 – Retail Share)

Source: IRI InfoScan

~+1.6pp Average

Annual






Maximizing the Core, Innovating for the Future


tobacco products







tobacco products




~100%

~150%

~50%

<25%

2012 2013 2014 2015

Estimated U.S. E-Vapor Category Growth

Source: ALCS estimates

Consumer Expenditures Year over Year % Change

We estimate full-year 2015 consumer expenditures in

the e-vapor category to be nearing ~$2.5 billion.


Prevalence Deck June 2012 (2).pptx

Fullness of vapor

Familiar taste and form

Flavor variety

Dependable quality

Good battery life

Long-lasting cartridge

Reasonable value

E-Vapor Desired Attributes


Nu Mark’s E-Vapor Portfolio





MarkTen XL Features

Longer-lasting cartridge and battery

Familiar taste and form

More flavor variety

For Investor Purposes Only - Barclays GCS Conference, Sept. 9, 2015 51

Expanded Green Smoke Retail Presence





Expansion of Agreement with PMI

Expanded agreement with Philip Morris International includes joint research,

development and technology-sharing agreement on e-vapor products.

This supplements the 2013 agreement with PMI.

The latest step in our ongoing portfolio approach to product development and

commercialization.

Note: Third-party trademarks are the property of their respective owners and are included for informational purposes only.


Innovative Products Portfolio Approach





Regulatory Landscape

• We support FDA extending its regulatory authority over all

tobacco products.

• We believe FDA has an unprecedented opportunity to advance

public health goals.

• Proposed regulations recognized a continuum of risk for different

tobacco products.

• Implementation of a comprehensive tobacco harm reduction

strategy would be among the most meaningful actions FDA could

take to reduce the health effects of tobacco use.




tobacco products







Alcohol Assets





Wine Strategy


$50

$62

1H 2014 1H 2015

Wine Segment Performance


OCI - $ in Millions

+24.0%

18.9%

21.8%

1H 2014 1H 2015

OCI Margins

+2.9pp






SABMiller Market Value

Source: Bloomberg as of 8.31.2015

Note: Market value as of 8.31.2015

$20.2

Aug-15

Market Value ($ in Billions)

61


2011 2014

Adjusted Equity Earnings* ($ in Millions)

+8.3% CAGR

$812

$1,031


A Compelling Investment


• Diverse business

model

• Strong balance sheet

and cash flow

Return large

amounts of cash

to shareholders

Dividend Payout Ratio

80.9%

79.7%

78.4%

73.2%

69.8%

60.7%

59.8%

56.6%

53.8%

52.6%

MO

PM

RAI

LO

KRFT

GIS

KO

PEP

HSY

DPS

S&P Food, Beverage and Tobacco Index

NOTE: Altria’s dividend payout ratio is based on the August 2014 annualized dividend of $2.08 / $2.57 2014 adjusted diluted EPS. In addition, Altria’s announced targeted dividend

payout ratio is ~80% of adjusted EPS. All dividend payout ratios have been calculated using each company’s 2014 annualized dividend rate / 2014 actual and estimated

consensus adjusted diluted EPS. Dividend payout ratio ranks companies in the Food, Beverage and Tobacco Index in these respective categories.

Source: Bloomberg and Thomson First Call


An Attractive Dividend Yield

Source: Bloomberg

4.2%

2.2% 2.2%

Altria 10-year U.S.Treasury

S&P 500

Altria’s dividend yield

was higher than virtually

all S&P Food, Beverage

and Tobacco peers.

Note: as of August 31, 2015


Strong Dividend Growth

$1.36

$2.26

Aug-09 Aug-15

+8.8% CAGR


Note: Dividend shown annualized as of August 2009 and August 2015.

$ per Share


Returning Value to Shareholders

$13.0

$3.1

$16.1

2012 to Q2 2015

Share Repurchase

Dividend


In July 2015, Altria’s Board of Directors authorized

a new $1 billion share repurchase program.

$ in Billions






Investing For Our Future






Earnings Per Share Performance

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 2012 2013 2014

Altria's Adjusted Diluted EPS*

S&P 500 Operating EPS

Source: Altria company reports; Standard and Poor’s


7.9%

4.6%

Altria's AdjustedDiluted EPS*

S&P 500 OperatingEPS

2007 to 2014 CAGR Annual % Change


218%

63%

117%

Altria Group S&P 500 S&P Food, Beverage &Tobacco

Seven-Year Total Shareholder Return

Source: Bloomberg 12/31/2007-12/31/2014

Note: Total shareholder return is simple price appreciation plus the reinvestment of the dividend as of the ex-dividend date. Excludes spin-offs.



Regulation G Disclosure

For reconciliations and further explanations of non-GAAP financial measures, visit:

altria.com
