Altria's PMI Spin: Your Questions Answered.

Here are the answers to many of the questions you may have on the upcoming PMI (Phillip Morris International) spin from Altria (MO).

Q: I own Altria shares. What will I receive as a result of the Spin-off?


A: Altria will distribute one share of PMI common stock for each share of Altria common stock outstanding as of the Record Date for the Distribution.


Q: What is the Record Date for the Distribution, and when will the Distribution occur?


A: The Record Date is , , and ownership is determined as of 5:00 p.m. Eastern Time on that date. Shares of PMI common stock will be distributed on , . We refer to this date as the Distribution Date.


Q: What do I have to do to participate in the Distribution?


A: Nothing. You will receive one share of PMI common stock for each share of Altria common stock held as of the Record Date. You may also participate in the Distribution if you purchase Altria common stock in the “regular way” market and retain your Altria shares through the Distribution Date.


Q: If I sell my shares of Altria common stock before the Distribution Date, will I still be entitled to receive PMI shares in the Distribution?


A: If you sell your shares of Altria common stock prior to or on the Distribution Date, you may also be selling your right to receive shares of PMI common stock. You are encouraged to consult with your financial advisor regarding the specific implications of selling your Altria common stock prior to or on the Distribution Date.


Q: How will the Spin-off affect the number of shares of Altria I currently hold?


A: The number of shares of Altria common stock held by a stockholder will be unchanged. The market value of each Altria share, however, will decline to reflect the impact of the Distribution.


Q: What are the U.S. federal income tax consequences of the Distribution to U.S. stockholders?


A: Altria [has received] a private letter ruling from the Internal Revenue Service and an opinion of counsel that the Distribution of PMI common stock to Altria stockholders will qualify as a tax-free distribution for United States federal income tax purposes. You should, of course, consult your own tax advisor as to the particular consequences of the Distribution to you, including the applicability and effect of any U.S. federal, state and local and foreign tax laws, which may result in the distribution being taxable to you. Altria will provide its U.S. stockholders with information to enable them to compute their tax basis in both Altria and PMI shares. This information will be posted on Altria’s website, www.altria.com/PMIspinoff, promptly following the Distribution Date. Certain United States federal income tax consequences of the Spin-off are described in more detail under “The Distribution—U.S. Federal Income Tax Consequences of the Distribution.”


Q: Is the Distribution tax free to Canadian stockholders?


A: Altria anticipates that the Canadian revenue authority will conclude that the Spin-off is an “eligible distribution” for electing Canadian resident stockholders and thus eligible for tax-deferral. Altria will post the results of the Canadian revenue authority’s determination on its website once such results become available. Absent the tax-deferral, Canadian-resident stockholders would be required to include the distribution of PMI common shares in computing income under the Canadian Tax Act.


The foregoing is for general information purposes and does not constitute tax advice to any Canadian stockholder. Such stockholders should consult their own tax advisors regarding the particular consequences of the Distribution to them, including the applicability and effect of any Canadian federal, provincial and territorial and foreign tax laws and regarding the actions and information necessary to make the required election, in the event that the Canadian revenue authority determines that the Spin-off is an “eligible distribution” for electing Canadian-resident stockholders.

Q: When will I receive my PMI shares? Will I receive a stock certificate for PMI shares distributed as a result of the Spin-off?


A: Registered holders of Altria common stock who are entitled to participate in the Distribution will receive a book-entry account statement reflecting their ownership of PMI common stock. For additional information, registered stockholders in the U.S. should contact Altria’s transfer agent, Computershare Trust Company, at [1-866-538- ] or by e-mail at altria@computershare.com. Stockholders from outside the U.S. and Canada may call [1-781-575- ]. If you would like to receive physical certificates evidencing your PMI shares, please contact PMI’s transfer agent. See “Description of Capital Stock—Transfer Agent and Registrar.”


Q: What if I hold my shares through a broker, bank or other nominee?


A: Altria stockholders who hold their shares through a broker, bank or other nominee will have their brokerage account credited with PMI common stock. For additional information, those stockholders should contact their broker or bank directly. Questions regarding the Distribution can also be directed to our information agent, D.F. King & Co., Inc., at [1-800-290- ].


Q: What if I have stock certificates reflecting my shares of Altria common stock? Should I send them to the transfer agent or to Altria?


A: No, you should not send your stock certificates to the transfer agent or to Altria. You should retain your Altria stock certificates. No certificates representing your shares of PMI common stock will be mailed to you. PMI common stock will be issued as uncertificated shares registered in book-entry form through the direct registration system.


Q: If I was enrolled in an Altria dividend reinvestment plan, will I automatically be enrolled in the PMI dividend reinvestment plan?


A: Yes. If you elected to have your Altria cash dividends applied toward the purchase of additional Altria shares, the PMI shares you receive in the Distribution will be automatically enrolled in the PMI Direct Stock Purchase and Dividend Reinvestment Plan sponsored by Computershare Trust Company (PMI’s transfer agent and registrar), unless you notify Computershare that you do not want to reinvest any PMI cash dividends in additional PMI shares. Contact information for the PMI plan sponsor (Computershare) is provided on page 92 of this Information Statement.


Q: Why is Altria separating PMI from its business?


A: Altria’s Board of Directors and management have determined that the separation will enhance long-term stockholder value by providing the benefits set forth below under the caption “The Distribution—Reasons for the Distribution.”


Q: Why is the separation of the two companies structured as a spin-off?


A: A U.S. tax-free distribution of shares in PMI is the most tax efficient way to separate the companies.


Q: Are there risks to owning PMI common stock?


A: Yes. PMI’s business is subject both to general and specific business risks relating to its operations. In addition, the Spin-off presents risks relating to PMI’s being a separately-traded public company. See “Risk Factors.”


Q: Does PMI plan to pay dividends?


A: Yes. PMI plans to pay a dividend at the initial rate of $ per share per quarter. Dividends are subject to the discretion of PMI’s Board of Directors in accordance with applicable law. See “Dividend and Share Repurchase Policy.”


Q: What will the relationship between Altria and PMI be following the Distribution?


A: After the Distribution, Altria will not own any shares of PMI common stock. However, in connection with the Distribution, we are entering into a number of agreements with Altria that will govern the Spin-off and our future relationship with Altria. See “Relationship with Altria.”


Q: What will Altria own following the Distribution?


A: Altria will own 100% of PM USA and Philip Morris Capital Corporation, as well as its 28.6% economic interest in SABMiller plc.