Notes to Consolidated Financial Statements

(Continued)

Note 11.
Capital Stock:

Shares of authorized common stock are 12 billion; issued, repurchased and outstanding shares were as follows:

		Shares Issued					Shares Repurchased					Shares Outstanding
Balances,
January 1,
2002		2,805,961,317					(653,458,100)					2,152,503,217
Exercise of stock
options and
issuance of other
stock awards							21,155,477					21,155,477
Repurchased							(134,399,142)					(134,399,142)
Balances,
December 31,
2002		2,805,961,317					(766,701,765)					2,039,259,552
Exercise of stock
options and
issuance of other
stock awards							16,675,270					16,675,270
Repurchased							(18,671,400)					(18,671,400)
Balances,
December 31,
2003		2,805,961,317					(768,697,895)					2,037,263,422
Exercise of stock
options and
issuance of other
stock awards							22,264,054					22,264,054
Balances,
December 31,
2004		2,805,961,317					(746,433,841)					2,059,527,476

At December 31, 2004, 164,376,881 shares of common stock were reserved for stock options and other stock awards under Altria Group, Inc.’s stock plans, and 10 million shares of Serial Preferred Stock, $1.00 par value, were authorized, none of which have been issued.

Prior to the rating agencies’ actions in the first quarter of 2003, discussed in Note 9. Short-Term Borrowings and Borrowing Arrangements, ALG repurchased its stock in open market transactions. On March 7, 2003, ALG completed a $10 billion repurchase program, which resulted in the purchase of 215,721,057 shares at an average price of $46.36 per share, and commenced repurchasing shares under a one-year $3 billion repurchase program. Cumulative repurchases under the $3 billion program were 6,953,135 shares at a cost of $241 million, or $34.59 per share. ALG’s one-year $3 billion repurchase program expired in March 2004. During 2003 and 2002, ALG repurchased $0.7 billion and $6.3 billion, respectively, of its common stock. Following the rating agencies’ actions, ALG suspended its share repurchase program. Kraft began to repurchase its Class A common stock in 2002 to satisfy the requirements of its stock-based compensation programs. During 2004, 2003 and 2002, Kraft repurchased 21.5 million, 12.5 million and 4.4 million of its Class A common stock at a cost of $700 million, $380 million and $170 million, respectively.