Notes to Consolidated Financial Statements

(Continued)

Note 15.
Segment Reporting:

(Continued)

Domestic Tobacco Legal Settlement—During 2003, PM USA and certain other defendants reached an agreement with a class of U.S. tobacco growers and quota-holders to resolve a lawsuit related to tobacco leaf purchases. During 2003, PM USA recorded pre-tax charges of $202 million for its obligations under the agreement. The pre-tax charges are included in the operating companies income of the domestic tobacco segment.

Losses (Gains) on Sales of Businesses—During 2004, Kraft sold a Brazilian snack nuts business and trademarks associated with a candy business in Norway, and recorded aggregate pre-tax losses of $3 million. During 2003, Kraft sold a European rice business and a branded fresh cheese business in Italy and recorded aggregate pre-tax gains of $31 million. During 2002, Kraft sold a Latin American yeast and industrial bakery ingredients business, resulting in a pre-tax gain of $69 million, and Kraft sold several small businesses, resulting in pre-tax gains of $11 million.

Integration Costs and a Loss on Sale of a Food Factory—Altria Group, Inc.’s consolidated statements of earnings disclose the following items as integration costs, which are costs incurred by Kraft as it integrated the operations of Nabisco, and a loss on sale of a food factory. During 2003, Kraft reversed $13 million related to the previously recorded integration charges.

	For the years ended December 31,		2003		2002
	Closing a facility and other consolidation programs	North American food	$(13	)	$98
	Consolidation of production lines and distribution networks in Latin America	International food			17
	Loss on sale of a food factory	North American food			(4	)
	Total		$(13	)	$111

Provision for Airline Industry Exposure—As discussed in Note 8. Finance Assets, net, during 2004 and 2002, in recognition of the economic downturn in the airline industry, PMCC increased its allowance for losses by $140 million and $290 million, respectively.

Miller Transaction—As more fully discussed in Note 4. Miller Brewing Company Transaction, on July 9, 2002, Miller was merged into SAB to form SABMiller. The transaction resulted in a pre-tax gain of $2.6 billion or $1.7 billion after-tax.

See Notes 4, 5 and 6, respectively, regarding the Miller Brewing Company transaction, divestitures and acquisitions.

	(in millions)
	For the Years Ended December 31,		2004				2003			2002
	Depreciation expense from
	continuing operations:
	Domestic tobacco		$       203				$      194			$      194
	International tobacco		453				370			307
	North American food		555				533			497
	International food		309				266			207
	Beer									61
			1,520				1,363			1,266
	Other		66				63			53
	Total depreciation expense
	from continuing operations		1,586				1,426			$   1,319
	Depreciation expense from
	discontinued operations		4				5			5
	Total depreciation expense		$    1,590				$   1,431			$   1,324
	Assets:
	Tobacco		$  27,472				$ 23,298			$ 18,329
	Food		60,760				59,735			57,245
	Financial Services		7,845				8,540			9,231
			96,077				91,573			84,805
	Other		5,571				4,602			2,735
	Total Assets		$101,648				$ 96,175			$ 87,540
	Capital expenditures from
	continuing operations:
	Domestic tobacco		$        185				$     154			$     140
	International tobacco		711				586			497
	North American food		613				667			719
	International food		389				402			410
	Beer									84
			1,898				1,809			1,850
	Other		11				149			104
	Total capital expenditures from
	continuing operations		1,909				1,958			1,954
	Capital expenditures from
	discontinued operations		4				16			55
	Total capital expenditures		$    1,913				$  1,974			$  2,009

Altria Group, Inc.’s operations outside the United States, which are principally in the tobacco and food businesses, are organized into geographic regions within each segment, with Europe being the most significant. Total tobacco and food segment net revenues attributable to customers located in Germany, Altria Group, Inc.’s largest European market, were $9.0 billion, $8.5 billion and $7.4 billion for the years ended December 31, 2004, 2003 and 2002, respectively.

Geographic data for net revenues and long-lived assets (which consist of all financial services assets and non-current consumer products assets, other than goodwill and other intangible assets, net) were as follows:

	(in millions)
	For the Years Ended December 31,		2004				2003			2002
	Net revenues:
	United States—domestic		$37,729				$36,312			$40,637
	—export		3,493				3,528			3,654
	Europe		36,163				30,813			26,090
	Other		12,225				10,667			9,552
	Total net revenues		$89,610				$81,320			$79,933
	Long-lived assets:
	United States		$26,347				$25,825			$24,308
	Europe		6,829				6,048			4,939
	Other		3,459				3,375			2,981
	Total long-lived assets		$36,635				$35,248			$32,228