Governance and Board Developments

Your Board of Directors is firmly committed to good corporate governance as the cornerstone for strong business performance, and has organized itself accordingly. I refer you to the 2004 proxy statement for a comprehensive description of your Board of Directors and its committees, as well as the nominees for election to the Board at the 2004 Annual Meeting of Shareholders. This year’s proxy statement also includes a set of corporate governance guidelines, which appear as a separate exhibit.

In addition, all of our operating companies and corporate departments are governed by a strong, comprehensive set of explicit, enterprise-wide standards that make it clear that nothing is more important than compliance and integrity. I also want to stress the importance that we place on the ethics, integrity and transparency of our financial statements, as well as our disciplined business
policies and practices, which are overseen by the Board.

I am delighted that John S. Reed, our longtime director who stepped down last fall to become interim Chairman and Chief Executive Officer of the New York Stock Exchange, is standing for re-election this year. He brings a wealth of valuable experience and wisdom to the Board.

Billie Jean King, who has been a valued member of the Board since 1999, has decided not to stand for re-election in April. We thank Billie Jean for her outstanding service and contributions to the Board of Directors.

Sadly, we mourn the loss of former Vice Chairman and member of the Board of Directors, Ross Millhiser. Ross played a central role in the growth and development of our companies during a 40-year career that began in 1941. He was part of a core team of extraordinary executives who presided over the 1955 re-launch of Marlboro and served as President of the company from 1973 to 1978. We also regret the loss of Jane Evans, who was a member of the current Board of Directors before her sudden death last year and is memorialized in the tribute on this page.

Delivering Long-Term Shareholder Value

Looking ahead, I am excited about the prospects for improvement this year and even better results in 2005. Our operating companies have tremendous potential, despite short-term challenges in certain markets, and they are making the significant investments necessary to achieve long-term growth and success.

Altria’s ability to generate substantial cash flow is one of its greatest strengths. Looking ahead, this cash flow will come largely from Altria’s tobacco operating companies, with only cash dividends from Kraft and SABMiller. After funding capital expenditures, acquisitions and debt reduction, we plan to continue using Altria’s cash flow to reward shareholders.

I am certain that the actions we take today will ensure that Altria Group and its operating companies are stronger tomorrow, and that we are positioned to deliver superior value to our shareholders. I want to emphasize that the entire management team is committed to delivering superior returns to our shareholders, and I am confident that the Board of Directors will fully consider all alternatives in deciding how best to achieve that goal.

I also want to emphasize that we cannot achieve our potential without a talented and committed workforce, guided by a new generation of leaders that will take the Altria family of companies to even greater success. I extend my sincerest gratitude to all our companies’ employees for their hard work, dedication and commitment to innovation and responsibility. It is a privilege to be associated with them and to serve you, our shareholders.

Louis C. Camilleri
Chairman of the Board and Chief Executive Officer
March 1, 2004