Notes to Consolidated Financial Statements

(Continued)

Note 10.
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,
2001		2,805,961,317					(597,064,937)					2,208,896,380
Exercise of stock
options and
issuance of other
stock awards							28,184,943					28,184,943
Repurchased							(84,578,106)					(84,578,106)
Balances,
December 31,
2001		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
issuances 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

At December 31, 2003, 188,559,940 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.

ALG repurchases its stock in open market transactions. On March 12, 2001, ALG completed an $8 billion repurchase program, which resulted in the purchase of 256,967,772 shares at an average price of $31.13 per share. 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 $3 billion repurchase program. Through December 31, 2003, cumulative repurchases under the $3 billion program were 6,953,135 shares at a cost of $241 million, or $34.59 per share. During 2003, 2002 and 2001, ALG repurchased $0.7 billion, $6.3 billion and $4.0 billion, respectively, of its common stock. Following the rating agencies’ actions in the first quarter of 2003, discussed in Note 8. Short-Term Borrowings and Borrowing Arrangements, 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 2003 and 2002, Kraft repurchased 12.5 million and 4.4 million of its Class A common stock at a cost of $380 million and $170 million, respectively.