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Altria Will Seek Further Review of Jury Verdict in Tax Refund Case

Richmond, Va.
July 09, 2009

Altria Group, Inc. (Altria) said today it will seek further  review of a federal court jury verdict against it in a dispute with the United States Internal Revenue Service involving tax deductions related to four leveraged lease transactions. Altria filed suit seeking tax refunds totaling almost $25 million for taxes paid for years 1996 and 1997.

"We believe that Altria and its subsidiary, Philip Morris Capital Corporation, fully complied with the law governing these leveraged lease transactions and that Altria is entitled to a full refund," said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Altria. "We will seek further review of the jury's verdict in the trial court and, if necessary, in the appellate court," added Garnick.

The leveraged lease transactions involved a Metropolitan Transportation Authority maintenance railroad yard in Hollis, N.Y.; a wastewater treatment facility in the Netherlands; and power plants operated by Oglethorpe Power Corp. in Georgia and Seminole Electric Cooperative in Florida.

The IRS challenged deductions relating to four leases in 1996 and 1997, and Altria paid the disputed amounts and filed suit against the IRS for a refund.

The case is Altria Group v. United States, Case No. 1:06-CV-09430-RJH-FM.

Altria directly or indirectly owns 100% of each of Philip Morris USA, U.S. Smokeless Tobacco Company, John Middleton Co., Ste. Michelle Wine Estates and Philip Morris Capital Corporation. In addition, Altria holds a continuing economic and voting interest in SABMiller plc.

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