2018 Corporate Responsibility Progress Report

I n the past, our employees’ leadership and passion to succeed have enabled us to create and grow some of the biggest brands in the largest tobacco categories, maintain superior trade relationships and drive shareholder value. To win in the future, we need to build on that passion to transform our business, talent and culture. That’s why, in 2018 we responded to the dynamic business environment by investing in a transformative effort intended to deliver superior results into the future. Our approach continues to include promoting a vibrant, inclusive workplace; attracting, developing and retaining talented and diverse people; rewarding and recognizing our employees; and creating a safe workplace. However, in order to successfully navigate disruption, we need to fully integrate transformation into every aspect of this approach by acting boldly and doing things differently. While we’re early in this transformation journey, in 2018 we created a new structure and teams designed to accelerate our innovation pipeline, continue to maximize our robust core business, and enhance focus, role clarity and speed in decision making. We appointed a Chief Growth Officer to pursue strategic and innovative growth priorities apart from our current structure, that are better aligned with our dual strategies of maximizing income from our core tobacco businesses while also growing new income streams. We also appointed a Chief Transformation Officer, who also serves as our Chief Inclusion and Diversity Officer, to guide us through transforming our business, culture, and talent. Aligning our transformation and diversity and inclusion efforts ensures our focus on people and change is fully integrated into the changes we are undertaking to win in the future. Change management firm Kotter is advising and supporting us on this journey. This new structure is already sparking new ways of working, leading toward a more innovative and agile culture. We understand that innovation is more than just bringing products to market. Innovation also includes bringing new ideas, efficiencies and improvements to the jobs we’re already doing. Being agile is about bringing innovation to life by moving quickly, pushing boundaries, empowering our people and working in new ways. To achieve this cultural transformation, it will take all employees being willing to drive new ways of thinking, challenging the status quo and acting boldly. Throughout this chapter, we’ll share examples of how this transformation is coming to life across all aspects of our approach, as well as areas where we still have a lot of work to do. Promoting a Vibrant, Inclusive Workplace We’re focused on building a more diverse and inclusive culture. Although we’ve set goals and made some progress, more still needs to be done. We’re not alone - Corporate America as a whole is failing when it comes to diversity and inclusion. We have an opportunity to lead and make significant change, but it will take everyone leaning in and being uncomfortable. Altria’s diversity and inclusion (D&I) vision is to seek and value differences with our people, communities and suppliers to drive our success. Each of us brings our own point of view to work: one that is shaped by our education, family and life experiences as well as our age, gender identity, race and sexual orientation. When we value these differences, we effectively solve business problems and create a more inclusive workplace. In 2018, we made progress toward our goals with an intentional EnthusiasticTransformersbuilding adeeperconnection to the transformationby taking action tosolve localproblems. Our rallying call to create urgency and action, bringing thousands of employees into a movement to transform our organization. The Opportunity Big Focused teams of volunteers from across Altria who take on selected challenges for 90 days. The goal is to achieve amazing results and create new ways of working together at Altria. Sense of Urgency Demonstration Projects Fast-paced momentum toward achieving The Big Opportunity. The goal is to achieve commitments from more than 50% of employees to transform. Our Transformation Transformers Committed employee volunteers who are eager, willing and passionate about propelling us into the future. 50%+ 1 BUSINESS CULTURE TALENT More employees join each month Senior Leadership Role modeling, providing support and removing barriers Focused teams of volunt ers from acro s our company who take on s lected challenges for 90 days. The goal is to achieve amazing results and create new ways of working together. Sense of Urgency Demonstration Projects Fast-paced momentum toward achieving The Big Opportunity. The goal is to achi ve co mitments from more than 50% of employees to transform. Local Action 45 Altria: 2018 Corporate Responsibility Progress Report | Developing Our Employees and Culture