Cliff Fleet - Vice President of Investor Relations Mike Szymanczyk - Chairman and Chief Executive Officer Dave Beran - Executive Vice President and Chief Financial Officer

Chris Growe - Stifel Nicolaus Ann Gurkin - Davenport & Company Christine Farkas - Bank of America Judy Hong - Goldman Sachs David Adelman - Morgan Stanley Thilo Wrede - Credit Suisse

Good day and welcome to the Altria Group 2009 fourth quarter and full year earnings conference call. Today's call is scheduled to last about one hour including remarks by Altria's management and question-and-answer session. [Operator Instructions] Representatives of the investment community and media on the call will be able to ask questions following the conclusion of the prepared remarks. I would now like to turn the call over to Mr. Cliff Fleet, Vice President of Investor Relations for Altria Client Services. Please go ahead, sir.

Good morning and thank you for joining our call. This morning we will only be discussing Altria's 2009 fourth quarter and full year business results and will not be discussing the status of litigation. Our remarks contain forward-looking statements and projections of future results, and I direct you to the forward-looking and cautionary statements at the end of our earnings release for the review of the various factors that could cause actual results to differ materially from projections. As a result of the spin-off of Philip Morris International in the first quarter of 2008, our reported results reflect PMI as a discontinued operation for the first quarter of 2008. Revenues in operating company's income for PMI are therefore excluded from Altria's continuing results. Since Altria acquired UST and its smokeless tobacco and wine subsidiaries on January 6, 2009, US Smokeless Tobacco Company and Ste. Michelle Wine Estates financial results from January 6, 2009 through December 31, 2009 are included in 2009 full year consolidated and segment results. For a detailed review of Altria's full year business results please review the earnings release that is available on our website, www.altria.com. Altria reports its financial results in accordance with Generally Accepted Accounting Principles. Today's call may contain various operating results on both a reported and on an adjusted basis which excludes items that affect the comparability of reported results. Descriptions of these measures, as well as reconciliations, are included in the earnings press release. Now, it gives me great pleasure to introduce Mike Szymanczyk, Chairman and Chief Executive Officer of Altria Group, Inc.

Thanks, Cliff, and good morning everyone. I think that Altria continued delivering excellent results last year in what was I think everybody would agree is a very challenging environment. Challenges included weak economic conditions, high unemployment, significant increases in excise taxes at the federal, state levels which had impacts on the category volume trends of our tobacco businesses as well as the FDA assuming regulatory oversight over tobacco. In the face of these challenges, Altria delivered strong financial results. Adjusted earnings per share increased by 6.1% to $1.75 which met our increased guidance. In addition, we increased our dividend by 6.3% to an annualized rate of $1.36 per share. Solid fundamentals of Altria's operating businesses enabled these financial results. Cigarette segments adjusted operating company's income increased by 5.5% to $5.3 billion as PM USA implemented a profitable strategy around a significant FET increase and the marketplace disruptions that followed. These disruptions caused dislocations in the retail share performances of the company's brands but Marlboro displayed resiliency in what was an intensely competitive promotional environment. The UST integration is substantially complete and USSTC's retail share returned to growth. We are particularly pleased with the strong share growth of Copenhagen in the fourth quarter of the year behind a successful launch of Copenhagen long-cut wintergreen. In the fourth quarter of 2009, the combined volume of Copenhagen and Skoal grew 7.8% versus the prior year period, which was ahead of the smokeless category's volume growth rate. The cigar segment grew its adjusted operating company's income by 1.6% behind the continued retail share growth of Black & Mild and despite significant one time reductions in wholesale inventories. The four premium leading brands of Altria's tobacco operating companies displayed great strength in the challenging economic and competitive environment given the significant marketplace dislocations following the FET increase. Altria's tobacco operating companies focused on profitably managing their brands through the highly competitive business environment while still leaving them well positioned for continued success in 2010 and beyond. We are particularly pleased with Marlboro's performance. Marlboro's full year 2009 retail share was down only a tenth of a share point versus 2008 despite competitive spinning on discount brands which followed the increase in the federal excise tax. This comparatively stable retail share result for Marlboro was accomplished without compromising its profitability as the brand grew its margins on a year-over-year basis. Copenhagen and Skoal continued to benefit from USSTC's actions to return them to growth. Copenhagen's retail share growth was quite impressive as it grew 1.5 share points from the third to the fourth quarter behind the successful launch of Copenhagen long-cut wintergreen. Skoal also displayed relatively strong retail share stability in the fourth quarter when compared to some competitive brands which appeared to be impacted by Copenhagen's new product launch. To build on this successful launch, Copenhagen plans to introduce two new smokeless products in the first quarter of 2010. Copenhagen long-cut straight will expand the brand into the straight segment which the brand has historically under served, and Copenhagen extra long-cut natural will strengthen the brand's position in the core natural segment. Skoal also has a number of initiatives planned to strengthen its position in the smokeless products category which will unfold as the year progresses. Black & Mild also continued its strong share performance in 2009, growing 1.3 share points versus the prior year period. Share growth was driven by the successful new product launches of Black & Mild Wood Tip, Black & Mild Wood Tip Wine and the equity campaign introduced at the beginning of the year, "Enjoy Black & Mild." We are also pleased with the initial results for Black & Mild's new untipped product, Black & Mild Cigarillo, and expect to continue expanding into geographies where this product is sold. The Altria family of companies delivered these strong results as it completed a significant internal restructuring which we believe positions us well for future success. Creation of three central support organizations, Altria Client Services, Altria Sales and Distribution, and Altria Consumer Engagement Services -- allows the delivery of services to the operating companies in a financially disciplined and effective manner. The internal changes also encompass the continuation of significant cost reduction initiatives including PM USA's closure of its Cabarrus, North Carolina cigarette manufacturing facility. Across the Altria family of companies, $398 million in cost savings were delivered in 2009. Since 2006, over $1 billion in cost savings against the $1.5 billion cost reduction program have been delivered and we expect to complete the program in 2011. Altria's business model of focusing on the strong premium brands of its tobacco operating companies which are supported by highly efficient and effective internal service providers proved its strength last year. This business model allowed us to absorb significant external impacts on the tobacco business while continuing to grow profits. Tobacco excise taxes at the federal and state levels increased substantially in 2009. The federal excise tax on a pack of cigarettes increased by 158% to $1.01 per pack and there were correspondingly large percentage increases on smokeless tobacco and machine made large cigar products. At the state level, the year end weighted average excise tax on cigarettes increased by 12% which is at the high end of the annual increases of 10% to 12% over the past several years. Continuing pressure on state budgets may lead to excise tax increase proposals in many states in 2010. These tax increases had significant and expected impacts on category volume trends. PM USA believes that the cigarette category declined an estimated 8% in 2009, in line with historical price elasticity. USSTC believes that smokeless category's volume grew at an estimated rate of 7% in 2009, while Middleton believes that the machine made large cigar category's growth slowed after the FET increase, resulting in a category that slightly declined in 2009. There were also large declines in trade inventories across tobacco categories during the year, which had a disproportionate impact on the shipment volumes of our tobacco operating companies. PM USA estimates that trade inventories for its cigarettes declined by 17% from the beginning to the end of the year. This decline disproportionately impacted PM USA's high volume brands. We expect that 2009 cigarette trade inventory fluctuations are likely to impact quarterly shipment comparisons for the cigarette segment in 2010. In the first quarter of last year, the trade significantly reduced cigarette inventories in anticipation of the FET increase on April 1. PM USA believes that trade inventory levels were reduced towards the end of the first quarter of 2009 to minimize fore-tax payments. In the second quarter of 2009, the trade rebuilt their inventories, but reduced them again in the second half of the year as they adjusted the lower cigarette category volume and the higher costs associated with maintaining cigarette inventories. There were also significant declines in the trade inventories of the smokeless tobacco products of USSTC and the machine made large cigars of Middleton. USSTC believes there were trade inventory declines on its products due to a number of factors including the discontinuation of multi-can promotional deals and its Rooster brand, and the change in the shipping unit from ten to five can rolls. Middleton believes that trade inventory declines on its products were due partially to the movement to the more efficient Altria sales and distribution system which significantly reduced wholesale delivery lead times. Although, Altria's tobacco operating companies cannot predict what will happen with trade inventories in 2010, we believe that many of the significant changes that occurred in 2009 were likely one time events as they were largely caused by significant external events or changes in the practices of Altria's tobacco operating companies. The business environment for 2010 is likely to remain challenged as adult consumers continue to be under economic pressure, and face high unemployment. In addition, we are cautious about the outlook for state excise tax increases as well as the competitive environment. Given these uncertainties, our guidance for 2010 is prudent in what will likely be another challenging year. Altria forecasts 2010 adjusted diluted earnings per share will increase to a range of $1.85 to $1.89. This represents a 6% to 8% growth rate from an adjusted base of $1.75 per share in 2009. Due to PM USA's profitable FET related pricing strategies last year, we expect the first and second quarters of this year to be more challenging for income growth comparison purposes than the back half of 2010. We therefore expect adjusted earnings per share growth to build in the second half of this year. Altria's financial success and the challenging environment of 2009 proves the strength of our business model, and gives us confidence that we can continue delivering strong returns to our shareholders which we expect will include future dividend growth. Beginning with our next declared dividend, we are changing the dividend payout ratio target to approximately 80% of adjusted earnings per share. This change reaffirms our commitment to delivering cash returns to our shareholders in the form of dividends and is reflective of the underlying financial strength of the Company. This financial strength is anchored by our strong balance sheet which includes our investment in SABMiller. All future dividends payment remain subject to the discretion of Altria's Board of Directors. We are very pleased that in 2009 Altria delivered a total shareholder return of 39.1%. Altria has exceeded the total shareholder return of the S&P 500 every year for the last ten years. I will now turn the call over to Dave Beran, Altria's Executive Vice President and CFO, who will discuss Altria's business segment results.

Thank you Mike. I'll start with the cigarette segment which promptly managed its way through the FET marketplace dislocations of last year. PM USA's objective last year was to maximize income while maintaining Marlboro's strong position in the cigarette segment. For the full year 2009, reported operating company's income for the cigarette segment increased by 3.9% to $5.1 billion due primarily to higher list prices and cost savings, partially offset by lower volume and higher pre-tax charges related to the previously announced closure of its Cabarrus manufacturing facility. When adjusted for restructuring charges, adjusted cigarette segment's operating company's income grew by a strong 5.5% to $5.3 billion despite significant cigarette volume decline. PM USA's reported cigarette shipment volume declined 12.2% for the full year but was down an estimated 10.5% when adjusted for changes in trade inventories and calendar differences. PM USA estimates that total cigarette industry volume declined an estimated 8% in 2009 when adjusted for changes in trade inventories and calendar differences. Marlboro performed well in 2009 as it nearly maintained its retail share position when compared to 2008 despite deliberate decisions to maximize earnings by moderately spending targeted promotional money in response to heightened competitive spending. We are also pleased that Marlboro Menthol maintained its position as the fastest growing brand in the menthol category, helped by the successful launch of Marlboro Blend 54. PM USA also promptly reset the retail share position of the balance of its brand portfolio in the post FET environment. These portfolio brands held a relatively stable combined retail share position of just under 8 share points to the back half of the year at a higher profit level than prior to the FET increase. The cigarette segment also delivered strong results in the fourth quarter. Reported operating companies income increased 2.9% to $1.2 billion due primarily to higher list prices and cost savings partially offset by lower volume. When adjusted for restructuring charges, adjusted operating companies income grew by 2.8%. Fourth quarter volume declined versus the year ago period, reflecting the effects of the FET increases on April 1 but it continued to perform in line with historical price elasticity of negative 0.3. PM USA estimates that cigarette industry volume declined by 10% in the fourth quarter of 2009 versus the year ago period when adjusted for changes in trade inventories. PM USA's reported cigarette shipments volume declined by 11.4%. Marlboro's fourth quarter retail share of 41.7% was down 0.2 of a share point from the third quarter. Marlboro's quarter to quarter share variability was driven primarily by fluctuations in competitive promotional spending which increased in the fourth quarter. During the back half of 2009, Marlboro's retail share of 41.8% was essentially the same as the first half of the year and significantly higher than its share in the initial period of dislocation following the FET increase. Marlboro also grew its margins in the fourth quarter from the year ago period as it benefited from a disciplined approach to promotional spending. Marlboro is well positioned for success in 2010 and has a strong campaign plan to continue building its position in the cigarette category. In the first quarter of 2010, PM USA began shipping two new variants of Marlboro called Marlboro Special Blend to build upon its strong position in the core non-menthol business. Overall, we are pleased with the performance of the cigarette segment in 2009. Income growth was strong despite significant volume declines and intense competitive environment. Marlboro also showed strength as it profitably and successfully managed through the pricing dislocations following the FET increase. The goal for the smokeless segment last year was to return USSTC's premium retail share to growth and the company successfully accomplished this objective. USSTC implemented a methodical plan which unfolded throughout the year that first enhanced the value equation on Copenhagen and Skoal and was then followed with brand building equity programs such as the launch of Copenhagen long-cut wintergreen. As a result, our smokeless products segment's retail share grew by 0.9 of a share point from the third to the fourth quarter of 2009. Copenhagen drove this retail share increase as it grew its share of the smokeless category by 1.5 share points to 24.7% which was the highest quarterly retail share achieved for the brand in 2009. Skoal's retail share also performed comparatively well versus competitive brands in the fourth quarter as the brand achieved a retail share of 23.4%, a decline of a 0.2 of a share point versus the third quarter. Smokeless products volume in the fourth quarter of 2009 increased 3.6% from the prior year period driven by 7.8% increase in Copenhagen and Skoal's combined volume. After adjusting for trade inventory changes, pipeline volume for the expansion of Marlboro Snus and the continuation of its Rooster brand, USSTC estimates that smokeless products shipment volume increased approximately 2% versus the fourth quarter of 2008. For the full year of 2009, smokeless products volume decreased 2.4% versus the full year 2008 but was up about 1% when adjusted for the same factors. Reported operating companies income for the smokeless product segments was $79 million in the fourth quarter of 2009 and $381 million for the full year. When adjusted for asset impairment, exit and integration cost and acquisition related charges, fourth quarter operating companies income was $137 million and for the full year of 2009, it was $632 million. We are very pleased the smokeless products segment retail share and volume returned to growth in the fourth quarter and that the UST integration went smoothly and is substantially complete. We expect these accomplishments combined with USSTC's future plans and strategies to lead to continued success in 2010. In 2009, Middleton accomplished its objective of growing earnings in Black & Mild's retail share of the machine made large cigar category. Reported operating companies income for the full year of 2009 grew by 7.3% to $176 million, but when adjusted for integration cost, operating companies income grew by 1.6% to $185 million. Black & Mild delivered another year of strong retail share results, growing its share of the machine made large cigar category by 1.3 share points as it benefited from the successful launch of two new wood chip products. Middleton's cigar volume for 2009 was down 3.6% versus the prior year but when adjusted for changes in trade inventories, volume was estimated to be up slightly. The cigar segment's fourth quarter reported operating company’s income grew 2.8% to $37 million. When adjusted for integration cost, adjusted operating companies income declined 7.1% to $39 million. Black & Mild increased its retail share of the machine made large cigar category by 1.2 share points to 30.6% while Middleton's cigar volume in the fourth quarter of 2009 declined by 2.7% due primarily to trade inventory reductions. We remain encouraged by Ste. Michelle's performance in a particularly challenging environment for the wine business. Overall, wine retail industry volume as measured by Nielsen Total Wine Database for US Food and Drug increased 2% in 2009. In addition, adult consumers continued down trading to less expensive wines and reduced their own premise purchases at restaurants and bars. Despite these marketplace dynamics, Ste. Michelle's full year 2009 retail volume as measured by Nielsen grew by 10% as adult consumers increasingly chose its high quality and affordable wines. Ste. Michelle's full year 2009 wine shipments were down 2.1% versus the year ago period to 6 million cases. Reported full year operating companies income for the wine segment was $43 million, but was $73 million when adjusted for acquisition related charges of $30 million. Ste. Michelle's fourth quarter wine shipments were 1.9 million cases, down 2.2% versus the year ago period. The wine segment's reported operating companies income was $21 million but when adjusted for acquisition related charges of $9 million, was $30 million. Let me conclude with financial services. Reported operating companies income for the full year of 2009 increased $199 million versus the prior year period to $270 million due primarily to higher gains on asset sales and a lower increase to the allowance for losses in 2009, partially offset by lower lease revenues as a result of lower investment balances. For the fourth quarter of 2009, financial services reported operating companies income increased $36 million versus the prior year period due primarily to an increase in the allowance for losses in the fourth quarter of 2008. The allowance for losses at the end of 2009 was $266 million, reflecting a net decrease of $38 million for the year. Mike and I will now be happy to take your questions. While the calls are compiled, let me cover a few housekeeping numbers. Marlboro's price gap versus the lowest effective priced cigarette was 33% in the quarter. Marlboro's net pack price was $5.41 and the lowest effective price cigarette pack price was $4.05. The cigarette discount category's fourth quarter retail share was 27.9%. The estimated weighted average cigarette state excise tax at the end of the fourth quarter was $1.26 per pack. 14 states, the District of Columbia and Puerto Rico, increased their cigarette excise taxes in 2009 with an average increase of $0.52 per pack in those 14 states and DC. Copenhagen's retail price was $4.21, and its net price gap versus the leading discount brand was approximately 48% in the fourth quarter. Our reported 2009 full year tax rate was 34.2%. We anticipate that Altria's 2010 full year effective tax rate on operations will be approximately 35.5%. And CapEx was $273 million in 2009 and ongoing depreciation and amortization was $291 million. Operator, do we have any questions?

Thank you. [Operator Instructions] And our first question comes from Chris Growe of Stifel Nicolaus. Chris Growe - Stifel Nicolaus: Thank you. Good morning. I had a couple of questions. The first being, I just want to get a feel for your cigarette volume expectations. I'm looking out post FET, once you lap that. Are we just returning to previous levels of decline, do you expect a little bit of an increase in the decline rate for the industry? What is baked into your assumptions?

I don't think we are going to get into giving forward projection on volume, but what I would say to you is that what we've seen since the FET is very consistent with historical price elasticities, you are going to lap up pre-FET quarter, although as I pointed out in my remarks, there were some inventory implications relative to that first quarter, and in the second quarter you are likely to see, I think, takeaway that is pretty consistent with historical projections. I can't guarantee that but we don't have any data that would tell us something to the contrary, although once again there were some pretty significant inventory adjustments that took place in the second quarter. I think history is still the best guide here, but there are nuances and that is why I am forewarning people that we are going to see some effects on comparisons quarter to quarter in 2010 that are related, the nuances both from an inventory point of view and from a tax point of view that came out of the activities in 2009. Chris Growe - Stifel Nicolaus: And really I'm curious, my calculations with some of the numbers you gave, it looks like there were there about 3 billion units of inventory pulled out in 2009. Just to be clear, is that out of the system now? That is not likely to be rebuilt in any meaningful way?

I can't guarantee what the trade is going to do at any point in time. They do make decisions about inventory that are based on their business model for a particular point in time. But I do think that it's fair to say that the overall volume in the cigarette category went down. And so I think that in general it's fair to say that you are going to see a one-time permanent reduction in the wholesale inventories and corresponding reduction in retail inventories. That doesn't mean there won't be inventory fluctuations that take place quarter to quarter or month to month relative to other things that the trade is considering. I think you've had the same occurrence take place, or similar occurrence take place, in the cigar business, largely though, in our case, driven by the fact that we changed the system by which we deliver, and that the old system encouraged more building and carrying of higher levels of inventory and that the new system, which is the same as the cigarette delivery system, doesn't necessitate that because we are able to provide much better delivery service, and so there's no need to make the investment. And, again, the tax rate went up so the cost of carrying inventory for wholesalers and retailers went up and that typically causes people to adjust down what they are going to carry in inventory. So, I think again that's a couple of events that are permanent events. Whether or not they have permanent implications all the time on the inventory I can't tell you but I would think that the overall system for our products would result in a lower level of inventory. In the smokeless business, we have also made lots of adjustments in that business both from packing sizes that we ship out, the whole promotion system has changed dramatically. We had spoiled situations that were higher and now we are in a situation, in particular with Copenhagen Wintergreen, which has taken off very nicely where we have higher stocks that we like to have so inventory will catch up there. So, it's a mixed bag that you're going to see in 2010 relative to inventory in the smokeless business, and we are going to expect to see growth in the smokeless business, in our smokeless business and in the category overall. That may have some effects on inventory that will be positive. So I think that one is a little bit different position. Chris Growe - Stifel Nicolaus: Thanks for the color. I have just one follow up for you. As we look at the cost savings coming through in 2010 without pinpointing a number, one area I was interested in is are we going to see some of those manufacturing optimization cost savings starting, are they coming through now? Does that come through once the plant officially closes? Is that how it works?

Yes. We shut down Cabarrus manufacturing facility this summer. We are in the process of moving that equipment. It is just about complete. You should see those savings start to accrue this year. Chris Growe - Stifel Nicolaus: Okay. Thank you.

Your next question comes from Ann Gurkin of Davenport & Company. Ann Gurkin - Davenport & Company: Good morning. Given the very remarkable performance of Marlboro in 2009, I was wondering, Mike, if you can help us better understand the demographic profile behind that brand.

Sure. Let me comment on the brand and its performance a little bit and intertwine that into it. I really do think since I've been around long enough to have gone through a couple of recessions on the brand, I really do think that the brand's performance over the last year has been quite remarkable compared to the situation it found itself in on the prior two occasions that I can remember that I was involved with. What's happened here is that if you look at Marlboro's share for the 12 months ending in March of 2009, prior to the FET, it was averaging monthly about 42%. And if you look at it for the nine months following the FET to the end of 2009, it averaged 41.6% or a 1% decline. And if you look at it in December, it was actually up over 42% in the month of December. So, it took a little bit of an adjustment. I would describe that as primarily due to the economic circumstances the country finds itself in, but not much. And still is showing good resiliency. Relative to the demographics, Marlboro's demographic profile actually remains quite strong. We look at it in the 21 to 29 bracket and the 30 to 39 bracket, and both of those situations it has a substantially greater share, bigger. The difference between its national average share and its share in both of those demographics is bigger than most brands. So, it remains quite strong with a good demographic profile before it, and some of that is what picks up the slack for business that it may lose in the older demographics' discounted products. It is done quite nicely. The loyalty factor remains high. Demographics actually look quite good, and I think it ended the year in pretty good shape. So, we want to keep it that way, and I also think that as we see the economy improve, we'll also have the chance to, as we have done in the past, regain some of the folks that we might have lost to discounted brands. We feel pretty good about Marlboro. Ann Gurkin - Davenport & Company: That's great. Thank you.

Your next question comes from Christine Farkas of Bank of America. Christine Farkas - Bank of America: Thank you very much. Thank you very much, good morning. Mike or Dave, I have a question, if I could, on price gap. I heard you talk about price gap in cigarettes of 33% which looks a little bit light. I'm wondering if you can talk about the fourth quarter gap versus the third quarter gap and if you think this mid 30s range is really the new norm. And then, I have a follow-up on smokeless price gap, as well.

Sure. Relative to cigarette price gaps, they've stayed in the low to mid 30s. Hasn't been much movement there. I wouldn't tell you that there is any meaningful difference between the third and fourth quarter relative to Marlboro's price gap. I think that given the economic circumstance, the price gaps are appropriate, but they are on the lower side of what we've been able to sustain in better times, and I think that that is a positive for us as the country recovers economically. That I think bodes well for the brand going into the future. There hasn't been much movement there. It's been pretty stable. Christine Farkas - Bank of America: Thanks for that. In smokeless given the wider price gap of 48% and yet seeing Copenhagen grow volumes and share again, is it safe to say that the price gap in smokeless can stand to be materially wider than cigarettes for the intermediate term at least?

So far, so good. We are paying attention to that as we go down the path on this particular subject. We'll see. We feel like that's in pretty good shape. It can vary by geography, frankly. That is somewhat true in the cigarette business. We are finding that is true in the smokeless business, both because of tax implications and differences in states and also due to the competitive activity in states. But, in general, we are very pleased with the way Copenhagen has responded to the activities that we've undertaken, and in the face of those activities, because while our focus has been on Copenhagen, Skoal has held up reasonably well and it will get its turn here as we go on down the path a little bit further. So I think we're feeling like we accomplished what we wanted to accomplish with the smokeless business in 2009, that we have it set up the way we wanted to get it set up and now we are off to demonstrating that we can make that business grow, make those brands grow the way we want them to grow and have that be an ongoing great contributor to the overall Altria enterprise. Christine Farkas - Bank of America: And finally, Mike, is the growth in Copenhagen more broad based than before or are there particular states driving that success?

Copenhagen and Skoal both have areas of strength, although they are national brands. But I would say when you look at the growth in Copenhagen, it's really strongly being driven right now by Copenhagen long-cut wintergreen and that is everywhere across the board. Christine Farkas - Bank of America: Great. Thank you very much.

Your next question comes from Judy Hong of Goldman Sachs. Judy Hong - Goldman Sachs: Thanks. Good morning. Mike, just in terms of Marlboro and the competitive environment, I think in 2009 you clearly saw the step up in promo spending from Pall Mall. What is your assessment of how that plays out in 2010 and at what point do you think would there be a need for Marlboro to step up more in terms of the promos and get more competitive in the marketplace?

I can't predict what the future is going to be. I can tell you I think we have a pretty good model in place for how we both read what is going on in the marketplace and how we respond to it in a very tactical and surgical way that's efficient. That is why you are seeing the shares hold up and the margins because we are pretty, I think, refined today in the way we go deal with competitive issues. But at the end of the day, Marlboro has not been the significant loser to any changes related to discount. It's come from other places and some of that has been ours and some of it is the rest of our premium portfolio, as well as basic in some geographies where we don't give it much support. Although, I have to say, in our other premium brands, we saw a step down in their market share following the FET, but then they've been remarkably stable ever since then through the balance of the year. And of course their margin and profitability has been quite strong following that because of pricing actions we took. Judy, it's hard to predict the future, but I would say what we are doing so far right up through the end of the year has worked very well for us and I don't see any reason why it won't continue to. Judy Hong - Goldman Sachs: Okay. And then, just in terms of the fourth quarter, your operating profit per unit or per pack in the cigarettes stepped down from the second and the third quarter even though pricing has obviously held up pretty nicely. So, I'm just wondering if there's anything that caused the profitability to step down on a quarter to quarter, whether timing of expenses or anything that could explain that difference.

I always like to remind people, look, the way we run the business, cost savings and spending are not bounded by quarters in the way we build and execute plans. That means that in any given quarter, if you evaluate margins compared to prior quarter, you may be incorrectly optimistic or pessimistic about the result because we don't look at it that way. I would point out to you that the margin for Marlboro versus margin in the fourth quarter of the prior year was higher this year, but I think I'd look at the whole year rather than try to sort through the quarters because we just don't bound [ph] things that way. So there are differences in the basis each year that are going to play out when you start doing the math for a particular quarter. Judy Hong - Goldman Sachs: Okay. And then, just finally on smokeless, clearly things like the Cope Wintergreen is off to a pretty good start here. Have you seen any changes in terms of the competitive environment there? It seems like it's sourcing some of that growth from your competitors' brands. Have you seen the competitive activity step up in response to Cope Wintergreen?

It's a competitive marketplace and there's some competitive activity out there. We actually, interestingly, we launched Copenhagen Wintergreen at a list price that we thought was really efficient given all the differences in tax structures around the country, and we have done nothing more than that from a retail price point of view. So, we have not done any retail price promotion on Copenhagen Wintergreen. So, yes, the market has got some competitive activity in it and I expect we'll see competitive activity as we go on through the year, but we haven't seen impact actually on Copenhagen Wintergreen. Like I said a little bit earlier, our biggest issue on Copenhagen Wintergreen right now is keeping it in stock at retail stores given the delivery cycle and the fact that it's growing and retailers are trying to keep up with it. They always lag on something that's growing pretty rapidly and while we seem to have the wholesale side of that in pretty good shape now, the retail side still has some catching up to do. Judy Hong - Goldman Sachs: Okay. Thanks.

Your next question comes from David Adelman of Morgan Stanley. David Adelman - Morgan Stanley: Good morning, Mike. I wanted to ask you three things. Firstly, have you or any of your representatives had any subsequent discussions as of yet with representatives of the FDA?

Here is how the FDA communication process works. And understand that the FDA is building their enterprise, if you will. So, they started from scratch and appointed Dr. Dayton as director and he's been building that enterprise. There is a communication system with them. They have set up an electronic docket, so they raise the subjects where they want to have input, and then you communicate to that electronic docket. That is a public docket so anybody can communicate on that particular subject. So, we communicate to them via that, and that's the process so far. I think as they get their enterprise put together, there will become more interaction that is direct communication with FDA individuals, inspectors and people like that, but that hasn't begun yet in the regulatory process. But there is a lot of communication relative to the subjects or questions that have to be answered or places where the FDA has asked for input, but that's through a docket system where those communications are typically in writing, and people can see them. David Adelman - Morgan Stanley: Okay. Secondly, as it relates to Marlboro and demographics, the HHS data shows that amongst young adult smokers -- no question Marlboro is over indexed relative to overall market share, but it shows among that demographic a fairly consistent decline in share over the last call at the last decade, do you think that that's accurate? Do you think that's occurring? And if so, why?

First of all, I'm not sure that I can correlate that data with our data. We've had the same data approach to this for a long time. So, I would tend to look to our data to understand what's going on. Second, we focus our activity, our marketing activity at 21 or above. And so when we evaluate this, we look at where we focus our marketing. So, we look at 21 to 29 as a demographic and we look at 30 to 39. So, we look at those decade groups. I can remember back when Marlboro had a share in the mid 20s overall and it had a really high share in the young adult category back in those days. It doesn't have a share that high, but it certainly has a share that is significantly larger among 21 to 29 year olds and we actually build share in the 21 to 29 category and the 30 to 39 category. So, I can't speak to the comparison for you, but I can tell you that the demographic profile of the brand remains positive. You should expect that we get demographic growth on this brand because it's built into the structure of it at this point in time. That is not to say, David, as I mentioned, that you don't lose some share in older demographics, as well, because sometimes those are more susceptible to discount activity. David Adelman - Morgan Stanley: Okay. And then, one question, last question on the smokeless business that I'm having difficulty reconciling, which is that if you look at the data Q3 to Q4, it looks like the data would indicate you promoted it net at higher levels, presumably because of the launch of Copenhagen Wintergreen. In other words, your revenue per can was sequentially lower. Your profitability per can was sequentially lower. And yet Dave's comments indicated that the average retail price point of Copenhagen from the third quarter to the fourth quarter was flat at $4.21. How does one reconcile those two things?

Two things. One is launch expenses related to a new product launch. There are wholesaler costs related to product launch and other costs. That doesn't necessarily mean that it's retail price promotion activity. We haven't actually engaged on that with Copenhagen Wintergreen at all. The other thing that is in those numbers, where there is cost is the expansion of Marlboro Snus. So, you have to look at that smokeless data today as having all of our smokeless business in it including the Marlboro Snus business, and that business realized some expansion cost in the fourth quarter and will continue to have that happen. David Adelman - Morgan Stanley: Okay. Thank you.

Your next question comes from Thilo Wrede from Credit Suisse. Thilo Wrede - Credit Suisse: Good morning, gentlemen. A quick question on the UST business and the accretion that you promised there for 2010. On an adjusted basis UST OCI was about $705 million in 2009. That's opposed by about $1 billion in interest expense for the acquisition. How are you going to be able to get the OCI level up to that interest expense to make it accretive this year?

Could you ask the question again? It was broken up when you came across. Thilo Wrede - Credit Suisse: Sorry about that. The question was how are you going to achieve the accretion for UST this year given that you would have to grow OCI by about 45% to offset the interest expense for the acquisition?

When we look at our plans for UST, as we said in our remarks, 2009 was a year for us to reset the value equation and then start building equity enhancing products behind our premium brands, both Copenhagen and Skoal. You saw the first approach to that with Copenhagen Wintergreen in the fourth quarter and we just announced two new product initiatives behind Copenhagen and more to come with Skoal. When you take that into consideration with the way the category is performing and the annualization of our total cost reductions initiatives for USSTC we believe the combination of those factors would make this acquisition accretive in 2010. So, it's not any one factor. It's a combination of all the work that we did this year and our plans for next year. Thilo Wrede - Credit Suisse: Okay. And then, another question on Marlboro. Given where you see the economy going, given what you expect for state excise tax increases and promotional spending from competitors, what should we expect from Marlboro in 2010? Better performance than in 2009, similar to 2009, what are you expecting?

What we said before is that our objective in our cigarette business is to maximize income but maintain some modest share growth on Marlboro. So, that's what our focus would be for 2010, and I would anticipate that, we don't see any reason why we can't do that right now. But obviously the year will unfold and we'll have to respond to conditions as we see them. But the objective hasn't changed and I don't think right now we see anything that gets in our way. Thilo Wrede - Credit Suisse: It looks like in 2009 the focus was more on the profit growth part rather than the Marlboro share growth part. Will that continue in 2010 or will you try to balance it more?

Not exactly because what we did was, we had a period of dislocation on Marlboro last year because of the FET increase and I think you have to separate the FET increase from the economic conditions. Whether or not the FET increase, I think we probably would have seen a bit of Marlboro share growth for the year, but we chose not to spend into that period right after the FET. So, that cost us a bit of share in volume, but it was a profitable exercise. So, we chose -- you are right, we chose profit there, but that's behind us now. Thilo Wrede - Credit Suisse: Okay. So, that sounds like you are striving to get more of a balance in 2010?

The goal hasn't changed. It's still to maximize income, to maintain some modest share momentum on Marlboro. So, I say that and then people try to create for themselves what they think it means. So, maybe I'll help you with that. It means we don't have to grow the share on Marlboro every month or every quarter, but over sustained periods of time we want to see some modest share growth on the brand to make sure that the franchise is healthy. That's not the only measure we use. We look at other underlining dynamics in the brand to make sure that we are comfortable with its health. But if you want to look at share, that's the way to think about it. Thilo Wrede - Credit Suisse: Okay. And then, last question, average price per can of USSTC product has declined for three quarters in a row now. Should we expect the average price that you charged to start growing again at some point in 2010 and will that be more front or back weighted?

I'm not going to predict that. I think it's fair to say that we have a growth category here. We have healthy margins in this business and our interest is in growing our volume in a growing category. That's the way to build income in this business. So that's what our focus will be. Thilo Wrede - Credit Suisse: Okay. Thanks a lot.

Ladies and gentlemen, at this time, we have reached the allotted time for the question and answer session. I will turn the conference back to Mr. Cliff Fleet for closing remarks.

I would invite everyone to listen to Altria's webcast of its presentation at the annual Consumer Analysts Group of New York Conference on February 18 where Mike and Dave will discuss Altria's 2010 business strategies. I want to thank everyone for joining us today. If you have any follow-up questions please call the Investor Relations group.

Ladies and gentlemen, thank you. This does conclude this conference call. You may now disconnect.