Other strategic initiatives: Altria's commitment to the environment

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THE COMPANY SAYS MANAGEMENT SYSTEMS: To design and maintain effective management systems consistent with the spirit and intent of these Principles. Altria Group, Inc. (ALG), through its wholly owned subsidiaries, Philip Morris USA Inc. (PMUSA) and Philip Morris International Inc. (PMI), and its majority-owned subsidiary, Kraft Foods Inc., is engaged in the manufacture and sale of various consumer products, including cigarettes and foods and beverages. PMUSA is engaged in the manufacture and sale of cigarettes in the United States and its territories. Altria's commitment to the environment is flawed; in this case the company is mainly interested in retaining the best manufacturing and marketing talent. It is interested in ensuring that its best employees do not leave the country.

THE COMPANY SAYS COMPLIANCE: To conduct its business in accordance with all applicable environmental laws, regulations, requirements and corporate commitments. . PMI is a holding company whose subsidiaries and affiliates and their licensees are engaged primarily in the manufacture and sale of tobacco products (mainly cigarettes) internationally. Marlboro is the principal cigarette brand of these companies. Kraft is engaged in the manufacture and sale of branded foods and beverages in the United States, Canada, Europe, the Middle East and Africa, Latin America and Asia Pacific. Kraft conducts its global business through its subsidiaries, Kraft Foods North America, Inc. (KFNA) and Kraft Foods International, Inc. (KFI). Kraft has operations in 68 countries and sells its products in more than 150 countries.

THE COMPANY SAYS ENVIRONMENTAL FOOTPRINT: To take initiatives to minimize the current and future environmental impact of its activities on the land, air, water and other natural resources. PMUSA manufactures markets and sells cigarettes in the United States and its territories and contract manufactures cigarettes for PMI. PMUSA's total cigarette shipment in the United States was 187.2 billion units in 2003, a decrease of 2.3% from 2002. Its major premium brands are Marlboro, Virginia Slims and Parliament. Its principal discount brand is Basic. All of its brands are marketed to take into account differing preferences of adult smokers. Marlboro had shipments of 147.9 billion units in 2003 (down 0.4% from 2002) in the United States. PMUSA sells its tobacco products principally to wholesalers (including distributors), large retail organizations, including chain stores and the armed services. Altria's commitment to the environment is driven by the fact that youth smoking prevention programs and legislation should not reduce its sales.

THE COMPANY SAYS PACKAGING: To minimize, consistent with its business priorities, the environmental impact of its product packaging while maintaining the integrity of its products. Principal brands offered by KFNA and KFI span five consumer sectors: snacks, beverages, cheese, grocery and convenient meals. These products are generally sold to supermarket chains, wholesalers, super centers, club stores, mass merchandisers, distributors, convenience stores, gasoline stations and other retail food outlets. During 2003, ...