Exhibit 12.1
ALTRIA GROUP, INC. AND SUBSIDIARIES
Computation of Ratios of Earnings to Fixed Charges
(in millions of dollars)
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| | Nine Months | | | For the Years Ended December 31, | |
| | Ended 9/30/08 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Earnings from continuing operations before income taxes | | $ | 3,808 | | | $ | 4,678 | | | $ | 4,753 | | | $ | 4,123 | | | $ | 4,083 | | | $ | 3,490 | |
Add (Deduct): | | | | | | | | | | | | | | | | | | | | | | | | |
Equity in net earnings of less than 50% owned affiliates | | | (347 | ) | | | (516 | ) | | | (466 | ) | | | (447 | ) | | | (524 | ) | | | (311 | ) |
Dividends from less than 50% owned affiliates | | | 181 | | | | 224 | | | | 193 | | | | 168 | | | | 148 | | | | 112 | |
Fixed Charges | | | 204 | | | | 514 | | | | 681 | | | | 818 | | | | 783 | | | | 782 | |
Interest capitalized, net of amortization | | | (24 | ) | | | (5 | ) | | | | | | | 5 | | | | 6 | | | | 9 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Earnings available for fixed charges | | $ | 3,822 | | | $ | 4,895 | | | $ | 5,161 | | | $ | 4,667 | | | $ | 4,496 | | | $ | 4,082 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Fixed Charges: | | | | | | | | | | | | | | | | | | | | | | | | |
Interest incurred (A): | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer Products | | $ | 159 | | | $ | 438 | | | $ | 567 | | | $ | 674 | | | $ | 648 | | | $ | 639 | |
Financial Services | | | 28 | | | | 54 | | | | 81 | | | | 107 | | | | 94 | | | | 105 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 187 | | | | 492 | | | | 648 | | | | 781 | | | | 742 | | | | 744 | |
Portion of rent expense deemed to represent interest factor | | | 17 | | | | 22 | | | | 33 | | | | 37 | | | | 41 | | | | 38 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Fixed Charges | | $ | 204 | | | $ | 514 | | | $ | 681 | | | $ | 818 | | | $ | 783 | | | $ | 782 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of earnings to fixed charges | | | 18.7 | (B) | | | 9.5 | (C) | | | 7.6 | (C) | | | 5.7 | (C) | | | 5.7 | (C) | | | 5.2 | (C) |
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(A) | Altria Group, Inc. includes interest relating to uncertain tax positions in its provision for income taxes, therefore such amounts are not included in fixed charges in the computation. |
(B) | Reflects Philip Morris International Inc. (“PMI”) as a discontinued operation. Interest incurred and the portion of rent expense deemed to represent the interest factor of PMI have been excluded from fixed charges in the computation. Including these amounts in fixed charges, the ratio of earnings to fixed charges would have been 11.8 for the nine months ended September 30, 2008. |
(C) | Reflects PMI and Kraft Foods Inc. (“Kraft”) as discontinued operations. Interest incurred and the portion of rent expense deemed to represent the interest factor of PMI and Kraft have been excluded from fixed charges in the computation. Including these amounts in fixed charges, the ratio of earnings to fixed charges would have been 5.9, 3.8, 3.0, 3.1 and 2.9 for the years ended December 31, 2007, 2006, 2005, 2004 and 2003, respectively. |