The ratings on Richmond, Va.-based Altria Group Inc. reflect the company's exposure to U.S. tobacco litigation and regulatory risk, and its participation in the highly competitive and declining U.S. cigarette market. Altria benefits from its leading market positions in the U.S. cigarette industry, its leading position in the smokeless tobacco category following the acquisition of UST Inc., high brand equity of the Marlboro brand, and strong free cash flow generation. Through PM USA, its largest subsidiary, Altria maintains a leading market position as the largest cigarette manufacturer in the U.S. The U.S. cigarette industry is mature and highly competitive. U.S. cigarette industry volume declined approximately 9.3% in 2009, which is higher than recent years' declines that were closer to 3%
