Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

At December 31, 2015 and 2014, the fair value of Altria Group, Inc.’s total debt was $14.5 billion and $17.0 billion, respectively. The fair value of Altria Group, Inc.’s debt is subject to fluctuations resulting from changes in market interest rates. A 1% increase in market interest rates at December 31, 2015 and 2014 would decrease the fair value of Altria Group, Inc.’s total debt by approximately $1.1 billion and $1.3 billion, respectively. A 1% decrease in market interest rates at December 31, 2015 and 2014 would increase the fair value of Altria Group, Inc.’s total debt by approximately $1.3 billion and $1.5 billion, respectively.

Interest rates on borrowings under the Credit Agreement are expected to be based on LIBOR plus a percentage based on the higher of the ratings of Altria Group, Inc.’s long-term senior unsecured debt from Moody’s and Standard & Poor’s. The applicable percentage based on Altria Group, Inc.’s long-term senior unsecured debt ratings at December 31, 2015 for borrowings under the Credit Agreement was 1.25%. At December 31, 2015, Altria Group, Inc. had no borrowings under the Credit Agreement.

At December 31, 2015, the fair value of Altria Group, Inc.’s derivative financial instrument in the form of a put option (the “option”) included in other current assets was $152 million. A 10% devaluation of the United States dollar against the British pound would decrease the fair value of the option by approximately $97 million, with a corresponding decrease to Altria Group, Inc.’s pre-tax earnings. A 10% appreciation of the United States dollar against the British pound would increase the fair value of the option by approximately $172 million, with a corresponding increase to Altria Group, Inc.’s pre-tax earnings.