ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk stemming from changes in interest rates, foreign exchange rates, commodity prices and equity prices.
Changes in these factors could cause fluctuations in our earnings and cash flows.
In the normal course of business, we actively manage our exposure to these market risks by entering into various hedging transactions, authorized under our policies that place clear controls on these activities.
The counterparties in these transactions are generally highly rated institutions.
We establish credit limits for each counterparty.
Our hedging transactions include but are not limited to a variety of derivative financial instruments.
Interest Rates We manage our debt structure and our interest rate risk through the use of fixed- and floating-rate debt and derivatives.
We use interest rate swaps and forward-starting interest rate swaps to hedge our exposure to interest rate changes and to reduce volatility of our financing costs.
Generally under these swaps, we agree with a counterparty to exchange the difference between fixedrate and floating-rate interest amounts based on an agreed notional principal amount.
Our primary exposure is to U. S.  interest rates.
As of May 28, 2006, we had $7.0 billion of aggregate notional principal amount (the principal amount on which the fixed or floating interest rate is calculated) outstanding.
This includes notional amounts of offsetting swaps that neutralize our exposure to interest rates on other interest rate swaps.
See Note Six to the Consolidated Financial Statements on pages 40 through 42 in Item Eight of this report.
Foreign Currency Rates Foreign currency fluctuations can affect our net investments and earnings denominated in foreign currencies.
We primarily use foreign currency forward contracts and option contracts to selectively hedge our cash flow exposure to changes in exchange rates.
These contracts function as hedges, since they change in value inversely to the change created in the underlying exposure as foreign exchange rates fluctuate.
Our primary U. S.  dollar exchange rate exposures are with the Canadian dollar, the euro, the Australian dollar, the Mexican peso and the British pound.
Commodities Many commodities we use in the production and distribution of our products are exposed to market price risks.
We manage this market risk through an integrated set of financial instruments, including purchase orders, noncancelable contracts, futures contracts, options and swaps.
Our primary commodity price exposures are to cereal grains, sugar, dairy products, vegetables, fruits, meats, vegetable oils, and other agricultural products, as well as paper and plastic packaging materials, operating supplies and energy.
Equity Instruments Equity price movements affect our compensation expense as certain investments owned by our employees are revalued.
We use equity swaps to manage this market risk.
Value at Risk These estimates are intended to measure the maximum potential fair value we could lose in one day from adverse changes in market interest rates, foreign exchange rates, commodity prices, or equity prices under normal market conditions.
A Monte Carlo (VAR) methodology was used to quantify the market risk for our exposures.
The models assumed normal market conditions and used a 95 percent confidence level.
The VAR calculation used historical interest rates, foreign exchange rates and commodity and equity prices from the past year to estimate the potential volatility and correlation of these rates in the future.
The market data were drawn from the RiskMetricsTM data set.
The calculations are not intended to represent actual losses in fair value that we expect to incur.
Further, since the hedging instrument (the derivative) inversely correlates with the underlying exposure, we would expect that any loss or gain in the fair value of our derivatives would be generally offset by an increase or decrease in the fair value of the underlying exposures.
The positions included in the calculations were: debt; investments; interest rate swaps; foreign exchange forwards; commodity swaps, futures and options; and equity instruments.
The calculations do not include the underlying foreign exchange and commodities-related positions that are hedged by these market-risk-sensitive instruments.
The table below presents the estimated maximum potential one-day loss in fair value for our interest rate, foreign currency, commodity and equity market-risk-sensitive instruments outstanding on May 28, 2006 and May 29, 2005, and the average amount outstanding during the year ended May 28, 2006.
The amounts were calculated using the VAR methodology described above.
## Table 0 ##
Altria Group, Inc.  and Subsidiaries Notes to Consolidated Financial Statements International Tobacco-Related Cases: As of January 27, 2017, PM USA is a named defendant in 10 health care cost recovery actions in Canada, eight of which also name Altria Group, Inc.  as a defendant.
PM USA and Altria Group, Inc.  are also named defendants in seven smoking and health class actions filed in various Canadian provinces.
See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement between Altria Group, Inc.  and PMI that provides for indemnities for certain liabilities concerning tobacco products.
Tobacco-Related Cases Set for Trial: As of January 27, 2017, nine Engle progeny cases are set for trial through March 31, 2017.
There are no individual smoking and health cases and no “Lights/Ultra Lights” class actions or medical monitoring cases against PM USA set for trial during this period.
Cases against other companies in the tobacco industry are scheduled for trial during this period.
Trial dates are subject to change.
Trial Results: Since January 1999, excluding the Engle progeny cases (separately discussed below), verdicts have been returned in 61 smoking and health, “Lights/Ultra Lights” and health care cost recovery cases in which PM USA was a defendant.
Verdicts in favor of PM USA and other defendants were returned in 41 of the 61 cases.
These 41 cases were tried in Alaska (1), California (7), Florida (10), Louisiana (1), Massachusetts (2), Mississippi (1), Missouri (4), New Hampshire (1), New Jersey (1), New York (5), Ohio (2), Pennsylvania (1), Rhode Island (1), Tennessee (2) and West Virginia (2).
A motion for a new trial was granted in one of the cases in Florida and in the case in Alaska.
In the Alaska case (Hunter), the trial court withdrew its order for a new trial upon PM USA’s motion for reconsideration.
In December 2015, the Alaska Supreme Court reversed the trial court decision and remanded the case with directions for the trial court to reassess whether to grant a new trial.
In March 2016, the trial court granted a new trial and PM USA filed a petition for review of that order with the Alaska Supreme Court, which the court denied in July 2016.
The retrial began in October 2016.
In November 2016, the court declared a mistrial after the jury failed to reach a verdict.
The plaintiff subsequently moved for a new trial, which is scheduled to begin October 16, 2017.
See Types and Number of Cases above for a discussion of the trial results in In re: Tobacco Litigation (West Virginia consolidated cases).
Of the 20 non-Engle progeny cases in which verdicts were returned in favor of plaintiffs, 18 have reached final resolution.
A verdict against PM USA in a purported “Lights” class action in Illinois (Price) was reversed and ultimately resolved in PM USA’s favor.
See “Lights/Ultra Lights” Cases - State Trial Court Class Certifications Concluded in 2016 below for further discussion.
As of January 27, 2017, 105 state and federal Engle progeny cases involving PM USA have resulted in verdicts since the Florida Supreme Court’s Engle decision as follows: 58 verdicts were returned in favor of plaintiffs; 44 verdicts were returned in favor of PM USA.
Three verdicts in favor of plaintiffs were partially or entirely reversed on appeal.
See Smoking and Health Litigation - Engle Progeny Trial Court Results below for a discussion of these verdicts.
Judgments Paid and Provisions for Tobacco and Health Litigation Items (Including Engle Progeny Litigation): After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation, since October 2004, PM USA has paid in the aggregate judgments and settlements (including related costs and fees) totaling approximately $473 million and interest totaling approximately $183 million as of December 31, 2016.
These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $82 million, interest totaling approximately $21 million and payment of approximately $43 million in connection with the Federal Engle Agreement, discussed below.
The changes in Altria Group, Inc. ’s accrued liability for tobacco and health litigation items, including related interest costs, for the periods specified below are as follows:
## Table 1 ##
The accrued liability for tobacco and health litigation items, including related interest costs, was included in liabilities on Altria Group, Inc. ’s consolidated balance sheets.
Pre-tax charges for tobacco and health judgments, the agreement to resolve federal Engle progeny cases, the agreement to resolve the Aspinall case (excluding related interest costs of approximately $10 million), the agreement to resolve the Miner case and the implementation of the corrective communications remedy pursuant to the federal government’s lawsuit were included in marketing, administration and research costs on Altria Group, Inc. ’s consolidated statements of earnings.
Pre-tax charges for related interest costs were included in interest and other debt expense, net on Altria Group, Inc. ’s consolidated statements of earnings.
Security for Judgments: To obtain stays of judgments pending current appeals, as of December 31, 2016, PM USA has posted various forms of security totaling approximately $82 million, the majority of which has been collateralized with cash
(1) The aging of amortized cost and gross unrealized losses is determined based upon a count of the number of months the estimated fair value remained below amortized cost by 20% or more, using month-end valuations.
The month count was reset back to historical unrealized loss month counts for securities impacted by the adoption of new authoritative guidance related to other-than-temporary impairments on January 1, 2009.
The gross unrealized losses were primarily concentrated in asset-backed securities as of December 31, 2009 and December 31, 2008.
Gross unrealized losses attributable to the Financial Services Businesses where the estimated fair value had declined and remained below amortized cost by 20% or more of $2.446 billion as of December 31, 2009 includes $1.162 billion relating to asset-backed securities collateralized by sub-prime mortgages.
Gross unrealized losses attributable to the Financial Services Businesses where the estimated fair value had declined and remained below amortized cost by 20% or more as of December 31, 2009 also includes $73 million of gross unrealized losses on securities with amortized cost of $117 million where the estimated fair value had declined and remained below amortized cost by 50% or more, of which, $1 million was included in the less than three months timeframe and $72 million was included in the greater than twelve months timeframe.
We have not recognized the gross unrealized losses shown in the tables above as other-thantemporary impairments in earnings based on our detailed analysis of the underlying credit and cash flows on each of these securities.
The gross unrealized losses are primarily attributable to general credit spread widening in the structured credit marketplace and liquidity discounts, and we believe the recoverable value of these investments based on the expected future cash flows is greater than or equal to our remaining amortized cost.
At December 31, 2009, we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before the anticipated recovery of its remaining amortized cost basis.
See “—Other-Than-Temporary Impairments of Fixed Maturity Securities” for a discussion of the factors we consider in making these determinations.
The following table sets forth the amortized cost and gross unrealized losses of fixed maturity securities attributable to the Closed Block Business where the estimated fair value had declined and remained below amortized cost by 20% or more for the following timeframes: Unrealized Losses from Fixed Maturity Securities, Greater than 20%—Closed Block Business
## Table 2 ##
(1) The aging of amortized cost and gross unrealized losses is determined based upon a count of the number of months the estimated fair value remained below amortized cost by 20% or more, using month-end valuations.
The month count was reset back to historical unrealized loss month counts for securities impacted by the adoption of new authoritative guidance related to other-than-temporary impairments on January 1, 2009.
The gross unrealized losses were primarily concentrated in asset-backed securities as of December 31, 2009 and December 31, 2008.
Gross unrealized losses attributable to the Closed Block Business where the estimated fair value had declined and remained below amortized cost by 20% or more of $1.131 billion as of December 31, 2009 includes $885 million relating to asset-backed securities collateralized by sub-prime mortgages.
Gross unrealized losses attributable to the Closed Block Business where the estimated fair value had declined and remained below amortized cost by 20% or more as of December 31, 2009 does not includes any gross unrealized losses on securities where the estimated fair value had declined and remained below amortized cost by 50% or more.
We have not recognized the gross unrealized losses shown in the tables above as other-than-temporary impairments in earnings based on our detailed analysis of the underlying credit and cash flows on each of these securities.
The gross unrealized losses are primarily attributable to general credit spread widening in the structured credit marketplace and liquidity discounts, and we believe the recoverable value of these investments based on the expected future cash flows is greater than or equal to our remaining amortized cost.
At December 31, 2009, we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before the anticipated recovery of its remaining amortized cost basis.
See “—Other-Than-Temporary Impairments of Fixed Maturity Securities” for a discussion of the factors we consider in making these determinations.
Other-Than-Temporary Impairments of Fixed Maturity Securities We maintain separate monitoring processes for public and private fixed maturities and create watch lists to highlight securities that require special scrutiny and management.
Our public fixed maturity asset managers formally review all public fixed maturity holdings on a quarterly basis and more frequently when necessary to identify potential credit deterioration whether due to ratings downgrades, unexpected price variances, and/or company or industry specific concerns.
For private placements our credit and portfolio management processes help ensure prudent controls over valuation and management.
We have separate pricing and authorization processes to establish “checks and balances” for new investments.
We apply consistent standards of credit analysis and due diligence for all transactions, whether they originate through our own in-house origination staff or through agents.
Our regional offices closely monitor the portfolios in their regions.
We set all valuation standards centrally, and we assess the fair value of all investments quarterly.
Our private fixed maturity asset managers formally review all private fixed maturity holdings on a quarterly basis and more frequently when necessary to identify potential credit deterioration whether due to ratings downgrades, unexpected price variances, and/or company or industry specific concerns.
Fixed maturity securities classified as held to maturity are those securities where we have the intent and ability to hold the securities until maturity.
These securities are reflected at amortized cost in our consolidated statements of financial position.
Other fixed maturity

<table><tr><td></td><td>Fair Value Impact</td></tr><tr><td>In Millions</td><td>May 28,2006</td><td>Averageduring2006</td><td>May 29,2005</td></tr><tr><td>Interest rate instruments</td><td>$8</td><td>$10</td><td>$18</td></tr><tr><td>Foreign currency instruments</td><td>2</td><td>1</td><td>1</td></tr><tr><td>Commodity instruments</td><td>2</td><td>2</td><td>1</td></tr><tr><td>Equity instruments</td><td>1</td><td>1</td><td>–</td></tr></table>
<table><tr><td>(in millions)</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Accrued liability for tobacco and health litigation items at beginning of year</td><td>$132</td><td>$39</td><td>$3</td></tr><tr><td>Pre-tax charges for:</td><td></td><td></td><td></td></tr><tr><td>Tobacco and health judgments</td><td>21</td><td>84</td><td>11</td></tr><tr><td>Related interest costs</td><td>7</td><td>23</td><td>2</td></tr><tr><td>Agreement to resolve federalEngleprogeny cases</td><td>—</td><td>43</td><td>—</td></tr><tr><td>Agreement to resolveAspinallincluding related interest costs</td><td>32</td><td>—</td><td>—</td></tr><tr><td>Agreement to resolveMiner</td><td>45</td><td>—</td><td>—</td></tr><tr><td>Implementation of corrective communications remedy pursuant to the federal government’s lawsuit</td><td>—</td><td>—</td><td>31</td></tr><tr><td>Payments</td><td>-190</td><td>-57</td><td>-8</td></tr><tr><td>Accrued liability for tobacco and health litigation items at end of year</td><td>$47</td><td>$132</td><td>$39</td></tr></table>
<table><tr><td></td><td colspan="2"> December 31, 2009</td><td colspan="2"> December 31, 2008</td></tr><tr><td></td><td> Amortized Cost-1</td><td> Gross Unrealized Losses-1</td><td> Amortized Cost-1</td><td> Gross Unrealized Losses-1</td></tr><tr><td></td><td colspan="4"> (in millions)</td></tr><tr><td>Less than three months</td><td>$408</td><td>$94</td><td>$3,377</td><td>$928</td></tr><tr><td>Three months or greater but less than six months</td><td>203</td><td>52</td><td>6,159</td><td>2,338</td></tr><tr><td>Six months or greater but less than nine months</td><td>18</td><td>7</td><td>662</td><td>325</td></tr><tr><td>Nine months or greater but less than twelve months</td><td>859</td><td>306</td><td>25</td><td>21</td></tr><tr><td>Greater than twelve months</td><td>1,827</td><td>672</td><td>—</td><td>—</td></tr><tr><td>Total</td><td>$3,315</td><td>$1,131</td><td>$10,223</td><td>$3,612</td></tr></table>

Question: In which section is Less than three months smaller than Three months or greater but less than six months in 2008?
Answer: Amortized Cost-1 and Gross Unrealized Losses-1