- **Strong performance of on! nicotine pouches:** Despite price increases in Q4, **on! experienced impressive volume growth** and met profitability targets ahead of schedule. This indicates strong consumer resonance and the potential to continue compounding volumes at industry growth rates.  **[MO_3413756_16]**
- **Supply chain resilience for e-vapor products:** Altria has diversified production facilities for **NJOY away from China**, reducing potential impacts from tariffs and trade tensions. This strategic move demonstrates Altria's ability to mitigate policy uncertainties and maintain product supply.  **[MO_3413756_24]**
- **Confident guidance and growth opportunities in smoke-free products:** Altria feels good about the **2025 EPS growth guidance** and sees opportunities as consumers are ready to move to smoke-free alternatives. The company emphasizes the potential for growth if the regulatory environment improves.  **[MO_3413756_11]**

a79a51e264534915b0dfd0a717cabd486c78e2ffa35a96b7cad5e313a3f02c41

- Altria is experiencing increased pressure on cigarette volumes due to the proliferation of illicit e-vapor products, leading to significant shifts in adult tobacco consumer preferences away from cigarettes. The company estimates that cross-category impacts contributed approximately **3% to 4%** to the cigarette industry decline over the last 12 months.  **[MO_3413756_11]**
- The cumulative impact of inflation continues to pressure Altria's core consumer base, who are at the lower end of the socioeconomic status, potentially leading to downtrading and market share losses. Altria has observed this pressure manifesting in increased discount segment share and a decline in Marlboro's market share.  **[MO_3413756_11]** **[MO_3413756_18]** **[MO_3413756_20]**
- Regulatory uncertainties, including potential policy changes such as the proposed nicotine cap and the possibility of having to pull **NJOY ACE** from the market at the end of March, could negatively impact Altria's business and earnings guidance.  **[MO_3413756_14]** **[MO_3413756_21]**

836181f4615912a33ed84622febe5c7b21dba0623231f17764b3a99b3bae151a

1. **NJOY's Future and Patent Issues**  
   **Q:** What are the options for NJOY amid patent issues?  
   **A:** Billy Gifford explained they are considering multiple pathways for NJOY due to patent disputes with JUUL. They are working on modifications to avoid patent infringement, including filing SE exemptions for three patents, and are **"vigorously working"** on the fourth.  **[MO_3413756_12]** **[MO_3413756_13]** **[MO_3413756_15]**  A settlement requires a **"reasonable party,"** and they will be disciplined in their approach.  **[MO_3413756_12]**  Illegal disposable products dominate the market, influencing their considerations.  **[MO_3413756_12]** 

2. **EPS Guidance and NJOY Impact**  
   **Q:** Does guidance account for potential NJOY withdrawal?  
   **A:** Salvatore Mancuso confirmed that their EPS guidance includes scenarios where NJOY ACE might be pulled from the market at the end of March.  **[MO_3413756_14]**  They provided a range to accommodate various outcomes and are confident about meeting their targets.  **[MO_3413756_14]** 

3. **Nicotine Pouches Growth**  
   **Q:** Can on! maintain growth despite price increases?  
   **A:** Billy Gifford stated that on! resonates with consumers even with higher pricing.  **[MO_3413756_16]**  They improved promotional spending and met profitability targets **ahead of time**.  **[MO_3413756_16]**  They are awaiting authorization for **on! PLUS** to further engage consumers.  **[MO_3413756_15]** 

4. **Cigarette Market Share and Consumer Pressure**  
   **Q:** Are cigarette share losses becoming a concern?  
   **A:** Gifford acknowledged that economic pressure leads consumers to downtrade, impacting market share.  **[MO_3413756_18]**  They aim to keep consumers with Marlboro by offering value.  **[MO_3413756_18]**  Illicit vape products are affecting cigarette sales.  **[MO_3413756_18]** 

5. **Regulatory Environment and FDA Enforcement**  
   **Q:** What is expected from the FDA under the new administration?  
   **A:** Gifford hopes the FDA will function as intended by authorizing legal products and enforcing against illegal ones.  **[MO_3413756_21]** **[MO_3413756_22]**  He believes the regulatory system is **"broken"** and needs to improve.  **[MO_3413756_21]** 

6. **Synthetic Nicotine Market Entry**  
   **Q:** Will Altria enter the synthetic nicotine market?  
   **A:** They have been evaluating this market, especially given the FDA's enforcement discretion.  **[MO_3413756_17]**  It's now **"moved up on our radar"**.  **[MO_3413756_17]** 

7. **Impact of Potential Tariffs**  
   **Q:** How would tariffs affect Altria's vaping business?  
   **A:** Gifford stated that tariffs on China would have **limited impact** as they use production facilities outside China.  **[MO_3413756_24]**  He declined to specify locations for competitive reasons.  **[MO_3413756_24]** 

8. **Controllable Costs in Smokeable Division**  
   **Q:** Why did controllable costs spike in Q4?  
   **A:** Mancuso attributed the **13% increase** to timing factors and emphasized disciplined resource allocation.  **[MO_3413756_15]**  They use data analytics for efficient spending.  **[MO_3413756_15]** 

9. **Consumer Trends in Convenience Channels**  
   **Q:** What are you seeing in consumer spending trends?  
   **A:** Gifford noted that cumulative inflation continues to pressure their lower-income consumers.  **[MO_3413756_20]**  They are monitoring economic conditions.  **[MO_3413756_20]** 

10. **Manufacturing Locations and Tariff Mitigation**  
    **Q:** Can you mitigate tariffs through production shifts?  
    **A:** Gifford confirmed they have facilities outside China, limiting tariff impact.  **[MO_3413756_24]** 

13626f4330c5ba6b2f5ec445ff1ca7509924fd00656916bcba8f43eeca296a21

Altria’s Q4 highlights robust on! pouch volumes exceeding profitability targets early, yet cigarette volumes fell ~3–4% due to illicit e-vapor. Management remains confident in 2025 EPS despite potential NJOY withdrawal, though regulatory risks loom.

597b4b804011e2084d51940b77b087f0e0a9b98b17750b1a07590bd3b9a5e176

2ff64afd164628b0d68ca853f168b836a2cb64566aea4dc4212b007493391f1b

**Annual guidance for FY 2025:**
- **Adjusted Diluted EPS**: $5.22 to $5.37  **[MO_3413756_3]**  (raised from $5.07 to $5.15  **[MO_3405062_5]** )  
- **Impact of 1 Fewer Shipping Day**: (no prior guidance  **[MO_3413756_6]** )  
- **Assumptions on Illicit E-Vapor Market**: (no prior guidance  **[MO_3413756_6]** )  
- **Reinvestment of Cost Savings**: (no prior guidance  **[MO_3413756_6]** )  
- **Lower Expected Net Periodic Benefit Income**: (no prior guidance  **[MO_3413756_6]** )  

04b53a870e727bfa93f14be482498c27ea5a776e75a5d510323b4a52f3b94900

| Metric | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------|---------|---------|---------|---------|---------|---------|---------|---------|
| NJOY Consumables Shipment Volume | N/A | N/A | N/A | **7.5** **[0000764180-23-000126_mo-20230930.htm:64]** **[0000764180-23-000125_exhibit991erq32023.htm:0]** **[0000764180-23-000126_mo-20230930.htm:85]** | **11** **[MO_3371545_3]** **[0000764180-24-000007_exhibit991erq42023.htm:0]** | **10.9** **[0000764180-24-000056_exhibit991erq12024.htm:0]** **[0000764180-24-000057_mo-20240331.htm:75]** **[0000764180-24-000057_mo-20240331.htm:54]** | **12.5** **[MO_3395273_1]** **[0000764180-24-000091_exhibit991erq22024.htm:0]** **[0000764180-24-000093_mo-20240630.htm:87]** | **10.4** **[0000764180-24-000100_exhibit991erq32024.htm:0]** **[0000764180-24-000102_mo-20240930.htm:87]** |
| NJOY Device Shipment Volume | N/A | N/A | N/A | **0.9** **[0000764180-24-000007_exhibit991erq42023.htm:0]** | **0.9** **[0000764180-24-000007_exhibit991erq42023.htm:0]** | **1** **[MO_3380742_1]** **[0000764180-24-000057_mo-20240331.htm:75]** **[0000764180-24-000056_exhibit991erq12024.htm:0]** **[0000764180-24-000057_mo-20240331.htm:54]** | **1.8** **[MO_3395273_1]** **[0000764180-24-000091_exhibit991erq22024.htm:0]** **[0000764180-24-000093_mo-20240630.htm:87]** | **1.1** **[0000764180-24-000100_exhibit991erq32024.htm:0]** **[0000764180-24-000102_mo-20240930.htm:87]** |
| NJOY Share of the E-Vapor Category | N/A | N/A | N/A | N/A | **3.7** **[MO_3371545_3]** **[0000764180-24-000018_mo-20231231.htm:55]** | **4.3** **[0000764180-24-000057_mo-20240331.htm:75]** **[0000764180-24-000057_mo-20240331.htm:54]** **[0000764180-24-000056_exhibit991erq12024.htm:0]** | **5.5** **[0000764180-24-000093_mo-20240630.htm:64]** **[MO_3395273_1]** **[0000764180-24-000093_mo-20240630.htm:87]** **[0000764180-24-000091_exhibit991erq22024.htm:0]** | **6.2** **[MO_3405062_2]** **[0000764180-24-000102_mo-20240930.htm:65]** **[0000764180-24-000102_mo-20240930.htm:87]** **[0000764180-24-000100_exhibit991erq32024.htm:0]** |
| U.S. Nicotine Pouch Category Share | **24.4** **[0000764180-23-000012_exhibit991erq42022.htm:8]** | **26.2** **[0000764180-23-000058_exhibit991erq12023.htm:6]** **[0000764180-23-000060_mo-20230331.htm:71]** | **29.1** **[0000764180-23-000113_mo-20230630.htm:63]** **[0000764180-23-000112_exhibit991erq22023.htm:7]** | **32.3** **[0000764180-23-000126_mo-20230930.htm:64]** **[0000764180-23-000125_exhibit991erq32023.htm:7]** | **35.9** **[0000764180-24-000018_mo-20231231.htm:55]** **[0000764180-24-000007_exhibit991erq42023.htm:8]** | **40.1** **[0000764180-24-000057_mo-20240331.htm:54]** **[0000764180-24-000056_exhibit991erq12024.htm:5]** **[0000764180-24-000057_mo-20240331.htm:74]** | **41.6** **[0000764180-24-000093_mo-20240630.htm:65]** **[0000764180-24-000093_mo-20240630.htm:87]** **[0000764180-24-000091_exhibit991erq22024.htm:7]** | **43.9** **[0000764180-24-000102_mo-20240930.htm:65]** **[0000764180-24-000100_exhibit991erq32024.htm:8]** **[0000764180-24-000102_mo-20240930.htm:86]** |
| on! Share of the Total Oral Tobacco Category | **5.9** **[0000764180-23-000012_exhibit991erq42022.htm:7]** | **6.5** **[0000764180-23-000058_exhibit991erq12023.htm:6]** **[0000764180-23-000060_mo-20230331.htm:71]** | **7.0** **[0000764180-23-000113_mo-20230630.htm:63]** **[0000764180-23-000112_exhibit991erq22023.htm:7]** | **6.9** **[0000764180-23-000126_mo-20230930.htm:64]** **[0000764180-23-000125_exhibit991erq32023.htm:7]** | **6.9** **[0000764180-24-000007_exhibit991erq42023.htm:8]** | **7.1** **[0000764180-24-000057_mo-20240331.htm:54]** **[0000764180-24-000056_exhibit991erq12024.htm:5]** **[0000764180-24-000057_mo-20240331.htm:74]** | **8.1** **[0000764180-24-000093_mo-20240630.htm:65]** **[0000764180-24-000091_exhibit991erq22024.htm:7]** **[0000764180-24-000093_mo-20240630.htm:87]** | **8.9** **[0000764180-24-000100_exhibit991erq32024.htm:8]** **[0000764180-24-000102_mo-20240930.htm:86]** **[0000764180-24-000102_mo-20240930.htm:85]** |
| Traditional Smokeless Category Share | N/A | N/A | **70.9** **[0000764180-23-000113_mo-20230630.htm:63]** | **67.7** **[0000764180-23-000126_mo-20230930.htm:64]** | **64.1** **[0000764180-24-000018_mo-20231231.htm:55]** | **59.9** **[0000764180-24-000057_mo-20240331.htm:54]** | **58.4** **[0000764180-24-000093_mo-20240630.htm:65]** | **56.1** **[0000764180-24-000102_mo-20240930.htm:65]** |
| Copenhagen Oral Tobacco Category Share | **26.1** **[0000764180-23-000012_exhibit991erq42022.htm:7]** | **25.4** **[0000764180-23-000060_mo-20230331.htm:71]** **[0000764180-23-000058_exhibit991erq12023.htm:6]** | **24.3** **[0000764180-23-000113_mo-20230630.htm:63]** **[0000764180-23-000112_exhibit991erq22023.htm:7]** **[0000764180-23-000113_mo-20230630.htm:82]** | **23.1** **[0000764180-23-000125_exhibit991erq32023.htm:8]** | **21.7** **[0000764180-24-000007_exhibit991erq42023.htm:8]** | **20.1** **[0000764180-24-000056_exhibit991erq12024.htm:5]** | **19.5** **[0000764180-24-000093_mo-20240630.htm:65]** **[0000764180-24-000091_exhibit991erq22024.htm:7]** | **18.7** **[0000764180-24-000100_exhibit991erq32024.htm:8]** |
| Total Cigarettes Industry Discount Category Retail Share | **27.8** **[0000764180-23-000012_exhibit991erq42022.htm:6]** | **28.2** **[0000764180-23-000058_exhibit991erq12023.htm:5]** **[0000764180-23-000060_mo-20230331.htm:69]** | **28.2** **[0000764180-23-000112_exhibit991erq22023.htm:5]** **[0000764180-23-000113_mo-20230630.htm:80]** | **28.2** **[0000764180-23-000126_mo-20230930.htm:64]** **[0000764180-23-000125_exhibit991erq32023.htm:6]** **[0000764180-23-000126_mo-20230930.htm:82]** | **28.6** **[0000764180-24-000007_exhibit991erq42023.htm:6]** **[0000764180-24-000018_mo-20231231.htm:54]** | **29.1** **[0000764180-24-000056_exhibit991erq12024.htm:4]** **[0000764180-24-000057_mo-20240331.htm:72]** | **29.3** **[0000764180-24-000093_mo-20240630.htm:64]** **[0000764180-24-000093_mo-20240630.htm:84]** | **29.8** **[0000764180-24-000102_mo-20240930.htm:83]** |
| Shipments of Premium Cigarettes as a Percentage | N/A | **94.3** **[0000764180-23-000060_mo-20230331.htm:69]** | **94.6** **[0000764180-23-000113_mo-20230630.htm:79]** | **95.0** **[0000764180-23-000126_mo-20230930.htm:81]** | N/A | **95.6** **[0000764180-24-000057_mo-20240331.htm:72]** | **95.8** **[0000764180-24-000093_mo-20240630.htm:84]** | **96.1** **[0000764180-24-000102_mo-20240930.htm:83]** |

9de93e023ed52453be11a831c33be1ca5a63abdf373cdc47f1946cc62f822164

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

0ae94d7a2a6345ebf69ac9bbe33e71fc1e8b9c7e4ce28f8fd5ef292f8e8a0d97

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

1d725f5affe00cdc1f1bd82075dd435405fea211c7763e00b4acc0e83245e0fc

| Segment/Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Smokeable Products           | **5,456**  **[0000764180-23-000012_exhibit991erq42022.htm:5]**  | **5,090**  **[0000764180-23-000060_mo-20230331.htm:14]**  | **5,820**  **[0000764180-23-000113_mo-20230630.htm:20]**  | **5,572**  **[0000764180-23-000126_mo-20230930.htm:20]**  | **5,274**  **[0000764180-24-000007_exhibit991erq42023.htm:5]**  | **4,906**  **[0000764180-24-000056_exhibit991erq12024.htm:3]**  | **5,495**  **[0000764180-24-000091_exhibit991erq22024.htm:4]**  | **5,540**  **[0000764180-24-000100_exhibit991erq32024.htm:5]**  |
| Oral Tobacco Products        | **632**  **[0000764180-23-000012_exhibit991erq42022.htm:7]**    | **628**  **[0000764180-23-000060_mo-20230331.htm:14]**   | **680**  **[0000764180-23-000113_mo-20230630.htm:80]**   | **685**  **[0000764180-23-000125_exhibit991erq32023.htm:7]**   | **674**  **[0000764180-24-000007_exhibit991erq42023.htm:7]**    | **651**  **[0000764180-24-000057_mo-20240331.htm:17]**   | **711**  **[0000764180-24-000091_exhibit991erq22024.htm:6]**   | **722**  **[0000764180-24-000100_exhibit991erq32024.htm:7]**   |
| All Other                    | N/A              | **1**  **[0000764180-23-000060_mo-20230331.htm:14]**     | **8**  **[0000764180-23-000113_mo-20230630.htm:20]**     | **24**  **[0000764180-23-000126_mo-20230930.htm:20]**    | N/A              | **19**  **[0000764180-24-000057_mo-20240331.htm:17]**    | **3**  **[0000764180-24-000093_mo-20240630.htm:24]**     | **(3)**  **[0000764180-24-000102_mo-20240930.htm:24]**   |
| Total Net Revenues           | N/A              | **5,719**  **[0000764180-23-000060_mo-20230331.htm:14]** | **6,508**  **[0000764180-23-000113_mo-20230630.htm:20]** | **6,281**  **[0000764180-23-000125_exhibit991erq32023.htm:0]** | N/A              | **5,576**  **[0000764180-24-000057_mo-20240331.htm:17]** | **6,209**  **[0000764180-24-000091_exhibit991erq22024.htm:0]** | **6,259**  **[0000764180-24-000100_exhibit991erq32024.htm:0]** |

350c34297f753d74980c781a6fd48e4870e45fcc9365a84a5b556f0d44a9674f

40e9d0d05acca4e6905ac41c5fee34884fbf66b19d6de2a6f74885fae9f43df9

Altria Group, Inc. (MO) is a leading American corporation that operates through several wholly owned subsidiaries, including Philip Morris USA Inc., John Middleton Co., U.S. Smokeless Tobacco Company LLC, Helix Innovations LLC, and NJOY, LLC. The company is primarily involved in the manufacture and sale of tobacco products, offering a range of smokeable, oral tobacco, and e-vapor products **[0000764180-24-000018_mo-20231231.htm:7]**. Altria's product lines include well-known brands such as Marlboro cigarettes, Copenhagen and Skoal moist smokeless tobacco, and NJOY e-vapor products **[0000764180-24-000018_mo-20231231.htm:7]**.

1. **Smokeable Products** - Includes combustible cigarettes and machine-made large cigars, with Marlboro as the principal brand. PM USA is the largest cigarette company in the United States, and Middleton produces cigars **[0000764180-24-000018_mo-20231231.htm:7]**.
   - **Cigarettes** - PM USA's primary product, with a shipment volume of 76.3 billion units in 2023 **[0000764180-24-000018_mo-20231231.htm:7]**.
   - **Cigars** - Produced by Middleton, with a shipment volume of approximately 1.8 billion units in 2023 **[0000764180-24-000018_mo-20231231.htm:7]**.

2. **Oral Tobacco Products** - Consists of moist smokeless tobacco (MST) and snus products, featuring premium brands like Copenhagen and Skoal, and the value brand Red Seal. Helix Innovations also produces on! oral nicotine pouches **[0000764180-24-000018_mo-20231231.htm:7]**.

3. **E-Vapor Products** - Sold by NJOY, LLC, including the NJOY ACE, the only pod-based e-vapor product with FDA market authorization. NJOY contracts with third-party importers for its products **[0000764180-24-000018_mo-20231231.htm:7]**.

4. **All Other** - Encompasses research and development for new product platforms and technologies, including NJOY, Horizon, and Helix International **[0000764180-24-000057_mo-20240331.htm:17]** **[0000764180-24-000093_mo-20240630.htm:24]**.

69272728bbb96afd240b4a852aec4f40f458714a2bfa181d9b3b073e955c26aa

25918e9eca04974dd9b73326aa72858355210c278ea6111971a1c530271b31cd

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | January 2024  **[0000764180-24-000102_mo-20240930.htm:102]** |
| End Date/Duration        | December 31, 2024  **[0000764180-24-000102_mo-20240930.htm:102]**  |
| Total Additional Amount  | $3.4 billion  **[0000764180-24-000102_mo-20240930.htm:7]** |
| Remaining Authorization  | $310 million  **[0000764180-24-000102_mo-20240930.htm:7]** |
| Details                  | Increased from $1.0 billion to $3.4 billion in March 2024  **[0000764180-24-000102_mo-20240930.htm:7]** |

50d857b73fd8885aaf6bf91c1e73f8d73c44535eb9da9a2cf3d064c35f1f6e18

1. Given the ongoing patent infringement lawsuit filed by JUUL against NJOY, which could potentially result in an exclusion order and halt imports of NJOY products by the end of December, can you provide more details on your contingency plans, specifically regarding the substantial equivalence applications and design changes to circumvent the patents, and how confident are you in receiving FDA approval in time?  **[MO_3405062_13]** **[MO_3405062_17]** 

2. Regarding your "optimize and accelerate" initiative aiming to achieve at least $600 million in cumulative cost savings over the next five years through modernizing processes and leveraging artificial intelligence and automation, can you elaborate on the specific areas where these savings will come from, how these changes will impact your workforce, and what risks may affect your ability to achieve these savings?  **[MO_3405062_4]** 

3. With the growth of illicit flavored disposable e-vapor products contributing to elevated cigarette industry volume declines and impacting your e-vapor category growth, what specific actions are you taking to address this issue, and how effective do you expect regulatory enforcement to be in curbing the proliferation of these products?  **[MO_3405062_2]** 

4. In light of Japan Tobacco's recent acquisition in the U.S. cigarette market and considering your partnership with them on the Ploom device, how might this change in their market presence impact your joint venture and the competitive dynamics in the U.S., and are there plans to adjust your strategy accordingly?  **[MO_3405062_18]** 

5. Given the elevated cigarette industry volume declines due to economic pressures on consumers, the growth of the discount segment by 1.5 share points, and Marlboro's retail share decline both year-over-year and sequentially, how do you plan to balance your pricing strategy with market share retention in the premium segment while addressing the shift toward discount products?  **[MO_3405062_5]** 

84f477e664c0912205a9779133799445a0484f73118716f50b56fb7644c1aa27

e69add3585c6400543b116190d64e4b16eb70da93e2466b24b3612d4156b60ea

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Full Year Adjusted Diluted EPS**: $5.07 to $5.15, representing a growth rate of 2.5% to 4% from a base of $4.95 in 2023  **[MO_3405062_5]** .
  2. **Share Repurchase Program**: $310 million remaining under the current share repurchase program, expected to complete by year-end  **[MO_3405062_6]** .
  3. **Cost Savings Initiative**: Multi-phase initiative expected to deliver at least $600 million in cumulative cost savings over the next 5 years, with total pretax charges for the initial phases estimated at approximately $100 million to $125 million  **[MO_3405062_4]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted Diluted EPS**: Narrowed full-year 2024 guidance range to $5.07 to $5.15, representing a growth rate of 2.5% to 4% from a base of $4.95 in 2023  **[MO_3395273_5]** .
  2. **Factors Influencing Second Half Growth**:
     - Timing of the NJOY acquisition in June 2023.
     - Two additional shipping days in the second half of the year.
     - Benefit of an accelerated share repurchase program, which is back half weighted.
     - Expiration of the legal fund related to the Master Settlement Agreement (MSA) costs in the fourth quarter  **[MO_3395273_7]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted Diluted EPS for 2024**: Reaffirmed guidance to deliver full-year adjusted diluted EPS in the range of $5.05 to $5.17, representing a growth rate of 2% to 4.5% from a base of $4.95 in 2023  **[MO_3380742_3]** .
  2. **Share Repurchase Program**: Expanded share repurchase program to $3.4 billion. Implemented a $2.4 billion accelerated share repurchase program, with 46.5 million shares received in March, representing 85% of the ASR Program. Expected to receive shares representing the remaining 15% by the end of the second quarter. Anticipated having $1 billion remaining under the currently authorized share repurchase program, expected to complete by year-end  **[MO_3380742_5]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted Diluted EPS**: Expected to deliver a full-year adjusted diluted EPS in the range of $5 to $5.15, representing an adjusted diluted EPS growth rate of 1% to 4% from a $4.95 base in 2023. Growth expected to be weighted towards the second half of the year  **[MO_3371545_5]** .
  2. **Additional Shipping Days**: Guidance includes the impact of 2 additional shipping days in 2024  **[MO_3371545_5]** .
  3. **Impact from Illicit E-Vapor Enforcement**: Assumes limited impact from illicit e-vapor enforcement on combustible and e-vapor volumes  **[MO_3371545_5]** .

7f4ec05946113a9ebc20135829e01700057b3b1bd39da21b4982d6987ec452cd

NJOY Consumables Shipment Volume

NJOY Device Shipment Volume

NJOY Share of the E-Vapor Category

U.S. Nicotine Pouch Category Share

Traditional Smokeless Category Share

Copenhagen Oral Tobacco Category Share

Shipments of Premium Cigarettes as a Percentage

b30886127f16852986c2245b441ea76d5cca320ab9731d50054e3379be17d426

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Smokeable Products

- Cigarettes

- Cigars

Oral Tobacco Products

Smokeless Products

Wine

All Other

Total Revenue

680dac7a62135fb435afca3041a08dceb311a686c71215d063d72547c3ea0d66

| Name                        | Position                                                                 | Start Date          | Short Bio                                                                                                                                                                                                 |
|-----------------------------|--------------------------------------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Jody L. Begley              | Executive Vice President and Chief Operating Officer                     | N/A                 | Jody L. Begley leads Altria's core tobacco and smoke-free businesses, as well as the Consumer Experience and Operations Logistics support functions  **[0000764180-24-000018_mo-20231231.htm:168]** **[0001558370-24-004695_tmb-20240516xdef14a.htm:60]** .                                               |
| Daniel J. Bryant            | Vice President and Treasurer                                             | N/A                 | Daniel J. Bryant has been employed by Altria or its subsidiaries in various capacities during the past five years  **[0000764180-24-000018_mo-20231231.htm:168]** .                                                                                   |
| Steven D’Ambrosia           | Vice President and Controller                                            | February 27, 2023   | Steven D’Ambrosia has been serving as Vice President and Controller since at least February 27, 2023  **[0000764180-23-000020_mo-20221231.htm:181]** .                                                                                                 |
| Murray R. Garnick           | Executive Vice President and General Counsel (Retired)                   | Retired April 1, 2024 | Murray R. Garnick managed complex litigation matters and played a key role in legal strategies for transactions and regulatory affairs. He retired effective April 1, 2024  **[0000764180-24-000018_mo-20231231.htm:168]** **[0001558370-24-004695_tmb-20240516xdef14a.htm:55]** **[0001558370-24-004695_tmb-20240516xdef14a.htm:59]** **[0001308179-23-000575_mo4112081-def14a.htm:55]** .                  |
| William F. Gifford, Jr.     | Chief Executive Officer                                                  | April 2020          | William F. Gifford, Jr. has been CEO since April 2020. He joined Altria in 1994 and has held numerous senior leadership roles  **[0001558370-24-004695_tmb-20240516xdef14a.htm:46]** **[0001308179-23-000575_mo4112081-def14a.htm:41]** .                                                                     |
| Salvatore Mancuso           | Executive Vice President and Chief Financial Officer                     | N/A                 | Salvatore Mancuso has been employed by Altria or its subsidiaries in various capacities over the past five years  **[0000764180-24-000018_mo-20231231.htm:168]** .                                                                                     |
| Heather A. Newman           | Senior Vice President, Chief Strategy & Growth Officer                   | N/A                 | Heather A. Newman leads Altria's Enterprise Strategy, Planning & New Ventures, International & Corporate Development, and Digital Transformation & Technology functions  **[0000764180-24-000018_mo-20231231.htm:168]** **[0001558370-24-004695_tmb-20240516xdef14a.htm:60]** **[0001308179-23-000575_mo4112081-def14a.htm:56]** .                        |
| W. Hildebrandt Surgner, Jr. | Vice President, Corporate Secretary and Associate General Counsel        | N/A                 | W. Hildebrandt Surgner, Jr. serves as Vice President, Corporate Secretary, and Associate General Counsel at Altria Group, Inc.  **[0000764180-24-000018_mo-20231231.htm:168]** .                                                                       |
| Charles N. Whitaker         | Senior Vice President, Chief Human Resources Officer and Chief Compliance Officer | N/A                 | Charles N. Whitaker has been employed by Altria or its subsidiaries in various capacities over the past five years  **[0000764180-24-000018_mo-20231231.htm:168]** .                                                                                   |
| Robert A. McCarter III      | Executive Vice President and General Counsel (Effective April 1, 2024)   | April 1, 2024       | Robert A. McCarter III was elected to become Executive Vice President and General Counsel, effective April 1, 2024. He has been with ALCS in legal positions since 2015  **[0000764180-24-000018_mo-20231231.htm:168]** .                               |

c86a9db0dd5609873675089e01823be5f76449c14f4c9aa48112ae0a6b2d44f0

**Annual guidance for FY 2024:**
- **Full Year Adjusted Diluted EPS**: $5.07 to $5.15  **[MO_3405062_5]** (no change from prior guidance  **[MO_3395273_5]** )  
- **Share Repurchase Program**: $310 million remaining under the current share repurchase program  **[MO_3405062_6]** (no prior guidance)  
- **Cost Savings Initiative**: Multi-phase initiative expected to deliver at least $600 million in cumulative cost savings and total pretax charges of $100 million–$125 million  **[MO_3405062_4]** (no prior guidance)  

95b87b9e494fbba9f74667737a92b56b141fa77a68f7c3dab190145d75161641

1. **Earnings Growth Guidance**  
   **Q:** Are your longer-term earnings targets still achievable?  
   **A:** Yes, Altria believes their longer-term targets are achievable. While they guided for low single-digit earnings growth in 2024 following similar growth in 2023, they emphasize that their growth algorithm is on a compounded annual basis and there will be variability due to investments like the NJOY acquisition. They anticipate that as investments ease over time and profitability increases in other categories like on!, they will return to mid-single-digit growth.  **[MO_3371545_10]** 

2. **Sustainability of Smokable Segment**  
   **Q:** Is your smokable segment's financial model sustainable?  
   **A:** Altria is confident in the sustainability of their smokable segment. Despite negative sales and OCI growth for two consecutive quarters, they highlight that macroeconomic pressures and illicit products are impacting volumes. They focus on maximizing profitability over the long term while making appropriate investments in Marlboro and growth categories.  **[MO_3371545_11]** 

3. **Price Realization Deceleration**  
   **Q:** Why did price realization decelerate in the smokable business?  
   **A:** The deceleration was due to both trade-down within Marlboro and increased promotional spending. Altria used the Marlboro Black and Gold packs to provide options for consumers under economic pressure, keeping them within the Marlboro franchise. They emphasize the importance of looking at price realization over the long term rather than quarterly fluctuations.  **[MO_3371545_9]** 

4. **Competitive Landscape and Strategy**  
   **Q:** How are you navigating the competitive landscape in cigarettes and e-vapor?  
   **A:** The combustible segment remains competitive, with consumers under economic pressure and an increase in illicit products. Marlboro continues to grow its share in the premium segment and remains steady post-pandemic. In e-vapor, competitors have increased promotional spending as Altria expands NJOY's distribution. Altria feels good about NJOY's proposition and early consumer feedback.  **[MO_3371545_12]** 

5. **Investments Impacting EPS Growth**  
   **Q:** Will increased investments affect your ability to generate EPS growth?  
   **A:** While investments in smoke-free products like NJOY and Ploom will accelerate in 2024, Altria's core businesses remain strong. They expect more investment in NJOY as they're now in **75,000 stores** and are filing for Ploom in the first half of 2025. They believe their core tobacco business is strong enough to support these investments and continue generating EPS growth.  **[MO_3371545_14]** 

6. **Regulatory Changes Impact**  
   **Q:** What impact have regulatory changes in Louisiana had on illicit vaping products?  
   **A:** Early signs are encouraging in Louisiana, where new regulations require manufacturers to certify compliance with FDA guidelines. Altria is seeing illicit products being removed from the marketplace. Several other states have passed or are considering similar legislation.  **[MO_3371545_17]** 

7. **California Menthol Ban Effects**  
   **Q:** How did the California menthol ban affect your sales?  
   **A:** Legitimate shipments to California decreased by about **15%**, with black market activity increasing. Some menthol smokers switched to non-menthol Marlboro cigarettes, leading to a retail share increase for Marlboro in California. However, overall sales in California decreased, commensurate with the industry.  **[MO_3371545_20]** **[MO_3371545_21]** **[MO_3371545_22]** 

8. **Potential National Menthol Ban Impact**  
   **Q:** What would be the impact of a national menthol cigarette ban on your sales?  
   **A:** It's difficult to predict without knowing the final rule and enforcement activities. Altria notes unintended consequences observed in California, such as black market activity and illicit products entering the market. They emphasize the need for the FDA to consider these factors.  **[MO_3371545_22]** 

9. **Price Strategy Divergence**  
   **Q:** Will you react to competitors' more aggressive pricing strategies?  
   **A:** Altria acknowledges competitors' aggressive moves in segments like menthol and discount categories. They've made investments in these areas while maintaining Marlboro's steadiness in the premium segment. They utilize data analytics and revenue growth management to be efficient and effective, and have successfully navigated such competitive dynamics in the past.  **[MO_3371545_15]** 

10. **Impact of E-Cigarettes on Volumes**  
    **Q:** How much are e-cigarettes and modern oral products affecting cigarette volumes?  
    **A:** Modern oral products have minimal impact, historically accounting for about **1%** of cross-category movement. Illicit e-vapor products contribute to **1.5% to 2.5%** of the industry volume decline. The majority of the volume decline is driven by illicit e-vapor products rather than legal e-cigarettes or modern oral products.  **[MO_3371545_19]** 

11. **NJOY Sell-Through Trends**  
    **Q:** How are NJOY's sell-through trends progressing?  
    **A:** NJOY's shipment volume was **$11 million**, with a national share of **3.7%** during the period owned by Altria. Small-scale promotions increased national share by an incremental **0.03%** in November and another **0.03%** in December. Early results are encouraging, and Altria plans to expand marketing activations nationwide this year.  **[MO_3371545_18]** 

12. **Risk of Modern Oral Nicotine to Youth**  
    **Q:** Are modern oral nicotine products a risk to young people?  
    **A:** Altria acknowledges there could be a risk if not marketed and sold responsibly. They have requested the FDA to issue marketing guidelines for the category to protect harm reduction for adults while preventing underage use. Altria's approach to the marketplace involves minimal interaction with underage individuals.  **[MO_3371545_23]** 

b31545863d070babf8321364875e8dae7ae1ed80c95b52af8b46081e49a886e2

| Name                        | Start Date | End Date | Reason for Change |
|-----------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP | 1934  **[0000764180-24-000018_mo-20231231.htm:161]**    | Present  | Current auditor   |

59fbf49ea1c52f76a9c3972bd714e639afbd87081443ac155304d06aff14be78

- Total Revenue: $6,259 million (-0.4% YoY)  **[0000764180-24-000102_mo-20240930.htm:3]** **[0000764180-23-000126_mo-20230930.htm:3]**   
- Smokeable Products: $5,540 million (-1% YoY)  **[0000764180-24-000102_mo-20240930.htm:3]** **[0000764180-23-000126_mo-20230930.htm:59]**   
- Oral Tobacco Products: $722 million (**+5% YoY**)  **[0000764180-24-000102_mo-20240930.htm:3]** **[0000764180-23-000126_mo-20230930.htm:59]**   
- Net Income: $2,293 million (**+6% YoY**)  **[0000764180-24-000102_mo-20240930.htm:3]** **[0000764180-23-000126_mo-20230930.htm:3]**   
- EPS (Diluted): $1.34 (**+11% YoY**)  **[0000764180-24-000102_mo-20240930.htm:3]** **[0000764180-23-000126_mo-20230930.htm:3]**   

7bf891422c756446ab69ad7782a34ce58615d6d67ad6372353b7d6e7f7a1398e

b334f0253ebf6a2c5c0e47550191c409cb8b64246d9a70c4969552a5b783ae6a

62bcae0511b01d22659b75d4b098ba454774cc604d45ed64109697fd52db5275

- **Altria increased its full-year guidance, reflecting confidence in its core businesses and the positive impact of the ABI transaction.**  **[MO_3380742_6]**
- **The smokable products segment is expected to benefit from lower SG&A costs throughout the year, contributing to margin growth and strong profitability.**  **[MO_3380742_9]** ,  **[MO_3380742_13]**
- **Marlboro demonstrated strong pricing power with an **8.5%** price per pack increase, maintaining stable share in the premium segment despite economic pressures and down-trading.**  **[MO_3380742_12]** ,  **[MO_3380742_10]**

c937bef08e8446666d3e72bc449a4a009bb313728b0a99c62443201717b594a4

- **Marlboro continues to grow its share within the highly profitable premium cigarette segment**, demonstrating resilience in a competitive marketplace and maintaining its aspirational brand status.  **[MO_3371545_12]**
- **Early results from NJOY's market expansion are encouraging**, with increases in national retail share following limited promotional offers; Altria plans to further expand NJOY promotions and marketing activations, which could contribute meaningfully to growth in the e-vapor category.  **[MO_3371545_14]** ,  **[MO_3371545_13]**
- **Regulatory actions are beginning to reduce the availability of illicit e-vapor products**, with early signs of success in states like Louisiana; this may benefit Altria by reducing illicit market competition and allowing their legitimate products like NJOY to capture more market share.  **[MO_3371545_17]**

7609edb24ca1abc719420b4e92beda7168e758ca3b12513ae81a49315e660bdb

| Year | Amount Due (millions) | Debt Type               | Interest Rate (%) | % of Total Debt |
|------|-----------------------|-------------------------|-------------------|-----------------|
| 2024 | 776                   | Senior Unsecured Notes  | 4.000             | 3.1% = (776 / 25,200) * 100 **[0000764180-24-000102_mo-20240930.htm:89]** **[0000764180-24-000102_mo-20240930.htm:26]** **[0000764180-24-000102_mo-20240930.htm:2]** |
| 2024 | 345                   | Senior Unsecured Notes  | 3.800             | 1.4% = (345 / 25,200) * 100 **[0000764180-24-000102_mo-20240930.htm:89]** **[0000764180-24-000102_mo-20240930.htm:26]** **[0000764180-24-000102_mo-20240930.htm:2]** |

e149d2a039baca5b2b27d948958b7ae3cc358940df41a48ce040962a92d85169

- **Declining cigarette volumes** continue to pressure Altria's profits, with **domestic cigarette volumes declining by over 11%** in the second quarter, primarily due to macroeconomic factors and the growth of illicit e-vapor products. The company estimates that cross-category movement from cigarettes to illicit e-vapor contributed an estimated **2% to 3% of the cigarette industry decline** over the last 12 months.  **[MO_3395273_5]**
- Despite high margins, Altria's **Smokeable Products segment adjusted operating income declined by 2%** in the second quarter, as **volume declines and increased costs** weigh on profitability. The company is supporting consumers through investments in Marlboro Black, but **controllable costs were up high single digits**.  **[MO_3395273_8]**
- **Illicit e-vapor products** and inconsistent regulatory enforcement pose significant challenges. Altria acknowledges that the e-vapor category continues to be overrun by illicit disposable products, which **now represent more than 60% of the category**, and enforcement efforts have been inadequate.  **[MO_3395273_2]**

4341ef41eb9f648fc50f2d0e362c69e9177eba9bc0ea5156c8daa5c3d59f7a01

- Altria is experiencing significant declines in cigarette volumes, with an estimated **8% industry decline** in 2023, primarily due to the growth of illicit e-vapor products, which negatively impacts their core business.  **[MO_3371545_18]** ,  **[MO_3371545_11]**
- The company's **smokable segment has faced consecutive quarters of negative sales and operating profit growth**, raising concerns about the sustainability of their financial model amid heightened competition and macroeconomic pressures affecting consumers' discretionary income.  **[MO_3371545_16]** ,  **[MO_3371545_11]** ,  **[MO_3371545_26]**
- Altria's ability to offset volume declines with pricing strategies is under pressure due to increased competition and promotional activities, leading to doubts about returning to revenue growth in the smokable segment and achieving their long-term growth targets.  **[MO_3371545_26]** ,  **[MO_3371545_10]** ,  **[MO_3371545_15]**

e901167ee63cde8ec46a62e44c924fbfb73d06be8bfe55cb363fcfebe2f98403

1. **Guidance Raise and Underlying Performance**  
   **Q:** Why was the guidance raise modest despite ABI share sale and buybacks?  
   **A:** Altria was pleased to revise their guidance, increasing the bottom end by a full percentage point and the top end by about **0.5 percentage point**, reflecting confidence in their core businesses and providing flexibility to invest in innovative tobacco products. The guidance reflects the accretion from the ABI transaction.  **[MO_3380742_6]** 

2. **Sustainability of Pricing Strategy**  
   **Q:** Is the strategy of raising prices despite volume declines sustainable?  
   **A:** Altria believes maximizing long-term profitability while investing in Marlboro and growth segments is the right strategy. They acknowledge consumers are under economic strain due to inflation and high interest rates but feel confident in their price realization of **8.5%** this quarter, with consumers experiencing just under **6%** at retail. They plan to continue making appropriate investments and supporting consumers under pressure.  **[MO_3380742_7]** 

3. **Smokable Segment Costs and EPS Guidance**  
   **Q:** Can you meet EPS guidance despite higher smokable costs?  
   **A:** Altria is confident in growing margins in the smokable segment. The higher controllable cost per pack in Q1 was due to one-time accounting adjustments related to MSA costs and LIFO inventory valuation, impacting Q1 more than the rest of the year. They also benefit from lower SG&A costs, which will continue throughout the year.  **[MO_3380742_8]** **[MO_3380742_9]** 

4. **Pricing Strategy and Price Gaps**  
   **Q:** Are you concerned about wider price gaps and down-trading?  
   **A:** While they cannot discuss future pricing decisions, Altria feels good about Marlboro's steady share and growth in the premium segment, despite some down-trading due to economic pressure. They manage price gaps at the store level using data analytics and believe their tools are effective. They also highlight the need for regulatory enforcement against illicit e-vapor products impacting volumes.  **[MO_3380742_10]** 

5. **ABI Stake and JUUL Losses**  
   **Q:** Will you progressively exit the ABI stake over next 4 years?  
   **A:** Tax considerations are one of many factors in their capital allocation decisions regarding the ABI investment. The recent sale included both restricted and unrestricted shares, with a tax liability of less than **$100 million**, expected to be offset by JUUL losses. They await feedback from the IRS on JUUL losses and will consider future ABI transactions accordingly.  **[MO_3380742_15]** 

6. **R&D Spending Shift and Profitability**  
   **Q:** Does shifting R&D affect smokable profitability growth?  
   **A:** There is a shift in R&D spending toward innovative products, contributing to lower SG&A costs in the smokable segment. This reduction benefits smokable profitability, which will continue throughout the year, alongside overall company EPS growth.  **[MO_3380742_13]** 

7. **NJOY Performance and Illicit Vapes**  
   **Q:** Why is NJOY's sales declining despite share gains?  
   **A:** NJOY gained **60 basis points** in share, but retail sales are down due to the growth of illicit disposable e-vapor products, which are impacting legal products. The pod segment, where NJOY competes, continues to shrink as illicit disposables grow.  **[MO_3380742_16]** 

8. **Oral Tobacco Strategy vs. Zyn**  
   **Q:** What's your strategy with Zyn gaining share in oral tobacco?  
   **A:** Altria aims to maximize profitability while investing in Copenhagen and on!. They acknowledge moist smokeless consumers are moving to nicotine pouches to avoid social friction. They feel good about on!'s performance and plan to improve retail positioning and expand the product pipeline with on! PLUS pending FDA authorization.  **[MO_3380742_17]** **[MO_3380742_20]** 

9. **Consumer Pressure and Promotions**  
   **Q:** How are you supporting consumers under economic pressure?  
   **A:** Altria is adjusting retail promotions using data analytics to address consumer economic pressures. They tailor promotions at the store level, providing options like Marlboro Black to keep consumers engaged with the brand even when under financial strain.  **[MO_3380742_18]** **[MO_3380742_19]** 

10. **on! Promotions and Market Share**  
    **Q:** Have you increased promotions on on! due to share loss?  
    **A:** Altria hasn't specifically stepped up promotions to address share loss. They utilize advanced analytics to manage promotions, aiming to keep consumers engaged and induce trial. Despite short-term variability in retail pricing, they focus on long-term volume growth with significant year-over-year retail price increases.  **[MO_3380742_14]** 

512ca8c23862fe468051c376419b33412ca1fc5ad8fab1a2a28e5cfa87422520

- **Growth of illicit disposable e-vapor products is negatively impacting Altria's legal e-vapor sales**, particularly NJOY, whose retail sales have declined double digits over the past few months despite share gains. This suggests that **illicit products are eroding market share and revenues** in the e-vapor category.  **[MO_3380742_16]**
- **Consumer economic pressure due to cumulative inflation, increased debt levels, and high interest rates** is impacting lower-income consumers' discretionary spending, putting pressure on Altria's core cigarette business. The company acknowledges that their consumers are under strain, which could lead to **accelerated volume declines** in the smokable segment.  **[MO_3380742_7]** **[MO_3380742_18]**
- **Higher costs in the smokable products segment**, including increased MSA cost per pack and inventory accounting adjustments, led to a **mid-teens increase in controllable cost per pack** in Q1. These increased costs could continue to **pressure profitability** if not fully offset by price increases, which may be challenging given the economic strain on consumers.  **[MO_3380742_8]**

bd22ab6a978636a913aeefb0b883017d3512089134a6c496cceee7070e703b49

- Altria faces potential disruption in its smoke-free portfolio due to ongoing patent litigation with JUUL over its NJOY products, with a final determination date set for December 23rd; if the International Trade Commission rules against them, an exclusion order could stop imports of NJOY products.  **[MO_3405062_13]** **[MO_3405062_16]** **[MO_3405062_17]**
- The widening price gap between Marlboro and the lowest competitive cigarette brands, now at **47%**, amid consumer economic pressures and increased downtrading to deep discount brands, may negatively impact Marlboro's market share.  **[MO_3405062_12]** **[MO_3405062_9]**
- Despite stronger-than-expected Q3 results, shipment timing benefits and inventory adjustments suggest potential earnings deceleration in Q4, raising concerns about over-shipments in Q3 that may unwind.  **[MO_3405062_11]** **[MO_3405062_0]**

cdee80c51695161977fb24eb840e0f5ea7c1001f14920f101aaf2a9b8f8e95ec

1. **EPS Guidance**  
   **Q:** What are the drivers of second-half EPS growth?  
   **A:** The company expects a step-up in EPS growth in the second half due to factors such as lapping the acquisition of NJOY (which occurred in June of last year), two extra shipping days, the back-half weighting of their accelerated share repurchase program, and the expiration of the legal fund related to MSA costs in the fourth quarter.  **[MO_3395273_7]** 

2. **Illicit Vape Impact**  
   **Q:** How are illicit vapes affecting cigarette declines and enforcement efforts?  
   **A:** The increasing prevalence of illicit vapor products is contributing to higher cigarette industry decline rates. While awareness of the issue is growing, enforcement actions need to significantly step up. In places like Louisiana, enforcement led to authorized vape products increasing and illicit ones dropping to nearly zero, but overall enforcement across the U.S. remains insufficient, allowing bad actors to entrench supply chains.  **[MO_3395273_9]** **[MO_3395273_10]** 

3. **Smokeable Segment Profits**  
   **Q:** Are smokable profits expected to grow this year amidst volume declines?  
   **A:** Despite strong net price realization and margin performance, smokable volumes are down, increasing controllable costs per pack. Tailwinds expected in the second half include two extra shipping days and the expiration of the legal fund in Q4. The company is managing the business to maximize profitability while balancing investments in Marlboro and smoke-free products.  **[MO_3395273_8]** 

4. **MSA Legal Fund Impact**  
   **Q:** What is the benefit from the expiration of the MSA legal fund?  
   **A:** The total legal fund of about **$500 million** will expire in the fourth quarter. The company pays its fair share based on shipments and will see a benefit of one-quarter this year, with the remaining three quarters impacting 2025.  **[MO_3395273_16]** 

5. **Industry Volume Trends**  
   **Q:** Are there signs of stabilization in industry volume declines?  
   **A:** The company notes some "green shoots" with a more steady decline in cigarette volumes, partly due to lessening inflation. However, increased consumer movement to illicit vape products counteracts this trend, highlighting the need for sustained enforcement actions.  **[MO_3395273_15]** 

6. **NJOY Device Share**  
   **Q:** Can you discuss NJOY's device share and conversion rates?  
   **A:** NJOY's device share has seen a significant sequential increase, reaching **25%**. While it's early to provide conversion data from device to consumable sales, the company is optimistic about NJOY's positioning and plans to share more insights as data becomes available.  **[MO_3395273_13]** 

7. **ABI Stake and Credit Rating**  
   **Q:** How does the ABI stake relate to the credit rating and future sales?  
   **A:** Maintaining an investment-grade credit rating is important for accessing the commercial paper market. The company manages a strong balance sheet with over **$1 billion** in excess cash after dividends. There is no change in how they view the ABI stake; it's considered a financial asset aimed at long-term shareholder value, with no immediate plans for further sales.  **[MO_3395273_14]** 

8. **Leaf Cost Inflation**  
   **Q:** What is the outlook on leaf cost inflation?  
   **A:** The company is seeing some inflation in leaf costs due to higher labor and fuel expenses. However, since they blend multiple years of leaf and their cost of goods is relatively low, with high margins in the cigarette category, primary cost drivers remain MSA, federal excise taxes, and fees. They work closely with growers to manage costs effectively.  **[MO_3395273_17]** 

9. **Wholesale Shipment Trends**  
   **Q:** Will shipment trends continue to lag consumption trends due to inventory dynamics?  
   **A:** While there was a sizable inventory headwind in the first half, overall inventories tend to balance over time. As volumes decline, inventories are expected to decrease commensurately. Retailers allocating shelf space to illicit vape products may also impact inventory levels in traditional categories.  **[MO_3395273_18]** 

10. **International RRP Expansion**  
    **Q:** Are there plans to expand RRPs internationally, including NJOY and Swick?  
    **A:** Currently, the focus for NJOY is on the U.S. market, given the challenges with illicit vapes internationally. As for on! in Sweden and the U.K., market share figures are not yet disclosed due to early stages. Updates on Swick will be shared as they approach year-end.  **[MO_3395273_19]** 

15a0a6e57704ab23c772d144efb87a02938f52302e19d20d072bc1da4dde36de

1. **Guidance and Earnings Outlook**  
   **Q:** Despite strong Q3, why maintain broad guidance range?  
   **A:** Management reaffirmed guidance, acknowledging economic strain on consumers and dynamic market conditions. They believe maintaining the current range is appropriate due to quarter-to-quarter fluctuations and the impact of illicit products affecting all categories.  **[MO_3405062_9]** **[MO_3405062_10]** **[MO_3405062_12]** 

2. **Patent Litigation with JUUL**  
   **Q:** How will JUUL's lawsuit affect NJOY products?  
   **A:** The company expects a final determination in December regarding the patent infringement case. They have filed PMTA exemptions for three of the four patents, involving simple exterior changes to NJOY products. Teams are working on avoiding infringement of the fourth patent. Negotiations with JUUL continue, but no significant updates are available.  **[MO_3405062_13]** **[MO_3405062_16]** **[MO_3405062_17]** 

3. **Cost Management and Margins**  
   **Q:** What drove the impressive EBIT margin improvement in smokables?  
   **A:** Controllable costs decreased in the quarter, contributing to a **350 basis point** EBIT margin expansion. However, management attributed this to timing factors and cautioned against extrapolating this trend, suggesting costs may normalize over the longer term.  **[MO_3405062_14]** **[MO_3405062_15]** 

4. **Pricing Strategy and Consumer Trends**  
   **Q:** Any concerns about widening price gaps impacting Marlboro?  
   **A:** While the national price gap is at **47%**, management is leveraging Revenue Growth Management (RGM) to address price gaps at the store level. They focus on maximizing long-term profitability and are monitoring consumer economic strain and down-trading, but remain confident in Marlboro's performance in the premium segment.  **[MO_3405062_12]** **[MO_3405062_12]** 

5. **Competitor's Heated Tobacco Offering**  
   **Q:** How will a competitor's heated tobacco product affect you?  
   **A:** Management acknowledges the new product and will monitor its impact. They believe e-vapor will remain the largest growth category, followed by nicotine pouches and then heated tobacco. The company is progressing with its joint venture with Japan Tobacco for the Ploom device, aiming to file a PMTA in the first half of 2025.  **[MO_3405062_15]** **[MO_3405062_18]** 

6. **NJOY Product Adjustments**  
   **Q:** Will changes to NJOY products affect FDA applications?  
   **A:** Further changes to circumvent the remaining patent would require new SE applications. The company emphasizes that the adjustments involve minor exterior modifications that do not change the device's function.  **[MO_3405062_17]** **[MO_3405062_17]** 

7. **Joint Venture with Japan Tobacco (JT)**  
   **Q:** Does JT's U.S. acquisition affect your partnership?  
   **A:** There is no impact on the joint venture for the Ploom device. The collaboration is progressing well, with teams working together on the PMTA application process.  **[MO_3405062_18]** **[MO_3405062_18]** 

8. **Regulatory Developments**  
   **Q:** Timeline for FDA's proposed import rule implementation?  
   **A:** The company has urged the FDA to expedite enforcement without going through the proposed rule process, as they believe the FDA already has the jurisdiction. They await the FDA's response and have no specific timeline to share.  **[MO_3405062_19]** **[MO_3405062_19]** 

9. **Shipping Days and Inventory Impact**  
   **Q:** How did shipping days affect Q3 and Q4 expectations?  
   **A:** An extra shipping day in Q3 benefited results, with another extra day expected in Q4. Management noted that inventory fluctuations tend to balance out over time, and there's nothing significant to highlight regarding shipments and inventories.  **[MO_3405062_7]** **[MO_3405062_9]** **[MO_3405062_11]** 

10. **Economic Strain on Consumers**  
    **Q:** Are economic pressures influencing consumer behavior?  
    **A:** Yes, management observes that economic strain is leading some consumers to down-trade or shift due to the impact of illicit products across categories, including nicotine pouches and e-vapor. They continue to monitor these trends closely.  **[MO_3405062_8]** **[MO_3405062_12]** 

e388e37093efc2b6cfef1141d9fc6c29350003f5c62aa56289df6ecacfc642de

- **Marlboro continues to grow in the Premium segment**, supported by Altria's implementation of **Revenue Growth Management (RGM)** strategies, allowing for more effective pricing and resource allocation in the marketplace.  **[MO_3405062_12]**
- Altria is **making great progress** in resolving the patent litigation with JUUL over NJOY products by filing **PMTA exemptions** for **simple changes to the exterior** of the product, and is confident in their contingency plans, indicating that **JUUL is worried about the success that NJOY has had in the marketplace**.  **[MO_3405062_13]** **[MO_3405062_16]**
- Altria's joint venture with Japan Tobacco on the **Ploom device**, a heat-not-burn product, with plans to file a **combined PMTA MRTP in the first half of 2025**, positions the company to capitalize on growth in emerging nicotine product categories, with **e-vapor expected to be the largest category**.  **[MO_3405062_15]**

402f59cba0d902372a3c69054508392d6207b38d0f76df21eaf304204e7d17ae

- **Altria narrowed its full-year 2024 EPS guidance and expects adjusted diluted EPS growth to accelerate in the second half of the year, driven by factors such as the benefit from the acquisition of NJOY, two extra shipping days, and the expiration of legal fund payments, highlighting confidence in its financial outlook.**  **[MO_3395273_8]**
- **NJOY is showing strong momentum with device retail share increasing to **25.4%**, more than doubling sequentially, indicating potential for future growth in the smoke-free product category.**  **[MO_3395273_19]**
- **Altria is seeing positive signs ("green shoots") in the market as inflation lessens and consumers adapt, suggesting potential stabilization in cigarette industry volumes, which could support future earnings growth.**  **[MO_3395273_15]**

e5d9cc7649edb4811dac84505f637dd7da321be8ee215656c78bcf1191316941

Altria Group Inc (MO)

Financials